A few of us were having drinks at a bar with a patio last evening when a Lamborghini pulls up. A fun debate started with someone saying they will never have the $100M that’s needed to afford that car and a rich lifestyle. So it got me thinking what you really need to afford a wealthy lifestyle, either in net worth or income.
First, let’s calculate how much you need:
-Lamborghini lease incl insurance is $5k/month
- Range Rover daily driver is $2k/month
-$3M house with prop taxes is 15k/month
- Renting a boat couple times a year $1k/month
- trip for 4 in biz class with top hotels is $30k. Say 4 trips a year. Averages out to $10k/month
- $5k for grocery, gas, miscellaneous stuff
-Avg $2k/month for kids stuff
-$5k/month for shopping, gifts, celebrations
-$5k/month for services (cleaners, cooks etc)
So far we’re at $50k/month. Or $600k annual. Which equals $1M/yr in pre-tax W2 income or $750k/yr in passive income with long term capital gains. If that house is paid off, you need only $500k/yr pre tax to fund it all.
So income wise, if you want to save half and spend half and still live a baller lifestyle, you need $2M/yr. That’s an M2/L7 couple in tech.
Passive income and net worth wise, you need $12M invested and a paid off home. That’s it. All these numbers have inflation buffer built in. Most of you Sr SWEs will get there by age 45-50.
Awesome awesome time to be in tech. Hope the gravy train lasts another 10 years at least.
Some of you will argue $3M doesn’t buy a baller house. Well, it does where I live. $5M buys a baller home anywhere (it’s all relative). Just add another $2M to your number.
TC > $1M YoE 17
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comments
Most of you Sr SWEs will get there by age 45-50.
Nice car (i.e. BMW i8) - $1K/mo
$750k mansion in midwest - $4K/mo
Renting boats - $1K/mo
Trip for 4 in economy, to EU, 10 times a year - $4K/mo avg
Groceries, uber eats, food delivery for 4 - $2K/mo
Toys, games, clothes etc for kids - $500/mo
Gifts, celebrations - $200/mo
Do your own dishes - $0/mo
So we're at $12K/mo, or $140K annual, meaning $200K/yr in pre-tax income, for a more reasonable but clearly low upper class/upper middle class lifestyle. Double for saving you need $400k/yr which you can get easily from L6, some L5 jobs. You can still take that first class trip to Tokyo once a year or better once every 2 years.
Most SWEs (in FAANG) can get this lifestyle by mid-late 20s, and they likely won't have kids, so those flights go to first class and costs get cut to only $20K/roundtrip flight. Definitely achievable for most on Blind if you LC grind and get those jobs. This also don't factor in buying expensive clothing or dinners, you can get it for $50K more in TC, 2 expensive dinners/mo and some good clothes shopping every couple months
Just goes to show we are not far off from living high class life, but only thing left is to find a job that doesn't crush your soul
You also forgot to include the other homes and flying first class between them.
Nursing nanny is 8k+tips.
Daycare is 3k or up.
Private school is 3k or up
After school tutor / activity maybe another 1k
Now Multiplier that with # of kids. You need another 200-300k w2 income
Also people want to be conservative, ie if I’m laid off I still want to afford the lifestyle for a while. So having 3-10x of your projected number makes practical sense.