"100% of people who do not save money do not have any!"--Dave Ramsey

[freebeard]

In fact most people make less in retirement than while they are working - and therefore pay less in Federal income taxes.

I could bring in another $10K a year before I'd owe taxes, but nobody's picking up what [Intellectual Property] I'm putting down.

[redpoint5]

Originally Posted by JSH

However, the biggest impact on your tax rate is not the feds - it is your income in retirement which is related to how much money you have accumulated. The vast majority of people do not have a massive investment portfolio that is earning more investment income in retirement than what they made during their wage earning years. In fact most people make less in retirement than while they are working - and therefore pay less in Federal income taxes.

I'm probably conflating wealth and earning. Most people make it into the top 80% wealthy bracket, but they don't necessarily make it into the top 80% earning bracket.

I'll have to rethink my strategy.

Originally Posted by freebeard

I could bring in another $10K a year before I'd owe taxes, but nobody's picking up what [Intellectual Property] I'm putting down.

If you offer free money, I'll pick (some of) it up. You and I both know we could make more if we could be bothered to. How much do we care about side money being properly reported?

[freebeard]

I'm probably conflating wealth and earning.

"Wealth is a person's ability to survive a certain number of days forward." ― R. Buckminster Fuller

[Piotrsko]

Missed all the back and forth yesterday pm, but it's still hillarious today. Thanks Y'all.

JSH makes the most simple economic sense, doesn't mean I agree 100%.
Can't see Redpoint running day care.
small f freebeard has income issues but seems to scrape by just like most 'po folk.
Xist.... aargh but entertaining. Sometimes.

[freebeard]

freebeard has income issues but seems to scrape by just like most 'po folk.

Income is fine, it's the expense of living (mainly rent and car insurance). I'm at the short end of a fiscal month right now.

I treat it as a discipline.

[Isaac Zachary]

All I know is that money is expensive.

You can't earn something without effort and sacrifice.

Just don't sacrifice what's more important for what's less important.

Make a priority list. A budget is part of that list.

But don't micromanage everything if it's not necessary to do so.

Don't fret over mistakes, learn from them.

[JSH]

Originally Posted by redpoint5

I'm probably conflating wealth and earning. Most people make it into the top 80% wealthy bracket, but they don't necessarily make it into the top 80% earning bracket.

I'll have to rethink my strategy.

Wealth and Income are taxed very differently. The only real wealth tax is property taxes. For anything else wealth is only taxed when it is converted to income and then it is taxed at very favorable rates. Capital gains are taxed at 3 rates depending on income. The current rates for a couple are:

0% up to $83,000 per year
15% from $83,000 to $517,000
20% Above $517,000.

What percentage of people do you think make more than $83,000 in retirement off their investments? The vast majority of retirees pay nothing in taxes yet workers are told to not take a tax break today so that we can possibly get a tax break in the future that most people will never get.

Roths make sense for the very wealthy and people that need to tap retirement accounts before 59 1/2.

[Isaac Zachary]

What about if there's an oportunity to buy a house like this?

It's deed restricted and the family can't make more than $56,000 year, which we qualify for. But I calculate the mortgage payments to be about $2,000 a month! That's half or our or anyone's income that makes that much! I wonder what kind of taxes and other fees I would also have to pay. Seeing how I'd be nearly 80 years old by the time I pay it off I don't think it's worth it.

https://www.homes.com/property/100-o...tn40rjx8qs3td/

[redpoint5]

Originally Posted by Isaac Zachary

What about if there's an oportunity to buy a house like this?

It's deed restricted and the family can't make more than $56,000 year, which we qualify for. But I calculate the mortgage payments to be about $2,000 a month! That's half or our or anyone's income that makes that much! I wonder what kind of taxes and other fees I would also have to pay. Seeing how I'd be nearly 80 years old by the time I pay it off I don't think it's worth it.

https://www.homes.com/property/100-o...tn40rjx8qs3td/

You don't have to pay it off to come out ahead. Paying rent has no equity. You're supplying the equity for someone else.

$2k/mo will be beans in 10 years as inflation erodes the value of money.

My mortgage from 13 years ago on a 4-bed 2.5 bath 2600 sq/ft house is like $1,200/mo with taxes and insurance as escrow. The rental value is $2,600, or double my cost. I paid $217k, and it's valued at $517k. I've got like $400k in equity from the house in only 13 years, and the mortgage has entirely been paid by renters throughout this time.

If you can afford to buy AND a lender is willing to fund your purchase, it's almost always the best long term plan.

I take out the largest mortgage lenders are willing to give me because they actually are quite conservative these days when it comes to their threshold for debt to income. If they are willing to lend the money, I'll easily be able to pay because I'll always make any adjustments needed. Even if I lose a job, I'd just rent out a couple rooms and the mortgage would be paid.

[JSH]

Personally I would never take out a mortgage that was 50% of my net income. They are estimating a payment of $2185 a month which likely includes taxes, insurance, and PMI.

How does someone that is paying 50% of their income on a mortgage afford to do the maintenance on a house? Or eat for that matter. When the furnace goes out and a new one is $7,000 - then what?