Student loan payments: Actual numbers

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Old Gregg
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Re: Student loan payments: Actual numbers

Postby Old Gregg » Fri Jan 15, 2016 12:27 pm

Anyway, not to bring up the argument of paying down loans v. investing again..but with the way the stock market is going...this is exactly why paying down loans may be better. This shit is supposedly going to be as bad as 2008 according to some.


This is one of the most stupid posts in this thread, and I'm quoting this for posterity.

1) I actually do believe we're headed for a recession (although many people have been saying this for years, so just because you're right when you keep saying x team is going to lose for once, doesn't mean you actually have any predictive ability).

2) A recession "as bad as 2008" is really saying something. It's saying that a recession as bad as the last one, which was as bad as the Great Depression, will happen literally within 8 years of the last one. Weird to say that considering there are decades separating the Great Depression from the Great Recession. Generationally-impacting recessions don't happen as frequently as you believe.

3) "We're heading into a recession" implies that there was a recovery, which is a questionable assumption when you look at the fundamentals.

------------------------

Should any of the above impact your decision to invest? FUCK NO.

1) You're not a short-term trader. When you invest, you invest for retirement. This means you're looking at investment vehicles which, over say 30 to 40 years, will give you returns adjusted for recessions, depressions, etc.

2) There are plenty of financial instruments for (1) above.



But even funnier, your suggestion is that you allocate your money from investment to.... your loans? I'm sorry... but what will that accomplish? If you're fired because of the recession, you will still be unable to pay your loans after your emergency fund is exhausted. At best, your principal will be somewhat lower, but you're still fucked.

If you want to be risk averse, save more cash to prepare for the possibility of losing your job.

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Old Gregg
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Re: Student loan payments: Actual numbers

Postby Old Gregg » Fri Jan 15, 2016 12:31 pm

this whole, "can't time the market" thing has gone way too far is total puffery put out by institutions who have absolute interests in keeping you invested.
the market is clearly in free-fall now. doing "nothing" is timing the market just as much as buying in or out assuming your transaction costs are free. if you really think that there's an equal chance that the market goes up in the next month as down, sure, don't stray. but I have absolutely no idea you could come to that conclusion.



The "timing the market" argument exists because, presumably, when you throw your money in an index fund, you're throwing it for gains that'll happen over 30 to 40 years, not because you're looking to liquidate in 3 to 4 months. If you're a short to medium term trader who actively manages their portfolio, then you should absolutely time the market, and you should know when and where buying and selling opportunities present themselves. If you're investing for retirement or for the longer term, there are few non-actively managed investment vehicles that will beat an index fund.

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lacrossebrother
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Re: Student loan payments: Actual numbers

Postby lacrossebrother » Fri Jan 15, 2016 2:54 pm

Old Gregg wrote:
Anyway, not to bring up the argument of paying down loans v. investing again..but with the way the stock market is going...this is exactly why paying down loans may be better. This shit is supposedly going to be as bad as 2008 according to some.


This is one of the most stupid posts in this thread, and I'm quoting this for posterity.

1) I actually do believe we're headed for a recession (although many people have been saying this for years, so just because you're right when you keep saying x team is going to lose for once, doesn't mean you actually have any predictive ability).

2) A recession "as bad as 2008" is really saying something. It's saying that a recession as bad as the last one, which was as bad as the Great Depression, will happen literally within 8 years of the last one. Weird to say that considering there are decades separating the Great Depression from the Great Recession. Generationally-impacting recessions don't happen as frequently as you believe.

3) "We're heading into a recession" implies that there was a recovery, which is a questionable assumption when you look at the fundamentals.

------------------------

Should any of the above impact your decision to invest? FUCK NO.

1) You're not a short-term trader. When you invest, you invest for retirement. This means you're looking at investment vehicles which, over say 30 to 40 years, will give you returns adjusted for recessions, depressions, etc.

2) There are plenty of financial instruments for (1) above.



But even funnier, your suggestion is that you allocate your money from investment to.... your loans? I'm sorry... but what will that accomplish? If you're fired because of the recession, you will still be unable to pay your loans after your emergency fund is exhausted. At best, your principal will be somewhat lower, but you're still fucked.

If you want to be risk averse, save more cash to prepare for the possibility of losing your job.

Pretty sure he was talking about the strategy where instead of paying down loans on the 10 year plan, you do PAYE and invest the difference hoping to come close to a 6.5% return therefore not losing money and also staying somewhat liquid. That liquidity isn't necessarily for an emergency fund.
But don't let this observation get in the way of a good opportunity to be condescending.

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NoBladesNoBows
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Re: Student loan payments: Actual numbers

Postby NoBladesNoBows » Fri Jan 15, 2016 3:22 pm

Last edited by NoBladesNoBows on Sun Aug 14, 2016 7:22 pm, edited 1 time in total.

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Old Gregg
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Re: Student loan payments: Actual numbers

Postby Old Gregg » Fri Jan 15, 2016 3:39 pm

But don't let this observation get in the way of a good opportunity to be condescending.


Oh awesome. I was worried for a hot second that you hadn't taken your own advice to heart.

krads153
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Re: Student loan payments: Actual numbers

Postby krads153 » Fri Jan 15, 2016 3:46 pm

lacrossebrother wrote:
Old Gregg wrote:
Anyway, not to bring up the argument of paying down loans v. investing again..but with the way the stock market is going...this is exactly why paying down loans may be better. This shit is supposedly going to be as bad as 2008 according to some.


This is one of the most stupid posts in this thread, and I'm quoting this for posterity.

1) I actually do believe we're headed for a recession (although many people have been saying this for years, so just because you're right when you keep saying x team is going to lose for once, doesn't mean you actually have any predictive ability).

2) A recession "as bad as 2008" is really saying something. It's saying that a recession as bad as the last one, which was as bad as the Great Depression, will happen literally within 8 years of the last one. Weird to say that considering there are decades separating the Great Depression from the Great Recession. Generationally-impacting recessions don't happen as frequently as you believe.

3) "We're heading into a recession" implies that there was a recovery, which is a questionable assumption when you look at the fundamentals.

------------------------

Should any of the above impact your decision to invest? FUCK NO.

1) You're not a short-term trader. When you invest, you invest for retirement. This means you're looking at investment vehicles which, over say 30 to 40 years, will give you returns adjusted for recessions, depressions, etc.

2) There are plenty of financial instruments for (1) above.



But even funnier, your suggestion is that you allocate your money from investment to.... your loans? I'm sorry... but what will that accomplish? If you're fired because of the recession, you will still be unable to pay your loans after your emergency fund is exhausted. At best, your principal will be somewhat lower, but you're still fucked.

If you want to be risk averse, save more cash to prepare for the possibility of losing your job.

Pretty sure he was talking about the strategy where instead of paying down loans on the 10 year plan, you do PAYE and invest the difference hoping to come close to a 6.5% return therefore not losing money and also staying somewhat liquid. That liquidity isn't necessarily for an emergency fund.
But don't let this observation get in the way of a good opportunity to be condescending.


Yes, that's what I'm talking about.

I'm not saying people shouldn't invest, period. I'm saying it may make a lot more sense to pay down loans first before dumping extra cash into the stock market while not paying down loans. We're looking at the next 10 years anyway, not 30-40 years.

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Re: Student loan payments: Actual numbers

Postby AVBucks4239 » Fri Jan 15, 2016 4:07 pm

lacrossebrother wrote:this whole, "can't time the market" thing has gone way too far is total puffery put out by institutions who have absolute interests in keeping you invested.
the market is clearly in free-fall now. doing "nothing" is timing the market just as much as buying in or out assuming your transaction costs are free. if you really think that there's an equal chance that the market goes up in the next month as down, sure, don't stray. but I have absolutely no idea you could come to that conclusion.

Who cares what happens next month if you're not going to retire for a couple decades? I don't care if the market loses 50% by the time the bell closes today--I'm still maxing my 401k and tIRA and investing in 100% equities.

One of my favorite articles ever is this hypothetical study of Poor Bob (http://awealthofcommonsense.com/worlds- ... ket-timer/), who invested huge lump sums immediately before every crash since the Great Depression: December 1972, August 1987, December 1999, October 2007.

In total he invests $184,000. And despite being the worst possible market timer in the history of planet earth, he ends up with $1.1 million. The lesson being that staying the course, keeping costs low, and thinking long term than being reactionary are what is necessary to accumulate wealth.

Pretending like you know what the market is going to do next month and moving your money elsewhere is dumb (unless you're retiring in the next five years). Just leave it in low cost index funds for long enough and your return will be significant, because the market always goes up given enough time. Always.

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AVBucks4239
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Re: Student loan payments: Actual numbers

Postby AVBucks4239 » Fri Jan 15, 2016 4:11 pm

NoBladesNoBows wrote:Ehh I dunno, if you look at the DJIA for the past year it's pretty batshit unpredictable. Trying to play the short game is really damn tough100% proven to be completely impossible.

FTFY.

whysoseriousbiglaw
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Re: Student loan payments: Actual numbers

Postby whysoseriousbiglaw » Sat Jan 16, 2016 12:50 pm

bk1 wrote:
whysoseriousbiglaw wrote:Do you live in a big city with a kid? If so, then yeah 200k is not enough to save on. Why not relocate and transfer offices in your job?

This is ridiculous. It is definitely possible to save while earning 200k for a family of 3, even in an expensive metro area.


Not saving enough though.

We probably clear around mid to upper 200ks with no kids in an expensive metro area and I feel like we aren't saving enough even with minimal debt. The COL is just too insane. There's no way these people could ever afford to buy a place either in an expensive area.

Not to mention, daycare in expensive areas cost 3k a month. Raising a kid in a city is ridiculously expensive.

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bk1
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Re: Student loan payments: Actual numbers

Postby bk1 » Sat Jan 16, 2016 7:50 pm

whysoseriousbiglaw wrote:
bk1 wrote:
whysoseriousbiglaw wrote:Do you live in a big city with a kid? If so, then yeah 200k is not enough to save on. Why not relocate and transfer offices in your job?

This is ridiculous. It is definitely possible to save while earning 200k for a family of 3, even in an expensive metro area.


Not saving enough though.

We probably clear around mid to upper 200ks with no kids in an expensive metro area and I feel like we aren't saving enough even with minimal debt. The COL is just too insane. There's no way these people could ever afford to buy a place either in an expensive area.

Not to mention, daycare in expensive areas cost 3k a month. Raising a kid in a city is ridiculously expensive.

You're suffering from lifestyle inflation if you think this is objectively true.

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LA Spring
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Re: Student loan payments: Actual numbers

Postby LA Spring » Sun Jan 17, 2016 12:48 am

Please define lifestyle inflation. The high COL metros are overly ridiculous. Granted I honestly don’t understand how a $60K median income household makes it through the month. Are you talking about cutting way back on expenses, ala, fewer $12 burgers, matinee prices with no soda or snacks, frozen pizza rather than delivery, selective cable rather than a prime package, flip phone vs what you have, …pass up going out with colleagues for drinks…stuff like that?

Anecdotal as it is, I have yet to find a place with a low COL that pays well. Granted, they must exist, but they have escaped me (trust me I’ve looked).

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runinthefront
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Re: Student loan payments: Actual numbers

Postby runinthefront » Sun Jan 17, 2016 12:55 am

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Last edited by runinthefront on Mon Jun 13, 2016 10:44 pm, edited 1 time in total.

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Dcc617
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Re: Student loan payments: Actual numbers

Postby Dcc617 » Sun Jan 17, 2016 2:18 am

LA Spring wrote:Please define lifestyle inflation. The high COL metros are overly ridiculous. Granted I honestly don’t understand how a $60K median income household makes it through the month. Are you talking about cutting way back on expenses, ala, fewer $12 burgers, matinee prices with no soda or snacks, frozen pizza rather than delivery, selective cable rather than a prime package, flip phone vs what you have, …pass up going out with colleagues for drinks…stuff like that?

Anecdotal as it is, I have yet to find a place with a low COL that pays well. Granted, they must exist, but they have escaped me (trust me I’ve looked).


This is amazing.

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bk1
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Re: Student loan payments: Actual numbers

Postby bk1 » Sun Jan 17, 2016 2:31 am

LA Spring wrote:Please define lifestyle inflation. The high COL metros are overly ridiculous. Granted I honestly don’t understand how a $60K median income household makes it through the month. Are you talking about cutting way back on expenses, ala, fewer $12 burgers, matinee prices with no soda or snacks, frozen pizza rather than delivery, selective cable rather than a prime package, flip phone vs what you have, …pass up going out with colleagues for drinks…stuff like that?

Anecdotal as it is, I have yet to find a place with a low COL that pays well. Granted, they must exist, but they have escaped me (trust me I’ve looked).

Just to give you a heads up, this post comes off as incredibly naive. I can think of several low COL metros that offer lawyers high pay off the top of my head (Dallas/Houston/etc), unless you and I have different definitions of low COL.

The person I quoted said his/her household income was 250k+ and claimed that 200k was not enough to save for a family of 3. In either of those situations, you don't have to make the hypothetical sacrifices you've laid out. 60k for a family of 3? I agree that probably requires sacrifices. Free OTA TV + either Netflix/Hulu rather than cable/satellite, a cheap MVNO rather than VZW/ATT, routinely bringing lunch, etc are the kinds of choices I'd advise for a family in that situation. But a family of 3 can 100% live off of 200k pre-tax and save for retirement, even in places like NYC/SF. Even the guy who started this whole chain of comments admitted his living situation was a vestige of a previously higher salary and that he would probably go back to that higher salary because he had gotten used it (i.e., lifestyle inflation).

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LA Spring
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Re: Student loan payments: Actual numbers

Postby LA Spring » Sun Jan 17, 2016 3:19 am

True enough that Texas is a market/state where good pay (+160k) is common and the COL is reasonable (unfortunately for me, I was not able to crack that market…I have no ties so maybe that was an issue). Thus, I am left with ridiculously high COL choices. And yes, $200K is more than enough to comfortably “get by” even after tuition debt and a good 401k plan.

No surprise that Housing prices are a real bitch in these high COL metros. There are homes you wouldn’t pay $500k for and they want +1M….it’s unreal. Suffice to say that housing is the biggest COL obstacle.

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Re: Student loan payments: Actual numbers

Postby hous » Sun Jan 17, 2016 12:02 pm

Eat in. Bring your lunch. Live in a smaller apartment. Don't buy new cars, buy a used dependable car. Invest everything you can in index funds. Don't try to time the market, just invest periodically. That's how you beat lifestyle inflation.

whysoseriousbiglaw
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Re: Student loan payments: Actual numbers

Postby whysoseriousbiglaw » Sun Jan 17, 2016 1:28 pm

bk1 wrote:
whysoseriousbiglaw wrote:
bk1 wrote:
whysoseriousbiglaw wrote:Do you live in a big city with a kid? If so, then yeah 200k is not enough to save on. Why not relocate and transfer offices in your job?

This is ridiculous. It is definitely possible to save while earning 200k for a family of 3, even in an expensive metro area.


Not saving enough though.

We probably clear around mid to upper 200ks with no kids in an expensive metro area and I feel like we aren't saving enough even with minimal debt. The COL is just too insane. There's no way these people could ever afford to buy a place either in an expensive area.

Not to mention, daycare in expensive areas cost 3k a month. Raising a kid in a city is ridiculously expensive.

You're suffering from lifestyle inflation if you think this is objectively true.


My portion of the rent in NYC is only $1200 a month, albeit in a one bedroom (which I split with another person). I tend to save the vast majority of my salary - but saving is still much harder to do in NYC due to the ridiculously high taxes and COL. I pay $500 a month in taxes alone to NYC city tax, which amounts to yes, $6000 a year in NYC city taxes. The high taxes and generally high COL are so ridiculous that it's unbelievable that people would live here in the long term without having millions in the bank already.

In terms of lifestyle "inflation" - I grew up in the suburbs in a house. If anything, my lifestyle is now deflated since I live in an 800 square one bedroom but pay more money than the mortgage of a house in flyover on it. If you move to NYC from a suburb, prepare for a big lifestyle deflation. Nobody except poor people used to live in apartments where I'm from.

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Re: Student loan payments: Actual numbers

Postby whysoseriousbiglaw » Sun Jan 17, 2016 1:31 pm

runinthefront wrote:$250k for 3 people is about $83,333.00 spent on each person . . . except now really since your child's expenses for the year won't add up to anywhere near $80,000, and there's a colossal COL savings that comes with living in a group (i.e., family). If you don't think that $250k for a family of three (or even two!!! two people in your case!) is enough to live decently and still save, that's definitely due to a lifestyle inflation, dude. Even in NYC. Even in San Fran.


Define living "decently" - sharing a one bedroom among 3 people? If you want a decent 2 bedroom in NYC, prepare to pay like $5-6k for it a month.

Even then a family won't be able to save that much off $250 in NYC or SF, considering taxes along in NYC will take like at least $6,000 a year.

I have no idea where some of you guys grew up - but if you really think sharing a tiny ass apartment with your child is living "decently" despite paying through the nose for it, then you obviously come from a different background than most of us (aka suburbanites).

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A. Nony Mouse
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Re: Student loan payments: Actual numbers

Postby A. Nony Mouse » Sun Jan 17, 2016 1:37 pm

I feel like this is telling us more about you and your expectations than about lifestyle inflation/deflation.

whysoseriousbiglaw
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Re: Student loan payments: Actual numbers

Postby whysoseriousbiglaw » Sun Jan 17, 2016 1:37 pm

LA Spring wrote:True enough that Texas is a market/state where good pay (+160k) is common and the COL is reasonable (unfortunately for me, I was not able to crack that market…I have no ties so maybe that was an issue). Thus, I am left with ridiculously high COL choices. And yes, $200K is more than enough to comfortably “get by” even after tuition debt and a good 401k plan.

No surprise that Housing prices are a real bitch in these high COL metros. There are homes you wouldn’t pay $500k for and they want +1M….it’s unreal. Suffice to say that housing is the biggest COL obstacle.


Texas is pretty good bang for you buck - anywhere in the South really. A lot of small to mid sized firms in Southern cities tend to pay $120k starting, which isn't bad considering COL is like 1/5th the price of NYC plus a few of the states don't have income tax.

If you want more bang for your buck, live anywhere except for NYC, SF and maybe DC. Chicago is pretty affordable in comparison as well and pays market.

whysoseriousbiglaw
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Re: Student loan payments: Actual numbers

Postby whysoseriousbiglaw » Sun Jan 17, 2016 1:46 pm

A. Nony Mouse wrote:I feel like this is telling us more about you and your expectations than about lifestyle inflation/deflation.


Let's put it this way - NYC is one of the few places in the US where a person making a biglaw salary has the same lifestyle as a welfare mom (thank god for NYC welfare), except you actually have to work 60 hour weeks to pay for your own food and housing. Yeah you may live in a better area, but your apartment is going to be the same size and you are putting in a lot more work to live there.
Last edited by whysoseriousbiglaw on Sun Jan 17, 2016 1:47 pm, edited 1 time in total.

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runinthefront
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Re: Student loan payments: Actual numbers

Postby runinthefront » Sun Jan 17, 2016 1:47 pm

whysoseriousbiglaw wrote:
A. Nony Mouse wrote:I feel like this is telling us more about you and your expectations than about lifestyle inflation/deflation.


Let's put it this way - NYC is one of the few places in the US where a person making a biglaw salary has the same lifestyle as a welfare mom (thank god for NYC welfare), except you actually have to work 60 hour weeks to pay for your own food and housing.


what a dumb fucking opinion

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A. Nony Mouse
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Re: Student loan payments: Actual numbers

Postby A. Nony Mouse » Sun Jan 17, 2016 1:48 pm

runinthefront wrote:
whysoseriousbiglaw wrote:
A. Nony Mouse wrote:I feel like this is telling us more about you and your expectations than about lifestyle inflation/deflation.


Let's put it this way - NYC is one of the few places in the US where a person making a biglaw salary has the same lifestyle as a welfare mom (thank god for NYC welfare), except you actually have to work 60 hour weeks to pay for your own food and housing.


what a dumb fucking opinion

Yeah, this is a really dumb opinion, even with the edit.

whysoseriousbiglaw
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Re: Student loan payments: Actual numbers

Postby whysoseriousbiglaw » Sun Jan 17, 2016 1:49 pm

runinthefront wrote:
whysoseriousbiglaw wrote:
A. Nony Mouse wrote:I feel like this is telling us more about you and your expectations than about lifestyle inflation/deflation.


Let's put it this way - NYC is one of the few places in the US where a person making a biglaw salary has the same lifestyle as a welfare mom (thank god for NYC welfare), except you actually have to work 60 hour weeks to pay for your own food and housing.


what a dumb fucking opinion


(is not aware of LYNC, CITYFEPS, SEPS, Section 8 (defunct but grandfathered), etc.) NYC is a great place to live if you want welfare.

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Re: Student loan payments: Actual numbers

Postby Danger Zone » Sun Jan 17, 2016 2:03 pm

whysoseriousbiglaw wrote:
runinthefront wrote:
whysoseriousbiglaw wrote:
A. Nony Mouse wrote:I feel like this is telling us more about you and your expectations than about lifestyle inflation/deflation.


Let's put it this way - NYC is one of the few places in the US where a person making a biglaw salary has the same lifestyle as a welfare mom (thank god for NYC welfare), except you actually have to work 60 hour weeks to pay for your own food and housing.


what a dumb fucking opinion


(is not aware of LYNC, CITYFEPS, SEPS, Section 8 (defunct but grandfathered), etc.) NYC is a great place to live if you want welfare.

Okay can we get this shitpoaster out of this otherwise valuable thread




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