| Why your kids expect to be rich - Click HERE for Original Thread |
| 96MX6 |
I know we live in Alberta so everyone already makes 175K per year, so this might not apply.
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I refer to tidbits from the "Teens and Money" survey Charles Schwab released earlier this year. This poll of 1,000 Americans aged 13 to 18 from a variety of socio-economic backgrounds found that 73% believed they would earn "plenty of money" when they were adults.
In fact, the teenage boys expected to make an average $174,000 annually. Teenage girls expected to earn $114,200.
The reality check:
Median earnings of men who worked full time, year round in 2005, the latest year for which Census Bureau statistics are available, was $41,386.
Women working full time made a median $31,858.
Fewer than 5% of the U.S. population makes more than $100,000, according to the bureau. Only one household out of six report a six-figure income, according to the Federal Reserve's 2004 Survey of Consumer Finances. |
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| Prorsumgurl83 |
I think there is a gross misconception with kids as to how much things actually cost in general. I mean when I was a teen I thought I could get by with $1000/mo. Now I can't even imagine getting by on that every two weeks. But now that I have my own bills I know that $1000 isn't even enough for my mortgage...let alone everything else.
It is probably something that should be taught in school as some kind of reality check. Someone will get the $8/hr job at the Lube shop or the grocery store right? And a lot of kids won't grow up to be doctors. That is reality. It is nice to have goals to have a wonderful career and make bags of cash but it doesn't always work out that way.
But I agree, as a younger generation in Alberta there are lots of people who have it pretty good. Regardless of if the have a job in the trades or an education. Hell, you can pump gas for $12.50+ / hr... |
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| SilverZ24 |
Makes sense why so many young people get into huge debt at a young age thinking they will have no problem paying it off down the road. Yet in reality you see them have to downgrade cars, etc when it comes time to move out of their parents house.
Good read, and some other good articles linked there as well. |
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| TrevorK |
quote:
Originally posted by Prorsumgurl83
I mean when I was a teen I thought I could get by with $1000/mo. Now I can't even imagine getting by on that every two weeks. But now that I have my own bills I know that $1000 isn't even enough for my mortgage...let alone everything else.
Personally, I don't think the problem of kids thinking they'll make over 100K/year. I think the biggest problem is the attitude above.
I'm not trying to insult you, but to use your post as an example.
The key to being wealthy (relative to your income level of course) is to live within your means. When I bought my house I did up a budget, which came to ~$1800/month (It went up a bit at Christmas and such) for everything, including my mortgage payment at the time (It was only $600). I was able to stick to this budget (And I actually spent less many months) without an issue.
Because of living within my means I was able to pay off my house in a very short time and now have the ability to pay all my bills with under $1000/month if I ever became unemployed/injured.
The hardest part is that everyone wants what they see on TV/magazines. The cool bachelor pad with the loft, the nice leather furniture, the pool table and the BMW. Credit is so easy to obtain that this is all possible, even if you can't afford it. |
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| Inzane |
quote:
Originally posted by TrevorK
including my mortgage payment at the time (It was only $600).
Was that $600 per month or every two weeks? I can't see how you managed to pay off what I think you said was a ~$200k mortgage (at the time) at an accelerated pace, at that payment level. Did you double up payments or something? |
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| TrevorK |
quote:
Originally posted by Inzane
Was that $600 per month or every two weeks? I can't see how you managed to pay off what I think you said was a ~$200k mortgage (at the time) at an accelerated pace, at that payment level. Did you double up payments or something?
Sorry, I should've explained further. I budgeted for $600/month, which was the absolute minimum I needed to pay (The amount I needed to pay went down monthly - but that's what I used as an average for my budget). Any money that was leftover (After my $1800 in expenses) went straight onto the mortgage.
I just liked to have in my budget the numbers I'd need to pay the bare necessities, which is where $600/month came from. |
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| RoB |
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| Prudz_lude |
| ROFL :lol: :lol: :lol: :lol: :lol: :lol: if that could be my quote it would |
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| bapestaaa |
quote:
Originally posted by Prorsumgurl83
I think there is a gross misconception with kids as to how much things actually cost in general. I mean when I was a teen I thought I could get by with $1000/mo. Now I can't even imagine getting by on that every two weeks. But now that I have my own bills I know that $1000 isn't even enough for my mortgage...let alone everything else.
It is probably something that should be taught in school as some kind of reality check. Someone will get the $8/hr job at the Lube shop or the grocery store right? And a lot of kids won't grow up to be doctors. That is reality. It is nice to have goals to have a wonderful career and make bags of cash but it doesn't always work out that way.
But I agree, as a younger generation in Alberta there are lots of people who have it pretty good. Regardless of if the have a job in the trades or an education. Hell, you can pump gas for $12.50+ / hr...
Lube places actually pay more than $8/hr. I work with one guy and he is able to bring in 3200 a month after taxes working 40 hours a week |
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| 95EagleAWD |
quote:
Originally posted by TrevorK
The key to being wealthy (relative to your income level of course) is to live within your means.
I always seem to figure this shit out the hard way.
Fucking mortgage, I'd rather the car payment!!! :mad:
Oh well.... the Acura isn't that comfy to sleep in, I guess. |
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| EK9Hatch |
quote:
Originally posted by RoB
:lol:
Priceless...
Jamie |
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| the_saint |
quote:
Originally posted by bapestaaa
Lube places actually pay more than $8/hr. I work with one guy and he is able to bring in 3200 a month after taxes working 40 hours a week
$3200 after taxes per month?
Wow didn't know you could bring in $20+/hr at a Lube shop.
Impressive.
Alberta >>>>>> Manitoba for so many reasons. |
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| the_saint |
quote:
Originally posted by TrevorK
Because of living within my means I was able to pay off my house in a very short time and now have the ability to pay all my bills with under $1000/month if I ever became unemployed/injured.
Leaving within your means is the key, to avoid getting further into debt.
quote:
Originally posted by TrevorK
The hardest part is that everyone wants what they see on TV/magazines. The cool bachelor pad with the loft, the nice leather furniture, the pool table and the BMW. Credit is so easy to obtain that this is all possible, even if you can't afford it.
What is wrong with people wanting more?
I think there is nothing wrong with wanting what you see on television, and if that is your motivation for making more money (which is sad) and you can, why not?
Depending on your perspective, there will be many people who will wonder why you are telling people to settle for NOT having the cool bachelor pad, pool table and the BMW.
I agree that many people are out of touch with reality with regards to financial planning and cost of living, but there is nothing wrong with realizing that if you want the expensive lifestyle, you are better off figuring out how you will afford it, rather than spending money that isn't yours (credit).
thesaint |
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| Prudz_lude |
quote:
Originally posted by the_saint
Leaving within your means is the key, to avoid getting further into debt.
What is wrong with people wanting more?
I think there is nothing wrong with wanting what you see on television, and if that is your motivation for making more money (which is sad) and you can, why not?
Depending on your perspective, there will be many people who will wonder why you are telling people to settle for NOT having the cool bachelor pad, pool table and the BMW.
I agree that many people are out of touch with reality with regards to financial planning and cost of living, but there is nothing wrong with realizing that if you want the expensive lifestyle, you are better off figuring out how you will afford it, rather than spending money that isn't yours (credit).
thesaint
I agree with this. If you want to live the lifestyle, figure out how your going to get there and work towards it. It's rare you are just going to be handed a free ride your whole life, unless you have very rich parents who pay for your house etc. |
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| ReasonOne |
A book comes to mind when I read this post. It's called "The Millionaire Mind" by Dr. Thomas J. Stanley. If you have the patience for it, its a very good read. My father has been giving me books like this just about as far back as I can remember. And I find the details and statistics very fascinating.
He studies the trends, spending habits and attitudes of millionaires, multi-millionaires and people who have a high net worth. The bottom line is "living within your means". I commend TrevorK for his accomplishment.
I don't know how many times I've been ridiculed for driving my battered, ugly, rusted, piece of shit '88 Honda Accord that has almost 300,000 km. I've been questioned more times than I can recall "Why don't you get rid of it?" "How can you stand to be seen in that thing?" "You must be broke!" and so on.....and so forth. I just smile, nod and go about my business. It cost me virtually nothing to acquire, and it has always proven 100% reliable in the 5 years that I have owned it.
I've been so tempted to drop a whole load of cash on a couple of REALLY sweet rides..... But then I think about how much I really am socking away and always back out at the last minute. I'll do it eventually..... but I won't borrow money to buy a nice car. I'd rather pay it in cash. And when my "car" account reaches the right balance, I'll do it.
To be honest, I would rather put the money that I would be using to make a car payment and all the maintenance bills that come with it to pay down my mortgage.... and that's exactly why I keep driving my everyday beater. I have other cars that I work on for fun, but my Accord has never let me down. I don't have to worry about scratches, dents or dings of any kind. I certainly don't have to worry about theft (the rust is downright ugly). Until it breaks down I have no reason to part with it. When I'm bored with it, I'll sell it and buy something else.
Besides, I can afford other older cars due to the fact that I don't own a new one and don't make $400-$1000 monthly car payments. I make bi-weekly payments which shave a little time off the life of my mortgage and I can afford to set aside cash to put down on the anniversary.
I also have predetermined amounts going to different accounts "earmarked" for various purposes even though I might not access that money for a long time. I work it out so that when I get paid all the money goes to where it needs to and I don't miss it nor think about it. When there is enough in my earmarked account for a specific item, I buy it. If there's not enough... too bad.. I wait. I also have transfers that purchase my investments needed for my investment vehicles like clockwork. Then when times are tough I can always go to one of these accounts in a pinch. I also make a note of putting back at least half of the money I take out when I bounce back from a crisis.
I know it's not a fun or exciting way to live, but I keep thinking of the hard times I had growing up and it scares me to death to even consider repeating that cycle another generation.
Just my two cents. |
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| SilverZ24 |
Stupid ads! ------------>
^ definitely a good system you have going there. Not buying something unless you actually have the money for it is a good way of staying out of trouble. Plus you realize just how much money it actually costs when you pay in a lump sum like that and it makes you think twice.
I have been fortunate enough to be able to pay cash for my last 3 vehicles and a travel trailer. With the cheapest being 28 grand and the latest one 2 weeks ago being 40 grand. It is hard to save up for the first one, but once you have done it once, it is fairly easy to keep on doing it and it is a nice feeling to know everything you have is 100% paid for.
You will definitely enjoy your 'nice' car when you get it, but you may also never do it. Not because you can't, but because you don't want to. I know someone in his 40's that has a ton of money in the bank. One paid off house and two paid off condo's and he just spent 2500 on his last vehicle and it was the first time in his life he spent over 2 grand for a car. It has been a great way for him to build equity, although I personally couldn't do it. I definitely more of a auto enthusiast than he is. :) |
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| TrevorK |
quote:
Originally posted by SilverZ24
You will definitely enjoy your 'nice' car when you get it, but you may also never do it. Not because you can't, but because you don't want to.
This is probably the hardest part - everyone has to draw a line where they feel comfortable. For many, it's extremely hard to go from spending all your money to saving it.
The opposite is true, for many it's hard to go from saving your money to actually spending it.
As long as your happy with your choices, that's the key. Many people could care less about material goods, and would rather spend their money travelling, donating, etc... |
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| MAPEX |
quote:
Originally posted by 96MX6
I know we live in Alberta so everyone already makes 175K per year, so this might not apply.
site
I refer to tidbits from the "Teens and Money" survey Charles Schwab released earlier this year. This poll of 1,000 Americans aged 13 to 18 from a variety of socio-economic backgrounds found that 73% believed they would earn "plenty of money" when they were adults.
In fact, the teenage boys expected to make an average $174,000 annually. Teenage girls expected to earn $114,200.
The reality check:
Median earnings of men who worked full time, year round in 2005, the latest year for which Census Bureau statistics are available, was $41,386.
Women working full time made a median $31,858.
Fewer than 5% of the U.S. population makes more than $100,000, according to the bureau. Only one household out of six report a six-figure income, according to the Federal Reserve's 2004 Survey of Consumer Finances.
im insured a million bucks , of course my kids expect to be rich.. |
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| midnite |
quote:
Originally posted by SilverZ24
^ definitely a good system you have going there. Not buying something unless you actually have the money for it is a good way of staying out of trouble. Plus you realize just how much money it actually costs when you pay in a lump sum like that and it makes you think twice.
I have been fortunate enough to be able to pay cash for my last 3 vehicles and a travel trailer. With the cheapest being 28 grand and the latest one 2 weeks ago being 40 grand. It is hard to save up for the first one, but once you have done it once, it is fairly easy to keep on doing it and it is a nice feeling to know everything you have is 100% paid for.
You will definitely enjoy your 'nice' car when you get it, but you may also never do it. Not because you can't, but because you don't want to. I know someone in his 40's that has a ton of money in the bank. One paid off house and two paid off condo's and he just spent 2500 on his last vehicle and it was the first time in his life he spent over 2 grand for a car. It has been a great way for him to build equity, although I personally couldn't do it. I definitely more of a auto enthusiast than he is. :)
This is the same way I do it, save up until I can pay cash for something I want.
I won't take on debt unless that money is going into an investment with a higher return than the debt.
Though, unfortunately I should have gone into debt with a mortgage before the prices jumped. Oh well, change of plans. I'm an optimist. It's inspired me to start a side business which, if I work it right, will allow me in a couple years to purchase a house the same way I have my cars, debt free. :D |
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| Beerking |
quote:
Originally posted by midnite
It's inspired me to start a side business which, if I work it right, will allow me in a couple years to purchase a house the same way I have my cars, debt free. :D
hmmmmm.....:rolleyes: drugs???? |
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| RacerGirl |
| ^^ hahaha midnite would be the worst drug dealer ever. |
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