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You make one false premise here....and that's that people you see can't afford what they have. Some probably can't, but we're not all twenty something posers. I'm 42, support my wife and 3 children on my income, drive a Lexus IS250, and own a 400K house in Cobb. I'm also a private pilot and spend quite a bit on that hobby as well, and the wife and kids are all involved in their own passtimes.
The key here is that if I was living beyond my means, I'd be living in a 600K or 800K house and driving a BMW 7 series. For me, I have no debt except the house (paid cash for the cars and put 30% down on the house) and can afford all the things I have and still save and live within a realistic budget. It all depends on your income and priorities, and where you are in life. Just because someone drives a Lexus or lives in a nice house doesn't mean they are "car poor" or "house poor". Don't judge everyone by your yardstick.
Great post! I also wanted to add that not all 20 somethings are living paycheck to paycheck. A lot of people seem to assume that all people in their 20s and 30s are aimless and incapable of having money. Some people choose careers that are more lucrative than others.
A lof of people are saying that they make a decent middle class living, which is fine. However, I'm curious as to what people on this site, including the OP, consider middle class. The OP said they could not afford a 200k home and I think thats pretty standard for a middle class family. As I stated earlier, my household income is in the early $100K and I have always considered us middle class. I think of upperclass as people who make $200K and above. Just wondering what folks think.
Great post! I also wanted to add that not all 20 somethings are living paycheck to paycheck. A lot of people seem to assume that all people in their 20s and 30s are aimless and incapable of having money. Some people choose careers that are more lucrative than others.
A lof of people are saying that they make a decent middle class living, which is fine. However, I'm curious as to what people on this site, including the OP, consider middle class. The OP said they could not afford a 200k home and I think thats pretty standard for a middle class family. As I stated earlier, my household income is in the early $100K and I have always considered us middle class. I think of upperclass as people who make $200K and above. Just wondering what folks think.
$100k really doesn't sound like a lot to me to be honest. That's how much 2 Tech graduates are making right out of school these days -- sometimes up to $120k if they are both engineers. Also, many techies marry their college sweetheart a week or month after graduation. I don't think these young folks (my wife and I included) can realistically afford a $350k home. I think you said earlier your husband drives a luxury car, and you consider $70-80k to be luxury, not $30-40k. So you're telling me you have a $70k car on a low $100's/yr salary? I'm just wondering, since you said you have enough cash leftover to open up trust funds for your children (I'm assuming this is what you mean by generational wealth). I'm not accusing you or anything if that's my tone; I'm just curious since my family's in a similar financial situation as you and I don't see how you guys have so much more cash than we do.
This is a great post! I look forward to seeing more responses. I have posted something similar a few months ago about the "class structure" in the Atlanta area because I have found it confusing.
$100k really doesn't sound like a lot to me to be honest. That's how much 2 Tech graduates are making right out of school these days -- sometimes up to $120k if they are both engineers. Also, many techies marry their college sweetheart a week or month after graduation. I don't think these young folks (my wife and I included) can realistically afford a $350k home. I think you said earlier your husband drives a luxury car, and you consider $70-80k to be luxury, not $30-40k. So you're telling me you have a $70k car on a low $100's/yr salary? I'm just wondering, since you said you have enough cash leftover to open up trust funds for your children (I'm assuming this is what you mean by generational wealth). I'm not accusing you or anything if that's my tone; I'm just curious since my family's in a similar financial situation as you and I don't see how you guys have so much more cash than we do.
Well let me clarify.
First, I never said we made exactly $100K; I said we were in the early $100ks. That amount does not include yearly bonuses which are usually pretty decent. I also said that I didn't think the early $100K was that rich and that it was middle class in several of my posts.
Also, our salary is not our only source of income. We have a few conservative investments that do okay for us.
Second, I said that a true luxury car was in the $70 - $80Ks. My husband has a luxury car in the $40K range. Maybe I should have said high end luxury cars to clarify. My hubby DOES NOT drive a car thats more than $45K. Before my husband bought his car he did a ton of research and knew the best deal he could get. Not only did he talk the dealer down $7,000 off the sticker price be he talked them up a few thousand on his trade in (which he kept in excellent condition).
Then I also added that I drive a nice little 2005 used car for which I have a very low car payment because I got the best rate from my Credit Union.
I also didn't say that we had set up trust funds. I said that this was the goal for us in the next few years because I really want to be able to pass on something to our yet to be born children. In the meantime I said we have a retirement account (IRA Roth) and a savings account and then of course the stock.
Then, I also stated that we had very low debt and are way below the average national household debt so we are not wasting a lot of cash on credit card payments. The card we use the most (our AMEX) has to be paid off monthly.
Finally, I said that our home is only based on my husband's salary so we have a lot of breathing room on our mortgage and that we not only save money but are able to pay towards the principle on our home. M hubby saved up a nice downpayment and money for furniture for years before he bought our home. I never said we owned a $350K home...in fact our home was purchased for a lot less. We also bought a home at full market price in a TAD (tax allocation distrcit) which means that in about five years or so after most of the development has been completed we should be able to our home for a lot more than we bought it. Provided we don't get hit too hard on Capital Gains Tax..we should be able tp pump al lthat extra cash into our next home for a sizeable downpayment.
Besides, there is so much you can do to take the money that you have and make it work for you. We went the Financial Planner route to help us get started and see what we could do to maximize every dime in the door. We are still working on that but we hope to meet our goals in about 5 years.
Would this qualify as a "fake millionaire"? We know some people who are in their late 20s, and he makes $180,000 per year. The wife stays home with their two kids. They currently have a $2,000 per month mortgage payment (on a $300, 000+ house). They have been prepaying thier mortgage and are also saving about $6,000 per month for retirement (a total savings of about $300,000). They drive moderate cars and do not dress flashy or anything like that. They have absolutely no other debt. They are looking to move into Buckhead and buy a $900,000 house (mortgage payment including taxes, insurance, etc. of about $5,000 per month). Thoughts? This is a family member (hence, the knowledge of all the details) and has been discussed to a great length within our family. Just interested in an outsider's perspective.
I agree that Atlanta is so bad about extensive debt and obsession with appearing to look rich!
kagmypts, they're not fake millionaires. They will be actual millionaires one day. They're putting away $6,000 a month? JESUS! They're doing the right things so far, I would set aside $3k for retirement, save up the other $3k, wait until I get the $100k and invest in a CD.
My families situation, I have no clue of where we are. I'm a High school student and my dad makes about $60k-$70k a year. We are a family of five and have been doing good most of our life. I would consider us middle class I guess since we live in the bay area and things here are pricey. On the other hand, my dad was lucky enough to invest in real estate a couple years back. In total he owns a two 4plex's and a duplex and our house (which is reallly small, 1,000 sq ft.). We're not rich, just have been wise with our money.
$100k really doesn't sound like a lot to me to be honest. That's how much 2 Tech graduates are making right out of school these days -- sometimes up to $120k if they are both engineers. Also, many techies marry their college sweetheart a week or month after graduation. I don't think these young folks (my wife and I included) can realistically afford a $350k home. I think you said earlier your husband drives a luxury car, and you consider $70-80k to be luxury, not $30-40k. So you're telling me you have a $70k car on a low $100's/yr salary? I'm just wondering, since you said you have enough cash leftover to open up trust funds for your children (I'm assuming this is what you mean by generational wealth). I'm not accusing you or anything if that's my tone; I'm just curious since my family's in a similar financial situation as you and I don't see how you guys have so much more cash than we do.
Also, just want to emphasize that just because two families..any two families (not neccesarily comparing ours) make the same amount of money in salary doesn't mean they both manage their money the same.
For example, like many people we use MS Excel for our budget. However, one thing I like to do is plug all of my bills for one year and look at what I can expect my expenses to be.
Say you take all the utilities that you paid in 2006 and then youj roll them over into your 2007 sheet just to give you an estimate of what your bills may be. In 2006 your August gas bill was $140 and so you plug that into August 2007. August 2007 comes around and low and behold your gas bill is only $90 this August (tsay he weather wasn't as cold)! So what do you do with the extra cash? You either stash it away into a savings account or make another payment on a credit card bill or debt payment that you already made that month. Do that with all of your variable bills each month. You can make sure that the money set aside for variable bills each month alwasy equals zero and take the extra cash (regardless of the amount) and move it onto your savings line or your debt line. Now this isn't dealing with a huge amount of money but its just one example of how one person may do something with their money that another doesn't do.
I have met people who don't even have a written budget or any idea of how much cash is going in and out of their home. So not everyone manages money well.
I never said in any post on here that I was rich or anything but I know I'm not poor and that I have a decent understanding of finances. We still have much to learn and I never claimed to be an expert on anything. However, I do know that we have a system that works for us and allows us to have fun on items some times but also plan and invest for the future. Like I said make your money work for you and not the other way around.
Besides, people are allowed to spend their money the way they see fit.
Last edited by Collins AJ; 10-08-2007 at 05:24 PM..
Everyone should be able to afford their lifestyle, but no one can afford everything.
I don't think it is my business to tell someone how to spend their money, but at the same time people shouldn't cry and complain when they encounter emergencies. Many times they barely have anything saved, and are then forced to borrow money from the "Savers" and "Budgeters"...
I think when you learn that life is about more than buying everything, you start to spend on specific things that make you happy. For example, I could either buy 50 pairs of shoes a year, or instead I could buy 2 pairs of shoes and use my money towards a luxurious vacation. -I will not be able to afford both without using credit cards; and there is no way I would go in debt trying to afford 50 pairs of shoes and a luxurious vacation.
It's all based on making the proper decisions for your life. Some people feel that they would rather live now, because they may not live long. I say that I would like to live now and later, so I save and budget accordingly.
I would rather play the game to win...
Bingo! I could not agree more. That is the point that my husband and I make all the time to other people (and are often greeted with weird looks). People value all things differently - it is just about making the choices within your means!
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Before my husband bought his car he did a ton of research and knew the best deal he could get. Not only did he talk the dealer down $7,000 off the sticker price be he talked them up a few thousand on his trade in (which he kept in excellent condition). 
