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Old 10-24-2007, 11:05 AM
 
4,963 posts, read 3,923,610 times
Reputation: 2917

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Hi there
I have a question on finances. We make a six figure income and I am trying to figure out how others do it on this income. We dont have fancy cars ; one is 7 yr old(100,000 miles), one is 4 yr old(75,000 miles). I went to look at a new car yesterday and was astounded at how expensive they are and what payements would be. I see nothing but suv's etc here where we live that are probably costing $40,000 at least.
We both work, we have two investment houses (both are not rented at the moment, one is being redone, the other, we are trying to get a tenant), we didnt have any credit card debt until our tenant moved out and we used all our savings to redo the house. Now we are back into credit card debt again(unfortunately). We dont eat out much, we dont buy a lot, we dont go on fancy vacations ; when I go home, I go at the off peak times and try to get cheap flights, we havent bought new furniture in years.

Obviously the new car will be put on hold, but I am wondering if everyone is deep into debt, or just living for today.
thanks
dorothy
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Old 10-24-2007, 11:08 AM
 
3,698 posts, read 9,982,342 times
Reputation: 2593
Spend a month writing down every penny you spend, including cash. Then you'll see exactly where your money is going.
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Old 10-24-2007, 11:16 AM
 
Location: Weston, FL and Vero Beach, Fl
2,945 posts, read 11,934,457 times
Reputation: 2057
Aren't you dealing with 3 mortgages + property tax? One property is not rented while the other is? I believe this might be one of your woes. As the poster above stated, write down all your expenses or just create an Excel spreadsheet to see your recurring expenses.

- Where do you live?
- You have a 6 figure income - is that closer to $100,000 or $999,999? :-)
That's a pretty wide moat and if you are at the lower end of 6 figures, that could be more revealing than heading the other direction.
- How large is your family?
- Are you supporting adult children? or parents?
- What are your shopping habits?

There are so many factors to consider and more information is needed. :-)
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Old 10-24-2007, 12:54 PM
 
7,099 posts, read 23,885,607 times
Reputation: 7248
I am guessing that the "investment" property may be costing you more than you think. Once you get it rented, evaluate what you are actually spending on repairs, insurance, taxes, etc. You may not be charging enough rent to pay the cost.

And I certainly hope that you have a separate property account for rental income/expenses that is separate from your regular living expense checking accounts.

The next time you need to make major repairs, try to get a loan on the equity of the house. Charging it to a credit card can really cost a lot more in interest fees.
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Old 10-24-2007, 12:59 PM
 
Location: in drifts of snow wherever you go
2,493 posts, read 3,058,527 times
Reputation: 692
Quote:
Originally Posted by okaydorothy View Post
Hi there
I have a question on finances. We make a six figure income and I am trying to figure out how others do it on this income. We dont have fancy cars ; one is 7 yr old(100,000 miles), one is 4 yr old(75,000 miles). I went to look at a new car yesterday and was astounded at how expensive they are and what payements would be. I see nothing but suv's etc here where we live that are probably costing $40,000 at least.
We both work, we have two investment houses (both are not rented at the moment, one is being redone, the other, we are trying to get a tenant), we didnt have any credit card debt until our tenant moved out and we used all our savings to redo the house. Now we are back into credit card debt again(unfortunately). We dont eat out much, we dont buy a lot, we dont go on fancy vacations ; when I go home, I go at the off peak times and try to get cheap flights, we havent bought new furniture in years.

Obviously the new car will be put on hold, but I am wondering if everyone is deep into debt, or just living for today.
thanks
dorothy
Dorothy,

PM me with your email address if you want a copy of my expense tracker.

Greenie
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Old 10-24-2007, 01:09 PM
 
781 posts, read 3,485,828 times
Reputation: 276
Quote:
Originally Posted by okaydorothy View Post
Hi there
I have a question on finances. We make a six figure income and I am trying to figure out how others do it on this income. We dont have fancy cars ; one is 7 yr old(100,000 miles), one is 4 yr old(75,000 miles). I went to look at a new car yesterday and was astounded at how expensive they are and what payements would be. I see nothing but suv's etc here where we live that are probably costing $40,000 at least.
We both work, we have two investment houses (both are not rented at the moment, one is being redone, the other, we are trying to get a tenant), we didnt have any credit card debt until our tenant moved out and we used all our savings to redo the house. Now we are back into credit card debt again(unfortunately). We dont eat out much, we dont buy a lot, we dont go on fancy vacations ; when I go home, I go at the off peak times and try to get cheap flights, we havent bought new furniture in years.

Obviously the new car will be put on hold, but I am wondering if everyone is deep into debt, or just living for today.
thanks
dorothy
It would be worth the $$ to buy a Quicken, Quick Books or Microsoft Money program. You can track all your expenses and see at the click of a button how you are spending your money. I second the question about your family responsibilities.....children, parents, etc....this will effect how you are spending.

You sound like you are real estate rich but cash poor....that happens a lot. You may consider selling a home so you don't have the mortgage and taxes to carry and that might lighten your load a bit.

Good Luck
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Old 10-24-2007, 01:24 PM
 
4,963 posts, read 3,923,610 times
Reputation: 2917
We are considering selling the house we are doing up, just to relieve our outgoing a bit. Its just us two with two boys. They are both in school.
I agree with the real estate rich and cash poor. Unfortunately we live in NY and like the rest of the usa, the real estate market is terrible.

I grocery shop every 3-4 weeks, dont really buy the boys lots of clothes, toys etc.

I was saying to my dh last night that we should really get out of real estate and just have our own house to worry about.
Our income is about $200,000. Our debt including mortgages is $600,000, our net equity after mortgages is about $700,000. One home is paid for, the other two have the mortgages on it.

am I in the minority or the majority thinking that debt is bad?
dorothy
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Old 10-24-2007, 02:45 PM
 
781 posts, read 3,485,828 times
Reputation: 276
As a whole, debt is not the "big boogieman", it is how you get it and what you have to show for it.

Going into debt to go on a vacation is not the smartest thing....there is nothing to show for it. Buying a home and having debt is different...you have a tangible asset. At least with the 3 homes you have, they are tangible assets but they may be pulling you under if the upkeep is too much.

There is also debt that is on one or/and many CC's......with the interest, if you don't pay it off, you basically are just treading water, never getting anywhere.

So, in a nutshell, debt is not really bad if it is managable and you have an asset to show for it. It sounds if you are on the right track by trying to eliminate some of your overhead and perhaps you can feel a little less cash poor.:-)

Good luck, Dorothy
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Old 10-24-2007, 04:57 PM
 
Location: Salt Lake City, Utah
7,731 posts, read 11,942,361 times
Reputation: 5939
Quote:
Originally Posted by okaydorothy View Post
Hi there
I have a question on finances. We make a six figure income and I am trying to figure out how others do it on this income. We dont have fancy cars ; one is 7 yr old(100,000 miles), one is 4 yr old(75,000 miles). I went to look at a new car yesterday and was astounded at how expensive they are and what payements would be. I see nothing but suv's etc here where we live that are probably costing $40,000 at least.
We both work, we have two investment houses (both are not rented at the moment, one is being redone, the other, we are trying to get a tenant), we didnt have any credit card debt until our tenant moved out and we used all our savings to redo the house. Now we are back into credit card debt again(unfortunately). We dont eat out much, we dont buy a lot, we dont go on fancy vacations ; when I go home, I go at the off peak times and try to get cheap flights, we havent bought new furniture in years.

Obviously the new car will be put on hold, but I am wondering if everyone is deep into debt, or just living for today.
thanks
dorothy
You're joking right? You can't make it on a six figure income when you aren't even living like you are on one?
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Old 10-25-2007, 12:36 AM
 
69,372 posts, read 53,591,148 times
Reputation: 9357
Quote:
Originally Posted by okaydorothy View Post
Hi there
I have a question on finances. We make a six figure income and I am trying to figure out how others do it on this income. We dont have fancy cars ; one is 7 yr old(100,000 miles), one is 4 yr old(75,000 miles). I went to look at a new car yesterday and was astounded at how expensive they are and what payements would be. I see nothing but suv's etc here where we live that are probably costing $40,000 at least.
We both work, we have two investment houses (both are not rented at the moment, one is being redone, the other, we are trying to get a tenant), we didnt have any credit card debt until our tenant moved out and we used all our savings to redo the house. Now we are back into credit card debt again(unfortunately). We dont eat out much, we dont buy a lot, we dont go on fancy vacations ; when I go home, I go at the off peak times and try to get cheap flights, we havent bought new furniture in years.

Obviously the new car will be put on hold, but I am wondering if everyone is deep into debt, or just living for today.
thanks
dorothy
hello Dorothy, I'm one of those individuals that is self employed, I gross 7 figures but after I pay all my bills, the net take home pay is about 1/3rd of what you make. My family lives very comforably on what I make. I have learned one simple trick.. USE A DEBIT CARD FOR EVERYTHING.. This way you can look at the end of the month and go.. Oh my god.. we spent X on fast food..

We have learned to pay for everything up front, no debts, no credit cards. My house will be paid off within months. Dont buy furniture unless cash is in the bank.. Dont buy new tv's, pc's (and I own 12 pc's cause of the business).. all cash up front, some of them $5K each..

Cut bills everywhere..
That $3 cup of coffee this morning, cost you $780 over the year
That supersize at McDonalds, costs $350 over a year, multipied by # of people in the household..

To be honest, I cant figure out how people cant live on 1/2 of what you make. $1K a week is decent income for a family of 4.
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