Marketwatch: Why those earning 400k per year are barely scraping
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Yep. Sam (the author of this budget) is making a projection for a high earning couple living in the Bay Area.
He also assumes to many luxuries--private school, way too much eating out, and maxing out retirement. If you can max out retirement, stay current on bills, enjoy vacations, and have kids in private school--you are not, by definition, scrapping by.
A more realistic couple would live in the suburbs, have their kids a good public school, and not eat out like maniacs.
Wait I just noticed that gas went down for COVID lockdowns, but not the food bill. So they were either spending more than this when the restaurants were all open (and forgot to mention it), or they just order in takeout 4x a week.
My main takeaway is that your zip code is just as important as your salary. $400k in Manhattan isn't exactly balling. That's not even upper class for a family of four. But if you sell the home and take that money elsewhere you can buy a mansion in cash and live off your investment interest. That's why so many people are leaving CA and NY.
But pairing the words struggle and $400k was bound to earn them some free clicks. They know exactly what they're doing.
But pairing the words struggle and $400k was bound to earn them some free clicks. They know exactly what they're doing.
Look at this bullshit:
Fuck.
Off.
So in 25 years they have a paid off 2M house (that probably appreciated to 3-4M$), if their 40k invested compounded at 5% (low for the stock market) they have 1.9M$ invested. Nevermind that their income might have went up and they chose the periods where the kids are most expensive (except college).
How dare you want to lower these people's net wealth at 50 from 6M$ to 4M$ just to have universal health care! /s
And this is in CT one of the wealthiest states in the US, This town does border our state capital, but yeah it def would.
They are putting into a 529 for not just college, but "K-12" as well, which means they want to send their kids to a private school. SEND THEM TO PUBLIC SCHOOL
They spend $150 a month on phones for two adults only (they have a family plan but their two children are in preschool/day care, why do they need phones?) GET A CHEAPER PLAN
Final thing: they now apparently have "no money" for other expenditures...if you've already budgeted your 401K, 529, vacations, charity, and "entertainment"...guess what? YOU DON'T HAVE TO SPEND MONEY ELSEWHERE SO WHO CARES?
They spend $150 a month on phones for two adults only (they have a family plan but their two children are in preschool/day care, why do they need phones?) GET A CHEAPER PLAN
Final thing: they now apparently have "no money" for other expenditures...if you've already budgeted your 401K, 529, vacations, charity, and "entertainment"...guess what? YOU DON'T HAVE TO SPEND MONEY ELSEWHERE SO WHO CARES?
For 4 people including 2 kids(one still in diapers) who will grow out of and wear holes in things constantly?
That part is fine.
The real question is, if they only have $34 to spare each year and their only savings are the 401k and the kids college accounts, how did they save up 320k for the down payment?
Another day, another ridiculous article with insanely inflated monthly costs making very well off people look poor.
$200 a month on clothes.
$250 a month to charity.
$600 a month on vacation savings.
$2000 a month on food.
$1.6 million dollar mortgage costing $9000 a month
$200 a month on clothes.
$250 a month to charity.
$600 a month on vacation savings.
$2000 a month on food.
$1.6 million dollar mortgage costing $9000 a month
Does anyone, ANYONE actually look at these articles and come out thinking, "Yeah, they're right, these people are just barely getting along in life, man" because I've personally never seen it... despite similar articles always popping up once every several months. Like I honestly am baffled if anyone would take these in good faith
Often from equity selling a house. But again, not a real family.
Look at this bullshit:
Fuck.
Off.
Who spends $65 a day on food? My parents spent £400 a month on food when I was a kid and they had five mouths to feed.
Who spends $7200 a year on three weeks of vacation when two of them are at home? Is their idea of a road trip going to Disneyland?
I know people who earn less in a year than these guys earn in a month and they don't go crying about how little money they have to spend after bills. Why is it that the more money you have, the unhappier you seem to be?
I mentioned it earlier in the thread, but people like my brother read this shit and think the tax plans specifically target his family - that has 3 kids and makes under $150k a year. People like him believe they're rich and therefore the dems wanna come for their "money"
They also believe the will be millionaires eventually, so they feel personally attacked when the rich get taxed.
They're paying for cribs and baby clothes each year while paying for both child care and preschool at the same time for newborns?
These types of articles are completely tone def during times such as these. People have families (retired parents) and friends that actually are able to manage kids, so daycare spend is variable. $1.6 mill house is a variable, most people with families move out to the suburbs and buy $500k - $800k houses.
With $400k household income....you should not be scraping by. Also this cashflow statement isn't actually showing that, there's significant amount of retirement investments. It's just not liquid asset. These articles are so, so wrong.
With $400k household income....you should not be scraping by. Also this cashflow statement isn't actually showing that, there's significant amount of retirement investments. It's just not liquid asset. These articles are so, so wrong.
Again, I didn't say it was a good example. The housing and childcare appears to be the least egregious, which seems to be the complaint of most.
Lmao the amount of monthly spending is just ridiculously high all around. And three vacations a year? $250 a month on charity? $200 a month on kid stuff? Things like strollers and beds are one-time purchases, so putting those things in brackets is just trying way too hard to justify the spending.
Sure, if you spend like that then of course you feel poor on that income.
Sure, if you spend like that then of course you feel poor on that income.
They essentially are. Having more money will change the way the vast majority of people think and there aren't many exceptions to that. Look at how people in poverty but homed treat the homeless like aliens or how the wealthy would look at someone making 60K a year as being in abject poverty.
That's fair! I try to frequently remind myself that my wife and I are lucky, even if we don't make anywhere near what the family in this article does.
I guess that's at about the range where "personal responsibility" no longer applies. Pure delusion.
I'll be honest, the food expenses is the only part of this that seems mildly believable. Even back when I was working retail making 7.25 an hour I was regularly spending 20 - 30 a day on takeout meals. I racked up a lot of debt that took me 4 years to payoff, but it happened.
I think in the context of people who are extremely busy and don't really "think" about their money, ordering out is extremely common.
I have no idea how you would spend that much cooking at home though.
Sounds like these people have all of their needs covered and then some.
Yes, the cost of living has caught up with just about everyone, though.
Housing, healthcare, the cost of retirement, and education are all absurdly priced.
Yes, the cost of living has caught up with just about everyone, though.
Housing, healthcare, the cost of retirement, and education are all absurdly priced.
Yeah. Just anecdotal, but most people I know who are well-off (and who make less than $400k) live in the suburbs, have their kids in public schools (it helps that the schools in our district are some of the best in the country), and live in modest homes.
On the other extreme, I know people making far less than that who are leveraged to the tits, own multiple expensive cars, and generally live far beyond their means for seemingly no other reason than to give off the appearance that they're doing well for themselves.
Don't try to keep up with the Joneses and you can get very far on far less than $400k.
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It's called "living beyond your means," and if you're bringing in $400k a year and just living paycheck-to-paycheck, that's on you. You can get a good house for a lot less than $1.2M. You can have fun vacations without spending $7000 each year. You can easily entertain yourself for a lot less than $3600 each year.
My net income across all sources is at most about $20k/year right now, less than their net monthly income. I'm able to get to the end of the month with a fair amount of money to spare, because I live within my means. My house payment is $615/month, including taxes and insurance. I cook most of my meals instead of going out to eat, and I buy my groceries at Walmart. I don't buy designer clothes. I have a 2003 Ford Ranger completely paid for, title in hand, and my insurance is only like $60/month. I have also chosen not to have kids (for reasons other than finances), so that helps. It also helps that where I live has a relatively low cost of living, but still. If I was bringing in $20k each month instead of each year, I could live more than comfortably for the rest of my life.
My net income across all sources is at most about $20k/year right now, less than their net monthly income. I'm able to get to the end of the month with a fair amount of money to spare, because I live within my means. My house payment is $615/month, including taxes and insurance. I cook most of my meals instead of going out to eat, and I buy my groceries at Walmart. I don't buy designer clothes. I have a 2003 Ford Ranger completely paid for, title in hand, and my insurance is only like $60/month. I have also chosen not to have kids (for reasons other than finances), so that helps. It also helps that where I live has a relatively low cost of living, but still. If I was bringing in $20k each month instead of each year, I could live more than comfortably for the rest of my life.
They have jobs that pay that much but they're still expected to pay $7500 a year out of pocket for healthcare? That doesn't sound like a good employer healthcare provider.
"A middle-class lifestyle is defined as: owning a home, having two kids, saving for retirement, saving for college, going on modest vacations several weeks a year, and retiring in one's early 60s."
I grew up poor so idk but are the American middle class really saving all that much for college, maxing out their 401ks, and going on multiple vacations a year?
With all that saving and having money for entertainment and vacations, where's the struggling part?
I grew up poor so idk but are the American middle class really saving all that much for college, maxing out their 401ks, and going on multiple vacations a year?
With all that saving and having money for entertainment and vacations, where's the struggling part?