CommonCent$ – 40 YEARS TO BROKE & BEYOND – A SIMPLE BREAKDOWN ON HOW SOMEONE CAN WORK A 40+ YEAR CAREER AND STILL END UP BROKE

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40 Years To Broke & Beyond – A Simple Breakdown On How Someone Can Work A 40 Year Career & Still End Up Broke.

 

$2,240,000 @ a $56,000 median household income (2015-2016)

Where does it all go? Monthly payments, interest and taxes

Take a look at the scenario below. Feel free to plug in your numbers.

  • Mortgage / Rent $225,000 + $175,000 interest 4.5% = $400,000 (payment $1080.00 per month)
  • Income Taxes W2 Employee $627,200 @ 28%
  • Property Taxes $60,000 (include with rent total if renting)
  • 6% Sales Taxes On Purchases $30,000
  • Car Insurance $60,000 @ $125 per month
  • Medical Insurance $96,000 @ $200 per month
  • Life Insurance $24,000 @ $50 per month
  • Homeowners Insurance $48,000 @ $100 per month
  • Gas For One Vehicle $96,000 @ $200 per month
  • Groceries $144,000 @$300 per month
  • Eating Out $73,000 ($5 per day is really conservative)
  • Water Bill $24,000 @$50 per month
  • Electric Bill $96,000 @ $200 per month
  • Cable Bill $24,000 @$50 per month (another conservative one)
  • Cell phone $24,000 @$50 per month (another conservative one)
  • House Phone $24,000 @$50 per month
  • Clothes $72,000 @ $150 per month
  • Hair $96,000 @ $200 per month
  • Vehicles 5 new $30,000 vehicles every 8 years =$150,000 @ 4% interest = $175,584
  • Childcare $54,600 (per child) X 2 $109,200
  • Your College $85,000 @ 6.8% for 20 years = $155,720.89 ($70,720.89 in interest)
  • Kids College $85,000 @ 6.8% for 10 years = $117,382.08 ($32,382.18 in interest)
  • Entertainment $72,000 (this is conservative)
  • Christmas $40,000 @ $1000 per year
  • Thanksgiving $12,000 @ $300 per year
  • Discount Wedding $15,000 ($20,000 to $36,000 is average for the DMV)
  • Personal Foolishness Fund $30,000
  • Somebody Else’s Foolishness Fund $30,000
  • Savings $0
  • Charitable Giving (maybe!)

Total = $-2,775,086.92 (expenses) + $2,240,000.00 (income)  

Difference $-535,086.92

Add Home Equity $400,000 (if renting there is no equity)

Home Owner Net Equity $-135 086.92 after 40 years aka BROKE 

Renter Net Equity $-535 086.92 after 40 years aka REALLY BROKE

This does not account for inflation, additional real life scenarios such as layoffs, divorce, home and vehicle maintenance, private school tuition, illnesses, random foolishness, etc.

Stay tuned for CommonCent$ with Jay Cameron – Financial and Life Strategy Workshops in 2017.

Learn SIMPLE, EASY-TO-UNDERSTAND STEPS to help avoid this scenario.

The Solution? Reduce the obvious! Less consumption