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Frugal couple accumulate large nest egg by choosing not to live beyond means
Seattle Times ^ | 01/04/04 | Kathleen Lynn

Posted on 01/04/2004 1:31:24 PM PST by Holly_P

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To: dalereed
Luckily, all we have is our mortgage.

I have a Lab, Sheppard, and 3 kids because some guy told me that they increase in value. So far he's been wrong, but it's great fun.

We buy what we need, save up for what we cannot afford, and monitor down to the penny.

As we tell our kids: There is alot that we want, but nothing that we need.

21 posted on 01/04/2004 1:59:06 PM PST by baltodog
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To: dogbyte12
re: Look what is going on here. Dad paid for college. They have no kids. The wife isn't at home, but working, even though they don't need her to do so.)))

I was thinking the same thing--especially the "no kids" part. You don't get this much ahead just by driving a modest car and shopping at KMart and living in a rundown neighborhood...They're selling a false hope.

Not to mention that he's an academic and probably has posh benefits.

22 posted on 01/04/2004 2:00:51 PM PST by Mamzelle
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To: Holly_P
"I can purchase anything I want because I have a financial nest egg."

She's right. I'm not in her position now, but I have been before. Somehow when you're financially solvent the "want" factor subsides to a reasonable level. With a nest egg you have more freedom and true buying power.

I'm working my way back there.
23 posted on 01/04/2004 2:02:50 PM PST by avenir ("If there's one thing I can't stand, it's being tortured by someone with cold hands"--Dr. Who)
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To: PISANO
If I exclude the home and can include my condo I guess according to his formula that qualify for "wealthy" since my net worth is more than double his formula. As for CC, and time payments, i've never had a balance on a CC and never in my life bought anything on credit. If I don't have the cash, I can't afford it and don't buy it.
24 posted on 01/04/2004 2:03:08 PM PST by dalereed (,)
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To: PISANO
That must mean that their savings/401k's/IRA's etc have to be 400k more than their mortgages/credit card bills/liabilities. That seems pretty steep for a 40 year old making 100k per year. Am I missing something here?

Perhaps. It is not so hard to do with compound interest and taxfree investments. The paths of living with debt to make other people wealthy, and having compound interest work for you to make you wealthy, diverge rather quickly. The fact that this couple has no children makes it much easier for them, but I know a couple who did the same thing with four children, and they lived quite well. The U.S. is such a wealthy country that ordinary people who are willing to be a little frugal can accumulate wealth over two to three decades.

25 posted on 01/04/2004 2:04:11 PM PST by marktwain
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To: dogbyte12
"I would rather die with "just $100,000" in the bank, and get nicer clothes, than die with $400,000 sitting in line at the K-mart waiting for the blue light special."

LOL! You're right, there is some balance there.
26 posted on 01/04/2004 2:05:06 PM PST by avenir ("If there's one thing I can't stand, it's being tortured by someone with cold hands"--Dr. Who)
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To: dalereed
My ex wife retired 10 years ago by living exclusively on the $500/mo social security disability payment she recieves along with the $1,800/mo alimony I pay her. Of course she was able to buy a new home with the equity from the sale of our former home. She's pretty frugal.
27 posted on 01/04/2004 2:06:26 PM PST by umgud (speaking strictly as an infidel,,,,,,,,,,,,,,,,)
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To: dogbyte12
I noticed that too - it's amazing how much kids cost. Yeah - if I wasn't paying for the kids orthodontics, my college tuition, kids school clothes, live in a decent neighborhood so my kids can go to nice schools, etc. etc. and both of us worked, I guess I wouldn't have as much credit card debt either.
28 posted on 01/04/2004 2:10:21 PM PST by deziner
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To: kcpopps
True about the property taxes....depressing, isn't it?
29 posted on 01/04/2004 2:14:43 PM PST by what's up
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To: Holly_P
My New Year's Resolutions -on the financial front- are to put away $6,000 in savings, $700 in my 401K, reduce my taxable income by $1,000, and shave $2,000 off my credit card debt.

The bills will kill you if you let them get out of hand (i.e., live beyond your means).BTW, I'm in my mid-20s and making OK money, which is why some of those #s seem low.
30 posted on 01/04/2004 2:17:34 PM PST by Conservative til I die
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To: Holly_P
Holly, if I can offer one bit of advice, a good way to stay out of debt is buy a used car. I bought a new Civic, which is still a great car, but gas and the monthly payments come out to almost $330 a month. Nevermind the $175 or so for insurance.

If I could change one thing I would have started with a decent used car.
31 posted on 01/04/2004 2:21:26 PM PST by Conservative til I die
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To: kcpopps
my wife and I inherited her grandparents home. We have no morgage, credit card, or car payment, DEBT FREE!! But that property TAX really gets under my skin. It is in fact a rent payment, and I know that I really don't own my house, the government does.

We have made many choices to stay debt free, even bypassing the 0% down for 5 years for a decent car. But it's nice to wake up in the morning and not be forced to go to work because someone will take away my stuff if I miss a payment.
32 posted on 01/04/2004 2:22:52 PM PST by duk
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To: dogbyte12
I would rather die with "just $100,000" in the bank

By your logic, why even bother dying with $100K in the bank? Why not spend it all?
33 posted on 01/04/2004 2:24:17 PM PST by Conservative til I die
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To: Holly_P
Looks like they have no children. So, guess who gets all their money when they go? Sam, everybody's uncle.
34 posted on 01/04/2004 2:25:10 PM PST by Alouette (Proud parent of an IDF recruit!)
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To: Alouette
We don't have childern either but I paid my nephews way through college and what might be left after we die will go to nephews, nieces, and FR.
35 posted on 01/04/2004 2:31:12 PM PST by dalereed (,)
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To: kcpopps
Excellent point!
36 posted on 01/04/2004 2:32:22 PM PST by octobersky
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To: Holly_P
I'm not old enough to have accumulated any debt (Or wealth) I hope to avoid the former and embrace the latter.

Want some free advise?

Don't buy a new car every 3-4 years,
and when you do buy a car, don't buy more car than you need.
Don't buy anything with a credit card. always pay cash.
Max out your employer's 401k or 403b plan.

37 posted on 01/04/2004 2:36:59 PM PST by woofer
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To: Holly_P
It'd be nice to be in that situation, but yeah, some of the things in their lifestyle that make it possible aren't workable for a lot of us. They don't have kids, and that makes a huge difference.

Still, we can all recognize the choices we made that took us out of that league. Like getting married.
38 posted on 01/04/2004 2:38:19 PM PST by Clinging Bitterly (President Bush sends his regards.)
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To: Holly_P
Meaning no disrespect to anyone, but how "rich" are you if you have no children? What is our purpose on Earth? To die with a fat bank acount? My children are my reason for working my ass off - to provide for them (not for me).
39 posted on 01/04/2004 2:38:37 PM PST by mcenedo (lying liberal media - our most dangerous and powerful enemy)
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To: woofer
Don't buy a new car every 3-4 years, and when you do buy a car, don't buy more car than you need. Don't buy anything with a credit card. always pay cash. Max out your employer's 401k or 403b plan.

And don't let any of these knuckleheads tell you that saving too much money is a bad thing.
40 posted on 01/04/2004 2:38:41 PM PST by Conservative til I die
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