$250,000 A Year And, Yes, They’re Living Paycheck To Paycheck - InvestingChannel

$250,000 A Year And, Yes, They’re Living Paycheck To Paycheck

Proprietary Data Insights

Top Luxury Goods Stock Searches This Month

Rank Name Searches
#1 Blue Nile 195,883
#2 Tapestry 3,248
#3 Signet Jewelers 2,645
#4 Fossil Group 788
#5 Charles & Colvard 772


Story Stocks: Tying It All Together

One of the wonderful things about investing is you have myriad strategies to choose from. 

Quantitative. Qualitative. A little of both. 

Over the past couple weeks, The Juice has told stories illustrating the state of the broad economy and our personal finance to develop narratives around stocks. With this qualitative approach to investing: 

  • You assess broad economic data. 
  • You consider the things companies disclose publicly. 
  • You factor in what you’re seeing on the ground. 

Tie it all together. Come to some conclusions. Consider moving forward with what makes sense to you. Discard the rest. Buy and sell stocks accordingly. 

Story #1 

As personal savings rates continue to decrease, cash-strapped consumers turn to credit card debt to finance life. Barely making ends meet amid inflation, this subset of the population shops for necessities at dollar stores. 

Story Stocks #1

Dollar General (DG) and Dollar Tree (DLTR) both report solid earnings and impressive guidance. 

On its conference call, Walmart (WMT) blames its struggles on a shift in spending. Its customers are diverting cash away from higher-margin general merchandise (discretionary spending) items to lower-margin groceries (needs). 

Get the full scoop on story #1 here

Story #2

Not everyone in America is hurting. In fact, some people are doing quite well financially, thank you. 

Story stock #2

Costco (COST) disses Walmart and other “discount” retailers. The warehouse chain has seen no worrying spending shift. The Costco customer might be buying fewer pandemic-related items (e.g., sporting goods, office supplies), but they’re still strong and seemingly confident. 

Get the lowdown on story #2 here

See how that works? You can perform this following the data exercise across industries. We’ll keep providing examples in future editions of The Juice.

Actually, the Costco story got us thinking. How is high-end, luxury retail looking lately? Expect to hear from us on the subject later this month. 

You might think the wealthy are all financially healthy. Think again. Scroll with us.  

Personal Finance

$250,000 A Year And, Yes, They’re Living Paycheck To Paycheck

Key Takeaways:

  • A huge portion of the population lives paycheck-to-paycheck.  
  • This includes people making a shitload of money. 
  • Just another sign of one of the craziest, most confusing economies we’ve ever seen. 

Source: PYMNTS.com/Lending Club 

This chart and finer grain data from it is absolutely mindblowing. 

Let’s summarize: 

  • 42.4% of people earning more than $100,000 a year lived paycheck-to-paycheck in April. 
  • Nearly 64% in the $50,000-to-$100,000 bracket barely made ends meet. 
  • Overall, 61% – about 157 million people – lived paycheck-to-paycheck in April, up nine percentage points from April 2021. 

Here’s where it gets even more unbelievable: 

  • 36% of people with annual incomes of $250,000 or higher lived paycheck-to-paycheck in April

Think about that. 

Before taxes, $250,000 a year equals $20,833 a month. In relatively high-tax California, the typical single person making a quarter of a million bucks takes home roughly $12,350 each month. 

That’s a big tax hit, but still. 

Struggling Or Just Financially Unhealthy? 

The study does note that of paycheck-to-paycheck Americans, 31% have no difficulty meeting their monthly expenses, even though they fail to have a cash surplus at the end of the month. Meantime, 22% say they do experience trouble paying their bills.

It should come as no surprise that the paycheck-to-paycheck crowd carries higher credit card balances. This holds even when controlling for income. 

The Bottom Line: Talk about tying it all together. Talk about this insane, so tough to make sense of economy we’re living through. 

We tend to automatically think it’s only people with relatively low incomes who live paycheck-to-paycheck. Obviously, this isn’t the case. 

From this, we can (probably) safely assume that at least some of these high earners put themselves into situations where they bit off more than they can chew. Maybe they bought more house than they could afford. Or rented an apartment too rich for their blood. That Tesla or Audi in the driveway. Yeah. 

Makes the stories we’re telling around discount retailers and the one we’re going to tell you later this month about luxury retail even more compelling.

Want to get content like this directly to your inbox?
Then we urge you to sign up for our newsletter here

Related posts

Carl Icahn Increases His Stake In Take-Two Interactive To 10.68%


iPad Mini Display Outperformed By Kindle Fire HD & Nexus 7


Foxconn Might Open Manufacturing Plants In The U.S. [REPORT]


Peter Cundill Protégé Tim McElvaine on Investing in Japan [VIDEO]


Set Bing Home Page Image As Lock Screen In Windows 8


Morning Market News: JCP, APO, MCHP, ZIP, ENR, LGF, EA, ATVI, COV, LNT