How many people are rich

[innerSpaceman]

Originally Posted by Alex

Really? I feel like I could do all of those things now (assuming "pay off" doesn't mean paying the full price on the house but rather servicing a mortgage on the house since you're not going to buy one every year).

It reads that way, but I didn't take it that way. Although it's becoming increasingly difficult for middle-class families to pay off a mortgage, buying a home on such terms is decidedly a middle-class circumstance. It's only a rich circumstances to buy a house outright, so that's what I took SL's statement to refer to. And if it did not, that's what I refer to.

[Morrigoon]

Originally Posted by innerSpaceman

Although it's becoming increasingly difficult for middle-class families to pay off a mortgage, buying a home on such terms is decidedly a middle-class circumstance. It's only a rich circumstances to buy a house outright, so that's what I took SL's statement to refer to. And if it did not, that's what I refer to.

You'd rarely find a rich person who thinks paying all cash for a house is a good idea.

Most wealthy folks would rather leverage that money, putting down just what they need to to make the payment pencil out. Then use the rest of the money (that this paid-off house would theoretically cost) to put down payments on rental properties, putting down just as much as they need to to make the property cash flow after accounting for maintenance and vacancy allowances.

Part of the reason for this is that in an upward-trending market, if you've put less down on a property, the amount of money by which your property increases in value represents a higher percentage in relation to what you've invested in it.

And now that I've bored you all to death, I'm going to go back to my sewing.

[Strangler Lewis]

From what I see, a year of college plus room and board seems to run between 30K to 50K and change a year. I would happily let the school or the government shoulder the burden, but I hope my kids don't have to be burdened with large loans.

That said, before making any large commitments, I think we'll be having more discussions along the lines of what the kids expect to get out of college than my parents had with me.

[MouseWife]

So, reading this, I am not rich. But, like you said, compared to others we are. We also know people who make many more $$ than we do.

I know I am not rich because I am thinking I would be better off NOT working because it will put us in another tax bracket and then we'll have to pay. Our son now no longer gives us a child tax credit. That kills me as he is still our child.

College. I guess we live in a very low income neighborhood because the person who came to advise us about college/scholarships said not to save money for school as it would only hurt us when we apply for grants, etc. It is true, they ask you what you have in your checking/saving. They do not take into consideration your cost of living. And, you have to claim your parents income until you are 23.

I think the more you make, the more you spend. If you guys {Alex} don't live over the top, that is smart. You don't sound like you are lacking in any way. What would you consider a luxury that you don't have and would like?

[Alex]

About the only thing I can think of is the time to spend the money I make. The catch for me is that I make enough money that I can afford to travel year 'round. But if I traveled year 'round I wouldn't make any money.

[Ghoulish Delight]

I'm with you there. That's a big dividing line for me, to have enough money to not HAVE to work.

Now that we're living on a single income, with a new life to feed, I'm definitely feeling like we were perhaps just above that "rich" line as DINKs. I mean, we couldn't go out and buy a new car every couple of years or anything, but we could travel fairly freely, deal with large sudden expenses without worry, and indulge in entertainment options (movies, APs, dinners, concerts, et. al.) with regularity. All while enjoying many many every day conveniences - cable with DVR, smart phones, 2 cars, 2 computers, the list goes on and on.

Add to that, we are in a position where, while going jobless is not my first choice, neither would it be disastrous. It would take a very very long unsuccessful job search to see any real "adversity", and even then the "adversity" would for a while take the form of dropping unnecessary conveniences. Lightyears from homelessness.

Being on one income, I would no longer call us "rich". Though a promotion or two, and a change in our real estate [non]fortunes have the potential to change that.

But then, I kinda have a fuzzy distinction between "rich" and "wealthy". I tend to view "rich" as simply being well off enough to not have to rely on debt for your chosen lifestyle, while "wealthy" happens when you can really spend freely. Like I said, fuzzy, but I've definitely never felt "wealthy".

[Strangler Lewis]

I remember in the original "Father of the Bride," the groom's father had all these grand plans about building the kids a house to live in after they were married. They rejected it and said they would find their own house to buy. When asked how they would afford it, they said they would get a mortgage. The groom's mother nearly fainted with horror. Spencer Tracy leaped in to say, "Nothing wrong with a mortgage. Had one myself 'til recently."

[Kevy Baby]

Originally Posted by innerSpaceman

I'm sure I would be filthy rich if I were plunked down in Ecuador, or maybe even Idaho. But because I live on the West Side of L.A., I'm decidedly un-rich from my daily perspective.

Yes, but could you make as much in Ecuador or Idaho as you do in LA for comparable work? The trend is generally no, but it is not a linear relationship. An [insert job title] here does not make 3X the monthly mortgage payment for a median home in every city.

[innerSpaceman]

Originally Posted by Kevy Baby

Yes, but could you make as much in Ecuador or Idaho as you do in LA for comparable work? The trend is generally no, but it is not a linear relationship. An [insert job title] here does not make 3X the monthly mortgage payment for a median home in every city.

That's why I wrote "plunked," meaning to imply impossibly there yet earning what I make here.

[Kevy Baby]

Originally Posted by innerSpaceman

That's why I wrote "plunked," meaning to imply impossibly there yet earning what I make here.

One of these days I will learn how to use a quote as a launching point and not sound contentious in my comments.

I was just using your comment as a starting point for mine. Sorry if it sounded otherwise.