The divide gets bigger as you get older...

[Anonymous]

Anonymous wrote:I am 40 and have gone full circle now. I put in my time in big law and saved aggressively. Now I work in a small firm, theoretically only billing 1500 hours a year (only I'm having a hard time keeping my hours down), and I only go into the office when I want. I'm fairly happy with how my things turned out. Personally, I wouldn't want to give a moment longer to big law, but I'm glad I made a big law salary for a number of years in my twenties/early thirties and built my resume and gained some clients, and invested most of my big law salary along the way. Now I can coast. And I have no envy of my friends who outlasted me in big law.

Same. Stayed in biglaw until age 33, lived a pretty cheap life given the salary [because I lived at the office], invested a ton of it. And now at a financial regulator in a nothing job. I never was a partner and yet even being an associate for eight years allowed me to coast afterwards.

[Anonymous]

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Anonymous wrote:I think it simply becomes harder to HIDE that you haven’t saved or accumulated any money.

The first big shift is couples buying their first home. Then it’s upgrading to a nicer home. Later, it’s when you can retire.

I have a number of friends who continue to rent a fancy lifestyle. They may have high earnings but can’t save any or much. Still don’t own a home. We make less but bought a while ago and have since upgraded. It is becoming more and move obvious that certain couples haven’t saved any money especially if they can’t even buy a house or apartment.

I know the type of friends you're talking about - as I have that type in NYC - renting the 5-7k/mo apartment and thus not saving much or at all despite high salaries but when they consider buying, given the down payments they have saved despite high salaries they'd have to buy "regular" apartments - built in the 80s, shared laundry etc. even though they're doormen buildings in a good part of town and then it's ew I'm not buying THAT, have you seen the views from my luxury apartment and my all granite kitchen? I get it but then the cycle continues and equity doesn't get built at all.

Outside of NYC though IDK maybe it's just because I know fewer people here [moved here only five years ago], somehow I don't assume that people who haven't bought can't afford it. I mean maybe they can't but it doesn't seem like renting a fancy life is THAT expensive here. I always assume they aren't buying and just investing a ton maybe to buy someplace else.

Yes. I live here in DC and I rent. I have a high salary but just continue to save and invest until I get married. Currently dating someone now so if we end up marrying we should be fine.

Same. I don't think renting esp in this area where salaries are high is a sign that someone is poor/can't afford a down payment. I think of it as a sign that they are invested to the hilt - as some of my apartment dwelling friends are and/or aren't looking to stay here more than x years so they aren't focused on buying here. But yeah the divide gets bigger if someone is making money and not doing anything with it besides spending on luxury living - so you have to own a home or if not owning then invest a TON more than people who do own etc.

Someone who is still renting because they are investing ALL of their money is an outlier. I have one friend doing this.

The majority of people who are high income and haven’t bought simply don’t have the downpayment. They are spending most of what they are making.

I have a friend in mortgage lending in this area who always says that - looking at people's incomes etc. and the age at which they buy you'd think they have a LOT more in down payments or savings and investments than they typically do; and that's in this area where salaries tend to be high, people tend to be reasonably educated and financially conservative. I won't pretend to understand how this happens though as I don't see that many with earth shatteringly luxury lifestyles, though I guess lots of people in this area travel A LOT and it's always trips that are fancy and long and over time that adds up.

or long studies = student debts and start work later in life

[Anonymous]

18 months in Big Law plus a severance during the crash in 08 allowed me to buy a row house in Bloomingdale. I lived in the basement apartment and rented out the main house. Now married and live in the main house with my kids, rent out the basement. Best decision I ever made.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think it simply becomes harder to HIDE that you haven’t saved or accumulated any money.

The first big shift is couples buying their first home. Then it’s upgrading to a nicer home. Later, it’s when you can retire.

I have a number of friends who continue to rent a fancy lifestyle. They may have high earnings but can’t save any or much. Still don’t own a home. We make less but bought a while ago and have since upgraded. It is becoming more and move obvious that certain couples haven’t saved any money especially if they can’t even buy a house or apartment.

I know the type of friends you're talking about - as I have that type in NYC - renting the 5-7k/mo apartment and thus not saving much or at all despite high salaries but when they consider buying, given the down payments they have saved despite high salaries they'd have to buy "regular" apartments - built in the 80s, shared laundry etc. even though they're doormen buildings in a good part of town and then it's ew I'm not buying THAT, have you seen the views from my luxury apartment and my all granite kitchen? I get it but then the cycle continues and equity doesn't get built at all.

Outside of NYC though IDK maybe it's just because I know fewer people here [moved here only five years ago], somehow I don't assume that people who haven't bought can't afford it. I mean maybe they can't but it doesn't seem like renting a fancy life is THAT expensive here. I always assume they aren't buying and just investing a ton maybe to buy someplace else.

Yes. I live here in DC and I rent. I have a high salary but just continue to save and invest until I get married. Currently dating someone now so if we end up marrying we should be fine.

Same. I don't think renting esp in this area where salaries are high is a sign that someone is poor/can't afford a down payment. I think of it as a sign that they are invested to the hilt - as some of my apartment dwelling friends are and/or aren't looking to stay here more than x years so they aren't focused on buying here. But yeah the divide gets bigger if someone is making money and not doing anything with it besides spending on luxury living - so you have to own a home or if not owning then invest a TON more than people who do own etc.

Someone who is still renting because they are investing ALL of their money is an outlier. I have one friend doing this.

The majority of people who are high income and haven’t bought simply don’t have the downpayment. They are spending most of what they are making.

I have a friend in mortgage lending in this area who always says that - looking at people's incomes etc. and the age at which they buy you'd think they have a LOT more in down payments or savings and investments than they typically do; and that's in this area where salaries tend to be high, people tend to be reasonably educated and financially conservative. I won't pretend to understand how this happens though as I don't see that many with earth shatteringly luxury lifestyles, though I guess lots of people in this area travel A LOT and it's always trips that are fancy and long and over time that adds up.

or long studies = student debts and start work later in life

+1

DH and I posted some financial info on Bogleheads a few years back. When people saw our HHI (at the time probably $600-700k in our early 30s), they ripped us a new one for not more having more saved. We politely explained that our incomes has risen dramatically and that we had paid off $400K+ of student loan debt with interest and they were more kind. Probably should have included that small detail on the front end, tho.

[Anonymous]

Anonymous wrote:Your health is your wealth, especially later in life. All the money in the world will not be enough if you are sick mentally or physically. Soooo many people I know have dropped dead early or gotten ill (cancer, strokes) or are mentally sick. Live your life for happiness not for making a mountain of money.

Yes!!! And money cannot buy health.

Also, I work with many folks who work a 70 hour week. Their health is crap and they age young - cancer, obesity, etc. One guy is in this early 40s and losing patches of hair due to stress. NO THANKS!! I'll take my mid-level go no where that pays 300k (for about 30 hrs of WFH) rather than his 800k salary (he has to be in the office)!

[Anonymous]

Anonymous wrote:

Anonymous wrote:Your health is your wealth, especially later in life. All the money in the world will not be enough if you are sick mentally or physically. Soooo many people I know have dropped dead early or gotten ill (cancer, strokes) or are mentally sick. Live your life for happiness not for making a mountain of money.

Yes!!! And money cannot buy health.

Also, I work with many folks who work a 70 hour week. Their health is crap and they age young - cancer, obesity, etc. One guy is in this early 40s and losing patches of hair due to stress. NO THANKS!! I'll take my mid-level go no where that pays 300k (for about 30 hrs of WFH) rather than his 800k salary (he has to be in the office)!

This feels a little like a humble brag TBH. What the hell is a 30 hr/wk mid level job that pays $300?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Your health is your wealth, especially later in life. All the money in the world will not be enough if you are sick mentally or physically. Soooo many people I know have dropped dead early or gotten ill (cancer, strokes) or are mentally sick. Live your life for happiness not for making a mountain of money.

Yes!!! And money cannot buy health.

Also, I work with many folks who work a 70 hour week. Their health is crap and they age young - cancer, obesity, etc. One guy is in this early 40s and losing patches of hair due to stress. NO THANKS!! I'll take my mid-level go no where that pays 300k (for about 30 hrs of WFH) rather than his 800k salary (he has to be in the office)!

This feels a little like a humble brag TBH. What the hell is a 30 hr/wk mid level job that pays $300?

Being a mid-level in healthcare. As in, a Nurse Anesthetist.

[Anonymous]

I honestly assumed that was a troll.

Back to the original topic…

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Your health is your wealth, especially later in life. All the money in the world will not be enough if you are sick mentally or physically. Soooo many people I know have dropped dead early or gotten ill (cancer, strokes) or are mentally sick. Live your life for happiness not for making a mountain of money.

Yes!!! And money cannot buy health.

Also, I work with many folks who work a 70 hour week. Their health is crap and they age young - cancer, obesity, etc. One guy is in this early 40s and losing patches of hair due to stress. NO THANKS!! I'll take my mid-level go no where that pays 300k (for about 30 hrs of WFH) rather than his 800k salary (he has to be in the office)!

This feels a little like a humble brag TBH. What the hell is a 30 hr/wk mid level job that pays $300?

Being a mid-level in healthcare. As in, a Nurse Anesthetist.

Nurse Anesthetist from home? Do you mail people the syringe?

[Anonymous]

The gap does grow wider, and lifestyle creep is a factor, but what people sometimes miss is that for those still on the high earning path, once you’ve achieved some success and moved up into the mid six figures yet are still working the same amount as when you made 80k or 100k but with more power and influence and more control over your time, it’s not like they keep working just to buy another house or a private plane. It’s not just the money. It’s hard to walk away from a high paying job where people look up to you and you have credibility and sunk costs. A lot of those people once they’re 40 or so wouldn’t want to work for habitat for humanity, it wouldn’t even occur to them.

[Anonymous]

It's becoming apparent in my family. My brother lives in central PA and is a civil engineer. For various reasons, he never got all the certs required so he works a job that pays on the lower scale of civil engineering. His wife is a SAHM and has never been to college. Contrast that with a dual income professional family.

I don't think it bothers him but it bothers my SIL immensely that we can afford a nice house, vacations, etc.

[Anonymous]

Anonymous wrote:18 months in Big Law plus a severance during the crash in 08 allowed me to buy a row house in Bloomingdale. I lived in the basement apartment and rented out the main house. Now married and live in the main house with my kids, rent out the basement. Best decision I ever made.

Similar outcome here with a different path. I graduated debt free from undergrad (scholarship ships + working retail+ help from parents) and immediately went to work in the ngo world. Lived cheaply, traveled a good bit, also on the cheap, and saved and invested like crazy. I bought a small property back home (MCOL at the time) and kept working and saving. Sold my property in ‘07 and bought a row home in Bloomingdale in ‘08. I was able to let my investments ride and keep investing through the recession. Not having loans to pay and going right to investing while everyone was living cheap anyway was they key to living well despite not having big law $$.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Your health is your wealth, especially later in life. All the money in the world will not be enough if you are sick mentally or physically. Soooo many people I know have dropped dead early or gotten ill (cancer, strokes) or are mentally sick. Live your life for happiness not for making a mountain of money.

Yes!!! And money cannot buy health.

Also, I work with many folks who work a 70 hour week. Their health is crap and they age young - cancer, obesity, etc. One guy is in this early 40s and losing patches of hair due to stress. NO THANKS!! I'll take my mid-level go no where that pays 300k (for about 30 hrs of WFH) rather than his 800k salary (he has to be in the office)!

This feels a little like a humble brag TBH. What the hell is a 30 hr/wk mid level job that pays $300?

I'm in FAANG.

[Anonymous]

Anonymous wrote:18 months in Big Law plus a severance during the crash in 08 allowed me to buy a row house in Bloomingdale. I lived in the basement apartment and rented out the main house. Now married and live in the main house with my kids, rent out the basement. Best decision I ever made.

Similar, bought a home in 2007 under a first-time buyer program with zero down. It's worth 3x what I paid and will keep my children in passive income forever. I was making maybe $65K at the time.

[Anonymous]

Anonymous wrote:It's becoming apparent in my family. My brother lives in central PA and is a civil engineer. For various reasons, he never got all the certs required so he works a job that pays on the lower scale of civil engineering. His wife is a SAHM and has never been to college. Contrast that with a dual income professional family.

I don't think it bothers him but it bothers my SIL immensely that we can afford a nice house, vacations, etc.

He can buy a nice house in central PA if he really wants one.

-Pa native