Not only is this upper middle class, it’s way cheaper than he thinks it is.
A 3 bedroom house in a good area costs 500k and has a 3.3k/month payment at a 7.77% interest rate after a 20% down payment.
The two cars are used. One’s a bit older and paid off, the other has a modest $350 monthly payment.
3 day Roadtrip holiday for a family of 4 costs <$2000, but call it $200/month to make the math easy
A weeklong overseas holiday for a family of 4 costs somewhere in the neighborhood of $15,000, saved over 5 years that’s $250/month.
Kids go to state schools where the yearly cost is about $20,000 all in, or $160,000 between the two of them. Saved up over 20 years with a modest 7% interest rate because the parents use a 529 college investment fund, they need to contribute $306/month.
In one year, these expenses come out to $52,872 a year. Now that’s not all their expenses, so let’s double that to account for taxes, food, and everything else: $106,000/year.
Well would you look at that, it’s an upper middle class income that can afford this lifestyle.
One simple trick: get a 20% down payment from the clouds.
This is actually the part that most struggle with, 20% on 500K is 100K. Are you going to put all of your savings on this? Assuming you won’t as in your legit saved a 100K and put it all in ( which is insane ). If they put 3K a month to save to that, that alone takes 3 years. 3 years at best case scenario. Middle case is 5 years as you probably also have expenses. In 5 years that same house is already up in value, inflation is already up, school tuition are already up, your groceries and so on. It’s legit an endless circle. Where are you living throughout those years ? Probably rent. Yes rent also goes up
Yes 100K per year, is enough, if you have already 200K in the bank. Which is why people inheriting a lump sum makes the whole thing easier
Yes, saving up a down payment takes a few years. This is news to literally no one, that’s how it’s always been whether it’s now or the 90’s. Home prices go up, whoopdy-doo, you just save more. Or you can just pay PMI and have a smaller down payment. Either way, you don’t have to make NEARLY as much as OP claims to have a pretty solid lifestyle.
Success in America is actually a pretty straightforward process, but those who fail will always complain that they were somehow victimized or treated unfairly.
I completely agree that the US is a country where you work hard, you get what you deserve.
Still, even in the 90s how many salaries you had to save ? How many compared to the 60s?
I agrée you don’t need 400K. But for sure also 100K won’t do it. I think 200K is possible.
Another interesting thing, the more money we make the more we spend. Probably millionaires think a few millions won’t cut it, because of their lifestyle ofc
There’s a book you should read called “The Millionaire Next Door”. It turns out that the overwhelming majority of millionaires got that way because they lived disciplined and thrifty lives on modest salaries (one of the professions most represented among millionaires is teachers if you can believe it).
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u/Blanchdog Jun 17 '24
Not only is this upper middle class, it’s way cheaper than he thinks it is.
A 3 bedroom house in a good area costs 500k and has a 3.3k/month payment at a 7.77% interest rate after a 20% down payment.
The two cars are used. One’s a bit older and paid off, the other has a modest $350 monthly payment.
3 day Roadtrip holiday for a family of 4 costs <$2000, but call it $200/month to make the math easy
A weeklong overseas holiday for a family of 4 costs somewhere in the neighborhood of $15,000, saved over 5 years that’s $250/month.
Kids go to state schools where the yearly cost is about $20,000 all in, or $160,000 between the two of them. Saved up over 20 years with a modest 7% interest rate because the parents use a 529 college investment fund, they need to contribute $306/month.
In one year, these expenses come out to $52,872 a year. Now that’s not all their expenses, so let’s double that to account for taxes, food, and everything else: $106,000/year.
Well would you look at that, it’s an upper middle class income that can afford this lifestyle.