Ever wonder how others afford their lifestyle?

[Anonymous]

I don't discount the fact that lots of people here -- including many posting here -- have trust funds, family help, inheritance, or had income in the past that really provides a huge cushion for them -- such as having bought and sold a business or apartment or whatever. But I don't find that to be as true when you're talking about people in "middle America" -- which is what OP seems to be referring to. I'm not saying it isn't possible, but it is just more likely when the family has lived in a higher income area for a long period of time because that family wealth has accumulated over time.

OP - don't discount people's need to maintain a "lifestyle" to show others.

[Anonymous]

All I know and care about is I go to sleep at night never worrying about my next meal, being homeless or sweating bills I make.

[Anonymous]

Anonymous wrote:All I know and care about is I go to sleep at night never worrying about my next meal, being homeless or sweating bills I make.

I need to remember this. I take my (nice) life for granted sometimes.

[Anonymous]

People who live in middle America have cheap housing and many, many own their land. That takes a lot of expense right off the table.

[Anonymous]

Anonymous wrote:People who live in middle America have cheap housing and many, many own their land. That takes a lot of expense right off the table.

The middle America OP is referring to is central/Southern NJ -- so these people aren't in NYC finance jobs. The area is cheaper than here but not exactly cheap like Iowa and it's a high taxation area.

[Anonymous]

Anonymous wrote: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.

Reminds me of the book, "The Millionaire Next Door."

[Anonymous]

Anonymous wrote:

Anonymous wrote:We are the millionaires next door and you can be sure we don't talk about it -- except to the other ones.

Is there a secret handshake I'll learn when my net worth gets above $1MM?

You just know. Rich people...just know each other. Sometimes a poser can infiltrate, but...you just know. It's pretty close to secret handshakes, actually...little dropped hints, what you are wearing/not wearing...

I mean, it can get tricky, especially since most rich people always spend below their means because they want to stay rich. But once you know the signs, you can see them.

[Anonymous]

I don't wonder about how other people pay for stuff. I've been around long enough to know that some people make a lot if money, get annual gifts from family ($15,000 per person), spend everything they make, or are doing something illegal. I worry about myself and my family. Not everyone has the same priorities as I do.

[Anonymous]

Anonymous wrote:Usually one of the following four apply:

1) Drug money
2) Embezzlement
3) Inheritance or trust
4) Massive CC debt.

Stealing from elderly relatives is also very common.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are the millionaires next door and you can be sure we don't talk about it -- except to the other ones.

Is there a secret handshake I'll learn when my net worth gets above $1MM?

You just know. Rich people...just know each other. Sometimes a poser can infiltrate, but...you just know. It's pretty close to secret handshakes, actually...little dropped hints, what you are wearing/not wearing...

I mean, it can get tricky, especially since most rich people always spend below their means because they want to stay rich. But once you know the signs, you can see them.

+1

[Anonymous]

Those Disneyland trips could be gifts from the grandparents. One of the family members might work for a travel company and get more free night stays than they can use so give it away to family members. My dad ends up with more miles than he can use or even wants to use - sometimes that means we don't have to pay for our flights to visit family, and then once we're in town, we stay with family. So our family vacations are actually really cheap - just a few hundred dollars.

Also, they might be living small in other ways - maybe their rent or mortgage is way below what most people in their income bracket live in, so that frees up liquidity for vacations. Or maybe they're super cheap when it comes to clothing & food - having a stay at home spouse makes it easier to cook only from scratch and stick to a budget. We could easily come up with the money for 1-2 more family vacations a year if we planned out our meals more.

But to your original question, yes I do wonder - especially when I see all these 800-900k town homes selling in my area. I can't imagine who is buying them - sure, a few I get, but thousands of families with parents who have just a few more years of experience than we do are able to afford an almost $1M home? Clearly a lot of people are more comfortable living at the bounds of their budget than we are - I prefer to take on a mortgage that we could still afford if one of us lost our jobs rather than one we would scramble to cover each month.

[Anonymous]

Here's how many people in DC appear much more affluent than they actually are: both parents work; they rent out the basement; they vacation with their parents/ILs or use their parents/ILs' vacation homes; they include massive renovation budgets in their mortgages; they max out both parties' credit cards; they hope for a good share of inheritance/salary boosts to cover their debts.

In other words, it's a great, big illusion they set up and hope others will believe.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are the millionaires next door and you can be sure we don't talk about it -- except to the other ones.

Is there a secret handshake I'll learn when my net worth gets above $1MM?

You just know. Rich people...just know each other. Sometimes a poser can infiltrate, but...you just know. It's pretty close to secret handshakes, actually...little dropped hints, what you are wearing/not wearing...

I mean, it can get tricky, especially since most rich people always spend below their means because they want to stay rich. But once you know the signs, you can see them.

+1

In DC, "millionaire" is illusory. A couple can top $1 million just by buying a house at the bottom of the market, living frugally in it, and saving well for retirement from the start while slowly climbing the latter. That couple can still take small vacations and worry about how to finance their kids' private college educations. It's not necessarily as fun as you imagine.

[Anonymous]

Anonymous wrote:Usually one of the following four apply:

1) Drug money
2) Embezzlement
3) Inheritance or trust
4) Massive CC debt.

We are #5 (as are a lot of people we know): make it yourself. I know people don't want to believe this. But it is true.

[Anonymous]

Anonymous wrote:All the time here. A lot of my friends have their kids in so many activities and I can't fathom how they do it financially. I don't dwell on it because it's really none of my business but the thought definitely pops into my head from time to time.

Ah, this one I can answer for you! I have my kid in a fancy shmansy ballet school but I got her in at 1/3 the price through GroupOn. Other classes I've taken her to are either the drop in hour at the kid's gym, which is like $10, or through the Y or a rec center. So same activities as other kids, but much cheaper than the most popular options.

Also, we use a licensed in-home daycare which we absolutely love and it also happens to be 30% cheaper than even a low-cost center in DC, so our overall childcare expenses are less than others. What we expect to pay for childcare when we have two (au pair + part time preschool for older one) is not much more than what most of our friends are already paying for one.