Lifetime income & expenses

ancapailldorcha

Posted on behalf of another poster who wishes to remain anonymous:

Hi there,

Just had an idea to briefly outline some lifetime income and expenses as very rough figures and got a bit of a surprise as per below:

Expenses

Mortgage 360000
Kids 500000
Wedding 15000
Living Expenses 540000
Pension 288000

Total 1703000

Income

Lifetime Earnings 1440000

Balance -223000 Loss

Caveats

-For some context, these figures are extremely rough and based on an average couple with 2 kids in Dublin.

Mortgage 360,000 (Likely only an apartment)
2 Kids 500,000
Wedding 15,000
Living Expenses 540,000 (Based on 1500 a month for 2 people for only 30 years)
Pension 216000 (Combined Pension)

Lifetime Earnings 1,080,000 (Based on 3000 net monthly take home pay for 30 years)

- No parents or family member may require financial aid at any point
- Not particularly living in luxury raising a family in apartment and still in a minus balance
- Very low pension
- Results on significant debt so I'm wondering what I may be missing here.

This seems to be just an average family with not 6/7 kids but the finances don't add up!

This is just a very rough estimate so feel free to correct or suggest figure changes!

Geuze

Lifetimeearnings seem low?

Average FT earnings in Irl are 45k, more in Dublin.

A household has typically more than 1 earner.

0gac3yjefb5sv7

45k seems quite high but heard it quoted by the CSO report.

Geuze

Note that 45k is the mean FT figure, not the median.

Owryan

Did you include child benefit in monthly income?

Worth about €40,000 for 2 children.

blindside88

Pension shouldn't necessarily be taken as an expense. Has it been put back in to life time earnings at the end?

0gac3yjefb5sv7

Geuze wrote: »

Note that 45k is the mean FT figure, not the median.

What significance does this have actually?

Arthur Daley

Living expenses of 1,500 a month for two people would be kind of a sub dole existence week after week.

But yes now housing costs are back to 'boom' levels the numbers for the average punter just don't stack up.

Significant structural corrections are inevitable. When? Not if.

andrew

I'd echo the comments which say lifetime earnings are too small. If you assume a married couple where:

• The the couple's earnings match this data from 2009 throughout their lifetime
• The couple are the same age, and have a child at age 34, and the mother doesn't work at all after this
• The couple puts away 5% of their post tax income into a pension, beginning at age 30, and earns a measly 2% return on their investment each year
• The couple retire at 65 and take a pension lump sum.

Then you're looking at lifetime earnings, from 22 to 65 (incl. pension pot), of €1,955,438. 

The main differences are:

• You assume your couple only work for 30 years, but most people work from 22-65, so 43 years.
• Pension isn't an expense; you earn interest on the pension and eventually can get the principal and interest back 

In my model, the household's monthly net monthly income looks like this:

Avatar MIA

Pheonix10 wrote: »

What significance does this have actually?

Say 9 people earn €24,000 per annum, and 1 person earns €240,000.

Average/mean is €45,600, but median is €24,000.

Taking the Mean, the population are quite well off, using the median, there's a clear disparity.

A simplified version.

Wanderer78

Avatar MIA wrote:

Taking the Mean, the population are quite well off, using the median, there's a clear disparity.

I think this is the argument people like Joe stiglitz make between mean and median incomes.

I agree with those that say debt levels are now out of control, particularly private debt levels. This will have to be addressed eventually

Avatar MIA

Wanderer78 wrote: »

I think this is the argument people like Joe stiglitz make between mean and median incomes.

I agree with those that say debt levels are now out of control, particularly private debt levels. This will have to be addressed eventually

There's a big gap between those well off and those on lower incomes, but very few people in Ireland are in poverty. Relative poverty yes, but that's always going to be the case unless you try and bring in communism. And that doesn't work.

Wanderer78

Avatar MIA wrote:

There's a big gap between those well off and those on lower incomes, but very few people in Ireland are in poverty. Relative poverty yes, but that's always going to be the case unless you try and bring in communism. And that doesn't work.

I'm convinced it's possible to create a more equal society without introducing problematic ideologies such as socialism etc. Maybe I'm naive, but I do realise there's something fundamentally wrong with our current approaches. We 're a very dynamic and intelligent species, but we must want to try change things

Avatar MIA

Wanderer78 wrote: »

I'm convinced it's possible to create a more equal society without introducing problematic ideologies such as socialism etc. Maybe I'm naive, but I do realise there's something fundamentally wrong with our current approaches. We 're a very dynamic and intelligent species, but we must want to try change things

You can start practicing your Nobel speech now if you can.

Wanderer78

Sadly I think we 're gonna experience a few more very serious economic/financial crisis before we truly start changing things, I.e. we could be waiting years if not decades for that