Would I be rich if i earned $150k a year? I'd like to think so :)
If not, an even $200k certainly would do it. What about for you? I have to give a big shout out to Living Almost Large as she posted something similar the other day and it really got me thinking.She adds a huge political twist on it, but i'd totally recommend it if you find this topic interesting - at least for the pretty passionate comments being thrown around on it! (you say one thing about Obama or McCain that someone doesn't like and they are allllllll over it..haha)
But what type of salary or other income would it take for YOU to feel "rich"? Have you ever thought about it? I have the tendency to consider one's net worth to determine that, so it was pretty cool to think a bit differently here. I think for me, I'd have to bring home somewhere in the $150-$200k range if i really didn't wanna have to worry about money again.
But to be honest, i really don't think a set salary determines whether you're wealthy or not. It's HOW you spend it, or not spend it, that's the determining factor.
There are plenty of people blowing through $200k-$300k a year on their lavish lifestyles, yet barely saving a few pennies. I wouldn't consider them rich, even though they may look it (The Millionaire Next Door anyone?). At the same time, there are a select few making $500k+ and saving 90% of it while living comfortably and in peaceful bliss. Your salary/other income definitely plays a big role, but you have to account for where it goes to.
Then we have those crazy frugal bastards (meant in the most loving and sincere way possible) who make $60k and invest 20-30% into their already heavily fortified nest egg! So while they may not be rich at the present time, I guarantee they'll make it faster than those a lot of those non-saving fools making twice that.
As LAL also mentioned, $250k will go a lot farther in places like Smallville, USA than New York City or LA. So that has to be considered as well. I can tell you that splitting a bachelor pad in NYC with 5 people cost me more way more than my old abode in Fairfax, VA which i only split with one person. The nightlife was totally different, but so was the fatness of my wallet ;)
Does all of this really matter though? not really....unless someone's about to pay us our "ideal" amount anytime soon, you can go ahead and file it away in your "good to have on hand, just in case" folder. And I'm still gonna have to base my views on the rich depending on what their net worth is since it shows whether someone's saving/investing or just spending it all away.
Definitely leave a comment with your magic # though, as ya never know who'll be reading it! Plus i hear that if you concentrate on it long enough, you can force it to happen circa "The Secret" kinda stuff. But you can think what you want ;)
Labels: career, millionaire love, net worth
posted by J. Money at
11:34 AM
19 Comments:
I believe I qualify as a frugal bastard (is that gender neutral?). Non profit salary, 50% going into savings. And I live in the heart of a very expensive city. It is definitely about how you spend it.
Hell yes I'd be rich if I made $150k a year!
I see how a lifestyle shift can really blow your money away- but I like to think that with that sort of money I would be able to save and live comfortably - no problem.
I gave you an award by the way :)
Is this your own salary or combined? I think it depends on where you live. In CA, $150,00 combined will make you less stressed, but not rich. I think $250,000 combined would make me feel rich.
Ooooh, I'd be sooo rich!
I think I'd be fine on half of that, really. I'd feel rich even then! I don't have a need to scale up, and living in the south is pretty cheap. :)
I am pretty sure that almost everybody would feel rich if they went from 50,000 to 150,000 overnight. But that does not happen so often. As you go from 50k to 60k to 70k, your expenses find a way of adjusting upwards. (When Donald Trump restructured his debt in the early 1990, he negotiated a monthly living allowance of over 400k after tax! His expenses adjusted upwards big-time, right?)
I agree with all of you who say that living within your means and saving some of your income is a matter of attitude. I have always saved money no matter how little I made. Also, I always felt somewhat comfortable, even when our family (of 4) made only 28k in the late 80s. Yes, I saved money with that income, too, although we lived in an expensive metropolitan area.
Yup, being a "frugal bastard" is definitely gender neutral ;) haha...that's too funny.
I had a feeling a lot of you would consider it a lot of money. I think when we're being so frugal and conscious of our spending habits these days, a jump like that would only help us cushion our game plan.
but you're right Cat, it all depends on where we live and all. And yup, i meant the $150k example to be for only 1 person :)
Vilkri - wow, you are hardcore i love it! glad to see you're so great at saving...esp with your big family.
And thanks savingcent!!! I love awards, so i am honored :) Appreciate you reading and taking the time to comment!
$400,000 and above is a rich salary.
Some of you may say damn, that's way to much, but if you make that much money a year, you can blow your money on frivilous things and still have plenty of money in retirement and saving!
I see people who earn $250 blow through it and not live rich. $50K comes of the top for FED/State/SS taxes. $40K to retirement, $40 for mortgage/prop taxes, $25K for the nanny/childcare, $20K saved for college. Not tough to spend the rest, food, clothes, utilities, home maintenance, etc.
Joe
the hubby and I pull in about $170k a year combined. We live in the San Francisco Bay Area, and we are definitely not rich if you consider that a tiny house measuring 1240 sqft goes for $1 million. Additionally, we're hit by a lot of taxes so our take home isn't as large as it looks. We do save a lot and we plan to move out of here someday.
pfft. i so agree with the comment about making 400k is rich. agreed, then you can live in luxury and save tons of dollars.. win-win :)
but yes, to me 150k would be mind-numbingly amazing. i'm a college student, i make about 6k a year. and i call myself a 'frugal bastard' because even if i have 200bucks in my bank account that's over an entire paycheck sometimes.
oh man. the degree will come, in just a few short years. and then even 40k is going to feel well, nice :) then again, i live in metro detroit where a nice condo can be found for 70k and a decent-area house can be found for 75k. so it's definitley a matter of where you live.
$400k would make me faint...and not so much because i'd be forever wealthy, but i'd hope to come out a live from all the partying i'd be doing ;) haha.. so it better come gradual!
And $75k for a house?!!! Sexy as hell. i think my door cost that.
i don't think it necessarily matters where you leave. i live in one of the top 3 most expensive cities in the US (and not in the 'burbs). 150K would triple my salary. i live a great life right now (even with putting 50% into savings) - hell yeah i'd be rich. and so would anyone else. if you can't live rich on that much you *really* need to rethink your "necessary" expenses.
just sayin'.
Interesting question - and Im going to add another dimension in answering....
I make not to much less than 150k a year in total comp, and no I dont feel rich. I live in San Francisco though...
I think the extra dimension Id like to add is -- Id expect I *will* feel pretty rich after making this kind of money for a few years.
Making that kind of money will allow me to save 40% (including 401k), so after 3-4 years Id hope to have enough saved that there is a nice cushion to allow me to feel 'rich'.
What a great post - and I agree I don't think your salary necessarily makes you rich. I don't really have a magic number...just looking forward to the day when work in itself is so rewarding that the money doesn't even matter.
J,
150K you think is enough? Then let me tell you Mr.Finance and I make together around $152, live in OC and we definetly dont feel rich. I wonder once we pay off our debt how we would feel. Maybe not rich but more comfortable. Perhaps, finally we can make a baby.
Interesting question. I'm always thinking 'just another £20k in my salary and I'll be comfortable...' but it never works out that way. I always seem to live just within my income, as lifestyles change as income increases, so it kind of remains relative. I think it's an interesting issue though, especially when you look at the lifestyles of top earners. Take a random London city banker in his early forties. If he's any good at his job, he probably gets an annual bonus of anything up to £1 million before tax, on top of his base salary (well, pre-credit crunch, anyway). Lots of young people get into industry with the idea that they'll work their guts out for a few years, make some BIG bucks, then get out before they burn out. Unfortunatley, once they get to the point where they want to do that they are saddled with financial commitments that aren't so flexible, such as multiple massive mortgage payments, expensive cars, wives that are used to the high income and the lifestyle that comes with it, and kids in private schools. Sorry about the detour from the main question, but it is something I think about often, living in London where it's all about the Square Mile. I don't know any city boys who don't live the lifestyle, as it is drummed into them and perpetrated through the companies themselves. So, IMO it's all how you spend it, not what you earn.
I like that whole extra dimension! "after making this kind of money for a few years." is definitely something to consider.
If you're at $150k or $400k per year now, it really makes a difference as to how long someone's been making it for. I'd guess that you'd be slowly moving up to any of those 2 ranges over time, which i guess then also gets you into the whole "upgrading your lifestyle" gradually as well.
to be honest, it's truly scary that you can make a couple hundred g's yet still feel average. i don't care where you live either, if you can't save or invest enough to have a nice cushion by that point, i'm afraid your $hit out of luck...
that's obviously my own opinion though, everyone does their own thing and in their own way. if you prefer "looking rich" over "feeling rich", then more power to you my friend. All i know is, ima keep saving that money ;)
As a journalist, I was bringing home only $19,000 a year. It paid my bills for sure, but I knew that after graduating college (a year and a half to go, baby!) it wouldn't pay my student loans off as quickly as I'd like. (Say what you will about student loans being "good debt." Debt is still debt, and I'd like to get out of it as quickly as possible to avoiding paying ridiculous amounts of my hard-earned money to interest.)
So I began scouring the Internet for a new job. I ended up going part-time for $11 an hour, and I plan to keep this job until I finish school in the hopes that it will allow me to be stress-free and focus on my education.
But I also found many job listings for office assistants with salaries starting at $30,000. Hold up! $30,000 to do what I consider to be mostly-stress-free work? I could pay off my student loans in 3 years with that kind of salary! (I have $26,000 in student loans with one year to go. Living expenses are only around $500 a month or $6,000 a year, including groceries, gas, a decent level of entertainment funds, rent, utilities, cell phone and Internet.)
So what's my magic number? $30,000! I laugh at myself from time to time for having such low income goals, but I chalk it up to my belief for 10 years that I'd always be making under $22,000 a year. $30,000 would allow me to live VERY comfortably ($24,000 over what I'd actually need to live.) if my bills do not substantially increase. I like having such an attainable number though because it keeps my expectations in check. I'll never want a mansion if I know I'll never make a mansion-owner's salary. ;)
I like the way you think ;) If you can get live comfortably with under $20k every year, you are set!!! I wish I had that mindset at your age - would have def. changed my habits even earlier...imagine if you get a job at $40k or $50k later? you'll be in heaven :)
ps: enjoy college as much as you can! I'd do anything to go back...haha..
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