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Comment by legitster | Hacker News Reader

I can relate to a lot of this, I was pretty stinking poor growing up. Now I make good money. (I still buy used tires from shady lots tho).

But even now that I'm making good money, it boggles my mind how richer everyone else still seems. Like, how do so many young people have a favorite island in Hawaii? How is everyone out there affording new cars? People actually picked a college major without thinking about cost?

One thing I have to constantly wrap my head around is that being broke doesn't correlate to income. I have a family and a mortgage and savings and nothing left over for luxuries at the end of the month. But someone working as a bartender can afford a new Jeep and go to Vegas 4x a year because they have a good roommate situation and they are due to inherit their parent's second house one day.

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> Like, how do so many young people have a favorite island in Hawaii? How is everyone out there affording new cars?

The reality is that oftentimes they simply can't, at least according to a responsible definition of "afford".

All we see from the outside is the brand new Jeep, we don't see the fact that they're underwater on a 72 month loan with 6% interest. The average car loan term in 2019 was 69 months, that's insane. Something like 30% of trade ins have negative equity.

Even ignoring debt, I've spoken to a surprising number of people who make great money and live lavishly but have effectively no retirement savings. The level of financial literacy in the US is abysmal.

> Something like 30% of trade ins have negative equity

Could you please clarify what this means. E.g., A car "X" is traded in for a car "Y". X gets a trade-in-value of $2,000. That is, the cost to buy Y is reduced by 2,000. Where does the negative-equity in your point apply here please? Thanks.

Your old car has more debt left on it than you get in the trade-in.

The dealership gives me 10k, but it still has a 12k loan on it. So on top of the cost of the new car, I am still out $2k.

We can help you out and roll that into the loan for the new car.

I would strengthen your statement to say that almost everyone can't afford it. Median household income is around $67K in the US, and the median household assets (minus the house) at age 65-69 is $75K. So even if a third of your income is being replaced by social security, a typical household has not even two years of income saved. A 25th percentile household has less than 5 months! Most people save basically nothing, on net. Even 75th percentile households only have 4 years of income. Assuming reasonable investment returns, that's only saving 2.5% on average. Pensions aren't expensive, retirement is expensive! People, even ones who can easily afford it, often won't save.

https://dqydj.com/household-income-percentile-calculator/ https://dqydj.com/average-median-top-net-worth-percentiles-b...

> median household assets (minus the house) at age 65-69 is $75K

Why would you take out the house? For most people that's a key part of their retirement.

Going into retirement as a renter or with a $500k home paid outright is one of the biggest difference makers.

Selling your house takes time. In a bad economy, it could take a lot of time. Knowing your "liquid" net worth has some value.

But if you own your home you don’t have to worry about paying for a place to live (taxes aside.)

I do see how knowing what your liquid net worth is has some value, but knowing your expenses has value, too.

True. Taxes and utilities do add up. Some neighborhoods also have HOA fees. A lot of people are living month-to-month on their paycheck, so expense is key.

Note: I own my home outright. I bought it in 2000, before the real estate bubble really took off, had a 15 year mortgage, paid it off early.

Right, but that $500k is tied up in your housing, so not really accessible.

I wouldn’t discount it entirely, but home equity should clearly be evaluated differently than cash in the bank.

I’m not sure the, everyone is in debt, is a good explanation for what you’re seeing. Everyone is in debt but that doesn’t allow you to sustainably live beyond your means. Sure you’ll get a small bump on your way to maxing out your credit cards but it won’t take long to reach your limit and then you’re worse off than you were before.

I think a better explanation is small inheritances. I think there are a number of people that have come into small inheritances. Enough to change their situation but not enough to move out of their social circles and because of that they’re very unlikely to let you know.

Say someone gets $500k from their uncle. Not a small sum of money but not a gigantic inheritance. You’re not going to immediately retire if you get that but you might pay off your mortgage. Now ask yourself what your lifestyle might be if someone came along and wiped out your mortgage. Now that Jeep or Audi might not be such a big deal and your looking at them thinking, “how on earth can they be doing that? They’re working the same job I am and I can’t do that”.

I couldn't help but do the same thing when I was reading the article, in the opposite direction: "wait - you had a wife and you were poor?" When I was young and my income was low or nonexistent, it seemed like women could smell the poverty on me and I couldn't even get close to them. It was like trying to sneak up on a grazing gazelle - they'd hear me coming and just sprint to a safe distance. The more money I made, the closer I could get until I finally made enough money that they stayed close enough to talk to.

Even now, married 20 years, the author talks about the burden on his wife and kids if he went back to being poor - I'm sure my wife would just leave if I was genuinely stuck in a poverty cycle with no way of getting out, and I wouldn't really blame her.

That's a very sad way to view the world and people.

Why would it be sad? Women are attracted to security and success. Men are attracted to good genetics expressed physically.

Women may, overall, tend to have a different relationship to security and success than men tend to. Simplifying it to "they are attracted to those things" doesn't align with my experiences though.

This worldview is limiting, even insulting, to both men and women though and you should try not having it.

Since we're tossing random anecdotes, everyone I know in a happy relationship makes less than me.

I'm suppose if I was properly rich and flaunted it, certain women would suddenly be interested, but no person I'd marry.

Women are attracted to stability. You can be a stable and trustworthy poor guy and be attractive to women. Women find unstable psycho rich guys hideously unattractive.

I don’t really understand what’s sad about it. I’m from Bangladesh, where nearly all marriages are still facilitated by family members. When a profile for a man comes in, do you think the aunties are looking at the guy’s hobbies and tastes in music? Of course they’re judging men based on education and earning potential. Why wouldn’t they?

It’s completely rational for women to place a high value on men’s income. The vast majority of people want kids someday. From the perspective of women, that means they need to either find a man with a good job that can support a family, find one who truly can take on half the caregiving and half the bread winning, or can truly take over the domestic role. The number of men who, if they’re not out earning money, can instead have the kids bathed, homework done, and dinner on the table for when the woman gets home from work are vanishingly small. Great stay at home dads exist, but they’re unicorns. Statistically, they are vastly outnumbered by the number of guys who leave the mother of their children to do both the bread winning and caregiving. Thus as a purely rational matter, it makes complete sense for women to seek out men who can at least fulfill the traditional male gender role.

Oh boy...

My wife wouldn't and no woman in a relationship I know would care about this either.

Love is not based on income.

That sounds tremendous depressing.

A partnership is teamwork not two doing different things.

So what if it’s tremendous[ly] depressing? It’s depressing that basically no animal dies of old age in the wild. It’s still the reality.

Your comment doesn’t really seem to be trying to substantiate your claim, so much as it’s trying to paint a picture of how depressing his description of reality is. From that, I’m pretty confident you’re trying to define some ideal definition of love – which, if he’s correct, would not be ‘wrong’ but would simply not be common in the real world – while he’s trying to factually describe the motivations for human relationships in the real world.

(I’m not sure I quite agree with his gloomy picture, but I don’t think you are even coming at it with the same intent.)

He describes his mental image and his current relationship in a way which says 'if I'm poor my wife would leave me'.

In my relationship and in my marriage it's not me who is poor it's us. Or it's us who have money.

And neither of us would leave each other because of money.

And the sentiment his comment convays is at least also not reflected in relationships around me.

All platitudes aside, comparison really is the thief of joy.

Lots of people have very different situations from what they project (witting or unwittingly), they might be running up debt to pay for their lifestyle or maybe they have profitable small side businesses, and bartend for the bills and social aspect.

Focus on your journey, and where you are on the path, don't get distracted with people "passing" you on shorter, longer, or completely different paths.

Certainly. My point was largely that poor vs wealthy is often hard to actually tell.

In the case of the bartender, this wasn't actually a hypothetical: I have more than one friend in this exact situation - they got one good inheritance, are waiting on another, and in the meantime live rent free at a parent's property. In both instances they even get aid from the state.

While they appear poor on paper (and they often describe themselves as poor), they have tremendous resources at their disposal.

I know someone who was doing the equivalent of the bartending thing. Her grandfather was loaded and all major expenses taken care of. She kept it quiet but would give coworkers a ton of shit for general life things that she didn’t have to worry about. “sorry I’m late I had a flat tire.” “That’s not an excuse. You should have found a way to get new tires so you’re not late like me.”

I struggled with this as well and then I started asking people about it, I grew up lower middle class and there were some very rough stretches of time during my childhood.

What I've observed:

1) They're not saving for retirement. $0.

2) They spend a lot using credit. New vehicles with 2k down and high monthly payments. High monthly credit card bills.

3) They have a lot of stuff but are essentially living pay cheque to pay cheque. One thing that surprised me was working at a company that got acquired and payroll got moved to the parent company which had a pay schedule that was 1 week later, so they told us we would get paid one week later than we had historically. Inconvenient, but no problem for me. Out of an office of about 40 people 15 said they wouldn't be able to pay their bills. These were all people who made over 6 figures.

Another thing I've noticed is that many people don't look at absolute price but instead look at monthly payment, I think raising interest rates are going to hurt a lot of people that from the outside seem to have a dream life.

These people are likely not maxing out their 401ks and are borrowing their current luxuries from their future selves.

Comparing finances to others without actually having all the information isn’t worthwhile.

> One thing I have to constantly wrap my head around is that being broke doesn't correlate to income. I have a family and a mortgage and savings and nothing left over for luxuries at the end of the month. But someone working as a bartender can afford a new Jeep and go to Vegas 4x a year because they have a good roommate situation and they are due to inherit their parent's second house one day.

I feel like we don't count our own responsible expenses but double count other people's luxury expenses.

A new jeep is maybe 6k/yr. A trip to Vegas is maybe 1k. That's maybe a total 12k/yr

If you're mortgage is 3k a month and he's paying 500 a month in rent, you throw in two kids @ $1,000 a month and maybe 500/month in savings and you're looking at 66k in expenses which dwarfs the 12k.

I am sorta in the same boat, because I grew up relatively poor I'm paranoid so I save/invest a lot and drive a Honda while my coworkers complain of dealer markups on their new Porsche :)

It would be a real bummer if civilization collapses and it would all be for nothing, but otherwise I hope to FIRE in a few years...

I read all of this in Rodney Dangerfield's voice.

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