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Is everybody in debt?

115,673 Views | 681 Replies | Last: 3 mo ago by Captain Winky
EliteZags
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ea1060 said:

not hedge said:

I'm amazed of the different business owners and HNW individuals who don't know of the backdoor
Does it really matter when you can only invest $6k/year in a Roth IRA? Thats not much to a HNW individual.
am I missing something here or is everyone else?

the backdoor roth they're referring to above allows up to 40.5K
not hedge
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That's the mega backdoor
The Debt
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This thread is awkward for me.
JohnLA762
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The Debt said:

This thread is awkward for me.


Why awkward? You should be the expert!
YouBet
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ea1060 said:

not hedge said:

I'm amazed of the different business owners and HNW individuals who don't know of the backdoor
Does it really matter when you can only invest $6k/year in a Roth IRA? Thats not much to a HNW individual.


Hell yes, every dollar matters.
TXTransplant
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not hedge said:

That's the mega backdoor


Yep. Backdoor Roth is just to get around the income limits on "regular" $6k/year self-directed Roth.

Mega backdoor Roth allows the up to $40.5k contribution, but it is made after-tax into your 401k. Not all plans/employers allow it. You also have to subtract your employer's contribution to your 401k from that cap.

They are two totally different and separate investment opportunities.
Jason_Roofer
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In my businesses, I get to see first hand how people spend their money. I know for fact 5% of customers are maxed out on credit cards and pay the minimum every month. I also know that there are more than a few people that are over the age of 40 that don't have an extra 5,000 sitting around for emergencies. I've watched people take a 30,000 dollar insurance check and use it up on everything except their roof and do so in less than 6 months, only to turn around and finance their bill at 12% interest to pay for my work.

These same people have 85-100,000 dollar new vehicles.

The banks are more than happy to help you get overextended.

I think most people are just not good with money. I mean MOST....

The new gadget right now is just too much for people to handle.
Spurswin5
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Sandman98 said:

I think we're seeing wealth and asset transfer from boomers beginning to drive the lifestyle of a heck of a lot of people. People don't usually tell you about that source of wealth.


Also seeing Silent Generation to last of the Boomers, some who are still winding down their careers.
Ghost of Bisbee
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Ag92NGranbury said:

smart money has been stashing cash and keeping the powder dry... we are on the precipice of buyer's bonanza and it will be glorious

stocks, land, real estate, boats...etc


Can you elaborate?

Genuinely interested in your opinion.
I keep telling myself this and see nothin but rising home values, inflation, and demand still not being satiated for real estate
gig em 02
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ChoppinDs40 said:

If both people work it's not hard at all for 2 professionals to be pulling in $300k plus in Texas's big cities. Locked in mortgage at prepandemic prices? That's a lot of discretionary spending available.

And when debt has been so cheap, why not use it? Obviously need to use it intelligently. My mortgage is 30yr at 2.5% - I'm not paying that down "sooner" to save on effective interest rate of 1.8%. But also put back ~65k/ year in 401k/HSA/other investments and have a decent emergency savings fund in cash.

Leverage away!


When people say things like this I know they grew up rich and haven't spent much time around the middle class. $300k combined household income is less than 10% of the population. According to the link I posted below $227,000 puts you in the 95th percentile in Dallas.

Parents with large retirement accounts that are sending money to their kids before they die is probably less than 5% of the population. I'm jealous of people that see the world this way because it means they've never even recognized the existence of 95% of the country.

Look at the actual statistics on savings and income. If all these people are so financially savvy why are 72 month car loans standard? It's not a bunch of millionaire next doors driving those raptors you see everywhere.

Disney world has been operating at full capacity. Who is voting for Biden if that many people are that financially well off?

https://statisticalatlas.com/metro-area/Texas/Dallas/Household-Income
GE
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gig em 02 said:

ChoppinDs40 said:

If both people work it's not hard at all for 2 professionals to be pulling in $300k plus in Texas's big cities. Locked in mortgage at prepandemic prices? That's a lot of discretionary spending available.

And when debt has been so cheap, why not use it? Obviously need to use it intelligently. My mortgage is 30yr at 2.5% - I'm not paying that down "sooner" to save on effective interest rate of 1.8%. But also put back ~65k/ year in 401k/HSA/other investments and have a decent emergency savings fund in cash.

Leverage away!


When people say things like this I know they grew up rich and haven't spent much time around the middle class. $300k combined household income is less than 10% of the population. According to the link I posted below $227,000 puts you in the 95th percentile in Dallas.

Parents with large retirement accounts that are sending money to their kids before they die is probably less than 5% of the population. I'm jealous of people that see the world this way because it means they've never even recognized the existence of 95% of the country.

Look at the actual statistics on savings and income. If all these people are so financially savvy why are 72 month car loans standard? It's not a bunch of millionaire next doors driving those raptors you see everywhere.

Disney world has been operating at full capacity. Who is voting for Biden if that many people are that financially well off?

https://statisticalatlas.com/metro-area/Texas/Dallas/Household-Income
Probably a little presumptuous to assume somebody grew up rich and doesn't see 95% of the country because of something like that. Its true that it's not hard for two professionals to pull in $300,000. It's also true that it is rare.
Diggity
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Ghost of Bizbee said:

Ag92NGranbury said:

smart money has been stashing cash and keeping the powder dry... we are on the precipice of buyer's bonanza and it will be glorious

stocks, land, real estate, boats...etc


Can you elaborate?

Genuinely interested in your opinion.
I keep telling myself this and see nothin but rising home values, inflation, and demand still not being satiated for real estate
you're not paying attention then. Real Estate has cooled significantly and demand is way down in most markets.
Ghost of Bisbee
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Diggity said:

Ghost of Bizbee said:

Ag92NGranbury said:

smart money has been stashing cash and keeping the powder dry... we are on the precipice of buyer's bonanza and it will be glorious

stocks, land, real estate, boats...etc


Can you elaborate?

Genuinely interested in your opinion.
I keep telling myself this and see nothin but rising home values, inflation, and demand still not being satiated for real estate
you're not paying attention then. Real Estate has cooled significantly and demand is way down in most markets.


Lol since when
Diggity
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Since rates doubled.

Prices are still way up from pre COVID levels but demand is down in most markets. Just ask anyone trying to sell a home right now. Very different market from this time a year ago.
jja79
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The last 3 months or so have been noticeably slower. A lot of mortgage lenders are trimming staff due to the slow down. I've taken a lot of calls from guys I've known for years looking for a place to land.
MRB10
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“There is no red.
There is no blue.
There is the state.
And there is you.”

“As government expands, Liberty contracts” - R. Reagan
YouBet
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gig em 02 said:

ChoppinDs40 said:

If both people work it's not hard at all for 2 professionals to be pulling in $300k plus in Texas's big cities. Locked in mortgage at prepandemic prices? That's a lot of discretionary spending available.

And when debt has been so cheap, why not use it? Obviously need to use it intelligently. My mortgage is 30yr at 2.5% - I'm not paying that down "sooner" to save on effective interest rate of 1.8%. But also put back ~65k/ year in 401k/HSA/other investments and have a decent emergency savings fund in cash.

Leverage away!


When people say things like this I know they grew up rich and haven't spent much time around the middle class. $300k combined household income is less than 10% of the population. According to the link I posted below $227,000 puts you in the 95th percentile in Dallas.

Parents with large retirement accounts that are sending money to their kids before they die is probably less than 5% of the population. I'm jealous of people that see the world this way because it means they've never even recognized the existence of 95% of the country.

Look at the actual statistics on savings and income. If all these people are so financially savvy why are 72 month car loans standard? It's not a bunch of millionaire next doors driving those raptors you see everywhere.

Disney world has been operating at full capacity. Who is voting for Biden if that many people are that financially well off?

https://statisticalatlas.com/metro-area/Texas/Dallas/Household-Income
Disagree. I grew up solidly middle class and not rich at all.

If both of you have degrees and get into corporate and stick with it, it's not that hard to be making that kind of money in your 30s and 40s. My first job out of college paid me about $25K and I got there. It's actually a pretty easy formula if you stick with it. Most people either don't stick with it for various reasons or they do stick with it and then just blow all the money they make.
Ghost of Bisbee
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Diggity said:

Since rates doubled.

Prices are still way up from pre COVID levels but demand is down in most markets. Just ask anyone trying to sell a home right now. Very different market from this time a year ago.


Ok, fair. So demand is lower than it was a year ago. Prices certainly aren't. With rates the way they are it just doesn't make sense to buy a home for most until rates decrease
MRB10
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YouBet said:

gig em 02 said:

ChoppinDs40 said:

If both people work it's not hard at all for 2 professionals to be pulling in $300k plus in Texas's big cities. Locked in mortgage at prepandemic prices? That's a lot of discretionary spending available.

And when debt has been so cheap, why not use it? Obviously need to use it intelligently. My mortgage is 30yr at 2.5% - I'm not paying that down "sooner" to save on effective interest rate of 1.8%. But also put back ~65k/ year in 401k/HSA/other investments and have a decent emergency savings fund in cash.

Leverage away!


When people say things like this I know they grew up rich and haven't spent much time around the middle class. $300k combined household income is less than 10% of the population. According to the link I posted below $227,000 puts you in the 95th percentile in Dallas.

Parents with large retirement accounts that are sending money to their kids before they die is probably less than 5% of the population. I'm jealous of people that see the world this way because it means they've never even recognized the existence of 95% of the country.

Look at the actual statistics on savings and income. If all these people are so financially savvy why are 72 month car loans standard? It's not a bunch of millionaire next doors driving those raptors you see everywhere.

Disney world has been operating at full capacity. Who is voting for Biden if that many people are that financially well off?

https://statisticalatlas.com/metro-area/Texas/Dallas/Household-Income
Disagree. I grew up solidly middle class and not rich at all.

If both of you have degrees and get into corporate and stick with it, it's not that hard to be making that kind of money in your 30s and 40s. My first job out of college paid me about $25K and I got there. It's actually a pretty easy formula if you stick with it. Most people either don't stick with it for various reasons or they do stick with it and then just blow all the money they make.


This. Two hard workers in their 30s with degrees from TAMU should easily be able to accomplish this. I didn't grow up rich, but wasn't below the poverty line, and worked my way through A&M. My wife and I are in this group and are under 35.
Diggity
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Man. Who is talking care of everyone's kids?

HH income of $300K (minimum of course, we went to A&M for crying out loud) and let some $15/hour flunky raise your kids.

American dream baby!
ChoppinDs40
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Diggity said:

Man. Who is talking care of everyone's kids?

HH income of $300K (minimum of course, we went to A&M for crying out loud) and let some $15/hour flunky raise your kids.

American dream baby!
heh... my kid's daycare teachers are both college educated and one has a masters in early childhood development. Some people in this world do things for their passion and not money.

Granted, we pay just north of $15k/year for ours.
Diggity
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My bad.. we'll bump it to $25/hour since she has her master's.

techno-ag
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$150k is certainly possible for even a school principal in Houston. Dual income households obviously rake in more.

https://www.chron.com/news/houston-texas/education/article/highest-paid-houston-high-school-principals-2017-11955180.php
ChoppinDs40
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gig em 02 said:

ChoppinDs40 said:

If both people work it's not hard at all for 2 professionals to be pulling in $300k plus in Texas's big cities. Locked in mortgage at prepandemic prices? That's a lot of discretionary spending available.

And when debt has been so cheap, why not use it? Obviously need to use it intelligently. My mortgage is 30yr at 2.5% - I'm not paying that down "sooner" to save on effective interest rate of 1.8%. But also put back ~65k/ year in 401k/HSA/other investments and have a decent emergency savings fund in cash.

Leverage away!


When people say things like this I know they grew up rich and haven't spent much time around the middle class. $300k combined household income is less than 10% of the population. According to the link I posted below $227,000 puts you in the 95th percentile in Dallas.

Parents with large retirement accounts that are sending money to their kids before they die is probably less than 5% of the population. I'm jealous of people that see the world this way because it means they've never even recognized the existence of 95% of the country.

Look at the actual statistics on savings and income. If all these people are so financially savvy why are 72 month car loans standard? It's not a bunch of millionaire next doors driving those raptors you see everywhere.

Disney world has been operating at full capacity. Who is voting for Biden if that many people are that financially well off?

https://statisticalatlas.com/metro-area/Texas/Dallas/Household-Income
Coming to defend my original post - thanks everyone for piling on the naysayers.

I grew up ANYTHING but rich and far from it. Both parents worked for the school district for 30+ years. Mother taught for 25 years in small town Texas. Father taught math and did a lot of construction work. Mother also died while I was in college from a long bout with cancer - so yeah, we were just RAKING IT IN HOMEY! Family of 5.

You're right though - most Americans are dumbasses and wouldn't know what working hard, keeping your head down, investing in the future, and making sacrifices was if it slapped them in the face.

As long as they "got 'dere cell phones" and netflix and WIC payments, they're set!

I absolutely loathed the kids in my small town growing up that had the newest Jordans, gold chains and yet got free lunches and lived in a trailer house. We bought discount rack clothes and I didn't board an airplane until I was 15 years old - camping vacations for us and dinner at grandparents 2-3 nights a week.

But back to my post... I don't have a huge friend group per se but every single one of them that went to A&M and got a degree and has a pulse is doing well... upper middle class and some are doing VERY well. I just turned 35 and have friends that are CFOs, senior sales positions, Partners at firms (legal, accounting, and engineering), own their own companies, SVPs of marketing, etc.

As YouBet said... if you got a decent degree from A&M (engineering, business, medical, etc.) and didn't completely piss everything away by marrying some crazy hoe, being lazy as hell at work, or trying to cut corners.... 13 years into your career you should be making $150k+ easily. Marry a girl who did something similar and voila, you're 300k+ and likely still moving at an upward trajectory.

I'm not trying to jinx it but if my wife and I continue to advance at any similar clip that we have thus far... we'll likely be in the 500-600k/annually position in 5 years.

This has come with sacrifices. My wife is 33 and still going to school (has her Masters already and we're going for her PhD) - we're seeing the return on investment paying cash for her Masters. My Masters from A&M has paid itself 10x fold. We work hard and raising a family can be tough but we see the value in raising our daughter to see that hard work can get you where you need to be - not chardonnay chelsey that lugs snot-nosed terrors around to t-ball practice every day in the leased blacked out suburban. To each their own but both our parents worked, and still work. Outside of the occasional $100 for birthdays or picking up the check at dinner, our wealth has been 100% accumulated by us.

End Rant.

gig em 02
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It's not hard, you just have to perform at the top level of a top major at a top university, then perform well enough to go to graduate school, then devote your entire life to your work, then hope that you work for a company that actually rewards hard work or that there is a perfect opening for you to get the necessary promotions, then marry someone who has done the same thing, then have kids but not actually want to spend time with them.

Not to mention having an upbringing that puts you on track to be able to do those things in the first place. Sounds like I was wrong, it's simple to be in the 98th percentile of earners!

The interesting thing is that you acknowledge many people from your small town are buying things they can't afford and living off the government. So to the ops point, yea lots of debt.
coastalAg
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This is what I was thinking. The number of households with two college degreed earners is a very small percentage of the population. Of that sample, there will be people who are irresponsible, get divorced, have big time student loans, have an unforeseen emergency, have to support family members, etc and aren't able to accumulate wealth at the rate they should.
MAS444
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" It's not hard, you just have to perform at the top level of a top major at a top university, then perform well enough to go to graduate school, then devote your entire life to your work, then hope that you work for a company that actually rewards hard work or that there is a perfect opening for you to get the necessary promotions, then marry someone who has done the same thing, then have kids but not actually want to spend time with them."

Oh give me a freakin break…
gig em 02
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MAS444 said:

" It's not hard, you just have to perform at the top level of a top major at a top university, then perform well enough to go to graduate school, then devote your entire life to your work, then hope that you work for a company that actually rewards hard work or that there is a perfect opening for you to get the necessary promotions, then marry someone who has done the same thing, then have kids but not actually want to spend time with them."

Oh give me a freakin break…


True, it requires catching a lot of breaks and taking advantage of them when they come
YouBet
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gig em 02 said:

It's not hard, you just have to perform at the top level of a top major at a top university, then perform well enough to go to graduate school, then devote your entire life to your work, then hope that you work for a company that actually rewards hard work or that there is a perfect opening for you to get the necessary promotions, then marry someone who has done the same thing, then have kids but not actually want to spend time with them.

Not to mention having an upbringing that puts you on track to be able to do those things in the first place. Sounds like I was wrong, it's simple to be in the 98th percentile of earners!

The interesting thing is that you acknowledge many people from your small town are buying things they can't afford and living off the government. So to the ops point, yea lots of debt.


Lol. This is absurd. My career had nothing to do with my degree from A&M where I'm guessing I was middle of the pack of my schools graduation class....at best.

If you go into corporate America and put your time in and work hard and marry someone who does the same thing then you are a dumbass if you don't get to that combined salary level at some point. Especially with what companies are paying now. Hell, I had ICs reporting to me that were making $100k+ pre Covid and before I left corporate. Those people are now making close to what I was making as a senior leader after all of the Covid Great Resignation salary increases.

You will make some sacrifices with your free time, for sure, but you are making it way more difficult than it really is. The reality is that most women bail before they can get there due to kids which hinders the overall math for the couple.
TwoMarksHand
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A great thread that turned into a TexAgs circle jerk.
ChoppinDs40
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I love his "and not spend any time with them" lol

I worked my ass off BEFORE I had kids, by design, so that I'm now in a position where I can come and go as I please (within reason) and work around family stuff.

Sounds like someone just wants to make sure he gets his red stapler.

You're right though. I've had to manage some people that are complete dumbasses. They've lucked out and are making 100+k.

They won't get to that 400-500+ though and that's fine.

To get this thread back on track… this board is a very VERY specific slice of a demographic in America. Predominantly white, southern, college educated males. Yes there are plenty of others but I bet that's the majority.

So yes, most of us were born with a 3-0 count vs maybe 0-2 for others. I've also known and worked with kids that were rounding third the day they were born. SMU trust fund kids anyone? It happens.

The main problem is there is no required financial education course for any level education in this country. Ever wonder why the doctor who just got his first real paycheck that has 500+k in loans goes and buys a Porsche the moment they're getting 15k paychecks? I've done lots of deals with single owner medical practices. Some of the most wheels off and irresponsible people with money I've ever seen.

And some make absolute fortunes moving into things like real estate vs being a dentist or spine surgeon.
LostInLA07
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Agree except today a white make is not facing a 3-0 count entering the workforce. DEI scores = they are almost having to contest a strike out upon application unless they have a backdoor option.
ag94whoop
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For every story of an Ag graduating and having HH income of $300-500k, there are 5-10 stories of Ags making way way way less. Some industries pay 10x what others do. That's just the way it is. Some people make massive money in PE or software or forensic accounting while others are making ends meet but without a huge cushion in education, agriculture, construction or even law.

Some like me have lived the entrepreneur life and made money and subsequently lost it all. I had to completely, and I mean completely, start over financially 10 years ago after a business I had started and appeared to be booming suddenly collapsed, losing virtually my entire net worth. I nearly lost everything except what mattered (thank the Lord for a loving and patient wife). Since then we changed our focus. We have done just fine living conservatively, and have no real worries in life, two of our three kids are at A&M now (one kid still in middle school) and life is good. We won't ever be wealthy by some standards but we are happy, have an amazing family life, zero debt, a couple little pieces of land and a little money for the future.

Most people in this country are in debt because they are trying to live someone else's life or live up to some standard they see for themselves. I used to stress about becoming wealthy. I was envious of the success of some of my friends, and never happy with what I had. After changing my perspective …. I now relish every second I have and I no longer envy my friends but I am both proud and happy for them and wish them nothing but joy.
Good friends are rare. Be one.

In the end, life is about making the best of your situation. Find joy in every moment God lets you breathe, love your family and friends with everything you have (and the Ags too), don't worry about what others have or what Tony think about you and simply be happy with where you are.

You will never be happy with what you want, until you are happy with what you already have.
Joy is about living a fulfilled life.

Good luck, God Bless and Gigem!
AggiEE
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I think the moral hazard of the 2008-2009 recession coupled from unprecedented monetary and fiscal policy during COVID has signaled to the masses that there's little to no consequences to financially unsound actions either by the government or the populace.

Combine that with runaway inflation, the ever growing divide between the "Have Yachts" and "Have Nots", and the fact that their government has kept them living in a cage these past few years and people are just going to YOLO.

If you are one of the desperate masses with no money to your name, and a government that's willing to backstop everything no matter the long-term cost, why aren't you going to get into more and more debt? They have no money, nothing to their net worth. They gave to file bankruptcy? Ha! There are probably a million ways around the consequences of that and they will keep the debt train going.

Our entire concept of money is not based on gold, it's not based on fiat, it's not based on anything other than TRUST and CREDIT, and that entire system of trust has been completely eroded.
Carlo4
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jja79 said:

The ex wife is the ex.

And the horses name is Friday
 
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