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Old 01-12-2017, 01:41 AM
 
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I read somewhere that about 40% of working Americans make less than $30k a year ($15 an hour.) Most people could not come up with $1000 to cover an emergency. A good percent of Americans are poor.

The result is most Americans live pay check to paycheck and have very little saved for retirement and with the average Social Security check being about $1200, many seniors live their final years in poverty.

Anyone on this board, the exception and even though you were low income most of your life, you still saved a good amount of money for retirement? If so, tell us how.
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Old 01-12-2017, 06:19 AM
 
Location: Tennessee
23,599 posts, read 17,589,896 times
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In general, it's not going to be possible.

I live in a low cost of living area where the average person probably makes slightly less than $15/hr. We are very low tax area as well, so there's a very small burden from the state level and local levels.

Even here, it's hard to find a house that doesn't need a lot of work for under $75,000. If a person at that income level can even qualify for a mortgage, they would be out much less than rent, but due to being unable to save much for a downpayment because of their low income, poor credit due to irregular income, etc., they're probably stuck renting, and as we know, the rent trap is going to be one of the biggest stumbling blocks for low income people, other than their low income itself.

When you're at the subsistence level like that, it takes about everything you have to put food on the table, keep a car on the road, lights on in the house, and a rood over your head. There's very little left with which to save after all required bills are paid, even at a very low standard of living with little debt or children.
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Old 01-12-2017, 06:43 AM
 
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most of the country's poverty is in these cheap low cost of living rural areas , not the city's where better opportunity's exist .very low cost of living areas are generally low cost for a reason .
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Old 01-12-2017, 08:00 AM
 
29,782 posts, read 34,880,403 times
Reputation: 11705
Quote:
Originally Posted by Serious Conversation View Post
In general, it's not going to be possible.

I live in a low cost of living area where the average person probably makes slightly less than $15/hr. We are very low tax area as well, so there's a very small burden from the state level and local levels.

Even here, it's hard to find a house that doesn't need a lot of work for under $75,000. If a person at that income level can even qualify for a mortgage, they would be out much less than rent, but due to being unable to save much for a downpayment because of their low income, poor credit due to irregular income, etc., they're probably stuck renting, and as we know, the rent trap is going to be one of the biggest stumbling blocks for low income people, other than their low income itself.

When you're at the subsistence level like that, it takes about everything you have to put food on the table, keep a car on the road, lights on in the house, and a rood over your head. There's very little left with which to save after all required bills are paid, even at a very low standard of living with little debt or children.
Your point along with MathJak and probably others makes a very good point. For some of us as more affluent retirees and perhaps certainly as transplants or possible transplant frame things different than others. We in this forum tend to describe these areas as low COL because that is how we see them. Often if not most of the time others might call them low income areas. I will ask Serious Conversation in a more appropriate thread. Be ready my friend as I am looking forward to your thoughts.

This can perhaps make a difference in how we view the challenges facing those who were born and raised there. How often do folks transplant to what they consider a low cost of living area while at the same time seeking out the more costly housing areas. This is perhaps a dynamic that can result in cost of living creep for those who are working and living there without the benefit of resources earned elsewhere.

My wife gave me a statewide statistic the other day that stunned me regarding the average salary for a specific job description. Made me wonder a few questions that are off topic in this thread but perhaps mentionable elsewhere.
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Old 01-12-2017, 08:37 AM
 
Location: East of Seattle since 1992, originally from SF Bay Area
29,823 posts, read 54,503,450 times
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My mother-in-law worked part time on and off, and her husband was laid off before he qualified for a pension, then died long before her. There was no way to save anything during their lifetimes. She managed until her passing in 2014 on $700/month Social Security. She went into an adult family home at age 82, and while we had to help out financially at first, after some long, tedious paperwork she got onto state medicaid which paid the balance of her care cost above her SS. That lasted 13 years, as she made it to 95. Whether that kind of services will exist when the less financially ready boomers retire is unknown, but I expect the number of those in need to exceed the available funding. Her care started at $3,400/month in 2001, new patients there are now paying close to $5,000.
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Old 01-12-2017, 08:59 AM
 
Location: Tennessee
23,599 posts, read 17,589,896 times
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Quote:
Originally Posted by TuborgP View Post
Your point along with MathJak and probably others makes a very good point. For some of us as more affluent retirees and perhaps certainly as transplants or possible transplant frame things different than others. We in this forum tend to describe these areas as low COL because that is how we see them. Often if not most of the time others might call them low income areas. I will ask Serious Conversation in a more appropriate thread. Be ready my friend as I am looking forward to your thoughts.

This can perhaps make a difference in how we view the challenges facing those who were born and raised there. How often do folks transplant to what they consider a low cost of living area while at the same time seeking out the more costly housing areas. This is perhaps a dynamic that can result in cost of living creep for those who are working and living there without the benefit of resources earned elsewhere.

My wife gave me a statewide statistic the other day that stunned me regarding the average salary for a specific job description. Made me wonder a few questions that are off topic in this thread but perhaps mentionable elsewhere.
I have two words for the "cost of living creep" - Asheville, NC.

Asheville is a known tourist mecca in the mountains, attracting both affluent (largely northern) retirees who want picturesque views, and younger, countercultural types who are in Asheville due to its permissive attitudes - think a small scale San Francisco.

Asheville really doesn't have much of a local economy. Since it's a tourist mecca, many jobs are in low paying industries like leisure and hospitality, food service, bars, etc. There also a lot of small businesses in the counterculture end of various types that don't pay a lot. Much like where I am ninety miles away, the prevailing local wages tend to be low, but at least our housing prices are much lower and we do not have NC's high taxes. The best jobs are going to be in the medical system, schools, and a smattering of a professional class.

But what's happening to the cost of living in core Asheville? It's rising dramatically as people with money from elsewhere move in, bidding up real estate prices to levels difficult if not impossible to afford on the prevailing local wages. This is a small, butt ugly dwelling in a hip neighborhood. $300,000. It is becoming increasingly difficult to find anything in Asheville for under $300,000.

https://www.trulia.com/property/3049...ville-NC-28806

The people who are bartending and waiting tables in those hip Asheville restaurants and breweries are often piling in with a lot of roommates, stuck renting, or living relatively far from Asheville in the smaller towns and rural areas that are a lot cheaper.

I know some people who have moved from here to Asheville. Almost all are living an "alternate lifestyle" of some form or another. A tattoo artist friend of mine from my college days and his girlfriend (waitress) I went to high school with moved - they're sharing a house with his business partner, who manages but does not own, the same tattoo shop, and his wife is a manager of a store in a mall. Between the four of them, they seem to be fine and have some spare coin, but they are all in their 30s, not kids right out of college or high school. They're intelligent and know what they're doing, but they probably have few of the benefits us corporate stiffs do. I'm sure they're probably behind the curve in "what they need for retirement," but they're living a lifestyle where the cookie cutter principles just don't fit as well. They seem happier living their unconventional lifestyle, even with its sacrifices, than many folks following the formula.

If you're low income and have no reason to believe, for whatever reason, that you're income will not improve to a point that you can sufficiently save, you're going to have to get creative most likely.
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Old 01-12-2017, 09:10 AM
 
2,952 posts, read 1,641,144 times
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I know a guy who NEVER made more than $50,000 per year and is worth around 20 million. All from real estate investments (bare land, west coast) bought in the 60's and 70's and being sold the last few years. He give 15% to charity for every sale he makes.

His investment guy told us.
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Old 01-12-2017, 09:11 AM
 
Location: SoCal
13,246 posts, read 6,345,210 times
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Quote:
Originally Posted by Hemlock140 View Post
My mother-in-law worked part time on and off, and her husband was laid off before he qualified for a pension, then died long before her. There was no way to save anything during their lifetimes. She managed until her passing in 2014 on $700/month Social Security. She went into an adult family home at age 82, and while we had to help out financially at first, after some long, tedious paperwork she got onto state medicaid which paid the balance of her care cost above her SS. That lasted 13 years, as she made it to 95. Whether that kind of services will exist when the less financially ready boomers retire is unknown, but I expect the number of those in need to exceed the available funding. Her care started at $3,400/month in 2001, new patients there are now paying close to $5,000.
I think if you are poor all your life, the government will take care of you.
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Old 01-12-2017, 09:20 AM
 
Location: Tennessee
23,599 posts, read 17,589,896 times
Reputation: 27682
Quote:
Originally Posted by foundapeanut View Post
I know a guy who NEVER made more than $50,000 per year and is worth around 20 million. All from real estate investments (bare land, west coast) bought in the 60's and 70's and being sold the last few years. He give 15% to charity for every sale he makes.

His investment guy told us.
There are a few cases like that. A friend of my uncle's who I know casually bought a bunch of land on a local lake back in the 70s and has sold it off in pieces over the years to make several million. He was never a low income earner, but I'd say this land constitutes the bulk of his wealth.
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Old 01-12-2017, 10:09 AM
 
29,782 posts, read 34,880,403 times
Reputation: 11705
Quote:
Originally Posted by Serious Conversation View Post
I have two words for the "cost of living creep" - Asheville, NC.

Asheville is a known tourist mecca in the mountains, attracting both affluent (largely northern) retirees who want picturesque views, and younger, countercultural types who are in Asheville due to its permissive attitudes - think a small scale San Francisco.

Asheville really doesn't have much of a local economy. Since it's a tourist mecca, many jobs are in low paying industries like leisure and hospitality, food service, bars, etc. There also a lot of small businesses in the counterculture end of various types that don't pay a lot. Much like where I am ninety miles away, the prevailing local wages tend to be low, but at least our housing prices are much lower and we do not have NC's high taxes. The best jobs are going to be in the medical system, schools, and a smattering of a professional class.

But what's happening to the cost of living in core Asheville? It's rising dramatically as people with money from elsewhere move in, bidding up real estate prices to levels difficult if not impossible to afford on the prevailing local wages. This is a small, butt ugly dwelling in a hip neighborhood. $300,000. It is becoming increasingly difficult to find anything in Asheville for under $300,000.

https://www.trulia.com/property/3049...ville-NC-28806

The people who are bartending and waiting tables in those hip Asheville restaurants and breweries are often piling in with a lot of roommates, stuck renting, or living relatively far from Asheville in the smaller towns and rural areas that are a lot cheaper.

I know some people who have moved from here to Asheville. Almost all are living an "alternate lifestyle" of some form or another. A tattoo artist friend of mine from my college days and his girlfriend (waitress) I went to high school with moved - they're sharing a house with his business partner, who manages but does not own, the same tattoo shop, and his wife is a manager of a store in a mall. Between the four of them, they seem to be fine and have some spare coin, but they are all in their 30s, not kids right out of college or high school. They're intelligent and know what they're doing, but they probably have few of the benefits us corporate stiffs do. I'm sure they're probably behind the curve in "what they need for retirement," but they're living a lifestyle where the cookie cutter principles just don't fit as well. They seem happier living their unconventional lifestyle, even with its sacrifices, than many folks following the formula.

If you're low income and have no reason to believe, for whatever reason, that you're income will not improve to a point that you can sufficiently save, you're going to have to get creative most likely.
Very familiar with Ashville and a perfect example of a dichotomy between COL and working income v retirement income. It is a transplant target but don't wander to far away.
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