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Living on $100k a Year

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Re: Living on $100k a Year

#21

Post by ivraatiems »

mberning wrote: post #6

I really cannot sympathize. My father raised a family of 6 making ~$30k/yr at his peak. Yes we struggled at times. Public school. Knock off sneakers. Cheap cost cutter food and small simple meals. Crap car. Etc. When I started working in software I made way more money right out of school than my family ever made. And I developed a lot of bad spending habits as a result. After a few years I got my head on straight. Pa…

> My father raised a family of 6 making ~$30k/yr at his peak.

When your father was working and you were growing up, $30k was worth more (perhaps much more, depending on how old you are) than it is now. His job probably had benefits and protections modern jobs don't have. What used to work for people increasingly doesn't work, in large part because benefits are disappearing, government programs and subsidies are being cut, and what's considered a "fair wage" hasn't tracked at all with how much things actually cost, especially on the coast.

Re: Living on $100k a Year

#22

Post by jimhefferon »

d4mi3n wrote: post #3

> "And now I'm one of those coastal elites, a term, you know, that people in Middle America use. And it feels like betrayal," he says. "But what I've learned in moving to the coast is there's real inequality. And the biggest driver of that inequality is the tax code. The biggest social welfare has been to the rich and powerful, giving them loopholes and abilities to keep money from the government and keep money from…

> Nobody seems to be interested in improving the situation

Plnty of us are interested. But people with enough money to pay for their own media, and their own politicans and party, they are really not interested.

Re: Living on $100k a Year

#23

Post by thesmallestcat »

ben_jones wrote: post #2

I'm kind of disappointed by this article. As someone who makes a little over six figures (before combined comp.) in the Bay Area I expected to relate a lot to the individuals described in this article. Instead is just had 4 testimonials from individuals who weren't happy on a six-figure income, it failed to list any of the root causes either then a small jab at the tax code.

Sounds like two have crushing debt. The family that's "struggling" on $100k in KC (really?) wants for "educational opportunities for her high-school-aged son," whatever that means, which somehow translates to "working overtime ... to make enough money to live on" (emphasis added). The last account is absent any useful info, just some "Keeping up with the Joneses" comments. It's a puff piece so that relatively well off, comfortable families can commiserate in the shared "struggle."

Re: Living on $100k a Year

#24

Post by paulddraper »

> "People feel like they haven't been getting ahead for a long time," says Jim Tankersley, who covers taxes and the economy for The New York Times.

I won't say this can't be true, but by experience casts doubt on trusting what people "feel".

For example, lots of people feel they struggle to attain homeownership. But homeownership rates are within 1% of what they were in 1980. Meanwhile, median house sizes have increased 50% since then (or 100%!, relative to household size).

Lots of people feel they aren't being paid enough. But median household income has increased ~25% over the past 40 years (50%, relative to household size). (Looking at household, not individual, child care has transitioned from one stay-at-home parent to one working parent + contracted child care and only the latter adds to "household wages".)

Lots of people feel that education is too expensive, but total scholarship money has exploded. In my home state of Florida, a 970 (Math + Reading) SAT and 3.0 GPA gets you a 75% scholarship to any state school. That is well within reach for most university-bound students. Or achieve a 1270 SAT + 3.5 GPA + 75hrs community service for 100% scholarship.

Lots of people feel cost of living is rising. And yet, there are 10% more people living in urban areas since 1980, which tend to be far more expensive than rural ones.

Sometimes I think all some people ask is to own a home and a couple cars in a good neighborhood with good schools in a big city, travel abroad, and go to private or out-of-state school for a few months salary of a hobby job (and obviously without ROTC) after buying the new $700 smartphone every year and continue that lifestyle into government-sponsored retirement. You know...do what their parents did, but without any of the drawbacks.

---

In reality, I suspect these feelings are grounded much more with keeping up with the Jones' (+ Facebook), rather than the objective quality of living.

Re: Living on $100k a Year

#25

Post by jerrycabbage »

This is an awful article. How is it at the top of ycombinator. There is no breakdown of any costs or what their living standard ACTUALLY is. These people could very well (and likely do) have spending issues. Eat out too much, buy too many gadgets, replace their car far too often, etc. Thats the problem far too often. Boo Hoo

Re: Living on $100k a Year

#27

Post by abalashov »

As someone with a six-figure self-employment income, I can also say that cash flow is a very important part of the equation. If you take an appropriate discount for bad/unsteady cash flow (and few of us do), one is led to the conclusion that $100k+ in SE income can often afford one a ~$40k lifestyle at best, in terms of recurring expenses one can reasonably commit to and consistently afford.

That's something a lot of people on salary don't get. Back when I was on W-2 and had much lower compensation than I nominally have now, I had my ducks in a row, taxes paid, a positive savings rate, and good credit. That hasn't been the case since I went self-employed about ten years ago.

If someone were to divide my annual revenue (less expenses) by 12 and distribute it to me on the 1st of every month, a lot of problems would be solved. But because that's not how reality works, I take a bath in late fees, interest, overdraft fees, no access to credit due to bad rating, etc.

Some of those things are more avoidable than others depending on the choices one makes, but that's not the point. The point is that W-2 and SE income are not equivalent. Unless you've devised some compensation scheme that is substantially similar to salary as a contractor, you can't afford anywhere near a $100k lifestyle as a consultant earning $100k+. There are many days I'd happily trade places with folks who get a lower, but steady paycheck every two weeks for doing more or less one job.

Re: Living on $100k a Year

#28

Post by incadenza »

I don't mean to sound unsympathetic, but it would be nice to hear what is eating into their income so much.

My thought pattern here is that if you can't manage on $100,000 a year then you'll have the same problem at $200,000 a year, so on and so forth.

Re: Living on $100k a Year

#29

Post by stanmancan »

The article even touches on how everyone is trying to keep up with the Joneses instead of living within their means.

Everyone is in a different financial position but instead of recognizing that and living a life you can afford, people get jealous of what their neighbours have or their friends are doing and pursue the same lifestyle regardless of if they can afford it or not.

I do not sympathize with someone struggling to make ends meet on $100K a year. That is a ton of money and if you have debt and bills you can’t handle then unless it’s just a result of horrible life circumstances, it’s most likely your own bad decisions.

Re: Living on $100k a Year

#30

Post by Y7ZCQtNo39 »

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 awhile. If I wanted to be a homeowner, a good portion of my retirement savings / investments would be going towards that.

If I decided to have kids, which would mean at least a place with additional bedrooms, plus additional health care coverage costs, etc., I could see it getting tight. I might have to compromise my retirement savings goals.

I don't have a lot, but I'm also a minimalist. And I realize that, income wise, probably 80% of society has it worse than me. I don't know how households earning around $50k would feel any semblance of having a future financially. Growing my savings/investments is the only way I feel like I'm getting ahead. Having any sort of typical American dream goal (house, kids, etc) would basically nullify my ability to get ahead, with the exception of building some home equity.

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