Upper and UMC Ppl: Do you Actually Know Anyone Living Beyond their Means?

[Anonymous]

Anonymous wrote:

Anonymous wrote:My BIL, 45 years old, single (live-in GF with her own (relatively low-paying, but more than enough to live on as a single person job with benefits), no kids, no intention of having kids, makes $350-$400K/yr.. He has told all of us (family) that he lives paycheck to paycheck, and even takes on OT work (he's a radiologist).

Why?

He bought a 2.5 million dollar home on the water on LI. It should be easily affordable on his income, but he knew nothing about real estate and is not the most common sensical person in the world. The house is 30+ years old, so of course has maintenance involved + a pool to be maintained year-round + landscaping to be maintained. He was completely shocked by the home upkeep costs. On top of that, he is embroiled in a battle with the city over the placement of a pool house on his property, an issue the previous owners even disclosed to him, but got him to agree to a tiny amount of money in escrow to wash their hands of it. He has paid a legion of realtors, consultants, and lawyers to deal with this, some of the same ones who gave him poor advice to begin with.

Does his house still look gorgeous? Yes. Did he just buy a 10K+ custom-made bed his GF really wanted? Yes. Does he still eat at expensive restaurants? Yes. Does he have any health insurance? No. Could he maintain any part of this lifestyle if he stopped working tomorrow? No.

So, he is constantly stressed about money, but he makes more than enough to cover the day-to-day. He keeps hoping the situation will improve, but every time it looks like one crisis is over, another seems to pop up.

Now, if he did lose his job, he does have a $2.5 million property he could borrow against, or sell. He would probably find a new job quickly. I agree with the poster who says most UMC/UC people have more ways to cushion a true crisis.

Before anyone asks, no one is asking him to borrow money. He literally cannot stop talking about his woes.

A radiologist without health insurance?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My BIL, 45 years old, single (live-in GF with her own (relatively low-paying, but more than enough to live on as a single person job with benefits), no kids, no intention of having kids, makes $350-$400K/yr.. He has told all of us (family) that he lives paycheck to paycheck, and even takes on OT work (he's a radiologist).

Why?

He bought a 2.5 million dollar home on the water on LI. It should be easily affordable on his income, but he knew nothing about real estate and is not the most common sensical person in the world. The house is 30+ years old, so of course has maintenance involved + a pool to be maintained year-round + landscaping to be maintained. He was completely shocked by the home upkeep costs. On top of that, he is embroiled in a battle with the city over the placement of a pool house on his property, an issue the previous owners even disclosed to him, but got him to agree to a tiny amount of money in escrow to wash their hands of it. He has paid a legion of realtors, consultants, and lawyers to deal with this, some of the same ones who gave him poor advice to begin with.

Does his house still look gorgeous? Yes. Did he just buy a 10K+ custom-made bed his GF really wanted? Yes. Does he still eat at expensive restaurants? Yes. Does he have any health insurance? No. Could he maintain any part of this lifestyle if he stopped working tomorrow? No.

So, he is constantly stressed about money, but he makes more than enough to cover the day-to-day. He keeps hoping the situation will improve, but every time it looks like one crisis is over, another seems to pop up.

Now, if he did lose his job, he does have a $2.5 million property he could borrow against, or sell. He would probably find a new job quickly. I agree with the poster who says most UMC/UC people have more ways to cushion a true crisis.

He's a doctor without health insurance? Find that hard to believe. They more than anyone else knows the risks of being uninsured and how costly care is. And plus why wouldn't his hospital/private practice group provide coverage like all other employers??

My BIL is also an anesthesiologist. He has some major health issues and they are contracts not employees. So private insurance would be very expensive. They have insurance through my sister's job.

Why would private insurance have to cost more than an ACA plan? I mean, he wouldn't get subsidies, but it looks like my BIL would pay $400/mo for bronze, $700/mo for Platinum, and could also get a catastrophic plan for less than $200/mo..

Our family plan (doesn't matter if we buy in on the healthcare.gov site or directly from blue cross) is $3200/month. There are times I've thought about dropping it and being uninsured. I could see if someone is close the edge on finances that it would be pretty easy to drop $40k in insurance premiums, especially if he's a doc and may get some kind of preferential pricing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My BIL, 45 years old, single (live-in GF with her own (relatively low-paying, but more than enough to live on as a single person job with benefits), no kids, no intention of having kids, makes $350-$400K/yr.. He has told all of us (family) that he lives paycheck to paycheck, and even takes on OT work (he's a radiologist).

Why?

He bought a 2.5 million dollar home on the water on LI. It should be easily affordable on his income, but he knew nothing about real estate and is not the most common sensical person in the world. The house is 30+ years old, so of course has maintenance involved + a pool to be maintained year-round + landscaping to be maintained. He was completely shocked by the home upkeep costs. On top of that, he is embroiled in a battle with the city over the placement of a pool house on his property, an issue the previous owners even disclosed to him, but got him to agree to a tiny amount of money in escrow to wash their hands of it. He has paid a legion of realtors, consultants, and lawyers to deal with this, some of the same ones who gave him poor advice to begin with.

Does his house still look gorgeous? Yes. Did he just buy a 10K+ custom-made bed his GF really wanted? Yes. Does he still eat at expensive restaurants? Yes. Does he have any health insurance? No. Could he maintain any part of this lifestyle if he stopped working tomorrow? No.

So, he is constantly stressed about money, but he makes more than enough to cover the day-to-day. He keeps hoping the situation will improve, but every time it looks like one crisis is over, another seems to pop up.

Now, if he did lose his job, he does have a $2.5 million property he could borrow against, or sell. He would probably find a new job quickly. I agree with the poster who says most UMC/UC people have more ways to cushion a true crisis.

He's a doctor without health insurance? Find that hard to believe. They more than anyone else knows the risks of being uninsured and how costly care is. And plus why wouldn't his hospital/private practice group provide coverage like all other employers??

My BIL is also an anesthesiologist. He has some major health issues and they are contracts not employees. So private insurance would be very expensive. They have insurance through my sister's job.

Why would private insurance have to cost more than an ACA plan? I mean, he wouldn't get subsidies, but it looks like my BIL would pay $400/mo for bronze, $700/mo for Platinum, and could also get a catastrophic plan for less than $200/mo..

Our family plan (doesn't matter if we buy in on the healthcare.gov site or directly from blue cross) is $3200/month. There are times I've thought about dropping it and being uninsured. I could see if someone is close the edge on finances that it would be pretty easy to drop $40k in insurance premiums, especially if he's a doc and may get some kind of preferential pricing.

He's single. He'd been looking at $700-800/month for the best insurance out there.

[Anonymous]

Anonymous wrote:Most people on DCUM would say I'm living beyond my means. I make $300k/year but bought a close-in house with a big yard that was too expensive ($4200/month). I max out retirement, but don't save a penny more than $18k/year. My 529s are low (my parents didn't pay for my college and I don't see the need; if the kids are smart enough they can get a scholarship, if not they can do ROTC). We have a house cleaner and a lawn guy and a dog walker. I pay for my parents' housing (including mortgage, utilities, upkeep) so that they can be the ones to watch our kids instead of sending them to a daycare. It's worth it to me -- I don't feel like taking my equity and downsizing to a smaller house with a longer commute. Everyone has different priorities.

How is the retirement looking?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:A non-equity partner at my spouse's law firm drives a Tesla X, has his tailor come to the office to measure new bespoke suits twice a year, and whose stay-at-home wife has more than one Berkin bag. Their two kids go to the same independent school as ours. I would guess they spend more than 3x what our family does at less than 1/3 the income. All that conspicuous consumption is about looking like he's a full partner and being taken seriously at the firm and with clients. I doubt that he feels like he has a choice about it.

Is your spouse not in biglaw? Bc at a biglaw firm, a non equity partner (for the firms that have 2 tiers of partner) make 300-400k/yr. Do you honestly think at 400k/yr, he can't drive a Tesla, buy a few $5000 suits per year, and buy the wife a few designer bags? Come on. Not everyone is "struggling" on 400k as DCUM would have you believe.

20-50 k for a Birkin bag on a 400k salary? Good recipe for financial disaster.

Yet everyone on DCUM acts like 25k for travel on 400k is perfectly fine and even necessary. Point is -- a non equity partner can afford this stuff and the PP is being overly jealous and insecure about the fact that that guy lives a life that's similar to her DH even though he's not even a "real" partner.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Most people on DCUM would say I'm living beyond my means. I make $300k/year but bought a close-in house with a big yard that was too expensive ($4200/month). I max out retirement, but don't save a penny more than $18k/year. My 529s are low (my parents didn't pay for my college and I don't see the need; if the kids are smart enough they can get a scholarship, if not they can do ROTC). We have a house cleaner and a lawn guy and a dog walker. I pay for my parents' housing (including mortgage, utilities, upkeep) so that they can be the ones to watch our kids instead of sending them to a daycare. It's worth it to me -- I don't feel like taking my equity and downsizing to a smaller house with a longer commute. Everyone has different priorities.

How is the retirement looking?

Looks good to me... I'll have two paid off homes in Nova, plus all the crap I put into 401k over the years, plus social security.

[Anonymous]

Anonymous wrote:Most people on DCUM would say I'm living beyond my means. I make $300k/year but bought a close-in house with a big yard that was too expensive ($4200/month). I max out retirement, but don't save a penny more than $18k/year. My 529s are low (my parents didn't pay for my college and I don't see the need; if the kids are smart enough they can get a scholarship, if not they can do ROTC). We have a house cleaner and a lawn guy and a dog walker. I pay for my parents' housing (including mortgage, utilities, upkeep) so that they can be the ones to watch our kids instead of sending them to a daycare. It's worth it to me -- I don't feel like taking my equity and downsizing to a smaller house with a longer commute. Everyone has different priorities.

Do you have an emergency fund? What does your debt look like outside of mortgage?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most people on DCUM would say I'm living beyond my means. I make $300k/year but bought a close-in house with a big yard that was too expensive ($4200/month). I max out retirement, but don't save a penny more than $18k/year. My 529s are low (my parents didn't pay for my college and I don't see the need; if the kids are smart enough they can get a scholarship, if not they can do ROTC). We have a house cleaner and a lawn guy and a dog walker. I pay for my parents' housing (including mortgage, utilities, upkeep) so that they can be the ones to watch our kids instead of sending them to a daycare. It's worth it to me -- I don't feel like taking my equity and downsizing to a smaller house with a longer commute. Everyone has different priorities.

How is the retirement looking?

Looks good to me... I'll have two paid off homes in Nova, plus all the crap I put into 401k over the years, plus social security.

Nice. Sounds like a good plan. You're building home equity, not frittering away your money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Most people on DCUM would say I'm living beyond my means. I make $300k/year but bought a close-in house with a big yard that was too expensive ($4200/month). I max out retirement, but don't save a penny more than $18k/year. My 529s are low (my parents didn't pay for my college and I don't see the need; if the kids are smart enough they can get a scholarship, if not they can do ROTC). We have a house cleaner and a lawn guy and a dog walker. I pay for my parents' housing (including mortgage, utilities, upkeep) so that they can be the ones to watch our kids instead of sending them to a daycare. It's worth it to me -- I don't feel like taking my equity and downsizing to a smaller house with a longer commute. Everyone has different priorities.

Do you have an emergency fund? What does your debt look like outside of mortgage?

My only debt is $1 million in mortgage debt. Don't worry, I'll be ok.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most people on DCUM would say I'm living beyond my means. I make $300k/year but bought a close-in house with a big yard that was too expensive ($4200/month). I max out retirement, but don't save a penny more than $18k/year. My 529s are low (my parents didn't pay for my college and I don't see the need; if the kids are smart enough they can get a scholarship, if not they can do ROTC). We have a house cleaner and a lawn guy and a dog walker. I pay for my parents' housing (including mortgage, utilities, upkeep) so that they can be the ones to watch our kids instead of sending them to a daycare. It's worth it to me -- I don't feel like taking my equity and downsizing to a smaller house with a longer commute. Everyone has different priorities.

Do you have an emergency fund? What does your debt look like outside of mortgage?

My only debt is $1 million in mortgage debt. Don't worry, I'll be ok.

So 401k is your emergency savings?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most people on DCUM would say I'm living beyond my means. I make $300k/year but bought a close-in house with a big yard that was too expensive ($4200/month). I max out retirement, but don't save a penny more than $18k/year. My 529s are low (my parents didn't pay for my college and I don't see the need; if the kids are smart enough they can get a scholarship, if not they can do ROTC). We have a house cleaner and a lawn guy and a dog walker. I pay for my parents' housing (including mortgage, utilities, upkeep) so that they can be the ones to watch our kids instead of sending them to a daycare. It's worth it to me -- I don't feel like taking my equity and downsizing to a smaller house with a longer commute. Everyone has different priorities.

Do you have an emergency fund? What does your debt look like outside of mortgage?

My only debt is $1 million in mortgage debt. Don't worry, I'll be ok.

So 401k is your emergency savings?

No, I have cash in an online savings account, about 80. But it makes me sweat to think that that money is just sitting there at like 1% interest. I really want to put it in an index fund but I resist the urge. I guess I like to gamble.

[Anonymous]

BTW it feels so good to tell strangers that I have a bazillion dollars in mortgage debt and I have no intention of fully paying for college. It's so refreshing because if I said this in real life people would recoil.

[Anonymous]

Anonymous wrote:

I agree with this. It's not very common that people making $300k+ are going into the red every month, but it's very surprising how many people at that level are only saving 10% or less of their income. If you make $100k, when you imagine making $300k you picture a nicer lifestyle and a very good nest egg in the bank to give you financial security and possibly enable early retirement. Then you see people making $300k and what they actually have is a similar 401k balance to the $100k person, a nicer car and a house 2 neighborhoods over with an additional bedroom. They're not on the verge of bankruptcy but they're also not a single step closer to financial independence or actual wealth, and that's the part that feels wasteful.

+1. You also see people with golden handcuffs--they make a great living, but they set their spending at that level. Not only are they not saving more, they are locked into mortgages and car payments and private school tuition that make downsizing really daunting. So, not beyond their means, but right up against them.

Also, I grew up in the construction industry, and there were a lot of developers who were making big money who were absolutely one bad deal away from bankruptcy. One of the people my family worked with had a huge custom house, expensive cars, horses, travel, etc....when he died (suddenly) it turned out that his estate was nearly worthless because of the amount of debt he was carrying. Not uncommon at all in that field.

And we have one good friend from really old money who lives off of a trust fund (big enough to pay for multiple homes, lots of travel, etc.)...her brother, with the same amount in trust, ended up flat broke because of his spending. So it's not just "new money" at risk of losing it all.

What you've described sounds like a lot of people on DCUM!

We have friends who make about double what we do (400k) to our 200k..they are dinks and we have kids....and they have about the same amount in savings/retirement funds as we do. We live simply and they have more expensive taste in every area-theyve renovated every area of their house, take super nice vacations, dine out at nice places, have 2 new luxury cars, etc. They are now planning for kids and anticipate having a live-in nanny and doing private school. Their neighborhood is more upscale and there is more of an emphasis on keeping up with others. Theyre not living beyond their means...they're just what the millionaire next door describes as "under-accumulators of wealth" based on their salaries.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Most people on DCUM would say I'm living beyond my means. I make $300k/year but bought a close-in house with a big yard that was too expensive ($4200/month). I max out retirement, but don't save a penny more than $18k/year. My 529s are low (my parents didn't pay for my college and I don't see the need; if the kids are smart enough they can get a scholarship, if not they can do ROTC). We have a house cleaner and a lawn guy and a dog walker. I pay for my parents' housing (including mortgage, utilities, upkeep) so that they can be the ones to watch our kids instead of sending them to a daycare. It's worth it to me -- I don't feel like taking my equity and downsizing to a smaller house with a longer commute. Everyone has different priorities.

Do you have an emergency fund? What does your debt look like outside of mortgage?

My only debt is $1 million in mortgage debt. Don't worry, I'll be ok.

So 401k is your emergency savings?

No, I have cash in an online savings account, about 80. But it makes me sweat to think that that money is just sitting there at like 1% interest. I really want to put it in an index fund but I resist the urge. I guess I like to gamble.

If you liked to gamble, then you would have it in the market. You like money so much, but don't seem to know how to get more outside of your w2 wages. I have a w2 wage income of ~450k and on some days see my fidelity account maks gains of 3k a day, sometimes more, sometimes less, but at the end of the year, i have done absolutly nothing and have increased my investment income by half of my w2 income. At 40 yrs old i can do the math and see a day that i can live on investments and not even touch my 401k.

Do we go without? Absolutly not, but i also dont want to be a wage slave much longer and definitely don't want to be working much more than 12 more years.

We do have one thing in common. I dont have to save for my kids college either. My money did all the work for me, no scholarship needed.

[Anonymous]

Anonymous wrote:I have a friend who I think lives outside her means.. but I don't know.

What I know is that within a year or two she went from living a modest but comfortable life to owning a massive, beautiful home decorated straight out of a Pottery Barn catalog. She never wears the same designer clothes, has fancy cars and a fancy boat, vacations regularly to Bermuda, and became a stay at home mom. Her kids go to private school, and wear designer/trendy clothes, plus she has a part time nanny available whenever she needs a sitter, and just seems to have a lot of additional wealth. Her husband has a good job- but the instant change in a short period of time makes me wonder.

That being said, my gut instinct with them is that the additional funds are coming from a trust/inheritance that I am unaware of. I still think they went from zero to 180 on the spending... way too fast... but I have to believe their is a source of income beyond the husbands salary.

+1. I know two families exactly like this.