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Living on $100k a Year

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Re: Living on $100k a Year

#91

Post by flatline »

rayiner wrote: post #70
flatline wrote: post #43

Earlier quoted context omitted.

Crap cars are also expensive as hell to keep running nowadays. Buying new or nearly new, if you need the transportation for your job, can be more economical. That wasn’t the case 40 years ago. That labor that his mom presumably put in is also not without monetary value - two working parents cost a fortune in childcare, and many people need both salaries to make the equivalent of what just one used to.

That's a falsehood people tell themselves to justify buying a new car. One of my parents' cars is a 2003 Acura. It's never needed anything but oil changes since we got it. Cars these days are much cheaper to operate than they used to be.

Hondas are notoriously reliable, but at a certain age things can start going wrong and if you need that car you can easily pay more than it’s worth to keep it running a few more months. It’s happened to me before, it just happened to my friend’s CRV. The problem is that they are a gamble.

Re: Living on $100k a Year

#92

Post by Consultant32452 »

abalashov wrote: post #82
Consultant32452 wrote: post #79

Earlier quoted context omitted.

>But you try budgeting appropriately through a divorce and absurdly expensive custody battle I did. >But in a way, you're making my point for me; $100k in SE income is not the same as $100k in W-2 income. Actually, I'm making the exact opposite point. The budget is the exact same. The budget is what forces you to not over-spend when times are good, so that you have plenty of money around when times are lean.

Well, indeed; what that adds up to is that it's safer (if perhaps unwise, that's debatable) to get closer to the line with a stable income than an unstable one. Otherwise, it seems your advice is "live within your means", "spend less than you make" and "save for rainy days". Thanks, dad.

>it's safer to get closer to the line with a stable income than an unstable one.

No, it means you've failed to accurately assess what the "line" even is.

>Otherwise, it seems your advice is "live within your means", "spend less than you make" and "save for rainy days". Thanks, dad.

No, my advice was a specific set of principles and practices laid out within Ramsey's book which could help you to overcome the problems in your life that you were discussing. I was not promoting useless platitudes.

Re: Living on $100k a Year

#93

Post by cperciva »

gizmo wrote: post #78
cperciva wrote: post #58

Earlier quoted context omitted.

The middle class has been unfairly burdened with paying for the expenses of the entire country. The poor, unable to, the rich, unwilling to. That's not really supported by the data. A more accurate summary would be "the poor, unable to, the rich, not numerous enough to". Raising taxes on the top 1% or the top 0.1% or the top 0.01% has very little impact on total revenues simply because you need to raise taxes 50x, 50…

Confiscatory taxes on the wealthiest would bring in hundreds of billions. That's not "very little impact", the money could be used to massively improve the lives of millions. Yes, there are few people, numerically, in the top 0.01%, but that doesn't mean their taxes are inconsequential. Otherwise you might as well argue that they should pay no taxes at all. Absurd.

Confiscatory taxes could bring in hundreds of billions of dollars... once. But you can only expropriate someone's property once.

Re: Living on $100k a Year

#94

Post by SomeStupidPoint »

abalashov wrote: post #83
SomeStupidPoint wrote: post #81

Earlier quoted context omitted.

> They have relatives, friends, aesthetic preferences, social obligations, religious beliefs, and other things that "do not compute" in mathematical models. They compute fine -- most models are just "lying with math" by excluding the value of those things from their calculations. It's not different than a friend who ignores those things when using words -- of course it doesn't make sense why you don't move if you don…

Well, fair enough. Either way, the effect is the same — those variables are excluded from discussions in an almost sociopathic way.

I agree, but poking holes in why they're excluded is important, because it let's you have this exchange --

"You can't argue with the math!"

"Well, hold on now, I think you left a whole bunch of things out!"

If you don't know where the problem in the math is, despite there being an extremely obvious problem, many people will ignore your objections. That's why they use math, to paper over their obviously poor behavior.

Being able to strip that bare is useful.

Re: Living on $100k a Year

#95

Post by vostok »

killercup wrote: post #51
rayiner wrote: post #40

Recently, the news media seems to have developed a weird fetish for the petit bourgeoisie. The U.S. is highly atypical in how we treat the upper middle class. In Germany, for example, a two-income couple making 84,000 Euro ($100,000) in Bavaria nets 57% of their income: https://www.icalculator.info/germany.html . In Maryland, a relatively high-tax state, they net 76% of their income. And that doesn't adjust for the a…

Just a heads up: The numbers for Germany on that page include all social security contributions, including health insurance (4.7k€) and pension contributions (6k€). (Not sure if you accounted for these in your number for Maryland.)

As an American, I incur the below costs:

* $18,000/year 401k contribution (similar to pension, but I take on the market risk)

* $5,500/year IRA contribution (similar to pension, but I take on the market risk)

* $200,000 total in tuition per child at my alma mater.

* Health insurance costs. This can easily be $12,000/year or more for a family.

None of these are included in the tax amounts that we pay.

This is also not considering that German cities are much cheaper than equivalently walkable American cities.

Re: Living on $100k a Year

#96

Post by rpmcmurphy »

abalashov wrote: post #74
emerged wrote: post #73

Earlier quoted context omitted.

There's an irritatingly prevalent attitude that once you've moved to a high cost of living area (or were born there), you're forever entitled to stay there. That if you can't afford it, it's the fault of society and needs to be corrected.

I don't know if it's the fault of society, but it's fairly natural. Humans get attached to familiar places in which they grew up, in which they have lived in a long time, etc. They plant social roots. I'm not saying that means people who can't afford to live in places like NYC or SF shouldn't move, just that there's a complex tension between economic theory and "messy" human reality. The ideal rationally self-interes…

This ^^^^. I have lived in San Francisco for 25 years now. While I could reduce my cost of living dramatically by moving, I have spent my entire post-college life here. Nearly all of my friends and professional network are here, so I have approximately zero interest in moving, even if it would be cheaper, it would not be worth it.

Re: Living on $100k a Year

#97

Post by abalashov »

rpmcmurphy wrote: post #96
abalashov wrote: post #74

Earlier quoted context omitted.

I don't know if it's the fault of society, but it's fairly natural. Humans get attached to familiar places in which they grew up, in which they have lived in a long time, etc. They plant social roots. I'm not saying that means people who can't afford to live in places like NYC or SF shouldn't move, just that there's a complex tension between economic theory and "messy" human reality. The ideal rationally self-interes…

This ^^^^. I have lived in San Francisco for 25 years now. While I could reduce my cost of living dramatically by moving, I have spent my entire post-college life here. Nearly all of my friends and professional network are here, so I have approximately zero interest in moving, even if it would be cheaper, it would not be worth it.

And arguably wouldn't make financial sense. There's a benefit to being within driving distance of 900 of the world's top 1000 tech companies, or whatever it is.

You might be able to afford a better lifestyle on a modest paycheck in Sioux City, Iowa, but what happens when that company, the approximately ~1 serious tech employer in town, lays you off? In the Bay Area, you just go across the street.

Lest anyone think I'm a cheerleader, I live in northeast Georgia and have no intention of moving to the Bay Area. :-)

Re: Living on $100k a Year

#98

Post by Y7ZCQtNo39 »

Spooky23 wrote: post #69
Y7ZCQtNo39 wrote: post #30

I'm one of those coastal elites. Early career, so ballpark around this salary. I have some student loan debt, but my portion of the rent is only $1,000 a month plus utilities (I split a place). I spend about $2,500 a month. And I sock away the rest (about $60k annually) into investments. $100k still goes far in a high cost of living, coastal area. However, I drive a used car. I'm a renter, and probably will be for aw…

The difference between you and the 1987 version of you is that you are kneecapped from an earning power perspective. Barring equity compensation that appreciates, you’re likely to grow your income until around 35. Then you plateau. You’re also unlikely to retain companies or career skill set through to retirement. So you’re facing a crisis where you need to transition and maintain salary around age 40, where 1987 you…

Your children can always borrow for college. You can't borrow for retirement, so it makes sense to prioritize retirement savings.

I agree, though, that the purchasing power is nowhere near 1987 and that the plateau comes earlier. I suppose it's what makes saving earlier and saving more ever pertinent for the younger generation. If I can get to 200k before I plateau, I'd be happy. If I have a working spouse that makes at least 100k, I'd say we could probably keep the American dream alive for us.

At least via my 401k, there are few poor options to choose, thankfully. The worst you could probably do is pick a fixed income class (and get no growth) or go too risky with international funds (if you for some reason went 100% international). But the target-date funds and index funds provided (SP500, etc) are diversified and generally considered good investments.

Re: Living on $100k a Year

#99

Post by abalashov »

SomeStupidPoint wrote: post #94
abalashov wrote: post #83

Earlier quoted context omitted.

Well, fair enough. Either way, the effect is the same — those variables are excluded from discussions in an almost sociopathic way.

I agree, but poking holes in why they're excluded is important, because it let's you have this exchange -- "You can't argue with the math!" "Well, hold on now, I think you left a whole bunch of things out!" If you don't know where the problem in the math is, despite there being an extremely obvious problem, many people will ignore your objections. That's why they use math, to paper over their obviously poor behavior.…

Aye.

It seems to me we'd do better taking an empirical approach and pricing in widespread psychological realities.

For instance, it's clear that one of the things people don't do very well with, especially as they head into middle age and beyond, is big downward adjustments in lifestyle. It just doesn't accord with the expectation of upward mobility and progression through life anywhere, least of all in the land of the American Dream.

So, even when economic circumstances get worse, their spending tends to remain stubbornly high relative to the quantitative reality. It seems to me sanctimoniously chiding people for that is not a constructive response. It's clearly what most people do, in some measure. The question is how to best deal with that systemically, if in any way at all.

Re: Living on $100k a Year

#100

Post by abalashov »

Consultant32452 wrote: post #92
abalashov wrote: post #82

Earlier quoted context omitted.

Well, indeed; what that adds up to is that it's safer (if perhaps unwise, that's debatable) to get closer to the line with a stable income than an unstable one. Otherwise, it seems your advice is "live within your means", "spend less than you make" and "save for rainy days". Thanks, dad.

>it's safer to get closer to the line with a stable income than an unstable one. No, it means you've failed to accurately assess what the "line" even is. >Otherwise, it seems your advice is "live within your means", "spend less than you make" and "save for rainy days". Thanks, dad. No, my advice was a specific set of principles and practices laid out within Ramsey's book which could help you to overcome the problems…

My point was that with greater volatility, a smaller portion of income remains sufficiently consistent, and thus the line will be lower and the budget will be smaller.
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