[QUOTE=kondormid]I fail to see how a person on high income has to spend more than a person on low income.
Two people, both buy a house next door to each other, both house cost 150,000. The first person earns 100,000 a year, the second earns 15,000. They both cut back to the bear minimum and spend the rest on the mortgage.
Which one do you think will pay it off first?
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There are some faulty assumptions in your example.
#1 How would a person on 15000 per year purchase a house of 150000? Mostly mortgage companies look at multiples of income upto 4, ie. his max. mortgage would probably be only 60,000. Therefor the other 90000 must come from his own pocket. That would make a sizeable downpayment, cutting his monthly payments considerably. Now exactly what person on 15000 pa can save 60,000 which is four years’ his/her annual salary? I wouldn’t say it is impossible to do that, either, through shrewd savings and shrewd property purchases and sales, someone could do it.
#2 Now a person earning $100,000 who purchases a $150,000 house. Well, firstly, since that person has higher earnings, it is likely his house purchase would need to reflect a more appropriate salary structure. Also, given such a high salary, how likely would that earner be to save the deposit, if he could just roll into the bank and present a salary slip? Of course, given that he purchased such a house anyway, it is likely or unlikely he would furnish that house in the same way as #1.
So it is quite likely that the savings patterns of each person would actually reflect in the lifestyles and choices they make. If you earn more, you spend more.