Anonymous
Post 01/12/2018 15:30     Subject: Upper and UMC Ppl: Do you Actually Know Anyone Living Beyond their Means?
I think theres a lot of UMC that get sucked into living above their means because they feel so close to being able to afford that lifestyle. Like, one more promotion and they should have it. They are also educated and understand ways to "float" debt for years at a time while still maintaining a high credit score. Your 0% interest for 15 months is up? Get a new one and float that debt for another 15-18 months.
Anonymous
Post 01/12/2018 15:24     Subject: Upper and UMC Ppl: Do you Actually Know Anyone Living Beyond their Means?
Anonymous wrote:
Anonymous wrote:A non-equity partner at my spouse's law firm drives a Tesla X, has his tailor come to the office to measure new bespoke suits twice a year, and whose stay-at-home wife has more than one Berkin bag. Their two kids go to the same independent school as ours. I would guess they spend more than 3x what our family does at less than 1/3 the income. All that conspicuous consumption is about looking like he's a full partner and being taken seriously at the firm and with clients. I doubt that he feels like he has a choice about it.


Is your spouse not in biglaw? Bc at a biglaw firm, a non equity partner (for the firms that have 2 tiers of partner) make 300-400k/yr. Do you honestly think at 400k/yr, he can't drive a Tesla, buy a few $5000 suits per year, and buy the wife a few designer bags? Come on. Not everyone is "struggling" on 400k as DCUM would have you believe.


NP. As someone who makes in the range of $300 to $400K per year and has 2 kids in independent schools, I can affirmatively say that I cannot buy a Tesla or buy designer bags on this income. The tax burden is substantial. And you need to make almost $140,000 to pay for $80,000 in tuition with after-tax dollars.
Anonymous
Post 01/12/2018 13:47     Subject: Upper and UMC Ppl: Do you Actually Know Anyone Living Beyond their Means?
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Most people on DCUM would say I'm living beyond my means. I make $300k/year but bought a close-in house with a big yard that was too expensive ($4200/month). I max out retirement, but don't save a penny more than $18k/year. My 529s are low (my parents didn't pay for my college and I don't see the need; if the kids are smart enough they can get a scholarship, if not they can do ROTC). We have a house cleaner and a lawn guy and a dog walker. I pay for my parents' housing (including mortgage, utilities, upkeep) so that they can be the ones to watch our kids instead of sending them to a daycare. It's worth it to me -- I don't feel like taking my equity and downsizing to a smaller house with a longer commute. Everyone has different priorities.


Do you have an emergency fund? What does your debt look like outside of mortgage?


This is my life. Our HHI is $275k and our mortgage is $4400. Our daycare expenses are $2600/mo.
We max my husband’s TSP and my Roth 401k plus my $15k limit for ESPP. We fund our kids 529s on target to pay for 4yrs of undergrad. We still manage to save some money. We still go on vacation 1-2x a year. We eat out 1x a week on average. We aren’t eating PB&J.


How?!?! You’re pulling in less than 16k a month because we make 375k and that’s how much we bring home. So let’s assume 12k take home pay.

You’re spending 7k on it just on your mortgage and daycare. So you have 5k remaining. You’re telling me that with 5k left you fund multiple 529s, dine out, go on vacation, buy clothing and birthday presents, home repairs, cars, etc? I’m not buying it.

Also how are you contributing to a Roth given you’re over the income threshold? I assume you mean a bsckdoor Roth? You don’t list your own 401k but only a Roth.

The numbers don’t add up unless you don’t have cars, are extremely frugal with groceries, rarely buy any clothing and go on super inexpensive vacations.


Pp here. I just noticed the ESPP of 1k per month. So you’re actually saying you do everything including multiple 529s on 4K per month?
Anonymous
Post 01/12/2018 13:46     Subject: Upper and UMC Ppl: Do you Actually Know Anyone Living Beyond their Means?
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:Most people on DCUM would say I'm living beyond my means. I make $300k/year but bought a close-in house with a big yard that was too expensive ($4200/month). I max out retirement, but don't save a penny more than $18k/year. My 529s are low (my parents didn't pay for my college and I don't see the need; if the kids are smart enough they can get a scholarship, if not they can do ROTC). We have a house cleaner and a lawn guy and a dog walker. I pay for my parents' housing (including mortgage, utilities, upkeep) so that they can be the ones to watch our kids instead of sending them to a daycare. It's worth it to me -- I don't feel like taking my equity and downsizing to a smaller house with a longer commute. Everyone has different priorities.


Do you have an emergency fund? What does your debt look like outside of mortgage?


This is my life. Our HHI is $275k and our mortgage is $4400. Our daycare expenses are $2600/mo.
We max my husband’s TSP and my Roth 401k plus my $15k limit for ESPP. We fund our kids 529s on target to pay for 4yrs of undergrad. We still manage to save some money. We still go on vacation 1-2x a year. We eat out 1x a week on average. We aren’t eating PB&J.


How?!?! You’re pulling in less than 16k a month because we make 375k and that’s how much we bring home. So let’s assume 12k take home pay.

You’re spending 7k on it just on your mortgage and daycare. So you have 5k remaining. You’re telling me that with 5k left you fund multiple 529s, dine out, go on vacation, buy clothing and birthday presents, home repairs, cars, etc? I’m not buying it.

Also how are you contributing to a Roth given you’re over the income threshold? I assume you mean a bsckdoor Roth? You don’t list your own 401k but only a Roth.

The numbers don’t add up unless you don’t have cars, are extremely frugal with groceries, rarely buy any clothing and go on super inexpensive vacations.
Anonymous
Post 01/12/2018 13:29     Subject: Upper and UMC Ppl: Do you Actually Know Anyone Living Beyond their Means?
How does everyone know so much about other families' finances? I have no clue which if any of my friends are living beyond their means. How would I know that?
Anonymous
Post 01/12/2018 13:26     Subject: Re:Upper and UMC Ppl: Do you Actually Know Anyone Living Beyond their Means?
I know plenty of UMC people who are living on the edge. People usually just don't talk about it, plus, they typically have the assets and clout to juggle debt/accounts when things get tough. I know a few family who belong to a country club, kids dressed to the nines, and their house has almost been foreclosed on at least 2x. They just got a renter and then they can't be foreclosed on and in the meantime got current on their mortgage. Also have a beach house they could sell in a pinch. Other friends have used 400K in HELOC to buy other house and spend tons of money on travel and clothes. It's pretty common in places like Bethesda and McLean where people are always keeping up with the Joneses. Have had other friends have to move to Florida because they went bankrupt here. There's plenty of it, but UMC people have more options and cushion and typically can get family to help if need be.
Anonymous
Post 01/12/2018 13:24     Subject: Upper and UMC Ppl: Do you Actually Know Anyone Living Beyond their Means?
Anonymous wrote:Maybe me? I was a good saver when young and single, but now with family we are spending more than our HHI of about $150k. But because of what I've saved (and a bull market), our net worth keeps going up. NW was up $350k this year despite spending more than we earn (I have plenty saved). I do wonder how much I can safely spend. It's much lower than 4% at the moment, more like 1%. Will likely need it for another 40 years or so.


We're here, though our NW has not gone up so much because I left everything in savings (stupid, I know). After about 7 years of spending more than we earn, we have to stop. It's hard, but it is finally at a point it will affect our futures. Our NW is close to 1 mil, despite earning between $120K and $170K over that time range, but much of that is in retirement savings.

BTW, HHI should include investment income.
Anonymous
Post 01/12/2018 13:17     Subject: Upper and UMC Ppl: Do you Actually Know Anyone Living Beyond their Means?
Maybe me? I was a good saver when young and single, but now with family we are spending more than our HHI of about $150k. But because of what I've saved (and a bull market), our net worth keeps going up. NW was up $350k this year despite spending more than we earn (I have plenty saved). I do wonder how much I can safely spend. It's much lower than 4% at the moment, more like 1%. Will likely need it for another 40 years or so.
Anonymous
Post 01/12/2018 12:19     Subject: Upper and UMC Ppl: Do you Actually Know Anyone Living Beyond their Means?
Anonymous wrote:
Anonymous wrote:Most people on DCUM would say I'm living beyond my means. I make $300k/year but bought a close-in house with a big yard that was too expensive ($4200/month). I max out retirement, but don't save a penny more than $18k/year. My 529s are low (my parents didn't pay for my college and I don't see the need; if the kids are smart enough they can get a scholarship, if not they can do ROTC). We have a house cleaner and a lawn guy and a dog walker. I pay for my parents' housing (including mortgage, utilities, upkeep) so that they can be the ones to watch our kids instead of sending them to a daycare. It's worth it to me -- I don't feel like taking my equity and downsizing to a smaller house with a longer commute. Everyone has different priorities.


Do you have an emergency fund? What does your debt look like outside of mortgage?


This is my life. Our HHI is $275k and our mortgage is $4400. Our daycare expenses are $2600/mo.
We max my husband’s TSP and my Roth 401k plus my $15k limit for ESPP. We fund our kids 529s on target to pay for 4yrs of undergrad. We still manage to save some money. We still go on vacation 1-2x a year. We eat out 1x a week on average. We aren’t eating PB&J.
Anonymous
Post 01/12/2018 12:08     Subject: Upper and UMC Ppl: Do you Actually Know Anyone Living Beyond their Means?
I don’t know anyone who has admitted to being in debt. I know of a coworker who made a big bet buying her house that she and her husband would keep their jobs and only ever make more money. I know of a few families where the house they own and cars they drive don’t seem to line up with their jobs - but I suspect family help before I suspect irresponsible spending.

I’m about to turn 40 and we’re in the thick of it right now with daycare and preschool. Little choices now like sending 2 kids to a daycare center vs. in-Home / church preschool can make a difference of $1-2k a month. The difference of having a fancy SUV vs. my trusty Subaru might be $500 a month.

These decisions don’t break the bank now, but we’ll find out in 15-20 years which friends are worried about paying for college or when they can retire.
Anonymous
Post 01/12/2018 12:04     Subject: Upper and UMC Ppl: Do you Actually Know Anyone Living Beyond their Means?
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
He's a doctor without health insurance? Find that hard to believe. They more than anyone else knows the risks of being uninsured and how costly care is. And plus why wouldn't his hospital/private practice group provide coverage like all other employers??

My parents are both physicians, so I know a lot of physicians.

There are definitely doctors without insurance. My dad's long-standing friend from med school with whom he always shared an office building was one of them.

Isn't this a bad dumb idea? Sure for minor day to day stuff, they write their own scripts and/or their dr. friends take care it for them for free. But isn't the point of insurance to insure yourself against big things -- that a health system wouldn't give you/your family for free, even if you work there? I get that certain types of drs. end up being independent contractors - providing their services to a health system but not an employee of it and thus no employer insurance option. But - so? Call up Blue Cross and buy a plan -- doesn't even matter if Obamacare is around or not - you can always buy private insurance. If it costs you $3000/month for a family -- you're a dr. you can budget for it?

I mean, *I* have insurance...and my parents have always had it too. I'm just saying it's not unheard of that a doctor wouldn't have insurance.

FWIW, the doctor in question was one of the wealthiest people I know, but he also had 6 children. When his youngest was hospitalized as an infant, he paid out-of-pocket for her care (my mom was there because that's her specialty). He died young due to an untreated medical problem. This wasn't due to not having health insurance, it was due to his not taking care of himself. He has left a huge estate to his large family.
Anonymous
Post 01/12/2018 12:01     Subject: Upper and UMC Ppl: Do you Actually Know Anyone Living Beyond their Means?
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Anonymous wrote:My BIL, 45 years old, single (live-in GF with her own (relatively low-paying, but more than enough to live on as a single person job with benefits), no kids, no intention of having kids, makes $350-$400K/yr.. He has told all of us (family) that he lives paycheck to paycheck, and even takes on OT work (he's a radiologist).

Why?

He bought a 2.5 million dollar home on the water on LI. It should be easily affordable on his income, but he knew nothing about real estate and is not the most common sensical person in the world. The house is 30+ years old, so of course has maintenance involved + a pool to be maintained year-round + landscaping to be maintained. He was completely shocked by the home upkeep costs. On top of that, he is embroiled in a battle with the city over the placement of a pool house on his property, an issue the previous owners even disclosed to him, but got him to agree to a tiny amount of money in escrow to wash their hands of it. He has paid a legion of realtors, consultants, and lawyers to deal with this, some of the same ones who gave him poor advice to begin with.

Does his house still look gorgeous? Yes. Did he just buy a 10K+ custom-made bed his GF really wanted? Yes. Does he still eat at expensive restaurants? Yes. Does he have any health insurance? No. Could he maintain any part of this lifestyle if he stopped working tomorrow? No.

So, he is constantly stressed about money, but he makes more than enough to cover the day-to-day. He keeps hoping the situation will improve, but every time it looks like one crisis is over, another seems to pop up.

Now, if he did lose his job, he does have a $2.5 million property he could borrow against, or sell. He would probably find a new job quickly. I agree with the poster who says most UMC/UC people have more ways to cushion a true crisis.


He's a doctor without health insurance? Find that hard to believe. They more than anyone else knows the risks of being uninsured and how costly care is. And plus why wouldn't his hospital/private practice group provide coverage like all other employers??


My BIL is also an anesthesiologist. He has some major health issues and they are contracts not employees. So private insurance would be very expensive. They have insurance through my sister's job.


Why would private insurance have to cost more than an ACA plan? I mean, he wouldn't get subsidies, but it looks like my BIL would pay $400/mo for bronze, $700/mo for Platinum, and could also get a catastrophic plan for less than $200/mo..


Our family plan (doesn't matter if we buy in on the healthcare.gov site or directly from blue cross) is $3200/month. There are times I've thought about dropping it and being uninsured. I could see if someone is close the edge on finances that it would be pretty easy to drop $40k in insurance premiums, especially if he's a doc and may get some kind of preferential pricing.


As I said, he's single, and his live-in GF has her own benefits through her state university job. The amount I quoted above is the total he would pay. Doesn't seem like $2400/yr against the costs of cancer treatment makes any sense whatsoever.
Anonymous
Post 01/12/2018 11:59     Subject: Upper and UMC Ppl: Do you Actually Know Anyone Living Beyond their Means?
Anonymous wrote:
Anonymous wrote:
He's a doctor without health insurance? Find that hard to believe. They more than anyone else knows the risks of being uninsured and how costly care is. And plus why wouldn't his hospital/private practice group provide coverage like all other employers??

My parents are both physicians, so I know a lot of physicians.

There are definitely doctors without insurance. My dad's long-standing friend from med school with whom he always shared an office building was one of them.


Isn't this a bad dumb idea? Sure for minor day to day stuff, they write their own scripts and/or their dr. friends take care it for them for free. But isn't the point of insurance to insure yourself against big things -- that a health system wouldn't give you/your family for free, even if you work there? I get that certain types of drs. end up being independent contractors - providing their services to a health system but not an employee of it and thus no employer insurance option. But - so? Call up Blue Cross and buy a plan -- doesn't even matter if Obamacare is around or not - you can always buy private insurance. If it costs you $3000/month for a family -- you're a dr. you can budget for it?
Anonymous
Post 01/12/2018 11:47     Subject: Upper and UMC Ppl: Do you Actually Know Anyone Living Beyond their Means?
Anonymous wrote:
He's a doctor without health insurance? Find that hard to believe. They more than anyone else knows the risks of being uninsured and how costly care is. And plus why wouldn't his hospital/private practice group provide coverage like all other employers??

My parents are both physicians, so I know a lot of physicians.

There are definitely doctors without insurance. My dad's long-standing friend from med school with whom he always shared an office building was one of them.
Anonymous
Post 01/12/2018 11:46     Subject: Re:Upper and UMC Ppl: Do you Actually Know Anyone Living Beyond their Means?
Anonymous wrote:Honestly no.

In general, people who spend a lot make a lot and are saving a lot.

Poorer people like to think to otherwise make themselves feel better for missing out ("So and so went on an exotic vacation but I bet they have no savings") but that doesn't make it true.

IME (admittedly anecdotal but so, it would seem, is yours), this is not true. Comfortably MC people (families with incomes of around $100K with two college-educated earners) are the most likely I've seen to do these kinds of things. My SIL is a case in point...maybe not exotic vacations, but certainly things like remodels or big screen TVs.

Actualy poor people might seem like they have poor money-management skills, but it's because it actually takes some money to be wise about money. My parents have a handyman who is always paying impound fees on his car. You can say it's irresponsible of him to park illegally, but the reality is that he's got no legal place to park anywhere close to where he lives. His "luxury" might be eating a grocery store steak (i.e. still under $10) once in a month or so...not taking exotic vacations.