Sounds like this board should live a little. Or make more money.

Buying a new nice vehicle and driving it for a long time isn't the issue. Plenty of people are financially smart and spending $50k+ on vehicles.

They are just an easy example. On a lower end I often use purses and shoes. Or, eating out all the time.

ORAggieFan said:

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CAD_ag said:

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I must be reading his charts wrong. Wouldn't median for a quintile be a value and not a range?

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I struggled with it as well. I think the Median is the right most of the bar for each color.

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Thanks ORAggieFan - That is what I assumed too. It doesn't really matter I suppose. The numbers for the lower quintiles are awful no matter how you read them and don't move much no matter what you assume. People in the upper quintiles likely know where they stand and have a plan.

Most of these people are not buying but leasing vehicles they cannot afford to buy.

This just shows me what I already know. Most Americans have to have everything they want now. Credit is handed out like free candy. People are trained to believe they "deserve" things rather than earning them. The whole concept of layaway is dead for a reason. Overconsumption is going to kill not just the government but also private coffers.

Just pathetic.

im 34 and lower than the lowest quintile with a NW of roughly -325k!

hope to get it to a NW of 0 by the end of next year

Vernada said:

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No doubt. When I went to trade in my 9 year old truck I couldn't believe how much new trucks cost! (that's the point I was making as much as anything)

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a base model xlt with 4x4 (I'm in co) and super crew (two car seats) is $40k+. It is pretty ridiculous.

Just a few days ago I needed a vehicle and decided to go used. Fully loaded 4 year old truck. Still right under $30k, not cheap by any means.

OasisMan said:

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im 34 and lower than the lowest quintile with a NW of roughly -325k!

hope to get it to a NW of 0 by the end of next year

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Yikes! How is that even possible?

Student loans is my guess

My med school + wife's undergrad (southwestern)

Didn't think about a second person being added to the bill, my first thought was med school but I figured that wouldn't get you all the way there on its own.

Good luck, I hope y'all do knock that out within a year.

Holy moly. Where'd you go to med school?

Hope you chose Derm.

gig em 02 said:

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FrioAg 00 said:

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That's a really good point. But collectively if low interest rates are causing people to over leverage our balance sheets, to the point that net worth low to zero, I'd still say spending expectations have outgrown income and wealth.

Cars may be the better example, because the interest is a much smaller expense than the depreciation.

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Don't forget extra expenses like cell phones, tv, internet, etc that weren't as prevalent 30 years ago

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Definitely good points. We pay AT&T ~$500 damn dollars a month for the luxuries of internet, mobile, home security, and satellite services. I'm actually calling them this coming week to ask for a larger discount considering they have a monopoly on our household. That is with a corporate discount on mobile and a new user discount on internet.

That same $500 was probably $75 in the '80s because some of these things didn't exist, obviously.

Think about all of the other SAAS type fees you might be paying as well....we have $5 per month for VPN, $100 a year for MS Office 360, etc.

The prevalence of lawn service has to be way more than it ever has been. We pay ridiculous luxury money for an all in one landscape / mowing service at an amount I won't even post because I'm embarrassed about it.

YouBet said:

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gig em 02 said:

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FrioAg 00 said:

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That's a really good point. But collectively if low interest rates are causing people to over leverage our balance sheets, to the point that net worth low to zero, I'd still say spending expectations have outgrown income and wealth.

Cars may be the better example, because the interest is a much smaller expense than the depreciation.

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Don't forget extra expenses like cell phones, tv, internet, etc that weren't as prevalent 30 years ago

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Definitely good points. We pay AT&T ~$500 damn dollars a month for the luxuries of internet, mobile, home security, and satellite services. I'm actually calling them this coming week to ask for a larger discount considering they have a monopoly on our household. That is with a corporate discount on mobile and a new user discount on internet.

That same $500 was probably $75 in the '80s because some of these things didn't exist, obviously.

Think about all of the other SAAS type fees you might be paying as well....we have $5 per month for VPN, $100 a year for MS Office 360, etc.

The prevalence of lawn service has to be way more than it ever has been. We pay ridiculous luxury money for an all in one landscape / mowing service at an amount I won't even post because I'm embarrassed about it.

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That seems excessive..

PFG said:

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Holy moly. Where'd you go to med school?

Hope you chose Derm.

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ha, a lot of it is the private schooling cost my wife poorly chose. She had big scholarship offers to Tex/A&M but picked Southwestern instead. Met her while she was doing her Masters at A&M. Gladly took the negative dowry ha...

Question for those on here. Do yall count net worth on a per person basis? So if you're married with a household net worth of $400k, does that mean your net worth is $200k?

Doubt this does, and I don't. Of course, expenses and goals are all combined in my model too.

Dr. Horrible said:

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Question for those on here. Do yall count net worth on a per person basis? So if you're married with a household net worth of $400k, does that mean your net worth is $200k?

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If married it should be household.

When I hear about folks having loans from undergrad for rice, TCU, smu southwestern...I'm always curious as to their major and "immediately after college..."

Mind sharing ?


And I don't mean 5--10-15k loans....I'm talking 40-60-100k.

Went to get my MBA after 3 years post-undergrad. It whipped out our first 3 years of savings (100% of my wife's salary in 3 years), and we came out with a net worth of Negative 60k.

And it was the best financial decision we have ever made.

Hard work, delayed gradification, team (family) alignment and sacrifices - - the recipe for financial success has not changed since the beginning of time.

edwardsk2003 said:

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When I hear about folks having loans from undergrad for rice, TCU, smu southwestern...I'm always curious as to their major and "immediately after college..."

Mind sharing ?

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she changed a few times
ended up going to a&m for a masters in rangeland ecology

she acknowledges her decision making at that time was not the best

edwardsk2003 said:

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When I hear about folks having loans from undergrad for rice, TCU, smu southwestern...I'm always curious as to their major and "immediately after college..."

Mind sharing ?


And I don't mean 5--10-15k loans....I'm talking 40-60-100k.

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Not undergrad but my MBA from SMU was around $70k for ~2 years. 100% loan. I was one of the only folks in my class who did not have employer help. I was also lucky to attend during the historic lows of the early aughts. My interest rate was 1.25. Another thread for debate but I paid it off early just to get it off the books.

I'm sure with the cost increases of college in general that it would surpass that with ease for 4-5 years of undergrad at any private school and many state schools regardless of study. Hell, I remember getting a letter from SMU almost 15 years ago now after finished about undergrad (it was sent to me by mistake) and it was somewhere north of $20k just for one semester of undergrad.

Lol @ taking out 325k in debt.

No regrets, love being a vascular neurologist

Flogi said:

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Lol @ taking out 325k in debt.

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Lol at me taking out 2 mil in debt. All about what you do with it.

What's your wife do? Just curious after all the debt she took on at a private school if it was worth it.

OasisMan said:

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No regrets, love being a vascular neurologist

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Awesome retort!

Would have been funny it he would have said "no regrets, I love being an art historian."

aggiebq03+ said:

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What's your wife do? Just curious after all the debt she took on at a private school if it was worth it.

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ha

She's an ecologist over here in NE FL. She loves her work,loves her friends and time at Southwestern, but realizes that it was not financially worth it.

YouBet said:

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gig em 02 said:

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FrioAg 00 said:

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That's a really good point. But collectively if low interest rates are causing people to over leverage our balance sheets, to the point that net worth low to zero, I'd still say spending expectations have outgrown income and wealth.

Cars may be the better example, because the interest is a much smaller expense than the depreciation.

---

Don't forget extra expenses like cell phones, tv, internet, etc that weren't as prevalent 30 years ago

---

Definitely good points. We pay AT&T ~$500 damn dollars a month for the luxuries of internet, mobile, home security, and satellite services. I'm actually calling them this coming week to ask for a larger discount considering they have a monopoly on our household. That is with a corporate discount on mobile and a new user discount on internet.

That same $500 was probably $75 in the '80s because some of these things didn't exist, obviously.

Think about all of the other SAAS type fees you might be paying as well....we have $5 per month for VPN, $100 a year for MS Office 360, etc.

The prevalence of lawn service has to be way more than it ever has been. We pay ridiculous luxury money for an all in one landscape / mowing service at an amount I won't even post because I'm embarrassed about it.

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Another fine point for some of the conviences of today vs. expenses of the past:

Look at the percentage of your pay and what you spend it on. Historically, food and rent were much higher percentages of pay. IIRC reading in the past (50's and up till the 70's and Nixon) food was upwards of 25% of a household budget. With food subsidies and such, that has dropped to about 10% of the family budget (average). Rent/mortgage was higher as well, unless you had rent controlled items.

This means more disposable income to buy other things. With the demand came supply, such as internet, phones, etc.



And for the $40k trucks, find an inflation calculator. When I bought my van last year, I was partially shocked by the prices as well. But going back a few years (especially the aughts), inflation is mostly the reason the prices are high. It is just that we've had 20+ years of stagnant wage growth, so things are technically more expensive, on a % of income basis.

~egon

PFG said:

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Quote:

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My wife and I bring in mid six figures. I still have yet to buy a car for more than $25k. As much as I love a nice vehicle, I just can't spend money there with so many better ways to use it.

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For whatever reason - financial forums (not just this one) loooooove to single out the automobile as the downfall of American financial values. I see it on damn near ever single board I read.

It is rare to see a torch lit in the name of overspending on other stuff, like sports and golfing. We all know folks that have season tickets to college and/or pro teams, along with hitting the links 3-5x a month. Tisk tisk for buying a nice car, but go ahead and spend $800 on a ticket, hotel, gas and food/booze to see the Aggies every weekend. Does it matter if your $800 every month is for sports or an auto payment? It shouldn't - but the vehicle shaming is all too prevalent. Maybe we can thank (blame) Mr. Debt Free Scream for this. I don't know, but it bugs the hell outta me.

Same for travel - this often gets a pass for "enriching your life" and "experiencing other cultures". Define it however you want, just spend below your means and save over them. If you want a nice car, and it won't detract from your savings goals - then go sign on the dotted line.

I drove the same old pick-up from 15 years old to 32. When I bought a new one, everyone around me at work and neighborhood gave me that look - the "shame on you for buying a new vehicle." Hate this about our current financial culture.

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You sell fords, chevys or imports?

Cars are just an easy example and it's pretty universally applicable. There are lots of other great examples including many you pointed out, but they vary more from person to person as to where the waist is spent

What is consistent is the great portion of people overspending instead of building wealth, as noted by the results quoted in the article.

Flogi said:

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Lol @ taking out 325k in debt.

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No regrets, love being a community organizer.
It's not my de-fault! It's The Man's!

well now that depends. .. .are you using said 1 ply toilet paper to wipe your bleeding vagene as well?