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I have 49k of student loans @ $315 a month. I cannot imagine 300k. Wow.
Of course, the wife and I only bring in about 70k combined (55+15), and if I go back into teaching (which I want to eventually), that will go down to about 50k combined (35+15).
How are you penalized for living within your means?
Simple, I will be paying higher future taxes due to debts incurred by other people living beyond their means, although I did not personally participate. The smart (but unethical) thing to do would have been to borrow 125% on my home, invest or buy assets with the proceeds, and walk away. I would have made a killing, and be would getting something in return for the taxes I pay. Doing the right thing in today’s society only means you will live a lower lifestyle and pay for someone else’s indulgences.
How in the world can you be making above 100k and living paycheck to paycheck?
That kind of living is reserved for people like me (when I used to be a teacher making 30k). I now make 55k and by no means live paycheck to paycheck. I feel well off. What do these people spend their money on?
Well, making another 50k would only yield another 30k takehome after taxes etc. If you live in an area where starter homes are 400k or more...and everything costs more (east\west coast) then you could eat up that 30k pretty quickly. (Consider if you home payment and property taxes were 3500/month alone)
Honestly I have seen people who make over $350k a year live paycheck to paycheck. I watched one raid their retirement accounts because they were broke as well.
But in my newspaper, it sounds like people are saving more and that our savings is going to hurt our economy....
I wish all the media would stop spinning and start telling the truth....
It will hurt the sham economy that the banks, with full collusion on the part of the Federal Reserve, have been supporting for years - i.e., the economy built on debt-financed consumption - the house of cards built on the idea of ever increasing stock and real estate prices coupled with the notion that the paper value of stocks and real estate can somehow be considered real wealth.
It will hurt the sham economy that the banks, with full collusion on the part of the Federal Reserve, have been supporting for years - i.e., the economy built on debt-financed consumption - the house of cards built on the idea of ever increasing stock and real estate prices coupled with the notion that the paper value of stocks and real estate can somehow be considered real wealth.
Any asset that can be sold for cash, such as equities or commodities ARE real wealth. If I have 1000 shares of a particular stock that is worth $20/share, then I can liquidate and have $20K to count as part of my net worth, just the same as if I had $20K cash in the bank. The difference is that the value isn't guaranteed and may appreciate or depreciate. Same with a home. You can't count on the value until you sell but you can sell at any time and realize a real gain or loss.
The problem we had was people borrowing 100% or near 100% with no equity down on a home, using interest only and other stupid loans, and then assuming the value would always appreciate. When the home depreciated, they were left with debt that couldn't be refinanced and negative equity.
But in my newspaper, it sounds like people are saving more and that our savings is going to hurt our economy....
I wish all the media would stop spinning and start telling the truth....
You have to keep this in perspective.
Average median household income in the US on the 2007 census report is a tad over $50,000.
Most folks ability to live the illusion dried up already as their debt to income ratios became real apparent real quick. Hopefully, they took a look in the mirror and decided to change their ways.
Someone making over $100,000 stalled that illusion for a while longer.
To illustrate how sad this is, I saw an ad in the local paper where my parents live where someone is asking for a "DONATED" van for a disabled person. Plan for the future much?
"I saw an ad in the local paper where my parents live where someone is asking for a "DONATED" van for a disabled person. Plan for the future much?"
There are certainly plenty of examples of people being careless and not planning for the future. However, I don't think the request for a van is one of those. People don't always plan for a disability or the need for a van for transport for same. Maybe the disability was sudden. Maybe the need was abrupt. Maybe they are people who couldn't have afforded a van for any reason but now have a disabled person in the family. And so on.
My husband and I make about $150k between us, and we're living close to month-to-month (we certainly don't have 6 months of savings, but we're getting there slowly). Our main problem is our student loan payments. We have $300k in loans between us (he's a doctor, I'm a lawyer) and we are paying out about $2500 a month; none of the interest is tax-deductible so it does hit us hard.
Combined with car payments, insurance, mortgages (we have two houses...the one we live in and one in Michigan we are renting out and maintaining instead of foreclosing on like a lot of people).... it's really easy to NOT save money every month.
For what it's worth, I know that we COULD do better. Sure, we could live in a condo or an apartment instead of a nice home....and sure, we could drive beaters instead of newer cars. We don't HAVE to max out our 401k plans. We're trying to do better with increasing the small amount we are currently saving, and putting it in the right place. Not looking for a "you're not appropriately frugal" lecture...I know it already. Just sharing how it could happen.
Ouch, you guys must just be starting out, don't worry, it'll get better over time and you'll be making more than double that. If he was doing NIH-funded research on the side, they can forgive the bulk of that loan if he obtains a grant, so he should look into that if he's interested in medical research. It's unfortunate they don't do so for his wanting to do public clinics.
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