Ever wonder how others afford their lifestyle?

[Anonymous]

Anonymous wrote:

Anonymous wrote:First, don't rule out family money (meaning, from their parents)

Second, many, many people's lifestyle goes beyond their means. I think it's because with the ease of getting loans or using credit cards, and as America has been moving more to an entitlement culture, there is less delay gratification in the form of saving or living within one's means. For example, the % of luxury cars that people actually own, rather than lease, is miniscule. Going into debt is not seen as a bad thing like it was in earlier times.

Until very recently, I was living in a very wealthy community on the west coast. I'm sure I looked like everyone's poor cousin due to the car I drove and the clothes I wore, etc. When the economy tanked, a few of the super-high-living people we knew took a dive, and we realized that they had stretched themselves and their credit to maintain their lifestyle. It sort of dawned on us that we might actually be worth more than some of the fancier people we knew, because we are savers so don't have loans--it may not be a fancy car, but we own it outright…same with the house, etc.

So, OP, I guess what I'm saying is assume the flashiness of the lifestyle means that there is solid financial bedrock underneath. Especially if it doesn't seem to add up.

Well--yeah. We have very HHI $550k but also old cars, not biggest house on block, etc. We also aren't on Facebook. We have another home that most people don't know about . We don't broadcast trips or spending, etc.

I never wonder. Some of the richest people I know are the least flashiest, non-brand oriented. Some of the mist financially hurting--second mortgages, zero savings, maxed out credit cards have the nicest cars, flashy mc mansion and Christmas photo cards with their exotic vacays

So true!

Also, Facebook is the land of pretenders. I think most folks post stuff on there just to brag. If your life is so great, go LIVE it. Don't write about it.

[Anonymous]

We have a pretty modest lifestyle. Given that we have an average size house, average cars, no fancy vacations, I think some people might be surprised when we retire at 60 with no drop in standard of living.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There are plenty of people in this area who graduated with highly marketable degrees and have been earning good incomes since they were in their 20's. Some of these people are dual income couples and they can afford to have some extras..

Exactly. Even two modest incomes of $150k a year per person - which is pretty much one or two steps above entry level professional adds up to $300K. If even one of the parents "makes it" and goes into the $200-$300K range, suddenly HHI hits $400-$500.

huh? What planet are you living on? I mean seriously.
This type of thinking blows my mind.

No kidding. Even with an MA and years of experience in my (admittedly poorly paid) field, I've never made $50K, let alone $150K. My husband, who has a technical career and a PhD, doesn't even make $150K. He probably will someday, but that day is not soon. And yes, this is in DC. Talk about delusional.

Why would you spend years of lost income to get degrees that reward you so poorly? Unless you love what you do, it seems strange.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There are plenty of people in this area who graduated with highly marketable degrees and have been earning good incomes since they were in their 20's. Some of these people are dual income couples and they can afford to have some extras..

Exactly. Even two modest incomes of $150k a year per person - which is pretty much one or two steps above entry level professional adds up to $300K. If even one of the parents "makes it" and goes into the $200-$300K range, suddenly HHI hits $400-$500.

huh? What planet are you living on? I mean seriously.
This type of thinking blows my mind.

We pay our entry level (undergrad) employees about $80K. One level up from there gets you about $90 to $110K. Another level up gets you $130 - $170. Next level up gets you $200 to $250, next level jumps to $300 to $400, next level goes to $600 to $800. Most people hit $150 within 4 to 5 years out of undergrad. A lot get stuck there. Some don't. I have a 26 year old on my team who is in the $200 to $250 range. All pretty normal at my company..... maybe my company is weird.

yes, that is the norm. everyone makes $750K ....

I didn't say everyone does. A good 20% top out at the $150k spot, maybe 50% top out at 250, 90% at the next level....

Point is starting salaries for undergrads are solid and hitting $100k with 1 to 2 years of graduation isn't remarkable at all.

YES IT IS YOU MORON.

Seriously. Mother of god.

An entry level consulting job at Bain, McKinsey, bcg, Deloitte, pwc will pay $70 to $80 all in. A promotion or two - achievable in a 2 year timeframe will pay you $100k

Many engineering jobs start in the $70 range, plus bonus. Google, Facebook, amazon, yelp, linkedin, msft, will all pay well.

Working for basically any bank, Goldman, ML, Barclays, etc will all pay $80 to $100 even your first year.

A lot of industries and companies pay like this.

As I said, not at all remarkable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There are plenty of people in this area who graduated with highly marketable degrees and have been earning good incomes since they were in their 20's. Some of these people are dual income couples and they can afford to have some extras..

Exactly. Even two modest incomes of $150k a year per person - which is pretty much one or two steps above entry level professional adds up to $300K. If even one of the parents "makes it" and goes into the $200-$300K range, suddenly HHI hits $400-$500.

huh? What planet are you living on? I mean seriously.
This type of thinking blows my mind.

We pay our entry level (undergrad) employees about $80K. One level up from there gets you about $90 to $110K. Another level up gets you $130 - $170. Next level up gets you $200 to $250, next level jumps to $300 to $400, next level goes to $600 to $800. Most people hit $150 within 4 to 5 years out of undergrad. A lot get stuck there. Some don't. I have a 26 year old on my team who is in the $200 to $250 range. All pretty normal at my company..... maybe my company is weird.

yes, that is the norm. everyone makes $750K ....

I didn't say everyone does. A good 20% top out at the $150k spot, maybe 50% top out at 250, 90% at the next level....

Point is starting salaries for undergrads are solid and hitting $100k with 1 to 2 years of graduation isn't remarkable at all.

YES IT IS YOU MORON.

Seriously. Mother of god.

An entry level consulting job at Bain, McKinsey, bcg, Deloitte, pwc will pay $70 to $80 all in. A promotion or two - achievable in a 2 year timeframe will pay you $100k

Many engineering jobs start in the $70 range, plus bonus. Google, Facebook, amazon, yelp, linkedin, msft, will all pay well.

Working for basically any bank, Goldman, ML, Barclays, etc will all pay $80 to $100 even your first year.

A lot of industries and companies pay like this.

As I said, not at all remarkable.

Another vote supporting PP. PP didn't say "any" job - PP said professionals. My DH and I are both professionals as are a lot of our friends and I would say $150k per person is the norm. First year associates at a big firm make $160k right out of law school. Even those in the government because they are usually at the top GS level. We have been lucky to have a few nice bumps so we are currently at $550k HHI and although I know that is unusual for the country as a whole, it is not that unusual in the NoVa area.

[Anonymous]

No. I don't really speculate. for a couple reasons.

I don't really see anyone who is living the whole "package" I want. Everyone that I know has something that they would do differently if their finances were a bit different. My best friend is very wealthy, but even she does without some luxuries I know that she covets.

My second reason is that I've known a lot of people who were killing themselves to pay for homes, vacations, cars outside their means. What I saw was not what they could afford. When I was a teen, a friend and her siblings took a month-long trip to Europe with their mom. The day before they returned home, the dad killed himself. He tried to do it to look like an accident, but the investigation revealed suicide and they didn't get the life insurance. Bankrupt. House foreclosed. Goodbye private school and vacations.

[Anonymous]

Anonymous wrote:Here's how many people in DC appear much more affluent than they actually are: both parents work; they rent out the basement; they vacation with their parents/ILs or use their parents/ILs' vacation homes; they include massive renovation budgets in their mortgages; they max out both parties' credit cards; they hope for a good share of inheritance/salary boosts to cover their debts.

In other words, it's a great, big illusion they set up and hope others will believe.

ding ding ding! This.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Here's how many people in DC appear much more affluent than they actually are: both parents work; they rent out the basement; they vacation with their parents/ILs or use their parents/ILs' vacation homes; they include massive renovation budgets in their mortgages; they max out both parties' credit cards; they hope for a good share of inheritance/salary boosts to cover their debts.

In other words, it's a great, big illusion they set up and hope others will believe.

ding ding ding! This.

Nobody rents out their basement

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There are plenty of people in this area who graduated with highly marketable degrees and have been earning good incomes since they were in their 20's. Some of these people are dual income couples and they can afford to have some extras..

Exactly. Even two modest incomes of $150k a year per person - which is pretty much one or two steps above entry level professional adds up to $300K. If even one of the parents "makes it" and goes into the $200-$300K range, suddenly HHI hits $400-$500.

huh? What planet are you living on? I mean seriously.
This type of thinking blows my mind.

No kidding. Even with an MA and years of experience in my (admittedly poorly paid) field, I've never made $50K, let alone $150K. My husband, who has a technical career and a PhD, doesn't even make $150K. He probably will someday, but that day is not soon. And yes, this is in DC. Talk about delusional.

Why would you spend years of lost income to get degrees that reward you so poorly? Unless you love what you do, it seems strange.

We do what we're good at. Frankly, I'm not good at much. I have no aptitude for STEM-related work. Law is probably the only well-paid profession I would have had any hope of succeeding in.

I can think of just a few people in our large circle of acquaintances (ages ~30-early 40s) who certainly make more than $150K--lawyers and a couple of doctors. I'm not sure what circles one would have to be running in to think that such a salary is the norm, or that anything less is a poverty wage.

[Anonymous]

My wife and I (mid 30s) have many gov't lawyer friends who are priced out of the area and have to commute in from pretty deep.

As far as how people afford their lifestyle, as a few have alluded to already, there are a lot of creative ways to make ends meet, regardless of how far apart those ends happen to be. For those who can figure out how to live it up beyond their apparent means without going broke, more power to you!

Personally, I don't know of a single person in my extended circle who has money problems for things they have bought. The only money troubles I have witnessed relate to bemoaning not being able to afford something. Our HHI is about $150k but we simply wouldn't choose to live here if we didn't have help.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I hear this "they live beyond their means" statement all the time but in 20 years of living here I have not seen very many that do -- compared to the very many who have money from another source -- family, trust, inheritance, made it flipping homes, good investments, ect ect. There are also many families where the relatives pay the tuition for private also. "Millionaires next door" are everywhere around the DC area.

I don't see many people living beyond their means in the sense of going into debt to fund their daily lifestyle but I do see people spending all they make, buying a home that really is pushing their budget in terms of how much they can afford in mortgage - one family friend was so maxed out on her budget that when she was unhappy with her childcare arrangements (she had gone with the cheapest one she could find), she didn't have the $150/month flexibility needed to switch to another option that would have been better for her family. That's scary to me - you're $150/month away from being in debt? Another friend had gone with one of the most expensive childcare options in town and had stopped contributing to her retirement and put off starting the college fund in order to make that work in her family's budget - so clearly they were maxed out, spending all they had.

I think people living at the absolute edge of their budget are the ones most at risk of going into debt if anything were to arise - so maybe they can afford it this month but there's just one unexpected life event away from being in debt and currently, they don't have the flexibility to make monthly payments on any new debt they might take on. That's what I see a lot of and it's scary.

This is us, sort of. We put almost all of our current income into childcare, and it's stressful but worth it to us. But we're not at risk of going into debt because we saved all our money for years before having kids and have a good sized cushion in the bank.

[Anonymous]

We are one of those families who make people wonder. DH's Mom has paid for private school starting with the overpriced preschool. She gifts us $28k annually, deposited $120k into 529s for each child and we'll get a big trust when she passes.

That said, DH and I were raised with a work ethic and want to achieve for ourselves. We buy trips and tickets for the kids, but don't spoil them or leave them with a nanny. We expect good manners and to behave with character. I've worked part-time or SAHM since kids came along, but we travel a lot. I use my PT income to fund Europe, Caribbean, Disney, etc. That's the main thing people hint about (aloud to me and to mutual friends.)

PP mentioned knowing who the rich people are - yes, it's clear who has lived with wealth for more then a single generation. They love a bargain, don't pay full price when they don't have to, and keep their Mercedes for more than 5 years.

[Anonymous]

Anonymous wrote:We are one of those families who make people wonder. DH's Mom has paid for private school starting with the overpriced preschool. She gifts us $28k annually, deposited $120k into 529s for each child and we'll get a big trust when she passes.

That said, DH and I were raised with a work ethic and want to achieve for ourselves. We buy trips and tickets for the kids, but don't spoil them or leave them with a nanny. We expect good manners and to behave with character. I've worked part-time or SAHM since kids came along, but we travel a lot. I use my PT income to fund Europe, Caribbean, Disney, etc. That's the main thing people hint about (aloud to me and to mutual friends.)

PP mentioned knowing who the rich people are - yes, it's clear who has lived with wealth for more then a single generation. They love a bargain, don't pay full price when they don't have to, and keep their Mercedes for more than 5 years.

Wow, my IL's gave $10k into our kids 529s and I thought that was a lot! My parents don't have any money and never did!
I'm not sure you can claim the "work ethic and want to achieve for ourselves" when you accept that much from MIL. If you donated her money then said that I would buy it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We are one of those families who make people wonder. DH's Mom has paid for private school starting with the overpriced preschool. She gifts us $28k annually, deposited $120k into 529s for each child and we'll get a big trust when she passes.

That said, DH and I were raised with a work ethic and want to achieve for ourselves. We buy trips and tickets for the kids, but don't spoil them or leave them with a nanny. We expect good manners and to behave with character. I've worked part-time or SAHM since kids came along, but we travel a lot. I use my PT income to fund Europe, Caribbean, Disney, etc. That's the main thing people hint about (aloud to me and to mutual friends.)

PP mentioned knowing who the rich people are - yes, it's clear who has lived with wealth for more then a single generation. They love a bargain, don't pay full price when they don't have to, and keep their Mercedes for more than 5 years.

Wow, my IL's gave $10k into our kids 529s and I thought that was a lot! My parents don't have any money and never did!
I'm not sure you can claim the "work ethic and want to achieve for ourselves" when you accept that much from MIL. If you donated her money then said that I would buy it.

So let me get this straight...since they accept gifts for their children's education, they can't want to also achieve things for themselves or have a strong work ethic?
The laughs on this website just keep coming.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Here's how many people in DC appear much more affluent than they actually are: both parents work; they rent out the basement; they vacation with their parents/ILs or use their parents/ILs' vacation homes; they include massive renovation budgets in their mortgages; they max out both parties' credit cards; they hope for a good share of inheritance/salary boosts to cover their debts.

In other words, it's a great, big illusion they set up and hope others will believe.

ding ding ding! This.

Nobody rents out their basement

Except for all the people who've installed a kitchenette + full bath in their basement. You see plenty of basements up for rent on CL. You really haven't noticed? It's pretty common and can cover half the mortgage for a lot of folks.