Unless you are their tax preparer you have no idea of the real state of their finances.

They could be funding everything with debt
They could be extremely thrifty in certain areas
Could be family money
Could have outside income you are unaware of

Etc etc so could be a million different reasons why they can afford certain things. Everyones finances are different and it is a lot more complex than just salary

Anonymous wrote:I have these friends. 2 kids in middle school, he makes max 150k she probably makes 60k. Have 550k home, have at least 2 vacations a year: one in Mexico and one in Europe. Eat out constantly.
How?

That doesn't sound hard to do on their income.

One or both of them could've had high paying jobs and saved up a lot of money pre-kids. As a result, they were able to pay for the house in cash, put a down a substantial down payment, or superfund 529s.

Anonymous wrote:A $550k home is not extravagant on that salary. And if the kids are in middle school, they could easily have bought it many years ago and paid less than that. At an HHI of over $200k, eating out and taking a couple of vacations a year sounds fairly reasonable.

The thing is that this HHI they only have for about 2 years. Before that she SAHM and his salary was 110k. They just bought this house.

A $550k home is not extravagant on that salary. And if the kids are in middle school, they could easily have bought it many years ago and paid less than that. At an HHI of over $200k, eating out and taking a couple of vacations a year sounds fairly reasonable.

I'm sure our friends wonder too. They probably think we got family help. The truth is, I did live in the city when I was young and single, and I bought in a then-shady area which drastically improved beyond anything I could've hoped for. We had an ample downpayment thanks to the 6 figure profit I made from the eventual sale, plus money we'd saved up.

I'm a single parent who makes just over $100K and has no family help. I own a home worth probably $750k and while I don't take lavish vacations, I do eat out several days a week.

I bought a small, cheap home 20 years ago and rode the real estate wave up. I bought the next (bigger, not as cheap) home using equity from that home plus a low interest rate on a mortgage. That house has appreciated. I max out my 401K and should have at least $100k saved for my kid's college when she's ready to go. I keep my cars a long time, don't overspend on home decorating and clothing and such.

Anonymous wrote:This actually describes us pretty well. What you might not know is that we paid off our house five years ago, and that leaves a lot of extra money for vacations and eating out.

+1. I missed the memo that said when you are young and single, you're supposed to live in the city. Instead, I bought a SFH 20 years ago in the suburbs---long before kids or a husband. House is now paid off. We don't have childcare expenses and neither of us have student loans.

I actually wonder what people are spending their money on if they can't afford a vacation? 550k is a very reasonable house amount for a 210k income.

Their mortgage is appropriate for their income, plus you don't know how much they put down. It looks quite normal to me.

This actually describes us pretty well. What you might not know is that we paid off our house five years ago, and that leaves a lot of extra money for vacations and eating out.

Similar stats and we take two vacations like that a year. Get over it.

No student loans.

Family money (or grandparents help with the vacations).

They are not maxing out 529s, 401Ks, and IRAs every year.

550K home with a 20% downpayment = $2200/mo payment.

210K is plenty of money for a family of 4 to live comfortably, really, if you don't have any extraordinary circumstances.

Stop being envious and live your own life.

I have these friends. 2 kids in middle school, he makes max 150k she probably makes 60k. Have 550k home, have at least 2 vacations a year: one in Mexico and one in Europe. Eat out constantly.
How?