Financial Differences in North America

[Admin]

A while back I helped a couple of friends collaborate on the attached document. It is a small 'primer' consisting of 2 'Lessons' - both aimed at helping to explain the 'normal' financial environment in North America (the friend who first developed it is Canadian - thanks Del). It is NOT a comprehensive document, but is written in both English and Russian to facilitate the effective communication of the 'concepts' in both languages.

I know I posted this previously, but if you guys think it might be worthwhile, I can post this as a 'sticky'.

Let me know.

- Dan

[Bruno]

Good PDF ... i am a European man but what is write in the file is true for us too... the main notion is the "disposal income"...

Our fixed cost, tax, living expense are other... but each man everywhere in the world need to know his "disposal income" before start the adventure of seeking a foreign bride...

This "disposal income" will be needed for pay the "living expense" of your future russian bride, school, trip for visit russian familly...

Previously, on these forum, it was a topic about how much money you need earn for be financialy confortable in these proces... if you earn 100K$ month but that you disposal income is only a few buck, don't start seek a foreign bride... if you earn 5K$ month but that your disposal is 1000$ month, the situation is better...

now, since i like detail ( sorry Dan  ) :

Disposable income is the amount of an individual's total income left after taxes, plus any transfer payments (grants) received from the government or elsewhere. This income is available to be "disposed of" as either spending or saving.

Another concept that is often confused with disposable income is discretionary income. This is equal to disposable income minus the cost of the fixed expenses of life (such as rent/mortgage, food, car payments, insurance, etc.). It is income that can be saved or spent on goods and services wanted, not needed. Unfortunately, the definition of discretionary income is fuzzier than that of disposable income, making it harder to measure.

http://en.wikipedia.org/wiki/Disposable_income

 

For these who will know how much money by hour they can spend for whatever they wish... a funny tool :

http://www.disposableincome.net/

In my case, i earn 9.84$ hour after tax, spend 3.75$ hour for expense and have 6.09$ hours for whatever i want

[aikorob]

Thanks for that link Bruno, now I am REALLY depressed

only 6.87 million years to catch Gates

[Muj]

Bruno,

I find you possess broad misconceptions on salaries and the cost of living in America.  First, most companies pay much or most costs of health care for employees.  The amount of coverage varies depending on the plan selected.  An HMO plan pays almost all costs.   The family is also covered for an additional charge.  The working spouse already covered receives rebate from his or her company.

Nearly all consumer products prove less in cost in America than almost anywhere in Europe. 

Food is generally cheaper in America then Western Europe. 

Housing costs are lower in America then Western Europe with some exceptions.  For example rural Europe is less expensive then Seattle. 

Many people from Europe work here in the USA.  I have never met a European who willingly returns to Europe after working and living in the USA.  Most Europeans  cite the lower cost of living and higher salary in the USA as one reson for staying.

 

[swindoom]

I worked in LA, Chicago, New Jersey but was still willing to return to the UK, even though I was being paid twice the amount I am paid in the UK for a similar job.

[Admin]

Bruno,

I find youpossess broad misconceptions on salaries and the cost of living in America. First, most companies pay much or most costs of health care for employees. The amount of coverage varies depending on the plan selected. An HMO plan pays almost all costs. The family is also covered for anadditional charge. The working spouse already covered receives rebate from his or her company.

Nearly all consumer products prove less in cost in America than almost anywhere in Europe.

Food is generally cheaper in America then Western Europe.

Housing costs are lower in America then Western Europe with some exceptions. For example rural Europe is less expensive then Seattle.

Many people from Europe work here in the USA. I have never met a European who willingly returns to Europe after working and livingin the USA. Most Europeans cite the lower cost of living and higher salary in the USA as one reson for staying.

What did you think about the write-up on finances in North America? (the subject and attachment to the originating post) Is it at least reasonably accurate?

- Dan

[andrewfi]

Engaged ~ Bruno did not write the document and was not making comparisons between Europe and the US. But if you have experience of, for example, the the UK and the US, you will know that whilst some things cost more in one place than another, the differences between the overall cost of living, in real terms, comparing like for like, is not so great. His seperate indication of his disposable income is interesting. On a relatively low wage he manages to maintain around 2/3 as disposable income, that is a figure that, given debt levels, in the US, most in the US would be very happy to be able to attain!

I think though that it is true to say that when one passes 'middle class' levels of income, that the US becomes a more 'profitable' place to live.

[jb]

Andrew,

I think, more to the point, that 2/3's of a relatively small number is still an even smaller number.  What I get from this discussion is a small lesson in ecnomics, either a man has the necessary "disposable" income to deal with this kind of courtship, or he doesn't.  Further, making a trip or two, or even three or four, from the US to the FSU is only a small part of the overall expense.  The really costly part of a marriage to a foreign bride begins once she has landed.  I've seen first hand what happens to a savings account after the wife arrives, it ain't pretty.

[andrewfi]

jb ~ It is true that Bruno's income as recounted to us is not large, but what it illustrates is that if disposable income is high then freedom accompanies. If he earns more money, almost all of it flows to disposable income. Actually this is very similar to the situation for most in the FSU. The proportion of income that is disposable is quite high. Additional incomes can thus make a consioderable difference to real standards of living. Given US savings and debt rates, how many American board members with an income at or around 'average' have in the order of $1000 per month of disposable income - that is Bruno's situation!

A guy earning more than Bruno, but maintaining a similar overall standard of living in fixed cost terms (housing, transport costs etc) will thus be significantly better off than for example, a typical American who has a large tranche of debt and little money left over after debt service. We feel well off based upon the amount of money we can spend, not the things we have, or the debt that paid for them. This is a really hard concept for many from this part of the world to understand and seemingly, from the opposing POV of our 'cross the pond cousins as well!

[jb]

Andrew,

What you say is true in an esoterical sort of way.  However, trying desperately to make this topical, if the amount of disposable income from that small salary is proportional small, will the vendors of service, i.e., airlines, and hotels, etc., reduce, in the same proportion, the cost of the desired service?  I don't think so.

I don't like using Bruno's salary as an example, since it bears little semblance of what a US worker bee bound for the FSU might face.   Even if a man is able to save 1/2 of his monthly salary, and at the end of 11 months that amount of savings will not pay for the R/T airline ticket, lodging, and other travel related expenses for a months vacation abroad, then IMHO, he doesn't need to get involved in seeking an RW.  Knowing full well what the costs are of getting her here, closing out her life in her home country and beginning a new one here, an American man earning Bruno's salary would be out of his depth very quickly. 

We must at least try to keep our posts in context of the stated goals.  This is not a poor man's game.

[andrewfi]

jb ~ See above, Bruno was not making the cpomparisons that another poster suggested he was, nor was he the author of the piece, as 'engaged' appeared to think. He was being criticised incorrectly. I pointed this out. But the amount of disposable income is the crux of the matter. Bruno can quite clearly work toward his objectives on a relatively low salary becasue he maintains a high disposable income and he does things in a manner that I nor most Americans would do.

He has the all important buffer between incomings and outgoings. A guy earning a six figure income in the US and spending all of it on regular outgoings is less able to afford what Bruno is doing, even on his low salary and that includes being married!

I agree though that, in general, this is not poor man's sport and I can not imagine how an urban or suburban US dweller on 'average' income and normal amounts of disposable cash could afford to properly undertake and follow through this process. I also can not imagine that many women from round here would want to live in the rural and cheaper parts of the US.

[Bruno]

Both, JB and Andrew have right...

Since i am alone now, it is easy for me... specialy because i keep the same life level that when i was married...

But once married, the fixed expense grow... more food, more energy, bigger appartment... and this is certainly not fully compensate by lower tax...

When i was married, since the wife don't work and the children, taxe level is lowered... it add around 300 euro month... but the expense needed for wife and child have reduce the global disposal income to a little 150 euro month...

Corting expense are nothing, they are one time expense... be married and life together lead to recurrent expense who are not possible to compress...

PS : JB, i am not specialy a poor man... i am a state worker ( employe ) with fixed income, several extra-legal advantage, a life work contract, good pension plan, etc ... i can make a trip to Ukraine and stay 3 week with money spared during 2 month...

I am a middle class man and i live like a middle class man everywhere... some middle class people ( American of other ) try to life like rich people and this lead to financial problem... only need to be realist and of course, inform you future bride over your life level... don't lie or try impress her with expensive hotel, expensive restaurant, expensive gift  when you are not able to make it in your home country... this will lead to false expectation... and probleme in your future couple...

Let see a example, Clyde don't seem to be a rich man, but more a middle class man... in the beginning, he have know some difficulty with his budget... himself have need to adapt to a new situation... but i am almost sure that now, he have more easy that in the beginning...

Some people can learn live with the money they earn, same in case of medium income... some other are not able, you can give them several million $$$ and all is spend in a short time... 

[Bruno]

What did you think about the write-up on finances in North America? (the subject and attachment to the originating post) Is it at least reasonably accurate?

Like i have say before, the pdf file is good... with a very few little change, i can use it for our European situation too...

Since the goal is to explain how are western man finances, it reach it goal without real problem... short, clear and simple : 10/10

 

[jb]

Well,  I've butted my head against that brick wall all I want to.  If Bruno wants to believe his $9.84/hr after tax income is the US equivalent of "middle class", then I suspect he'd find my lifestyle a bit on the lavish side.  I could not even afford to own, operate and insure my vehicles on such small money.  We obviously gain nothing by comparing apples to oranges.

A similar income in the USA would be only fractionally above poverty wages, and any family of two or three existing on such a wage would probably be eligible for food stamps and other government subsidies.   Therefore, I'll address my comments solely to those American men who might read this, if your disposable income, after tax, after debt service, after the purchase of food, fuel, transportation, insurance, (health, home, and auto), clothing, housing, utilities, toys, etc., does not exceed at least 10 times the price of a R/T ticket to the FSU, you are probably not making enough money to pursue a woman abroad.  Naturally, if you are a man with a past, you will have to deduct such things as child support and alimony before you can consider starting a new family with a woman from the FSU.

Them's the cold hard facts of life.

[Bruno]

 same with a cheap flight, it will be around 1000$... so do you mean that a man need 10000$ disposal income month before thinking pursue a woman abroad ?

[jb]

I realize English is not your native tongue, therefore I make allowances for your inability to comprehend the thoughts, but what part of;

Therefore, I'll address my comments solely to those American men who might read this

do you not understand?

[ConnerVT]

That would be $10,000 USD / YEAR... Not month.  And yes, it's probably a good guideline figure.

I fall squarely in the middle class, income wise, here in the US.  I hope I never find myself in your middle class statistics, Bruno... 

[andrewfi]

jb ~ Apples and oranges are not being compared here, except in so far as it is cheaper for Bruno to go to Ukraine than for an American.

There is no single economic definition for 'middle class' income in the US but, in 2004 it was generally accepted that pre-tax incomes between $25K and $75K would be middle class. There are definitions in respects of median incomes and stuff, but as a range, $25-75K seems appropriate.

Bruno, if one adds back into his net figure a notional 30% for taxation starts off with about $14 per hour, or, about $30,000 per annum, probably more given that he probably does overtime. Now, he does not have to worry about additional costs for healthcare - no insurance or deductibles, no worries about dental care etc. etc.

So, whilst he would not be in the upper middle class, by US definitions he sure is middle class in income terms. Middle class is a broad church and surely you have a grander lifestyle than he. What may be confusing you, jb, and others is that in the US some 90-95% of all Americans consider themsleves to be middle class, clearly not likely to be true, in either economic, or social terms. You, jb, in income terms if in no other manner, might well be more accurately considered to be upper class with a net worth in excess of $250,000. Your self assessed position in a social, or economic, ranking does not define anyone elses!

[Admin]

Seems the topic has drifted from one of addressing how to effectively communicate the differences in financial considerations - to one in which we are addressing how much money is enough to be able to pursue RW and a reasonable lifestyle.

It would seem that Bruno was addressing the former and provided some of his specific examples - and we now have drifted to a different topic.

It seems clear that many countries will have different standards of living and different income levels necessary to position in the median classes.

In fact, I think CNN just today released a report stating that Oslo, Norway is the most expensive city in the world (http://www.cnn.com/2006/TRAVEL/01/31/oslo.cost.reut/index.html).

So... back to the point of the post - it seems Bruno felt the document suitably addressed his situation and would be useful as a communication tool to explain the financial situations a couple might face in Belgium.

Any others?

- Dan

[Muj]

My pointis simply is that the cost of living is lower in the USA then Western Europe.  Therefore the same disposable income in the USA affords more.

[Bruno]

It would seem that Bruno was addressing the former and provided some of his specific examples - and we now have drifted to a different topic.

Bruno have posted over the content of the document, mainly over "disposal income"... but other people have drifted and make some comment on my own case... i have only put the result from a script ( tool ) over "disposal income"... Sorry Dan, i am not responsible from what make other in reaction of my post...

Maybe next time, you will say that i am responsible of the insult i received...  

[jb]

As far as I can see no one insulted Bruno.  He is the one who freely offered up his hourly wage as a comparative tool, nobody solicited that information from him.  I was merely trying to point up that no one earning a $12-14 hour wage here should be involved in pursuing a MOB.  Perhaps they should stick with the gals who already live in their own neighborhoods, at least those women would already understand what's involved in living on that sort of income.

WRT the document itself, I suppose there are some who would benefit from it, but (and understand I'm trying not to say an unkind thing about it), it's basically 3rd grade math.  I married a woman with a master's degree in math and physics, she got past addition and subtraction a long time ago. She didn't need that kind of financial explanation, nor would I have offered such a "show and tell", she'd have been insulted.

[Todd]

Just a couple of comments.

The average industrial wage is $36,000/year.  The overall average family income is somewhere around $46,000/year.  (In most cases, both people work.)

I simply don't believe $25,000/year is middle class.  Of course, it might depend on location of the country, but $25,000/year strikes me as quite low in an urban environment.

 

[Bruno]

I have wrote AFTER tax... before tax, i earn 16.60$ hours... 2775$ month... 33306$ year... at this you add 928$ food cheque, 2860$ holliday money, 1560$ for the 13 month... total 38654$ year... my loan is a year loan, holliday or ill or stay home with ill family members change nothing, always pay... these yearly income follow the official index of price ( inflation ) and is raised from 2.5% each two year ( anciennety )... so, it is around a middle income... the number publish was the result of the link publish, for calculate the disposal income... the script use income AFTER TAX...

[BC]

Bruno,

loan (lohn) = salary/wages/compensation

And don't forget full family medical coverage included.