You don't get anything out of it if you outlive the term... unless you are talking about a whole life policy, and those are WAY more expensive.
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200k a year families claim they are "not rich"
- Thread starter Liberty4all
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You don't get anything out of it if you outlive the term... unless you are talking about a whole life policy, and those are WAY more expensive.
Being a millionaire isn't even that special nowadays. IIRC, every fifth household of retired people in Switzerland have assets (house, insurance, funds etc) over 1000k.
I understand. It might have been so high you erased it from your mind
. I bought my policy last year. I don't smoke and my family's medical history is relatively good, same goes for my wife. So we got a fairly good deal it seems from hearing these other accounts
.If a person with an annual income of a million dollars spends $975,000 of it every year, does the fact that they're only left with $25,000 make them middle-class? Do you not see how absurd that assertion is? 401K, investments, and the mortgage aren't costs that are diminishing your net worth.
You're conflating wealth with liquidity.
ThLunarian
Member
I guarantee you that if I received 500k for free tomorrow, I would be set for life with absolutely no qualifiers. Tack on two children to care for and I'd say the same. Tack on five children to care for and I could still do it, but maybe with some qualifiers.
If you don't think that's feasible, you need some perspective and could use a lesson on living within your means.
"Oh we make 200k a year, but that's really not much because we have some kids."
People get by on a quarter of your income with the same number of kids, in the exact sane city where you live. That is not a defense. You make a TON of money.
If you don't think that's feasible, you need some perspective and could use a lesson on living within your means.
"Oh we make 200k a year, but that's really not much because we have some kids."
People get by on a quarter of your income with the same number of kids, in the exact sane city where you live. That is not a defense. You make a TON of money.
faceless007
Member
Of course they are. They don't have to fucking worry about daycare! The second person has to do it themselves!
Jesus christ the logic in this thread. "Well if I spend money on something am I really better off than someone who doesn't make enough to buy it in the first place?" Well if you don't think so just don't buy it and see how much you like it.
The misunderstanding in this post rather nicely summarizes the whole problem with these arguments.
When people talk about the 1%, they're generally referring to the top income-earners. When people talk about being rich, they're generally talking about assets.
You can have plenty of income but not a lot of assets, if you manage your money poorly like the folks in the article.
Marty Chinn
Member
That doesn't change the point. It's unfair to average out the long run when the costs are higher and immediate now. You have to factor that in with your current intake vs what it costs you. Saying it averages out doesn't have much weight to a current situation.
Marty Chinn
Member
I count daycare as a cost of living expense, not some luxury purchase. Cost of living is a huge factor in determining wealth. The kid has to be taken care of, there's no question about that. So how is someone who makes 150k spending 50k of that on daycare better off than someone making 100k without daycare? They financially end up being the same at the end of the day.
Particle Physicist
between a quark and a baryon
It depends on lots of factors. Life insurance is completely dependent statistical algorithms that factor in age, occupation, medical history, travel history, etc.
My wife and I were able to get a nice life insurance at a good price, but we are both pretty young, healthy, etc. State Farm also lets you do these bundles, where the more insurance you get from them, the better the deals. Life + auto + renters insurance was cheaper than getting Auto + renters at other insurance companies (for us).
I am disappointed in you Cyan. You had a chance to cross promote your budget thread, by making the word budget a clickable link.
Particle Physicist
between a quark and a baryon
Skel1ingt0n
I can't *believe* these lazy developers keep making file sizes so damn large. Btw, how does technology work?
I grew up in the exact same position, and I know exactly what you mean.
I am disappointed in you Cyan. You had a chance to cross promote your budget thread, by making the word budget a clickable link.
Ha! Right you are, sir!
faceless007
Member
Tell that to all the single parents who don't make enough to get it. FFS.
So is someone who makes $1 million and spends $900,000 on random crap. You seriously don't think that person would be richer?
Add about 350k in debt to that which is what I owe on a house and 1 vehicle. We have no other debt. Subtract that 350k from 500k = 150k. Then you have to bury your deceased spouse. Then you have many monthly and yearly expenses that go along with owning a 350k house - taxes, maintenance and upkeep, utilities. And you have to provide health care for yourself and kids. And you have no full-time job. And if this thread isn't evidence enough, you are absolutely delusional if you think anyone is going to give any sort of help or have any sympathy for anyone that gets a 500k payout on the death of a spouse.
I'd still have the bills of a 200k household on 25% of the income.
I eagerly await your response on how you're going to be set for life in this scenario raising 2 kids.
The Technomancer
card-carrying scientician
I don't agree that day care is a cost of living expense, but regardless I still disagree with your reaction point: just because many people cannot afford something does not mean that that thing isn't important to their basic quality of life, it just means that they're fucked. If things get so bad that an enormous number of Americans can't afford to pay heating bills, does having the money to do so suddenly mean that you're paying for a luxury?
Marty Chinn
Member
I'm not talking about overspending. I'm talking about paying what needs to get paid to get by. You know what? It sucks if the single person can't afford to get it, but what do they do with their kid then? They have to work in order to pay for them and their kid. What do they do? Somehow paying for your kid now makes you rich?
The children enhance your happiness though!
ThLunarian said:
I really don't consider my wife/loved one dying + the premium cost of a life insurance policy "free"...
I am (sort of) and make $200k. As a family of (soon to be) four, we live confortably but are certainly not rich. We don't eat out much, do 90% of our grocery shopping at No Frills (discount grocery store) and buy our meats in bulk at Costco.
If we were "rich", we would be able to:
- buy a second vehicle and not have to wait until my wife goes back to work following maternity leave
- buy a new TV for the family room since my current one is "only" a 50" 720p model
- replace our carpet with new flooring
- I could get a membership to a private golf course(s) and not have to play at the public courses
- we could finish out basement
- etc.
I am in no way complaining about my life, but for where we live our $200k salary is good enough for us to be comfortable but not much more.
Now, if and when my wife makes partner at her firm... then we will be rich. ;-)
mr stroke
Member
then I guess we are arguing the definition of "Rich"?
IMO-
200k is enough money to live comfortably with the ability to retire early
Rich/Wealthy is-Bill Gates, Warren Buffett, etc...
distantmantra
Member
The wife and I make ~$165k a year combined. We've got a baby girl, our mortgage is $2,600 month in Seattle. We're doing well, but we're not anywhere close to being rich.
Nobody's angry at anyone for making more money than them. They're angry and frustrated because it's like greed and jealousy have no end. Everyone seems to think that they're one step away from the poor house but they don't seem to have any idea how the rest of the world lives. It's insulting, frankly, and for those of us who are quite comfortable making a fraction of that, it sounds like whining for the sake of whining.
What's whining about whining for whining sake?
You're arguing the definition of rich. I've made no secret of the fact that I find the word to be worthless. It's a variable with infinite values.
The problem with this argument is that its logic can be extended to the point where nobody except the poorest and most downtrodden person in the world has a right to complain.
Everybody complains, it's just a thing that people do. People will complain about big things like politics and they will complain about minutia like standing too long in line for coffee. Just because somebody complains about the issues of their life, doesn't mean that do not think there are others who have it worse off.
Marty Chinn
Member
Retire early? Not in California.....
Jim E. Rossler
Banned
What's whining about whining about whining for whining's sake?
Here are the definitions we should work with:
Well Off = I'm paying all my bills, putting money away for retirement, and reasonably sure I can put my kids through college and retire in a comfortable manner.
Wealthy = Doing all of the above, plus I can take a trip to wherever I want every year and have no issues driving a luxury car around.
Rich = I could stop working and still do pretty much anything I wanted without any worry whatsoever.
Most people making $200K are in the "Well Off" category. Shit, I make over $120K and i'm driving a 2002 Ford Escape and still tracking when paychecks come in to make sure the credit card gets paid off every month. Of course I'm also putting away $20K+ a year for retirement, but also pay on the order for $30K a year in mortgage interest and property taxes. That right there is $50K a year I don't even see.
Should have bought a cheaper house!
Well Off = I'm paying all my bills, putting money away for retirement, and reasonably sure I can put my kids through college and retire in a comfortable manner.
Wealthy = Doing all of the above, plus I can take a trip to wherever I want every year and have no issues driving a luxury car around.
Rich = I could stop working and still do pretty much anything I wanted without any worry whatsoever.
Most people making $200K are in the "Well Off" category. Shit, I make over $120K and i'm driving a 2002 Ford Escape and still tracking when paychecks come in to make sure the credit card gets paid off every month. Of course I'm also putting away $20K+ a year for retirement, but also pay on the order for $30K a year in mortgage interest and property taxes. That right there is $50K a year I don't even see.
Should have bought a cheaper house!
Second-order whining, or meta-whining.
Can be seen as petulant and irritating, though generally less so than first-order whining.
Meta-meta-whining.
Pedantic. Trying too hard to be clever. Can be seen as sympathetic to the original first-order whiner, and therefore in the same boat with them.
What's whining about whining about whining about whining for whining sake?
Meta-meta-meta-whining.
Overdoing it. At this level, the whiner has killed the joke, and is long past the internet-argument point of no return.
The problem with this is that unless you inherited money, or have parents that provide for you well into adulthood, excluding this group of people, every single one of us has been in the poor house.
I spent 13 of my first 18 years living in a trailer park, living off food stamps, unemployment, and Ronald Reagen government cheese in the early 80s, and about 10 of the following years living in a 2 bedroom apartment.
Its very difficult to debate these kinds of issues with GAF, or hell, anyone else for that matter because the perspective doesn't go 2 ways.
Most of us have been poor at some point in our lives, but very few people have actually earned 200k in a year's time and have any perspective from that point of view. They base their perspective of those people on their own assumptions, gut feelings, and outrageous articles like what's posted in the OP.
I'd easily use the word Rich to describe your definition of Wealthy. One global vacation a year plus a luxury car with no issues? That's rich.
Being able to do pretty much anything without even having to work any longer? That's like, very rich. That's outside this system of classification as far as I'm concerned.
Jim E. Rossler
Banned
Who's Whining about whining about whining about whining about whining for whining sake?
Cyan.
Do I implode if I meta meta meta meta meta whine?
It could be rich, but there are a lot of people doing those kinds of things who, if they lose their job, will quickly eat through their savings.
mr stroke
Member
I live in CA..
Assuming everything goes well and you manage your money properly at 200k a year you should be able to do so.
ThLunarian
Member
Your scenario is a little more restricting than mine would be, sure. But I see two ways I could handle it.
The first way is to move. Buy a 130k house in Charlotte, NC (that's where I live). Spend 10k on moving expenses. Sell a bunch of crap you don't need that might not fit in your new house, make back 5k.
You now have 365k in the bank. You can either rent out your first house or put it on the market. Spend 25k fixing it up (give or take), you have 340k left.
Get less expensive insurance. 1300/month is way too much; 500 should cover you and the kids. You're not working so you don't need daycare. If you rented your house out, congratulations! Put your remaining 300k in a conservative investment account, generate 20-30k per year in interest, and use that along with your rental income for a fairly stress free (financially) life. If you decide to sell the first house instead, it's a little trickier, and you may have to get a job. That would also require daycare, but you would not have to spend 1k/month on it. Budget that for 500/month. Now even if you didn't get a job you'll still be able to live well for 5 years minimum until your house sells, and if it sells sooner then you're golden.
The other option is to stay where you are and pay off the house. This is the worse option IMO, because you end up not as secure, but it's doable. In that case, pay off your house and you're left with 140k after the funeral (I forgot to include that in Scenario 1's calculations, my bad). Cut costs on daycare and insurance in accordance with your area, get a full time job, and bam, you have 150k in the bank to invest, or for college funds, or what have you. You no longer have a mortgage payment, so your job will easily cover any expenses you might incur.
Marty Chinn
Member
200k with a family? What age do you expect that they can retire? Are we forgetting the skyrocketing costs of college?
That's exactly what I posted. There's no way I could keep my house and current standard of living if the primary wage earner passed away. No way could I do it on 500k. I could stretch it out, but the house definitely has to go at some point, and the earlier the better because I don't know what my employment situation would be for a while. I might be able to find a full-time job quickly, or I might not and would have to live off the savings.
Yet everyone followed up on my post telling me I should easily be able to keep my house, at least part of my standard of living, raise 2 kids, and live off my investment income of whatever is left. No way that's going to happen if I paid off my mortgage debt.
AbortedWalrusFetus
Member
We're assuming you've actually budgeted your expenses and planned for retirement. If you can't retire on that much money you are living above your means, plain and simple.
Marty Chinn
Member
Be able to retire, sure. I'm not arguing about that. But retire early? I think I'd have to disagree there.
AbortedWalrusFetus
Member
With the way my expenses are budgeted one a $110k income in Philadelphia, I am able to put ~$20k per year into retirement funds. That's enough to retire two years early. Now, assume you add $30k per year for childcare, and another $30k per year for the higher cost of living expenses, you should be able to near the same thing in california with a family of four with an income of $170k
51 and 3 months.
Of course you can retire early on 200k. There is a broad range of incomes with which you can likely retire early, with the right planning and some sacrifices. That planning becomes significantly easier--and the sacrifices lessen--when you earn 200k.
Shouta
Member
You have debt to manage after the insurance payout in your scenario. That's what will drain your money. Imagine if you got the payout without the debt. You can then reduce costs by conserving and reducing usage of things unless needed. Additionally, you can shop smarter reducing that bills as well. If you got a normal job after that, you'd have some additional income to support the 500k that was given.
But I digress, insurance payout is kind of a separate topic.
A 200k a year income is rich because it's a value that allows you to increase your monetary power much more easily than it would below it. Yeah, 200k/year isn't 1 mil/year or more but unlike earning 50k/year, it puts you into a position where you can earn money very easily and become wealthy/stable with proper management. It's very difficult to do so at 50k, nigh impossible at times. However, at 200k, you have a lot more room to do so as long as you aren't inflating your lifestyle.
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