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BS, if you can't buy a 2 million dollar home and make 250k you make bad decisions in life with your money. If you have lets say a 500k place, with 350k in mortgage you have about a $1800 mortgage, approximately $500 in housing expenses per month, lets say $600 in car expenses per month, a generous $1500 for children costs specifically, and another $1500 for family cost/miscellaneous/food. Hell lets throw in another 500 just for S's and G's. Thats a total of $7400 in cost, and on average lets say $900 of that goes towards equity.
You make approximately 160,000 after tax (prolly more since I have assumed 3 children above in expense but lets play it safe), thats 13,300 per month in income, and $6500 per month in sunk expenses. That leaves you saving $6800 per month in savings and equity. Let's assume you make 0% on this month (man you suck at investing).
After 1 year you have $81600 saved up + your original 150k in equity. After 5 years you have 558,000 saved up in pure cash. After 10 years you have just south of 1 million in the bank, after 10 years. Plenty to buy a smaller unit in great falls with cash and enough to buy a normal unit in great falls with 50% down.
Just saying, thats 10 years at that rate and you are in the most expensive part of this county which is one of those most expensive parts of the country. No one can deny that Great Falls IS the 1%
Are you super rich? No. But I don't think anyone can argue that this represents the upper class, not the middle class in this area.
Why don't you talk to the folks who has a HHI of 250K but with no other financial resources such as inheritance or large home equity built long ago and see how many of them are living in a two million dollar home? You can even talk to people who make 300K (again with no other financial resources such as inheritance or equity built years ago) and see how many of them are living in a two million dollar home. I guess most of the people I know in this tax brackets are either dumb or are very bad investors like you said.
Honestly, I was just intrigued by the headline on my Vienna Patch and didn't delve into why she made the comment.
Context matters. The context is that she was interviewed by Patch while participating in the Republican National Convention and she was making the point that Democrats have declared that families making $250,000 are rich and their taxes need to be raised higher to further subsidize the 51% who pay no federal income taxes. She, as a legislator from Northern Virginia, was making the point on behalf of her constituents, who she describes in the full interview as "probably the highest numbers of two-income families in the country" and "some of the highest numbers of professional women," that "they're the ones that are going to be hit by those taxes." And that is where she goes on to make the point that a $250,000 income in Northern VA does not go as far here as it does in less expensive parts of the country.
So yes, this can turn into a discussion of politics and the merits of tax proposals, in which case it would probably be moved to another forum. But to take a 37-second clip out of context and use it to attack a woman who as a legislator is explaining the effects of proposed legislation on her constituents is unfair.
Location: Chapel Hill, NC, formerly NoVA and Phila
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Quote:
Originally Posted by Yankeesfan
Context matters. The context is that she was interviewed by Patch while participating in the Republican National Convention and she was making the point that Democrats have declared that families making $250,000 are rich and their taxes need to be raised higher to further subsidize the 51% who pay no federal income taxes. She, as a legislator from Northern Virginia, was making the point on behalf of her constituents, who she describes in the full interview as "probably the highest numbers of two-income families in the country" and "some of the highest numbers of professional women," that "they're the ones that are going to be hit by those taxes." And that is where she goes on to make the point that a $250,000 income in Northern VA does not go as far here as it does in less expensive parts of the country.
So yes, this can turn into a discussion of politics and the merits of tax proposals, in which case it would probably be moved to another forum. But to take a 37-second clip out of context and use it to attack a woman who as a legislator is explaining the effects of proposed legislation on her constituents is unfair.
Please show me where I attacked this woman??? As I said, I wanted to discuss whether a $250K income is considered "rich" in NoVA. I wanted to discuss the comment, not the woman or the politics behind it. I saw the 37-second clip, thought it was interesting that she did not consider $250K a "rich" income, even in this area and commented on it. If you call that an attack, then so be it. I call it the beginning of a discussion.
$250k is not rich around here, but is not struggling either.
I think a lot of it depends on where you are at in life. For example, a two income couple in their 40s who just got to that income level after many years of education and hard work, and who are paying for a home in the inner suburbs so they have a manageable commute, are trying to save for their retirement since they have no pension and may never see social security or medicare, are still paying off their student loans while trying to save for their kids to go to college, are paying for daycare/after school care, and are helping elderly relatives make ends meet, probably doesn't feel very rich or have a lot of money left over to splurge.
Health care, college, and housing costs have been outpacing inflation and income for a number of years, so incomes don't stretch as far as they used to, even at that relatively high level. And with the recent economic turbulence, it's not suprising a lot of people in this area in that income range (especially if it's based on two incomes) might feel some anxiety about whether they can keep up that level of income and their lifestyle.
On the other hand, a single 30 year old with that income and no debts, or an empty nest couple in their 60s with a paid off house, a seven figure retirement fund, and guaranteed pension and health care may feel and/or appear rich.
Also, if you went a few years not spending like an idiot, you'd have a ton of money saved up.
Ok so you can't afford a nanny today specifically, in 5 years you'll have a half million dollars saved up. I feel like its all this gotta have it now society. Can you buy a porsche and act like a fool and be rich with 250k income? No, but if you just restrain yourself for a few years you will be able to have all of those things you named.
Location: Chapel Hill, NC, formerly NoVA and Phila
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Quote:
Originally Posted by CAVA1990
One size doesn't fit all. If you bought a house in the 80s and your payment is $1,000 a month you'll be livin' large on $250K.
This is so true. Another aspect that I sometimes fail to consider is student loans. College these days is so expensive. And many of the people making the $100+ income are also paying back big student loans. My husband and I were both very blessed to have had our college tuition paid for by our parents (of course it was only $8K back then!), so we weren't saddled with that debt right out of college. That can make a huge difference in monthly expenses.
Housing really is the biggest factor in NoVA being so expensive. Plus commuting expense. I don't find the other parts of NoVA to be that much higher than other parts of the country. Having just moved to North Carolina, I am actually paying more in property taxes, insurance, and some utilities. And we (Virginians) have a great array of public universities to choose from that are relatively affordable that residents of some other states don't have (such as NJ), so there are parts that are aspects in NoVA that are cheaper. Of course, housing is usually the biggest line item expense, so it factors in greatly.
In the end, unless you're one of those who doesn't need to ask what something costs, it just never seems to be enough, right? I survived in NOVA alone on $40-50k with my own apartment. I now make more than double that plus have my husband's income, and it still feels tight.
Quote:
Originally Posted by marie5v
It's not rich at all. It's not poor, but it's not rich. Upper middle class, I would say. My husband and I make a combined 150K with one child, in Fairfax, and honestly we are struggling with the mortgage, home repairs, student loans, etc. We're certainly not poor, but no way are we more than plain old middle class. Another 100K a year would be great, but it would only bring us up to very comfortable - we still wouldn't be living the high life with polo ponies and tiaras.
I'm in a similar boat - my husband and I have a gross total income of about $165k. We have one child (an infant still, so no extra-curricular costs yet!). We couldn't afford to buy in Fairfax because we are too upside-down in our Woodbridge townhouse to sell it, so we have to rent it out (for less than the monthly mortgage + escrow, so we're still losing money monthly) while we live in our SFH in Sterling. Our current home cost about $310k, which we were very fortunate to find for a SFH with a bit over 1800 square feet. It's not a mansion, it's not new (built in the 70s), we don't have a garage, and the exterior needs work. And we just had to replace out water heater this week (plus some additional pluming pieces while we were at it). Our townhouse is not yet rented out, so we are paying 2 full mortgages and maintenance costs every month. I have a small student loan I'm still paying off. We drive a Honda Civic (paid off) and a Nissan Altima (purchased used, so monthly payments are not outrageous), so not exactly luxury vehicles. We eat out a couple times on the weekends, and my husband eats out for lunch every day at work (fast food or Panera type places). Without incurring additional debt via loans and credit cards, we are basically "making ends meet." I would never say we're poor, but we're at a point where, if we needed to cut back on spending, we don't have a lot of areas from which to trim (eating out would obviously be on the cut list, but after that, I'm not so sure...). We don't buy luxury items, we don't have luxury services (lawn service, cleaning service, nanny...nothing like that), and we use a home daycare provider since it's cheaper than a commercial daycare facility. Add another $100k or so to our annual income, and we'd be happy and comfortable, but I wouldn't say rich. It just means I would be able to get the small SUV I want for when we travel with our baby and 2 small dogs and luggage (right now, we all cram into the Altima, which is a very tight fit), and we would be able to afford to have a second child in daycare (we want to have another child, but we're hesitant due to finances), and we could actually hire landscapers to fix our mess of a property and replace our decrepit brick patio. I don't think an SUV, two children, and exterior home fix-ups constitute "rich" by anyone's definition.
I will add that I am also saving some money each month. I deem that a priority. I would cut back on the eating out before I would stop having that money directly deposited to a savings account (versus our checking account that we use for everything).
Quote:
Originally Posted by tysonsengineer
BS, if you can't buy a 2 million dollar home and make 250k you make bad decisions in life with your money. If you have lets say a 500k place, with 350k in mortgage you have about a $1800 mortgage, approximately $500 in housing expenses per month, lets say $600 in car expenses per month, a generous $1500 for children costs specifically, and another $1500 for family cost/miscellaneous/food. Hell lets throw in another 500 just for S's and G's. Thats a total of $7400 in cost, and on average lets say $900 of that goes towards equity.
So, let's check out some of the assumptions you're making - first is that someone has $150k equity in their current home. So, you're ignoring the tons of people who are currently upside-down in their current homes. And an $1800 mortgage? My total mortgage + escrow monthly payment on my $278k townhouse is about $2100, so on a $350k mortgage, that would obviously be even higher. $600 in car expenses is certainly not for anything near "luxury" vehicles; I'm looking to buy a used SUV (Acura MDX because I need a third row seat and reliability), and, even used, it's going to run us about $510/month. I understand Acura is "luxury" compared to some, but it's certainly not "luxury" in this area full of Mercedes and BMWs and whatnot (heck, even a VW SUV is significantly more expensive). And a "generous" $1500 for children costs? Where exactly is that a generous figure? I have ONE child and pay a HOME daycare provider about $900/month. An actual commercial daycare facility in my area runs $1300-$1500. For ONE child. JUST for daycare - not for clothes or toys or sports/lessons/activities. I'm currently paying two mortgages, and not a single penny of either one goes toward equity. Your math is not flawed overall, just not realistic nor representative of a more typical NOVA household. I'm not saying we all need HHIs of $250k, but I certainly wouldn't be living in a $2M home if I did have that income level. Our HHI is currently more than half of that, and we're relatively comfortable with a total of about $600k in homes (split between two due to our personal situation, but assume it could be one $600k home).
This is so true. Another aspect that I sometimes fail to consider is student loans. College these days is so expensive. And many of the people making the $100+ income are also paying back big student loans. My husband and I were both very blessed to have had our college tuition paid for by our parents (of course it was only $8K back then!), so we weren't saddled with that debt right out of college. That can make a huge difference in monthly expenses.
Amen. I have a friend who earns a six figure salary, but she has about $1500/month in student loans. It used to be that six-figure salary was impressive...until I moved to NOVA (I grew up in New England)!
Please show me where I attacked this woman??? As I said, I wanted to discuss whether a $250K income is considered "rich" in NoVA. I wanted to discuss the comment, not the woman or the politics behind it. I saw the 37-second clip, thought it was interesting that she did not consider $250K a "rich" income, even in this area and commented on it. If you call that an attack, then so be it. I call it the beginning of a discussion.
Michgc, to clarify, I wasn't referring to you specifically (I'm sorry it seemed that way), but to others here and, as happens frequently, some of the Patch.com commentors (although they're nothing compared to the vicious commenters, on any subject, at washingtonpost.com and another site that we apparently aren't permitted to mention here). And the Patch didn't do a sufficient job of placing the 37-second excerpt in context. The segment is, like you said, a good conversation starter , but she had a specific purpose in explaining it that way.
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, but she had a specific purpose in explaining it that way.
