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Marketwatch: Why those earning 400k per year are barely scraping
- Thread starter Deleted member 21339
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They didn't pick $400k out of the blue. It's totally to counter Biden's tax plan.
Really the lesson should be don't go outside your budget.
You can have kids and save. Hell I have 3 and we still manage to save ~30% of our gross income a month. But if I bought a house with a payment of 7k a month I don't think anyone would be surprised when I was out on the streets.
So basically the Middle Class as expected and reflects everything we know about Middle class families just spend a lot more so they end up with not a lot of money at the end of month
My family especially my dad was the same way they just end up having not much cash by the end of month because people like spending money when they have it especially with business people like my dad who do it for the sake of appearance even though they should like more frugal
Though my family isn't American but same general idea
My family especially my dad was the same way they just end up having not much cash by the end of month because people like spending money when they have it especially with business people like my dad who do it for the sake of appearance even though they should like more frugal
Though my family isn't American but same general idea
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i stopped at the 1.6 million dollar home
and don't give me a "ooh big city expense." my in laws are from nyc and bought a large 2 family house in nyc for half that and they'll rent out one side to subsidize the mortgage. 1.6 is obviously some over the top manhattan apartment or some mansion sized bullshit
also a highlander is one of toyota's most expensive cars
and don't give me a "ooh big city expense." my in laws are from nyc and bought a large 2 family house in nyc for half that and they'll rent out one side to subsidize the mortgage. 1.6 is obviously some over the top manhattan apartment or some mansion sized bullshit
also a highlander is one of toyota's most expensive cars
Tbh, I would probably have to be a billionaire to spend more than $1 million on a home.
I see $500k homes in some states that I'd consider a luxury. Plus I wouldn't want some overwhelmingly big house or mansion and I don't really care about living deep within NYC or SF. I'll gladly commute into the city. Living 2hrs from a dope city is a luxury within itself for me. I was shocked to see homes in Chicago, the 3rd or 4th largest city in the US, that were cheaper than homes in South Florida (although property tax on some of these homes can bring them up to SF and NYC prices).
The situation in SF is an absolutely fucking joke though.
I see $500k homes in some states that I'd consider a luxury. Plus I wouldn't want some overwhelmingly big house or mansion and I don't really care about living deep within NYC or SF. I'll gladly commute into the city. Living 2hrs from a dope city is a luxury within itself for me. I was shocked to see homes in Chicago, the 3rd or 4th largest city in the US, that were cheaper than homes in South Florida (although property tax on some of these homes can bring them up to SF and NYC prices).
The situation in SF is an absolutely fucking joke though.
Yep.
But they do end up with a lot of money at the end of the month, after having invested in their retirement and their kids future educational costs. The framing of this article makes it seem like they are barely scrapping by but they are in fact living very comfortably now while also preparing for their future.
?? You realize a $1m house with 20% down would only have a monthly payment of less than $3,500 right?
Where I live (Toronto) the average RENT for a two bedroom apartment is $3,000.
Yeah i noticed the savings thing
Fucking bullshit it's definitely a tax reaction
That's nice an' all but who has $400k just lying around for the downpayment on a house?
Normal folks can't afford that. I have a pretty good job with pretty good pay and the only way I'm saving up £235'000 is if I put away half my salary every month for the next ten years, which is totally unrealistic.
I think they are responding to my hypothetical, "if I was a billionaire," post.
There are 1,000 millions in 1 billion. You could afford a million-dollar house much sooner than that point obviously.
This is $50k more than that at $1.65 million and it's still about an hour to drive to SF from there without traffic. It's way worse than with traffic. It's 3 beds, 2 baths, only 1100sqft and a house that was built in 1956 so it's not even new.
3762 Carlysle Ave, SANTA CLARA, CA 95051 - 3 beds/2 baths
(MLSListings) 3 beds, 2 baths, 1147 sq. ft. house located at 3762 Carlysle Ave, SANTA CLARA, CA 95051 sold for $1,305,000 on Apr 8, 2016. MLS# ML81563973. Welcome Home! Popular Westwood Oaks Home * Just Steps ...
That's not a mansion by any means. When did your in-laws buy too? Here, within just the last 5 years my house has gone up nearly 50% in value over what I paid for it in the same market. So if someone bought before pricing went up course they could have paid less back then but that doesn't reflect on the market now. The market here is rapidly changing and for many outpacing the rate at which people can save.
This is $50k more than that at $1.65 million and it's still about an hour to drive to SF from there without traffic. It's way worse than with traffic. It's 3 beds, 2 baths, only 1100sqft and a house that was built in 1956 so it's not even new.
3762 Carlysle Ave, SANTA CLARA, CA 95051 - 3 beds/2 baths
(MLSListings) 3 beds, 2 baths, 1147 sq. ft. house located at 3762 Carlysle Ave, SANTA CLARA, CA 95051 sold for $1,305,000 on Apr 8, 2016. MLS# ML81563973. Welcome Home! Popular Westwood Oaks Home * Just Steps ...www.redfin.com
That's not a mansion by any means. When did your in-laws buy too? Here, within just the last 5 years my house has gone up nearly 50% in value over what I paid for it in the same market. So if someone bought before pricing went up course they could have paid less back then but that doesn't reflect on the market now. The market here is rapidly changing and for many outpacing the rate at which people can save.
Isn't that like walking distance to Apple HQ?
This is $50k more than that at $1.65 million and it's still about an hour to drive to SF from there without traffic. It's way worse than with traffic. It's 3 beds, 2 baths, only 1100sqft and a house that was built in 1956 so it's not even new.
3762 Carlysle Ave, SANTA CLARA, CA 95051 - 3 beds/2 baths
(MLSListings) 3 beds, 2 baths, 1147 sq. ft. house located at 3762 Carlysle Ave, SANTA CLARA, CA 95051 sold for $1,305,000 on Apr 8, 2016. MLS# ML81563973. Welcome Home! Popular Westwood Oaks Home * Just Steps ...
That's not a mansion by any means. When did your in-laws buy too? Here, within just the last 5 years my house has gone up nearly 50% in value over what I paid for it in the same market. So if someone bought before pricing went up course they could have paid less back then but that doesn't reflect on the market now. The market here is rapidly changing and for many outpacing the rate at which people can save.
I'm sorry but... this is ridiculous. This house is right next to the Apple headquarters and SO CLOSE to a ton of other companies on the valley. I don't even understand why you are trying to make a point in distance from the center of San Francisco when most people are not even working there, they are working in the surrounding areas in the Valley.
Here is a 350K house for the same features but actually an hour from where people work 60 Wilson Way #172, MILPITAS, CA 95035 | MLS# ML81797785 | Redfin (and way more ghetto but I guess that's the point we are discussing here right? People have to adjust. Also you could easily remodel the house for 100K)
Or here's one south for HALF the price with the same features 3581 Flint Creek Dr, SAN JOSE, CA 95148 | MLS# ML81814702 | Redfin and not ghetto.
I understand commuting has value but it's about the choices. The richest people I've met were living in CT instead of NY and just commuting because it saved them a crap ton of money.
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I really wish they didn't publish this and give Financial Samurai more traffic/attention. There are MUCH better personal finance blogs than this.
I've already said this, but you should not take anything this guy posts seriously. I would not be surprised if he was semi-trying to troll people for attention.
I've already said this, but you should not take anything this guy posts seriously. I would not be surprised if he was semi-trying to troll people for attention.
"The poors are sharpening their guillotines, someone write an article about how we're just like them."
TBH I never think about my 401k contributions as savings, though I guess it is.
If they're saving about 40k a year just by putting it in a 401k, then they're saving 10% of their pre-tax income, which isn't too bad.
What I think of savings is money I can put in a bank account that I can convert to real estate or other investments that aren't retirement but rather passive/portfolio income. They don't seem to have a lot of that.
If they're saving about 40k a year just by putting it in a 401k, then they're saving 10% of their pre-tax income, which isn't too bad.
What I think of savings is money I can put in a bank account that I can convert to real estate or other investments that aren't retirement but rather passive/portfolio income. They don't seem to have a lot of that.
Yes, it looks like it is. I didn't realize that at the time I saw that listing because I don't typically associate Santa Clara being close to Apple HQ. There's a corner of Santa Clara that approaches Cupertino and that just happens to be where the house is. Typically you think of Sunnyvale or San Jose as neighboring Cupertino and not Santa Clara.
As for it being close to Apple, see my response above. That said, for what you're getting, put it in perspective. That house is small and nowhere near the mansion that some people think the money buys. If you go for something that's modestly bigger, say in the 1500 to 1900 sqft range, that could just jump the price back into that range while not being close to Apple. Plus you have to factor in that the market is actually down in the Bay Area from the recent pandemic yet when the person bought, it probably wasn't down so the current market rates aren't totally accurate to the time that the person bought. 1100 sqft is small for a family of four. So even though it's higher than the average for that size, when you size up a bit, it just puts it back in range. Here's $1.6 million for 1654sqft and not close to Apple in Santa Clara:
2495 Ramke Pl, SANTA CLARA, CA 95050 - 3 beds/2 baths
(MLSListings) 3 beds, 2 baths, 1654 sq. ft. house located at 2495 Ramke Pl, SANTA CLARA, CA 95050 sold for $1,625,000 on Dec 16, 2020. MLS# ML81811361. OPEN HOUSE- Saturday Nov. 14th 2-4pm and Sunday Nov. 15th 1...
I also point out the distance to SF, because a lot of posts were focused on SF and this was to illustrate moving away from SF is still damn expensive. There are plenty of major companies in SF that people commute to from the South Bay.
That's a manufactured home though. That's not the same as a house. There's a reason those things are cheap.
Again, not a house. That's a townhouse, but at least it's not in the same league as a manufactured home.
I'd be scraping by if I spent all my money each month too.
Who am I kidding that's exactly what I do, the difference is I'm not blowing it all on expensive luxuries.
Who am I kidding that's exactly what I do, the difference is I'm not blowing it all on expensive luxuries.
$2 million home, paying for preschool & daycare (why both?) & k-12 (free everywhere in the US), $7200 road trip every year. $65/day for food. Yes, I;d say this family qualifies as "wealthy". If they wouldn't spend so much on luxuries, they wouldn't be spending all their money. That;s most definitely not a "middle class lifestyle".
But that's kinda the point. It is a huge luxury to buy a house in the Bay Area, something only wealthy people do, or people overspending or got lucky buying at just the right time. There are plenty of quality alternatives. I work in the Bay Area, I could choose to spend most of my income on rent and maybe even buy a house, I choose instead to live in a nice apartment building a 5 minute walk from work, took a bit of work and luck to get an affordable apartment here but I've done it three times so far (I even lived near that Santa Clara home for a year when I first moved here, had an amazing rent)
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I mean....someone has to live in those homes that are walking distance from those companies, and I think it's ridiculous that they should be reserved for millionaires. I think the premise of the article is preposterous, but as someone who lives in the bay area and has driving anxiety I think it sucks that even if I make it to the top of the food chain at the company I work for, I'm never going to be able to afford to live in a house that's walking distance from the office unless I'm literally an executive, and I'll always have to spend several hours a day commuting on the bus.
(Of course, the easier answer for me would be to just relocate to an office in another state, which I'll probably do instead, but I've lived here my whole life and have always dreamed of owning a home and it's downright depressing that I have to choose between the two)
Listing a manufactured home to prove houses are way more affordable in the Bay Area is a bad example though. It totally ignores the fact that you have to still rent the land it sits on and you're at the mercy of who owns the lot. You're much better off renting. My main point in all this is houses are super expensive here and you're not getting a mansion for that price; you're getting a small house that is likely at least 60 years old too.
You aren't getting a mansion, but is just as much a luxury as one. Buying a house in the Bay Area is an above-middle-class choice. As is many of the items on that list, like paying for k-12 schooling, $65/day food, etc.
I would do almost anything for 80k a year.
I would let ExxonMobil fuck me in the ass(with appropriate preparation) and tell me I'm a useless piece of shit every day if I could make 80k a year.
I would let ExxonMobil fuck me in the ass(with appropriate preparation) and tell me I'm a useless piece of shit every day if I could make 80k a year.
People are acting like they should just buy a cheaper and smaller house though. My point is people suggesting this don't realize these aren't big homes which is why I was showing what you get for that price here. A lot of people just don't realize what the market is like and how quickly prices rise here too. I'm not saying these people aren't well off or can't afford it; I'm saying the money doesn't get you what many picture in their head.
Sorry, but the tough decisions of the rich of how to spend all that money is what gets people talking.
Poor people articles, from what I've seen, are kind of the opposite. Like, "look how bad you are at managing your money, poor people".
They have tons of savings though so it's really family who has enough money to be extravagant and save a ton as well
The food and young kids does not compute. When I was little my grandma would heat up a can of spaghettios and I'd be good. Pop-Tarts and Nesquick could fuel you for half the day. You can get a shedload of stuff to eat with Amazon 15% off S&S every month.
Theres a lot of bullshit there but if you are MAXING OUT YOUR 401K OF COURSE YOU WONT HAVE MONEY LEFT
Nevermind the crazy ass tax returns they must get every year, and a job like that comes with crazy bonuses and stock options to boot. Fuck off.
Nevermind the crazy ass tax returns they must get every year, and a job like that comes with crazy bonuses and stock options to boot. Fuck off.
400k is 8x my salary.
Even at full tax burden, and assuming no change to my current lifestyle (I stay in my current location, same food buying habits, same entertainment spending habits, keep my current car which is a 2019 model I bought brand new last year, etc), I end up still making nearly 6x more my current salary. That'd be unanimously positive for me across the board.
Heck, if I could keep my current lifestyle and make this pay for just 1 year, it could be dramatically life changing. It could literally settle all my current debts in just a few months and leave the rest of the year with gained capital to invest and save and secure a lot of things I thought would be out of reach. And that's even if I paid the full tax liability with zero deductions or credits.
I could drop back to my current pay rate the next year and still feel significantly positive impact from just one year of this pay level.
But the people they talk about live in insanely high expense areas. So basically capitalism just screws you no matter what, unless you're part of the hyper rich. But hey, at least these folks can save and do aggressively save for retirement. I can't do that on 50k/year in my area. I'm not living paycheck to paycheck but I don't have enough left over to put aside for a secure retirement. These people choose to max out 401k contributions each and every month and probably do set aside for a nice warm blanket on a rainy day.
Even at full tax burden, and assuming no change to my current lifestyle (I stay in my current location, same food buying habits, same entertainment spending habits, keep my current car which is a 2019 model I bought brand new last year, etc), I end up still making nearly 6x more my current salary. That'd be unanimously positive for me across the board.
Heck, if I could keep my current lifestyle and make this pay for just 1 year, it could be dramatically life changing. It could literally settle all my current debts in just a few months and leave the rest of the year with gained capital to invest and save and secure a lot of things I thought would be out of reach. And that's even if I paid the full tax liability with zero deductions or credits.
I could drop back to my current pay rate the next year and still feel significantly positive impact from just one year of this pay level.
But the people they talk about live in insanely high expense areas. So basically capitalism just screws you no matter what, unless you're part of the hyper rich. But hey, at least these folks can save and do aggressively save for retirement. I can't do that on 50k/year in my area. I'm not living paycheck to paycheck but I don't have enough left over to put aside for a secure retirement. These people choose to max out 401k contributions each and every month and probably do set aside for a nice warm blanket on a rainy day.
Really need to get away from peoples' lack of financial literacy as an implicit defense for why those earning high salaries can't stretch their money.
If you're still feeling "broke" (LMFAO) on a salary of $400K you're spending your money wrong - period.
If you're still feeling "broke" (LMFAO) on a salary of $400K you're spending your money wrong - period.
I don't understand US wages. Is there an "average" wage or does it vary so much by location that it's meaningless?
Like, I live in the UK, outside of London so cost of living is less, work for a charity so I'm paid less than for the same job elsewhere, and my salary is £42k. I consider myself well off, given my work life balance and career path. But whenever I read threads on US wages, people talk as though $40k - $50k is poverty line.
Like, I live in the UK, outside of London so cost of living is less, work for a charity so I'm paid less than for the same job elsewhere, and my salary is £42k. I consider myself well off, given my work life balance and career path. But whenever I read threads on US wages, people talk as though $40k - $50k is poverty line.