because money does not make you rich
One of my favorite quotes below, attributed to Bob Dylan:
“A man is a success if he gets up in the morning and gets to bed at night, and in between he does what he wants to do.”
Why a Six-Figure Salary No Longer Means You’re Rich
91–100 of 101 posts
Re: Why a Six-Figure Salary No Longer Means You’re Rich
#92Earlier quoted context omitted.
As someone who recently quit a six-figure tech job in SF... 100k/year does not "barely" cover cost of living. When I first got the job, I decided I wanted to live close to where I was working in SOMA, which meant paying quite a bit more in rent, but I never had any illusions that what I was paying for was a necessity of life. Though I mainly picked it out for the location, it was easy to tell the building was built e…
That's sounds awesome until you factor in a family with several kids and some retirement goals. Not everyone lives in their 20's forever.
I'm friends with a married couple who's got one kid, planning on having more. Husband works in tech, wife doesn't work. Their finances end up looking a lot like mine, except they live in an area of Palo Alto where my rent gets them a decent-sized apartment. (Both I and they are saving for retirement.)
Re: Why a Six-Figure Salary No Longer Means You’re Rich
#93Earlier quoted context omitted.
That's sounds awesome until you factor in a family with several kids and some retirement goals. Not everyone lives in their 20's forever.
I'm friends with a married couple who's got one kid, planning on having more. Husband works in tech, wife doesn't work. Their finances end up looking a lot like mine, except they live in an area of Palo Alto where my rent gets them a decent-sized apartment. (Both I and they are saving for retirement.)
ok, so let's try to see how this works out
making $100k/household in Palo Alto:
$30k goes to taxes $30k goes to family housing, unless it's a trailer park probably about $10k goes/will go eventually to things like soccer, music, other misc kids stuff, unless you decide to punt on after-school development
the remaining $2.5k/month goes to food and clothing for 3 and I guess retirement savings? We also leave out cars, gas, vacations, cellphones, saving for college, etc etc.
There is not a chance to ever buy any housing in this area on that. I also don't see much room for more kids. Sounds like barely covering living expenses.
Re: Why a Six-Figure Salary No Longer Means You’re Rich
#94Earlier quoted context omitted.
It is problematic for dual-income households with kids. In these situations, kids are raised by a combination of: 1) Extended family (typically retired grandparents) 2) Daycare / child-care / "school system" 3) Private child-care (e.g. nannies or babysitters) #1 is cheapest, but ties the family down to where the grandparents are. Both parent jobs need to be located relatively close by. #2 typically take a huge chunk…
>#1 is cheapest, but ties the family down to where the grandparents are. Both parent jobs need to be located relatively close by. Also, it's kind of shitty to your parents. Is watching your kid from 9-5 on weekdays really what they wanted to retire for?
Um, yes? It is bizarre how unaware some folks are of how human civilization has been organized for centuries.
Re: Why a Six-Figure Salary No Longer Means You’re Rich
#95Earlier quoted context omitted.
I think there are a couple of factors you're overlooking. Consider the case of a dental hygienist married to a nurse. In SF, they both earn about 110k a year. So $220k is a high salary, comparable to a physician in a modestly paying speciality. Here's the thing... I think payroll deductions apply to the entire 110K of each dh and nurse's salary, but only the first $110k of the physicians salary. However, the second s…
In progressive tax situations that is called the 'marriage penalty' (second salary is all taxed at the higher marginal rate) which is mitigated somewhat by changing the tax thresholds for married people filing jointly. You can file separately of course, and it seems a number of people are living together and filing as individuals, it gets complicated as you get kids because they become dependents (and a tax credit) o…
Married filing separately doesn't change tax rates, it just splits the tax into two paper trails.
Re: Why a Six-Figure Salary No Longer Means You’re Rich
#96Earlier quoted context omitted.
>#1 is cheapest, but ties the family down to where the grandparents are. Both parent jobs need to be located relatively close by. Also, it's kind of shitty to your parents. Is watching your kid from 9-5 on weekdays really what they wanted to retire for?
Um, yes? It is bizarre how unaware some folks are of how human civilization has been organized for centuries.
So that's how you want to spend your retirement years, as a babysitter?
Re: Why a Six-Figure Salary No Longer Means You’re Rich
#97Earlier quoted context omitted.
> "the growing number of dual-income households has been suggested as an exacerbating factor in the growing income inequality in the U.S." That's a red herring. When people talk about inequality as a serious economic problem, they're not talking about any discrepancy between households living off a salary or two. They're not even talking about the discrepancy between the ninety-nine and the one percent -- they're tal…
I don't think it's as much of a red herring as you suggest. More and more, a dual income is required for basic sustenance. That has a significant impact in many intangible ways: stress, family dynamics, freedom to pursue entrepreneurial efforts, etc.
It was suggested that dual incomes were a cause of increased inequality, not a symptom. And that's wrong.
The inequality that's an economic problem is not between those earning more than 100k and those earning less [1]. The problematic inequality is the difference between those earning more than 1M and those earning less. [2]
I absolutely agree that dual incomes are an increasing-necessity, but they're a symptom of inequality. They're more-required because the "below 1M" earners have not been seeing their wages rise with their increased productivity. And those "lost wages" are going to the "above 1M" crowd -- not the above 100k crowd.
[1] Two incomes are not making anyone cross that line, save a hypothetical family with two executives at small-to-mid-size firms. And the problem is primarily the rates-of-change of wages between those earning more than 1M and those earning less. That there's a gulf is not, by itself, much of a problem. That it's getting wider, is concerning. That tangible objective increases in worker output and efficiency are not translating into increased worker rewards is the ticking time bomb.
Re: Why a Six-Figure Salary No Longer Means You’re Rich
#98Consumerism. It convinces people that once they make $100k/year, they require a vehicle that befits someone who makes that much money. It convinces people that they require a place to live that compares to their other 6-figure earning peers. More, bigger, better -- the importance of those three things outweighs most everything else. I grew up (and now live) in rural Appalachia. The "American dream" is defined much di…
There is little clear thought about the range of options in major expenses. Most feel intuitively the range of "not enough" vs. "not necessary" without giving it the contemplation it deserves.
For example, we wanted features in rental living space commonly only found in condos or more expensive rental property.
We prioritized and ended up cutting almost 40% off our rental costs and got every feature we needed and wanted most (e.g. on a park, in-home washer/dryer, corner unit, two-story floor plan, super-close parking, neighborhood living near freeway, etc., etc.)
We gave up a lot of square footage (but met all storage space needs). Lower rent was a predicting factor that maintenance would be poor (but it's not terrible), neighbor likeability varyies more than we would prefer, etc. But it really feels like a complete win.
Managing smart auto maintenance in part by using mechanics on JustAnswer has allowed similar savings for our vehicles.
Re: Why a Six-Figure Salary No Longer Means You’re Rich
#99Earlier quoted context omitted.
I'm friends with a married couple who's got one kid, planning on having more. Husband works in tech, wife doesn't work. Their finances end up looking a lot like mine, except they live in an area of Palo Alto where my rent gets them a decent-sized apartment. (Both I and they are saving for retirement.)
ok, so let's try to see how this works out making $100k/household in Palo Alto: $30k goes to taxes $30k goes to family housing, unless it's a trailer park probably about $10k goes/will go eventually to things like soccer, music, other misc kids stuff, unless you decide to punt on after-school development the remaining $2.5k/month goes to food and clothing for 3 and I guess retirement savings? We also leave out cars,…
We live in a world where a lot of people are still living on $2 a day or less. And you consider $10k/year on soccer and music lessons a necessary living expense? Gimmie a break.
Re: Why a Six-Figure Salary No Longer Means You’re Rich
#100Earlier quoted context omitted.
As someone who recently quit a six-figure tech job in SF... 100k/year does not "barely" cover cost of living. When I first got the job, I decided I wanted to live close to where I was working in SOMA, which meant paying quite a bit more in rent, but I never had any illusions that what I was paying for was a necessity of life. Though I mainly picked it out for the location, it was easy to tell the building was built e…
That's sounds awesome until you factor in a family with several kids and some retirement goals. Not everyone lives in their 20's forever.
Here's what my family's spending looked like over the last 12 months:
$8,824 housing
$1,870 food
$2,965 medical
$8,982 personal and transit
$55,306 savings
$52,761 taxes
$130,708 donations
$261,416 total (income)
To adjust for there being about twice as many people, let's double the first four categories. And because we're talking about a $100k income let's decrease taxes proportionally down to $20k. Now tax rates are graduated so we would really pay less than that, and kids cost less than adults per person in terms of food and housing, but let's be conservative and stick with this. What do we get?
$17,648 housing
$3,740 food
$5,930 medical
$17,964 personal and transit
$21,753 savings
$20,000 taxes
$10,000 donations
$100,000 total (income)
(This is Boston, which is not quite as expensive as the bay area, but nearly so.)