: If you make under $57,343, you're frankly screwed



SpeedyArizona
11-08-05, 10:39 PM
http://moneycentral.msn.com/content/SavingandDebt/P134742.asp?GT1=7392

How will younger generations be able to start out when they don't have the money to do it? I just found this article interesting.

A visit to the glitzy section of any city in America will give you the idea that we don't know what to do with all the money we have. You get the same impression at any high-end mall in suburbia.

In fact, income thins out pretty quickly. According to the most recent (2003) IRS statistics (http://www.taxfoundation.org/taxdata/show/250.html) on tax returns, households needed at least $295,495 to be in the top 1%, $130,080 to be in the top 5%, $94,891 to be in the top 10% and $57,343 to enter the top 25%.

Yes, you read that right. If your household income is over $57,343, you're well toward the front of the line when the checks are handed out. If your income is below $29,019, you sink into the bottom 50%.

Train wreck
Increasingly, those in the bottom 75% -- households with incomes below $57,343 -- are starting to look like a long, slow train wreck. Without recognition of the problem, the entire country could find itself in dire straits pretty quickly.

Let me show you why.


In the 10 years from 1993 to 2003, income has continued to concentrate. While the bottom 50% of earners had 14.92% of income in '93, they had 13.99% in '03. Similarly, the top 25% have enjoyed an increased share of total income, rising from 62.45% in '93 to 64.86% in '03. This is pretty much what you'd expect over a period of rapid change. Those with leverage increase their incomes. Those without leverage don't.

Over this period the dividing line income for the bottom 50% has risen from $21,179 to $29,019, rising 4.3% a year. Had the income line risen only with inflation it would have risen to $26,504. And that's an important fact: Even the bottom of the income scale has gained some purchasing power over the period -- about $2,515 (see table below).

Combine that additional income with recent low interest rates on home mortgages, a period of weak-to-declining rents for apartments, a multitude of low-interest and no-interest offers from stores and car manufacturers, and the people who do a lot of the heavy lifting in our society have been getting along.

Better to be on top
Those with earning power have done a lot better than just get along. Earners at the top 1% line have gained $63,040 in purchasing power. Earners at the top 10% line have gained $12,198 in purchasing power, while seeing the portion of income they spend on income taxes decline from 20.2% to 18.5%. Earners at the top 25% line have gained $5,570 in purchasing power.

Elvis
11-08-05, 10:44 PM
I don't know who Frank is, but he'd better stay away from my backside.

It ain't how much you make, it's how much you keep.

powerglide
11-08-05, 11:14 PM
:yeah:

I used to make much more money as an investment banker but I spent MUCH more money living the lifestyle. I learned my lesson. Now I do what I love, make much less, but actually keep/save much more!

ben72227
11-08-05, 11:17 PM
It ain't how much you make, it's how much you keep.

Exactly. People in this country (for the most part) have TERRIBLE saving habbits, but I guess when you have things like credit cards and you can get anything instantly without having to pay actual *money* for it...well...:lildevil:

To further this point, theres a story about a high school algebra teacher. This man taught school for 30+ years - he was very modest - he wore clothes from Wal-Mart, lived in a run-down one-bedroom house in the ghetto. He was very cheap basically, and people thought, oh, he must be so poor. He drove an old chevy Nova too:lildevil:.

Point is, when he died, he left a 1.8 MILLION dollar endowment for his alma mater, the school he got his degree from. All of this money came from his penny pinching over the years. It just goes to show that it's not how much you earn, its how much you SAVE!

SpeedyArizona
11-08-05, 11:46 PM
I completely agree, many people in this country don't know how to save money. I have 1, just 1 credit card which I only use when I make a large purchase. So many people have went into debt because they charge money they don't accually have and can't pay back.

On another note, he left $1.8 million?!?!?! I could honestly never save my money that well. The main thing I think people should live their retirement years with is this saying, "YOU CAN'T TAKE IT WITH YOU"! When I'm old and retired, I'm going to spend every last penny since it doesn't do me any good when I'm dead (well, if I have kids they'll get a large portion, but otherwise it's spend, spend, spend :D)! I do expect an inheritance from my parents, I don't want some school to get it.

Stoneage_Caddy
11-09-05, 12:07 AM
i earn below 25k , and have for the past 10 years ...and will continue to do so for the indefinate future regardless of my education .....in todays workplace you have to sweep the floor and clean toilets for 10 years before you can get promoted to slightly above minum wage ...and perhaps get a nice pair of gloves for that toilet brush duty....

but ill have a $36,000 peice of paper on my wall and i wont have to pay back student loans .....ill be able to say i did something else that no one thought i could when i set out to do it ...

i have no income to save , goes right in and right out ...between the car , food and insureance (you see the 17 year old girl on the cell phone thats 3 inches off my bumper pays less per year)....

as for my retirement ....i got it all planned out , ill have my heart attack when im 40 and die ,and be found with a hooker driveing the same 94 deville ...long before i have to worry about retireing....LOL


in other words .....ive got to get my own shop .....

Ralph
11-09-05, 02:19 AM
...between the car , food and insureance (you see the 17 year old girl on the cell phone thats 3 inches off my bumper pays less per year)....
as for my retirement ....i got it all planned out , ill have my heart attack when im 40 and die ,and be found with a hooker driveing the same 94 deville ...long before i have to worry about retireing....LOL
in other words .....ive got to get my own shop .....

I wouldn't mind having a 17 year old girl 3 inches off my bumper! As long as her little sister was there too ...:grouphug:

And what's so bad about dying with a hooker in a 94 DeVille?:cloud9:

powerglide
11-09-05, 03:18 AM
I don't think credit cards are anything to be shun.

I have 4 of them and I use them to pay for everything.

Since I always pay off everything on time, and never carry a balance, it costs me nothing at all. In fact I get cash back, airline miles, gifts etc.

I think people should exploit these credit cards not be exploited by credit card companies.

davesdeville
11-09-05, 07:03 AM
Since I always pay off everything on time, and never carry a balance, it costs me nothing at all. In fact I get cash back, airline miles, gifts etc.

I think people should exploit these credit cards not be exploited by credit card companies.

Damn straight.

FSU_Noles
11-09-05, 09:18 AM
...and will continue to do so for the indefinate future regardless of my education .....in todays workplace you have to sweep the floor and clean toilets for 10 years before you can get promoted to slightly above minum wage

but ill have a $36,000 peice of paper on my wall and i wont have to pay back student loans


in other words .....ive got to get my own shop .....

That $36000 piece of paper will open many doors for you. Almost regardless of what the degree is in, employers are looking for people with them. The Federal Reserve Chairman Alan Greenspan has a degree in Music and he has been controlling this economy for over a decade.

Don't sell yourself short or get your degree then sit on it, start applying for jobs, even if you are only slightly qualified. Or as you said, write a business plan and open your own shop.

Don't get just your degree and hang it on the wall - leverage it.

:thepan:

Elvis
11-09-05, 09:30 AM
I don't think credit cards are anything to be shun.

I have 4 of them and I use them to pay for everything.

Since I always pay off everything on time, and never carry a balance, it costs me nothing at all. In fact I get cash back, airline miles, gifts etc.

I think people should exploit these credit cards not be exploited by credit card companies.

In other words, do you work for your money, or does your money work for you?

Most people don't have the discipline to handle four credit cards.

NIK
11-09-05, 10:33 AM
I don't think credit cards are anything to be shun.

I have 4 of them and I use them to pay for everything.

Since I always pay off everything on time, and never carry a balance, it costs me nothing at all. In fact I get cash back, airline miles, gifts etc.

I think people should exploit these credit cards not be exploited by credit card companies.

Exactly! Use them to your advantage ...... the secret, however, is to pay the balance off everytime. By doing this, you are taking advantage of a 30-45 day grace period. Also, use the incentives - in my case, my last two car purchases were reduced by about $4,000.00 due to my GMCard rebates! And I didn't pay a dime in interest!

Kev
11-09-05, 10:39 AM
Credit cards are like very sharp, multi-edged knives. If handled properly and wisely, they can be very useful tools. If mishandled, they can bleed you dry.

Best to start with a butter knife and move up slowly.

Elvis
11-09-05, 10:40 AM
Exactly! Use them to your advantage ...... the secret, however, is to pay the balance off everytime. By doing this, you are taking advantage of a 30-45 day grace period. Also, use the incentives - in my case, my last two car purchases were reduced by about $4,000.00 due to my GMCard rebates! And I didn't pay a dime in interest!

That's huge. My father-in-law did that too.

But you MUST pay off the balance every month. People don't realize how much more they're paying for things that they carry on credit cards. A $1500 television might end up costing you over $2000.

mccombie_5
11-09-05, 11:32 AM
I dont posses any credit cards. My wife had one, but she got rid of it, we didnt need it. I pay for everything cash, if i cant afford it, i dont buy it, its how ive always worked. Even when i was young and working for my uncle, driving limos, i saved money i didnt spend. I had a new car yearly (sometimes two) and I had a small house with my first wife, i got my share of it, and bught a slightly bigger house with my current wife. We lived there for some time, then moved a few times with our son, then moved to where we are now, we are nicely settled here. I have never wanted credit. There would be too much temptation to buy things i dont need. ( i can afford to now, but in the past i couldnt, and if i had palstic money i would of i know it)

Automatically, every time i get paid i put 25% of it into a mid interest account, it should pay me a very handsome sum when i do retire.

The younger generation (my son's gen) spend money on cards like its going out of fashion. He restrains this to some extent, since his University fund has beenpaid for by my mother, and he holds down a job too, regardless of this, he does not earn enough as a student to afford a place of his own.........

When i was his age, everything WAS cheaper, regardless of what people say, i earned a good income when i was driving limos, and i was also at university...

RobertCTS
11-09-05, 12:05 PM
i earn below 25k , and have for the past 10 years ...and will continue to do so for the indefinate future regardless of my education .....in todays workplace you have to sweep the floor and clean toilets for 10 years before you can get promoted to slightly above minum wage ...and perhaps get a nice pair of gloves for that toilet brush duty....
but ill have a $36,000 peice of paper on my wall and i wont have to pay back student loans .....ill be able to say i did something else that no one thought i could when i set out to do it ...
have no income to save , goes right in and right out ...between the car , food and insureance (you see the 17 year old girl on the cell phone thats 3 inches off my bumper pays less per year)....
as for my retirement ....i got it all planned out , ill have my heart attack when im 40 and die ,and be found with a hooker driveing the same 94 deville ...long before i have to worry about retireing....LOL
in other words .....ive got to get my own shop .....

StoneAge,
You sound like another Manic Monday.(Know who discovered the Bangles)

Opportunities are there if you're willing to work in areas where you might not see an interest. For the last 30 years I've been manufacturing carboard partition for inside of boxes. Boring as hell.. but it provides me with a good life style.

Edit: I just read your profile and now know why you are poor. That will change!!

powerglide
11-09-05, 12:10 PM
For the last 30 years I've been manufacturing carboard partition for inside of boxes. Boring as hell.. but it provides me with a good life style.

LOL! Sorry, no offense at all but it just sounds funny when you put it like that!

Hell, I know for a fact that these types of 'boring' businesses are some of the best.

(Peter Lynch's investment rule #something)

gdwriter
11-09-05, 12:13 PM
They say money talks. All mine says is "good-bye."

RobertCTS
11-09-05, 12:14 PM
LOL! Sorry, no offense at all but it just sounds funny when you put it like that!

Hell, I know for a fact that these types of 'boring' businesses are some of the best.

(Peter Lynch's investment rule #something)

Here's the secret side of the success..just about everything manufactured today gets put into a cardbord box with cardboard inner-packaging. There has alway been a good market for the damn stuff!:yup:

powerglide
11-09-05, 12:20 PM
:yeah:

LittleB
11-09-05, 12:34 PM
Right now I make pretty decent money, and before, when my boyfriend and I were renting, it was so easy to save money. Our rent was only $800, and boy was I loving it. I bought SO MUCH STUFF and still had money left over. It was fun while it lasted, but there are more important things in life. We decided we needed to get into a house (cuz in Cali the prices were rising VERY quickly.) So now we own our own home, and I am broke as hell, but it's all for a good cause. The only part that bothers me is that I can't really save up, because it all gets spent on the mortgage payment and bills. My boyfriend on the other hand makes SUPER good money, so if a rainy day were to come we would definitely be OK, but I still wish I could do some saving of my own.....

RobertCTS
11-09-05, 12:41 PM
Right now I make pretty decent money, and before, when my boyfriend and I were renting, it was so easy to save money. Our rent was only $800, and boy was I loving it. I bought SO MUCH STUFF and still had money left over. It was fun while it lasted, but there are more important things in life. We decided we needed to get into a house (cuz in Cali the prices were rising VERY quickly.) So now we own our own home, and I am broke as hell, but it's all for a good cause. The only part that bothers me is that I can't really save up, because it all gets spent on the mortgage payment and bills. My boyfriend on the other hand makes SUPER good money, so if a rainy day were to come we would definitely be OK, but I still wish I could do some saving of my own.....

Wow, Little B. Did you sign the mortgage paper with your boyfriend? If it's in his name and you're giving him money towards the payments..you could see all your money go up in smoke someday. Just concerned.

LittleB
11-09-05, 12:49 PM
Wow, Little B. Did you sign the mortgage paper with your boyfriend? If it's in his name and you're giving him money towards the payments..you could see all your money go up in smoke someday. Just concerned.

Both of our names are on it, I'm safe LOL. My boyfriend and I wouldn't have it any other way, we are in it together! :D

:shhh: plus my family would've NEVER let that happen either.

EcSTSatic
11-09-05, 01:07 PM
Both of our names are on it, I'm safe LOL. My boyfriend and I wouldn't have it any other way, we are in it together! :D

:shhh: plus my family would've NEVER let that happen either.

Stuff happens. I share RobertCTS' concern. Can you show in a court of law that you pay half? Sorry, too much Judge Judy.

LittleB
11-09-05, 01:13 PM
The house is in both of our names...so we are both protected if something should happen.

EcSTSatic
11-09-05, 01:20 PM
I think you can forget about the significant wage increases that the article hopes for. The only way to get ahead of the curve is to get a better job - one that isn't targeted for outsourcing to some 3rd world country for peanuts on the dollar. That's not easy to do I know.

Lower income families find themselves just paying for the essentials and don't have much discretionary income. It's a downward spiral for many. I guess it's why the tax system is looked to for an answer. Some say make the higher income wage earners support the system to relieve the others. Some say a flat tax is the answer - those that purchase should be taxed.

Credit card and other finance companies are in the business to make money. They understand human nature. We want it now, regardless of knowing we couldn't afford it today. However you want to say it, they prey on the weak.

RobertCTS
11-09-05, 01:22 PM
The laws usually work for the women. If they are married and never worked they are intitled to half of you home and valuables. If you had a lot coming into the marriage and have documented that you may be able to save that.

Look at race car driver Jeff Gordon. He married "Miss Winston" a beautiful girl. He made millions of bucks risking his life on the race track. She never had to do anything but come divorce time she still got half of his millions.

Pre nupts are vital but most women flip when you mention them.

DeVillish
11-09-05, 01:41 PM
yeah...see i just want a nup to protect my car...forget everything else she CAN NOT have my baby....:tisk:

RobertCTS
11-09-05, 03:26 PM
yeah...see i just want a nup to protect my car...forget everything else she CAN NOT have my baby....:tisk:

:histeric: Devillish..that's because you are a soldier. You don't have any wealth yet. Just your car. Give you another 15 years, married with a couple kids and you can't stand her anymore but can't afford to divorce her! Change your VIN number, repaint the Charger and run away!:yup:

LittleB
11-09-05, 03:28 PM
:histeric: Devillish..that's because you are a soldier. You don't have any wealth yet. Just your car. Give you another 15 years, married with a couple kids and you can't stand her anymore but can't afford to divorce her! Change your VIN number, repaint the Charger and run away!:yup:

:yeah:

DeVillish
11-09-05, 03:30 PM
but i like black....oh well yellow might be cool, or hemi orange....

RobertCTS
11-09-05, 03:41 PM
but i like black....oh well yellow might be cool, or hemi orange....

Change the wheels, change the color of the rear stripe. Put the stripe down the middle or it's gonna be 1/2 her's

LittleB
11-09-05, 03:44 PM
You know it really does suck though, I've seen A LOT of women take their ex husband for all they got. It's wrong... :nono:

Playdrv4me
11-09-05, 04:26 PM
Im the opposite of most of you guys... I am the perfect example of what TOO MUCH money too soon can do to destroy your financial compass.

I went from working a minimum wage sales floor job at an Office Max, to almost tripling my salary instantly in February of 2001 in a customer service position for the company I work for now. As I progressed I was doing so well I was receiving rapid pay increases and huge increases everytime I changed position.

As a result I never got a true feel for responsibility and jumped into everything I could. I am now single and only 23 years old making over 40k a year with the option to have made almost 50 at one point and it doesnt matter whether I would have made 60... I made SO MANY financial mistakes at such a young age I am now dearly paying for it and what I make is pretty much meaningless. Had I started saving and not spending when I should have, Id be enjoying the fruits of my labor now.

powerglide
11-09-05, 04:45 PM
Amen!

SpeedyArizona
11-09-05, 04:56 PM
I like how my salary is set up, I control how much I make a year. Usually the real estate firm takes out 6% of the selling price of the home. So if I sell a $1,000,000 property, $60,000 is taken out, and I usually get 2% so around $20,000. I do get a fixed rate salary, but most of the money I make comes from the bonus I get. Some of my co-workers have a 6 figure salary, and someday I'll be there too :D!

Krashed989
11-09-05, 05:30 PM
I make about $8000 a year... because of college taking up most of my time... but its alright though, because I am really good at saving money. I have $1k in the bank right now. and I don't touch that.

I have no credit though... Because my sis screwed that for me by bouncing checks, and missing credit card payments... So now I don't know what I'm gonna do to get credit because I have been declined 6 times already... Do any of you know what I can do?

powerglide
11-09-05, 05:42 PM
I guess you can take out a small loan when you buy something nexttime (if you can) even if your interest is high.
Then pay it back on time every month.....I understand this builds credit.

Kev
11-09-05, 05:58 PM
I make about $8000 a year... because of college taking up most of my time... but its alright though, because I am really good at saving money. I have $1k in the bank right now. and I don't touch that.

I have no credit though... Because my sis screwed that for me by bouncing checks, and missing credit card payments... So now I don't know what I'm gonna do to get credit because I have been declined 6 times already... Do any of you know what I can do?Not having a credit card now for you is not a bad thing. Be patient. Take McCombie's example, if you canít pay cash for it now, you can't afford it and shouldn't get it. Keep saving a portion of every source of income you receive, even if it is only a few dollars worth. The value is not in the dollar amount now but in the discipline of consistent saving habits. In time your savings will grow exponentially.

I wish I had learned that at your age, if so, I would be a millionaire today.

There will be plenty of opportunity for you so establish a good credit history when you are finished with school and earning a respectable wage.

If you learn to save a dime out of every dollar now when they are few it will be easier to save that dime out of every dollar when they are many.

mccombie_5
11-09-05, 06:04 PM
Indeed.

Someone your age does not need a credit card, it will get you into trouble later. Its good in many ways, if you cant get it, you wont miss it, if you can afford it on a credit card, it becomes the standard, meaning you have to borrow more money fro things you want, then they become the standard, and more money is needed to exceed it, but interest rates suck up as much as the loan itself.

Like builing a garage on sand.. Eventually your assets sink.

Krashed989
11-09-05, 06:12 PM
I was saving about 1/2 of every dollar... but then college started and the demand for money increased, while the supply stayed the same. So that's not the case right now... Part of the problem is that I need to get a job closer to the college, because right now I have to drive an hour to get from college to work...

Right now I'm looking to buy a restoration project. so that I can restore it and sell it for profit... but its hard to find a car that you can make profit on nowadays. Well, over here anyway.


Thanx for the advise guys!

Kev
11-09-05, 06:15 PM
At 18 all I could think of was here and now, I gave little thought for the future. I grew up very poor and when I got a job that paid well I foolishly spent all that I earned. When I wanted something, even if it was for a good cause, I would buy it wheter I could afford it or not. I found ways to justify it. I would finance it against some small savings in a credit union and thus began my descent down that slippery slope of indebtedness.

I became eligible for credit cards and found them to be very handy. I made good money and thought I would pay them off quickly and sometimes I did. The incidious part was that I was training myself to get it now and pay it off in time. Things would be on sale that I would not pass up. Not having the cash at the time was no problem, I would just use my card and pay it off before it accumulates much interest. Then something else goes on sale that I need, or a major appliance fails and must be replaced, the next thing you know my balance is climbing faster than an F15!

The bottom line is, learn when you are young and you might avoid these pitfalls.

Stoneage_Caddy
11-09-05, 06:47 PM
I got one credit card ....i started out 2 years ago at a 500 limit , and once a year i apply for another level , last year was 2k and now its 6k ...im not asking for more ....ive wanted a card with this limit on it in case something happens to the car ....

The card is only used for the car ....

Woudlnt have went over a 500 limit on a card ...but when i had to ask dad for money to put the tranny in my car i decided "no more" and id have a card so i wouldnt have to go to him again ...

i still owe for the tranny and have 3k on the card right now , down considerably from the didaster of 9 months ago , when the my job at the VA kept forgetting to pay me and my GI Bill couldnt pay me because of the va screw up ....car repairs and school ran that thing up in a hurry ,esp when you dont see any income for 3 months

MikeB066
11-10-05, 05:03 PM
The overlooked fact behind the MSN article is that they were talking about household incomes, not just individual incomes. The actual figures are available from http://www.taxfoundation.org/taxdata/show/250.html along with some analysis. The figures are based on 128 million tax returns, some joint and some individual so interpreting the MSN article to mean a single person must earn at least $60,000 to live decently is mistaken.

Yes, wages have not kept pace as prices for housing, automobiles, and capital cost items have increased significantly in the last thirty years. At the same time, the average cost of convenience items has dramatically fallen and the useful life of big ticket items has increased. It used to be that cars or appliances would not last more than 10 years unless really well maintained, because some of the technologies were being developed and the engineering had not been worked out. With advances in metallurgy, solid state electronics, etc. we can make things last longer, but we have to pay more for those manufacturing techniques and associated R&D. Today's convenience items that used to be luxury items have fallen. When they came out CD players cost a few hundred dollars, as did VCR's, and now they can be had for less than $50 at Wal-Mart.

The real problem lies not with the rising trend in outsourcing, but with America's mentality of "I want stuff, and I want it as cheap as I can find it!" Manufacturers and service industries are shipping jobs overseas so they can fill stores and deliver services for as little as possible in response to consumer demand. If you are angered by jobs going overseas, stop shopping at discount stores to get the lowest price on Chinese manufactured clothing and pay the premium for an equivalent American product.

A great example would be Dell computers. Dell offers two lines of laptops, the Inspiron line targeted at consumers that comes with the latest components, is manufactured inexpensively, and whose support is handled out of a call center in India. The Dell Latitude laptops are targeted towards business users so they are less likely to change components month to month, are more rugged, cost significantly more, and the support lines are answered in the US. Some people buy Inspirons because they want a cheap laptop, and after two years the thing is trashed, plus they get end up frustrated whenever they have to call tech support. Latitudes on the other hand last longer and are more reliable keeping management and maintenance costs down, so businesses love them. Short term thinking when purchasing goods is the heart of the problem. You can pay less up front and have to replace an item sooner with another foreign made or supported product, or you can pay a little more on the front end to save money long term and keep jobs in America.

Now who is actually going to do that?
:hmm: