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Climbing the Wealth Ladder

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Re: Climbing the Wealth Ladder

#291

Post by account73466 »

leetcrew wrote: post #287
Izkata wrote: post #209

Earlier quoted context omitted.

> I've married, raised a family, and had memorable trips with them. I think this part is their point. Even you are looking backwards at what you have done, instead of future plans, implying the younger years are the more interesting ones.

I think they're just rebutting the claim that they must not have done anything interesting/meaningful if they were able to save so much.

No, that would be a stupid argument. The argument is that by saving almost all your after-basic-expenses income you postpone too many things which would be just much less interesting or cool when you are over 55. For example, traveling when you are in your 60ies and 20ies are two different things. In the latter case the cool things that you find/learn can positively impact your entire life. If you are in you 60ies it is much harder to be impacted by external things and change your habits/preferences even if you want it.

Re: Climbing the Wealth Ladder

#292

Post by Pfhreak »

itake wrote: post #289
Pfhreak wrote: post #268

Earlier quoted context omitted.

Any definition of the middle class that doesn't include the middle of incomes seems wrong to me. Median means half above, half below, how would that not be the "middle" class?

Where did you get the $31k as the median income for Seattle? This source says it is closer to $95k? https://www.seattletimes.com/seattle-news/data/seattle-media...

I took the national median per capita income. Looking at King County's per capita median income puts it closer to $46k. [1] I also suspect I low balled the housing and medical insurance costs.

[1] https://www.census.gov/quickfacts/fact/table/kingcountywashi...

Re: Climbing the Wealth Ladder

#293

Post by arkh »

esotericn wrote: post #89
arkh wrote: post #87

Earlier quoted context omitted.

> grocery store cashier who makes $2000 USD/month after taxes Not "close" to most European/western countries. You may be really disconnected from normal people revenues. > assuming average yearly yield with reinvested dividends at 8.5% That's a big assumption. > At this level travling/vacation expenses isn't a problem for the cashier Inflation over 30 years then 20 more years of retirement may change this.

He's specifically talking about the Swedish perspective where the income distribution is much flatter. In the UK it'd be more like $1K for the cashier and $10K for the exec rather than 2 and 5.

From their post about the $2k salary after taxes:

> but they are close to most European/western countries

Re: Climbing the Wealth Ladder

#294

Post by cvwright »

slothtrop wrote: post #245
CPLX wrote: post #29

Earlier quoted context omitted.

Yup. I see this kind of logic in personal finance discussions all the time but it's bullshit. There simply aren't any spending decisions you can make that will change you from not wealthy to really wealthy. Those things can just move you from poor to middle class at best, or to a better level of middle class. Outside of real outlier status where you're paid really, really large amounts of money for your services (lik…

Exactly, we can't even save our way to retirement (we need to invest), let alone expect frugality to translate to wealth. If you aren't in business for yourself, pay raise is the way up.

> pay raise is the way up

Not if the person spends it all, like they did the earlier lower salary. Better beer, bigger TV, new cars, etc and you can easily blow through quite a decent raise.

Re: Climbing the Wealth Ladder

#295

Post by anewguy9000 »

disintegore wrote: post #205
anewguy9000 wrote: post #59

Earlier quoted context omitted.

2-10 grand over 10 years wont even cover inflation. so you're actually poorer.

I suppose you're that much less poorer. In any case, you have something like 30 grands on hand, which you wouldn't have otherwise. That's cash down on a house.

not in 10 years its not

(maybe somewhere on earth it is?)

Re: Climbing the Wealth Ladder

#296

Post by tempsy »

shantly wrote: post #283
tempsy wrote: post #178

On the "travel freedom" category - just want to say we live in extremely unusual times when it comes to travel and there's little reason to pay out of your savings to fund travel at the present moment. In the US we've been living in the Golden Age of travel and credit card rewards for the last decade. I started churning cards in 2012 and have not paid in full for personal travel since. It's become slightly harder to…

Something I've wondered about this: doesn't opening & closing tons of lines of credit fuck with your credit rating? Or do you just leave them open until/unless the issuer decides to close the (unused) account, leaving you more crap to have to watch for fraud & such?

It does a tiny bit but it's not a huge weight in the credit scoring equation and has very little long term effect. I've maintained a ~750+ score for a long time despite opening 5-6 cards/year on average.

I wouldn't do it if I were in the market to buy a new house in the next ~12 months but otherwise a small temporary dip in your credit score has literally zero impact on your life.

Re: Climbing the Wealth Ladder

#297

Post by BeetleB »

doubleInt wrote: post #193
BeetleB wrote: post #169

Earlier quoted context omitted.

> I suggest you look up what stock ownership means. Stock ownership traditionally means partial ownership of a business. Except that you almost have no decision making power unless you own a lot of stocks, and that's not going to happen while working a simple middle class job. It also doesn't mean that the company will pay you a portion of their profits. It is entirely up to the company whether they want to pay you a…

Do you own stocks? If you don't, and your reasoning above is the reason why, I strongly recommend you reconsider. There is more to be lost by fearing your lack of control and failing to invest than there is by investing, in say, index funds.

You're the second or third person assuming I'm advocating against stocks. Why do people keep assuming this from my comment? Nothing in my statement suggests owning stocks is a bad idea.

I own stocks. My wealth portfolio is high in stocks. This has little bearing on my comment. I'm not recommending against stocks - in the US I've not found a better investment (real estate is worse).

I'm simply pointing out that the notion of ownership in a company via stocks is very different from what most people imagine. You own almost nothing, and you have virtually no control over the means of production.

Re: Climbing the Wealth Ladder

#298

Post by joncrane »

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…

Oh you'd be surprised how many people at the $250k income level have been cruising along barely net worth neutral in spending and took out some kind of personal loan or used their credit card for that $10k "new roof" blip or impulsively traded in a car that was a few k upside down, and they started to get further and further underwater. At some point the credit runs out and the next $10k blip means they are literally homeless within a few months.

I think the difference is that people like that have a MUCH better safety net in the form of family and friends who can easily provide $5-10k handouts to get a family out of a jam. (Then of course you have the people that are already abusing THAT source of funds. Even though they are making $250k).

You would be AMAZED at how close to the edge people live at every income level. It's like a part of human nature to do it, regardless of whether one is a millionaire or a pauper.

Re: Climbing the Wealth Ladder

#299

Post by zrail »

SketchySeaBeast wrote: post #237
zrail wrote: post #159

Earlier quoted context omitted.

(assuming you're asking in good faith) It's the same thing, just on a different scale. If you own, say, one share of VTSAX (Vanguard Total Market Index) you now own, by proxy, 1.8% of one share of Microsoft stock. You don't have any direct voting or economic rights but because of the way a mutual fund is structured you get most of the economic benefit of that fraction of a share. I.e. you get the benefit of most of t…

I still don't know how that equates to actual ownership of anything - it seems like an incredibly abstract form of ownership, as you get no power, don't share in the profits (if you don't get dividends you only get cash if you sell, that price being only vaguely linked to the current success of the company), and can have your ownership watered down at any time. You own the stock, but that seems incredibly distant fro…

Yeah it’s pretty abstract. One correction, you definitely do get the dividends that a company pays if you own them through a mutual fund. Funds report their net asset value (NAV) every night and when a company pays dividends it raises the fund’s NAV. US funds are required to pay out dividends to their shareholders as part of their tax status (basically a very specific type of non-profit).

Re: Climbing the Wealth Ladder

#300

Post by Retric »

brailsafe wrote: post #243
opportune wrote: post #232

Earlier quoted context omitted.

They are in the same boat in that they face potential financial ruin if they don’t get their next paycheck for whatever reason. There is already a separate terms to describe people who live paycheck to paycheck to cover essential living expenses, it is called poverty.

I think one is trying to get out of ruin in general, whereas the other potentially risks financial ruin

You can be poor and have financial security. Pensions that fail to keep up with inflation would often strand the elderly with minimal income. But, assuming they had heath insurance they where generally in an very stable situation.
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