patrick.net

PS' example is also not quite frugal by my standard.

rent: $ 1500 per month (2BR condo good enough in the Almaden school district, Leland HS is a very good public school)
utilities: $ 200 p.m. (no heating needed for winter, just put on more clothes)
two cars: $ 450 p.m. (Pump up at Costco can save a bit, Honda Civic is my car!)
food: $ 400 p.m. (cup noodle is good soul food)
clothes: $ 50 p.m. (why does one need to constantly buy new clothes? We stop growing after 18, right? Just watch the weight then no new clothes needed)
misc.: $ 500 p.m.

$3100 p.m., $37,200 per year. I think you can save quite a bit with such a small expenditure.

tsusiat,

there's a big gang problem up there in Vancouver, especially among the kids of the wealthy parents who are still scooping up the last bit of gold thousands of miles away.

A few months back, two Chinese kids got shot in the bar after getting into a fight with another Chinese kid. It stirs up a big emotional story in China because the the dead kids had two blog sites showing off their lifestyle to fellow Chinese across the ocean. They were driving drinking like mad, and their girlfriends were showing off their own lavish lifestyle on the internet as well, arousing lots of envy and jealousy of course.

So when the news broke out, the internet in China was filled with hoorays and schadenfreude chanting that corrupt parents eventually met their fate, deservingly.

I have seen with my own eyes the conspicuous consumption of the youngsters. Let me just put it this way, thou shalt not get in the way of other people's self-destructive lifestyle, they will eventually live a life they deserve.

Owneroccupier,

I see the news out of Vancouver on a daily basis. Sad to say, you are pretty accurate as to your take on the situation there.

As to the situation in China, I have no idea, but your insight sounds pretty reasonable to me.

I have to agree with PS that 120K/year in coastal US is an OK income, for a real household (with a wife and a husband). It's even worse for a household with kids.

It is only OK because one has to live a "respectable" life in a respectable community. That kind of "respect" costs money.

I've seen a family who made $80K (two teachers) in Orange County and sent their kids to top-rung Ivies. I know because ......

Everything is possible.

That's why I am often confused by this world. It's quite absurd, if you ask me.

Sometimes, I just want a world war that kills off 80% of the world's population (excluding moi).

ps,

I was half joking. Food is one area that I don't skimp on, since we are both health nuts.

Bay Area actually has a wide range of choices for all price points depending on what kind of service and goods one desires. I find the general price level to be very competitive, even compared to cities like Shanghai if you want the same quality. The myth of BA as a place of high cost of living is entirely skewed by housing cost alone.

tsusiat,

You misunderstood PS. He makes much more than 120K/year. He was just using that number as an example.

Also, education is over-rated. Yours truly stopped listening in class since the 2nd grade -- perhaps never listened in class -- and was frequently reprimanded, and a few times received physical punishement, as a result. Few people ever learn anthing of substance at school and in college. It's all about a diploma with a recognizable name stamped on it. But that name makes all the difference. So you want to send your kids to Harvard, Yale, Princeton, period.

There are two kinds of education: vocational and liberal. Most education today is of the former type. True liberal education should be given to children of means and prepare them to rule (more wisely).

Since education is by and large a sham, merit-based admission makes absolutely zero sense. A merit-based system only attracts certain type of people who are good at following an established path and are willing to twist their minds to conform to a pre-ordained pattern; in other words, slaves of certain variety. When a country starts to boast its broadbased, merit-based education system, you know it has reached its peak.

Regarding education: The highly schooled Chinese was conquerred by illiterate Mongols and Manchurians. The same could probably be said of the Romans.

PS-

Follow me closely,

the fact that you don't admit to knowing anyone who makes less than $100,000/yr in the Bay area indicates you are, by definition, no more in touch with the "reality" of the Bay area than I am.

If you weren't talking about your_current_situation, what were you talking about?

If you pulled the number out of a hat, why not pull out the median income and talk about that?

For every million dollars you tell me you make, I'll name you 3 countries I've visited.

For every graduate degree you tell me you've got, I'll tell you all about the years I spent smokin' doobies and playing music.

Now those were good times...

No, actually, why_don't_you_just_tell_me_what_your_situation_is_so_there_won't_be_any_misconceptions_about_the_relevance_of_your_observations!

tsusiat,

You are demanding a very personal revelation from PS. I think it inappropriate for you to do so.

But I feel your angst.

ps wrote:
Assuming you live frugally in a 3br/2ba SFR in the MontaVista or Lynbrook high school districts in Cupertino:

rent: $ 2500 per month.
utilities: $ 300 p.m.
two cars: $ 500 p.m.
food: $ 500 p.m.
clothes: $ 200 p.m.
misc.: $ 500 p.m.

Please help me understand how you feed two adults and two high school kids with $500 per month. Every time I leave the grocery store with next to nothing, it's $50+.
I have heard of high school kids (at Lynbrook actually) with a daily lunch budget of $0.50. Since there's nothing to buy for $0.50, they go hungry every other day.

GC,

I demand nothing, I'm just needling the impoverished hundredthousandaires at this blog who are very concerned that the wisdom of their decision to rent might be misconstrued as anything but "frugality", as opposed to, say, necessity...

Mind you, if PS is wealthy on an order of magnitude above say, $120,000 per year, it seems odd that he would choose that number to illustrate the possiblility of makin' a life in the bay area, if only one is frugal and parsimonious.

I think Hall and Oates had a song about being "Out of touch..." back in the 80s...

Look at this South Bay Townhouse.

http://www.craigslist.org/sby/rfs/157081160.html

It is a "SHORT SALE"

I have not seen this before.

Peter P

$640,000 -

and the fridge is NOT included?

WTF???

Peter P

$640,000 -

and the fridge is NOT included?

WTF???

Sorry for the double post.

Night all!

Sorry for the double post.

No matter how many times you post you still cannot get that fridge for free! :)

PS, agreed. I should've replaced word "education" with "schooling" in most places.

Did you guys take a look at Forbes' slideshow on Bilionaire Bachelors? (http://www.forbes.com/billionaires/2006/03/08/06billionaires_bachelors_slide.html?boxes=popslide&boxes=custom)

Is it just me, I thought the only attractive guys are the Saudi Prince (a bit old), the Lebanon guy (the coolest), and perhaps the German guy called Stefan. The North American guys are pretty, well, nerdy.

I'm not a gay.

New thread: Duh!

PS-

so you need the last word do you?

What's the matter, you don't mind intimating you know all about family economics, pray tell, based on your "examples" you know less than you pretend.

Rinse, repeat.

My comment BTW was not directed at any earlier commentary between you and Astrid, nor does it need to be.

I don't bother reading every word of every thread here because, hey, I have other things to do also.

My comment was a very basic one, people who make $120,000 per year are wealthy by any stretch of the imagination.

Deal with that, if you can....

Also, my other basic point is that anyone who spends $30,000/yr on rent and $6,000/yr on food for a family of four needs to give his head a shake.

If necessary, I suggest moving somewhere a bit cheaper!

PS-

re cheaper rent,

Don't tell me that's impossible now, this blog is full of people quoting the soon to appear bounty due to overextended borrowers needing "income" for their "investment" properties.

Also, check out the graphic at the front of this site.

ps, Tsusiat, and Owneroccupier,

Sorry about being unclear in my wording. Reading your exchange made me feel like dead writer or Ben Bernanke! :) I think of 100-150K as upper middle class and 150K+ as wealthy. These are not strictly Bay Area measurements, but as I've mentioned before, I know very few people who are making $100K+ individually 3-5 years out of college.

My friends almost all went to "top" schools and they still budget for student loans. They'll be in a position to have kids in their early 30s, especially if the housing prices go down by 50%+ and their wages keep up with real inflation. But these are really pretty exceptional people, top 1-5% of the population.

I think there was a study out there that showed very few rich people consider themselves to be rich, even though most other people think they are. Detroit auto execs making $200K a year still think of themselves as middle class or upper middle class, because they live amongst higher ups making $500K a year, and so on. High achievers in BA think they're not making so much, but they don't remember the lawn guys or babysitters who come to their 1,500 sq ft PA POS to take care of their needs.

What about all the people working for $10/hr or less? Even in the BA, there are a lot more of those than people pulling $100K+. I don't think we can ignore them when looking at the whole picture.

I have a good friend who made $22K/yr gross who lived in BA for a year. And he was carrying college loans and bought a new Sentra. So it can be done, even here, if you're super frugal and single/not dating.

I also think the misc. would go a lot higher if you have 2.5 kids. The family health insurance costs and copays can really add up. Also, kids have a lot of costly school activities like school uniforms, etc. Brown bagging is a nice idea, but not really doable if both parents are working hard to just pull in that $100K+. Kids seem to magically quadruple all family activities - popcorn in movies, motels on road trips, and birthday parties.

College expenses are also going up very fast, and even if you shield all the savings in tax deferred accounts, @$120K, you'll still be responsible for the entire tuition for at least one kid, and a good chunk of any simultaneous collegiate.

Also, a family with kids is more economically fragile if something happens to one of the wage earners. They can't dramatically cut their costs because of the kids. I personally wouldn't feel comfortable raising kids unless I know I can still do a decent job if the family gross income dropped by half. (Doable! Insist my parents, if you ship them to China. As if I'd ever send my kids to a Chinese public school!) Once again, not ditching on kids, just being very conservative about costs and risks.

My own ’situation’ is not relevant, and it would be ridiculous to use that as a basis for where this discussion started out.

I have already disclosed the context of my observations - they are based on a sample that I am aware of. Take it for what it is worth.

I merely made a comment about your "budget".

Show me where it says I need to read an entire thread to make a comment about a "frugal" budget like yours.

LOL!

Astrid

my point is that, though Parick.net seems flooded with "elitists" who consider good money poor money, the reality is more than half the families in the Bay area get by on significantly less than what PS quoted.

So regardless of his financial situation, I merely called him out on the idiocy of his budget.

I didn't intend to start a long flame about how tough it is to survive on $120,000/year, but I have to say, the whole thing is pretty funny.

BTW - PS, where exactly does credit card debt fit into your "budget" - under "miscellaneous"?

PS-

Sir,

you are under the misapprehension that you control the rules of engagement.

I was commenting on your budget.

deal with it.

I think of 100-150K as upper middle class and 150K+ as wealthy.

It is very easy.

Anyone who flies commercial (first class or animal farm) is in the middle class. Anyone who can Conservatively Afford (tm) private aircrafts (jet charter, frational ownership, full ownership) consistently is wealthy.

Anyone who cannot afford to fly in any plane is in the lower class.

Peter P,

fly where, Reno or Kathmandu?

Anyone who flies commercial (first class or animal farm) is in the middle class.

There are CEOs of $1bn companies that fly commercial. Didn't Roger Sibone fly commercial even though he ranked as one of the top 100 wealthiest in the Valley for a while?

PS -

I know you care, you know you care...

I know you can't stand to be thought of as an elitist,
but on the other hand, I know you're not one of "the people".

According to your budget and your definition of "wealth", your $120,000 year number places such a family in the "upper middle class".

So I guess you're saying you know nobody below the Upper Middle Class,

or for that matter, you know nobody who really does live "frugally" as Astrid noted earlier.

Please do not keep trying to maintain how tough it is to get by when you have 25% of your discretionary earnings to spend or save, even after your rather high rent payments are factored in.

Need I mention the people in the income bracket you mention who bought houses say, 10 years ago, quite possibly have mortgage payments nowhere near to the rental expenses you quoted.

Are they not "wealthy", if their mortgages clock in at 1500 to 2000 per month? This is not that unlikely -

http://tinyurl.com/k4n2p

There are CEOs of $1bn companies that fly commercial. Didn’t Roger Sibone fly commercial even though he ranked as one of the top 100 wealthiest in the Valley for a while?

The point is that Roger Sibone could Conservatively Afford â„¢ private aircrafts. The fact that he chose not to is less important. :)

fly where, Reno or Kathmandu?

Anywhere.

RE: animal farm reference...

We overheard flight attendants using that term...

Peter P,

That's a relief, thank god I'm not one of the mob!

ps,

Now that we have the definitions cleared out. I'll just restate my original sentence.

If you're a newcomer to BA without substantial savings, you have to be in the upper 20% income to give your kids a good education. All cleared? :)

One problem with the BA is that it attracts so many overachievers who are enslave themselves to their employers in return for "equity" in a $1M plus POS. They could double their living standards easily by moving to almost any other tech center.

PS-

No shit you are the shit, man.

ps,

(forgive me for sounding a bit GC right here)

I do wonder about the all sacrificing parents. I think of kids as sort of the ultimate in consumable goods. There's almost zero change, especially in the middle and upper middle classes, that kids will return any investment to the parents, yet they cost a tremendous amount in time and money.

So my first question would be - are parents all brainwashed?

And my second question would be - is parenthood really be so rewarding that it's worth forgoing 20 years of nice restaurant, frequent sex, chance to ditch spouse for better model, living in an urban environment, financial security, etc etc?

:) How much do you value your child?

ps is pretty awesome, isn't he. He even knows who Frank Kingdon Ward is!

change = chance

(maybe I need drugs, pronto!)