"WEEKEND INVESTOR Six-Figure Incomes"

[scrabbler1]

Wow. Thanks for tip; worked great

It worked for me, too. Thanks tfud'er.

 

[haha]

I see they quote Robert Bell in the article....his blog "Living Stingy" is one of my favorite sites...he hits the nail on the head about how much money people waste on nonsense, and how to avoid the pitfalls of debt....

He is also REALLY BIG on personal responsibility...

Check it out!!!!!!

Thanks for reminding me of this guy. He is really an old school social critic more than a cheerleader for ER

There are a lot of really, really stupid people in this world. It took me a long time to figure this out. I had always assumed that most folks were pretty bright, but just lazy thinkers on occasion. The reality is, of course, that most people are dumb as posts. Even so-called "smart" people with important jobs like airline pilot, doctor, lawyer, or even congressman, can be dumb as dirt and believe the stupidest things.

This that he mentions above I only figured out 10 or 15 years ago- ie. it was high time for me. My wife used to chide me when I would express puzzlement at why someone or some group was behaving a certain way. She's say, for god's sake, they are just stupid like people usually are!

 

[jerome len]

There are a number of people that I worked with that made around 200k or more and many of them lived paycheck to paycheck. I once knew a business owner that made over a million each year and when he died, his family was broke. His fractional jet, his California mansion that lost a grundle in the last rececssion and his wild spending habits cost his family their business. So, LBYM is a state of mind....some people have it, some don't.

I have a harder time understanding how some can live on less than 40k a year then understanding how others end up broke making over 200k a year. I've done well and LBYM all my life. This is a great blog because we hear from all types of folks; mostly good, honest folks of all income ranges......and, it helps me keep my thinking reality based. I read the WSJ story this morning.......I hope it wakes up some of their readers to cut back......the money gets spent quick when you lease luxury cars, buy expensive homes and eat out in expensive restaurants because you think your 200k a year makes you an entitled person.

 

[Mulligan]

There are a number of people that I worked with that made around 200k or more and many of them lived paycheck to paycheck. I once knew a business owner that made over a million each year and when he died, his family was broke. His fractional jet, his California mansion that lost a grundle in the last rececssion and his wild spending habits cost his family their business. So, LBYM is a state of mind....some people have it, some don't.

I have a harder time understanding how some can live on less than 40k a year then understanding how others end up broke making over 200k a year. I've done well and LBYM all my life. This is a great blog because we hear from all types of folks; mostly good, honest folks of all income ranges......and, it helps me keep my thinking reality based. I read the WSJ story this morning.......I hope it wakes up some of their readers to cut back......the money gets spent quick when you lease luxury cars, buy expensive homes and eat out in expensive restaurants because you think your 200k a year makes you an entitled person.

I wonder if many of these fall into the trap of not understanding the expensive carrying costs involved in some purchases. I peaked at a low 100k, not 200k, but even then there were several things I passed on not because I couldn't afford to buy it but I knew I couldn't afford the ongoing costs of it, also. As far as eating out goes, I was surprised at how often people do this. I read today in paper the average person eats out almost 200 times a year down from about 215 a few years ago. That is a lot of eating out even if it is McDonalds. I average once a week and maybe twice every other week and I thought that was plenty.


Sent from my iPad using Tapatalk

 

[BellBarbara]

When we bought our last house (about 450K) on the closing docs the profit to the sellers (about 150K) was all directed to credit card companies!?! They were both in the SW industry each making easily 150K. Later we understood when we started getting bulk mailings addressed to them from Casinos and other gambling type things.

 

[BellBarbara]

Also, my BFF makes 350-400K, other than maxing out her 401k, nothing to show for it. She can't stop spending, and passed this on to her kids, who are over 30 and still not supporting themselves. Very sad. She was not like this when she made less than 100K.

 

[JoeWras]

I wonder if many of these fall into the trap of not understanding the expensive carrying costs involved in some purchases.

Sadly, some governments go down this path too and we all end up paying for it.

 

[Lucantes]

Thanks for reminding me of this guy. He is really an old school social critic more than a cheerleader for ER
This that he mentions above I only figured out 10 or 15 years ago- ie. it was high time for me. My wife used to chide me when I would express puzzlement at why someone or some group was behaving a certain way. She's say, for god's sake, they are just stupid like people usually are!

The movie Idiocracy comes to my mind here!

 

[nano54]

That is insane....DD and DM are just like this DD makes 200k and DM makes 110k they have been married for 33yrs and have roughly 70k in 401k and have 27yrs left on mortgage.....long story short they need to learn "no." Luckily DW and I have decided we are going to buck the family tradition and we are doing it on 1/2 of DD and DM income, maxing out 401k and college fund no credit cards, it has been great

 

[Wingnut]

I was blown away by the lady first mentioned in the article. Even after going through a half-million $$ bankruptcy 9 years ago, she gets herself right back in deep financial trouble by vastly overspending what her big $200k/yr income could sustain. Her explanation: "I felt entitled".......What utterly oblivious, misguided, narcissistic CRAP. No one is "entitled" to continuously spend on luxuries far beyond their means. Some one eventually gets stuck with the tab.
And BTW- after that 2005 bankruptcy, (Ch 13 vs Ch 7 not stated), what mental midgets in the financial industry approved her credit limit increases to get right back to $300k in the hole?

And agree 100% with JoeWras. This is NOT a unique story. I've seen it a few times too. Hardly the kind of folks a solid economy is built on.

Bump. The 40 year old grandmother referred to in this story is the poster child of the disintegration of Responsibility in the USA and why I see stunning similarities between the USA now and many previous civilizations (particularly Roman) destined for the dust heap of history. Mandarin lessons anyone?


Sent from my iPad using Early Retirement Forum

 

[panacea]

There's a way to read paid sites, with the "Google First Click Free" hack:

It works like this. You first copy the web address of any news article that is behind the registration firewall and paste that URL into the Google Search box. Now click the first Google result and you’ll be able to read the full text of the corresponding story without registering or subscribing.

Very cool. Had no idea you could do this. Thanks!

 

[AnIntentionalRoad]

All the conspicuous consumption will simply drive up our stock portfolios.

"Let them eat cake!" in the words of Marie Antoinette.

 

[daylatedollarshort]

I say bless the high spenders and the people willing to take on big mortgages. They are increasing my property values and I buy their discards at thrift shops. I just furnished a large part of one of the kids' apartments for $150 and it looked great, including a fully equipped kitchen with microwave and convection oven.

We see a lot of former co-workers with households with one or two six figure incomes and they spend to reward themselves for working so hard at soul sucking jobs they hate. They are on high income / high spend treadmills and don't know how to get off.

 

[RobLJ]

It worked like a charm. Thanks!

( I can always count on this forum to learn something useful now and then. )

Or you can just copy the headline into Google search and click on what is usually the first search result. Almost always works unless you're reading more than 5 or 10 articles from the same newspaper.

 

[kmt1972]

Do You Make $400,000 a Year But Feel Broke?

Video version of the same article. A hypothetical budget with a 400K income with very little left for savings.

 

[LOL!]

For those interested, this article got a lot of derisive exposure around the blogosphere. Here are some selections:
Still Curious About Running Short on a $400,000 Income? Read This. - Total Return - WSJ

The phenomenon of individuals with six-figure incomes spending themselves into financial ruin puzzled and angered some readers of our weekend story on these affluent overspenders. Readers offered their own financial advice.

From the BBC: BBC News - Wall Street Journal explains how to go broke on $400k a year

The Journal's article is an example of "insidious reporting", writes the Los Angeles Times's Michael Hiltzik, asking readers to sympathise with high-earners in "situations that middle- and working-class families can only dream about".

LATimes: The WSJ again wrings its hands over our struggling 1% - LA Times

The article's theme is that even rich people can live beyond their means. Not really news. What's insidious about reporting like this is that it asks us to commiserate with high-earners who run into financial trouble despite having the flexibility to deal with their situations that middle- and working-class families can only dream about.

Yet if you turn from the Journal's news pages to its editorial page, you'll find the latter being cursed for the moral turpitude, and the former getting the benefit of the doubt. If the Journal's editorial writers read their news pages, they may discover that their reporters are undermining their usual argument that we need to safeguard the income of the "job creators" at the top of the economic pyramid by cutting income and benefits for the rank and file at the bottom.
[…]
Articles like this fall into the category of reverse econ-porn. They offer the chance not to salivate over the lifestyles of the rich and famous, but to chortle over their heedlessness and stupidity. Fine: give us this glimpse into how high earners can spend their way to ruin. Just don't ask us to feel sorry for them.

 

[Walt34]

Or you can just copy the headline into Google search and click on what is usually the first search result. Almost always works unless you're reading more than 5 or 10 articles from the same newspaper.

Even then you can do it again. Go into your browser's settings and look for the cookies for that newspaper, i.e., Washington Post. Delete the cookies. You do not have to delete all of your other cookies, just the ones for the Washington Post. Rinse 'n repeat.

 

[Sarah in SC]

I loved the BBC article on the story. Snark snark snark at its finest!

 

[LOL!]

Here is a plea for another WSJ article:
The story the Wall Street Journal won’t touch.

But the corollary story that the WSJ won’t touch is this: if it families making $400,000/yr are feeling like they are struggling, then how must 150 million people getting by on less than $50,000/yr feel? Where is the WSJ chart showing us the typical distribution of expenses for a family making less than $50 grand a year? Show us that chart WSJ, and then explain to us, since you advocate for cutting all programs that benefit or help support these people, exactly where the fat is in their budgets?

 

[JoeWras]

I just take this article as a cautionary tale that anyone can get in trouble.

So it is OK for someone to make 50k? They shouldn't be derided? Ask the majority of our earthly inhabitants... they may differ. From the same BBC: they say a USA adjusted average worldly wage is 18k.

That gives you the answer - the world's average salary is $1,480 (£928) a month, which is just less than $18,000 (£11,291) a year.

But these dollars are not normal US dollars. The economists use specially adjusted exchange rates - the average salary is calculated in Purchasing Power Parity (PPP) dollars. One PPP dollar is equal to $1 spent in the US.

Essentially, the PPP dollar takes into account the fact that it is cheaper to live in some countries than others. The idea is that we don't care how many actual dollars somebody is paid in, say, China, but we care about what sort of stuff those dollars can buy.

So what's enough? We should all be able to live on 18k, I guess, unless we want to get into the envy game.

But anyway, how about all the rock stars and movie stars who run into trouble? Once their royalties diminish, they suddenly are having trouble making it work.

 

[MooreBonds]

So it is OK for someone to make 50k? They shouldn't be derided? Ask the majority of our earthly inhabitants... they may differ. From the same BBC: they say a USA adjusted average worldly wage is 18k.



So what's enough? We should all be able to live on 18k, I guess, unless we want to get into the envy game.

But anyway, how about all the rock stars and movie stars who run into trouble? Once their royalties diminish, they suddenly are having trouble making it work.

I understand that there are many ways of slicing and dicing this, and it's no easy task to devise the "one" answer....but there are too many variables left unanswered in their article:

Taxes - how did they factor in tax policy into the equation?

SS/state pension plans - Workers in the US have SS contributions for them, which turn out to be a reasonably 'good deal' for low wage earners. Does China have a SS system? What about Europe's version? Having a mandate to retire at 60 (I think some European countries rule?) is vastly different compared to some other countries.

Standard of living - They looked at converting the currency to PPP to make $1 earned in the US 'equal' to $1 earned in China, but what exact standard did they use? Do many workers in China even have air conditioning available to them? Many of the world's citizens don't even have any potable water available to them. How does one 'adjust' for that? And I'm willing to bet that many structures built in China would not pass the same building codes in the US. How about auto standards? Air/water quality? Quality of healthcare standards? (Some developing nations have excellent healthcare systems for low costs, but many do not)

Food will always be somewhat based on world commodity prices and have adjustments based on local cost of transport, etc., and it's relatively easy to compare, since the cabbage in China is roughly equal to cabbage in England. But outside of most food and electricity, it's a bit of a hodgepodge of standards to attempt to compare and adjust for.

As I mention, it's an almost impossible task to truly equate the 'average world wage', but there are some very relevant, major variables that need to be attempted to be taken into account, which I don't know have been in their study.

 

[JoeWras]

As I mention, it's an almost impossible task to truly equate the 'average world wage', but there are some very relevant, major variables that need to be attempted to be taken into account, which I don't know have been in their study.

I don't know either.

Again, I think the point of the original article is that despite your income, you can "blow it" and get in trouble.

Perhaps a person in a 3rd world country should be spending their meager wages on expensive safe water, but instead they blow it on a mobile phone. (And yes I know many of us consider a phone a necessity.)

No matter your level, this danger is always lurking.

 

[daylatedollarshort]

I just take this article as a cautionary tale that anyone can get in trouble.

So it is OK for someone to make 50k? They shouldn't be derided? Ask the majority of our earthly inhabitants... they may differ. From the same BBC: they say a USA adjusted average worldly wage is 18k.



So what's enough? We should all be able to live on 18k, I guess, unless we want to get into the envy game.

But anyway, how about all the rock stars and movie stars who run into trouble? Once their royalties diminish, they suddenly are having trouble making it work.

I think those rock and movie stars do not work for publications where their editors and co-workers write editorials trying to derail basic, still expensive if you get sick but somewhat affordable medical care for the unwashed masses households making 25% of 400K or much, much less.