Most of my friends work in my industry. By most, I mean, um, all of them. This means that all of my friends make a similar income to me. Everyone spends their money differently, which I find fascinating.
I have one friend who lives with four roommates and one bathroom. I think he makes a bit less than me, but probably still six figures. He has a plain model of an older car. He drives to work every day, though he might carpool.
I have one friend who pays $2,500/month for a one bedroom apartment by himself. He has an older sportscar. He’s older (in his thirties) though (i.e. has been working for awhile now in our highly paid field) and is mostly working for the social aspect. I wonder sometimes if he’ll stop working when he has kids.
One particular friend triggered me to write this post. I think that she makes a bit more than I do, but I honestly doubt it is all that much more.
1. Her rent is comparable to what mine was when I was renting for a similar place.
2. I bought my car brand-new, but it is a subcompact that gets excellent gas mileage and cost me about $20,000, which I paid in cash. She drives a brand-new (as of when she bought it) BMW sedan with leather seats, a sunroof, and many other excellent controls. I have no idea how much it cost her, but I’m going to guess at least $40,000.
3. This is what really gets me. In one sentence, she will say that she wants to have kids in the next few years and then in another, she says that she wants to buy a condo. Her baseline is a place with an amazing view and she doesn’t see herself spending any less than $600,000. From my research on the internet, condos costing above $400,000 tended to have pretty high HOA dues and property taxes are a function of the assessed value. So even without the mortgage, the carrying costs would probably be well over $1,000/month. And at the amount she would be mortgaging, the tax deduction probably would actually mean something, whereas at the level of my mortgage, it doesn’t really. Honestly, if I wanted to live in a place like that (which I don’t), I would prefer to rent even if it cost $3,000/month because of how much risk a $600,000 condo represents – at least while renting, you could keep your savings and maybe keep building them up a bit.
Basically, we look for opposite things in both cars and real estate to buy. I’ve been falling out of touch with her over the last few years – I just don’t have any interest in spending money the way that she does. I’m not at the extreme of the friend who lives with four roommates either though. I’m somewhere in between them.
Readers, where do you fit on the lifestyle inflation spectrum of your friends?