Yeah if we go down that road, we can also assume that they inherit 200 million within the next 5 years - end of discussion.
But if you look at the numbers we have, you see a family that saves 1.5% of their salary. You’re welcome to argue that that’s smart
Valid point. I was assuming 5mil by retirement age. If they inherited 5 mil at 35 (little chance on saving it themselves) then they can spend all they want of course
Again, depends. A lot of families prepare and have a solid nest egg built up before kids, so it’s totally reasonable if this is their plan for the time being. But I do think as Ohai is saying people in this bracket doing this by and large come from wealthy backgrounds and have very healthy backstops. I would say that is the majority of the people I know in that bracket who are living in similar terms.
Are you saying that they’re saving very little because their family has wealth? If so, I find that kind of unethical. If your family’s previous generations have been successful enough to build up wealth and pass it on to you, you have a responsibility to add on to that wealth. Spending all you earn and relying just on inherited wealth to support you if things go sour is pretty selfish towards the next generations and is a slap in the preceding generations’ face.
I mean, I’m not going to get into a moral debate here on this, I’m simply saying it could be a reality. Maybe the parents have money and want to see their kids happy, who knows, past caring at this stage, but it does happen commonly.
Must be nice to not have to worry. Even if I saw the paperwork and was promised I’d receive a big inheritance, I wouldn’t believe it until the person died and that money made it into my multiple accounts and my name was on the titles.
welcome back @krnyc
No sh!t Sherlock. Is that why you get paid the big accountant bucks, to state the painfully obvious?
I’m curious how many experts commenting on this are in households currently bringing in $500k + per year…
I don’t see how your personal income is relevant in this context. Please do enlighten us.
If you don’t see how your personal income level impacts your analysis of this case, then I would submit there is a critical flaw in your reasoning ability.
so only 500k earners can analyze the money management of other 500k earners? I read an article that said that like 80% of nba bball players go bankrupt within 5yrs after retirement. You don’t need to be able to donk and earn 5mil/yr to see that that’s suboptimal money management. Same principle here.
Bottle service for rich people is not expensive!
Way to be defensive since your income is suboptimal, bud. The weakness can be sniffed out a mile away.
Lol I argue my point while you resort to personal attacks. Way to go chief, keep up the good work.
It means that you likely do not have exposure to the life parameters of people in this situation, including family, life stage, high tax rates, and high cost of living where people with such incomes are usually situated. I’m sure someone the Philippines making $8k would be confused on how a family making $21k in the US is below the poverty level.
It might be worth repeating that the family in the example is made up, and is meant to demonstrate a possible scenario where their budget could be close to being exhausted. Additionally, they are actually saving at a rate of about $100k a year, after employer match on their 401k contributions, home equity contribution, and the explicit $7k savings. How much money are you saving each year?
I certainly will, and get paid a lot for doing it. Thanks.
no matter what the parameters, it doesn’t explain the fact that there’s plenty of families living in the same areas, who have kids in the same schools and enjoy a pretty similar lifestyle are able to save quite a bit more than the example’s family. I know a few of them.
I’m currently saving about 60-70% of my take home pay but my situation is not really comparable to the family’s situation.
chances are you don’t but that’s none of my business. Empty barrels make the most noise.
Exactly. So why hold people to a standard that is based on your experience?
In any case, I’d like to hear the explanation on why a family putting away $100k a year is still considered irresponsible overall.