Perhaps the most out-of-touch video ever
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  Perhaps the most out-of-touch video ever
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Author Topic: Perhaps the most out-of-touch video ever  (Read 4191 times)
Fmr President & Senator Polnut
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« Reply #25 on: September 14, 2014, 06:43:45 AM »
« edited: September 14, 2014, 06:47:27 AM by Senator Polnut »

These people are morons. End of story.

They could cut back their expenses VERY easily. To me, that's the problem here. They're massively over-extending themselves in both terms of their commitments (mortgage etc) but also discretionary spending, which is where they're really shooting themselves in the foot - $25k a year in holidays? $12k for children's sports gear/toys? $4k in holiday spending and gifts? Bloody hell.

I mean someone like memphis would still see me as a bit of a spendthrift, but a little common-sense is not too difficult.
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jfern
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« Reply #26 on: September 14, 2014, 03:13:53 PM »

Remember, the Clintons were "dead broke" circa 2001.
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Person Man
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« Reply #27 on: September 14, 2014, 05:14:01 PM »

Could it be that some people would easily be able to complete the Brewsters Millions Challenge?
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DC Al Fine
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« Reply #28 on: September 14, 2014, 09:23:25 PM »

I'm confused as to what exactly is triggering the feeling of 'being broke' though?

Is it that you run out of money for food?  No, that cost is in here.
Is it that you run out of money for entertainment? No, that cost is in here.
etc...

What else do you possibly need that isn't already calculated in here?  Honestly it sounds like you're getting the maximum out of your money without going into debt.

Precisely. Families like this have no breathing room and massive commitments. The knowledge that one hiccup would be a financial disaster is what leads to feeling broke.
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The Mikado
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« Reply #29 on: September 14, 2014, 10:08:31 PM »

Eh, if I were them I would live beyond my means. Might as well enjoy their money while they can, because they'll likely be the first against the wall when the revolution comes.

It's been a while since I saw someone using that phrase.  Whenever I read an older book I mentally change "when the revolution comes" or "come the revolution" or whatever to "when Jesus returns" or "on the Day of Judgement."  It produces much the same effect as a convenient synonym for "never."
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Person Man
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« Reply #30 on: September 15, 2014, 08:23:54 AM »

Eh, if I were them I would live beyond my means. Might as well enjoy their money while they can, because they'll likely be the first against the wall when the revolution comes.

It's been a while since I saw someone using that phrase.  Whenever I read an older book I mentally change "when the revolution comes" or "come the revolution" or whatever to "when Jesus returns" or "on the Day of Judgement."  It produces much the same effect as a convenient synonym for "never."

Never say never but I imagine that I won't live to see it even if I live to be 120. I can easily see me living to see another great depression. I don't think the modestly wealthy will get their comeuppance the way they think they but I don't think they will be bailed out or always be a step ahead forever. 
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King
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« Reply #31 on: September 15, 2014, 11:53:19 AM »

One thing I don't understand is the logic of having a 30 year mortgage on a home and filling up savings accounts for kids college and retirement with that kind of dough. If I had all that income, I'd try to pay off my house ASAP. In the end, it would leave you with a lot more wealth and savings on interest.
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Brittain33
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« Reply #32 on: September 15, 2014, 12:24:09 PM »

One thing I don't understand is the logic of having a 30 year mortgage on a home and filling up savings accounts for kids college and retirement with that kind of dough. If I had all that income, I'd try to pay off my house ASAP. In the end, it would leave you with a lot more wealth and savings on interest.

If your 30-year mortgage is at 4.5% and you make a decent living, with tax deductions you are paying only 3% to 3.5% interest on that loan. Investments should be able to beat that most years.
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King
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« Reply #33 on: September 15, 2014, 03:29:52 PM »

Still, I would make ownership of the home as top priority. You can always take out loans on it later.
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DC Al Fine
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« Reply #34 on: September 15, 2014, 04:23:38 PM »

One thing I don't understand is the logic of having a 30 year mortgage on a home and filling up savings accounts for kids college and retirement with that kind of dough. If I had all that income, I'd try to pay off my house ASAP. In the end, it would leave you with a lot more wealth and savings on interest.

If your 30-year mortgage is at 4.5% and you make a decent living, with tax deductions you are paying only 3% to 3.5% interest on that loan. Investments should be able to beat that most years.

That's the rational thing to do, but I'm with King on this one. The interest savings aren't that big given their incomes and there's a lot of pleasure derived from being debt free.

Of course they shouldn't have a massive mortgage either.
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DC Al Fine
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« Reply #35 on: September 15, 2014, 04:32:52 PM »

My personal version of this phenomenon...

One of my accounting professors this year was the CFO of a small publicly traded company. I looked up her compensation and she made about $500k in 2013. 2013 was an unusually good year, but she never made less than $300k for all the years she was CFO. This person could not comprehend paying cash for her car.

It goes to show that fiscal competence and high income are only somewhat correlated.
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All Along The Watchtower
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« Reply #36 on: September 15, 2014, 04:51:18 PM »
« Edited: September 15, 2014, 04:54:26 PM by They call me PR »

An awful lot of people don't know how to manage their money. That is true pretty much regardless of how high their income is. Most people have meager personal "safety nets"-if they have one at all.

Places like Manhattan and San Francisco are becoming playgrounds of the rich-but even a lot of rich people don't "feel" rich in Manhattan or SF, because of how freakin' expensive it is. Maybe that is part of what is driving the out-of-control spending of these high-income people; the cost of keeping up with everyone else in Manhattan and SF. Things that are luxuries for most people become necessities, even entitlements for these people, and the cost of everything in the mad race to be at the top of the financial or high-tech sector continues to skyrocket-contributing more and more to the psychological insecurity of the people in those industries.
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They put it to a vote and they just kept lying
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« Reply #37 on: September 15, 2014, 05:02:34 PM »

Watching this video made me severely ill.
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pendragon
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« Reply #38 on: September 15, 2014, 05:08:13 PM »

I suspect that if you gave any of the people in this thread, complaining about this video, $400,000, they would be back down to $0 within a month or so.
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🐒Gods of Prosperity🔱🐲💸
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« Reply #39 on: September 15, 2014, 05:33:36 PM »

My personal version of this phenomenon...

One of my accounting professors this year was the CFO of a small publicly traded company. I looked up her compensation and she made about $500k in 2013. 2013 was an unusually good year, but she never made less than $300k for all the years she was CFO. This person could not comprehend paying cash for her car.

It goes to show that fiscal competence and high income are only somewhat correlated.

what about fiscal competence and being an accounting professor? Tongue
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memphis
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« Reply #40 on: September 15, 2014, 07:52:24 PM »

What's especially bad about some of these types is that they've put most off their assets into the most inaccessible places possible. Housing can be extremely difficult to unload, and even if you can get a good price the cost of closing the deal and moving all your stuff can be shockingly high. To say nothing of the stress involved. And then a lot of working professionals, who really ought to know better, have what investments they do have inside of a tax sheltered account like a 401(k) that can't be touched before retirement age without extraordinary costs. My grandmother was an illegal immigrant who never finished the 9th grade, but she knew enough to save when possible and to watch her pennies. It's amazing how many people with advanced degrees from elite schools can't figure it out.
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Indy Texas
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« Reply #41 on: September 15, 2014, 11:29:10 PM »

My personal version of this phenomenon...

One of my accounting professors this year was the CFO of a small publicly traded company. I looked up her compensation and she made about $500k in 2013. 2013 was an unusually good year, but she never made less than $300k for all the years she was CFO. This person could not comprehend paying cash for her car.

It goes to show that fiscal competence and high income are only somewhat correlated.

what about fiscal competence and being an accounting professor? Tongue

My dad is a physician who constantly berates his patients about the health decisions they make, all the while being someone who never exercises and is considerably overweight. People can compartmentalize their knowledge and let their emotions interfere when it comes to applying it to their personal circumstances.
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tik 🪀✨
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« Reply #42 on: September 16, 2014, 07:14:26 AM »

I suspect that if you gave any of the people in this thread, complaining about this video, $400,000, they would be back down to $0 within a month or so.

Sure. I'd buy a modest house and a modest car outright. And be very, very relieved, for a time.
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ingemann
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« Reply #43 on: September 16, 2014, 01:11:52 PM »

I suspect that if you gave any of the people in this thread, complaining about this video, $400,000, they would be back down to $0 within a month or so.

That's not unlikely, but there are big difference to getting 400 000 in the hands and earning it annual, because I doubt there many people who would waste them, rather like Tik they would likely invest them in property.
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Cory
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« Reply #44 on: September 16, 2014, 01:44:07 PM »

My dad is a physician who constantly berates his patients about the health decisions they make, all the while being someone who never exercises and is considerably overweight. People can compartmentalize their knowledge and let their emotions interfere when it comes to applying it to their personal circumstances.

This. We may not admit it, but subconsciously almost everyone has two sets of rules: one that applies to them and one for everyone else.
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dead0man
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« Reply #45 on: September 16, 2014, 02:46:05 PM »

And the best people have a higher set for themselves and a lower set for everybody else.  Those people are rare.
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Mr. Illini
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« Reply #46 on: September 16, 2014, 04:47:39 PM »


Agreed, and the owner of this gorgeous Bucktown 4-bedroom home is basically living in poverty.

http://www.zillow.com/homedetails/2162-N-Claremont-Ave-Chicago-IL-60647/3732297_zpid/

As expensive as it is to live in Chicago, and it is, the article is obviously ridiculous and shouldn't be taken seriously. In fact, it is an insult to those who are actually making decent salaries and scraping by because of cost of living. $400,000 salaries don't fit that buck.
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Person Man
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« Reply #47 on: September 16, 2014, 06:04:29 PM »

And the best people have a higher set for themselves and a lower set for everybody else.  Those people are rare.
This.


Agreed, and the owner of this gorgeous Bucktown 4-bedroom home is basically living in poverty.

http://www.zillow.com/homedetails/2162-N-Claremont-Ave-Chicago-IL-60647/3732297_zpid/

As expensive as it is to live in Chicago, and it is, the article is obviously ridiculous and shouldn't be taken seriously. In fact, it is an insult to those who are actually making decent salaries and scraping by because of cost of living. $400,000 salaries don't fit that buck.

How much do you think it takes to actually live comfortably in Chicago, anyways?
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jaichind
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« Reply #48 on: September 21, 2014, 03:28:35 PM »

Thinking about this topic I want to make it clear how expensive it is to raise a child in an neighborhood where a family that makes $400K might reside once we take discretionary spending in to account.  Looking at my own case, I did an analysis of what it would cost in discretionary spending for my three year old child from birth to him finishing graduate school.  In 2014 dollars I worked it out to a bit more than $1 million.  This does not include cost of food clothing etc etc which I consider mandatory spending.  The $1 million include the cost of nannies, nursery school, various classes, taxi to take the child to nursery school/classes, summer camp, a car for him when he is old enough, cost of private university and graduate school.  Note since we live in a good school district we do not have to pay for elementary school and up.  Note that classes of various sorts will add up.  Our son goes to swimming, soccer, and martial arts classes on top of nursery school which works out to about $6K a year.  This will only go up from here.  $1 million could be even worse if it was not the fact that we plan to retire early so there will be no need for nannies once our child is ten or so.  If it was not for that the bill will be even higher.  Note that this family in Chicago has two children so you can imagine this financial burden.  Of course as I pointed out, this is completely discretionary, but around where I live what we are doing for our child is pretty standard.
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Indy Texas
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« Reply #49 on: September 21, 2014, 04:08:33 PM »

Thinking about this topic I want to make it clear how expensive it is to raise a child in an neighborhood where a family that makes $400K might reside once we take discretionary spending in to account.  Looking at my own case, I did an analysis of what it would cost in discretionary spending for my three year old child from birth to him finishing graduate school.  In 2014 dollars I worked it out to a bit more than $1 million.  This does not include cost of food clothing etc etc which I consider mandatory spending.  The $1 million include the cost of nannies, nursery school, various classes, taxi to take the child to nursery school/classes, summer camp, a car for him when he is old enough, cost of private university and graduate school.  Note since we live in a good school district we do not have to pay for elementary school and up.  Note that classes of various sorts will add up.  Our son goes to swimming, soccer, and martial arts classes on top of nursery school which works out to about $6K a year.  This will only go up from here.  $1 million could be even worse if it was not the fact that we plan to retire early so there will be no need for nannies once our child is ten or so.  If it was not for that the bill will be even higher.  Note that this family in Chicago has two children so you can imagine this financial burden.  Of course as I pointed out, this is completely discretionary, but around where I live what we are doing for our child is pretty standard.

None of the boldface items are necessities and you may be shocked to find that the majority of children in this country, to say nothing of the rest of the world, must manage without them.

Number of f#$%s given about your situation: Zero.
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