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I would like to read the entire story however, I do not want to subscribe for a small fee and I cannot log in.
Oh well, I will venture to guess that those who make that much money still do not know how to control their finances and spending and are overspending for items that are not necessary or cost of lot in maintenance.
Yes, that pretty much sums it up. $400,000 per year sounds like you're loaded, especially to someone who makes $40,000 per year. Poor decision making, poor impulse control, and so-called "retail therapy" exist at high income levels just as they do at low income levels.
It's like that classic cracked article on rich people
"I guess I'm considered rich now! Well, if I'm so 'rich,' why am I broke at the end of the month?!?" Uh, I think it's because your mortgage is $3,000 a month, since you live in a ****ing palace. And because you took your family on that Disney cruise last summer."
They say they hate being slaves to the corporations, the government, etc....but they don't want to do what it takes to get that freedom.
They have been sold a bill of goods. They keep hoping that the next big purchase will somehow make them happy, even though the last one didn't. They rack up obscene charges and pay for everything month to month.
Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn't ... pays it.
Plenty of people out there who make six figures but don't understand how financing works. They all melted down during the real estate crash. And they're waiting for the next financial panic so that they can melt down again.
Several years ago, back in 2008, I was listening to a radio show that asked callers to call in if they were making over $100k annually and living paycheck to paycheck. Lots of people called in to that show. Most of them just listed some expensive things like child care and left it at that. One of the callers was in some huge amount of debt, largely student loans.
This is not news.
I am one of them. Bad decisions, mainly in my choice of spouse, resulted in debt that took years to pay off, but the child still had to be raised in the meantime and put through college. There's no palace--just a 900 sq ft condo, and I didn't begin making better money until within the last ten years and only hit six figures a couple of years ago.
That's one way it happens--no chance for a single mom to save for college, and only received a few bucks support sporadically from ex during her formative years, but by the time college came, I made better money and her dad had pulled himself together enough that he was regularly employed and so we were eligible for nothing as far as financial aid. All three of us took out loans. Halfway through her father became unemployed again, so I had to carry his share.
I will get it paid off--plan is to kill the college debt in six years. It was worth it. Neither her dad nor I ever went to college and we wanted her to do better.
I also live in NJ and work in the city, so it's a very high COL area, and commuting alone costs $4k a year.
I do not shop at Whole Foods. I drive a used Corolla. I hate shopping in general, and since I am too tall to buy clothes in normal stores anyway I buy my clothes through catalogs and only on sale. I make my bills every month, and I have the usual extras such as minimum cable/Internet and this phone I'm typing into, but I haven't gone on a fly-away vacation in years. Six figures doesn't translate into a life of luxury for everybody.
Last edited by Mightyqueen801; 09-07-2014 at 10:47 AM..
I have a family of four and I do not spent 575 a MONTH on groceries and other goods.
I could live like a king on 6 figures so those guys "facing financial ruin" can go fornicate themselves with a rusty hook.
Take the post prior to yours -- the single mother sending the kids to college. That's expensive. There is NO DOUBT about that.
But there is absolutely no reason why the kids can't attend their first two years at a less expensive school -- even a community college -- and then transfer as upperclassmen. They could drop the cost of a first-rate education by nearly half. Or they could transfer to an even more prestigious school and have an even better chance of landing the really good jobs. (And still save a few dollars doing it.) OR they'd have money left over for grad school.
But they want the four-year school experience. Football games and sororities and all-nighters in the dorm. So they pay for that. There are ALWAYS options. But most people want what they want and don't mind going into debt to get what they want.
I get by on a poverty-level income, why can't you?
because i don't have to. I worked hard to not have to do that, and I don't want to spend my life saving for a mythical retirement. I want to spend it now.
Quote:
Originally Posted by Ultrarunner
I can honestly say no to all of the above...
Heck, never had cable, cell and my newest appliance is 20 years old....
Because you dont want to or because you can't reasonably afford? How is your suffering relevant? Should we all suffer?
Quote:
Originally Posted by AngelWingDesigns
Such a waste these people had no clue how to manage their money.
AGain, how does it hurt you? If I was on public assistance, then your opinion is valid and a concern. But if I worked hard to get into a good school, worked hard to graduate at the top and worked hard to get a good job, how does it hurt you. #jealousy
Quote:
Originally Posted by ScoopLV
Plenty of people out there who make six figures but don't understand how financing works. They all melted down during the real estate crash. And they're waiting for the next financial panic so that they can melt down again.
Oh please. Id say its a small minority who truly don't grasp it. They just don't care, and since they make enough money they don't have to.
Actually, that $575 per week is for a hypothetical couple.
$400,000 per year gross income
$12,000 per year into retirement
$10,000 per year into college tuition fund
$273,000 per year after income taxes & above retirement & college tuition savings
$87,000 per year on mortgage payments
$25,000 per year on maintenance
$15,000 per year on utilities
$30,000 per year on utilities
New car ($60,000) every 4 years, or $15,000 per year
$9,000 per year on car insurance
$21,000 per year on dining & entertainment
$12,000 per year membership dues at a club
$26,000 per year vacations
$10,000 related to sports for the kids
$4,000 per year for gifts
$5,000 per year for fundraisers & charitable giving
... and this $400K per year income earner is $10K per year in the hole.
Where is the line item for clothing?
Take it out of the $45,000 per year utility bill. Really? And what kind of kid sports cost $10,000 a year? OTOH, a couple can now contribute $13,000 a year into an IRA, and at that level they should be putting at least $40,000 per year into retirement and savings, plus another $40,000 per year into charitable giving. $10,000 a year into college tuition is a joke. You can gift $13,500 per child tax free, so that line item should be a minimum of $27,000/year.
The problem with this budget is that the people are making a lot less than they think they are. Add in the mortgage payments (I assume that includes home insurance and property taxes), maintenance and commuting expenses and they are only making about $150k after taxes and fixed expenses, possibly less if their maintenance budget includes a landscape contractor and house maid service. They might have to dial back the two weeks on the Riviera every year.
Oh please. Id say its a small minority who truly don't grasp it. They just don't care, and since they make enough money they don't have to.
And I'd say that it is a VERY small minority who live considerably below their means, so that they don't have to care about money. I don't see a whole lot of that going on in this country.
Even those of us who do live within our means aren't spared from caring about money. Our family is on the right track, but we could very easily go off the rails if we weren't vigilant. There's plenty to shop at Whole Foods, go on vacation, and send the kids to college, but there are still limits we have to respect. This is true at all income levels.
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