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On I Made $570K Last Year, But I Don't Feel Rich (In Fact, I Feel Worried)
Obviously this guy is really really really rich, and I definitely agree that he has some unadressed anxieties about this, but as someone who is basically one of this dude's children (two siblings, physician father in mid-50s, etc), I would say that it's unfair to say someone is crazy or poorly adjusted for worrying about money. I think most if not all people worry about money, and that it doesn't necessarily correlate super-closely with how much money you make. Also, some of the back-of-the-napkin calculations here are grossly underestimating the cost of raising children. I think most of us progressive, liberally-minded Billfolders probably do or would aim to provide our kids with as much good education as we would feel we could afford. Obviously you do not need to spend lots on schooling to provide a great education for your children, but given the means, many people would prioritize that (over the Lexus or whatever). Some expenses that others haven't mentioned that this guy likely shells out for include $20,000/year/child for private school, especially if he lives in an urban area with limited access to quality public schools. Say another $5,000/kid for extracurriculars (instrument lessons, sports, overnight camp, exchange student programs, etc. etc. etc.) If they live far from family, say that's 1 flight/year to both the inlaws. $300x5x2 is $3,000, and that's basically the most affordable flight one could possibly get, not in a holiday season, etc. etc. These kind of expenses that would be minor for an individual end up being really expensive when you're a family of 5. I'm not saying he's not rich (HE IS!!!), but I am saying that this money is going somewhere, and it's not all going to the private chef and Range Rover. Oh, and don't forget that when you're making that much money, your federal + state tax rate is probably nearing 50%. This is probably his pretax income. (And because of marriage taxes, if his wife worked a job making, say, $60,000 a year, she would be taxed at the same rate as her husband, and take home only about $30,000 or whatever. )
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On I Made $570K Last Year, But I Don't Feel Rich (In Fact, I Feel Worried)
@Jake Reinhardt FACT.
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On The Triumphant Return of Do 1 Thing
GOOOOOOOOOOOOOOOOOOO LOGAN!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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On How to Stop Going into Credit Card Debt for the Sake of "Points"
@seaermine Since my checking account isn't with the same bank as my credit card, I don't think it's possible for me to automatically pay the full balance. If they were both with the same bank I could do this, and if I chose a $ amount I could set up a recurring payment, but not the exact feature I want: Pay outside credit card full balance each month. I could just set up a $140 transfer I guess, but I am still scared of putting something else on the cc and then forgetting to transfer the extra. That's my own damn fault I guess though.
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On How to Stop Going into Credit Card Debt for the Sake of "Points"
I just put my autopay yoga membership ($140/month) on my credit card. That way I get the points and I also know exactly how much my bill will be each month and can account for that from my checking account. If I cared more about getting points I would just add some other regular, non-impulse-buy expenses (utility bills, Netflix, phone bill, etc), so that I would know to have, say $400 in my checking account to pay off my credit card on time. The main thing that annoys me is that I can't set up autopay for the full balance of my credit card. They only let you do that for the minimum, which is a great way for them to trick you into going into credit card debt.
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On Preemies and Health Care Costs
@stuffisthings I've worked at multiple hospitals and I pretty much get the sense that this is what they do. There is some competition between hospitals (in relation to the insurance companies), so that keeps prices down somewhat; an insurance company could just tell the hospital no, we're not covering any of your services because you're making up really high prices. However, insurance companies don't have much trouble jacking their premiums up, so they transfer a lot of the cost to the consumer rather than bargaining with the hospitals. Also hospitals will claim to take Medicare/Medicaid, but since doctor's aren't truly "need-blind," for some reason it can suddenly become much more difficult to get an appointment when you're not privately insured.
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On Charting Your Percentages of Pay Spent on Housing Responses
Thanks Mike! I wonder, when people think it's crazy to spend a lot on housing, are they saving that much more money than people not spending it on housing? Because if you spend 1/4 your take-home pay on housing but the rest goes to transportation and new clothes and beer and gadgets or something, that seems like... basically equally financially wise to me, and just a lifestyle choice. So having such a stringent rule of thumb seems kind of silly.
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On Babies As Luxuries
@deepomega From an economic perspective, if you are healthier-than-the-average-person-with-insurance, it will cost you less over the long run to have only catastrophic insurance and to cover preventative and regular health care costs out-of-pocket. HSAs (Health Savings Accounts) are basically a tax-sheltered way of doing this, along with a high-deductible insurance plan. Of course, this only works if you have the out-of-pocket funds to do so. Of course, the more (presumably healthier) people take advantage of this, the more sick people will be stuck with regular insurance and therefore higher premiums. So HSAs are an effective way to save money on insurance for some people and should be recognized as such, but are indeed in practice really only beneficial for the "healthy and wealthy." And yes these are all arguments for why universal health insurance would prevent poor and sick people from being screwed over by health care.
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On What Percentage of Your Pay Do You Spend on Rent?
@seaermine hahahaa they asked for my dad's 1099. which was awkward for me to ask for?
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On I Made $570K Last Year, But I Don't Feel Rich (In Fact, I Feel Worried)
@AuntAgatha My mom is a "stay-at-home" mom and while we never had a personal chef, we did have a cleaning person. My family is lucky enough that the choice for my mom to not work for pay wasn't a question of, "will you be the primary homemaker or contribute income to pay for those services?" She stopped working to have quality time with her children and to be able to contribute to a lot of organizations that wouldn't be able to pay her for her work. My mom more greatly enjoys driving (less-privileged) kids who wouldn't otherwise have rides to extracurricular activities, and would rather do that than clean the bathroom. She likes to cook and sees that as a valuable way to contribute to the family, but if she didn't, why not outsource it and spend the time you would otherwise be stressed out shopping and preparing food doing things that make you happy and contribute to the family. I don't know, playing in the backyard with your kids; helping them with their homework; volunteering; whatever. Obviously these are privileges but if you have the ability, why feel the (arguably patriarchal) pressure to cook? There are many other valuable ways ones' time can be spent. Not sure if that's how this woman's time is being spent, but we don't know that she's sitting around getting pedicures by any means. Also, the reality is that many people of all incomes eat out a lot, which is generally less healthy. If you're looking at 3 meals for a family of 5 out, you're talking about the same amount of money for something way more expensive and less healthy. Finally, just a note that part of what makes it possible for many families to have two-earner households is the sharing of responsibilities like coordinating soccer games, carpools, PTA fundraisers, etc. usually disproportionately by mothers (and some fathers) not working full-time. There are some systemic issues here of course but it is a huge responsibility that often falls on the shoulders of those who are more available to do it. We shouldn't undervalue this contribution.