Compensation

How does the life change when you start making 200k or more base salary than 130k base?

OSIsoft ret.co
Mar 14

Do you feel rich? Do you spend a lot more? Do you feel like now you don't really have to worry about spending on anything?

(Of course, buying a house might still be difficult, but what about others?)

What are the things that you couldn't do with 130k but can do with 200k?

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  • LeanTaaS ♥️ data
    It's the stock money which makes the difference.
    Mar 140
  • Oracle now@google
    You can finally afford to rent an apartment.
    Mar 140
  • You can but about 2k more worth of cheeseburgers a month post taxes.

    Realistically, you just save more unless you have lifestyle creep.
    Mar 140
  • We make $400k+ in Boston area and don’t feel rich . One kid , on track for 2. We end up with about 200k post tax and 401k. Daycare is 2.5k/month , mortgage and property taxes 5.5K for an average home in a good school , Maintainence is another $500, college fund about 15k:year . Once second kid is here we will basically not be saving much outside of 401k and college funds . It’s because mortgage is so fuckingmuch
    Mar 1410
    • Google Bergey Sin
      This. Avoiding kids is one of the best financial moves you can make.
      Mar 14
    • Credit Karma WRra32
      Correct the last line to “mortgage + daycare is so fucking much” and I’m on board lol
      Mar 14
    • Your day Care is ridiculously expensive.
      Mar 14
    • Apple OFOM41
      Wow how much did you buy your house for and what’s the square footage?
      Mar 14
    • Facebook YxQF87
      Why the fuck did you buy a house?
      Mar 14
    • 1.05M house , yes you are right it’s day care and housing that is killing us . Wife wants a nanny which costs just as much as well. It’s impossibly crazy to have children , don’t have any if u r not rich
      Mar 14
    • Apple it’s between 2k and 2.5k sq ft , great school district , can be under 1 hr to Boston depending on the day in peak rush hour , it’s renovated not new .
      Mar 14
    • Pegasystems ATrefler
      So you have nothing left after you have bought everything you want and maxing out 401k while giving your kids the best opportunities
      Mar 14
    • Apple OFOM41
      Thanks for responding @justme2k19! Was curious about the housing market in Boston Area especially compared to Silicon Valley.
      Mar 14
    • Credit Karma WRra32
      Boston is very expensive, but it’s much cheaper than LA, NYC, or SF.
      Mar 14
  • Amazon
    🍪cutter

    Amazon

    BIO
    Op
    🍪cuttermore
    You get laid more often
    Mar 140
  • Credit Karma WRra32
    220k base after 7% 401k distribution is roughly 10k a month.

    3k for one bedroom apartment, 7k for everything else.

    At 130k base, I’d probably need a roommate or I’d have to live in a non-desirable neighborhood.
    Mar 1416
    • New ORFM42
      Trust me. People live very well on $85k, take me for example. You also need to take into acccount RSU and bonuses. Make it $100k total.

      Now, I don’t neccessarily need a one-room apartment. (Says ~1.5k/month on renting) => 18k a year. Food and everything else for another $2k => 24k.

      Cash burn: 42k, 68k for investing imo is pretty good.
      Mar 14
    • Wayfair str(10)
      Ok but like what are you spending $49k on? If I spend half my money on rent but still have $2k/month left over, who cares that I'm spending >1/3 my income on rent?
      Mar 14
    • Credit Karma WRra32
      str(10) nothing wrong as long as you have parents to bail you out.

      If you even went a couple months without working it would be a financial calamity for you.
      Mar 14
    • Wayfair str(10)
      Wtf are you talking about? I have a 6 month emergency fund in addition to other savings, and I save $2k/month. Every ~2 months I buy myself another month of runway. Also unemployment is a thing.

      Why word you assume I need rich parents to bail me out?
      Mar 14
    • Credit Karma / EngMovingGoal
      My colleague is likely confused by the conventional wisdom that one should only spend X% on rent.

      The nuance of the above rule is that it stops mattering as much when incomes get large, which really means anywhere north of 100k.

      If you are solvent, go you!
      Mar 14
    • Credit Karma WRra32
      Okay just went to paycheck city calculator. 130k base is 7k a month, after 401k you’re at 6.5k a month, then take away another $100 for medical benefits / commuter pass etc.

      Paying 3k rent on 6.4k cash take home is lol.
      Mar 14
    • Wayfair str(10)
      WRra32, you're simply parroting what you've read from financial blogs. You've given no evidence to support your position and you've made wildly inaccurate assumptions about my financial situation. Super cringey.

      If I can save 1 month+ of expenses every two months and also pay $3k/month, who the fuck are you to say I shouldn't do it?
      Mar 14
    • Google beefjezos
      I'm paying $2.3k for rent+utilities on my $6.2k per month after tax and I feel poor :(
      Mar 14
    • Str(10) u r also saving for ur future when u r old , u have children and they go to college , get married etc etc . 18.5k In 401k every year wont cut it
      Mar 14
    • Wayfair str(10)
      Here's a thought - why don't people who have no fucking idea what my financial situation is stop lecturing me about my financial situation.

      I don't pay $3k in rent. I'm saying IF I DID, I'd still have $49k left over post tax, which is MORE than enough to live on and save a large sum of money.

      Also $130k base is entry level in the bay area, and if you're still getting paid entry level money after a couple of years of experience, you're an asshole.
      Mar 14
  • SAP kimsoo
    You think too much. Rich means you earn a couple millions a year at least. Or you have property or deposits worth hundreds of millions. Engineer is just an engineer, still middle class.
    Mar 145
    • Facebook / EngWildGoose
      FIRE is the definition of wealthy. And you don’t need hundreds of millions for that. Even 10m would let you withdraw up to 400k (inflation adjusted) til the rest of your life.
      Mar 14
    • Salesforce Zed12
      I'm hoping to retire on $800k in the next few years. That's $32k a year at 4%. That's plenty to live on and I'll probably earn more doing something I love once I'm FIRE. BTW, that includes having my house paid off. Like WildGoose said, that's the definition of wealthy. The more content you are with less, the quicker you get to feeling rich. Plus, we're all already wildly rich based on the rest of the world.
      Mar 14
    • Facebook gEKd54
      Dude - engineers are not middle class...
      Don't you think it's a bit absurd to call the people in the top %1 of compensation in this country middle class?

      True, as long as you depend on a salary to pay the bills you're not financially independent, but that has a lot to do with the decisions you make on how to spend the money.
      Mar 14
    • Fb engineers might be top 1% but engineers are usually too 5-10%
      Mar 14
    • Facebook gEKd54
      I accept your correction - it depends on whether you measure by household or personal income.

      Top 5% personal income start at around 100k and almost all engineers clear that.

      For an household this is 166k and I think most engineers reach that within a few years.

      Still - even if engineers where in the 90th percentile or above they dont qualify for the middle class
      Mar 14
  • Facebook / EngWildGoose
    Once I started making more than I need (arguably that’s more than 200k) I stopped tracking every dollar I spend. I just live instead of counting money.
    Mar 140
  • Intel no_name?
    I’d like to hear how people avoid the higher taxes. Maxing out 401k and HSA are two obvious ways but what else can we do to reduce the total taxable income/tax bracket.
    Mar 145
    • Symantec / IT
      SymSnacks

      SymantecIT

      BIO
      Executive serving the Operations and IT industry for almost two decades out of the Bay Area. My passion is growing people into their fullest potential.
      SymSnacksmore
      Deferred compensation is another way. Useful to defer your actual pay to a later date when you might be in a better tax situation (retirement, lower paying job etc).
      Mar 14
    • Google Bergey Sin
      Google Roth Mega backdoor.
      Mar 14
    • Microsoft uhuhu
      @bergey - that is smart and I do it but does not defer taxes. The balance does grow tax free though.
      Mar 14
    • Intel no_name?
      Are capital gains tax free in Roth IRA ? Is that the advantage it has over a regular brokerage account?
      Mar 14
    • Microsoft ujRW20
      Roth accounts grow tax free, but the dollars in the account are after-tax dollars. Traditional accounts grow tax free, but you pay taxes when you take out dollars from the accounts. You put taxed dollars into a brokerage account. These funds are taxed when sold (different rates for short term vs long term capitol gains)
      Mar 14
  • I went from 130 in Philly to 220 in NYC.
    I take a bus now rather than driving my Accord (which as a second car in NYC I could not afford and had to sell)
    I live in a shittier apartment compared to one in Philly.
    But ya.. the bank balance and savings increases. Maybe will be able to retire earlier.. But hard to keep lifestyle creep at bay... My wife now shops at Neiman Marcus and not at Marshall's anymore.
    Mar 142
    • Facebook ra37cbaufh
      +1000 for lifestyle creep
      Mar 14
    • MathWorks cJ8oNw
      How is it living with 220k in NYC? Are you living in Manhattan?
      7d
  • Google iambackag
    If you are smart, you just save more and worry less about the occasional bill or vacation budget
    Mar 140
  • New
    EMVH32

    New

    PRE
    Amazon
    EMVH32more
    You pay more taxes. You save every dime and live like a poor person the first year otherwise you’ll under pay taxes and then you’re screwed.

    You also do what do what you can to hide from telemarketers.
    Mar 140
  • Facebook FfEV64
    Nothing changed for me. I picked up a better car to drive, but that's it. I save more money, but don't plan to touch it unless absolutely necessary.
    Mar 140
  • F5 Networks d12345kj
    Life is still same. Still do check budget, count dollars... :)
    Mar 140
  • Dave Ramsey hoo-rah aside, it’s important to reward yourself with something. You worked hard and that shouldn’t go unrecognized internally. Maybe it’s a new car, a nicer apt, etc.

    But, do your best to avoid “lifestyle creep”. Don’t finance a crazy expensive car, or make financial decisions with long term impacts like becoming house poor. It will only restart the hedonic treadmill.
    Mar 140
  • Microsoft / Eng
    temp_

    MicrosoftEng

    PRE
    Amazon
    temp_more
    I invest all the extra
    Mar 140
  • Facebook / Eng
    mrballz

    FacebookEng

    PRE
    Microsoft
    mrballzmore
    With my family, lifestyle creep is real. It happened several times - our household income jumped 20-50% YoY, credit card debt started creeping up, had to sit down, review spending, make a budget. To be fair, kids were also growing and getting more expensive, but still.

    Our household income is over 500k and we are still on budget, regularly saying no to things kids want, etc.

    That said, I don't stress about unforeseen expenses like I did when I started. There is enough buffer in discretionary spending and large liquid savings.
    7d2
    • MathWorks cJ8oNw
      wtf you had credit card debt with 500k income? what in the world were you buying?
      7d
    • Facebook / Eng
      mrballz

      FacebookEng

      PRE
      Microsoft
      mrballzmore
      Maybe credit card debt is the wrong word, more like credit card balance.
      7d
  • Intel / EngRiso4ever
    More travel to other countries, fly business class.
    Mar 140
  • Google Woopsy
    For me it was moving from a 2BR apt to a 3BR house (one kid), by affording a $5k rent
    Mar 140
  • Facebook ra37cbaufh
    I live the same life but I feel safer abiut the money
    Mar 140
  • Microsoft jPzm21
    Whatever the income is that you stop living month to month is when you start to live a little more stress free. You can achieve this at lower incomes if you don’t let your lifestyle grow at the same rate as your income.
    Mar 140

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