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Living on $100k a Year

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Re: Living on $100k a Year

#61

Post by killercup »

azinman2 wrote: post #54
killercup wrote: post #51

Earlier quoted context omitted.

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.)

Not to mention high quality education through university.

Yeah, that's something I always forget about when talking to people from the US: I don't have any student loans. A semester at a university in Germany costs around 250€ (plus housing and food), so it's hard to get to a point where you need 10 years to pack back loans. I had a part time job all through university and even saved up a reasonable amount of money.

Re: Living on $100k a Year

#62

Post by rayiner »

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.)

The Maryland number includes social security, but not health insurance. Health insurance is hard to account for, because most people in the $100,000 get employer-provided health benefits on top of salary, which are tax-free. But I'm also excluding a bunch of itemized deductions (mortgage interest, etc.) that don't exist in Germany that are widely used in that income bracket in the U.S.

Re: Living on $100k a Year

#63

Post by rayiner »

azinman2 wrote: post #54
killercup wrote: post #51

Earlier quoted context omitted.

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.)

Not to mention high quality education through university.

They pay for those benefits by heavily taxing the middle class. If someone proposed a tax bill that cut corporate tax rates, held the line on taxes on incomes over $250,000, dramatically jacked up taxes on people making $50,000-$250,000, and instituted a 25% sales tax, to pay for free/cheap education and healthcare, they'd be shot.

Re: Living on $100k a Year

#64

Post by Consultant32452 »

fady wrote: post #42

A lot our missing the point. 100k/year is good but it takes just one major expense for that to set you back, put you in the hole, and usually leads to more interest, fees and spirals out of control. "The report, put out by Pew Charitable Trust, includes the results of surveys conducted in 2014 and 2015 to see how Americans were coping with what are referred to as financial shocks—those one-off expenses that crop up f…

>A lot our missing the point. 100k/year is good but it takes just one major expense for that to set you back, put you in the hole, and usually leads to more interest, fees and spirals out of control.

It really should not, if you've budgeted conservatively in the way that our grandparents generation did. For example, if you don't have 3-6 months of expenses in a savings account, short term disability insurance, long term disability insurance, and a term life insurance policy of 10x your annual salary, you're living a fairly high risk financial lifestyle. Again, if you budgeted the way your grandparents did you wouldn't have any debt except MAYBE your house, so a financial setback would almost certainly not result in more interest or fees, since you wouldn't be paying any interest to begin with.

You've accepted this false narrative that the banks have sold you on that being perpetually indebted to them is normal. It's not, from a historical standpoint. And you don't have to live that way.

Re: Living on $100k a Year

#65

Post by abalashov »

Consultant32452 wrote: post #59
abalashov wrote: post #27

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…

It sounds like you are not budgeting appropriately for the amount and variability of your income. I just recently left the consulting game, but did so for nearly a decade. If you're truly interested in making a change I recommend reading The Total Money Makeover by Dave Ramsey.

I'd like to think I budget appropriately, though I'll admit I didn't always when I was younger; it's an acquired skill. But you try budgeting appropriately through a divorce and absurdly expensive custody battle.

But in a way, you're making my point for me; because $100k in SE income is not the same as $100k in W-2 income, it requires special budgeting considerations, to the degree that I'd benefit from reading a whole book about it. :-)

Re: Living on $100k a Year

#66

Post by pjc50 »

Consultant32452 wrote: post #37
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…

>Is there anything that can be done to improve the situation? Yes, but it's all the things that "coastal elites" don't want to hear. The first two topics of conversation would likely be about trade and immigration policy. But it's hard to talk about either without being shouted down as xenophobic or racist. It's worth noting that Obama ran on a platform to renegotiate NAFTA during his first primary.

What evidence is there that protectionism and further raising of the immigration barrier would actually solve any of these problems?

Re: Living on $100k a Year

#67

Post by tedivm »

Spooky23 wrote: post #53
tedivm wrote: post #36

Earlier quoted context omitted.

Food stamps and WIC are welfare. What exactly do you think welfare is?

Usually temporary assistance, which is when you get cash is considered welfare. Most people who understand this stuff don’t consider safety net programs like food stamps or WIC that way. The difference is that the Food stamps/WIC allow you to work, and most people on them do. “Welfare” requires you to not work in order to get a benefit. The most vociferous disgust regarding people on welfare usually comes from people…

That is a pretty ridiculous definition, and isn't even self consistent. With the exception of disability insurance and unemployment the majority of welfare programs (including where people just get direct cash) are income based (meaning people are allowed to work, but if their income rises above certain levels they lose some of the benefits).

Food stamps are exactly the same, as is the reduced price lunches mentioned. If his parents made more money they would lose access to those welfare benefits.

Re: Living on $100k a Year

#68

Post by jorblumesea »

cperciva wrote: post #58
jorblumesea wrote: post #15

The middle class has been unfairly burdened with paying for the expenses of the entire country. The poor, unable to, the rich, unwilling to. Tax breaks are at best a very short term proposition, and if the numbers are to be believed, the current tax plan only serves to widen the gap over time. Unfortunately, many Americans have been convinced to vote against their best interests since in many places, D means Devil. H…

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…

The federal tax code is a highly unequal affair, and due to a system of complicated loopholes and itemized deductions, the wealthiest among us get the lions share of spending and deductions. While I agree that raising taxes by 500% on the rich is an absurd idea, it's really not asking much for the wealthy to pay their fair share.

These deductions and "welfare for the rich" basically amount to hundreds of billions in lost revenue.

This is well documented, NYT has a good run down: https://www.nytimes.com/2015/03/18/business/economy/taxes-ta...

If you're in the top 0.1%, the actual taxes you pay each year is a far lower percentage than the middle class would pay, due to this unequal system. The rich get richer, and use that money to rig the game further.

Just look at the current tax bill that was passed.

Re: Living on $100k a Year

#69

Post by Spooky23 »

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 would be entering peak earning years.

It’s a particularly vicious cycle as professionals marry late and have kids late, so when you’re scrambling to maintain your 401k to retire, you get hit with a big college bill in your late 40s/early 50s. If you invest unwisely and don’t have a home, you’re choosing to either retire comfortably or not pay for college.

Re: Living on $100k a Year

#70

Post by rayiner »

flatline wrote: post #43
ivraatiems wrote: post #21

Earlier quoted context omitted.

> 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…

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.
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