Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 09-11-2018, 05:01 AM   #61
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 6,263
Quote:
Originally Posted by urn2bfree View Post
As far as "wasteful" spending-
1)second home as a rental that apparently costs more than it generates
2)second mortgage used to improve home while still paying off student loans?!
3) maintaining a car just for racing and participating in weekend races until his financial makeover
4) 2 dogs - look like they could be purebred, but who knows? Wasteful? Well, clearly 2 dogs are not a necessity

That nothing in the article even questioned the last two items screams of an obliviousness borne of entitlement.
I hope those who think these sorts of people won't run out of money and then ask for a bailout from us savers are right, and I am wrong. I am skeptical.
Now you're upset because they have 2 dogs?
__________________

RunningBum is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-11-2018, 06:56 AM   #62
Thinks s/he gets paid by the post
 
Join Date: Jan 2018
Location: Tampa
Posts: 1,621
Quote:
Originally Posted by RunningBum View Post
Now you're upset because they have 2 dogs?
haha
Seeing many more families with 2 dogs now.
__________________

__________________
TGIM
Dtail is offline   Reply With Quote
Old 09-11-2018, 07:18 AM   #63
Recycles dryer sheets
Lukeee's Avatar
 
Join Date: Feb 2018
Posts: 131
perhaps the 2 dogs are a source of income for them.

I was about to attach a pic just in case there were questions about how 2 dogs could be a source of income... but i like this place and didn’t want to be banned.
__________________
Person who will often put his foot in his mouth and not realize it.

2020 or bust!
Or
Perhaps 2021...2022...NVM
Lukeee is offline   Reply With Quote
Old 09-12-2018, 08:09 AM   #64
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Amethyst's Avatar
 
Join Date: Dec 2008
Posts: 6,663
I agree pets are a luxury, not a real necessity, but what are they supposed to do now? Get rid of the dogs?
Having too many kids is not financially responsible, but the financial makeover isn't going to say "send them to the orphan farm."

Also I think the owner is right to idle the racing car for now, not try to sell it. It was probably a source of joy to him, and he likely would not get his money out of it (sort of like telling me to sell my jewelry - the $$-smart thing to do was not to buy it in the first place, but selling it now will net very little).

Unless there are lots of fancy meals out and vacations that weren't in the article, there seems hope for this family. They work, they earn, they seemingly stay out of trouble and they are not what I'd call over-housed. And she's got a pension coming.

Quote:
Originally Posted by RunningBum View Post
Now you're upset because they have 2 dogs?
__________________
If you understood everything I say, you'd be me ~ Miles Davis
'There is only one success – to be able to spend your life in your own way.’ Christopher Morley.
Amethyst is offline   Reply With Quote
Old 09-12-2018, 08:47 AM   #65
Recycles dryer sheets
 
Join Date: Nov 2016
Location: Camas, WA
Posts: 393
I think some of us (myself included) sometimes forget about the life lived before retirement. We're so busy scrimping and saving for the future, we don't take a little of that money to enjoy today. Saving for tomorrow is great, but what if tomorrow never comes?

The family in the article still has two young kids and a mortgage. That's the stage of life they're in. He has a car as a hobby, probably an expensive hobby, but that's what he enjoys doing. Take that away and what is he left with?

I'm sure we all have areas we could cut back. I know I do. But I want to enjoy life now also, not just after retirement.

At least the family in the article is saving and planning for the future. They have way more set aside than I did at that age.
mountainsoft is online now   Reply With Quote
Old 09-12-2018, 08:57 AM   #66
Thinks s/he gets paid by the post
imoldernu's Avatar
 
Join Date: Jul 2012
Location: Peru, il
Posts: 4,970
Not being very knowledgeable in the income, assets, liability analysis, my inclination is to first look at the household budget, (read that as to where the money is spent... not what looks good)

from here:
https://www.usatoday.com/story/money...heck/34378157/

.
Quote:
Food: $7,203, which can be further broken down into $4,049 of food at home and $3,154 on food away from home.
Alcoholic beverages: $484.
Housing: $18,886, which includes mortgage payments or rent, property taxes, maintenance, utilities, household services and products, furnishings and appliances. On a monthly basis, this implies that the average household spends $1,573 on all of these expenses combined.
Apparel and services: $1,803.
Transportation: $9,049. In addition to the cost of vehicles, this includes gasoline, finance charges, maintenance, insurance and public transportation expenses.
Health care: $4,612, which includes the cost of health insurance, medical services, prescription drugs as well as other medical supplies.
Entertainment: $2,913. This includes in-home entertainment costs, as well as outside-the-home entertainment ventures. Certain other expenses, such as your pets, are included here.
Personal care products and services: $707.
Reading: $118.
Education: $1,329.
Tobacco products and supplies: $337.
Miscellaneous: $959.
Cash contributions (charity, for example): $2,081.
Personal insurance and pensions: $6,831. The largest expense in this category is Social Security payroll tax, but life insurance premiums and pension contributions are also included.
Personal taxes: $10,489, which includes the average household's $8,367 federal income tax bill, as well as state and local income taxes.
That doesn't address the original article at all, but sets some kind of guideline as to how an average family, with a $75,000 income, spends.

A far cry from our own income/expense, of a little more than half of the average, but some insight into how the average American family works and spends.

If I were asked to give advice on a similar situation, I think I'd ask first, for a comparison breakdown of the actual expenses... and where the dollars or percentages differ... to explain why.

Instead of a top down, a bottom up.
__________________
We only know, what we know.
imoldernu is offline   Reply With Quote
Old 09-12-2018, 09:23 AM   #67
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,839
Quote:
Originally Posted by imoldernu View Post
Not being very knowledgeable in the income, assets, liability analysis, my inclination is to first look at the household budget, (read that as to where the money is spent... not what looks good)

from here:
https://www.usatoday.com/story/money...heck/34378157/

.

That doesn't address the original article at all, but sets some kind of guideline as to how an average family, with a $75,000 income, spends.

A far cry from our own income/expense, of a little more than half of the average, but some insight into how the average American family works and spends.

If I were asked to give advice on a similar situation, I think I'd ask for a comparison breakdown of the actual expenses... and where the dollars or percentages differ... to explain why.

Instead of a top down, a bottom up.

We did exactly that when we started thinking about retiring. I put our budget in the same categories as the Consumer Expenditure Survey and looked for the items that were out of range. I couldn't do a lot about some categories, like housing, without moving, but other categories like groceries and hair salons were a real wake up call. I know now the groceries in my neighborhood stores are 2 - 5 times what they cost at the ethnic and outlet markets only 10 minutes from my house. Now I keep a price list so I don't get ripped off any more.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 09-12-2018, 10:35 AM   #68
Full time employment: Posting here.
 
Join Date: Jun 2017
Location: Western NC
Posts: 800
Quote:
Originally Posted by mountainsoft View Post
I think some of us (myself included) sometimes forget about the life lived before retirement. We're so busy scrimping and saving for the future, we don't take a little of that money to enjoy today. Saving for tomorrow is great, but what if tomorrow never comes?

The family in the article still has two young kids and a mortgage. That's the stage of life they're in. He has a car as a hobby, probably an expensive hobby, but that's what he enjoys doing. Take that away and what is he left with?

I'm sure we all have areas we could cut back. I know I do. But I want to enjoy life now also, not just after retirement.

At least the family in the article is saving and planning for the future. They have way more set aside than I did at that age.
Still, it points out the impact of housing expense on one's ability to save for other goals.

At best, they've stretched their home expenses beyond the recommended, so something's gotta give.

Which is why we see so little retirement savings...with saving for college likely out of the question altogether.

Another risk is of course the fact that they've bet their main "investment" and most of their household income only on real estate.

It wouldn't take a "Great Recession" to drop local home values and also put hubby out of work.
ncbill is offline   Reply With Quote
Old 09-12-2018, 12:28 PM   #69
Thinks s/he gets paid by the post
 
Join Date: Sep 2006
Posts: 1,823
I must be missing something, a couple of 40+ year olds that chose to invest in real estate in Seattle area instead of stock market have a net worth of $627,000 who work as a school teacher and an appraiser of real estate and they are doing poorly?

This is a tough crowd, there are 11 million households in US in this age group and they are in the top 12 percent of their age group.


https://dqydj.com/net-worth-by-age-c...united-states/
Running_Man is offline   Reply With Quote
Old 09-12-2018, 12:37 PM   #70
Thinks s/he gets paid by the post
Fedup's Avatar
 
Join Date: Mar 2014
Location: Southern Cal
Posts: 3,314
They are a little lite on retirement savings but they are still young yet, both of my kids have very similar amount and they are in their 20s, and one is a creative type, so not high income. At least this couple is now aware of their problem, they are seeking help. That’s the first step toward getting FI, conscious about the lack of savings and perhaps a desire to contribute more.
Fedup is offline   Reply With Quote
Old 09-12-2018, 01:58 PM   #71
Full time employment: Posting here.
friar1610's Avatar
 
Join Date: Jun 2002
Posts: 922
Quote:
Originally Posted by urn2bfree View Post
As far as "wasteful" spending-
1)second home as a rental that apparently costs more than it generates
2)second mortgage used to improve home while still paying off student loans?!
3) maintaining a car just for racing and participating in weekend races until his financial makeover
4) 2 dogs - look like they could be purebred, but who knows? Wasteful? Well, clearly 2 dogs are not a necessity.

That nothing in the article even questioned the last two items screams of an obliviousness borne of entitlement.
I hope those who think these sorts of people won't run out of money and then ask for a bailout from us savers are right, and I am wrong. I am skeptical.
I don't know their whole story so I'm not going to "bark" at them for having dogs. But as a dog-owner who recently paid >$1200 in vet bills for a minor problem with Fido, I have to admit that I picked up on the 2 dogs in the picture as being an expense that might not be essential.
__________________
friar1610
friar1610 is offline   Reply With Quote
Old 09-12-2018, 02:37 PM   #72
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 4,161
Quote:
Originally Posted by Running_Man View Post
I must be missing something, a couple of 40+ year olds that chose to invest in real estate in Seattle area instead of stock market have a net worth of $627,000 who work as a school teacher and an appraiser of real estate and they are doing poorly?

This is a tough crowd, there are 11 million households in US in this age group and they are in the top 12 percent of their age group.


https://dqydj.com/net-worth-by-age-c...united-states/
Yep. They are better off than most people, but they may have higher expectations about retirement spending than most people.

I see two issues, real estate exposure and college.

Half their net worth is driven by an attractive local real estate market. They believe they made $150k in two years on their primary residence. Maybe, maybe not. They think they have $150k equity in the rental. No information on how that happened. The fact that he is a real estate appraiser may give them an advantage in making money on residential property. But, still, $300k of their net worth is in their principal residence.

Annual costs at the University of Washington are about $28k. They probably want to fund 8 years of that, and they don't have any earmarked savings for it.

Figuring $150k gross income, $25k in taxes, and $40k in mortgage payments, the have $85k for other spending.

The Consumer Expenditure Survey that ImOlder posted has about $50k for expenses that could match up to that $85k. I'd recommend that they they track their expenses in the CES categories, and see what they can cut.

I'd like to see the planner's retirement budget. They probably can use a discussion on their priorities. Sounds like they are doing that.
Independent is offline   Reply With Quote
Old 09-12-2018, 03:03 PM   #73
Recycles dryer sheets
 
Join Date: May 2017
Posts: 292
For what it's worth, the $850k house is where they lose me. DW and I combined make double what they make and live in a fairly HCOL (for the Midwest) and wouldn't think of buying a house that expensive, even though we can afford it.
brokrken is offline   Reply With Quote
Old 09-12-2018, 03:12 PM   #74
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,688
Quote:
Originally Posted by brokrken View Post
For what it's worth, the $850k house is where they lose me. DW and I combined make double what they make and live in a fairly HCOL (for the Midwest) and wouldn't think of buying a house that expensive, even though we can afford it.
Of course, you also would have no reason to buy a house that expensive. While you could overpay, the people here cannot underpay, as you would know if you had ever lived anywhere where residential real estate is expensive or very expensive.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 09-12-2018, 03:15 PM   #75
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,839
Quote:
Originally Posted by haha View Post
What you say? In state and living at home it should be less than half of that. The most recent resident tuition figure I have seen is less than $11,000. Still too damn much. It helps young people to pay their own way, and work. Many fewer of these students would drink their way through the years at college, and still fewer would take courses that while fun will have zero or at times negative career value.

True that the US post secondary education system is a swindle, but the young person does not have to cooperate in being swindled.

Ha

There are also many community college degrees these days that may lead to more promising careers than low demand majors at four year colleges. Besides less costs, there's an extra two years in the job market at a skilled worker salary.
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is offline   Reply With Quote
Old 09-12-2018, 03:32 PM   #76
Confused about dryer sheets
 
Join Date: Aug 2016
Posts: 1
Give this couple’s occupations, they could live pretty much anywhere. They should dump the expensive house while the market is good, sell the rental property, and use the proceeds from both to liquidate the debts and still have money left over for a down payment on a home in a lower cost state. They can start over. They’re young enough.

I realize the Pacific Northwest is beautiful and the thought of living in “flyover country” doesn’t sound appealing, but there are plenty of beautiful places in low cost states. In the end, it’s about priorities.
Austin704 is offline   Reply With Quote
Old 09-12-2018, 03:32 PM   #77
Recycles dryer sheets
Lukeee's Avatar
 
Join Date: Feb 2018
Posts: 131
Quote:
Originally Posted by brokrken View Post
For what it's worth, the $850k house is where they lose me. DW and I combined make double what they make and live in a fairly HCOL (for the Midwest) and wouldn't think of buying a house that expensive, even though we can afford it.


For a person (me) that never focused on FIRE till more recently, I will say it’s easy to fall into the ‘I want to upgrade my home’ sickness. There was a point when DW and I were seriously considering ‘upgrading’ 10+ years ago but decided to put the cost of moving and commissions into renovating the home. It’s only now that i dig deeper into some costs that offset profit that I’m glad I didn’t upgrade.
Using a $850K home as the example
- property tax (probably $10K a year...$50K for 5 years).
- bigger interest payments ($500K loan at 3.25%) of $77K in interest payments for the first 5 years.
- moving in future is probably $20K in commission / moving and furnishing new home.
__________________
Person who will often put his foot in his mouth and not realize it.

2020 or bust!
Or
Perhaps 2021...2022...NVM
Lukeee is offline   Reply With Quote
Old 09-12-2018, 03:33 PM   #78
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 4,161
Quote:
Originally Posted by Fedup View Post
It is more obvious, if you do your own tax. I use TurboTax, I just add SS, no tax at first, the minute I add other income, 85% of SS is taxed. If that’s not means testing, what is ?
Quote:
Originally Posted by mrWinter View Post
Did not know it worked that way. Bummer. Is that Fed tax or state or both?
It's not quite as extreme as "the minute".

If a couple has $40,000 of combined SS benefits, they can have another $12,000 of regular income and none of their social security benefit will be taxable. That means they have $52,000 of income and pay no FIT because $12,000 is less than the $24,000 standard deduction.

At $20,000 of other income, for a total of $60,000, they include $4,000 of their SS benefits in taxable income, but still pay no tax.

But, then it grows quickly.

When they get to $40,500 of other income, for a total gross of $80,500, about half the SS will be taxable. So they will be taxed like people who have $60,500 of income.

And, when they get up to $57,000 of other income, for a total of $97,000, 85% of the SS will be taxed. So they will be taxed like other people who have $91,000 of income.

I agree with FedUp that this amounts to a means test on SS benefits. But note that it is not an extra tax on SS, just a loss of the preferential SS treatment.

37 states do not tax SS benefits. That includes 9 that have no state income tax. https://www.kiplinger.com/slideshow/...its/index.html
Independent is offline   Reply With Quote
Old 09-12-2018, 08:11 PM   #79
Thinks s/he gets paid by the post
redduck's Avatar
 
Join Date: Mar 2005
Location: yonder
Posts: 2,524
Quote:
Originally Posted by jazz4cash View Post
I'm pretty sure their problems are due to the vanity license plates.
Quote:
Originally Posted by OldShooter View Post
IMO that is a symptom of the problem, which is poor judgment on spending.
Hey, hey, OldShooter, I have vanity license plates. Worth whatever I pay for them every year (or every two years, I forget which).
__________________

__________________
"I'm in the need of a new signature line" -- redduck
redduck is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Got Flu Despite Shot TromboneAl Health and Early Retirement 74 12-31-2017 09:56 PM
Trip report: Travel despite US Travel Alert msbearkeley Travel Information 5 12-02-2015 09:57 PM
Refinancing despite unreleased Mortgage? gauss FIRE and Money 6 05-05-2015 05:04 PM
Chimp Charlie dies at 52 despite smoking habit MasterBlaster Other topics 1 10-06-2010 12:38 PM
Self-insurance health opinions and challenges Roger_R FIRE and Money 23 05-27-2007 06:56 PM

» Quick Links

 
All times are GMT -6. The time now is 11:05 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.