<p>Thanks, eyeamom. Can you clarify for me (I am a total idiot when it comes to this stuff)- what will last 30 years? The principal? If one makes 4% on investments and can (hopefully, barring catastrophe) live on that 4%, then they hopefully rarely would have to touch their principal?</p>
<p>
. Done, and done. But, if we movedacross country housing would be much more expensive than what we would get for our paid-for house, so unles we pay cash for the difference, if thats doable, we are back to a mortgage.</p>
<p>If you live below your means, you will accumulate savings.</p>
<p>If you live above your means, you will accumulate debt. Eventually, no one will lend you any more money, and you will be forced to live below your means because some of your income will go to debt service.</p>
<p>If you live at your means, one unexpected expense could force you to take on debt, forcing you to live below your means until you pay it off.</p>
<p>LOL on the sitting in front of the boob tube!</p>
<p>We just got back from a very nice vacation and had 2 meals that I have never in my life paid that much for. I really hope I don’t find myself wanting to make a habit of that. I suspect that when the credit card bill arrives it will be a wake-up call. But boy was it a treat! </p>
<p>I want to travel (really want to take a safari) and hoped to be able to take more ski vacations, but my knees are reminding me that I am edging further away from the days of youth and closer to the chair-in-front-of -the-tv stage. But like Bay and qdogpa, I don’t want to be a burden on my kids and I want to enjoy life (Davey Jones’ death today was a wake-up call). So trying to find that happy medium-- enough to enjoy with no worry, but able to have some left for them or for the “just in case”.</p>
<p>I don’t think that a special meal from time to time is spending a lot of money. Our weekly food bill isn’t chopped liver these days and we have a lot of nice stuff at home. It’s just that we cook it and the setting isn’t as nice.</p>
<p>Spending a lot of money to me is if it is outside of a reasonable budget that includes savings.</p>
<p>Similar here. We are extremely fortunate to be in the 1%, but we live very differently because both spouse and I grew up in impoverished homes, and we have been the only ones in each of our families to go to college and move out of poverty. We live in a reverse sort of inheritance, providing help to our families. But our childhoods were excellent for teaching us how to be frugal and even now, we take very little for granted. </p>
<p>I absolutely understand people with low enough incomes that they have never saved anything and therefore unexpected events could make life fall apart (that was our childhood and it was not due to any sort of financial mismanagement or lack of discipline on the part of our parents!). Making ends meet was the daily and weekly challenge, there wasn’t extra “ends” to put in the bank!</p>
<p>I know so many hard working, diligent people that were simply dealt a pile of catch-22s, undone by randomly bad events they could not have foreseen nor prevented. I would love love love to connect the ‘trapped’ people with the wealthy, educated, and resourceful people (who think those who are ‘trapped’ should just think their way out of it), to see if they can give specific advice about how to make the dots connect. I’m one of those wealthy, educated resourceful people and I get stumped by their life predicament. I simply have <em>no idea</em> how they can improve their lives (without the infusion of cash from a benefactor), and I’ve spent my life thinking about it. </p>
<p>But having said that, I am truly stunned how more well off folks who could create a buffer- be it insurance, savings, diversification- are so comfortable with not doing so. I’m simply way too risk adverse I guess.</p>
<p>Remember, though, that the high income people who spend it all and more tend to be more visible, both in the status symbol items that they buy, and the financial trouble that they get into by spending beyond their means.</p>
<p>Meanwhile, some other people (not necessarily even that high income) may not have particularly expensive spending habits, but end up being financially secure because they generally spend less than their means. But they may not be very noticeable.</p>
<p>How is one “noticeable” or “not noticeable” when it comes to spending habits? Seems to me the ability to live within ones means can be done across many income levels, and conversely, the economy had impacted people across all income levels as well. Are you referring to the kinds of cars people buy and the other expensive toys they accumulate?</p>
<p>^^^. I am about as oblivious to the spending habits of others as one could be. I don’t recognize the logos of expensive cars and couldn’t tell you how much any car other than my own costs. I don’t pay much attention to the toys and vacations of other families. But even I can be shocked by the lifestyles of some friends and neighbors.</p>
<p>People who I’ve known long enough to know that their backgrounds don’t include inherited money. People who have been upfront about their jobs/careers, and the money going out clearly doesn’t match the money coming in. No day traders, nobody who got in the ground floor of Google or Apple, no patents, no entrepeneurs, no financial wizards, no family owned land.</p>
<p>I deleted several examples because they are too identifiable if anyone I know ever reads this post. Truly, though, if I am wondering how in the world someone’s lifestyle is being supported, there is a real, obvious disconnect. I wonder when the juggling balls will all come tumbling down.</p>
I do believe in an afterlife–but I don’t think I’ll be taking my money along, so I agree with you. I guess I would also like to factor in leaving a reasonable inheritance for my kids, if possible.</p>
I am not responsible…</p>