blackdiamond
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Post by blackdiamond on Feb 16, 2011 11:04:19 GMT -5
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lurkyloo
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Post by lurkyloo on Feb 16, 2011 11:37:06 GMT -5
Interesting article; thanks for posting. (Is it bad that I'm left wondering how on earth they kept their federal income tax so low?)
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Post by Savoir Faire-Demogague in NJ on Feb 16, 2011 11:37:41 GMT -5
Items to cut back on are incidental at best.
It is fairly easy for a typical two income, middle class couple to earn $250,000. Two average, run of the mill middle class jobs for a couple in their mid to late 30s, in any HCOL area...take your pick of any two of the following: IT(any job classification) Accounting Finance Sales Marketing Engineer Purchasing Production Traffic
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Post by Savoir Faire-Demogague in NJ on Feb 16, 2011 11:40:05 GMT -5
Interesting article; thanks for posting. (Is it bad that I'm left wondering how on earth they kept their federal income tax so low?)
They maxed their 401K contributions as well as a number of other pre-tax items. Their 401K contributions alone account for $33,000 in reductions.
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Deleted
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Post by Deleted on Feb 16, 2011 11:51:17 GMT -5
These poor poor people.
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blackdiamond
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Post by blackdiamond on Feb 16, 2011 12:02:53 GMT -5
SF your point on cut backs has merit. I couldn't figure out why they had a phone line and still paid for cable, Internet and phone (guess that was for a cell phone) or the takeout vs eat out.
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Gardening Grandma
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Post by Gardening Grandma on Feb 16, 2011 12:09:56 GMT -5
In reality, to make ends meet, this squeezed couple would have to cut back on discretionary expenses
Huh? This "squeezed" couple? Puleeeze!
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Deleted
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Post by Deleted on Feb 16, 2011 12:13:56 GMT -5
I think states are going to really start losing "high" earning people. It is hard to leave the country, but moving to a different state isn't so bad.
The state income tax for MD in the table looks too low to me. I just did my state taxes and I want to move badly.
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souldoubt
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Post by souldoubt on Feb 16, 2011 12:19:48 GMT -5
Documented workers, small business owners and high earners have been leaving CA for a while and the state is in worse off shape than they would be had they just had to deal with the recession because of it. It's something I'll consider in the future but it's obviously contingent on lining up a job in another state.
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Post by Savoir Faire-Demogague in NJ on Feb 16, 2011 12:25:01 GMT -5
I think states are going to really start losing "high" earning people. It is hard to leave the country, but moving to a different state isn't so bad.
Starting? Mass migrations of wealthy individuals has been under way for a long time. NJ loses 50,000 people per year due to the high cost of living, and high taxation. Just a year or so ago, it was widely reported the $70 billion in wealth left New Jersey for low tax states. CA and NY states are losing high income residents at alarming rates.
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Deleted
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Post by Deleted on Feb 16, 2011 12:25:47 GMT -5
Is there an aid fund being set up we can contribute to - or possibly a telethon?
What a bunch of self serving cow cookies.
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Post by Savoir Faire-Demogague in NJ on Feb 16, 2011 12:35:35 GMT -5
Is there an aid fund being set up we can contribute to - or possibly a telethon? What a bunch of self serving cow cookies.
This couple are paying their "fair share" of taxes which the article points out are over $78,000. They do have $62,000 in student loans and for a couple, each with college and graduate degrees(him only). They are merely a typical family of four, living in a high cost of living, and high tax area.
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Deleted
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Post by Deleted on Feb 16, 2011 12:38:09 GMT -5
I'm not crying for any family making $250k unless they live in Manhattan.
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stats45
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Post by stats45 on Feb 16, 2011 12:42:33 GMT -5
They are saving a good amount for retirement and college for their children, so I don't think any family would mind switching places with them. Their tax burden is between 24% and 29% of their income. Higher than I would like in an ideal world, of course, but not anything that made me gasp.
They might not have a lot of 'disposable income' because of their budget choices, but they could easily cut $30k or more from their budget (not including their savings) if times became difficult. A median household making around 50-60k could only dream of that flexibility.
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resolution
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Post by resolution on Feb 16, 2011 12:46:37 GMT -5
A lot of the expenses really look off to me if they are just a typical family of four. For example the NY family of four is eating $1859 per month. Over $1000 of that is the grocery budget and the rest is the eating out/takeout/lunch budget. The housekeeper is $416 per month. They are spending $476 per month on gasoline and an additional $223 on gas taxes, for a total price of $700 per month at the pump. The utility expenses are also over $400 per month and their phone/cable plan is $200 per month. If anyone showed up on this forum with those expenses saying their budget was in the red, people would be telling them they are outrageously high and not saying they are just a typical family with typical expenses.
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Clever Username
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Post by Clever Username on Feb 16, 2011 12:51:05 GMT -5
The article fails to address that stupidity is not illegal. Anyone can choose to spend all they earn. Many of these expenses are suspect. Despite health insurance, still paying $9k out of pocket? EVERY YEAR? Really? And though childcare is expensive, the pain is relatively brief.
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JustLurkin
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Post by JustLurkin on Feb 16, 2011 13:01:00 GMT -5
I didn't consider spending $10k on $250k to be overly lavish...but really...plenty of people somehow manage on much less. The tone just rubbed me the wrong way.
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Post by Savoir Faire-Demogague in NJ on Feb 16, 2011 13:05:24 GMT -5
A lot of the expenses really look off to me if they are just a typical family of four. For example the NY family of four is eating $1859 per month. Over $1000 of that is the grocery budget and the rest is the eating out/takeout/lunch budget. The housekeeper is $416 per month. They are spending $476 per month on gasoline and an additional $223 on gas taxes, for a total price of $700 per month at the pump. The utility expenses are also over $400 per month and their phone/cable plan is $200 per month. If anyone showed up on this forum with those expenses saying their budget was in the red, people would be telling them they are outrageously high and not saying they are just a typical family with typical expenses. All those expense are normal as pointed out and referenced in the article. They are living in the highest cost of living county in the US according to the article, Huntington, Long Island. The eating out budget is $2400 per year, that is $200 per month, peanuts. Childcare of $19,000 per year for two kids is routine. Every other expense if fairly average for that area in the NYC metro area.
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Post by Savoir Faire-Demogague in NJ on Feb 16, 2011 13:09:28 GMT -5
One item I do think is a bit over the top is their annual contribution of $8000 to their kids college fund.
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Deleted
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Post by Deleted on Feb 16, 2011 13:28:18 GMT -5
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Deleted
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Post by Deleted on Feb 16, 2011 13:44:01 GMT -5
I was speaking about the article - not about this hypothetical couple. After reading it my impression was that the author took a point he wanted to make and went back and made up statistics to support that position. And it is my assessment that it is a ridiculous set of circumstances.
"They are merely a typical family of four, living in a high cost of living, and high tax area.[/quote]"
I'm just curious - do you have any facts that back this up or is this just your personal opinion? Because it would seem that unless you were an economist or statistician studying cost of living nationwide, it would be difficult to state as a definitive fact that this is the case unless one took the time to do specific research regarding this statement. Given the short time between my statement and your response, I would assume you didn't have time to do much research. So I would be interested to see any references or facts you could provide that back up your statement.
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Deleted
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Post by Deleted on Feb 16, 2011 13:45:47 GMT -5
That one looked in line with their income to me. They are saving for 2 kids, who given their high income parents will get little financial aid. Growing at 8%, that is about 150K each.[/quote]
I agree with you on this - I thought this was one of the areas that was reasonable if even a little underfunded.
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stats45
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Post by stats45 on Feb 16, 2011 13:54:18 GMT -5
It is amazing how much children change your budget. From choices about houses to be in the right school district, childcare, insurance costs, college savings, etc. This has to be $60k to $100k in their budget.
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Angel!
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Post by Angel! on Feb 16, 2011 14:30:12 GMT -5
Some of those expenses may be average for NYC, but in their comparison chart, they didn't adjust a lot of these for different areas. In the article they point out how much food cost can vary by location, but the family is spending the same amount in all 8 scenarios. In many areas 19K for childcare when 1 kid is in school is excessive - I pay 15K & both my kids are under 3, get one in school & that amount is going to drop a lot.
$200/month for eating out isn't too bad, but then that doesn't include the $10 lunch each adult has out every day at work, which adds another $420 to the monthly food budget. Then add another $100 for their monthly take-out budget, & another $1K/month for groceries & you are looking at a ridiculous $1720/month for food. Which, again, they didn't adjust at all to account for COL.
The comparison also didn't adjust maintenance costs by location, or any of the utility costs. Both of which would vary greatly by COL.
This article feels like it is trying to show that people making $250K are barely scraping by & all these expenses are necessities. Makes you wonder how a single parent of 2 kids making $60K/yr even manages to get by. Especially since it is impossible to maintain the home & dress professionally without all these necessecities & the associated costs.
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Post by illinicheme on Feb 16, 2011 14:35:22 GMT -5
I think the problem with these kind of articles is that "rich" has so many connotations. For folks struggling paycheck to paycheck, being able to save for retirement and kids' college sure looks like rich. For upper middle class folks like this hypothetical $250k income couple, they see the word "rich" and think "We're not even close to independently wealthy!" Then we get all these "look - I don't own a jet or anything!" articles about how $250k isn't rich.
We're not at the $250k mark (roughly $180k before bonuses in one of the most expensive areas of the country), but I can see both sides of the argument. I would never in million years say I'm not incredibly lucky to be at the income level we are. We're comfortable, plowing money into retirement, and have quite a bit of freedom in discretionary spending. But once we try to add kids to the mix, it will get a bit tight. We'll probably back off on retirement savings. As DINKs, we pay a metric $#!#-ton of taxes. I certainly wouldn't want to voluntarily pay anymore, but we've still got much more room to cut back than a family that makes less than us.
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Post by Savoir Faire-Demogague in NJ on Feb 16, 2011 14:39:27 GMT -5
I'm just curious - do you have any facts that back this up or is this just your personal opinion? Because it would seem that unless you were an economist or statistician studying cost of living nationwide, it would be difficult to state as a definitive fact that this is the case unless one took the time to do specific research regarding this statement. Given the short time between my statement and your response, I would assume you didn't have time to do much research. So I would be interested to see any references or facts you could provide that back up your statement.
I have lived in the NY Metro area for over 25 years. The town I live in, is solidly on the low end of middle class income wise. Property taxes are insane. The home I rent an apartment in has $12,000 per year prop taxes. Homes run $325,000 to $600,000, and it is not even an exclusive town. Go north about 20 miles and average homes are in the multi-million range with property taxes pushing and exceeding $50,000.
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olderburgher
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Post by olderburgher on Feb 16, 2011 14:53:56 GMT -5
Oldncrabby is right! The author had a point to make and then adjusted numbers to reach it. After reading the story I can only recoil in horror for people like my wife and I who never had a combined income of 250K. Wait a minute, my kids went to college and graduated without debt and DW and I have managed to retire comfortably. How could we have done that? Oh yeah, we never had a maid or cleaning service and cut our own grass. We did not take $4000 annual trips, brown-bagged lunches frequently and a pizza out might have been the dining out experience for a whole month. Contributions for college funds and retirement were less then regular and we did not budget $5000 for home maintenance. This writer needs to get real!
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Post by Savoir Faire-Demogague in NJ on Feb 16, 2011 15:01:10 GMT -5
$200/month for eating out isn't too bad, but then that doesn't include the $10 lunch each adult has out every day at work, which adds another $420 to the monthly food budget
If one even goes to a halfway decent restaurant you are looking at a minimum of $100, with or without tip. Nearly any restaurant in Manhattan will charge you $12 and up for a single glass of house wine. The last good place I ate at in the beginning of January I dropped $105, and we did not order any appetizers, or desert and she has a bottle of fancy spring water. The couple highlighted has kids. Take them out twice per month to a family style joint would easily run $50+.
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Clifford
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Post by Clifford on Feb 16, 2011 15:12:21 GMT -5
After School Activities/Camp - 4000 Cleaning - 5000 Eating out (on top of takeout) - 2,400 Gifts, holidays, family celebrations - 3000 Entertainment (movies, sports events, etc.) - 2693 Entertaining at home - 1500 Out-of-pocket expenses (fun money, due to all other categories considered) - 3000 ______________________________ So spending $1800/month for entertainment or the privilege of not cleaning your own bathroom? $21,500/year spent on non-essentials (not counting the 4,000 for vacation). All this after maxing out 401(k)'s and putting away a good bit for college?
I'd say these folks are far from barely getting by. They spend over $25k/year on luxuries. I don't care where you live. That's living high on the hog.
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HoneyBBQ
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Post by HoneyBBQ on Feb 16, 2011 15:46:20 GMT -5
Meh, a lot of their spending is just stupid if you ask me. We make in that ballpark and have PLENTY to take home even though we spend $2000 a month in child support.
I have a housekeeper twice a month and it's $180 - not $450.
Phone, eating out, all that stuff is crap. Buy clothes that don't require dry cleaning and dry clean suits/coats less often. That bill is insanity.
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