The Struggle is Real

[Trey3216 15350]

4 minutes ago, ImissWallyPryor said:

I get your point about them possibly needing nice rides, but there are smarter ways to do this. They can buy a new car every 4 years when their newer car is paid off, leaving them with never having more than one car payment. I know a few couples who do exactly that. They can also buy 1 or 2 year old used cars and still have very nice vehicles. A friend of mine owns a used car lot, and he located a <1 year old, high-end Suburban (with 5,000-something miles on it) in another state for another friend of mine, saving him $35,000 off MSRP. All the guy had to do was fly a few hundred miles to pick it up, then drive it back. There are lots of semi-creative ways to be car frugal. 

Yep.  I schedule my truck buying habits around the 4-8 yr waves in the energy industry.  There's always 1-2 yr old trucks with highway miles available the 18 months following a downturn in the energy business.  Sounds bad, and I hate that folks suffer, but it's a logical progression.  

[Gene Parmesan 4008]

30 minutes ago, Nice Guy Eddie said:

I don't see how someone middle-class affords a boat and trips to Disney. Both have to eat up a fair percentage of the annual salary.  Or at least the boat did at some point.

What's middle class these days?  A boat doesn't have to be a huge financial burden if you are talking about something for lakes.  There are sensible avenues if you have to have one, but to the point of the article most likely end up like the rest in not putting enough away.

8 minutes ago, ImissWallyPryor said:

I get your point about them possibly needing nice rides, but there are smarter ways to do this. They can buy a new car every 4 years when their newer car is paid off, leaving them with never having more than one car payment. I know a few couples who do exactly that. They can also buy 1 or 2 year old used cars and still have very nice vehicles. A friend of mine owns a used car lot, and he located a <1 year old, high-end Suburban (with 5,000-something miles on it) in another state for another friend of mine, saving him $35,000 off MSRP. All the guy had to do was fly a few hundred miles to pick it up, then drive it back. There are lots of semi-creative ways to be car frugal. 

Their car expenses seem the most frugal on the list.  I realize they both drive luxury cars but it's eating up 9600/year.  That's 2 400/month payments.

[ImissWallyPryor 9046]

True, I only picked one item, but if they were wiser on multiple items, the savings would add up quickly. 

Edited March 27, 2019 by ImissWallyPryor

[Cheeseweasel 26438]

22 minutes ago, troph said:

I think the right answer is figure out how to work part time in a way you at least enjoy somewhat until your older - retirement business or gig economy or whatever.  it preserves your savings and probably prolongs your life.  save what you can along the way but the idea of having $2-5m in the bank earning 5-7% and living off of that for 20+ years is an unobtainable dream for most.  then when you really can't work you're probably within 5-10 years of dying and while this will sound morbid, at the beginning of the real end - hospital stays, etc. we should be allowed to say eff it, I'm out of here and take a lethal dose of some drug that makes you feel really happy on your way out and call it a good life.  with that plan you can probably "retire" with $500,000 to $1,000,000 which still requires savings but that's infinitely more doable than a couple mil. 

Yeah. That's my plan. I'm 52 and already have over 1mil saved but I'm not ready to retire. I'll grind out a few more years at my current job, then take something that occupies my time for a few more years (say 'hi' to me when I greet you at Walmart!)

[Billy Pilgrim 1983]

I’m not an accountant or tax attorney but when you have that kind of income, you just don’t get many deductions. We don’t get child tax credits, child care deductions, student loan interest deductions, mortgage  interest deductions, etc, etc. I wouldn’t be surprised if their tax burden is pretty close to what is stated on there given federal, state and city taxes.

[burntorangebongos 10750]

If they did trim some spending off of several categories, they could pay off their student debt before their kids start college. Tackle that bitch and get it off your back first. 

[Sbbruin 21865]

[Judge Roybeanbag 11819]

22 minutes ago, ImissWallyPryor said:

I get your point about them possibly needing nice rides, but there are smarter ways to do this. They can buy a new car every 4 years when their newer car is paid off, leaving them with never having more than one car payment. I know a few couples who do exactly that. They can also buy 1 or 2 year old used cars and still have very nice vehicles. A friend of mine owns a used car lot, and he located a <1 year old, high-end Suburban (with 5,000-something miles on it) in another state for another friend of mine, saving him $35,000 off MSRP. All the guy had to do was fly a few hundred miles to pick it up, then drive it back. There are lots of semi-creative ways to be car frugal. 

A guy that works for me said when his son needs to pick up clients in NYC he does Uber Black.  I'd imagine that's not always practical but it saves you from having to have a luxury car if you don't have to do it too often.

[burntorangebongos 10750]

17 minutes ago, Cheeseweasel said:

Yeah. That's my plan. I'm 52 and already have over 1mil saved but I'm not ready to retire. I'll grind out a few more years at my current job, then take something that occupies my time for a few more years (say 'hi' to me when I greet you at Walmart!)

Does that include your spouses retirement savings too? In other words is that for two people?

[Sbbruin 21865]

19 minutes ago, Cheeseweasel said:

Yeah. That's my plan. I'm 52 and already have over 1mil saved but I'm not ready to retire.

[burntorangebongos 10750]

11 hours ago, fattyflattie said:

What is the advised range?  I'm sitting around 17% all in, and that's comfortable (although tax season every year sucks).  But I agree, I have peers that are blowing me way out the water.  Banking on that inheritance I guess.  I did skip the whole "first" house deal and went straight into my second.   

I read somewhere that the advised range is 25% max, and I assumed that included taxes and insurance. If you are below that, then you are doing fine. Thumbs up.

[BrickHorn 18256]

The real problem is that these are two lawyers who probably went to law school for money.  They probably feel that owning two luxury cars, taking three vacations a year, spending five figures on extracurriculars for their kids, etc. are normal, necessary expenses.  They aren’t.  Those are luxuries.  

It’s not some American tragedy that they can’t both enjoy every luxury they feel entitled to by virtue of their profession AND stash away a nest egg.  They had a choice, and decided to spend rather than save.  Maybe they felt they earned those luxuries or deserved them or whatever.  But they didn’t NEED them.  And no one sympathizes when they find themselves strapped for cash now.  They aren’t struggling to make ends meet.  They’re just spending way more than they need to.

 

Edited March 27, 2019 by BrickHorn

[Gene Parmesan 4008]

I take two things away from this.  Having kids is absolutely the worst financial decision you can make, and Americans simply put bare minimum effort into their finances.  I'm certainly no exception either.  No matter what you make you'll easily spend it if you don't have a plan in place and kids are involved, and it doesn't even have to be extravagant spending.  Our family easily falls into that trap.  We pay off a car and you think there should be an extra $500 sitting in your account when everything is paid up, but it's not and you have no idea where it went.

[ImissWallyPryor 9046]

My son and DIL prioritized paying off her student loans (none for him, thanks to scholarships, research fellowships, and parents), which they did within 1.5 years of grad school. No new cars and house for them during that time frame. They just bought their first house - no new cars yet. Fortunately, they don’t have jobs that require them to impress clients with a nice vehicle, but I’m sure they’ll not go crazy when they decide to “invest” in a new car.  OTOH, one of my daughters can’t fathom delayed gratification. 

[52-80 19205]

47 minutes ago, Trey3216 said:

Yep.  I schedule my truck buying habits around the 4-8 yr waves in the energy industry.  There's always 1-2 yr old trucks with highway miles available the 18 months following a downturn in the energy business.  Sounds bad, and I hate that folks suffer, but it's a logical progression.  

hows the F350 Harley Davidson edition?

[SydneyCarton 48134]

1 hour ago, Cheeseweasel said:

I couldn't sleep at night knowing this. You seem like 1 bad day / 1 market turn away from having your shit pushed in.

Shrug. It feels relatively normal to me, but that is certainly the part of the 'Everyone has a plan till they get punched in the face" aspect to what I said earlier. I started in the home market later in life than many, so my payments have always been pretty high with a small AF downpayment. 

[Nice Guy Eddie 13515]

As mentioned here on another thread, we all know people that sneer at the lawyer buying a 100K new car, but that same person is driving at 70K truck with a 50K ski boat.

[Okie State 3821]

As mentioned here on another thread, we all know people that sneer at the lawyer buying a 100K new car, but that same person is driving at 70K truck with a 50K ski boat.

Or a $50K truck with $50K in zombie apocalypse accessories.

[Nice Guy Eddie 13515]

To each their own, my housing costs (mortgage, taxes, insurance) is 29% of my take-home. 

I would be more relaxed is it was closer to 20%, so I need to go demand a raise.

I do carry a one year emergency fund for major expenses. I think this is a must for anyone that doesn't want to sweat layoffs or anything related to your financial well-being.

 

 

[Vito Andolini 9127]

For the posters who claimed purchasing a home valued 3X your salary is a bad idea, are you saying the guy who makes $100K a year can’t afford a $300,000 house? 

And im envious of the NYC attorneys property tax and insurance bills. My place in CTX is nowhere near $1,500,000, but the property taxes and insurance bills aren’t that damn far off.

[Nice Guy Eddie 13515]

12 minutes ago, Vito Andolini said:

For the posters who claimed purchasing a home valued 3X your salary is a bad idea, are you saying the guy who makes $100K a year can’t afford a $300,000 house? 

And im envious of the NYC attorneys property tax and insurance bills. My place in CTX is nowhere near $1,500,000, but the property taxes and insurance bills aren’t that damn far off.

Isn't a mortgaged 300K house probably about $25K per year?  then yeah the guy earning 100K gross can't afford it, assuming he pays income tax and contributes to a retirement fund.

And to be clear, he might be able to pull it off, but that's a heavy nut to meet with 100K gross. I think this is only a good idea if the house is expected to appreciate a great deal.  Which also will raise prop taxes too.

Edited March 27, 2019 by Nice Guy Eddie

[Beau Vine 54319]

2 hours ago, TornACL said:

Welcome to the new normal, where the way to get clicks and discussion going is to smear absolute shit all over the walls. 

New motto?

[Vito Andolini 9127]

I guess I’m considering an adult who would bring something to the table with a down payment, enough to avoid that ridiculous mortgage insurance. Yes, if you’re making $100K a year, you should not take on a $2,000+ monthly mortgage payment.

[Gene Parmesan 4008]

13 minutes ago, Vito Andolini said:

For the posters who claimed purchasing a home valued 3X your salary is a bad idea, are you saying the guy who makes $100K a year can’t afford a $300,000 house? 

And im envious of the NYC attorneys property tax and insurance bills. My place in CTX is nowhere near $1,500,000, but the property taxes and insurance bills aren’t that damn far off.

He can afford it in the sense that someone would give him a loan for it, but it's still a bad idea.  Even if that family were capable of living like monks with the rest of their budget, it doesn't leave much flexibility for when something doesn't go according to plan.

[troph 24893]

I'm glad I have kids.  as an introvert and a sucker for searching for meaning in life, I have to say they are nice for a built in tribe and a reason to get up in the morning.  that said, holy crapola they drain the accounts....

Edited March 27, 2019 by troph

[Beau Vine 54319]

1 hour ago, burntorangebongos said:

I read somewhere that the advised range is 25% max, and I assumed that included taxes and insurance. If you are below that, then you are doing fine. Thumbs up.

Back 15-20 years ago before everyone lost their minds, Fannie Mae had a maximum of 36% PITI/gross income for conforming loans IIRC.

[Cheeseweasel 26438]

1 hour ago, burntorangebongos said:

Does that include your spouses retirement savings too? In other words is that for two people?

Yes. Everything is paid for / no debt. 

[Gene Parmesan 4008]

9 minutes ago, Vito Andolini said:

I guess I’m considering an adult who would bring something to the table with a down payment, enough to avoid that ridiculous mortgage insurance. Yes, if you’re making $100K a year, you should not take on a $2,000+ monthly mortgage payment.

You can crunch the numbers and make them work, and if you are responsible and nothing major goes off script, it can work out for you.  It's just not adhering to the plan for the worst hope for the best motto.

[Pato del Muerto 52535]

Just now, Beau Vine said:

Back 15-20 years ago before everyone lost their minds, Fannie Mae had a maximum of 36% PITI/gross income for conforming loans IIRC.

I was in that business for a few years in the mid 2000s. There were lenders willing to go to 45% or a little beyond. These were subprime lenders, so it was high risk anyway. What’s a little more risk?  In exchange, buyers were willing to sign on to terms like 2/28 ARM with a starting rate of 11.9%, when prime loans were in the 4s and 5s. 

That doesn’t even take into account the institutionalized fraud known as stated income or stated income and stated assets loans. 

[Spankytoes 1742]

1 hour ago, Billy Pilgrim said:

I’m not an accountant or tax attorney but when you have that kind of income, you just don’t get many deductions. We don’t get child tax credits, child care deductions, student loan interest deductions, mortgage  interest deductions, etc, etc. I wouldn’t be surprised if their tax burden is pretty close to what is stated on there given federal, state and city taxes.

This right here. We lost our last child credit this year since our son turned 18. SALT and property taxes got capped at $10,000. We are paying almost $12,000 in Federal Taxes and almost $1,000 in State taxes for 2018. And, of course, we are subject to the city taxes as a byproduct of both working in Manhattan. We both claim "0" on our deductions and max out our 401K. That's double what we paid last year, and we're not rich. Even itemized deductions won't save you if you're in a higher tax bracket. It's not nearly the same as earning the same level of income in Texas for a multitude of reasons. 

[Spankytoes 1742]

49 minutes ago, Vito Andolini said:

For the posters who claimed purchasing a home valued 3X your salary is a bad idea, are you saying the guy who makes $100K a year can’t afford a $300,000 house? 

And im envious of the NYC attorneys property tax and insurance bills. My place in CTX is nowhere near $1,500,000, but the property taxes and insurance bills aren’t that damn far off.

The stat is misleading. Outside of the Tri-State area, taxes aren't that bad. Most people also don't pay property taxes in Manhattan because they rent. We pay about $10,000 in property taxes in Nassau County, which is much less than we would have paid for a similar property in Westchester. Because we live on the coast, we have to pay $3,800/yr. in flood insurance in addition to the normal property insurance. While we chose to live there, we get screwed by property claims arising from when SS Sandy came through.

[G650 14272]

4 hours ago, Nice Guy Eddie said:

They’re average in the sense that they pretty much spend what they earn.  Most people end up in that spot if not worse.  They’re better than average in that a fair amount of their expenses are discretionary. 

They are average Americans in that they are fucking retarded.

[Amos Moses 795]

1 hour ago, BrickHorn said:

The real problem is that these are two lawyers who probably went to law school for money.  

Wait - you didn't?

[Spankytoes 1742]

3 hours ago, Brew said:

If everyone lives like they did in their 20’s, there would be no savings related issues. However, income goes up, expenses go up. Decide to have kids, and in today’s world it’s a competition to keep them as involved and educated as possible which isn’t cheap. Ours aren’t overly involved and we still spend more on them than some people that work for us make. Health insurance, private school, 529’s, sports, music, etc add up quickly.

I’m happy I live where I live every time I see this kind of article. I may not have all the culture of NYC around, but I’ll make sure to ponder on that while at the lake or beach or wherever we may be.

I've never understood that mentality. I just lived an entire year on my salary. If I get a 3% raise, I can still live on my old salary, which is what I would have done had I not gotten a raise. Rather than buy new shit because I'm getting "paid", I defer the increase into my 401K. (Or did until I reached the max) The average contribution for people my age is 6%, which blows my mind as a 40 year old. Don't you realize that you're halfway between graduating high school and being eligible to retire with a fraction of Social Security, at best? Some people think that it makes them special to leverage themselves to the hilt on buying adult toys. Instead of paying off existing debt with a bonus, they decide that they are entitled to a really nice family vacation because who doesn't want to take a 2 year old to Disneyworld when they won't remember?

Our 2010 Town & Country will be driven until the wheels fall off or the maintenance bill is more than the van's worth. 

[Okie State 3821]

I've never understood that mentality. I just lived an entire year on my salary. If I get a 3% raise, I can still live on my old salary, which is what I would have done had I not gotten a raise. Rather than buy new shit because I'm getting "paid", I defer the increase into my 401K. (Or did until I reached the max) The average contribution for people my age is 6%, which blows my mind as a 40 year old. Don't you realize that you're halfway between graduating high school and being eligible to retire with a fraction of Social Security, at best? Some people think that it makes them special to leverage themselves to the hilt on buying adult toys. Instead of paying off existing debt with a bonus, they decide that they are entitled to a really nice family vacation because who doesn't want to take a 2 year old to Disneyworld when they won't remember?
Our 2010 Town & Country will be driven until the wheels fall off or the maintenance bill is more than the van's worth. 

See post #133.

[troph 24893]

1 hour ago, Amos Moses said:

Wait - you didn't?

brick went into law for the ladies. 

[Trey3216 15350]

2 hours ago, 52-80 said:

hows the F350 Harley Davidson edition?

Nahh.  I wouldn't roll that

[Brew 3049]

1 hour ago, Spankytoes said:

I've never understood that mentality. I just lived an entire year on my salary. If I get a 3% raise, I can still live on my old salary, which is what I would have done had I not gotten a raise. Rather than buy new shit because I'm getting "paid", I defer the increase into my 401K. (Or did until I reached the max) The average contribution for people my age is 6%, which blows my mind as a 40 year old. Don't you realize that you're halfway between graduating high school and being eligible to retire with a fraction of Social Security, at best? Some people think that it makes them special to leverage themselves to the hilt on buying adult toys. Instead of paying off existing debt with a bonus, they decide that they are entitled to a really nice family vacation because who doesn't want to take a 2 year old to Disneyworld when they won't remember?

Our 2010 Town & Country will be driven until the wheels fall off or the maintenance bill is more than the van's worth. 

That works now, but I’m not living on my salary at 21 when I started working full time. Income increased through the 20’s, bought newer vehicles, bought a house, had kids, expenses went up. Now my income is up 20 times what it was my first year in the business, but most people don’t have that deal. Their 3-8% increases get eaten up by daily life just like all of the people complaining that their couple hundred in additional money each month with the change in withholding tables  just disappeared.

We set our firm up different in that I get 75% of my income in one check each year and take a smaller draw monthly during the year. I pay everything normal out of the draw and use the “bonus” for charity, savings, toys, other properties, etc. It makes it easy to control (my wife’s) spending/saving because my fixed monthly income is lower. Anyone in business for themselves or able to control their income stream should consider it. You have some liability risk on the cash in the entity, but it has worked well for our partner group.

[Brothahorn 10087]

Step one:  Leave NYC

Just don’t come to Texas.

[Poolflood 845]

This is bullshit.  They're 35 y.o. lawyers with two young kids.  Childcare costs at 42k a year AND they're spending another grand a month on sports/music/education?  

Husband's fucking the nanny

Wife's fucking the "Manny"

 

[troph 24893]

That works now, but I’m not living on my salary at 21 when I started working full time. Income increased through the 20’s, bought newer vehicles, bought a house, had kids, expenses went up. Now my income is up 20 times what it was my first year in the business, but most people don’t have that deal. Their 3-8% increases get eaten up by daily life just like all of the people complaining that their couple hundred in additional money each month with the change in withholding tables  just disappeared.
We set our firm up different in that I get 75% of my income in one check each year and take a smaller draw monthly during the year. I pay everything normal out of the draw and use the “bonus” for charity, savings, toys, other properties, etc. It makes it easy to control (my wife’s) spending/saving because my fixed monthly income is lower. Anyone in business for themselves or able to control their income stream should consider it. You have some liability risk on the cash in the entity, but it has worked well for our partner group.

Absolutely this. Own a business and throttle your income and take lump sums and splurge / save and invest. Totally agree.

[burntorangebongos 10750]

Honestly, I think Sydney is very okay if he has an inside the  beltway house like it sounds like he does because he is putting his investment dollars into real estate that should pay out. It is more of a long term gain and in the meantime, his family can enjoy its use. He can use this asset for a loan if he has to. If it all goes bad and he has to declare bankruptcy, his homestead is exempt, at least I think that is still true, right? Bottom line, is he should come out fine, especially if he is on high ground.

[Aqua Buddha 14599]

There are some holes in their budget but their mortgage isn't one of them.  They're making $500K in NYC this example and have 2 kids.  $1.5M for a house is reasonable.  

[SHOOTER12 8814]

23 hours ago, Pato del Muerto said:

One great thing about super low property taxes (0.6% roughly) and low insurance premiums (little severe weather and low crime area) is that more of my PITI can go towards the P&I, so the range of house price goes up. $300 a month in gas instead ofvtheir $5000 is nice too. 

Too bad I don’t make their $500k, I could live like a king out here. 

Same here...

[Anastasis 23480]

This thread going full on shaggy 2%er. Is it a better financial decision to buy a million dollar pad close in or a three quarter million dollar pad with a commute. 

[Brew 3049]

5 hours ago, Anastasis said:

This thread going full on shaggy 2%er. Is it a better financial decision to buy a million dollar pad close in or a three quarter million dollar pad with a commute. 

It’s better to buy the million dollar one close in and get the beach/lake house (why not both?) also.

[Parliament 14272]

6 hours ago, Anastasis said:

This thread going full on shaggy 2%er. Is it a better financial decision to buy a million dollar pad close in or a three quarter million dollar pad with a commute. 

I own both.  One for my family and one for my mistress (and her 2 hot friends).

[Okie State 3821]

This thread going full on shaggy 2%er. Is it a better financial decision to buy a million dollar pad close in or a three quarter million dollar pad with a commute. 

Same shit, different thread. Time and time again.

[SydneyCarton 48134]

12 hours ago, burntorangebongos said:

Honestly, I think Sydney is very okay if he has an inside the  beltway house like it sounds like he does because he is putting his investment dollars into real estate that should pay out. It is more of a long term gain and in the meantime, his family can enjoy its use. He can use this asset for a loan if he has to. If it all goes bad and he has to declare bankruptcy, his homestead is exempt, at least I think that is still true, right? Bottom line, is he should come out fine, especially if he is on high ground.

Ha. You more or less pegged my situation. Not sure about the Homestead exemption, but I don't see us remotely in danger of bankruptcy before we could sell the home anyway. We're inside the loop and on very high ground. I have zero worries about the real estate or the value of the investment, but then again, this also prevents me from making as many OTHER investments as I might make. Which is the real issue. But we looooove where we live and plan on being here for a long time. 

Edited March 28, 2019 by SydneyCarton

[SydneyCarton 48134]

9 hours ago, Dr. Beeper said:

Without knowing his finances, I’d bet with near certainty he’s okay. He may lose a job, but it’s a smart investment he’d make money on if he needed to sell, and his lifestyle is better being close in. 

If you were to offer me the choice between living in a $500K home with a 40 mile commute that may appreciate a few percent per year or may stagnate because there are newer subdivisions all the time, or stretching to get a $1MM+ home in town (good school district) that decreases my excess monthly cash, but is in ritzier more established neighborhood that is guaranteed to appreciate (over time, with patience), I’m choosing the latter every time. 

This of course assumes one has the means to do A or B, but most who gravitate toward the former won’t have the discipline to save/invest and earn the same rate the home in B would.  If you do, congrats, and have fun in Kingwood. 

Buying more home than what the average poster here thinks one “should” buy - for the right reasons - generally instills forced saving, discipline, and wealth more quickly than option A. 

Lol, I realize this isn't necessarily addressed to me, but just to clarify, the home we purchased was nowhere, NOWHERE near 1 million dollars. We are in an established neighborhood, but until about 3-4 years ago it was a gentrified one. But the neighborhood is definitely on the rise. A few teardowns and scratch builds and probably 6-8 renovations going on at any one time. But yes, even if I lost my job and income, I'd think we'd be able to sell the home relatively quickly.