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Yeah, this article is really frustrating. The amount of money this family is saving AND spending easily puts them in the "rich" category, as does the kinds of things they are buying. Further, hiding the actual data in a scary-colored table (lotsa evil red!) and drumming up just enough expenses to put them in the negative stinks of a "researcher" with an agenda.

I suppose it is a relatively reasonable demonstration of the fact that people in our society tend to grow their expenses to match their incomes. Although, saving upwards of $50k/year (33+8+principal) is actually quite responsible and their ability to do it is essentially proof that they are NOT "barely scraping by".

To look at it another way, this family is SAVING as much money - after all taxes, after all expenses - each year as the gross income of the median family in the United States.

The linked article is a troll.

And an incredibly successful one. I bet this article is the most viewed article on thefiscaltimes.com ever.

No emotion sells newspapers like mild outrage. The newspaper's job is to make you just a little bit outraged every day. Usually the real news of the world should be more than sufficient to outrage you, but on occasion they like to supplement it with stories like this.

It's almost as good a trick as my personal favourite: the top ten list with one inappropriate item deliberately included.

Not just that, but it actually ran in the Washington Post a little bit ago (bylines Fiscal Times). That's good trolling.

Quite.

I'm actually sympathetic to the argument being made -- that a given income may seem "rich" in one place, but actually not buy so much elsewhere. Living in NJ, I can see this every day.

But when you look into the details of the article, it's hard to buy it. The article says, for example, that it's "impossible" for the parents to clean and dress themselves. Bunk. If the rest of society can do it, why can't this family? Why do they spend so much money eating out, and spending $10/lunch every day at work?

So: ignore the article, but please still consider the fact that what might seem rich in one circumstance may not go as far elsewhere.

Further, at the rate they are paying/saving for their and their children's education, they don't need to do that very long before they no longer need to make the payments.

To present it as steady state is misleading.

EDIT : as other people are pointing out, there seems to be lots of double counting (high insurance premium + full contribution to HSA) and assumptions about steady state costs (cars,clothing) that are either misleading or a lifestyle choice that the family is making.

$36k a year is easily their minimum payment on a $600k mortgage. If they are only a few years into their mortgage, there is no way $20k of that is going to principal.

Your mortgage estimates are crap.

If their mortgage $600k @ 4.25% they will make principle+interest payments of $2,950/mo.

The first year they will pay down $10k in principle.

Year 10: $15.5k Year 16: $20k

So, unless they had the huge house many years before they had kids they are only "buying" 10-15k of house.

You're right -- I'm not in the US and I don't have a mortgage, so I guessed the rates wrong.

You don't need to put $33k/year into a retirement savings account if you're already buying $20k/year worth of house.

This is false. Your house is not consumable in retirement, so you can't really count it as retirement savings. At best, you would be able to downsize. That would extract some portion of the value of the home in order to maintain you through retirement. But you certainly can't count the whole house value as retirement savings.

Reverse mortgage: http://en.wikipedia.org/wiki/Reverse_mortgage

Anyway, over the long term (30+ years) inflation is going to increase the value of a home. Suggesting that a 750K house in a good location gains ~2% of it's value on average per year seems like a safe bet in most areas. Granted, it is a risky investment, but so is buying stocks. Anyway, 20% down + a sane 30 year mortgage on a 750K home really is a fairly large investment. If nothing else at some point they don't have a morgage anymore.

Edit: The point being they could probably be safe only saving say 10% for retirement (25K) and put 8k/year into some other use. They are getting close to the point where they could probably swing a live in housekeeper. (Lunches at work 5k, Day care and Babysitting 15K, Cleaning 5K. Dry Cleaning 1.2K + 8k less savings) = 34.2K / year. They could even cut into that 13,659 /year in Food and household supplies...

You don't need to put $33k/year into a retirement savings account if you're already buying $20k/year worth of house.

After all, house prices never go down, right?

Yep, and you should never buy stock because companies often go broke giving you nothing. Suggesting that perhapse they could only sat 25K (aka 10%) a year into retirement becuase of that huge morgage payment seems reasonble argument IMO.