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You can live like a King in Texas if you are making $100K a year.
That really depends on area in Texas (obviously just like anywhere else).
I make well over 100K a year in Texas, we don't shop, eat out much, spend on silly things, my wife drives a 10 year old car, i drive a 9 year old car. Well over 110,000 miles on each car. However, we live in an area with a 3.0% property tax rate. Live in a house that is approximately $150,000. Contribute 15% to 401K, max out roth iras. Spend on social security tax, medicare tax, income tax. 3.0% property tax. Spend on health insurance... yada... yada... after you look at all necessary expenses-- it really isn't much for a family to live on (even in Texas). It is definitely enough for a pretty good life... but nothing too extreme...
I have to lot of so called middle class in American really can't afford that lifestyle. I think you need make over $100k+, even in an cheaper place like Dallas. For expensive areas, like NYC, you might need like $500k a year! Most people in middle class would should be called the "working class" instead. The middle class lifestyle has many expenses (listed below) and it can get expensive.
Here is what I think most people consider a middle class lifestyle:
-Retire with same lifestyle as pre-retirement
-1-2 years worth of spending money in cash
-Enough money to buy a nice single family house (McMansion)
-Be able afford to put kids through university
-Money to buy new cars every 3-5 years
-Afford nice vacations each year (probably $10k+)
-Money to buy latest smartphone every 2 years,computers, and other electronics
The excepted middle class lifestyle is NOT really frugal. When you look at this list, you can tell how expensive it can get. Being able to spend a lot of your money while still saving for retirement requires a high income.
A lot of people living this lifestyle on has no retirement saving and/or tons of debts. These people are really working class can't / shouldn't try to go for this lifestyle. Of course people making less than $100K (like me) can save for retirement by living more frugal lifestyle. However, you will definitely miss many middle class niceties like brand new cars every few years!
This is a recipe for failure and poverty. Most successful middle class people know one thing, debt cripples. Debt cripples a country, debt cripples a state, and debt will no doubt cripple a family. Smart people know this. There are engineers in Silicon Valley that make $250K a year and drive 1989 Toyota's, mainly because they know what debt will do to a person's future. What you describe will commit a person to a lifetime of debt. While you're chasing the dream of keeping up with your neighbor, you'll eventually realize they bought ALL that stuff on credit, and you'll both die in debt. While the guy down the street that drives the beater and you thought was poor, he'll end up retiring when he's 50 and have more money than everybody on your block...
anyone who earns more than i do is over paid and is just spending wildly .
anyone who earns less than me cant possibly have a decent lifestyle.
not for nothing folks but what we spend and need to live is so different for each and everyone of us that this thread is almost a silly discussion. in fact this is about the only thing i can add to it.
I'm not sure why you are mentioning a $500k salary....
then i'm not sure that you read the original post of this thread. he said $100k, but then said $500k for more expensive cities like NYC.
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Originally Posted by user_id
You can disagree with whatever you wish, but talking about how things are doing today in your part of NJ doesn't address anything I've stated. I'm suggesting that there has been a 3 decade long generationally housing bubble that is now ready to swing the other direction, the effects of the down-swing will be more extreme in areas that are dominated by boomers. Those areas happen to be the Northeast and the West Coast, which are naturally the areas with the most unbalanced real estate prices in the nation.
well since i've been talking about NJ homes and land, and you've been addressing me, I think it has to somehow relate to what you're talking about. The thing is, in NJ, people need to live somewhere. so unless something happens to actually make people flee NJ (like, the increasingly higher property taxes if not addressed), then there is a supply of people willing to live in these homes.
Quote:
Originally Posted by user_id
You seem to think that pointing out that there are some communities within these areas that have more youthful owners is refuting my claim, but it doesn't. My claim is that the ownership is lopsided with the boomers owning a large percentage, not 100%. The neighborhoods with young families are often the cheaper neighborhoods, sadly many of these families financially strap themselves to buy a home with the delusional that the purchase will benefit them and allow them to "climb the property ladder". Its an "investment".
i'm sure boomers own a majority, but you really need to come here and see for yourself if you don't believe me, and they are not the cheaper neighborhoods that the young families have been taking over. Hoboken is not cheap. The parts of Jersey City are not cheap. Morristown is a pretty young community. Surely boomers still own a majority of the homes in NJ. I wouldn't doubt that if I looked at statistics, but there are 50,000 people in a square mile of Hoboken, and if you walk around the town for 4 hours the chances of seeing someone over 35 aren't that good.
Quote:
Originally Posted by user_id
Regardless, people living in states that are rapidly attracting young families have a bunch different experience than the people living in areas filled with rent-seeking boomers. Its hard to achieve a "middle-class" lifestyle when grandpa is stealing twenties out of your pocket everyday....
Yeah yeah, they aren't making anymore land, this is the cliched response one always hears when they suggest a bear market in real estate.
Of course its a bunch of boomers, they are the largest cohort and posses a lopsided portion of the nations wealth. But they won't see a lot of it...the barbarians are coming.
i'm not saying there's not a bear market in real estate. i'm not one to say that buying a home is a great investment. i think a home is a place to live and one should only buy what they afford and shouldn't assume any great appreciation of that asset. but i'm not slitting my wrist by buying a home in NJ. when i want to move, unless i move to a market that has been going up or not declining as much as the market i live in now, it's all relative. maybe my house drops 5% in value, but if the next house i buy dropped close to 5% also, then it is meaningless to me (especially if i'm upgrading in house type).
the "they aren't making land" comment applies to NJ on some degree. beachfront property is almost always in demand. a reasonable commute to manhattan is going to keep demand at least somewhat strong.
i just don't think it's as horrible for 20s, 30s, and 40s as people think. but young voters need to wake up and stop letting the older population dictate what our government does.
That really depends on area in Texas (obviously just like anywhere else).
I make well over 100K a year in Texas, we don't shop, eat out much, spend on silly things, my wife drives a 10 year old car, i drive a 9 year old car. Well over 110,000 miles on each car. However, we live in an area with a 3.0% property tax rate. Live in a house that is approximately $150,000. Contribute 15% to 401K, max out roth iras. Spend on social security tax, medicare tax, income tax. 3.0% property tax. Spend on health insurance... yada... yada... after you look at all necessary expenses-- it really isn't much for a family to live on (even in Texas). It is definitely enough for a pretty good life... but nothing too extreme...
so that's not middle class, or it is? i don't know how you could make well over $100k and not be doing pretty well. depending on how you define "well over", my wife and i make over $100k and live in NJ. i'm in an approximately $400,000 house and my tax rate is around 2.25%. my wife drives a 5 year old car, i drive a 1 year old car. we also have state income tax, which i don't think you have. SS tax, medicare tax, student loan payments. both contribute 10% to our 401ks, have a brokerage account, have quite a good amount going into our savings each month, and buy a lot of stuff that we "want" when we want it. i'm sitting down this month actually to try and waste less money on eating out and buying things, and saving more.
so that's not middle class, or it is? i don't know how you could make well over $100k and not be doing pretty well. depending on how you define "well over", my wife and i make over $100k and live in NJ. i'm in an approximately $400,000 house and my tax rate is around 2.25%. my wife drives a 5 year old car, i drive a 1 year old car. we also have state income tax, which i don't think you have. SS tax, medicare tax, student loan payments. both contribute 10% to our 401ks, have a brokerage account, have quite a good amount going into our savings each month, and buy a lot of stuff that we "want" when we want it. i'm sitting down this month actually to try and waste less money on eating out and buying things, and saving more.
Well we do have to drive more than you in NJ. Everything is really far apart in Texas... Spend at least $300 on fuel every month. Not to mention cost of upkeep of cars. Also we pay for my wife's grad school-- so I guess that cuts a big chunk out of it
Funny though cause everyone says there is a high cost of living in the north-east, but seems to me if you are paying a lower tax rate on home and get to drive less, cost of living is similar. I think people will find things balance out as far as cost of living goes no matter where they live. Some places have high property costs but low property tax rates, others have lots of public transportation... think people would realize if they move to Texas that the COL isn't all that different from the Northeast when you factor all of this in.
Also, I think I may just have a strange idea of what "doing well is"....
income is like water. it will always seek its own level. we will all spend extra income in our own priority order.
one thing is certain ,no matter how much the income there is always to much month at the end of the money.
your list of wants just increases with income. our retirement plan was buy a house in the pocono mountains of pa.
as our income increased as a family business finally paid off we decided to expand to 2 living places. pa for april to november and some place warm from nov to april..
if we had to make due with one place we could but the fact is why should we? our income allows the best of both worlds and so that becomes our life style and that becomes our income requirement...
thats why this discussion is a bit silly. the income needed is based on the lifestyle you want.
want your kids in private school as a middle class worker? that demands far more income than not having to pay it. when my kids were growing up in queens nyc the schools were horrible. i had to have both kids in private school. that put huge demands on our income needed to get by.
You can live like a King in Texas if you are making $100K a year.
That really depends on area in Texas (obviously just like anywhere else).
I make well over 100K a year in Texas, we don't shop, eat out much, spend on silly things, my wife drives a 10 year old car, i drive a 9 year old car. Well over 110,000 miles on each car. However, we live in an area with a 3.0% property tax rate. Live in a house that is approximately $150,000. Contribute 15% to 401K, max out roth iras. Spend on social security tax, medicare tax, income tax. 3.0% property tax. Spend on health insurance... yada... yada... after you look at all necessary expenses-- it really isn't much for a family to live on (even in Texas). It is definitely enough for a pretty good life... but nothing too extreme...
I've thought about this myself. I grew up in TN which has a relatively low cost of living and now live in California which has a very high cost of living. We've been thinking of moving to TX for years. Only problem is that in what I do, I would be taking a 40-50% paycut. We've been saving money to hopefully just buy a house outright in TX- perhaps Austin or Dallas to offset the loss in wages. Property taxes are also really high in TX. As in 2-3%. That means you're looking at somewhere around $4,000-$5,000 a year for an ordinary median priced home. The city that has more jobs in my field is Austin and houses that are not totally cookie-cutter or in blockled subdivisions seem to hover around the $300,000-$400,000 mark, which given the taxes there might as well be like paying for a $600,000 house in California.
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