Ever wonder how some people you know IRL can afford their lifestyle?

[Golgatha]

I honestly believe the people that have older not necessarily amazing cars in nice neighborhoods are the ones that aren't in debt; own their house, car and everything else they use.

This is the God's honest truth.

Personally I own a 2004 Ford Taurus with 176k miles on it (currently saving for a much nicer car). I live in a really nice neighborhood with 230-300k houses in it (pretty nice for KCMO area). The only debt I have is the mortgage on my house. I am 34 years old, so I would assume a mortgage still hanging over my head is to be expected. If everything goes as planned, I'll be debt free before my boys start to college. My oldest is 8 years old.

 

[lokiju]

I actually read a really interesting article about this topic last year but can't seem to find it at the moment. If I can find it, I'll post it here.

It basically showed in some study or survey that was done that as a whole, the less people made, the less likely they were to look for the best deal on something or us coupons. The higher earnings a family had, the more likely they would spend time looking for the best deal possible or for coupons before purchasing something.

Besides groceries, I do not by (almost) anything without first seeing if I can find it for cheaper or find an alternative for less elsewhere.

I often wonder how my own brother affords his lifestyle.

He's pretty level headed and responsible but he brings in a good bit less than I do plus his wife doesn't work. I'm making roughly $10-15k a year more plus my wife works full time yet I feel like we (my wife and I) are always stressing about money even though we don't buy anything without first saving up for it and paying in cash/money we actually have in our account.

Maybe we feel like we're "stressing" money as our focus is zero debt and maximized investments and savings vs day to day living.

My brother has a second child on the way and just built a $1,000 computer.

My wife and I have 1 child and have not plans on having a second and I haven't paid for a computer outright in over 5 years. I took a bunch of free/hand-me-downs and sold them all to buy a new computer I wanted last year but no money out of my pocket.

Whatever he's doing is either working really well or they're racking up debt left and right, which I hope isn't the case.

EDIT: Saw some comments about cars and agree. My last "car" was 10 years old and had almost 200,000 miles on it before it finally got to the point that repairs far outweighed the worth of the car and were beyond my abilities to take on myself.

My wife's car is 11 years old and has 135,000 miles on it.

Our goal is always to hit at the very least 10 years of life out of a car before getting a new one and not having any car payment if at all possible.

 

[Fritzo]

I used to think that, get jealous, and then do the same things they were doing by paying on credit. Ended up getting into a credit mess.

Turns out most of them were doing the same thing.

 

[highland145]

When someone filed for bankruptcy they can get a lot of their debt removed but at the cost of their credit score.

Essentially it is paid for by the government or in a broader spectrum; Tax payers.

Nope. It's paid for by the rest of the customers in that industry being charged a higher rate for goods/services. They may be taxpayers but the government isn't in the loop.

Now if you could provide me some government links where I can recover my $$ lost due to customers filing BK, I'll gladly eat crow and apologize for my misunderstanding.

 

[TwiceOver]

I started to wonder this about a friend of mine. He quit his job, his wife barely works and they have two kids. Yet he has every gadget known to man, new SUV, ATVs, and on and on. Then I realized he probably isn't/wasn't saving for retirement. So yeah, if I didn't have to do that I could live with a bunch of cool shit too.

 

[Exterous]

By not saving up for retirement

Thats a big one. We could live a very different lifestyle if we didn't put so much money away for retirement. Of course I hope to retire much earlier than 65

I think a lot of it has to do with people being irresponsible. My wife and I have built up our savings, our revolving credit stays near zero

I'm willing to bet that a lot of these people are carrying balances on credit cards and car loans as well, not realizing that while its only $200 a month for the car they are going to end up paying way more than the value after the 5 year loan

I actually read a really interesting article about this topic last year but can't seem to find it at the moment. If I can find it, I'll post it here.

It basically showed in some study or survey that was done that as a whole, the less people made, the less likely they were to look for the best deal on something or us coupons. The higher earnings a family had, the more likely they would spend time looking for the best deal possible or for coupons before purchasing something.

The Millionaire Next Door found similar findings but they found it was more of a personality than wealth thing. They found a lot of people who were high income earners who also had lower than expected net wealth. People who had relative high net wealth were more likely to spend time shopping for deals (So a worker making 50k a year but had fair amount of savings/retirement was far more likely to shop for a deal than a worker making 50k a year with no savings/retirement)

 

[ShawnD1]

The crazy thing is he's not stressed at all. Either he has a ton of money saved which I doubt or he's putting it all on a CC and not stressing at all, which if he is, damn I don't know how he does it.

$50 says he's on cocaine and that's why he's so chill even though he should be worried.

 

[PingSpike]

When someone filed for bankruptcy they can get a lot of their debt removed but at the cost of their credit score.

Essentially it is paid for by the government or in a broader spectrum; Tax payers.

The government pays for lots of things that it shouldn't but not your unpaid capital one bills. The losses on those accounts are paid for with part of the massive interest and fees charged to other accounts.

 

[HardcoreRobot]

Oh yes, thats a big factor too, they are NOT saving for retirement. The stats are unbelievable.

"Many workers report they have virtually no savings and investments. In total, 60 percent of workers report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000. "
--http://www.ebri.org/publications/ib/index.cfm?fa=ibDisp&content_id=5017

that same research group also has said they calcuated HALF of people 36-62 will not be able to afford BASIC NEEDS in retirement (cant find link).

so yeah, they are living beyond their means in the present (debt) AND not preparing at all for a future with no income...

 

[Exterous]

Oh yes, thats a big factor too, they are NOT saving for retirement. The stats are unbelievable.

"Many workers report they have virtually no savings and investments. In total, 60 percent of workers report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000. "
--http://www.ebri.org/publications/ib/index.cfm?fa=ibDisp&content_id=5017

Interesting TED talk on the saving for retirement mindset:
http://www.ted.com/talks/shlomo_benartzi_saving_more_tomorrow.html

 

[jagec]

that same research group also has said they calcuated HALF of people 36-62 will not be able to afford BASIC NEEDS in retirement (cant find link).

so yeah, they are living beyond their means in the present (debt) AND not preparing at all for a future with no income...

For the people in their 60s, at least, Social Security and Medicare should cover their basic needs, albeit at a very low level.

 

[ponyo]

I know exactly how. When you make 7 figures+ a year, it's pretty easy to live very comfortable lifestyle. I say good for them.

 

[Fritzo]

Just to get everyone's paranoia up, check out the movie called The Joneses on Netflix (David Duchovny and Demi Moore). The movie is about an "artificial family" planted in an upper class neighborhood by a marketing corporation. The family is then given specific cars, drinks, foods, clothes...all to create an envious lifestyle so the neighbors would try to keep up with them and the corporations would sell more products.

Makes you wonder....

 

[dave_the_nerd]

http://notalwaysright.com/no-need-to-drive-this-deal-home/20760

 

[highland145]

http://notalwaysright.com/no-need-to-drive-this-deal-home/20760

:biggrin: But, ma'am, it may be closer to $550.00

Profit

 

[Koing]

No. All the guys I hang out with make various amounts of £££ and don't live beyond their means in general.

Koing

 

[SirStev0]

I am hoodrich.

 

[highland145]

I am hoodrich.

24s on your Carpice Classic, living in a box?

 

[maddogchen]

i grew up thinking dang how can so many people afford BMWs and Mercedes...then I realized that most of them leased.

I had an old co-worker who's grandmother passed him on a good chunk of money. He used to buy old cars and rebuilt them. He had 26 cars when he got laid off. 4 years later I found that he commited suicide when he ran out of money....

 

[Exterous]

Carpice Classic,

I loved mine. RIP :\

 

[mmntech]

I've always worked odd hours/days. I'm always surprised by how many people are wandering around in the middle of the day. Costco is always busy. It's mostly people, families, in their 30s. Surely there aren't that many people far outside the usual 9-5 like I am.

People afford their lavish lifestyles by abusing credit. That's why the economy is so screwed up right now. Everything is paid for with money that doesn't exist. People buy homes basis mortgages on dual incomes, which is a huge no-no. They max our their CC, lines of credit, remortgage, lease vehicles. They want it now, they get it now. I was in the bank today and they're telling me I could get a mortgage with just 5% down if I buy some kind of insurance. I told them it sounded like a bad idea. They looked at me as if I was the first person to ever tell them that. Probably because I was.

 

[Golgatha]

Maybe we feel like we're "stressing" money as our focus is zero debt and maximized investments and savings vs day to day living.

EDIT: Saw some comments about cars and agree. My last "car" was 10 years old and had almost 200,000 miles on it before it finally got to the point that repairs far outweighed the worth of the car and were beyond my abilities to take on myself.

Regarding your "stressing" comment. I have two points.

1) It's much more stressful to not have at least 6 months worth of liquid savings when a job layoff or other life emergency happens.

2) I think it's just a mental thing. My wife and I "stress" about spending money because our focus is zero debt and saving for retirement over the long haul. Thing is, I really live a pretty good life. However I don't own a lot of big toys (boat, ATVs, motorcycle, etc), which would be nice to have, but would only serve to make me a slave to debt that much longer.

Regarding cars. My wife got her new-to-her mini-van (2005 Chevy Venture with 70k miles) recently so it's my turn now. I intend to buy a roughly $20k Subaru Impreza or WRX of some sort. Have around $10k saved up now and I absolutely won't buy (or even shop for) it before I can pay cash. Exception would be if I total my car or repairs outweigh the value of the vehicle. Even then, I would buy a $10k car and not a $20k one if push came to shove.

 

[Ultrabook]

Not necessarily rich parents, but parents/relatives that help them a lot. Eg my neighbor and her husband financed their son's house (and I'm sure charged them little/no interest), then when her husband died she dropped the remaining balance on the mortgage and gave them the house. She also bought them a new Toyota Land Cruiser a couple years ago. Also, the guy's son (neighbors grandson) recently married a girl whose dad owns some huge business and is a multimillionaire. So the girl has a cushy job working for daddy making about 350k (she's 23 and just out of school).

Some people have all the luck.

Damn. You're right. I guess family take care of their own pretty good. That might be the case with the guy I know because I'm not sure about his or his wife's family background.

 

[Ultrabook]

Inheritance (rich parents/aunts/uncles/etc or their life insurance policy was big or both of those)
Lots of credit/debt (the most likely of the 3 I will list)
Born to rich parents

But yes I look around at people flossin' all kinds of new sh!t and big houses and wonder WTF is going on, where is all that coming from. My wife and I have a pretty healthy income and while we live a very austere spartan lifestyle that includes zero debt, even if we did decide to lose our minds and spend all our money we couldn't live/spend like these people do.

Inheritance might be it. I'm like you too. Can't imagine living like they do even if I had the dough.

 

[Ultrabook]

$50 says he's on cocaine and that's why he's so chill even though he should be worried.

Geez. I hope not