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Comment by rfrey | Hacker News Reader

That means you earned more than $80,000 post-tax income surplus to your needs. That surplus is a third more than the US average total household pre-tax income.

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But the average household probably also isn't in 240k of debt unless they made very very poor financial choices.

I went back and checked my records. It was 140K! oops. Anyways, here is my list.

85k in student loans 30k 401k loan 20k car loan 30k car loan

So 46,000 in disposable income? That's a massive amount of money by normal-person standards.

Hell, the fact that you had $30k in a 401k that you could borrow from yourself already makes you exceptional.

Yes. I had ~$500 payments for each of those every month. Luckily, once I got the first one paid off, I was able to roll that previous payment into the next one.

401k match is nice and I'd had been working for 5-6 years when I did this, so it was vested.

I was in a deep hole, but I had a big shovel. I wish I hadn't dug the hole though. I encourage others to not dig holes either now that I've learned my lesson the hard way.

How was this "the hard way"?

going into debt in the first place is the hard way.

People say "I learned it the hard way" when in the end they lost something for eternity, went through suffering etc. Like a recovered drug addict with permanent health damage or someone who turned on the path of crime and spent his youth behind bars or something. To me it seems like you had a pretty good life, took on some debt to live even more carelessly and then matured and calmed down and channeled more of your disposable income into paying back said debt. I don't see the hardship based on your comments so far.

you know there are gray scales in life, right? Things can be hard without somebody dying. Marriage is hard. Raising children is hard. Those things are hard without dying, drug addiction, or other exceptionally hard circumstances.

You mention some pretty heavy consequences to learn lessons.

I'd say committing to something for 3-4 years that means telling yourself NO is pretty hard. Its not "survive being a Vietnam Prisoner of War" hard, but I never claimed it was.

Well said reply.

Actually, "learned it the hard way" refers to making the mistake yourself, rather than learning from someone else's mistake and avoiding making the mistake yourself at all.

It's better to learn from others mistakes, than to "learn it the hard way".

"The prudent sees danger and hides himself, but the simple go on and suffer for it." - Proverbs 22:3

Or they're in the US and had to go to hospital for treatment?

Or student debt; a doctor going 200k into debt for med school probably isn't exactly in dire financial straits.

I'd feel bad for a med student halfway through that gets sick. 100k of debt and no degree. yikes!

this is correct, the median household has a (positive!) net worth of ~$120k. you have to go down to the tenth percentile and below to find households that actually have negative net worths.

https://dqydj.com/average-median-top-net-worth-percentiles/#...

I do not think that "240k in debt" (he clarifies it was 140k in another comment) actually means owing 240k more than your total assets.

As far as the median net worth, that's just someone most of the way through paying off their mortgage...

I find it really hard to believe that only the tenth percentile has more student debt than savings. Virtually everyone I know in the 20s, and many in their 30s with advanced degrees, all have more debt than savings.

that shouldn't be too surprising. the lower net worth buckets are made up disproportionately of younger people who a.) are still paying off student loans (if they took them), b.) have yet to reach their life peak income, and c.) haven't had as much time to accumulate savings. if you look at the breakdown by age on the page I linked, you'll see that median net worth increases almost monotonically by age bracket.

you might also consider that there is probably some sampling bias in your social circle. I'd guess it disproportionately consists of people who have advanced degrees, possibly from more expensive schools. as a counter-anecdote, most of my friends got STEM degrees at a state university. the ones who took out loans paid them off completely within two years of graduation.

You're right. But I also changed my mentality. We became intentional with our money. Its amazing how you can find money in a budget to put towards debt. Its also how you stay out of debt going forward. You learn to prioritize your spending.

It’s amazing what you can do when you earn way more than the median household.

Yea. You can get $240k in debt.

Good luck getting anyone to lend you that kind of money if you're actually poor.

Someone who is able to get deeply in debt basically by definition has access to money. They would not be granted loans otherwise.

the largest portion of my debt was student loans (over half), which anyone can get in the US (not sure about other countries).

This is one of the hardest things to explain to people.

Here is a thought experiment. Lets assume that the minimum required to live in a given place is $20K.

So now you have two people, one makes $30K, the other makes $40K. How much more does the second one make compared to the first? Twice as much. At $30K, you have $10K disposable. At $40K, you have $20K disposable. And someone making $60K is making four times the disposable compared to $30K.

Once you get above cost of living, everything gets easier.

When we were looking for an apartment between selling and buying houses, I was surprised by how there is a decided floor to rent prices. Like nothing exists below a certain point. Somehow I felt we could just get a super cheap place because I thought housing price would scale with income. I was surprised when I found out it didn't. So your cost of living example holds up in my experience.

That's the result of housing shortages. Landlords can pick their tenants and since they don't run a charity they usually rent out to the highest bidder. The obvious solution would be to increase supply.

I think you're getting downvoted because you're missing the point somewhat. You had the opportunity and means to change your mentality and become 'intentional' with your money, and learn how to prioritise your spending, because you've had such a surfeit of wealth compared to the average that you won't have faced the same problems others would (and still) have. That's fantastic for you, don't get me wrong, but for many people it would sound quote tone-deaf.

If you can afford to put aside almost 100k a year and still live comfortably you are decidedly not in the class of people for whom saving is, if not an impossibility, a luxury.

We're not just talking about Pratchett's Boots Theorem[1], but also the fact that such people are quite literally only one or two paycheques away from total disaster. These are the people who can't afford to save because every penny is spent on merely surviving, and they can't amass the bare minimum amount of wealth it would take for them to be able to lift themselves out of that situation.

[1] https://moneywise.com/a/boots-theory-of-socioeconomic-unfair...

Being poor is only something you can truly understand once you've tasted it yourself. The stress alone feels like it's shaving many IQ points from your baseline. Even then, I got only a limited understanding compared to people in the third world. (not going for the misery olympics here, just an observation)

I completely agree here. I've never been poor. I can't imagine how some families feel that grew up in the south Chicago projects. The stress has the be very brutal.

Having been there, I second that. Juggling late utility bills in the middle of winter against having food to eat. If you come through that, it hangs with you forever in ways that others that have not will never understand. Even though that life is almost forty years behind me now, it clearly affects my life decisions every day. I am aware of that, and I manage it, but it is always there. Like you, I am not going for the misery olympics either. Just don't assume that, given my career and place in life now, I am not happy with my perfectly maintained fourteen year old car. I know I can afford a new one, thank you very much. But spending that kind of money, just because I can, does not bring me comfort. People that have never been poor will never understand that.

The deepness of my debt and the steepness of my accent are just variables in the equation.

Many people are 1-2 paychecks away from total disaster, but they never take the step to make a change. It can certainly feel impossible. But the reality is "merely surviving" has a broad usage. I know lots of people that are living paycheck to paycheck, but have the iPhone X.

https://www.daveramsey.com/dave-ramsey-7-baby-steps

I don't know if you're shilling this guy or drank too much of his kool aid but it's still blind to the reality of the situation seen across the entire world. You're talking about your 'equation', which is not the same equation other people are subjected to.

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