How does the life change when you start making 200k or more base salary than 130k base?
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?
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.
You can but about 2k more worth of cheeseburgers a month post taxes. Realistically, you just save more unless you have lifestyle creep.
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.
So you don't save anything besides 401k from 220k base?
$130k base is like $85k after taxes. $3k in rent is $36k/year. What are you spending $49k/year on?
You can finally afford to rent an apartment.
I invest all the extra
You get laid more often
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.
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.
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.
It's the stock money which makes the difference.