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Someone with a lower income but no housing costs, low medical costs, own their own cars, no childcare costs etc. is in a much better position than a family earning twice as much but carries a lot of debt and high bill load (mortgage, minivan, student loans, childcare costs, etc.). Really it's not about how much you earn but what you keep, and Raleigh lets you keep a lot of that earned money (if you so desire).
I will say that I've been looking around on Zillow and finding many affordable properties in the area. It's still a very reasonable place to live.
It's HILARIOUS a person assumes having a funded Roth is a requirement to be middle class.
If you want to retire someday, you'll want to fund it. Don't most middle class folks retire? Or are we working until we drop these days? Is that the "new normal"?
IMO $150k is waaay low. That is solid middle class ground. I would peg it around double that IMO. Above that you get into the upper middle.
$150k doesn't get you much after figuring in federal/state income tax, 401ks, Roth IRAs, college planning, etc. even assuming a low cost medical option. Ironically the higher, more compensated you become your benefits increase exponentially reducing out of pocket costs even further. Example, better paying employers/positions in the area offer child care, on site medical services, fitness centers, etc.
The nice thing about Raleigh is the ability to live a comfortable middle class lifestyle and save a considerable amount of income left over. For example, in the NE or west coast you might spend $600k-$800k on a home to get into a safe neighborhood (spending most of your income), in Raleigh you can do that on $200k. Leaves a lot of breathing room to build your own empire if you want to vs. keeping up with the Jones'. Expensive cars and homes kill most family budgets.
I would suggest that the typical Raleigh metro household with $150K annual income carries a pretty high debt load. They don't live in $200K homes-they live in $500K homes they bought with 5 or 10% down. Two shiny cars in the driveway. Not a lot of savings. Plenty of dinners out and name brand clothes for the kids. Basically treading water and waiting for their parents to die so they get a shot at retiring or paying for their kids' college.
They would be smarter to do it the way you suggest, but many do not. I personally know plenty of people who fit into the $150-$200K household income category who spend every dime and then some. I also know people with twice that income that live on much less than they earn, but in my experience the bias is towards the former.
If you want to retire someday, you'll want to fund it. Don't most middle class folks retire? Or are we working until we drop these days? Is that the "new normal"?
Granted it's still peanuts in general but still, certainly a good trend. Likely sparked by most of us being hit by not just one but two recessions. 2001 and 2008. Kidna like how the post-depression era folks were.
I would suggest that the typical Raleigh metro household with $150K annual income carries a pretty high debt load. They don't live in $200K homes-they live in $500K homes they bought with 5 or 10% down. Two shiny cars in the driveway. Not a lot of savings. Plenty of dinners out and name brand clothes for the kids. Basically treading water and waiting for their parents to die so they get a shot at retiring or paying for their kids' college.
They would be smarter to do it the way you suggest, but many do not. I personally know plenty of people who fit into the $150-$200K household income category who spend every dime and then some. I also know people with twice that income that live on much less than they earn, but in my experience the bias is towards the former.
Well, for us as an example.
1) We have that income.
2) We bought houses in the lower half of the $200's to the lower half of the $300's.
3) We certainly did not put down the minimum.
4) We did have two vehicles (one vehicle now), but one was $16k and the other $14k, so no car loans at all. We purchase vehicles with cash, not debt.
4.5) The only debt we carry is the mortgage and only because the rate is so insanely low.
5) Lots of savings, thank god.
6) We ate almost all meals at home. We ate out probably 2 meals a week there and neither was the more expensive suppers. Always breakfast or lunch.
7) No name brand clothing for anyone.
8) Not waiting for parents to die. Very excitedly waiting for myself to die.
EMWV, though.
Last edited by The Villages Guy; 06-08-2016 at 07:19 PM..
Honestly hope it doesn't get too far above that. Despite everything, that's still a beauty of Raleigh... 150k will still allow you to live comfortably and enjoy what Raleigh has to offer on a consistent basis as long as you aren't living above your means.
But I'm deeply troubled about the second half of number 8.
We learned the hard way as a young couple. Got $20k into debt, with low incomes and took 3 years of doing ZERO things in order to pay it off. From that day forward, we changed our ways and it got better and better every year.
No worries on #8. What seems like a bad thing can be a good thing, depending on what one's situation is. I have no regrets. Glad I was able to enjoy the Triangle area and the Tampa Bay area. Two great places, IMO.
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