Anonymous wrote:

Anonymous wrote:

Anonymous wrote:On DCUM, every time someone asks this question, multiple people say: "family money" because then they don't have to think about what they themselves could have done differently. I really don't think receiving large gifts or inheritances from family is as prevalent as you think. Minor downpayments are the most common form of help, but usually don't run into paying for the entire house.

Practically no one ever says: "stock market". Yet for us, that's been the sole driver of our wealth, and I suspect it contributes to the wealth of a lot of my neighbors in Bethesda, along with people who manage or sell successful businesses. We bought high tech stocks when they were cheap because we believed in the product and decades later can sell some stocks to meet our needs.

Naive.. It is inheritance. You do not live in that bubble so you don’t know. A lot of large inheritance is disbursed in installments over life and remainder upon death.

I remember in my 20s learning some parents were so rich they were gifting $60k/year to their kids to avoid inheritance tax when they die. Started when they were 18.

I was earning $50k as a salary that year.

It’s $30K/year. And the cutoff for the estate tax was lower in those days so it made more sense.

Buy a lottery ticket.

Go for a weekend vacation in rural NY or PA or MD. Shop at the local grocery store. Eat breakfast at the diner and chat with the locals. You’ll have a fresh perspective in no time.

I am upper middle class woman raised by a single mother who never broke $50K a year. Because I have attended elite universities, I know tons of the people you are describing. And family money is the key (I dont care what these other posters are saying). Here are several examples of ways the rich/upper middle class pass on wealth:

- Undergraduate paid for by parents. It's really hard to invest when you have educational debt.

-Down payments for first house

-At least two of my friends receive yearly gifts from their parents- the max gift amount. Clearing an extra 36K on top of your salary without paying taxes on it is an amazing leg up. Imagine if both sets of parents are doing this.

-Parents or grandparents paying for kids private and/or college.

-Some inherited from parents or grandparents.

So OP if this is you or your spouse and any of these amazing gifts are yours and you are still behind, then yes you are blowing your money. But if none of this applies to you then don't be hard on yourself and remember comparison is the thief of joy. I am always pinching myself about how lucky I am.

Would a $2M house make you happier than a $1M house OP?

I am just curious how much money OP (and those who feel left in the dust) actually make. My guess is that it's still well above what most people make.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:On DCUM, every time someone asks this question, multiple people say: "family money" because then they don't have to think about what they themselves could have done differently. I really don't think receiving large gifts or inheritances from family is as prevalent as you think. Minor downpayments are the most common form of help, but usually don't run into paying for the entire house.

Practically no one ever says: "stock market". Yet for us, that's been the sole driver of our wealth, and I suspect it contributes to the wealth of a lot of my neighbors in Bethesda, along with people who manage or sell successful businesses. We bought high tech stocks when they were cheap because we believed in the product and decades later can sell some stocks to meet our needs.

But how did you have so much excess wealth 20 years ago to invest substantial sums on individual stocks?

We followed the “prudent advice”:

Paid down student loans (guaranteed return as they say) but not too fast as they were tax deductible
Invested in diversified index funds through maxed out 401ks
Kept adding to some long term CDs for building up a down payment on a house (which took a LONG time since houses appreciated faster than the $50k/year we were saving).
Then we had kids, and whose there went $28k/year/kid for daycare
Then we bought a house and suddenly we are dropping $20k for waterproofing a basement…

Dabbling in the stock market is fun, but a) in 2023 you can say tech was great, but you have survivor bias (and honestly most high flying tech are not profitable enough to justify their valuation, like Uber or Tesla, or have already past their prime like Facebook).
In general they recommend against investing large sums in individual stocks unless you don’t care to lose it. And if you don’t care to lose $20Ks of dollars, you are already WAY richer than us and likely OP.

You followed the “prudent advice”. This is exactly your problem. This is OP’s problem.
This is the reason she is left behind. She doesn’t play to win. She plays not to lose.
“Prudent advice” will not get you rich overnight. It will make you comfortable when you get old.
OP’s friends that are getting richer are probably playing more aggressively and taking more risks.
“Prudent advice” is what most people choose to follow. Go to college and get a 9-5 corporate job instead of the
more riskier path of entrepreneurship. Same with investing.

I bet some of OP’s friends took more risks with their investments and got rewarded.

+1 most people are playing defense even after they’ve saved up some money. Too worried about losing it/protecting what they have vs using it to earn more

Anonymous wrote:
In general they recommend against investing large sums in individual stocks unless you don’t care to lose it. And if you don’t care to lose $20Ks of dollars, you are already WAY richer than us and likely OP.

Taking the safe, normal, and prescribed path is not a way to produce abnormal financial results. People do well investing in index funds, but that’s not a way to get rich. To make a lot of money you need to take risks and be able to live with possible downside. Is losing 20k going to change your life? Or are you just fearful about it without looking at the risk/reward objectively? I am not suggesting investing in single name stocks, just putting forward a general concept

Some people just earn more. We are early forties and live in a $3m+ house. We spent over 500k in updates since we bought our house. DH earns $2m+. We have no family money. DH has been steadily earning more. We have a relatively modest lifestyle compared to our peers in the same income bracket. Our kids still attend public school, fly economy, etc.

We know some people who we wonder how they afford their lifestyle of lavish cars, flying first class or private, expensive clothes, shoes, bags. They may be government contractors, not the owners but just employees. It must be family money because there is absolutely no way their income could support their lifestyle.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes, OP, this has been true for me. It can feel defeating at times, especially knowing this is likely to get worse as we get older. We try to just focus on ourselves, our financial goals, making smart choices for us. Staying of social media helps a lot. We've also started thinking about moving to a lower COL area in a few years when that will be a reasonable option due to jobs. I think where we are now, we're kind of on the bottom end of the range for our peer group in the DMV. We're still very fortunate and I don't want to lose sight of that, but it's hard when the people around you have a lot more. I think moving somewhere that our HHI and financial situation is more "average" would be beneficial for us on a lot of levels.

That's what's giving me anxiety. It's really, really hard to shake this feeling. You feel hopeless and overcome with dread.

What is there to feel hopeless about? Do you own a home and have a job? Retirement savings? That is all you need.

Sounds like advice to keep proles docile.

Nah the futile hope of capitalism is what mollifies the masses. But they will never give us the tools to overthrow them!

Anonymous wrote:My best friend just moved into a new build mansion and it forced me to confront the fact that actually, practically all of our friends have moved into homes at least two to maybe even ten times the value of our home. High status zip codes. Many of them have vacation homes. Outside of my husband's college friend selling his company for tens of millions, I really don't know where everyone's money is coming from. It is demoralizing. The real gut punch is one friend who lived near us. I thought they were making what we make, but then they moved into a $2.5 million dollar home, and held onto their old house, which is worth about what our house is worth, to rent it out. None of them are flashy or obnoxious, but it still feels like we're being left in the dust. I honestly think we've become the poor friends, so there's an embarrassment there as well. I can't stop thinking about where we went wrong and we're too old to pivot.

No, this is not a normal way to think. Those feelings you have are not valid or healthy and you need to seek health from a mental health professional. Seriously.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes, OP, this has been true for me. It can feel defeating at times, especially knowing this is likely to get worse as we get older. We try to just focus on ourselves, our financial goals, making smart choices for us. Staying of social media helps a lot. We've also started thinking about moving to a lower COL area in a few years when that will be a reasonable option due to jobs. I think where we are now, we're kind of on the bottom end of the range for our peer group in the DMV. We're still very fortunate and I don't want to lose sight of that, but it's hard when the people around you have a lot more. I think moving somewhere that our HHI and financial situation is more "average" would be beneficial for us on a lot of levels.

That's what's giving me anxiety. It's really, really hard to shake this feeling. You feel hopeless and overcome with dread.

What is there to feel hopeless about? Do you own a home and have a job? Retirement savings? That is all you need.

Sounds like advice to keep proles docile.

Sometimes you just need to embrace that you have enough and be done with it

I don’t know if it helps, but sometimes it’s just dumb luck too. We have bought/sold homes over the past 10 years that have allowed us to climb the property ladder (no family help). We were fortunate in unintentionally buying and selling at the right times. Our mortgage would be 70% higher in our current house if we bought today with higher prices and interest rates, according to Zillow’s estimate.
I think DH and I are hard workers (we both went to top colleges) but I also think a lot of our current economic position is more luck than skill. DH would disagree I think.

Anonymous wrote:

Anonymous wrote:On DCUM, every time someone asks this question, multiple people say: "family money" because then they don't have to think about what they themselves could have done differently. I really don't think receiving large gifts or inheritances from family is as prevalent as you think. Minor downpayments are the most common form of help, but usually don't run into paying for the entire house.

Practically no one ever says: "stock market". Yet for us, that's been the sole driver of our wealth, and I suspect it contributes to the wealth of a lot of my neighbors in Bethesda, along with people who manage or sell successful businesses. We bought high tech stocks when they were cheap because we believed in the product and decades later can sell some stocks to meet our needs.

But how did you have so much excess wealth 20 years ago to invest substantial sums on individual stocks?

We followed the “prudent advice”:

Paid down student loans (guaranteed return as they say) but not too fast as they were tax deductible
Invested in diversified index funds through maxed out 401ks
Kept adding to some long term CDs for building up a down payment on a house (which took a LONG time since houses appreciated faster than the $50k/year we were saving).
Then we had kids, and whose there went $28k/year/kid for daycare
Then we bought a house and suddenly we are dropping $20k for waterproofing a basement…

Dabbling in the stock market is fun, but a) in 2023 you can say tech was great, but you have survivor bias (and honestly most high flying tech are not profitable enough to justify their valuation, like Uber or Tesla, or have already past their prime like Facebook).
In general they recommend against investing large sums in individual stocks unless you don’t care to lose it. And if you don’t care to lose $20Ks of dollars, you are already WAY richer than us and likely OP.

You followed the “prudent advice”. This is exactly your problem. This is OP’s problem.
This is the reason she is left behind. She doesn’t play to win. She plays not to lose.
“Prudent advice” will not get you rich overnight. It will make you comfortable when you get old.
OP’s friends that are getting richer are probably playing more aggressively and taking more risks.
“Prudent advice” is what most people choose to follow. Go to college and get a 9-5 corporate job instead of the
more riskier path of entrepreneurship. Same with investing.

I bet some of OP’s friends took more risks with their investments and got rewarded.