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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

#21

Post by jedberg »

kec wrote: post #13
jedberg wrote: post #4

Earlier quoted context omitted.

Sure it will. That's a $1.2M house with 20% down. There are plenty of 2-3 bedroom 1200-1500sq ft houses around here in that range. Sure, it would be an average school district and maybe have a bit of a commute, but you can find stuff in that range for sure.

How many folks actually have $250k they can just drop on a mortgage downpayment?

It would be $200K, but 20% is a pretty standard down payment. Yes, it would take a while to save up that much, which is why housing around here isn't affordable, but it's also pretty standard.

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

#22

Post by rohit2412 »

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…

I guess then net worth should be seen as savings

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

#23

Post by dbancajas »

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…

Yeah. What's crazy is the article didn't talk about it. Biggest red flag right there.

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

#25

Post by wilg »

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…

Can you explain in more detail why you don't consider it savings? Maybe it is obvious but I am curious.

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

#26

Post by [deleted] »

jedberg wrote: post #12

If you're making $500,000 a year anywhere on the planet and struggling you've most likely let your lifestyle get the best of you. Sure, maybe there are a few circumstances where that's not the case: a major medical bill that you're paying off, caring for your parents or other loved ones. But otherwise, there would be lots of places to cut back without a notable change in quality of life.

[deleted]

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

#27

Post by kec »

jedberg wrote: post #21
kec wrote: post #13

Earlier quoted context omitted.

How many folks actually have $250k they can just drop on a mortgage downpayment?

It would be $200K, but 20% is a pretty standard down payment. Yes, it would take a while to save up that much, which is why housing around here isn't affordable, but it's also pretty standard.

$1.2M * 0.2 = $240k.

No one I know in the Bay Area who has bought a home in the last ~8 years has been able to scrape together 20%, everyone puts down less and gets PMI.

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

#28

Post by Areading314 »

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…

This doesn't make any sense -- paying down debt instead of SPENDING the money increases net worth and is ultimately the same as socking money into a savings account if you're debt-free.

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

#29

Post by war1025 »

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…

Anything that increases net worth, by definition, increases your net worth. That means you are using a currently surplus to pay down previous deficit.

The issue most "common people" have is they increase their debt load rather than paying it down.

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

#30

Post by akgerber »

crooked-v wrote: post #24
resters wrote: post #18

Try raising a few kids in a major city and paying private school tuition and child care fees. It easily eats up most of $500K of income.

If you can send every kid to private school, you're not "struggling".

Or — "after I spend all my money, I don't have any money left!"
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