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

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I think it's not that people with UMC incomes can't afford their lifestyles on their current income NOW, but that many save a shockingly low proportion of their income that could secure for themselves financial security, perhaps at an earlier age, or start to generate savings that could benefit future generations (pay for schooling, etc.).  WSJ ran an article a few years back titled "Six Figure Income - and Facing Financial Ruin" - a fascinating part of this article included a study of a Typical UMC Family in Chicago making $400K+ that were clients of Northern Trust (private banking with extensive research on their clients of course) - disposable income was somewhere near $275K and they contributed about $12K to retirement - the rest going to lifestyle.

I think many people spend large amounts before their retirement is secure.  Yes, they can afford it now, but assuming the high income will always be there is risky - for most, job security is lowest when they hit their 50's.

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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.[/quote]

I think this is the more common scenario. [/quote]

This makes me feel better about our own situation. We went from $100k to $200k in HHI overnight with a job change but we are still living like we make $100k and have just increased our savings. In the day to day it doesn't feel like my salary tripled, but then I check out my retirement and other savings accounts.[/quote]

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