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re: 50% of Americana aged 45-54 have a $95K net worth or less
Posted on 3/26/25 at 11:26 am to Boss
Posted on 3/26/25 at 11:26 am to Boss
quote:
I agree with what you are saying here, but then you should also do the same with a 401K. Could you liquidate tomorrow? Sure, but you pay a 10% penalty and then taxes on it. Your 1,000,000 401k is now worth 530,000.
Any good modeling should consider both taxes and future value.
1
Posted on 3/26/25 at 11:29 am to StringedInstruments
quote:Where do you buy meats/produce in Birmingham? Haven't been impressed with the quality and variety since moving here
I could technically save on food, but we invest in our health and buy top quality fresh items
Posted on 3/26/25 at 11:31 am to stout
My daughter is 8 and already has nearly that in her 529. People have no priorities. Gotta get that new phone and car
Posted on 3/26/25 at 11:31 am to GEAUXT
quote:
My daughter is 8 and already has nearly that in her 529. People have no priorities. Gotta get that new phone and car
Most people don’t have a $1MM+ income, which you know, but your brag is noted
Posted on 3/26/25 at 11:34 am to Mingo Was His NameO
quote:
In this case, I agree with you. I just think way too many people calculate how much money they have using their primary residence
This is a fact and one people don’t understand.
The more expensive the house the harder it is to sell plus you don’t have a for sure figure until the paperwork has ink. So, I completely agree with not using the equity figure in probably greater than 75% of the cases.
Great point on standard of living. Very important.
Posted on 3/26/25 at 11:35 am to stout
It’s unfair to exclude home equity
Posted on 3/26/25 at 11:36 am to Camp Randall
quote:
It’s unfair to exclude home equity
Not if I can calculate your expenses being higher if you move.
It may be a slow drain, but increase in expenses because you sold the house for current equity could lead to long term increased expenses.
This post was edited on 3/26/25 at 11:37 am
Posted on 3/26/25 at 11:36 am to Mingo Was His NameO
quote:
Most people don’t have a $1MM+ income, which you know, but your brag is noted
Yes, a large shovel helps...but the point remains. People are way too comfortable with debt. fricking door dash is apparently offering financing
Posted on 3/26/25 at 11:37 am to GEAUXT
quote:
fricking door dash is apparently offering financing
Are you kidding me?
People about to finance McDonald’s?
This post was edited on 3/26/25 at 11:38 am
Posted on 3/26/25 at 11:39 am to GEAUXT
Part of the issue is lifestyle creep. People earn more and spend more, so they just blow through any gains. That happened to us. Our income went up 84% in the past 3.5 years. We also have another driver in the house and two kids about to hit college. Yes we are saving a ton more, but those expenses, coupled with more travel, eating out a little bit more, and just enjoying ourselves definitely impacts our future savings. It's striking a balance between saving, saving, saving, and enjoying life a bit now.
Posted on 3/26/25 at 12:00 pm to wm72
I disagree, it's usually a populated city that's next to natural wonders such as beaches, mountains, and lakes. If there are jobs to be had, there are nearby places to live affordably. You may have to commute, or live in a dumpy neighborhood, or even an apartment. But It can easily be done. There are plenty of affordable neighborhoods along the gulf south where you can find a decent job.
Posted on 3/26/25 at 12:01 pm to Dawgfanman
You can also put that $400k in investment making 5%, and have $1666 a month to rent. Might find something less and pocket $300-400/mth, plus have access to the cash for emergencies
Posted on 3/26/25 at 12:07 pm to stout
HGTV has ruined people. You don’t need granite countertops, stainless steel appliances, and an outdoor entertaining area to have a nice home. Buy something modest that you can actually afford.
Plus: if you put just 5% into your 401K starting in your 20’s your net worth will be much higher than $100K.
Plus: if you put just 5% into your 401K starting in your 20’s your net worth will be much higher than $100K.
Posted on 3/26/25 at 12:11 pm to The Nino
quote:
Where do you buy meats/produce in Birmingham? Haven't been impressed with the quality and variety since moving here
Whole Foods for more than we should. A lot of Costco. Publix when we need a quick run because it’s near our house.
We could probably get even higher quality seafood at Sexton’s or meat at a butcher shop. But I’m fine with what we’ve been getting.
Posted on 3/26/25 at 12:12 pm to jizzle6609
quote:
The more expensive the house the harder it is to sell plus you don’t have a for sure figure until the paperwork has ink. So, I completely agree with not using the equity figure in probably greater than 75% of the cases.
Desirable housing priced at or near market value sells fast in most major markets right now. Housing in undesirable locations is hard to sell.
Posted on 3/26/25 at 12:15 pm to Upperdecker
quote:
No idea what I’d do with $10k/month with no kids and no mortgage
It goes quick. Hell my home and recreational property are paid for yet still costs me close to $800/month between property taxes and insurance. Another $300-400/ month in electricity between the two. Throw in groceries and household essentials. And you are at $2500-3000 a month just to live. Wife and I only have a couple car notes and don’t save very much off of a $150k ish per year income. That said we do have three children and the amount of shite that pops up costing you couple hundred dollars here and there is endless.
Posted on 3/26/25 at 12:20 pm to The Third Leg
Exactly if you move into a golf community you buy the cheapest custom home on the course not the one across the street. Same with a lake home you want year round deep water access. Not public access or a meadow where water is occasionally.
People line up to buy these homes and the equity in these is accountable.
People line up to buy these homes and the equity in these is accountable.
Posted on 3/26/25 at 12:22 pm to stout
quote:
Is it unfair not to include home equity? I excluded it because unless you want to live in a van down by the river you have to have a roof over your head
I say include it. Two guys with the same value house, one mortgage free and the other leveraged to the hilt, are in vastly different financial positions if their retirement accounts have the same balance. Also, the guy with big equity can downsize locally or move to a nice area in retirement, but the guy with small equity will have fewer options. Assets are assets.
I am at a better percentile excluding the home equity because I downsized when my kids grew up and invested the difference back then. This calculator says I'm at the 82%ile, but I don''t feel much above average.
Posted on 3/26/25 at 12:30 pm to BabyTac
You commit return fraud at academy?
Posted on 3/26/25 at 12:37 pm to Boss
quote:
401ks are pre-tax for federal purposes.
Correct, and as I stated if you plan your disbursements wisely you can limit those taxes. i.e. setting yourself up to be in the 12% bracket instead of the 22% bracket.
I'd never consider taking it out early but that's me. Actually, taking it out early has come and gone for me.
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