UMC deep in the negative

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Three of my relatives graduated medical school and worked off their debt in two years, Two cousins and 1 spouse, rented my basement apartment and lived pretty frugally for two years and worked off approx 200K of loans each. In fact, they lived more frugally when they were in medical school. In retrospect the two years went by fast. I think they also were so busy that it would not have mattered if they lived in a more expensive place. They were home mostly to sleep and do chores.

+1. This is what you have to do.

In comparison, we make 450k HHI and we stayed in our 800k house with an old car so we could pay 150k off in loans.

Oh no - an $800k house? Wow - was the neighborhood pretty safe at least? That must have been so hard!

Make fun of me alll you want. ON our salary, OP would have a $1.2 million house and a newish car or two. AND student loans.

I'm making fun of the way you described yourself as basically slumming in your $800k house.

Never stop DCUMming, DCUM

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Three of my relatives graduated medical school and worked off their debt in two years, Two cousins and 1 spouse, rented my basement apartment and lived pretty frugally for two years and worked off approx 200K of loans each. In fact, they lived more frugally when they were in medical school. In retrospect the two years went by fast. I think they also were so busy that it would not have mattered if they lived in a more expensive place. They were home mostly to sleep and do chores.

+1. This is what you have to do.

In comparison, we make 450k HHI and we stayed in our 800k house with an old car so we could pay 150k off in loans.

Oh no - an $800k house? Wow - was the neighborhood pretty safe at least? That must have been so hard!

Make fun of me alll you want. ON our salary, OP would have a $1.2 million house and a newish car or two. AND student loans.

The bolded is true though. OP thought if she and her DH attended the right kind of graduate school they would be entitled to a certain lifestyle, regardless of whether or not basic math supported that or not. She did not get the sympathy she was hoping for which is why she has not come back.

OP said she is living in a (if i remember right) $400k townhouse. That sounds pretty reasonable, to me. She and her family have to live SOMEWHERE and while they could all move into someone's basement or rent a studio apartment for the next 20 years, a $400k townhouse doesn't seem outlandish.

They have loans. Lots of people have loans. They have kids and loans. That's not so uncommon, too. They have a nice salary, and will eventually pay down the loans. They just will be stressed about money and question their choices until those loans get more manageable. It's probably take a decade for that to happen. Hopefully their salaries will go up during that time, and they can squirrel away all the money they can.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Three of my relatives graduated medical school and worked off their debt in two years, Two cousins and 1 spouse, rented my basement apartment and lived pretty frugally for two years and worked off approx 200K of loans each. In fact, they lived more frugally when they were in medical school. In retrospect the two years went by fast. I think they also were so busy that it would not have mattered if they lived in a more expensive place. They were home mostly to sleep and do chores.

+1. This is what you have to do.

In comparison, we make 450k HHI and we stayed in our 800k house with an old car so we could pay 150k off in loans.

Oh no - an $800k house? Wow - was the neighborhood pretty safe at least? That must have been so hard!

Make fun of me alll you want. ON our salary, OP would have a $1.2 million house and a newish car or two. AND student loans.

The bolded is true though. OP thought if she and her DH attended the right kind of graduate school they would be entitled to a certain lifestyle, regardless of whether or not basic math supported that or not. She did not get the sympathy she was hoping for which is why she has not come back.

OP said she is living in a (if i remember right) $400k townhouse. That sounds pretty reasonable, to me. She and her family have to live SOMEWHERE and while they could all move into someone's basement or rent a studio apartment for the next 20 years, a $400k townhouse doesn't seem outlandish.

They have loans. Lots of people have loans. They have kids and loans. That's not so uncommon, too. They have a nice salary, and will eventually pay down the loans. They just will be stressed about money and question their choices until those loans get more manageable. It's probably take a decade for that to happen. Hopefully their salaries will go up during that time, and they can squirrel away all the money they can.

Um OP has a VERY high amount of loans. $575k!!! Not an average amount at all.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Three of my relatives graduated medical school and worked off their debt in two years, Two cousins and 1 spouse, rented my basement apartment and lived pretty frugally for two years and worked off approx 200K of loans each. In fact, they lived more frugally when they were in medical school. In retrospect the two years went by fast. I think they also were so busy that it would not have mattered if they lived in a more expensive place. They were home mostly to sleep and do chores.

+1. This is what you have to do.

In comparison, we make 450k HHI and we stayed in our 800k house with an old car so we could pay 150k off in loans.

Oh no - an $800k house? Wow - was the neighborhood pretty safe at least? That must have been so hard!

Make fun of me alll you want. ON our salary, OP would have a $1.2 million house and a newish car or two. AND student loans.

The bolded is true though. OP thought if she and her DH attended the right kind of graduate school they would be entitled to a certain lifestyle, regardless of whether or not basic math supported that or not. She did not get the sympathy she was hoping for which is why she has not come back.

OP said she is living in a (if i remember right) $400k townhouse. That sounds pretty reasonable, to me. She and her family have to live SOMEWHERE and while they could all move into someone's basement or rent a studio apartment for the next 20 years, a $400k townhouse doesn't seem outlandish.

They have loans. Lots of people have loans. They have kids and loans. That's not so uncommon, too. They have a nice salary, and will eventually pay down the loans. They just will be stressed about money and question their choices until those loans get more manageable. It's probably take a decade for that to happen. Hopefully their salaries will go up during that time, and they can squirrel away all the money they can.

Um OP has a VERY high amount of loans. $575k!!! Not an average amount at all.

Sure - yes, that's true. They will be paying more for longer than most people. But it's too late to go back in time and not take the loans.

Basically the answer to OP's question is that it's going to take a very long time to feel UMC on a $220 HHI because of the loans.

[Anonymous]

Op, I think you need a lucrative side hustle. I paid down my loans when I got a consulting gig on the side that paid 10k a month

[Anonymous]

OP, I'm nearly 40 and the one thing I can tell you is that the years fly by so quickly in your 30s and 40s. And they go by more quickly with each passing year.

The reason I mention this is that it's so easy to slip into the rut of a life that works, but isn't particularly interesting or what you wanted, but as long as there's a roof over your head, you're paying your monthly payments and putting food on the table and allowing yourself a few small luxuries, it's easy to just coast and the years slip away one by one. That's fine. That's what many if not most people do. If you stick with what you have, you will eventually pay off your loans. Although by the time it gets to the point where the loans won't feel like a burden anymore, you'll have college bills! And then retirement to save for. You will never feel comfortably off, and always just managing, but it's not a terrible life.

The other thing I want to tell you is that the older you get, the harder it is to change careers or move into more meaningful occupations. If you're on a certain career and income trajectory, the longer you persist with it (and the older you get within that trajectory) the much harder it is to jump up into higher paying trajectories.

If you want more financial security and more money in your life, you need to make those decisions now. This means paying off your loans as quickly as possible. You can try by being superfrugal (living off no more than 50k a year) for the next few years. Hey, many people manage to do that. And the years will go by more quickly than you can imagine.

Or at least one of you bites the bullet and looks for a much higher paying job. It'll probably be your DH. He might not like the job but the money that comes with it will help you out a lot, financially. You and your husband likely made a mistake in going for softer but more rewarding jobs out of law school instead of higher paying but less satisfying jobs. Had you done the latter first and stuck with those high paying biglaw or corporate law jobs for five years, you'd likely have paid of your loans by now and put aside a sum for a decent house, and then could downsize to the 200k HHI and be happy. It's not too late for one of you to get on the corporate track now but you need to do it sooner rather than later.

When DH chose his career track he was focused on the money. He is in the corporate world and is quite good at what he does but he always followed the money. Based on what he'd observed when he was young and what others told him, if he put in ten years of dreary grunt work and long hours and work travel while chasing after opportunities, then he'd come out the other side highly placed and ironically, with the seniority that would allow him to slow down a bit. And that's what's happened. He worked very long hours and at roles that he found tiresome and for bosses he hated, but now he's 40 and financially successful and in a senior role that gives him a lot of authority and enjoyment. But he put in the grunt and dreary years first. Pain first, rewards later. It's the same with other examples listed here, the graduating from med school and living superfrugally to pay off the huge debts within a few years. Now they can enjoy life. You might be afraid of the choices now, but where do you want to be five years from now? In the same place? Or someplace better? If the latter, then you know what you need to do.

[Anonymous]

^^^^

This this this

I’m in my mid-40s and this is so true. Especially, to put in the pain now, get the higher paying job. I just watched a 60 year old colleague get pushed out. Assuming you can work uninterrupted until 65 is not an option for most people.

The poster is also right that kid’s college and retirement will be goals that you’ll have a harder time meeting later than now. But for now those loans are complete insanity.

[Anonymous]

8:06 Great Post

[Anonymous]

Except most lawyers who come out on the other side of that hard lifestyle are divorced and/or never see their children, stressed out and maybe a host of health issues to boot and are just a paycheck for the family. If you want to miss your children grow up to chase the almighty dollar then by all means. But, don’t fantasize the grind without mentioning the reality. Every single partner is divorced at my firm except for one. And she is simply not around enough one way or the other.

[Anonymous]

Anonymous wrote:Except most lawyers who come out on the other side of that hard lifestyle are divorced and/or never see their children, stressed out and maybe a host of health issues to boot and are just a paycheck for the family. If you want to miss your children grow up to chase the almighty dollar then by all means. But, don’t fantasize the grind without mentioning the reality. Every single partner is divorced at my firm except for one. And she is simply not around enough one way or the other.

But aren’t they legal jobs that pay more than 100k without working in big law?

I make over 200k in DC and don’t even have a graduate degree. Nor do I work long hours.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How old are you? Is this another one of those.. "I make x figures and I should be able to live like Y like those other folks (who happen to be like 15 years older than you"?

I'm 49, DH is 54. We both grew up lower/middle class, but neither of us have student loans because we worked our way through college, and I commuted to college from home. Those were the things I gave up to not have a loan when I graduated.

I lived below my means even when I started making six figures almost 20 years. That's how we were able to afford a nice house with a smallish mortgage.

If you are under 40, you have a ways to go. Yes your income is high compared to the rest of America, but not compared to the DC area. That's the problem. We used to live in an area more expensive than here.

Set your expectations to what is reasonable. Otherwise you will always feel like you're just keeping your head above the water rather than inching towards the coastline.

I am as you describe under 40. Unfortunately I had no opportunity to make decent income until after I took out my student loan debt - the IT industry went into full outsource mode just as I was ready to move up from my entry level position. You are right that there is always another $100k income I need to grasp at. Unfortunately my field is not that profitable in the private sector.

The IT field did not go full outsource mode. There are plenty of jobs and companies hiring. You either don't have the skill level or qualifications needed or are not trying hard enough.

I agree. Both DH and I are in IT and there is so much money to be made, it is obscene. I dont even have a degree and am on track for 300k this year. Dh makes a bit less, but had ridiculous RSUs.

NP. Lost DH recently and have a child. Quit my job when son was born a few yrs ago. I have a degree and left at $105k. Now not sure how much I will make. Can you share what you do? What training helped?

[Anonymous]

Anonymous wrote:Your mortgage debt does not lower your net worth if it, you know, comes with a house.

Your mortgage absolutely lowers your net worth. The value of your home raises your net worth. The difference between the two, is your positive (or negative) equity which contributes to, you know, your net worth.

[Anonymous]

Anonymous wrote:My jaw literally dropped when I read 575,000!!! How on earth???

Two law school bills. Did you know just the tuition for many private law schools is $55k-70k per year, three years? Even a public school like Berkeley charges more than $50k a year. It made the news years ago. Plus if you lived in a big city the housing costs were high. I know someone 8 years out of GW Law still repaying $300k. He qualifies for the public interest whatever program and is currently only paying 1/6 of what he should be without the program. He will stick with the government 10 years until the balance is forgiven.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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Anonymous wrote:OP needs to be more specific. What is the house worth and what did he pay for it? What's the exact student loan amount? I don't think the OP has any idea of what "net worth" means. We need to do the math for her.

Thanks for the assistance. $310,000 mortgage and "estimated" value of $425. Combined student loans are $575,000.

Ok then. Your net worth is not negative $700kt. It's negative $460k. You have $425k in assets (your home) and $885k in liabilities (your mortgage and your student loans). Did you and your spouse attend lower ranked law schools? Why do your jobs pay so little if you paid so much for the degrees?

We went to 2nd tier schools with major application flaws that meant no scholarship such as low undergrad GPA or LSAT.

You felt entitled to a “high-falutin’” education that you could neither afford nor earn through merit? Wow.

but.... but... Obama said everyone who wanted to go to college should. I was entitled to law school just because I WANTED to go but the MASSIVE debt just wasn't my fault and SHOULDN"T be MY responsibility!!!!

[Anonymous]

Anonymous wrote:

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Anonymous wrote:What's the balance of your retirement account?

Lower six figures, combined.

Then you subtract that from your liabilities and you are in even less debt than you think. You're not doing that badly, OP.

How could someone get through law school and not understand the basics of net worth? I took Accounting I as a freshman and learned all about assets minus liabilities as an 18-year-old.

WOW! I never took an accounting class and knew how to live within my means and net worth.

No wonder lawyers are evil sharks!