4 people who earn six figures and still feel broke

[Eug]

IMO any car over $20000 is essentially a luxury (unless you have specific need for it for your work). In fact, some may argue many cars under $20000 are just luxury items too.

For the record my car is $30000+, but nonetheless I always get irritated when someone driving a $40000+ or $60000+ car complains about being broke. My in-laws are short on cash but part of the reason is because they have a leased Audi A4. I had no use for my iPhone 4 but was seriously contemplating selling it to them instead of giving it to them despite their shortage of cash because they waste so much money on that car. But then I decided against it because they're my in-laws so I'll keep my mouth shut.

 

[echo4747]

meh. people who make a lot of money outspending what they make. boo hoo..

It really does not matter how much you make. what matters is how much you spend. I have seen a few people who make this much live paycheck to paycheck.

You got that right...

An old saying is " A penny saved is a penny earned" Actually a dollar saved; is like a dollar fifty earned.

 

[Sho'Nuff]

I make six figures, but in no way do I feel rich. Part of it comes with living in the Bay Area with it's very high cost of living, and the rest I think comes from the fact that my salary here is pretty average.

You don't feel rich because you are not rich. Making 6 figures today is not what it was even 10 years ago, much less 20. 100k in 1980 was a hell of a lot more money than it is now.

 

[BikeJunkie]

I don't think I would sleep well knowing my mortage is over $2k/month. The though of loosing my job would scare me to death.

I think this is where most middleclass'ers get themselves into the most trouble. Sure, the gadget purchases, car purchases, over-vacationing add up, but those are habits than can be changed and are easier to recover from financially. But purebeast mentioned the concept of being "house poor," and that's where the squeeze really takes its toll. Middle class neighborhoods are becoming very expensive to live in, and people aim for 2500+ sq ft (oftentimes 3500+) with all the trimmings (granite countertops, 3 car garage, finished basements, multi-level decks and paver patios).

Want to feel "free" again? Cut that crap out of the picture. It's hard, because if you want to live in a nice area, developers will do everything they can to force you into these monstrosities... but if you're picky and diligent, it can be done.

But like I said, I'm not even certain I want to buy another house. I hate losing the mobility when you're strapped to a mortgage. Even now, we're stuck here until we sell the house. I don't anticipate it being difficult, but it's still a huge hassle. And housing proved to not really be the investment it was back in the 70's and 80's.

I'm not at all ruling it out, and it's a primary consideration with respect to where we move, but the idea of renting is still in the back of my mind.

 

[ch33zw1z]

It doesn't matter how much you make if you still spend more than your income. Pretty simple math.

 

[JimKiler]

I wrote a paragraph trying to describe this one sentence. Welll done.

No, but you are still well off if you make six figures unless you have lots of dependents. That is what irks me about the IRS tax code, you can make 250K and if you have lots of kids or even a special needs kids you need all the money you can get yet the progressive tax penalizes you. Maybe i just hate how companies get to write off expenses but the same is not true for people.

 

[Mixolydian]

At least we all agree that spending is the major issue. :thumbsup:

 

[glenn1]

people need to stop having kids. problem solved

Too bad the parents of people who say things like this never took that advice. Besides, many parents' spending habits get more conservative after the children, not less. Spending gets redirected from eating out, wardrobe and shoes, and adult recreational pursuits into things for the children (clothes, food, childcare, etc). Many parents also wind up rationalizing their housing arrangements also, moving from downtown lofts selected for proximity to nightlife, into suburban detached homes selected for location in a good school district.

 

[Sho'Nuff]

IMO any car over $20000 is essentially a luxury (unless you have specific need for it for your work). In fact, some may argue many cars under $20000 are just luxury items too.

For the record my car is $30000+, but nonetheless I always get irritated when someone driving a $40000+ or $60000+ car complains about being broke. My in-laws are short on cash but part of the reason is because they have a leased Audi A4. I had no use for my iPhone 4 but was seriously contemplating selling it to them instead of giving it to them despite their shortage of cash because they waste so much money on that car. But then I decided against it because they're my in-laws so I'll keep my mouth shut.

I see similar situations a lot in my social circle (basically a lot of lawyers and low level execs). People who make a lot, but who spend a lot to "keep up with the Jones." For example, I know a patent attorney with a PH.D in chemistry who makes ~200k/year. He has a mountain of undergrad and law school debt, is divorced (ex wife totally f'ed him), and pays child support for his two kids. In sum . . . he has a shit ton of expenses (probably 10k/month). His salary lets him pay them, but he doesn't have the free cash to really enjoy the lifestyle that his salary brings to his coworkers. Nonetheless (and despite my cautioning), he bought a nice house (almost $600k) and a new Infinity G37 early last year. A few months ago I saw him and he was bitching and moaning about how he now has "no" money . . . life is unfair . . . etc. My response was essentially "no dumbass, you have no money because you made stupid decisions." I worded it nicer than that of course, but the message was the same.

Like others here, I am financially stable because my family lives way below its means. I drive an 11 year old toyota corolla and will likely drive it til it dies. My wife drives a nicer car (2009 Murano LE), but we paid it off long ago. The price of our house was 1.5x my income . . . etc. We are renovating it now because it needs it, but the stuff we are doing is "middle of the road" at best . . . e.g., going from home depot builders grade cabinets/fixtures to middle of the road stuff.

It is far easier to spend money then it is to save money. But if you are smart about saving, it does not have to be hard. All it really requires is some planning and some self control (to stick to the plan).

 

[sdifox]

No, but you are still well off if you make six figures unless you have lots of dependents. That is what irks me about the IRS tax code, you can make 250K and if you have lots of kids or even a special needs kids you need all the money you can get yet the progressive tax penalizes you. Maybe i just hate how companies get to write off expenses but the same is not true for people.

That is the part that irks me most.

 

[SAWYER]

If I had some of the incomes posted here where I live and how I spend money I would be loaded

 

[halik]

lol @ a $3k mortgage with $6k takehome. that right there is one of the idiots problem.

i make 6 figures myself, and my wife also works and makes good money, and we're well over the 6 figure mark. we just bought our first house which was $419k and our mortgage is around $2200. we looked at houses that were more expensive than this, but once calculating the mortgage we said f that, we'd feel house poor, and that was with less than a $3k mortgage. but we also planned for when we do have a kid and she isn't working, that we would be okay.

sounds like terrible planning purchasing a house with a $3k mortgage when your takehome is $6k. that is 50% of your takehome gone every month. no wonder he feels broke - he probably is.

but i definitely don't "feel rich" by any means.

Quoted for truf. Our household income is in the neighborhood of double of theirs we had a hard limit at 400K/7K taxes. We really wanted to spend in the low 300s, but it seems there was a lot more demand in that range (places getting bidded up way beyond reasonable $/sqft, essentially couldn't find any value buys), so I bumped it up a bit a got a place that appraised $10K over our buying price. No realtor + wrote an offer on the spot for the asking price if they include the garage they wanted extra $30K for.

If you overspend, you gonna feel poor... regardless of how much you make.

 

[JMapleton]

Let me guess, they all live in the LA or NY area.

 

[OCGuy]

It really isn't that hard.

I like to spend. Spendy spend spend....... :/

Bitcoins were quite the real savings-starter for some people.

 

[TwiceOver]

If our household were 6 figures, we'd be in really good shape. Not there, yet, but will be there in a few years probably.

We have set up our lives with the ultimate goal of being able to retire with dignity. We have one child and have no intentions of having him take care of us in any way when we get old. Our lives are set up in a way that, as the primary earner, if I lost my job and had to go back to factory labor we would be able to survive just fine off of a lower income and my wife's income. Our only debt is our house which really is only a few hundred more than what we would pay in rent. In a catastrophic situation, our retirement saving would have to take a back seat to living expenses.

I don't understand how people can go on and on thinking that they are never going to run into trouble and the next day will always be better than the last. It is also painfully clear that we need to be teaching economics/budgeting/etc as a requirement. How people can go off to college and rack up RIDICULOUS student loan debt and expect to live afterward is just beyond me. A $3k/mo student loan? you'd have to be making $200k right out of the gate to survive that monthly bill.

Of course it doesn't help that our government isn't helping by continuing to go further into insane levels of debt. $18T? Pfft, that's nothing.

Also, I see people ripping on Dave Ramsey. Bad advice, good advice, whatever. Some people, especially those with just plain stupid money problems, need that advice. I listen to his show from time to time and people call in with the dumbest of dumb money problems and his advice to them is basically what any moron off the street would say. Sometimes people just need to hear it from someone who they think is an authority.

Just remember $10k, $1M, $Whatever. If you're always living on the edge, someday you'll get burned.

 

[Naeeldar]

I think this is where most middleclass'ers get themselves into the most trouble. Sure, the gadget purchases, car purchases, over-vacationing add up, but those are habits than can be changed and are easier to recover from financially. But purebeast mentioned the concept of being "house poor," and that's where the squeeze really takes its toll. Middle class neighborhoods are becoming very expensive to live in, and people aim for 2500+ sq ft (oftentimes 3500+) with all the trimmings (granite countertops, 3 car garage, finished basements, multi-level decks and paver patios).

Want to feel "free" again? Cut that crap out of the picture. It's hard, because if you want to live in a nice area, developers will do everything they can to force you into these monstrosities... but if you're picky and diligent, it can be done.

But like I said, I'm not even certain I want to buy another house. I hate losing the mobility when you're strapped to a mortgage. Even now, we're stuck here until we sell the house. I don't anticipate it being difficult, but it's still a huge hassle. And housing proved to not really be the investment it was back in the 70's and 80's.

I'm not at all ruling it out, and it's a primary consideration with respect to where we move, but the idea of renting is still in the back of my mind.

I agree with you on the spending but on the flip side you really have to live in certain parts of the country to get reasonable housing costs. If you live in the Northeast the price increases in the last 15 years have been insane. I bought a 2 bedroom 2 bath condo for 160k. My parents house 20 years before that was 4 bedroom, garage, in-ground pool, for $140k.

Seriously giving thought to moving into the midwest.

 

[gorcorps]

If I had some of the incomes posted here where I live and how I spend money I would be loaded

No kidding

I could do magical things w/ just 110k.

 

[ch33zw1z]

No kidding

I could do magical things w/ just 110k.

no way, I would buy two Lexus SUV's and a bigger house, what could go wrong.

 

[Eug]

I see similar situations a lot in my social circle (basically a lot of lawyers and low level execs). People who make a lot, but who spend a lot to "keep up with the Jones." For example, I know a patent attorney with a PH.D in chemistry who makes ~200k/year. He has a mountain of undergrad and law school debt, is divorced (ex wife totally f'ed him), and pays child support for his two kids. In sum . . . he has a shit ton of expenses (probably 10k/month). His salary lets him pay them, but he doesn't have the free cash to really enjoy the lifestyle that his salary brings to his coworkers. Nonetheless (and despite my cautioning), he bought a nice house (almost $600k) and a new Infinity G37 early last year. A few months ago I saw him and he was bitching and moaning about how he now has "no" money . . . life is unfair . . . etc. My response was essentially "no dumbass, you have no money because you made stupid decisions." I worded it nicer than that of course, but the message was the same.

Yep. I make good money, and I spend a fair bit, but there are a lot of people who make about the same as I do that I work with that spend way, way more and then complain they don't have even more money.

P.S. I spend a fair bit on computers and tech gadgets. I once got criticized by my sister for doing that, but responded to her by saying that until she stops buying herself Lexuses or Mercedes or stops vacationing at 5-star resorts every year, she can STFU about that, esp. since my expenses on computers and gadgets combined after a decade is probably less than the premium she's paid on a single car vs. mine.

Like others here, I am financially stable because my family lives way below its means. I drive an 11 year old toyota corolla and will likely drive it til it dies. My wife drives a nicer car (2009 Murano LE), but we paid it off long ago.

I drive a 10 year old Prius, and my wife drives a 6 year old Yaris. However, the Prius is making some pretty weird noises. I'll have to take it in next week. We'll see what the repair cost will be. I guess I will have to decide if I want to keep this car going until my mortgage is paid off in 5-6 years or else splurge now for a new car.

The price of our house was 1.5x my income . . . etc.

You're lucky. Prices in Toronto are insane. Luckily I first bought my condo in the late 90s, and then upgraded to this house 6 years ago. Otherwise I wouldn't be able to comfortably afford my current home.

That said, if I were in that situation, I simply would buy a smaller house with lower expenses. I know some execs and professionals making good six-figure salaries living in semi-detached homes in decent but not exactly upscale areas. They didn't feel obligated to buy a huge detached home in the most expensive area of town.

 

[BikeJunkie]

I agree with you on the spending but on the flip side you really have to live in certain parts of the country to get reasonable housing costs. If you live in the Northeast the price increases in the last 15 years have been insane. I bought a 2 bedroom 2 bath condo for 160k. My parents house 20 years before that was 4 bedroom, garage, in-ground pool, for $140k.

Seriously giving thought to moving into the midwest.

You absolutely cannot beat the Midwest when in comes to housing and cost of living. We experienced the housing bubble too, but the gap between housing and wages didn't narrow nearly as much as it did in the rest of the country.

I grew up in a 3 bedroom house that my parents paid $60k for in 1979. They sold it for $120k in 1992. Today it's probably worth around $160k. $300k gets you a VERY nice house in some very nice suburbs. The prices that a lot of people are paying in similar suburbs in other parts of the country will be $500k+ for those houses.

Tons of employment opportunities, too. The only real downsides are the weather and lack of culture/diversity.

 

[sdifox]

Yep. I make good money, and I spend a fair bit, but there are a lot of people who make about the same as I do that I work with that spend way, way more and then complain they don't have even more money.

P.S. I spend a fair bit on computers and tech gadgets. I once got criticized by my sister for doing that, but responded to her by saying that until she stops buying herself Lexuses or Mercedes or stops vacationing at 5-star resorts every year, she can STFU about that, esp. since my expenses on computers and gadgets combined after a decade is probably less than the premium she's paid on a single car vs. mine.


I drive a 10 year old Prius, and my wife drives a 6 year old Yaris. However, the Prius is making some pretty weird noises. I'll have to take it in next week. We'll see what the repair cost will be. I guess I will have to decide if I want to keep this car going until my mortgage is paid off in 5-6 years or else splurge now for a new car.


You're lucky. Prices in Toronto are insane. Luckily I first bought my condo in the late 90s, and then upgraded 6 years ago. Otherwise I wouldn't be able to comfortably afford my current home.

That said, if I were in that situation, I simply would buy a smaller house with lower expenses. I know some execs making good six-figure salaries living in semi-detached homes. They didn't feel obligated to buy a huge detached home in the most expensive area of town.

except there isn't a whole lot of lower priced houses in Toronto. Average is like 540k

 

[manimal]

We make less in indiana than we used to in NYC and LA and SD. We used to have more at the end of the month because we dont have any car payments, Our house is payed off. We pay off the cards every month.

Then we got surprised by triplets and now we budget and make do just fine. Sure my wife bemoans not traveling like we used to but w/e I am happy at home with my family. Triplets are more expensive than bigger house and three car payments lol

 

[IndyColtsFan]

Tons of employment opportunities, too. The only real downsides are the weather and lack of culture/diversity.

The weather sucks, but as far as culture and diversity go, I figure that with the money I save, I can just go on nicer vacations to get that.

 

[Eug]

except there isn't a whole lot of lower priced houses in Toronto. Average is like 540k

Depends on the neighbourhood. Ours is very nice but isn't upscale, and local restaurants mostly suck. But yeah Toronto ain't cheap.

My mom moved from London, from a detached home, to a condo in Toronto.

 

[CPA]

That's because you're clueless and a hypocrite. I'm not going to demonize folks in the 1% who <gasp> want to keep more of what they've made when if I were in that position, I'd probably feel the same way. I'm not a 1%er by any stretch but still want to keep more of what I make.

Are there "evil" 1%ers out there who care for nothing but their own interests and themselves? Yes, but that happens at every economic layer. The amount of time you spend complaining about life would be better spent on training, education, or something of that nature.

This is actually a very good point that liberals, like Dave, seem to ignore, particularly when they are blathering about the "poor" "looking out for their best interests". We have a couple resident P&Ner's who use that line frequently.

Apparently, while this logic works for minimum wage earners and union members, it's not allowed for the 1%er's or "rich", Instead, they are required, in the liberal mind, to look out for others' best interest. It amazes me the double standards that are used in liberal logic.