Is this a common feeling in your early 40s? Feels like friends are getting rich and we're stagnant

[Anonymous]

Anonymous wrote:

Anonymous wrote:On DCUM, every time someone asks this question, multiple people say: "family money" because then they don't have to think about what they themselves could have done differently. I really don't think receiving large gifts or inheritances from family is as prevalent as you think. Minor downpayments are the most common form of help, but usually don't run into paying for the entire house.

Practically no one ever says: "stock market". Yet for us, that's been the sole driver of our wealth, and I suspect it contributes to the wealth of a lot of my neighbors in Bethesda, along with people who manage or sell successful businesses. We bought high tech stocks when they were cheap because we believed in the product and decades later can sell some stocks to meet our needs.

Naive.. It is inheritance. You do not live in that bubble so you don’t know. A lot of large inheritance is disbursed in installments over life and remainder upon death.

I remember in my 20s learning some parents were so rich they were gifting $60k/year to their kids to avoid inheritance tax when they die. Started when they were 18.

I was earning $50k as a salary that year.

[Anonymous]

Anonymous wrote:Op, this happened to me as well. I was happily going along and all of thr sudden everyone was buying crazy houses in expensive zip codes. I do happen to know for a fact that it is a combination of family money and tech sector jobs. It helped me refocus. I left my low paying job in Education a number of years ago now and doubled my salary. I work less and I am happier--I see my kids and enjoy my family. It also allowed my dh to take a paycut and get his dream job. So honestly, use this as an opportunity to look at your life and decide what you want. Yes, I will never live like them but I am really happy where I am.

You pivoted to tech from education and immediately doubled your salary? How? Help from friends in tech?

[Anonymous]

Anonymous wrote:It gets so, so much worse. My lifelong friends slow faded me along with their leap to big jobs and >$3M homes.

:// Can you describe how it gets worse? You mean friends move away to posher communities and you sort of fade from seeing them and making time? And of course your kids are in different schools. Before long a couple years have gone by and they have new friends closer to their new nicer homes and you’re an old friend? Or is it even worse in ways I can’t imagine? I imagine not being able to afford the same vacations and/or vacation homes. You’re basically blackballed from that stuff unless they give you a courtesy invitation once a year.

[Anonymous]

Age 35-45 for a lot of people is when -
Drs finish residency and specialty training.
Lawyers and consultants make Director / Partner - or know they won’t take that path.
PhDs finish post-docs and fellowships and get a well paying job.
GS15s decide to go to non-fed industry jobs.
Stock options vest,
Couples know how many kids they will have.
The highest daycare and nanny bills dwindle down to after school care and some camps.
The student loans are paid off.
Parents start dying and leaving inheritance.

If just a few of these things are true, it can seem like a family’s finances change overnight. In a 5 year span, our HHI went from $200k to $300k, my company’s stock doubled, and our childcare bills went from $50k/yr to $20k/yr.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It gets so, so much worse. My lifelong friends slow faded me along with their leap to big jobs and >$3M homes.

:// Can you describe how it gets worse? You mean friends move away to posher communities and you sort of fade from seeing them and making time? And of course your kids are in different schools. Before long a couple years have gone by and they have new friends closer to their new nicer homes and you’re an old friend? Or is it even worse in ways I can’t imagine? I imagine not being able to afford the same vacations and/or vacation homes. You’re basically blackballed from that stuff unless they give you a courtesy invitation once a year.

DP. That’s what my wealthier aunts & uncles did (I have a large extended family) as they got wealthy. Had very little interaction with them as I was growing up. They live in locales like Greenwich, Miami, Palo Alto etc.

[Anonymous]

Anonymous wrote:Age 35-45 for a lot of people is when -
Drs finish residency and specialty training.
Lawyers and consultants make Director / Partner - or know they won’t take that path.
PhDs finish post-docs and fellowships and get a well paying job.
GS15s decide to go to non-fed industry jobs.
Stock options vest,
Couples know how many kids they will have.
The highest daycare and nanny bills dwindle down to after school care and some camps.
The student loans are paid off.
Parents start dying and leaving inheritance.

If just a few of these things are true, it can seem like a family’s finances change overnight. In a 5 year span, our HHI went from $200k to $300k, my company’s stock doubled, and our childcare bills went from $50k/yr to $20k/yr.

Are you me? I didnt make as big a leap but went from $115k as individual contributor to team lead and $190k in under 5 years and bonuses on top. I could have doubled it if I left my company but our stocks and options also went way up and I'm vested now. And now down to 1 daycare payment instead of 2.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Yes, OP, this has been true for me. It can feel defeating at times, especially knowing this is likely to get worse as we get older. We try to just focus on ourselves, our financial goals, making smart choices for us. Staying of social media helps a lot. We've also started thinking about moving to a lower COL area in a few years when that will be a reasonable option due to jobs. I think where we are now, we're kind of on the bottom end of the range for our peer group in the DMV. We're still very fortunate and I don't want to lose sight of that, but it's hard when the people around you have a lot more. I think moving somewhere that our HHI and financial situation is more "average" would be beneficial for us on a lot of levels.

That's what's giving me anxiety. It's really, really hard to shake this feeling. You feel hopeless and overcome with dread.

What is there to feel hopeless about? Do you own a home and have a job? Retirement savings? That is all you need.

[Anonymous]

Starts in mid 30s. Facebook and Instagram (and Zillow if you so choose) leave nothing to the imagination.

[Anonymous]

Anonymous wrote:On DCUM, every time someone asks this question, multiple people say: "family money" because then they don't have to think about what they themselves could have done differently. I really don't think receiving large gifts or inheritances from family is as prevalent as you think. Minor downpayments are the most common form of help, but usually don't run into paying for the entire house.

Practically no one ever says: "stock market". Yet for us, that's been the sole driver of our wealth, and I suspect it contributes to the wealth of a lot of my neighbors in Bethesda, along with people who manage or sell successful businesses. We bought high tech stocks when they were cheap because we believed in the product and decades later can sell some stocks to meet our needs.

Huh? I said that. I have family money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:On DCUM, every time someone asks this question, multiple people say: "family money" because then they don't have to think about what they themselves could have done differently. I really don't think receiving large gifts or inheritances from family is as prevalent as you think. Minor downpayments are the most common form of help, but usually don't run into paying for the entire house.

Practically no one ever says: "stock market". Yet for us, that's been the sole driver of our wealth, and I suspect it contributes to the wealth of a lot of my neighbors in Bethesda, along with people who manage or sell successful businesses. We bought high tech stocks when they were cheap because we believed in the product and decades later can sell some stocks to meet our needs.

Huh? I said that. I have family money.

Self-made people are so weird because they are always trying to convince you that (1) they did it all not their own with no help and no luck, just hard work and smart, don't you dare discount any aspect of their success as timing or good fortune, but also (2) anyone could do what they did if they just tried a little.

And in reality, most wealth is generational and even many "self-made" people had head starts like private school, college paid for without loans, a chunk of change for a house downpayment or seed money for a business, lived with parents for some length of time when getting their start, etc.

Just weird resistance to the idea that somewhere between 70-90% of financial success is inherited.

[Anonymous]

"Family money" isn't buying those $3M houses for the most part. There are just not that many uber-wealthy people out there.

For most, "family money" means no college debt, wedding paid for, a $100K down payment provided, and maybe a $17K annual gift. That's nice but sure as hell isn't enough to land you in a $3M house unless you are also killing it professionally.

[Anonymous]

Anonymous wrote:I imagine some comes from cashing in stock market gains, stock options if they’re in the executive suite.

this is ignored all too often on this forum.

I follow the fatfire movement and so many people are just in high paying careers with amazing stick options.

One particular woman’s husband retired in his 40s because he was making 2 million a year in quant trading at a hedge fund.

i didn’t realize there were a good amount of careers where you can make over a million a year. It compounds over time especially if it is a dual income marriage where both partners are high earning.

[Anonymous]

Stock market for me - as in brokerage accounts on top of IRS max for retirement. No I didn’t start investing hundreds of thousands but I was consistently dollar cost averaging my biglaw bonuses while the rest of my class was trying to put every last penny into loans. I had loans too and paid them faster than required but realized early on that making 7% in the market would put me further ahead than rushing to pay off sub 3% loans.

[Anonymous]

Anonymous wrote:"Family money" isn't buying those $3M houses for the most part. There are just not that many uber-wealthy people out there.

For most, "family money" means no college debt, wedding paid for, a $100K down payment provided, and maybe a $17K annual gift. That's nice but sure as hell isn't enough to land you in a $3M house unless you are also killing it professionally.

This level of family money that you describe can make a HUGE difference. $100k down payment + some extra annual help plus no student loan payment - that’s a really big help getting started on the property ladder early in life. Over the long term that could very well be the difference between a $1m house and a $3m one, all other things being equal. (Not that a $1m house is something to sneer at - or feel despondent about - in my opinion)

[Anonymous]

Anonymous wrote:

Anonymous wrote:"Family money" isn't buying those $3M houses for the most part. There are just not that many uber-wealthy people out there.

For most, "family money" means no college debt, wedding paid for, a $100K down payment provided, and maybe a $17K annual gift. That's nice but sure as hell isn't enough to land you in a $3M house unless you are also killing it professionally.

This level of family money that you describe can make a HUGE difference. $100k down payment + some extra annual help plus no student loan payment - that’s a really big help getting started on the property ladder early in life. Over the long term that could very well be the difference between a $1m house and a $3m one, all other things being equal. (Not that a $1m house is something to sneer at - or feel despondent about - in my opinion)

This is true but you still have to be doing extremely professionally well. Most of the people in these homes are nowhere near a normal salary. Many people at my firm have made a ton through bonuses and stocks.