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Climbing the Wealth Ladder

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Re: Climbing the Wealth Ladder

#111

Post by mLuby »

howeyc wrote: post #65

The part at the end about his new millionaire friend not having a much different life is what I think about quite a bit. Until you reach "buy my own plane without worrying too much about cost" levels of wealth your life is pretty much like everyone else... You likely: * commute to work every day * work 8+ hours per day * spend weekend hours doing choirs (laundry, grocery shopping, etc) Sure the size and comfort (of h…

Generally agreed. The major difference is whether someone has a regular work schedule or not. You don't have to be a millionaire to not work, nor are most millionaires on perpetual vacation.

Nit-pick: There are plenty of cultures where barely middle-class families hire others to do their chores.

Re: Climbing the Wealth Ladder

#112

Post by rolltiide »

bronco21016 wrote: post #63
Retric wrote: post #50

Earlier quoted context omitted.

I agree, what’s useful about this mentality is not about becoming a multimillionaire, it’s about having your wealth match your income. A doctor making 250k is often living pay check to pay check while spending crazy money. Even with a steady paycheck their not accumulating wealth. Even worse, a football player with a 20million dollar contract is likely to end up broke if they instantly maximize their spending. Howeve…

It bothers me when people use the phrase living paycheck to paycheck to describe both someone who literally doesn’t make enough money to cover the essential bills of living as well as someone making $200k+. These people are not in the same boat whatsoever. The doctor, or any professional making that much, simply needs to turn in the lease on the luxury car, or downsize their house, or cancel their vacation to materia…

These are bad assumptions and it shouldn't bother you that much.

There are lots of people making $200k+ living paycheck to paycheck. If the most basic discussion about cost of living is going to blow your mind then just exit this discussion.

If you wanted month-to-month rent in my building in San Francisco (as opposed to a more typical yearly lease), it is $11,000 per month, with yearly leases being about half that.

People that only make "$200k+" via wage work aren't living here, just like I planned and the networking opportunities are pretty amazing.

Re: Climbing the Wealth Ladder

#113

Post by ThaJay »

esotericn wrote: post #48
Kirby64 wrote: post #12

Earlier quoted context omitted.

I think you're overthinking this. The article examples maybe aren't descriptive enough. #4 would mean I don't price shop Airbnb, hotels, and plane tickets so much. Or maybe I just take first class everywhere. Either way, you're talking spending amounts in the $10k+ range. #5 means you can buy whatever size house you want within limits. That's more a $1M+ decision (although, amortized out long term) #6 means Bill Gate…

No, they're dependent on preferences in what you want. Your preferences differ from mine here. Either that, or you're assuming that the reasonable benchmark for comparison is close to the absolute most expensive example within a specific sector, which doesn't really match how I spend money. Thinking about it more, I'd probably say I even hit #4 before #3. Why? a) I don't really care that much about eating out, so des…

You have completely missed the point. The fact that you could does not mean you shoud or even would.

Wanting a cabin in the woods and being able to afford it does not make you "House freedom level". That level is being able to buy any house you could want without second thought.

The fact that you would not choose such a house is completely irrelevant to this train of thought. Some things you have to plan out and some things are just not worth to consider for even a second.

Re: Climbing the Wealth Ladder

#114

Post by thatfrenchguy »

lazyguy2 wrote: post #86
Pfhreak wrote: post #27

I'm really not a fan of this breakdown because it seems to put each order of magnitude increase in liquid net worth as equal space on the graph. What percentage of people fall into each level. Maybe 50-60% of American adults fall into level 1? Surely, most folks will never reach Level 3 on this chart. While this is an interesting way for someone who has made significant increases in their income over the years, I don…

It's entirely possible for a wage earner to become a millionaire in the USA. Anybody with a middle class income can do it. It's not even complicated or hard to figure out. The problem is that it requires discipline and living under your means. The first step is to eliminate debt and don't make stupid purchases. Debt includes credit card, personal loans, car loans, and mortgages. Stupid purchases are things like expen…

> Anybody with a middle class income can do it

Median income in the US per person in 2018 is 35000$. 500$ a month is 6000 a month, or 17% of that before tax. At that income level you probably don't have any income to spare after housing + food + car + health care.

Re: Climbing the Wealth Ladder

#115

Post by deepaksurti »

IndrekR wrote: post #97
account73466 wrote: post #88

Earlier quoted context omitted.

>> a cashier ending up as a multi millionear set for life at 55 Except that the most interesting part of life is over

> Except that the most interesting part of life is over What makes life beyond 55 uninteresting?

Or may be what he means is that enjoying the experiences with the money in hand (leisure, travel) might not be as good as that in the youth, typically assuming health issues due to ageing.

Re: Climbing the Wealth Ladder

#116

Post by LUmBULtERA »

Kirby64 wrote: post #6
clktmr wrote: post #4

The article completely ignores the last and most important level of wealth, which is being financial independent. Being able to pay for rent, food, healthcare etc. for the rest of your life without the need of a day job will probably have the biggest impact on your life.

That's completely tangential to this article though. It depends on what your definition of that is, and some people handle it better than others. You see those people retiring on 500k (for a couple) and living in a van or something at one extreme. Then there's folks making 500k+/yr and somehow manage to spend most of it without saving any of it. Independence is a state of mind, not a dollar amount.

Yes, I agree with your take. One can be "financially independent" somewhere between level 3 and 5. Most folks who say they have met FI in the FIRE movement likely have NOT made it to Level 5 ("Home Price Matters Less"/$10mm+). FI people can generally say they can cover their housing costs, but they still need to make sacrifices with regard to location, quality, and size (housing costs matter).

Re: Climbing the Wealth Ladder

#117

Post by iso1631 »

leetcrew wrote: post #107
hultner wrote: post #60

Earlier quoted context omitted.

I wouldn't fully agree with this, I'd say income that non-linear to amount time spent it the highest driving factor. Let's take an example. I'm going to use Swedish living conditions and salaries as an example as that's where I live but they are close to most European/western countries. We have a frugal grocery store cashier who makes $2000 USD/month after taxes. We have a high level executive in a medium-sized compa…

does a swedish exec really make just $5000/month post tax? that's not much more than I net at my first software gig out of college (and not in SF or NYC).

According to wikipedia, average salary in Sweden is $2700 post tax ($3500 pre tax)

Re: Climbing the Wealth Ladder

#118

Post by vd84 »

The game changer is:

Move to a country where US dollar goes a long long way. Like Tim Ferris said: What would you do if you had a million dollars right now? Most people don't know. The tragedy is most people don't have any passion. All they do is keep calculating their net worth day in and day out. Happiness is not eating some expensive meal. It is continually growing and having some fun. Most things that are enjoyable aren't that expensive.

You can go snowboarding at whistler even if you don't have a lot of money. You don't need to own a house there, just get an airbnb

Re: Climbing the Wealth Ladder

#119

Post by localhost »

account73466 wrote: post #88
hultner wrote: post #60

Earlier quoted context omitted.

I wouldn't fully agree with this, I'd say income that non-linear to amount time spent it the highest driving factor. Let's take an example. I'm going to use Swedish living conditions and salaries as an example as that's where I live but they are close to most European/western countries. We have a frugal grocery store cashier who makes $2000 USD/month after taxes. We have a high level executive in a medium-sized compa…

>> a cashier ending up as a multi millionear set for life at 55 Except that the most interesting part of life is over

One of the (few) things that I took away from Tim Ferris' 4 hour work week was his concept of "mini retirements" [1] where every few years you "retire" and do something for an extended period of time before coming back into the workforce.

There are absolutely things that you can do when you are younger that you cannot (or are much more difficult) when you are older. It doesn't make then necessarily any more or less "interesting", however - that's completely up to you to decide.

[1] https://www.getrichslowly.org/how-to-take-a-mini-retirement-...

Re: Climbing the Wealth Ladder

#120

Post by account73466 »

greedo wrote: post #94
account73466 wrote: post #88

Earlier quoted context omitted.

>> a cashier ending up as a multi millionear set for life at 55 Except that the most interesting part of life is over

As someone at that age, I think this is completely incorrect, not to mention ageism. Dismissing the last 30% of your life as un-interesting is something I'd expect from someone without much life experience.

You take it out of the context and then accuse me of pushing ageism, well done!

The context is that we compare a life where

i) you save one third of your income and then start to flash money when you are 55, and

ii) you spend one third (or less) of your income on things that matter like finding significant other, having a family, making trips with your friends and family.

You cannot avoid spending 1/3 of your income without it affecting your life style. In extreme case, one can end up becoming a millionaire no one gives a fuck about.

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