Anonymous wrote:OP, the secret around here is that many people have incomes they are not telling you about. Inheritance, properties they own, help from parents, real estate run ups. It is emphatically not polite to talk about it, so very few do. Years later, after the fact, you find out the granny left them a little help. Also some people are in debt to their eyeballs. The best you can do is to mind your own financial house as best you can.

+1000

I know a 30 year old government worker and his wife with hhi of less that 130k hhi who's daddy bought them a 1.8 million dollar mcmansion. I am pretty sure I could live on 130k spending money and have very little stress in their situation.

You need at least 300k hhi more likely 400

You will be forever poor if you buy a house worth $850K. We have a HHI of about $170K with a mortage of $1500 per month on a $200K mortgage. We also have to scrape to some extent because of one private school tuition. You will be house poor and not have the flexibility in case of a lost job, illness, child with special needs, ill relative who needs support, dental work ($7000 for one implant, I'm just saying) and so forth. You'd be surprised how much life throws at you and with all your money tied up in a house that you cannot afford on that income you will never get ahead.

Investing, real estate, business.

Our hhi is average/high for this area but we got a huge savings near by getting an amazing g deal on a house, renovating it, selling it for note than double when the market was good a few months ago, living with family till we found another cheap house to renovate! It was just luck. It would've taken us years to save the amount of money we made. Thank God.

Many people have money/help from their parents. Hand me down luxury cars, paying for private school, second homes, vacation paid for, etc....so stop comparing and just live your life the best you can.

Anonymous wrote:OP, the secret around here is that many people have incomes they are not telling you about. Inheritance, properties they own, help from parents, real estate run ups. It is emphatically not polite to talk about it, so very few do. Years later, after the fact, you find out the granny left them a little help. Also some people are in debt to their eyeballs. The best you can do is to mind your own financial house as best you can.

In a playgroup of 11, I never understood how we were scraping by and others were living it up. As the years went by, you learned of this grandpa paying for this, this trust fund, this family down payment, etc. Out of 11, 9 had significant help. We were one of the two with no help and it was hard being in that position when they are talking about vacations with nannies in the Carribean and you are planning your car trip to Grandmas. But, as others have said, you don't say nice to meet you, my mom buys all my kids clothing, pays for school, buys our groceries and babysits for free. They keep that hidden and it comes up in casual conversation.

We have a hhi about 1/3 of yours and we are saving for retirement but obviously less than others but have time on our side.

Anonymous wrote:
One not-really-secret is that you start to see results a lot faster once you hit a certain critical mass in invested assets. After about $500K, I noticed that market swings REALLY had an impact on our bottom line. We could make (or shed) $10,000+ in a single day.

+1. And then thats when the power of compound interest starts taking off. We have about $700 or $800K invested - last month we were down $16,000. The month before that we were up $25,000. Our YTD growth is +$114K. Trailing twelve months is +$135K. Today I'm up $9,800 (on paper).

Totally understand, OP -- You get in the habit of saving and seeing that money accumulate, then you hit your goal and you almost don't want to spend it, even for the thing you were saving to buy!

I'm 48 and we have a little over $1M invested with zero debt (paid off the house). It's taken 15 years to get here.

One not-really-secret is that you start to see results a lot faster once you hit a certain critical mass in invested assets. After about $500K, I noticed that market swings REALLY had an impact on our bottom line. We could make (or shed) $10,000+ in a single day.

But, short of inheriting or winning the lottery (DON'T PLAY THE LOTTERY) slow and steady is the only way to go. Don't worry, you'll get there.

OP. Thanks for all of the comments, and for giving me some perspective. Sounds like I need to appreciate what I have and continue my slow and steady approach. Sometimes it just seems that everyone is out there vacationing away, and having these fab lives, but perhaps it isn't always what it seems.

I think part of our problem is that we used to save a lot more. We had a goal of having a 20% down payment for a house (850K). We finally bought the house, so now just scary to not see that money in the account anymore, plus we have a bigger house payment that I would like. We have a healthy emergency cash fund, we save for college each month, and we max out retirement accounts, so guess we need to just buckle back down, and start saving again for the next phase...

Thanks DCUM friends.

Anonymous wrote:Another secret, OP: as long as you are relying on an income you earn to support yourself, you will not be at a point where you don't have to think about spending. This goes for incomes of $500k+ just the same as incomes of 50k. The only people who truly don't have to think about their spending are the ones whose assets are so enormous that just the interest brings in more than they could ever spend.

Or, you are saving one spouse's income. Close enough.

While I hate it when people make comments like "at that income, you should be able to save for an addition in a few years" or "you should be able to save $5k a month," it does seem to stretch credulity to say that you have to think about every single purchase at your income level. What's your mortgage/rent (is it too high?), are you paying daycare/nanny? what about student loans? If any of those are in play, and you are comparing yourself to people who do not have those in play, that can be a difference of several thousand per month and may be the difference between feeling financially free and not so much.

Another secret, OP: as long as you are relying on an income you earn to support yourself, you will not be at a point where you don't have to think about spending. This goes for incomes of $500k+ just the same as incomes of 50k. The only people who truly don't have to think about their spending are the ones whose assets are so enormous that just the interest brings in more than they could ever spend.

OP I'm surprised you can't save more... we make 170k before taxes and are saving 50k a year. We're frugal, have two paid off cars and our house is half paid off. We aren't living like misers either, but don't have a lot of what others need (cable, eating out since we love to cook, etc).

Anonymous wrote:My DH and I make a solid income (approx 225k) and live very frugally. We figured that after years of saving and having responsible spending habits that we would be further along financially. We see so many people around us, with nicer cars, houses, vacations, etc. What is the secret to building wealth - real estate, the market, or should we stick with our slow and steady approach? We are trying to get to that next level, and it doesn't seem like we can do it on this income!

OP, how long have you been at this level of HHI ($225k)? Just because you make $225k does not automatically make you wealthy. It takes life time of thrift and savings to build wealth. My parents earned modest income before retiring, but are better off than their friends... my parents paid off their house early and have sufficient savings. They do not need much financial assistance in their old age. We also paid off our mortgage early, which was the key to building wealth. This will in turn benefits our child, college education, etc. like a step ladder.