Ever wonder how others afford their lifestyle?

[Anonymous]

Anonymous wrote:You say that she is from a small town. Well, their cost-of-living is probably magnitudes less than ours.

Back home in the upper midwest, so many blue collar workers have second homes on lakes, multiple boats, atvs, jetskis, you name it. But just about everything in their day-to-day lives is cheaper than what we pay in DC. Housing, daycare, etc.

Also, some people just prioritize their money differently. They may take trips but don't spend money on the things that you do.

This. I have a close friend who lives in Boise and her gorgeous (and I mean stunning!) house cost a whopping $250k. Their salaries might not be DC, but two earners bringing in $75k/yr in Boise can do very well.

[Anonymous]

We used to go to Disney relatively frequently. It was because my dad's sales job would take him down there. He'd use his travel stipend to drive the family down instead of flying alone..

[Anonymous]

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

BINGO



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.


and BINGO again!



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.

[Anonymous]

OP -- it's the same way that during the gov't shutdown, many of my (lawyer) peers were complaining that they'd have to start clipping coupons, or would have to borrow money from their parents, or could not afford to go out to lunch; for a few of them, I could tell that these were not just comments, but they were truly worried. It made me wonder how professionals at a relatively high salary could be stretched so thin, but it's just about the choices they've made re houses, cars etc. -- they've chosen a certain lifestyle that requires a certain inflow, and if that is upset for even 2 weeks, that screws everything up.

[Anonymous]

Anonymous wrote:My contractor, plumber and handyman all have beach houses or lake houses (I don't). I think self employed folks or business owners who deal in cash often do better than the white collar professionals.

This is why we are fools to pay blue collars more than 25 an hour. Your best defense is to only hire the Spanish speakers.

[Anonymous]

I have an IL who comes from a wealthy family. All of the money is tied up in trusts, investments like real estate holdings, stocks, bank accounts. I know because these family members had a need for fast cash and turned to my parents for a short term loan rather than the go through their regular channels. The ILs keep a modest checking and saving account.

These wealthy family members very occasionally outwardly splurge, but their BIG spending patterns are sporadic enough that it looks like they've "saved up" for a family trip to Europe, a new luxury car, advanced degrees (without loans). Think of the (multi)millionaires next door.

[Anonymous]

I know people like this who just rack up expenses on credit cards. And don't even put money into 529s or anything. But mostly credit...

[Anonymous]

Maybe DH does make more than you realize. Or maybe there are grandparents on either side who help with the kids' private school and activities. But if none of these are true -- it could just be about keeping up with the Joneses. I know more than one couple who feels they have an "image" to uphold often due to their profession -- i.e. I'm a physician living in SC, people expect that I have 2 luxury cars, a mansion in a wealthy subdivision, and a second home. People honestly think that others think about them all the time and will say -- well Dr. H must not be doing well since they only have one Mercedes and their other car is a [snicker] Honda. More power to them . . . keeps the economy growing.

[Anonymous]

Trust fund. And many people in Washington have hobbies for careers ~ jobs that don't pay what is needed for their lifestyles.

[Anonymous]

I have a neighbor who makes probably as much as we do. She labels herself as a top 5%. Their mortgage is twice ours, kids are in private schools, they go on vacations all the time (expensive ones, not necessarily prestigious ones), they stay in high end resorts, have pets, get massages, send their kids to expensive camps, have maids, drive expensive cars...and they have very little saved for retirement and kids colleges. They both work but they spend every dime they make.

They frequently stress about their money situation, but have a deep sense of entitlement for their lifestyle. She is frequently disparaging about how my kids go to public schools etc. I let her have her jollies because while I know they do not have even 40 K cash on hand for a down payment, she does not know that we are the millionaires next doors.

In their case I know how they afford their lifestyle and frankly it scares me. They are living on the razor's edge. Good for them...not something I envy or want for us.

[Anonymous]

Anonymous wrote:Maybe their parents gave them some money? Or inheritance from a relative? Or from their business? Investments? Who knows. Who cares. Just be happy for them.

Who the heck said she wasn't happy for them?

[Anonymous]

Many blue collar workers I grew up with who had lots of toys (jet skis, campers, etc) either dealt in cash businesses and were tax cheats, or were spending settlement proceeds (car accidents, children's birth injuries, workers comp). I am related to these people, so...yeah. Also yes to the white collar salaries stretching farther.

[Anonymous]

They are probably living above their means and in debt.

[Anonymous]

I assume they are in debt up to their eyeballs.

[Anonymous]

Every.single.day.

My DH has worked his way up to a great salary. But we are so conservative wrt retirement, college funds, emergency funds, other savings, that often we don't "feel" the money. I have SAH friends who are open about what GS level their DH is (so you get a pretty good idea what they make) and yet their spending seems so far above ours even though DH is private sector and makes more than any GS 15 (but maybe not SES, not sure what they make.)

I don't get it. Guess I never will.