Seeking advice

[LivingAlmostLarge]

TH Hi! You're back.

Anyway I noticed that too that as you make a lot more income and a lot more disposable income the rules sort of curve.

[disneysteve]

as you make a lot more income and a lot more disposable income the rules sort of curve.

Very true. All of the rules of thumb we talk about are geared toward the vast majority of people who occupy the mid section of the bell curve, not either extreme.

The rules do change at the ends of the curve because most everyday expenses are regressive. The less you earn, the bigger a chunk of your income they suck up and the more you earn, the smaller a chunk they require. A gallon of milk is the same price whether you earn 20K, 200K, or $2 million. So TH's person making $1 million/year can afford to spend a larger percentage of income on housing that the average person making 50K or 100K because a lot of standard costs are minimal in the big picture.

The same is true of cars. I've never spent more than 25K on a car but that was 1/6 of my income or more. If someone makes $1 million, 1/6 of their income would be $167,000. If they go out and buy an $80,000 car, they've actually spent less of their income than I did on the 25K car.