If it's even close to true ...
If it's even close to true ...
At first blush would seem hard to believe but based on stories my wife shared from being in the banking industry years ago it my be quite true??
Large house payment, two large car payments, plus regular high spending doesn’t leave many anything to save.
I am so grateful my wife and children have helped us save and try to avoid most of this pitfall of overspending.
My wife and I earned half of that back in 2005 and didn’t even come close to the paycheck to paycheck. We are pretty conservative people though.
I used to be a spender and went bankrupt. Now I’m a saver and It’s a much easier life.
I can see that. $250K ain't what it used to be.
Mortgage payment, 2nd mortgage, student loan payment, 2 vehicle payments, boat payment, Nitro spent about $5k per month alone on food
Thanos was the hero
Alot of those earning $250,000 a year likely live in high cost of living areas. You take out the taxes after earning $250,000.00 and then you start adding in property taxes, insurance, college tuition (or saving for college), saving for retirement etc. and it would not surprise me one bit. People pay too much attention to income and not enough attention to net worth. Someone can make a ton of money but if they are leveraged to the hilt they are literally living right on the brink.
It's more than possible to live in NYC, SF, Honolulu, etc. on $250k, even with a family.Originally Posted by NitroZ7
No different than living on $80k in Little Rock. Must live below your means, that's it.
As someone once said, "It's not what you make, it's what you spend". Pay yourself first.
My uncle gave me some great advice when I was 16. He helped me apply for American Express card that he co signed for. He said use this for everything, it’s free money for 30 days, but every time you use that card write it down in your check book just like you wrote a check. At the end of the month pay the whole bill. Failure to paying the whole bill will result in me breaking your nose, repeatedly if necessary! Every pay check save at least 7% bare minimum no matter what. He instilled great financial habits in me from the get go. So thankful as I look at some of my buddies situations as they close in on the age of 60.
It is possible but lets be honest. People that make that money run with crowds that belong to exclusive clubs, drive expensive cars etc. I was watching an interesting video on young investment bankers that quit and made quite a bit of money. Many of these were from other countries. They talked about how these younger workers joined an exclusive country club and bought expensive clothes because that was their means to gain social acceptance to the upper echelons. The saying in Miami is fake it till you make it. Alot of these high earners are going to fake themselves right into bankruptcy. The book the Millionaire Next Door was as correct then as it is now. Way too many aspirational wealthy people.
I've been around folks peeing +$1M/year, without an issue. But that's a choice, not an economic impact.
Can't feel for anyone who doesn't work to save, become debt free, etc. America is the land of anything.
Anything can be upward, downward, sideways or in a spiral. Individual responsibility is a tough master.
That’s crazy but I can believe it. I retired early last year at 57 1/2. Been saving all my life. A lot of my former colleagues had both spouses working full time making double what my wife and I made and are no where close and ready to retire. It all comes down to choices.
1999 Stratos 273 Vindicator 2013 Yamaha 150hp HPDI Vmax
Yep ... my trip to retirement wasn't very smooth.
Mid 30s, mid 40s and finally mid50s before it stuck.
Kept getting recruited back with stupid money.
Crissi burned her shingle last year. She's 56 soon.
We really enjoy our retirement. Relaxing & traveling.
Work is a means to an end, not a lifestyle, a path.
I see threads on Reddit where people are asking how to handle student debt in retirement. Answer: You are not ready to retire yet. I see retirement projections all over the place but people vastly underestimate what they need to retire early. How people think they can retire in their 50's with under a million dollars is mind boggling.
Let's say someone is 57, $200k in cash, $200k in stocks/bonds, $500k in 401k.
Comfortable 2/2 home, two year old RAV4 hybrid, no debt on the house or vehicle.
Pension starting at 60, $30,000/year, indexed for inflation. Retirement healthcare.
They spend $4,000/month on expenses and an "allowance" for disposable funds.
Furthermore, they earned enough during their career to achieve the max with SS.
Can they retire comfortably, safely and without concerns? They want to play golf.
The condo on the course is terribly tempting, day by day. It's their life's desire.
It would depend on that person's objectives. Do they want to leave money to heirs, live off the income and never touch the principal? Also many people do not have a pension or have their healthcare covered if the retire early. That makes a big difference. Retirement is a scary decision because you have to plan with alot of unknown variables. I actually factored in a $50,000.00 roof replacement at some point in my retirement calculations as the roof is 20 years old. Unfortunately crap doesn't stop breaking when you retire even if you own the house free and clear
They want to slide into home plate with empty pockets at 95 years of age.It would depend on that person's objectives. Do they want to leave money to heirs, live off the income and never touch the principal? Also many people do not have a pension or have their healthcare covered if the retire early. That makes a big difference. Retirement is a scary decision because you have to plan with alot of unknown variables. I actually factored in a $50,000.00 roof replacement at some point in my retirement calculations as the roof is 20 years old. Unfortunately crap doesn't stop breaking when you retire even if you own the house free and clear
Pension and healthcare are covered, thru retirement, Medicare adjusted.
The expenses do include 1.5% annually for residential maintenance costs.
HOA fees are include in expenses AND they mostly cover the exterior.
Now ... they really want to play golf, live the life, relax, enjoy. Ok now??
Still could be close depending on what inflation does and the market returns. $700,000.00 yielding 3% is $21,000.00 plus $30,000.00 is $51,000.00. Expenses of $4,000 a month is $48,000.00. Cash at $200,000.00 if inflation stays over 7% that cuts it in half over 10 years in terms of purchasing power. If we are talking about retiring today then I would be uncomfortable, but that is based on me planning for the worst. If you ever run a retirement calculator combination and put in a worst case scenario with high inflation and low market returns then it will keep you up at night and the worst case scenario is not out of the question over the next 10 years.
Remember, SS is indexed, property will appreciate, etc. Worst case scenario, a frosty mountain.
Once you nod off, it's over. The slave pit isn't suitable for my type. I'm an escapee, catch me.
For what it's worth, indexed spending, inflation & ROI breaking even ... estate at 95, $4.28M.
Plus the value of the condo added to the estate. Live longer SS doesn't stop, it's still there.
If they are retiring at 57 with no income or pension until 60 there going to burn through a lot of that cash unless the market improves. It’s possible but so many variables it won’t be relaxing every day but hopefully most days.
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