What class are you?

[StateNAurora]

Found this on the NYT website. On average I'm in the 58th percentile, solid middle class person. My income and wealth are what brought down my average, but as a younger person you wouldn't expect those to be too high in my line of work. Perhaps they should add an age variable. then we could compare ourselves against the norms for our age group. Hopefully it would show that you are not to far off from others in your age group.

http://www.nytimes.com/packages/html/national/20050515_CLASS_GRAPHIC/index_01.html

[yankeeyosh]

Sixtieth percentile. However, my education skews that value up way high...

[inmediasres]

I come out in the 54th percentile, but this is only because my education puts me in the 91st percentile, bumping me way up.

In the other three components, I'm far below.

[cheshrcarol]

They didn't really have a very good option for my job, close as I could figure I'm anywhere between 52nd and 62nd percentile. In addition to age, I think they should factor in background.

[Deavan]

Found this on the NYT website. On average I'm in the 58th percentile, solid middle class person. My income and wealth are what brought down my average, but as a younger person you wouldn't expect those to be too high in my line of work. Perhaps they should add an age variable. then we could compare ourselves against the norms for our age group. Hopefully it would show that you are not to far off from others in your age group.

http://www.nytimes.com/packages/html/national/20050515_CLASS_GRAPHIC/index_01.html

Hmm very interesting...according to that data set I am supposedly uppermiddle class...interesting I did it twice and I am between the 66th- 69th percentile

[StateNAurora]

Background? Like your parents are CEOs or factory workers?

I think age would play a huge factor in this. If you're twice my age and have the same charateristics then you're not doing so well. Wealth takes time to build up, where are you supposed to be at age 30?

[Deavan]

Background? Like your parents are CEOs or factory workers?

I think age would play a huge factor in this. If you're twice my age and have the same charateristics then you're not doing so well. Wealth takes time to build up, where are you supposed to be at age 30?


Agreed I dont have a whole lot of personal wealth at age 25 but I guess I am doing ok otherwise

[meatwad]

68th

blah blah blah yakety schmakety extra letters.

[cheshrcarol]

Background? Like your parents are CEOs or factory workers?Yeah, basically that's what I was thinking.


For exaple, if someone was unemployed and lived with their upperclass parents, does that make them lower class?

[steph78]

I agree about the age thing - that "wealth" category is going to vary greatly with age. I am in the 77th percentile (whoa). However, I feel someone who's approaching retirement age and has the same net worth as me is in a totally different position than me as a 27-year old with 30-40 years of employment left to go...also, I am married, so my household's net worth is logically bigger than a single person's probably would be. They didn't really ask about that either.

[wordsmith]

Hah...my job and education score 66th and 91st, respectively...

My income and wealth score 18th and 25th, for an average of 50th.

[Winter Storm]

Occupation: 63rd
Education: 97th
Income: 56th
Wealth: 37th
AVERAGE: 63rd

Whatever.

[SmilesSoSweet]

Occupation: 80% (but I had to put architect since landscape achitect wasn't an option and I'm higher than a drafter - so that might have screwed it up)
Education: 91% with my BS degree
Income: 69%
Wealth: 43%

Average: 71%

[old_school_soul]

Scored a 86% average...

[Kitty]

77th percentile.

[yankeeyosh]

I don't know if this test is flawed (which I think it is to some degree) but assuming there is some basis to it, I think this shows that we definitely have bright futures ahead of us....being above the median at age 24, 25, 26 is pretty good IMO

[capella]

Occupation- 69th
Education- 91st
Income- 56th
Wealth- 55th

Overall- 68th percentile.

Right. I am supposedly close to upper middle class???? And how does being a teacher rank 69th when I make jack crap? I think these results are wacky. I'd say I'd barely make solid middle class.

[old_school_soul]

One thing it doesn't account for is Location. Making 100k in NYC is much different than making 100K in Bumblefuck, Mississippi.

[StateNAurora]

As part of my research people are confronted with comparisons of their behavior against the norms. They found out that destructive behavior is not what the typical person participates in. In a sense they are conforming to a perceived norm, which does not really exist.

Some people, including myself, think that they may be ranked a little too high based on this research. Could our idea of what middle class really is be a little skewed? Despite all of our advantages, we still don't think we are as well off as we really are as compared to the larger population. Check out the upward mobility of those in the median class. Those who rank as high as we do on average climb higher on the scale. Those who score lower tend to stay there or drop down. Are we unsatisfied and impatient because we aren't climbing fast enough?

[StateNAurora]

As for the other factors (age, geography) they have accounted for these statiscally. I wish they had a research article where you could review their methods. This tool is simplistic but useful. With a research article though you could really see what questions were asked and what they found.

[wordsmith]

Some people, including myself, think that they may be ranked a little too high based on this research. Could our idea of what middle class really is be a little skewed? Despite all of our advantages, we still don't think we are as well off as we really are as compared to the larger population. Check out the upward mobility of those in the median class. Those who rank as high as we do on average climb higher on the scale. Those who score lower tend to stay there or drop down. Are we unsatisfied and impatient because we aren't climbing fast enough?

I think that class perceptions in general are skewed, or at least aren't what they have been in the past. Norms and expectations and perceptions generally shifting over time and whatnot.

[yankeeyosh]

As for the other factors (age, geography) they have accounted for these statiscally. I wish they had a research article where you could review their methods. This tool is simplistic but useful. With a research article though you could really see what questions were asked and what they found.

Agreed.

I think there should be four types of measures: 1) the overall percentile, 2) the percentile based on your age, and 3) the percentile based on your location, and 4) the percentile based on both age and location. A 25 year old making, say, $70 K is doing pretty damn well for themselves relative to other 25 year olds, but if they're living in, say, New York or San Francisco or Boston, they might just be in the middle of the pack (but probably still much higher than average for 25 year olds even for their area). If they can put a COLA adjustment in, and an adjustment based on age, it would be a lot more interesting.

[MetFanL]

63rd on average. There wasn't really a good choice for my occupation, though, b/c there are no gov't titles on there.

[Kitty]

THey didn't have any marketing occupations on that thing..so I chose something thats barely related to what I do.

[Winter Storm]

THey didn't have any marketing occupations on that thing..so I chose something thats barely related to what I do.

Yeah, I chose marketing/sales, which isn't exactly what I do.

[yankeeyosh]

THey didn't have any marketing occupations on that thing..so I chose something thats barely related to what I do.

I could have sworn I saw marketing while trying to find something roughly similar to what I did.

[Winter Storm]

Marketing/sales was under management.

[grneyedmustang]

66th percentile here. Whatever. :frustrate

[PVD99]

This makes no sense. A management CEO is considered middle class? Hardly.

[StateNAurora]

CEO

It's based on the prestige of the position and not on how much they make.

[capella]

As part of my research people are confronted with comparisons of their behavior against the norms. They found out that destructive behavior is not what the typical person participates in. In a sense they are conforming to a perceived norm, which does not really exist.

Some people, including myself, think that they may be ranked a little too high based on this research. Could our idea of what middle class really is be a little skewed? Despite all of our advantages, we still don't think we are as well off as we really are as compared to the larger population. Check out the upward mobility of those in the median class. Those who rank as high as we do on average climb higher on the scale. Those who score lower tend to stay there or drop down. Are we unsatisfied and impatient because we aren't climbing fast enough?
I don't think that's necessarily true though. I've been very much on the poverty end and I have plenty of relatives on that end too. Am I doing better than them? Yes. But I don't think it's that much better. And I also think that it is really dependent on your job. I won't ever climb much where I am (teaching). I still say a teacher is not upper middle class or close to it. I'd say I'm closer to working class. Heck, where I live most of my neighbors are working class. And I live here for the same reason as they do. Because I can't afford to live anywhere else. Prestige doesn't put food on the table. And who decided that teaching is so prestigious?? People who've never been in a classroom that's for sure. :p

[StateNAurora]

Yes ir is very dependent on your job, as far as room for growth. But I would think the higher your percentile the greater number of options you have. For instance you coud become an adminstrator at a school if you wished or jump to another industry altogether. A HS grad would not have the same options that more educated people have. The infographic is based on averages and are not absolutes. I'm sure we can all name specific cases that do not fit into the descriptions.

[wordsmith]

Prestige of position seems a pretty arbitrary thing to attempt to quantify.

[Kitty]

Marketing/sales was under management.

I didn't see that! I chose "editing"..lol..because a big chunk of my job is writing and editing, but I would by no means classify myself as an editor. I guess I didn't look hard enough.

[pisces2473]

My job brings me down, but it kinda ticks me off because I work in high-end retail and have a lot of important responsibilities. I'm in the middle, at 50%.

Occupation: 28
Education: 91
Income: 38
Wealth: 43

I don't think this is very accurate...

[EastCoastQLCing]

Prestige of position seems a pretty arbitrary thing to attempt to quantify.

I completely agree. This site doesn't take enough things into account.

[MollyMe]

I had 78 overall.

Occupation: 77
Education: 97
Income: 84
Wealth: 55

[yankeeyosh]

Let's see...if I take this job, I go up to:

Occupation: 53rd
Education: 97th
Income: 69th
Wealth: 37th:
Average: 64th.

If I was a "true" cat modeler and did actual science, occupation would rise to 68th.

[pisces2473]

My job brings me down, but it kinda ticks me off because I work in high-end retail and have a lot of important responsibilities. I'm in the middle, at 50%.

Occupation: 28
Education: 91
Income: 38
Wealth: 43

I don't think this is very accurate...
Oh what cracked me up is that if I get a Masters, I'll only go up to 51%. This shows that education doesn't factor in all that greatly. It's more job/income than anything else. :rolleyes:

[capella]

Oh what cracked me up is that if I get a Masters, I'll only go up to 51%. This shows that education doesn't factor in all that greatly. It's more job/income than anything else. :rolleyes:
Yes, but my job put me at 68th percentile when I make about in the 50th. I think they skewed it towards occupation. I don't think teacher constitutes upper middle class, do you? :rolleyes:

[pisces2473]

Oh yeah, they totally skewed it towards occupation. JOB is not indicative of class. Hmm, like I don't know any scumbag lawyers or doctors and sweet, awesome janitors and garbage men.

Anywhooooooooo...Amy, a lot of the teachers near me appear to be upper class, but that's because their husbands have big-time jobs, so they can join the country club and stuff. If it was just them alone, I don't think they'd be driving a new Benz to school.

[capella]

Oh yeah, they totally skewed it towards occupation. JOB is not indicative of class. Hmm, like I don't know any scumbag lawyers or doctors and sweet, awesome janitors and garbage men.

Anywhooooooooo...Amy, a lot of the teachers near me appear to be upper class, but that's because their husbands have big-time jobs, so they can join the country club and stuff. If it was just them alone, I don't think they'd be driving a new Benz to school.
Yeah, I'm guessing they aren't doing that on their salary alone. Even if they are at the top of the salary schedule. Two teacher salaries certainly don't indicate upper class :googly: I also think a bachelor's degree doesn't hold as much weight any more. I don't think that really puts you at the 90th percentile among our age group. Perhaps with the population as a whole, but more young people are finishing college now than in the past.

[pisces2473]

What was really sad was when I did my parents...who only have associates degrees...they were way higher than me. True, they make more and have more assets, but damn. I thought my degree would count for SOMETHING.

I think they should have had age in here...

[StateNAurora]

I think we have different ideas of what is middle class.

This gives a little clearer definition, read the the 5 class system and the Fussell Definition:

http://en.wikipedia.org/wiki/Class_in_the_United_States%2C_circa_2004

Again it's not all about your income.

[yankeeyosh]

Yes, but my job put me at 68th percentile when I make about in the 50th. I think they skewed it towards occupation. I don't think teacher constitutes upper middle class, do you? :rolleyes:

But some of them don't make sense...here's an example. The actuarial profession is ranked in the 43rd percentile. I don't know how many of you know what an actuary does, but essentially to get your designations (FCAS or FSA), you have to take a series of extremely difficult exams...probably on the caliber of the Bar exam, eight times. Actuaries tend to have very high positions in companies, and do very well for themselves. I tried to be an actuary once, and it's an incredibly competitive field...and really had no luck with it after years of trying. So I have no idea how it ranks in the bottom half. Meteorologists, interestingly, are ranked in the 68th percentile.


What was really sad was when I did my parents...who only have associates degrees...they were way higher than me. True, they make more and have more assets, but damn. I thought my degree would count for SOMETHING.

I think they should have had age in here...
Well, that's the thing...you're only 26, so you have a lot of time to catch up. :)


I think we have different ideas of what is middle class.

This gives a little clearer definition, read the the 5 class system and the Fussell Definition:

http://en.wikipedia.org/wiki/Class_...s%2C_circa_2004

Again it's not all about your income.

This is a pretty good model. And I think that among our generation, the "middle middle class" will virtually vanish. You're going to have lots of extremes...I can sense it already even though we're not even 30 yet.

[SunDevil]

Two years ago when I graduated college, I would have been at

Occ: 21%(it might have been 0% for unemployed)
Edu: 91%
Inc: 3%
Net: 25%
Average: 35%

Now that I have been working for two years,
Occ: 77% (I'm higher than judges!)
Edu: 91%
Inc: 69%
Net: 43%
Average: 70%

So, I guess I've 'moved on up'. I still don't realize it sometimes, after growing up at around the 25%. They should break it down by state and age.

[Spinney]

I don't get it...computer support specialist is ranked higher than programmers and software engineers. Tech support more prestigious than the high paying, challenging IT jobs?! I certainly don't consider my job one of the most prestigious out there in the computer field...in fact it's pretty entry level.

[lazereyes]

OCC: 43%
Educ:91%
inc: 18%
Wlth: 34%
Avg: 46%

This is bad right? my life is boring!

[yankeeyosh]

Here's another thing that bothers me about this...the education level. About 1/4 of the population has a baccalaureate degree, so the degree below the bachelor's, or associates, gets the 75th percentile, which means 75 percent have an AA/AS or lower. Nine percent get a master's, so the BA/BS is at the 91st percentile. So, even though 25 percent of the population has the same education as you, you are ranked in the 91st percentile in this survey, simply because it calculates the percentiles based on the percentage that has such a level of education, or lower.

Mathematically, using a simple Venn Diagram, it can readily be seen that 16 percent of the adult population has a bachelor's, but no master's. So, taking the population as a whole, one could argue that the "Average Joe" of that group would be in the middle, or 8 percentage points within that set. Then, you have to account for the additional 9 percent with a master's or higher. So, the "Average Joe" would be 17 percent from the "top", or in the 83rd percentile. Granted, in the silly "averaging scheme" that NYT uses, it would ultimately change the results by 2 percentage points, but I think that the bachelor's is given too much credit here.

Salary, too, is questionable (although there are more intervals), simply because of the COLA. Also, it doesn't say whether this is family or single-income. An individual making $65K is probably living large, whereas a family making $65K might be struggling.

[ebruening]

Occupation: 71st (I'm a high school teacher...the percentage is nice, yes, but come on...let's be realistic)

Education: 91st (again, I have a BA...whoopdedoo)

Income: 38th (they aren't taking your cost of living into account, which I find odd)

Wealth: 40th (how on earth did THAT happen? I would have expected zero...)

Total: 60th. I don't know what class that is in.

[Jedi of Zen]

Interesting poll! Here's me:

Occupation: 58th. My particular job was not on there, so I had to pick one of those "all other" options under healthcare. Which probably unfairly bumped me up a bit.
Education: 69th.
Income: 3rd. Waay down there in the single digits...woohoo.
Wealth: 25th.

Average: 39th

My goal is to have my education and income levels fall within the "top fifth" of this chart within the next 5-10 years. Clearly, I still have a looong way to go.

[K-man]

Occupation: 46
Education: 91
Income: 84
Wealth: 40
Avg: 65

Ahh...the glamorous life of a graphic designer :rolleyes:

[dc_burbs]

what are you guys using to determine wealth? I don't think I really have much, but everyone's seems to be pretty high..

[Winter Storm]

what are you guys using to determine wealth? I don't think I really have much, but everyone's seems to be pretty high..

Subtract your liabilities from your assets.

[dc_burbs]

Subtract your liabilities from your assets.

Sorry if I'm being dense, but what do you consider assets? I don't own a home, I'm still paying off my car, etc.

[Winter Storm]

Sorry if I'm being dense, but what do you consider assets? I don't own a home, I'm still paying off my car, etc.

Assets are usually anything you own that is valuable such as real estate property, savings, stocks, bonds etc.

[Jedi of Zen]

what are you guys using to determine wealth? I don't think I really have much, but everyone's seems to be pretty high..


I had to choose the lowest avaliable option in the poll, which somehow put me at 25th. Go figure.

[SunDevil]

what are you guys using to determine wealth? I don't think I really have much, but everyone's seems to be pretty high..

I looked at my Microsoft Money program. It keeps track of my net worth on a graph.

[lostindc]

Interesting that Database Admins were 3 Computer System Admins were 4 Network Admins were 8 and Computer Support Workers were 9 as these were the people that probably put together that website in the first place.

Job prestige also comes from where you work and your rank within that organization. I'd imagine Chief Justice of the Supreme Court would rank a bit higher than 37.

[SunDevil]

Job prestige also comes from where you work and your rank within that organization. I'd imagine Chief Justice of the Supreme Court would rank a bit higher than 37.

But they only make $180,000/year and can't take bribes from anyone. And no one in power wants to be their friend because it will look like they are influencing their vote. :)

They should have looked at how many years of experience you ave also.

[wordsmith]

Interesting that Database Admins were 3 Computer System Admins were 4 Network Admins were 8 and Computer Support Workers were 9 as these were the people that probably put together that website in the first place.

Job prestige also comes from where you work and your rank within that organization. I'd imagine Chief Justice of the Supreme Court would rank a bit higher than 37.

And the editor in chief of the Chicago Tribune would rank more highly than me, the editor of [the paper I work for]. By just a little. :neutral:

[shorty]

I'm in the 71st percentile. But if I change jobs and take a job I might enjoy more but get paid less for, it drops to the 63rd percentile (assuming my wealth stays the same).

[bridgetjones]

I ranked 58th. However I do not even live in the US! I thought is was accurate enough if I assume that Canada is like the US in certain assumptions. Meh? It was fun enough. I probably am doing better than many ppl my age although I compare myself worse against who I consider my peers to be.

Yeah I could not find anything close to my job on that list.

Prestige? That is sooooo subjective based on what company you work for and what the judger values. What makes a job prestigious? Although I think it is obvious the test designer does not have much respect for lawyers :p

[the dude]

I can’t believe this board has such little wealth. If you don’t have at least $50,000 in accumulated wealth by the time your 25, you really need to clean up your act. You don’t even need to make a lot of money you just need to be smart with it. It seems like most of you cant even make a mortgage down payment and you’ll be paying rent for life.

just for the record

Occupation: 51%
Education: 91%
Income: 56%
Wealth: 85%
Average: 71%

I didn’t include dividend and intrest income and income from other assets (i.e rent) in that case income is 84% and average is 78%. on second thought this test sucks

[shinyleaf]

Oh, please teach us, The Dude, how to "clean up our acts" and be smarter with our money! Thank goodness you are here! :rolleyes:

Somewhat interesting poll. Inherent factor ommissions, as can be expected with polls in general.

74th percentile here - much attributed to education and because I'm now a dual-income household.
One other factor not considered in the "wealth" portion is the stablity of that wealth. For example, we own a lot (A LOT) of land, but its output is largely determined by weather. One more bad year, and... well you've all read Grapes of Wrath, right? ... ok, I'm sure it can't go that bad...?

[StateNAurora]

How much should have saved by 30? 50 by 25 seems a bit high. Different people have different situations. I have friends who were given everything up through college and on into their adult life. I don't measure myself against them since they haven't built up what they have by themselves. Not counting my school loans I'm worth about $20,000, with loans about $10,000. I think thats pretty good having only worked a "real job" for 3 years and bought a car.

[shinyleaf]

How much should have saved by 30? 50 by 25 seems a bit high. Different people have different situations. I have friends who were given everything up through college and on into their adult life. I don't measure myself against them since they haven't built up what they have by themselves. Not counting my school loans I'm worth about $20,000, with loans about $10,000. I think thats pretty good having only worked a "real job" for 3 years and bought a car.

I think that's good too, StateNAurora :)

[the dude]

Inheritance, my balls. I was given nothing, I worked for everything I have because my mother never had anything to give me, ive been working since I was 14 and so have lots of people. The difference is I used my head when it came to money and you probably didn’t and that’s why your busting your ass now trying to cover loans and credit cards. So when you were 16 and blowing your paycheck at the mall I was saving for university. And while we both probably took huge student loans, you used yours to pay the tuition and maybe your living expenses. I on the other hand took my interest free student loans found some good long term corporate bonds and chose to live at home because it was cheaper. now if you are anything like me then you probably worked at least 20 hours a week in school but you probably used that money on booze, drugs and vacations, all the stuff that makes college great. But not m,e I saved every penny I earned working through school. Instead I used yields from my bonds purchased by my student loans to pay for the booze and drugs and saved every cent I earned working. So when you graduated you had a $60,000 debt and I had $60,000 surplus which I used as down payments for my two houses. Now renters are paying off both mortgages for me.


Im now 24 and still only working 20 hours a week, because I really don’t need to work more. In fact I can honestly say that if I quit my job tomorrow I would see almost no reduction in my standard of living

[yankeeyosh]

I can’t believe this board has such little wealth. If you don’t have at least $50,000 in accumulated wealth by the time your 25, you really need to clean up your act. You don’t even need to make a lot of money you just need to be smart with it. It seems like most of you cant even make a mortgage down payment and you’ll be paying rent for life.


OK...I would like to know HOW most people can accumulate $50K in wealth by age 25. Yes, there are definitely 25 yo's who have $50K in wealth, but I don't think that's the norm.

Mathematically, it's extremely hard. Say, at 22, you are starting out at $40K, which is slightly higher than the average starting salary for college grads. You save 20% of it, which is a very, very high percentage in this world. Also, let's assume your salary increases 8% a year, which is high in most settings, and your balance appreciates 10% a year. After this, you will have approximately 31K...STILL a long way from $50K. And if you have a "typical" loan debt, at least half of that has to be cut. Unless you're one of those wunderkinds making $70K at age 23 and you have low expenses, it's very, VERY hard for anyone to save that much in 3 years just starting out.

[shinyleaf]

The Dude:

1st, who are you addressing in your above post? Who even mentioned inheritance?

2nd: good job on being hard-working and knowing how to save your money. I thought someone should congratulate you, because it sounds like noone else ever has.

3rd: So now that you have so much free time, are you able to fill it with the "living" (i.e., socializing, vacationing) that "we" all did during college? I hope so, because I wouldn't trade my early-20's fun for a million bucks. Then, now, or tomorrow.

4th: It's probably a good idea to refrain from belittling the ENTIRE QLC because their priorities are not the same as yours.

[the dude]

OK...I would like to know HOW most people can accumulate $50K in wealth by age 25. Yes, there are definitely 25 yo's who have $50K in wealth, but I don't think that's the norm.

Mathematically, it's extremely hard. Say, at 22, you are starting out at $40K, which is slightly higher than the average starting salary for college grads. You save 20% of it, which is a very, very high percentage in this world. Also, let's assume your salary increases 8% a year, which is high in most settings, and your balance appreciates 10% a year. After this, you will have approximately 31K...STILL a long way from $50K. And if you have a "typical" loan debt, at least half of that has to be cut. Unless you're one of those wunderkinds making $70K at age 23 and you have low expenses, it's very, VERY hard for anyone to save that much in 3 years just starting out.

1st id like to say im whacked, i though someone mentioned inheritance in a reply it was a mistake and im sorry

In response to your quote. It all has to do with money management and knowing the system. Like I said earlier student loans give people a huge advantage in that they can be interest free or very low interest for the time you spend studying. Secondly financial assets and other assets like real estate are great because can be used as collateral for loans (which are necessary if you want to really increase your wealth) . Not to mention that having an okay savings base and even a small yield income can make you less risk averse and can give you other higher risk higher reward opportunities that might be far to risky otherwise.

For example, after I got my job and my houses I had a little extra money because I had no mortgage to pay, so I was able to buy gold futures on high leveraging and made a bundle. The truth is I got pretty lucky and made lots of money but commodities trading is very risky because of the leveraging. I would never recommend to someone who has they’re back against the wall to try and trade in commodity futures, but if you have even a little breathing room high risk ventures like these are great because they are relatively cheap with very high potential returns

[yankeeyosh]

In response to your quote. It all has to do with money management and knowing the system. Like I said earlier student loans give people a huge advantage in that they can be interest free or very low interest for the time you spend studying. Yes, it's "good" debt for the most part, although it's still debt, and it will reduce your wealth. And if you have too much of it, you can't afford to save.


Secondly financial assets and other assets like real estate are great because can be used as collateral for loans (which are necessary if you want to really increase your wealth) . Not to mention that having an okay savings base and even a small yield income can make you less risk averse and can give you other higher risk higher reward opportunities that might be far to risky otherwise.


But for the most part, you need a down payment to acquire such property.

For example, after I got my job and my houses I had a little extra money because I had no mortgage to pay, so I was able to buy gold futures on high leveraging and made a bundle. The truth is I got pretty lucky and made lots of money but commodities trading is very risky because of the leveraging. I would never recommend to someone who has they’re back against the wall to try and trade in commodity futures, but if you have even a little breathing room high risk ventures like these are great because they are relatively cheap with very high potential returns Ahh...but you said you got lucky. That's why it's so dangerous. Yes, you did fine for yourself, and you should be proud of that. However, there's a strong likelihood you will fail, and most 22, 23 year year olds just starting out are pretty tight, and high leveraging is not an option due to the substantial risk.

[SunDevil]

The truth is I got pretty lucky and made lots of money

That's all capitalism is, just being lucky. Meeting the right people, having the best ideas, investing in the right thing. Not everyone can be lucky, there are people who don't do as well.

Also, loans don't count as wealth. I could get a $300,000 home mortgage with a 10% down payment if I wanted, but I would consider myself -$270,000, not +$300,000, even though I do 'own' the property and could sell it to pay back the bank. There is a lot of risk if you can't find renters or if the housing market collapses.

[the dude]

Yes, it's "good" debt for the most part, although it's still debt, and it will reduce your wealth. And if you have too much of it, you can't afford to save.

Ahh...but you said you got lucky. That's why it's so dangerous. Yes, you did fine for yourself, and you should be proud of that. However, there's a strong likelihood you will fail, and most 22, 23 year year olds just starting out are pretty tight, and high leveraging is not an option due to the substantial risk.

an interest free loan is literally a blessing. perhaps it will increase liabilities for a while and reduce net worth. but if you use the loan well you can pay it off instantly with the principal as soon as your investment matures.

yes i did get lucky. but earlier i stated that 50,000 in assets is the least someone should have by age 25 i have substantially more than that just in financial assets and i attribute that to luck. my other assets namely my homes have already shown over a 170% REAL return in just over 3 years and that was not luck

I only used gold as an example. i purchased it because i was given advice from someone i really trust in financial matters. the investment could be anything. it could be a stock tip or a business that your friend wants to start. the point is if you save nothing and have nothing you will not be able to capitalize on great opportunities

[the dude]

That's all capitalism is, just being lucky .
spoken like a true socialist

Also, loans don't count as wealth. I could get a $300,000 home mortgage with a 10% down payment if I wanted, but I would consider myself -$270,000, not +$300,000, even though I do 'own' the property and could sell it to pay back the bank. There is a lot of risk if you can't find renters or if the housing market collapses.

I believe this is standard practice in regards to accounting for loans that is why in net worth only home equity is counted. If I counted the full value of both my homes im in the 93%



guys, im not trying to brag (well maybe a little) but my point is you dont need make millions of dollars to ensure security. i make shit but im still doing okay

[yankeeyosh]

yes i did get lucky. but earlier i stated that 50,000 in assets is the least someone should have by age 25 i have substantially more than that just in financial assets and i attribute that to luck. my other assets namely my homes have already shown over a 170% REAL return in just over 3 years and that was not luck

But if you have $20-30K in debt, and you are only making $30K and have to live on your own, how could you afford to go from having net worth of -$30K to $50K in five years? Most people aren't getting $50, 60K right out of school and can save a lot...despite the fact that many *think* they will get that. There are some who do, and G-d bless them. But for a high majority, that's not the case. Maybe they majored in something low paying, maybe they don't want to "sell out", maybe they simply have had trouble finding decent paying work. It doesn't matter, since it's very hard to make it on "standard" entry level salaries, much less save.

Granted, there are a lot more 20-somethings who own homes than there were 10 years ago, but even if you purchase a $300K house (which is nearly impossible if you're making an entry level salary, or even higher), your net worth is only the amount that you have in equity...NOT the actual value of the house. So yeah, the house values may be rising rapidly, but if you don't have $300K paid off, your net worth is NOT $300K.

[the dude]

YankeeYosh like I said earlier I paid my own way through school with money I earned before, but I see what you’re saying. You’ve graduated college and you have debt. Damage done.

First of all there are 4 guys living in my house. They are all around my age. They all work way more than me and make more than me but yet they can all barley cover expenses. Part of the reason is they are each paying me $700 a month in rent but my mortgage payment on that house is barley $1400 a month.

So basically every month you’re getting screwed by me or someone just like me, stop paying rent. If you cant cover the down payment move in with your parents or get a roommate or downgrade. The point is save for a down payment because every time you pay rent you are giving money away. When you pay a mortgage it’s like putting money in a savings account. Also, cut down on consumption for a while. It may suck, but long run it will pay off. And finally stop getting fucked on interest rates from the bank find a liquidable GIC if you need access to the money. they pay around 3% a hell of a lot higher than a normal bank’s .08% and you can make withdrawals every month

[wordsmith]

If I were paying $700 to rent, I might feel screwed. But given that I'm paying an infinitesimal amount, I really don't see any reason to mess with what works.

You're more than a little late getting in on the whole "pissing money away if you rent" argument that periodically rears its head on the boards, but if you do a quick search, I think you can probably find the approximately 19 billion threads that already exist on it.

I'd also echo shinyleaf's post that you'd do well to not start right off the bat belittling people. You're probably going to find that this is a board full of participants of very divergent lifestyles and priorities. There really isn't any reason to jump on and start railing that "This is how I did things, and everybody else do it that way, too."

[yankeeyosh]

YankeeYosh like I said earlier I paid my own way through school with money I earned before, but I see what you’re saying. You’ve graduated college and you have debt. Damage done.

First of all there are 4 guys living in my house. They are all around my age. They all work way more than me and make more than me but yet they can all barley cover expenses. Part of the reason is they are each paying me $700 a month in rent but my mortgage payment on that house is barley $1400 a month.

So basically every month you’re getting screwed by me or someone just like me, stop paying rent. If you cant cover the down payment move in with your parents or get a roommate or downgrade. The point is save for a down payment because every time you pay rent you are giving money away. When you pay a mortgage it’s like putting money in a savings account. Also, cut down on consumption for a while. It may suck, but long run it will pay off. And finally stop getting fucked on interest rates from the bank find a liquidable GIC if you need access to the money. they pay around 3% a hell of a lot higher than a normal bank’s .08% and you can make withdrawals every month

Man, the "house envy" discussions of the last couple of weeks may spill into this thread. But the thing is that MOST people cannot afford a down payment when they're 25...especially here, where a literal rat hole costs $500K. Yes, in some parts of the country, it's more feasible, but even still, it's very hard for people just starting out, unless they're in a powerhouse field, for them to save that kind of money for a down payment on their own. Yes, a lot more can now than 10 years ago because of a better economy and higher entry level wages, but a large majority still can't.

[the dude]

wordsmith, $700 a month is not bad at all depending on where you live. and if your rent is so much cheaper the likelihood is property values fall in the same range, either way the margin your landlord is making is probably equivalent. and although lots of other people have already said it before you are pissing away money.

secondly i never doubted people's abilities or incomes or intelligence. i doubted they’re ability to handle finances. and given the sentiment of many of the threads on this forum and the sentiment of this entire message board its not unreasonable to assume that for many cases my assumption is correct.

[StateNAurora]

What The Dude is trying to say is that those who don't/haven't save their haven't made the right decision. Those who have saved haven't made the best descisions in how/where they save it. Though you apologized you were being pompous with your posts. Basing your advice on what we should have done does not help us with what we should do.

I think the Rich Dad, Poor Dad series outlines how you should think about money and how it can be put to work for you. I can't go into specifics since I read it awhile ago but basically how most of us think about money is wrong. For instance a house is not an investment because you are not receiving money from it, unless you rent it or sell. Yes the value of your home may go up but thats a paper asset and is not realized unless you sell it.

I'll be buying my first home in the next couple of months and plan on renting part of it out. This way I'll cover my mortgage and make a little money as well.

I think another problem is that most people do not do the research when it comes to money. I get off on getting the best deal I can possibly can. If I can find a better deal than the next guy who bought the same thing I'll enjoy all the more. The house for instance, I'll probably receive nearly $5,000 in grants and special rates on my mortgage. All because I did a little research. My cell phone, which I really didn't want to give in and buy: got my Razr phone for free (reabates) and the start up fees covered (rebates again). Being smart about money isn't limited to investments but is applied to all of your money dealings.

[StateNAurora]

Found some good numbers that we can compare ourselves against:

http://moneycentral.msn.com/content/SavingandDebt/P61280.asp

Has anybody read this book before? I've heard of but never picked it up before. I've stuck to Rich Dad, Motley Fool, and Suze Orman.

[Winter Storm]

Personally, I don't give a damn whether the dude was trying to make a statement on the value of establishing savings early on. What I don't appeciate is the condescending attitude that everyone should have accumulated at least $50k in wealth by the age of 25 and if you haven't, then you need to "clean up your act". It is not going to be possible for everyone to do this. Everybody on this board comes from a different situation and is doing the best they can with what resources they have.

[StateNAurora]

However he came across he clearly has his finances in order and could offer some good advice. As long as it is presented in a helpful judgemental manner. The Rich Dad series also pointed out that most people are afraid to make the jump/take the risk needed to be financialy sucessful. Most never will either. The Dude made that jump long ago in his teens. While many of us have no to aspirations to be very rich, we all could be a little better off. I asume we all could use a littel advice on how to be that little bit better off.

[yankeeyosh]

However he came across he clearly has his finances in order and could offer some good advice. As long as it is presented in a helpful judgemental manner. The Rich Dad series also pointed out that most people are afraid to make the jump/take the risk needed to be financialy sucessful. Most never will either. The Dude made that jump long ago in his teens. While many of us have no to aspirations to be very rich, we all could be a little better off. I asume we all could use a littel advice on how to be that little bit better off.

I agree...the advice is fine and all, and it's appreciated, but I just don't like the "aura of superiority" towards those who DON'T have $50K saved three years after college.

[the dude]

Personally, I don't give a damn whether the dude was trying to make a statement on the value of establishing savings early on. What I don't appeciate is the condescending attitude that everyone should have accumulated at least $50k in wealth by the age of 25 and if you haven't, then you need to "clean up your act". It is not going to be possible for everyone to do this. Everybody on this board comes from a different situation and is doing the best they can with what resources they have.
winter storm, perhaps you are confused as to what i mean by 50k in wealth. It does not mean you have $50,000 in hard currency to go blow on a Lexus whenever you want. if you are 25, and have owned a small house or condo for a year that is fully furnished, have a little money in your RRSP (I think its a 401k in the US) and are still paying off 15k in student loans, the likelihood is that even with your debt you are probably at a net worth of 50k or a above. this criteria is by no means extravagant or difficult to obtain even at a pretty low income, provided you made good (not amazing) decisions with your money.

[J-girl]

I think RRSP is a rip off. Its the money I am never going to see till I am what 65 - but I still contribute nonetheless through my work.

[Winter Storm]

winter storm, perhaps you are confused as to what i mean by 50k in wealth. It does not mean you have $50,000 in hard currency to go blow on a Lexus whenever you want. if you are 25, and have owned a small house or condo for a year that is fully furnished, have a little money in your RRSP (I think its a 401k in the US) and are still paying off 15k in student loans, the likelihood is that even with your debt you are probably at a net worth of 50k or a above. this criteria is by no means extravagant or difficult to obtain even at a pretty low income, provided you made good (not amazing) decisions with your money.

No, I am not confused on what you mean by $50k in wealth and I did not assume you meant that in hard cash.

It was your assumption that everyone should be where you are and those who aren't need to catch up with you. Not everyone is in the position to buy a home at 25. In fact, many people on this board are struggling to get their first post-college job and move out of their parents home. In case you do not understand the nature of this forum, it is intended for 20-somethings who are trying to make it in the real world and many are still trying to find their path and come here for support.

The last thing people here need are new posters coming on the board telling them what they should have done and how they don't measure up to your level of success.

[SunDevil]

The Rich Dad series also pointed out that most people are afraid to make the jump/take the risk needed to be financialy sucessful. Most never will either. The Dude made that jump long ago in his teens. While many of us have no to aspirations to be very rich, we all could be a little better off. I asume we all could use a littel advice on how to be that little bit better off.

The problem is there are risks involved. Would you risk bankruptcy and being homeless on a chance you might be able to make some money in a few years? Could you quit your job and start a business and have enough money? Do you know enough to 'work the system' and get interest only loans and find people to pay you more than the bank charges each month? What would happen if the value of your assets would drop by 50% due to being in the wrong location? 60 Minutes did a story on a guy in New Orleans that is looking at bankruptcy when he used to be worth over a million dollars because the tenants left and he still owes the bank each month on 200 units that he can't sell(or sell for a big loss).

Most people don't have the time or knowledge to play the capitalism game, so they just maintain their lifestyle by working at a job. They would rather have a stable lifestyle with certainty, than a difficult one for a few years with unknown returns. There are people who fail, there are people who succeed.
You don't hear much from the people who fail.

[bridgetjones]

Dude I am responsible with money and I do not have 50K in assets. I am 26 years old. Yes I live with my parents. I have had some situations that have prevented me from being in a position to buy a place. To some extent I am sick of ppl going on about how renting is pissing money down the drain. Buying too much house or buying a place in a rush and regretting it is a drain too. Buyer beware...

As far as owning a place vs. renting... I am aiming to rent a place that is not too expensive and still saving money. I'd like to live in the GTA and not have to own a car. That saves several grand a year easy. I am rather sick of living at home so this is a comprimise.

So that means a decent smallish apartment in certain areas that I will not be able to buy a house in for years... If I were to buy a house, I'd have to buy a car bc it seems like housing prices in this city are too high for a single girl. At least in the areas I want to live in ie not the suburbs. Yes I want to buy a house not a condo. I should like to live in a nice house when married with a dog. Yeah I think I could buy a condo but then there are fees... I can actually save money renting if I do it right. I am good at the frugality game.

[wordsmith]

Most people are not in the dude's position. The idea that if they're not, there is something wrong with what they're doing and they need to reexamine how they're living their lives financially is absurd. Most people do not have that kind of wealth accumulated at that age. If he does, great. But it's far from the norm. And the condescension is unnecessary, regardless if the intent is to earnestly give advice or not (I'm leaning toward the intent NOT being earnestly to give advice, myself, but rather to pat himself on the back for where he is financially in life).

[lostindc]

I wonder what would happen when the tenants move out because they find out that they can rent a better place for much less. Nationally the ratio of mortage payments to rent costs are at their highest historical levels. The tenants should therefore be able to find a house (or apartment) to rent in the same area for about $500-$600.

[lostindc]

From browsing "How to get rich" titles at the local Barnes and Noble I found that the authors of these books had several things in common:

1. They all wrote books on how to get rich. Almost everyone wants to get rich so it is logical that these books will sell like hotcakes.

2. They all come up with various ways (some of which are dubiously legal) to avoid/reduce paying taxes. This too makes sense as it is hard to build wealth when the government gets a large cut.

3. Earning money through hard work and 40 hour weeks results in the highest tax bill - especially when you figure in the 18% in social security and medicare taxes. Adding in federal taxes this easy reaches 30%-35% even if you making under $50K

4. It is easy to have a 100K income per year that is taxed at a measily 15% tax rate - If you have $4.8 Million in ExxonMobil stock.

There are two Americas - with two different tax systems.

[bridgetjones]

Hey LostinDC,

I think "the dude" is Canadian and I presume he is living in either Vancouver or Toronto. I cannot imagine any other places in Canada where a shared house will run you $700 a month. Pfft! Gee with that attitude from my landlord... Lets just say I would not want to live there... It is that sort of condescending crap I get in conversations at times. I do not even think some of those ppl are doing it on purpose. :confused: BTW $700 CAD a month in the Toronto area is not bad.

I wonder if his parents helped on the downpayment. Hmm... I know enough ppl that think they are all independent and own a condo but in reality they had alot of help with downpayments/ co signing. I am sure my parents would co-sign but not give a downpayment. They probably would not even if they could afford it.

Plus in Canada, you do not have the option of writing off mortgage interest costs which makes it less of a benefit to own here. Anyhoo I will try to rent cheap in a good area and then find a nice guy with a good income to shack up with.... Hey thats a plan!

[pisces2473]

The Dude is on his way to being "The Banned" if he doesn't stop being so condescending, and assuming that if you don't have money, it's because you pissed away your college years, drinking and drugging all of the time.

People, don't listen to him. He's just here to make all of you upset.

[lostindc]

BridgetJones

I wasn't sure where he was living - I know $1400/month mortgage can be extremely cheap or extremely expensive (or someplace in between) depending or where you are living.

In the US (at least in many of the major cities) the housing market is really messed up right now. The interest + fees + taxes on owning an apartment here can be 50%-100% more per month than renting that very same apartment.

If he is Canadian his 50K in savings is only worth 43K American

[bridgetjones]

Yeah I was making a guess about where in Canada he is since he mentioned RRSPs and $700 for shared housing between 3-4 ppl. Rent is much much cheaper outside Toronto and Vancouver. I do not even think you could charge that much in Montreal. Anyhoooo.... Do not know about the US housing market except that in certain areas it is insane. More insane than Toronto or Vancouver I think... In Toronto, I could perhaps afford a very small condo for $200-$250K in downtown/nice area. I mean a freaking shoebox. However you may still be better off buying vs renting in Toronto depending on the circumstances.

Maybe I have a hope in hell of affording a decent house for $200-300K if I am lucky and most certainly not in the central core of TO. $300K mortgage would pretty much mean I need roomates or like I live to pay my mortgage. Blah!!!

[lostindc]

What he doesn't realize is that the cost of University is much more expensive in the US than it is in Canada (unless you attend West Point or Annapolis and don't mind spending the next 6 years in an exotic, warm and sandy locale)

[bridgetjones]

Yes plus even those in Canada may not have the option of staying in the GTA with their parents. I basically lived with my parents and attended a university in Toronto. What is the point of spending extra to live in res? Debt debt debt... I still have debt of like 15-18K CAD living at home!!!

Had my fun in the workplace and well there was instability... Lets just say under different circumstances I might have been able to buy a condo. Well that is if I liked condos all that much :confused:

[old_school_soul]

the_dude,

Some of us chose not to live with our parents. Some of us moved away to different cities. Thank God I moved out when I was 18, I never would be where I am now if I hadn't.

[bridgetjones]

Hey OSS there are some ppl whose parents would not let their kids live with them too. Yeah I love my parents but they are cramping my style enough that I will not live here long enough to get a downpayment together.