Frankly. with the recession and all, I am at a loss to understand how lake homes are still being offered for $749,500 up where I keep my RV.
My RV is small (25′) and it is a 2005 model, and will soon need some maintenance from a RV shop. Where I keep it is on rented space (cheap) so me having a RV on a lake lot and being retired is NOT saying I am rich, wealthy, millionaire, etc.
I just have a small paid for RV on a lake lot that a guy rents me cheap. Anyone could do it.
But back to the offerings for lake homes in the three quarter million dollar range. I don’t see how anyone like me “average” retired or otherwise in this day and time could buy something like a 600,000 lake home on an acre lot. I guess the upper crust has enough to do that, or do they really? The average guy retired can do some stuff like I do at the lake, but not to the tune of hundreds of thousands of dollars, just like the “non retired” worker cannot do a home to the tune of hundreds of thousands of dollars (although they do try and fail mostly).
Let’s face it: You can do ok retired–but you can’t really with any good sense do hundreds of thousand dollar lake houses. If your average and you can do that–please tell me how. Not sure if on your topic or not, but these last two days I was at my RV and I was so shocked that people still think money is limitless like prior to 2007.

@Jacob

It is like the insane prices of your CA houses.
Yes, CA folks make a few more dollars an hour than us SE USA folks draw in. But, not enough to “reasonably” live in the price homes you see out there. Say this area averages $18.00 to $20.00 an hour wage, and CA does $25.00 to $30.00.
Still, the funding is just not there for half a mill to three quarter mill homes. It isn’t there. We can discuss all the ramifications of these McMansions area wide. We can do a median income for the USA. It just does not compute to afford it!! Him and Her and two or three kids and a $500,000 home? Nope, it won’t work, I have tried it copious times on paper. I need to drive out west and see what the land of milk and honey looks like in 2010!!
I just don’t get it either, but then I am slow I guess.

I absolutely enjoy this blog and reads it religiously. I am looking forward to reading your book.

“However, I still struggle with the status anxiety of not being a millionaire like all the other retirees seem to be, so for some reason I am unhappy about having less than some others even though I have enough.”

Oh, Jacob, what a terrible demon it is to have a competitive streak! Just think of all those baby boomer retirees who don’t have even $50k saved up (was it 30% or 50% of the boomers?). You are so far ahead of that crowd that it’s silly.

P.S. My 90-yr-old mom never reached 1/3 of a millionaire, but she’s certainly doing well enough financially after a little luck came her way.

@George

I agree with your figures, and possibly 1000 families could be quite a few qualifiers. If you had been a loan officer, prior to the meltdown, I am sure some buyers would not have qualified, if you went on your calculations as shown in your post.
My point on this topic concerns the many who did not qualify financially, yet bought or were allowed to buy anyway. Further, this madness seems to be continuing in spite of the financial meltdown we are currently under.
Now, I think the guy and gal with the high level IT or management job needs to be looking over his/her shoulder to see if that job remains active. That would not only narrow the qualifiers, but further wreck the real estate business in Portland, or elsewhere. You are very correct that most of us are not in the group to qualify for such a 6K home, and even if I could scrape by the loan company I would never do that to myself or my family. I think that brass ring would quickly tarnish, and the polish to refinish it would not be there, ever again. But, I am pretty old fashioned when it comes to finances!!

I saw a bumper sticker with your new blog slogan on it: “the more you know, the less you need” – it’s an Aborigine saying, apparently… very nice.

Interesting to hear you say that you still measure yourself up to the Joneses once in a while – I guess that’s just human, but you probably have more freedom than they do, and that’s probably more important (they only have the possibility for freedom).

Yep, I saw it today – that’s *after* already noticing (yesterday?) that you changed your slogan – neat “synchronicity” there – what are the chances of that?

You may still have come up with it on your own, too – or the Aborigine you were in a previous lifetime thought it through you…

Although the differentiation is likely just a dualistic artifact …

It’s good to remember the bigger picture. Why do people want to be millionaires? To have piles of cash? When we focus so much on the money, we lose our sights on the bigger goals – freedom to watch our kids grow up, making a bigger contribution, or having a nicer lifestyle.

@Nick – There are two ways people are ruled, politically through laws, which are supposedly equal for everyone, and financially through money, which favors those who have it. In so far these two authorities are respected it is possible to acquire resources either through politics or finance—if the respect goes away the default is force. Money is a proxy for the financial power you wield and what is important is not how much you have but how much you have compared to everybody else.

http://www.marketoracle.co.uk/Article18600.html

The above article appeared today and is well worth reading. This illustrates what I posted some much about in this particular topic.

This is such an interesting post. Comparing yourself to others seems to be a losing battle because it so relative. You can compare yourself to the millionaire retirees and lose sight of the fact that that your cash flow is great and your life is very comfortable. You can compare yourself to others who do not have much (baby boomers who don’t have $50K in savings and feel extremely blessed. The perspective is so critical.

@George –
As these past few years have shown, the poor have owned the mortgages, while the rich rent. The answer has now become apparent given the price collapse. I wouldn’t classify it in terms of rich and poor; perhaps informed and uninformed. Or the elite and the sheeple. In other words, sometimes renting is more expensive, and sometimes owning is more expensive. Indeed, given where Jacob resides it’s cheaper for him to rent indefinitely at todays ownership prices.

Well I have more than spent my nickle on this thread. My apology for so many posts. In summation, here is all I am trying to say:

Think of a mortgage, or any other loan, as a 50 pound bag of dirt. Now you can carry that bag of dirt for several feet, yards, or even a couple city blocks. But when you try and carry that bag of dirt say 5 miles, it gets really really heavy. So then as well goes the mortgage. Usually when you get one (mortgage, car loan, other) your rather chipper in your youth or finances. As time drags by, you –lose your job, incur health problems, get sued, or something along those lines. This is when the bag of dirt gets too heavy to carry. People just simply won’t live within, or better, below their means. There is no risk management considered on the mortgage. No “What if I–what if this happens or that happens–how am I protected and covered so I can continue to service my obligation”? For most people to even “get it” with what Jacob is teaching us, they have to get out of these spend till you drop mindsets.
That’s all I am saying.

@Amy – I suspect this is because zoning laws put a lower limit on the price of a home (through its size) which keeps the poor from owning. It is similar to how minimum wage laws can keep people out of the job market.