If you make 500-600k range and are married with kids

[Anonymous]

Mortgage $7,400 - prepaying aggressively and should pay it off in full next year.

[Anonymous]

Mortgage - $6600
Daycare (2 Kids) - $3500
Nanny - $6500

Those are the largest monthly expenses, but of course there are many others...waiting until all 3 kids age out of daycare.

[Anonymous]

We've been at it for a little while, so our fixed expenses are quite low. Our mortgage is less than $2k, kids are in school with no daycare or nanny. So looking through our expenditures, most of it is associated with food, entertainment, clothing, and other spending. By my calculation, we save well over half of our income.

All our money is in buckets here or there based on investment type, rather than usage purpose. So we don't have any college savings, for example, with the assumption that we have plenty of investments to cover it and will convert some of it to cash if the kids have college expenses in excess of our cash flow.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We don't have a mortgage. Why do so many with such high incomes have a mortgage?

Just answering for myself here -- my mortgage is at 3.5% fixed interest. When you account for the mortgage interest deduction at my tax bracket, the interest rate is more like 2.4%.

Instead of using my excess funds to pay down this debt (and lock in a 2.4% real return), I have chosen (over the last 14 years or so since I took out a mortgage) to shove all of my excess funds into the stock market. It's beaten 2.4% by quite a wide margin.

I am focused on building wealth, not just eliminating debt.

+1

This is how the rich got that way and how they get richer. Take heed.

Love this! Hen you have wealth you don’t need a to be debt free just using and investing wisely so your money and net worth grows. Perk of low debt is to be credit worthy. Never again will we need our credit score , because we are be “loaning” our money. That’s how Banks make billions . For us, With the money we are not spending to repay them for our low 3.5% mortgage, we invest in corporate real estate. Most of ours will be paid off in less than 10 years and that rent will be income (tune of $20k a month). Paying off our house today will not pay us anything.



Another

[Anonymous]

Anonymous wrote:Mortgage - $6600
Daycare (2 Kids) - $3500
Nanny - $6500

Those are the largest monthly expenses, but of course there are many others...waiting until all 3 kids age out of daycare.

Wow...$10k a month on childcare! I realize we all want the best for our kids but that's got to hurt! Even if you send all three to private school you might actually spend less...

[Anonymous]

525k

Mortgage 2400
529 done
Daycare none
Investments (excluding 401k and IRA) 7k/mo

Other than that we spend like drunken sailors.

[Anonymous]

$600K Gross salary/draws + investment income

Taxes - $180k/year
Retirement/401k - $100k/year
Charitable contributions - $100k/year
Mortgage PI - $2900/month + $1000/month TI
Private school - $42k/year
Health insurance - $20k/year
Travel/vacation - $20k/year

[Anonymous]

525k
2400 PITI
No daycare
Public schools
College funded
Max 401k, plus max IRA, plus max HSA
15% of gross goes into ESPP (so approx $3,600/mo)
Invest ~8k in other brokerage accounts
Spend alot.

[Anonymous]

Anonymous wrote:We don't have a mortgage. Why do so many with such high incomes have a mortgage?

You ask Why? Because I'm good at math, that's why.

[Anonymous]

Anonymous wrote:525k
2400 PITI
No daycare
Public schools
College funded
Max 401k, plus max IRA, plus max HSA
15% of gross goes into ESPP (so approx $3,600/mo)
Invest ~8k in other brokerage accounts
Spend alot.

Aren't you limited to 25k per year for ESPP? Or is this for two people?

[Anonymous]

Anonymous wrote:

Anonymous wrote:We don't have a mortgage. Why do so many with such high incomes have a mortgage?

Just answering for myself here -- my mortgage is at 3.5% fixed interest. When you account for the mortgage interest deduction at my tax bracket, the interest rate is more like 2.4%.

Instead of using my excess funds to pay down this debt (and lock in a 2.4% real return), I have chosen (over the last 14 years or so since I took out a mortgage) to shove all of my excess funds into the stock market. It's beaten 2.4% by quite a wide margin.

I am focused on building wealth, not just eliminating debt.

We are in a similar situation. We have enough liquidate-able assets to pay off our house or buy another one cash. But under current conditions, we would almost be losing money to put it in our house. When we get a bit older, though, we may pay it off. My dad paid off their house as they approached their 60s just so us, his kids, had one less thing to worry about.

[Anonymous]

Anonymous wrote:Mortgage - $6600
Daycare (2 Kids) - $3500
Nanny - $6500

Those are the largest monthly expenses, but of course there are many others...waiting until all 3 kids age out of daycare.

You pay your nanny $78K/yr?

[Anonymous]

Anonymous wrote:

Anonymous wrote:We don't have a mortgage. Why do so many with such high incomes have a mortgage?

Just answering for myself here -- my mortgage is at 3.5% fixed interest. When you account for the mortgage interest deduction at my tax bracket, the interest rate is more like 2.4%.

Instead of using my excess funds to pay down this debt (and lock in a 2.4% real return), I have chosen (over the last 14 years or so since I took out a mortgage) to shove all of my excess funds into the stock market. It's beaten 2.4% by quite a wide margin.

I am focused on building wealth, not just eliminating debt.

Exactly this, we could pay off our house if we wanted, but it doesn’t make financial sense.

[Anonymous]

Anonymous wrote:

Anonymous wrote:525k
2400 PITI
No daycare
Public schools
College funded
Max 401k, plus max IRA, plus max HSA
15% of gross goes into ESPP (so approx $3,600/mo)
Invest ~8k in other brokerage accounts
Spend alot.

Aren't you limited to 25k per year for ESPP? Or is this for two people?

Two earners

[Anonymous]

Anonymous wrote:

Anonymous wrote:Mortgage - $6600
Daycare (2 Kids) - $3500
Nanny - $6500

Those are the largest monthly expenses, but of course there are many others...waiting until all 3 kids age out of daycare.

You pay your nanny $78K/yr?

Sounds like they are spending money on a nanny instead of investing. How foolish. Who needs daycaree AND a nanny?!