All debt is slavery. You have to work to pay it off. You are renting the money from the bank and paying interest to boot!
Can we have an 'honest' discussion about money and middle class income?
Started by
ukikkgr
, Apr 28 2012 07:40 PM
60 replies to this topic
#26
Posted 16 July 2012 - 04:33 PM
#27
Posted 16 July 2012 - 10:29 PM
You are they property of whomever you are in debt to.
#28
Posted 17 July 2012 - 10:15 AM
Read the definition of Debtor.
all I can say is you have no idea what slavery is if you think paying interest on borrowed money is the same as having your rights, liberties, and life taken from you.
what I mean is, equating debt to slavery is obscene.
Edited by hegemony, 17 July 2012 - 10:23 AM.
#29
Posted 17 July 2012 - 03:36 PM
You will never understand.
#30
Posted 17 July 2012 - 05:15 PM
You will never understand.
I am not that dense...please try to explain it to me. talk to me like I am a 5 year old, or a golden retriever. thanks.
#31
Posted 17 July 2012 - 05:23 PM
There's physical bondage and mental bondage.
Some can comprehend one but not the other.
Which one is better or worse depends entirely on the person.
Back on topic, we got serious about retirement this year. Not match your employer's contribution into the ol' 401k serious.... I mean max out the 401ks and IRAs serious. When i told the Mrs. that this was the best bet she looked at me like i was t-totally crazy.
Her thing is she didnt want to live like we were poor. But after some convincing aided by pie charts and paycheck calculators i convinced her to at least give it a try.
All this while still contributing to the kid's college fund.
This requires a lot of self reliance and self motivation on all aspects of your life of you arent making a crazy amount of money. Like learning how to fix and do things yourself (appliances, vehicles, school lunches) and prioritizing. Saving not 2 or 3 months or years down the line but 20-30 years down the line.
The days of pensions died when lifetime employment with a single company died.
These days its everyman woman and child for themselves. If you dont have a substantial nestegg by the time you hit 60-70 you'll probably HAVE to work to make ends for the rest of your life....if you can get gainful employment.
Even with a nestegg you'll probably have to do something on the side to stop your bank account from hemoraging money.
I can imagine the scenario improving as we get old.
Some can comprehend one but not the other.
Which one is better or worse depends entirely on the person.
Back on topic, we got serious about retirement this year. Not match your employer's contribution into the ol' 401k serious.... I mean max out the 401ks and IRAs serious. When i told the Mrs. that this was the best bet she looked at me like i was t-totally crazy.
Her thing is she didnt want to live like we were poor. But after some convincing aided by pie charts and paycheck calculators i convinced her to at least give it a try.
All this while still contributing to the kid's college fund.
This requires a lot of self reliance and self motivation on all aspects of your life of you arent making a crazy amount of money. Like learning how to fix and do things yourself (appliances, vehicles, school lunches) and prioritizing. Saving not 2 or 3 months or years down the line but 20-30 years down the line.
The days of pensions died when lifetime employment with a single company died.
These days its everyman woman and child for themselves. If you dont have a substantial nestegg by the time you hit 60-70 you'll probably HAVE to work to make ends for the rest of your life....if you can get gainful employment.
Even with a nestegg you'll probably have to do something on the side to stop your bank account from hemoraging money.
I can imagine the scenario improving as we get old.
#32
Posted 18 August 2012 - 06:02 PM
Read the definition of Debtor.
all I can say is you have no idea what slavery is if you think paying interest on borrowed money is the same as having your rights, liberties, and life taken from you.
what I mean is, equating debt to slavery is obscene.
Ditto, I am black and in debt, I can pay off my debts but I can't imagine buying my way out of slavery had I been born in a different time. I am a bit offended by equating the two.
It is freeing to be able to make better decisions about good debt and to teach my kids what I wished had been taught to me early in life. I actually think there is good debt (student loan, mortgage, car that allows me to get to and keep my job). Lately I have given a lot of thought on how to be fully debt free and have a passive source of income...
#33
Posted 17 September 2012 - 11:03 PM
OP, your house and your car are what are killing your investments.
If you make $120k or so in NY, your net after taxes is somewhere around $70-$80k. You say are spending about $50k of that on your house, utilities, and car. After food and daily living, that doesn't leave a lot for building wealth.
So you have 3 options:
1, offense. Make more money. Change jobs or career or start a business. etc
2, defense. Cut expenses. Move to a much cheaper place. Get rid of the expensive car and buy a $5-$10k used something. Etc
3, offense and defense. Combine both approaches to maximally increase your usable income. Imagine increasing your income to $10k per month while decreasing your expenses to $4k per month. That gives you $6k per month to invest in whatever you are good at. You would have $72k per year going towards investments. At a 10% yield, that's $7k a year each year. In 10 years you would probably make more from your investing yields than from your earned income.
Yes, you are in NY, which is more expensive than most places. But you are making more than comparable income.
If you make $120k or so in NY, your net after taxes is somewhere around $70-$80k. You say are spending about $50k of that on your house, utilities, and car. After food and daily living, that doesn't leave a lot for building wealth.
So you have 3 options:
1, offense. Make more money. Change jobs or career or start a business. etc
2, defense. Cut expenses. Move to a much cheaper place. Get rid of the expensive car and buy a $5-$10k used something. Etc
3, offense and defense. Combine both approaches to maximally increase your usable income. Imagine increasing your income to $10k per month while decreasing your expenses to $4k per month. That gives you $6k per month to invest in whatever you are good at. You would have $72k per year going towards investments. At a 10% yield, that's $7k a year each year. In 10 years you would probably make more from your investing yields than from your earned income.
Yes, you are in NY, which is more expensive than most places. But you are making more than comparable income.
#34
Posted 29 October 2012 - 12:58 PM
You don't mention kids, and yet you have a $350,000 mortgage. You owe 14K on a car/cars.
It's possible those 20-somethings inherited money. But it's also possible that they live in an apartment or small condo and drive used cars.
You also both filed bankruptcy, which while it isn't the end of the world, does suggest that you have in the past overspent and undersaved.
So I guess the bottom line is that what you make right at this moment is almost beside the point. Your history is what matters.
It's possible those 20-somethings inherited money. But it's also possible that they live in an apartment or small condo and drive used cars.
You also both filed bankruptcy, which while it isn't the end of the world, does suggest that you have in the past overspent and undersaved.
So I guess the bottom line is that what you make right at this moment is almost beside the point. Your history is what matters.
#35
Posted 07 November 2012 - 06:57 PM
As I posted in another post just minutes ago...
PAY YOURSELF FIRST!
At least 10% of every dollar I earn goes to the Bank of Me first, before any other person or place. You can even take it further and divy up that 10% amongst an EMERGENCY FUND, SHORT TERM, RETIREMENT accounts.
Live below your means. Not at your means, BELOW your means.
PAY YOURSELF FIRST!
At least 10% of every dollar I earn goes to the Bank of Me first, before any other person or place. You can even take it further and divy up that 10% amongst an EMERGENCY FUND, SHORT TERM, RETIREMENT accounts.
Live below your means. Not at your means, BELOW your means.
Edited by JrFICO, 07 November 2012 - 06:57 PM.
#36
Posted 07 November 2012 - 07:36 PM
Example of paying yourself first...
Net Income - $7500/mo, 10% of that is $750. If you took that every month and put it into a good mutual fund (NOT some bank savings account or CD nor a risky stock investment) averaging 12%, in 23 years from now (age 65) you'd have $1,050,000.
If you took $50,000 from your $100k retirement fund, transferred/rolled that over to said good mutual fund, and saved $750 monthly to that fund, at age 65 you'd have $1,730,000.
But of course, live BELOW your means, not AT your means, BELOW your means... for a period of time and you'll see your money grow.
Net Income - $7500/mo, 10% of that is $750. If you took that every month and put it into a good mutual fund (NOT some bank savings account or CD nor a risky stock investment) averaging 12%, in 23 years from now (age 65) you'd have $1,050,000.
If you took $50,000 from your $100k retirement fund, transferred/rolled that over to said good mutual fund, and saved $750 monthly to that fund, at age 65 you'd have $1,730,000.
But of course, live BELOW your means, not AT your means, BELOW your means... for a period of time and you'll see your money grow.
Edited by JrFICO, 07 November 2012 - 07:48 PM.
#37
Posted 20 November 2012 - 01:34 AM
Example of paying yourself first...
Net Income - $7500/mo, 10% of that is $750. If you took that every month and put it into a good mutual fund (NOT some bank savings account or CD nor a risky stock investment) averaging 12%, in 23 years from now (age 65) you'd have $1,050,000.
If you took $50,000 from your $100k retirement fund, transferred/rolled that over to said good mutual fund, and saved $750 monthly to that fund, at age 65 you'd have $1,730,000.
But of course, live BELOW your means, not AT your means, BELOW your means... for a period of time and you'll see your money grow.
Great post.
#38
Posted 21 November 2012 - 09:33 AM
Example of paying yourself first...
Net Income - $7500/mo, 10% of that is $750. If you took that every month and put it into a good mutual fund (NOT some bank savings account or CD nor a risky stock investment) averaging 12%, in 23 years from now (age 65) you'd have $1,050,000.
If you took $50,000 from your $100k retirement fund, transferred/rolled that over to said good mutual fund, and saved $750 monthly to that fund, at age 65 you'd have $1,730,000.
But of course, live BELOW your means, not AT your means, BELOW your means... for a period of time and you'll see your money grow.
How do you find a place to start investing on such low amounts to start? I dont have thousands of dollars to start investing with, but I'm trying to get a ball so I can get it rolling.
#39
Posted 21 November 2012 - 11:01 AM
How do you find a place to start investing on such low amounts to start? I dont have thousands of dollars to start investing with, but I'm trying to get a ball so I can get it rolling.
Depending on which company you go with, the minimum investment doesn't have to be multiple thousands. Vanguard for instance has a handful of funds with only a $1000 minimum. Do keep an eye on fees though as some places charge maintenance fees for low balances (though they may waive them if you are on an automatic investment plan).
If you don't have enough for the opening minimum yet, then that's where you temporarily set up a higher (none of them are exactly high these days) yield savings account, put in what you've saved so far, and set up automatic transfers to that account on a regular basis. Unless you are extremely financially disciplined, it is important that this be an account specifically for this purpose so that you don't accidentally spend it because it's all mixed in with your normal household budget. Once you have enough for your minimum investment, you can close the account and move the automatic transfers to be automatic contributions to your investments.
If you can siphon off $50 a week into the temporary holding account, you'd have $1000 in 20 weeks.
#40
Posted 25 November 2012 - 07:43 PM
It can be done. I've watched this the past 30 years unfold and have to say I'm not surprised they did it. They are just very determined people and scrutinize every decision regarding money. They do take overseas vacations every few years but use mileage points for their flights and try to get good deals on their hotels. But nothing over the top. They are not flashy folks and don't flaunt their wealth. They have passed this to their 2 kids (late 20 year old kids) and most discussions around the table are about mortgage interest rates or arguments about physics. They are happy.
You could be describing DH and me. No trust funds, less than 8 years of college between the 2 of us, and only one house, but other than that... For the average person who doesn't have a trust fund and hasn't founded a wildly succcessful business, the way to wealth is long and boring, tinged with a little luck and a few setbacks. Save early, save often, don't sentence yourself to a lifetime of car loan payments, don't get the best of everything you can afford. Live on less than you make. DH and I have an enviable travel budget but a laughably small mortgage payment relative to my income, and it will be paid off when I'm 65 (he's 74). We own one car and it cost us $20K. We haven't bought a piece of furniture in 10 years. We keep our clothes for longer than that as long as they aren't falling apart (and I know how to mend clothes). We hit the multimillion net worth mark last year.
#41
Posted 10 January 2013 - 07:12 PM
We gave two incomes and live on one; we save 100 percent of the lower of the two incomes
We do that too -- after-tax of course.
Is that true for you as well? Or do you save the entire gross amount of the lesser income?
In our case, my wife makes exactly half what I make and we save about 90% of her take-home. I want to increase that to 100% but we moved to San Francisco in CY2011 and we're still adjusting.
#42
Posted 10 January 2013 - 07:25 PM
We gave two incomes and live on one; we save 100 percent of the lower of the two incomes
We do that too -- after-tax of course.
Is that true for you as well? Or do you save the entire gross amount of the lesser income?
In our case, my wife makes exactly half what I make and we save about 90% of her take-home. I want to increase that to 100% but we moved to San Francisco in CY2011 and we're still adjusting.
between pre-tax retirement accounts and post-tax savings and investments in 2012 we saved my base salary (gross). our situation is a little unique because I have access to 2 additional deferred compensation accounts that can be maxed out (in 2012) at 17k each, along with maxing my spouse's 401k and my employer-matching retirement account. I don't contribute to social security which is part of the reason we are trying to put so much more away. neither of us will get health care coverage in retirement (until medicare kicks in) so saving more now will hopefully ease that expense. we might not always be able to afford to save and invest at this rate but hopefully what we're doing now will pay off.
#43
Posted 10 January 2013 - 09:52 PM
between pre-tax retirement accounts and post-tax savings and investments in 2012 we saved my base salary (gross). our situation is a little unique because I have access to 2 additional deferred compensation accounts that can be maxed out (in 2012) at 17k each, along with maxing my spouse's 401k and my employer-matching retirement account. I don't contribute to social security which is part of the reason we are trying to put so much more away. neither of us will get health care coverage in retirement (until medicare kicks in) so saving more now will hopefully ease that expense. we might not always be able to afford to save and invest at this rate but hopefully what we're doing now will pay off.
That's inspiring. We've experienced significant income growth in the last 4 years -- for my wife, as she has grown from 2 years post-college experience into midlevel positions having 6-7 years, and for me as I've hit the 10 year mark in my career and we moved to the Bay Area which is the epicenter of technology in this country. My income has grown 269% in that time, hers nearly 300%. Granted, housing here is more expensive, but not nearly so much as our income growth. Well... I started thinking recently about frugality -- something I used to pride myself on. I "hypermiled" in 2008 when gas prices shot to $4, I kept a journal of every purchase I made every day, I was very good at starting at "no" for a purchase and only buying if I could sell myself on 'yes." But... I realize now that I've lost a lot of that in the last 4 years as our incomes have grown. Partly out of the stress that comes from the additional hours required in our higher paying jobs. Nobody in my line of work that's getting paid $3k a week is working just 40 hours. So you get a housekeeper twice a month. And you eat out more. And..... the list goes on.
Don't get me wrong, this is an ENORMOUSLY good problem to have and I feel truly blessed. My father is the hardest working man I know and he's never made more than $45k a year in his life. (Still, in Ohio, with a wife that makes another $35k, it provided a totally do-able middle class lifestyle). But my point is that the magnitude of the good fortune that I was able to make that plus $100k has never been lost on me. So yes, it's a good problem to have, but combating the lifestyle inflation is still a problem.
My dream is to show our (still unborn) children, in a way that my hard working but risk-averse father never could, that in life all things are possible. What that means to me specifically is to show them that you can work hard and achieve an income that gives you endless possibilities, but just as important, that you can live modestly and frugally enough that you are never indentured to it.
That's what brought me back to Credit Boards, actually.
Edited by encoder, 10 January 2013 - 09:55 PM.
#44
Posted 12 January 2013 - 03:25 PM
between pre-tax retirement accounts and post-tax savings and investments in 2012 we saved my base salary (gross). our situation is a little unique because I have access to 2 additional deferred compensation accounts that can be maxed out (in 2012) at 17k each, along with maxing my spouse's 401k and my employer-matching retirement account. I don't contribute to social security which is part of the reason we are trying to put so much more away. neither of us will get health care coverage in retirement (until medicare kicks in) so saving more now will hopefully ease that expense. we might not always be able to afford to save and invest at this rate but hopefully what we're doing now will pay off.
That's inspiring. We've experienced significant income growth in the last 4 years -- for my wife, as she has grown from 2 years post-college experience into midlevel positions having 6-7 years, and for me as I've hit the 10 year mark in my career and we moved to the Bay Area which is the epicenter of technology in this country. My income has grown 269% in that time, hers nearly 300%. Granted, housing here is more expensive, but not nearly so much as our income growth. Well... I started thinking recently about frugality -- something I used to pride myself on. I "hypermiled" in 2008 when gas prices shot to $4, I kept a journal of every purchase I made every day, I was very good at starting at "no" for a purchase and only buying if I could sell myself on 'yes." But... I realize now that I've lost a lot of that in the last 4 years as our incomes have grown. Partly out of the stress that comes from the additional hours required in our higher paying jobs. Nobody in my line of work that's getting paid $3k a week is working just 40 hours. So you get a housekeeper twice a month. And you eat out more. And..... the list goes on.
Don't get me wrong, this is an ENORMOUSLY good problem to have and I feel truly blessed. My father is the hardest working man I know and he's never made more than $45k a year in his life. (Still, in Ohio, with a wife that makes another $35k, it provided a totally do-able middle class lifestyle). But my point is that the magnitude of the good fortune that I was able to make that plus $100k has never been lost on me. So yes, it's a good problem to have, but combating the lifestyle inflation is still a problem.
My dream is to show our (still unborn) children, in a way that my hard working but risk-averse father never could, that in life all things are possible. What that means to me specifically is to show them that you can work hard and achieve an income that gives you endless possibilities, but just as important, that you can live modestly and frugally enough that you are never indentured to it.
That's what brought me back to Credit Boards, actually.
#45
Posted 09 February 2013 - 09:55 AM
I opened up a Roth IRA with my credit union for free. The only requirement is to be a member. Check out your local credit unions. Just my $0.02.
Example of paying yourself first...
Net Income - $7500/mo, 10% of that is $750. If you took that every month and put it into a good mutual fund (NOT some bank savings account or CD nor a risky stock investment) averaging 12%, in 23 years from now (age 65) you'd have $1,050,000.
If you took $50,000 from your $100k retirement fund, transferred/rolled that over to said good mutual fund, and saved $750 monthly to that fund, at age 65 you'd have $1,730,000.
But of course, live BELOW your means, not AT your means, BELOW your means... for a period of time and you'll see your money grow.
How do you find a place to start investing on such low amounts to start? I dont have thousands of dollars to start investing with, but I'm trying to get a ball so I can get it rolling.
#46
Posted 05 March 2013 - 11:29 PM
I'm young...not a financial wizard by any means... but one thing comes to mind when reading this thread:
Are you gathering the information of all these 'rich' people based on what they're telling you or based on what you know to be true? Because people lie all day, every day, over and over and over and over...
9/10 people want to sound more important then they really are. Just saying. It's also a joke reading this forum sometimes with these people that say they make $10,000 a month and have a 500 credit score and all this. Everyone I know is struggling. My age or middle-aged. Not many people make near $100k a year and over it. Most of this board is real. Some of it is retarded. It's the Internet. A 12 year old boy could be a 40 year old woman and vice versa.
The scary thought is that a lot of people lie to people's faces these days just like they lie over the Internet. Oh boy...
#47
Posted 10 March 2013 - 06:41 AM
High income families are quite common here in DC and nearby counties, so I know plenty of people with HH incomes 250K and over. What I don't understand is how some of them consider themselves the solidly middle class and believe that 500K is upper middle class.lol
#48
Posted 10 March 2013 - 08:38 PM
I'm young...not a financial wizard by any means... but one thing comes to mind when reading this thread:
Are you gathering the information of all these 'rich' people based on what they're telling you or based on what you know to be true? Because people lie all day, every day, over and over and over and over...
9/10 people want to sound more important then they really are. Just saying. It's also a joke reading this forum sometimes with these people that say they make $10,000 a month and have a 500 credit score and all this. Everyone I know is struggling. My age or middle-aged. Not many people make near $100k a year and over it. Most of this board is real. Some of it is retarded. It's the Internet. A 12 year old boy could be a 40 year old woman and vice versa.
The scary thought is that a lot of people lie to people's faces these days just like they lie over the Internet. Oh boy...
nothing can be posted on the Internet unless it is true. I agree, you do sound young and unlike a financial wizard.
#49
Posted 13 March 2013 - 03:35 PM
I'm young...not a financial wizard by any means... but one thing comes to mind when reading this thread:
Are you gathering the information of all these 'rich' people based on what they're telling you or based on what you know to be true? Because people lie all day, every day, over and over and over and over...
9/10 people want to sound more important then they really are. Just saying. It's also a joke reading this forum sometimes with these people that say they make $10,000 a month and have a 500 credit score and all this. Everyone I know is struggling. My age or middle-aged. Not many people make near $100k a year and over it. Most of this board is real. Some of it is retarded. It's the Internet. A 12 year old boy could be a 40 year old woman and vice versa.
The scary thought is that a lot of people lie to people's faces these days just like they lie over the Internet. Oh boy...
nothing can be posted on the Internet unless it is true. I agree, you do sound young and unlike a financial wizard.
What I find sad is that I totally believe there are many people making $10k a month with a 500 credit score. While my Fico wasn't quite that low when I began earning a higher income, it wasn't yet 600. And I know there are an awful lot of people who live a lot more beyond their means than I ever have. I'm the type who takes as much pleasure out of my cash balances as I do my new toys 
And to echo the comment above yours, I live in the SF Bay Area. While our HHI is in the top 5% nationally, it's "just" in the top 10% locally. Not saying we're not very fortunate but our combined salary where I grew up in Ohio would go so much further than it does here that it's absurd.
#50
Posted 13 March 2013 - 10:31 PM
One theme among my friends who seemingly have more than I do is how much their parents helped them along their way. I wouldn't want their debt levels.
Perhaps moving in with the parents.
"One theme among my friends who seemingly have more than I do is how much their parents helped them along their way". Yep, I've known many people like that. If a person is fortunate enough to have parents who pay all of most of their college tuition, so they could avoid student loans, give them money for a down payment on their first home, babysit the kids for them for free, etc., then they have a huge advantage over those of us who grew up in poor families, with parents who couldn't do a thing for them financially to help them to get started in their adult lives.
When my kids were both young enough to need full time summer camp, and my husband and I were both working full time (I am out of work right now), we were paying $1,200 a month for summer camp for the both of them, and that's on the low end, here in Ohio. We've never earned anywhere near a six figure income, even with both of us working, so that was an extreme financial burden for us. I've never had the luxury of having parents or relatives who could babysit my kids regularly, for free.
I do often wonder the same thing as the OP.
Edited by RedHairedLady, 13 March 2013 - 10:31 PM.
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