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$500k a Year yet Struggling? Let's Do a Double Take

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Re: $500k a Year yet Struggling? Let's Do a Double Take

#101

Post by michaelmrose »

southphillyman wrote: post #47
aantix wrote: post #6

When my wife and I had our first child, we lived in SF. The neighborhood daycare in the Excelsior charged $1600/mo. This is five years ago. We're about to have our fourth child. With the upcoming summer, if we still lived in SF, we'd have four children in daycare. $6,400/mo.

Anyone living in a high COL city with multiple kids should look into importing an au pair. $2k a month would really help the au pair and her family back home and save the family potentially hundreds of dollars a month

Why do you think its OK to import people you can maximally exploit as live in slaves to safeguard the most important things in your life.

The minimum wage for NYC is $15 an hour and ultimately if you pay the minimum you get your pick of the worst employees.

Re: $500k a Year yet Struggling? Let's Do a Double Take

#102

Post by throwaway0516 »

manfredo wrote: post #36
aantix wrote: post #6

When my wife and I had our first child, we lived in SF. The neighborhood daycare in the Excelsior charged $1600/mo. This is five years ago. We're about to have our fourth child. With the upcoming summer, if we still lived in SF, we'd have four children in daycare. $6,400/mo.

So after daycare a couple making $0.5M/yr would "only" have $423,000 left to work with. What does rent cost? A 6 bedroom house can be rented for $11,500 a month [1]. So after rent and daycare the family has $285,000 to work with. Still very very far from struggling. 1. https://www.apartments.com/1934-powell-st-san-francisco-ca/e...

500k is pre-tax. The federal and state income taxes would be about $150k.

Re: $500k a Year yet Struggling? Let's Do a Double Take

#103

Post by aantix »

manfredo wrote: post #36
aantix wrote: post #6

When my wife and I had our first child, we lived in SF. The neighborhood daycare in the Excelsior charged $1600/mo. This is five years ago. We're about to have our fourth child. With the upcoming summer, if we still lived in SF, we'd have four children in daycare. $6,400/mo.

So after daycare a couple making $0.5M/yr would "only" have $423,000 left to work with. What does rent cost? A 6 bedroom house can be rented for $11,500 a month [1]. So after rent and daycare the family has $285,000 to work with. Still very very far from struggling. 1. https://www.apartments.com/1934-powell-st-san-francisco-ca/e...

Gross 500K, you're probably working with 300K after Fed/CA/SF taxes..

138K for rent.

76K for childcare if all four (might get a nanny cheaper)

Student loans because you both went to an Ivy League

Two cars, cell phones, real organic food, savings..

Maybe one big family vacation.

It adds up.

You won't be flying to Paris every weekend on a private jet.

Re: $500k a Year yet Struggling? Let's Do a Double Take

#104

Post by shiftpgdn »

ralph84 wrote: post #68
cableshaft wrote: post #14

"Some of these payments are applied to the principal on their loans, which increases the couple’s net worth by either building their home equity or by reducing their student debt. So that’s also savings." I don't count paying down a debt as "savings". It might be an increase in net worth but not savings. If paying down debt is considered "savings" now, then the entire USA is "saving money". But I think that not only…

It absolutely is savings. Compare two people: Person #1 - Makes $6000/month - Has an interest-only mortgage payment of $1000/month (yes it's still possible to get interest-only mortgages) - All other expenses are $4000/month - Puts $1000/month in a savings account Person #2 - Makes $6000/month - Has a mortgage payment of $1000 interest + $1000 principal = $2000/month - All other expenses are $4000/month Person #1 and…

Can you give more details on the interest only mortgages? I haven't seen that offered anywhere.

Re: $500k a Year yet Struggling? Let's Do a Double Take

#105

Post by AJ007 »

koolba wrote: post #58
SolaceQuantum wrote: post #40

Earlier quoted context omitted.

Eating all organic, fresh-from-farm food, eating at luxury restaurants, attending internationally acclaimed shows in the best seating, and maybe even investing in a little bit of modern art? Oh, and purchasing all the best in skincare, makup, spas, saunas, cryotherapy, light therapy, etc? Personal trainers, coaches, cleaners, cooks? I could imagine a combination of all of those could be 8,500$ a month. (EDIT: And I b…

Unless you’re feeding a small army, it’s not possible for groceries alone to add up to anything like that. Eating out easily could ($200/day x 30 days = $6000!) but not from actual cooking.

Especially if they are picking up someone else’s tab food could easily be $200 a day in a big city. If you add in other random things like female beauty products and services, can/Uber, or if both or alcoholics $100k of misc year expenses is very realistic and might even involve personal restraint keeping it down.

Re: $500k a Year yet Struggling? Let's Do a Double Take

#106

Post by easytiger »

ido wrote: post #98
easytiger wrote: post #85

Earlier quoted context omitted.

> Berlin (a major world city) No. In fact not at all. It is one of the only capital cities in europe that is a cash drain on the nation it resides in. It is in no way a "major world city". It is not a business centre, a financial centre or a cultural centre. It is not even the most interesting or beautiful city in Germany, Europe mostly has a much better school system with predictable outcomes that can't be achieved…

According to https://en.wikipedia.org/wiki/Global_city : Global Power City Index The Institute for Urban Strategies at The Mori Memorial Foundation in Tokyo issued a comprehensive study of global cities in 2018. They are ranked based on six categories: economy, research and development, cultural interaction, livability, environment, and accessibility, with 70 individual indicators among them. The top ten world cities…

London added the entire population of Berlin in the last 20 years or less. Berlin gets on that list because of the nation state it resides in having significant world status and economic output, and not because Berlin is of any presence in the world.

It is a burden on its nation*

*https://cdn.theatlantic.com/assets/media/img/posts/2016/08/S...

Re: $500k a Year yet Struggling? Let's Do a Double Take

#107

Post by notfromhere »

akgerber wrote: post #55
ido wrote: post #32

Earlier quoted context omitted.

Hi! My wife & I are raising 2 children in Berlin (a major world city) & earn a lot less than $500k while not struggling at all (in fact I save about 1/3 of my net pay even after deductions for both private and public retirement funds). Sending your kids to private schools is hardly a must, especially if you live in at least a middle-class neighborhood (which I assume you do on a $500k income).

The way the United States provides schooling free of charge from age 4 to age 18, and expects families to pay massive tuition bills before and after, does make parenting expensive at times— especially for young families starting out. $500,000 in income is, of course, enough money to pay even expensive bills, being well into the top 1% of family incomes.

People pay for private k-12 because there's a perception of the public schools being awful (and it may be true depending on the area). But if you live in a nice area with a well-funded school district, paying for private school is just ego. You won't get much of a difference in learning outcomes

Re: $500k a Year yet Struggling? Let's Do a Double Take

#108

Post by mikestew »

jshaqaw wrote: post #87
astura wrote: post #15

103,500/year on unexplained "other expenses??" Over $8,500/month?!! Which is almost double their mortgage payments Um.... What the hell? Their biggest line item is completely unexplained yet they are trying to explain where their money goes? I live a fairly indulgent life and I spend less than that on everything in a year. I can't imagine spending six figures on "misc" unless there's a lot of hookers and blow involve…

Do you have kids? Maybe not 8500 but there is always something from summer camp to orthodontics etc... Life with kids is worth it 200 percent but expensive.

You're saying it's reasonable for kids to eat up twice the median U. S. household income? Yeah, somehow that math doesn't add up to me. There's "expensive", and there's "you've got to be blowing money on stupid shit".

Re: $500k a Year yet Struggling? Let's Do a Double Take

#109

Post by notahacker »

astura wrote: post #15

103,500/year on unexplained "other expenses??" Over $8,500/month?!! Which is almost double their mortgage payments Um.... What the hell? Their biggest line item is completely unexplained yet they are trying to explain where their money goes? I live a fairly indulgent life and I spend less than that on everything in a year. I can't imagine spending six figures on "misc" unless there's a lot of hookers and blow involve…

The linked CNN article[1] breaks it down as essentially $52k on childcare and expensive child activities, 23k on food including some undoubtedly expensive "date nights" and the rest on the sort of insurance and maintenance costs you incur when everything you have is very expensive. The Bloomberg author's probably aiming to make it seem even more frivolous by having "other" as a massive line item, not that I'm convinced sure many people facing real rather than self-imposed spending constraints would consider $9k per annum on "no fancy bags, shoes or threads" clothing an example of the sort of thriftiness the article subjects seem to think they're demonstrating, or $23k to be a food budget for two adults and two kids that couldn't possibly be trimmed a little...

[1]https://www.cnbc.com/2018/03/06/budget-breakdown-of-a-couple...

Re: $500k a Year yet Struggling? Let's Do a Double Take

#110

Post by dagw »

nopriorarrests wrote: post #88
dagw wrote: post #77

Earlier quoted context omitted.

So when I put money every month into an index fund, that doesn't count as savings?

With index fund you can at least have stop-loss order in place. It's hard to set stop-loss order for house.

I agree that your house is in itself not savings and that taking out a mortgage to buy property doesn't count as savings, and one can have long discussion about if and when taking out a mortgage to by house is a sound financial decision. However once you have the house and the mortgage, then paying down that mortgage is savings, just not a very liquid form of savings. You can argue that it isn't the best and most efficient form of saving and depending on what the interest rates are and where you think interest rates are going you might be able to do something better with your money, but that is beside the point.
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