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re: 100k Club
Posted on 8/21/22 at 9:02 pm to thegreatboudini
Posted on 8/21/22 at 9:02 pm to thegreatboudini
quote:
I have managed to keep our monthly household spend the same since January 2019
In dollars? So you’ve significantly cut back on things you buy? With inflation the way it’s been, I don’t know how you pulled that off unless you finished off a car payment or something similar.
1
Posted on 8/21/22 at 9:05 pm to BadatBourre
Just think of it as your ability to max out your 401K contribution.
Stay on the same budget and max out your contribution. Your 50 year old self will thank me.
Stay on the same budget and max out your contribution. Your 50 year old self will thank me.
Posted on 8/21/22 at 9:27 pm to deeprig9
quote:
My household went from a 75k household to a 100+ household and went from getting a 4k refund to getting a 2k tax bill. All W2. It's all sorted out and adjusted now, but that immediate leap in income gave us an unanticipated surprise the next tax filing.
My household income has nearly tripled in the last 6ish years and we have never owed money at the end of the year. We adjust our withholding appropriately with each raise.
Going from 75k to 100k should have no bearing on what you receive or pay in april
Posted on 8/21/22 at 9:27 pm to BadatBourre
Two strippers instead of one.
Life changing.
Life changing.
Posted on 8/21/22 at 10:16 pm to BadatBourre
quote:
How much of a difference does it make once you've crossed into that 6 figure club?
I was working two jobs and just sort of drifted across the line, barely noticed it. We were in the early stages of recovery from a fairly significant financial crisis and had "found religion" on money, so to speak. I was laser focused on spending and, frankly, DGAF what arbitrary amount of money was coming in. If there was OT, I worked it. If there was a way to squeeze a nickel and make a penny pop out (morally, ethically and legally of course), I was squeezing.
From a core standpoint, I think the wealth secret is on the spending side, not the income side (although more income obviously helps).
This post was edited on 8/21/22 at 10:18 pm
Posted on 8/21/22 at 10:34 pm to Ace Midnight
quote:
From a core standpoint, I think the wealth secret is on the spending side, not the income side (although more income obviously helps).
Ehhh
Controlling spending is the key to not going backwards financially.
But income is 10x more important in terms of growing real wealth.
Who do you think will have an easier time building wealth? The guy who saves/invests 50% of his 80k income or the guy who saves/invests 30% of his 200k income?
Posted on 8/22/22 at 2:04 am to JohnnyKilroy
quote:
Who do you think will have an easier time building wealth? The guy who saves/invests 50% of his 80k income or the guy who saves/invests 30% of his 200k income?
The point is that $1 in lowered spending is worth ~20 in passive investing. This is a key principle in the FIRE community. You get more overall value from minimizing expenses.
Posted on 8/22/22 at 5:45 am to TomRollTideRitter
quote:
In dollars? So you’ve significantly cut back on things you buy? With inflation the way it’s been, I don’t know how you pulled that off unless you finished off a car payment or something similar.
Yes, in top line dollars.
You are correct, I did free up a truck payment in that timeframe which helps, but we also did the work to cut out frivolous spending.
Posted on 8/22/22 at 6:36 am to Huey Lewis
Maybe that's key in leanFIRE circles.
In the FIRE groups I see, the name of the game is cutting spending to where you are comfortable and maintain that comfort while doing what you can to maximize earnings. Once you have reach that comfortable level of lifestyle, the only real way to reduce the time to FIRE is to make more money.
You can only cut so much. The amount you can cut from your spending is most likely going to be way less than your additional earning potential.
In the FIRE groups I see, the name of the game is cutting spending to where you are comfortable and maintain that comfort while doing what you can to maximize earnings. Once you have reach that comfortable level of lifestyle, the only real way to reduce the time to FIRE is to make more money.
You can only cut so much. The amount you can cut from your spending is most likely going to be way less than your additional earning potential.
Posted on 8/22/22 at 6:55 am to JohnnyKilroy
As others have said OP, it really depends on your personal situation. As a single guy that would be substantial additional savings/investment.
As a married man with kids, you’re probably getting breathing room on your diapers, bigger house, formula, clothes, childcare, etc with some additional savings assuming no lifestyle creep.
When I hit $100k I began maxing 401k and bought a boat. Wouldn’t recommend the boat from a financial standpoint.
As a married man with kids, you’re probably getting breathing room on your diapers, bigger house, formula, clothes, childcare, etc with some additional savings assuming no lifestyle creep.
When I hit $100k I began maxing 401k and bought a boat. Wouldn’t recommend the boat from a financial standpoint.
Posted on 8/22/22 at 7:20 am to Larry Gooseman
quote:
Wouldn’t recommend the boat from a financial standpoint.
BOAT = Break Out Another Thousand
Boat - a hole in the water into which one pours money
The 2 best days in a boat owner's life - the day he buys the boat and the day he sells it
(I'm here all week, folks, try the fish.)
Posted on 8/22/22 at 9:13 am to Ace Midnight
I agree with this. I bought my boat, happiest I have ever been. Then when I sold it two years later for more than what I bought it for... I was very happen too.
I went from a GS-04 (like $15/hour I think) with the feds during my time at LSU to about $22/hour with the state and now I am in the private sector at $46.52/hour. I graduated from LSU in Dec 2019. The jump from the state to private sector allowed me to get my dream truck, afford more nice clothes, furniture, etc., not worry about spending at the grocery store and still have about 2,000$ leftover at the end of the month to save.
I went from a GS-04 (like $15/hour I think) with the feds during my time at LSU to about $22/hour with the state and now I am in the private sector at $46.52/hour. I graduated from LSU in Dec 2019. The jump from the state to private sector allowed me to get my dream truck, afford more nice clothes, furniture, etc., not worry about spending at the grocery store and still have about 2,000$ leftover at the end of the month to save.
This post was edited on 8/22/22 at 9:15 am
Posted on 8/22/22 at 9:43 am to BadatBourre
quote:
How much of a difference does it make once you've crossed into that 6 figure club? Sitting at 75k, and just dreaming what an extra 2k a month would be like for us.
Not much. Every increase in salary you get you will find a way to spend the money without knowing it. I currently make about 3x when I started my career and I feel like I have less disposable income now than I did then.
If you ever want the feeling of just having so much money there is nothing to worry about, you'll likely never be there. You have to find a way to not want anymore money first.
Posted on 8/22/22 at 10:20 am to BadatBourre
As long as you don't try to make your expenses match your new income, you really won't "feel" the extra money until you start seeing your checking/savings accounts hit those next thresholds. When I hit it, we just happened to be having our first child a few months later. So, it let us be able to continue with our normal expenses but still be able to go out and buy all the furniture, strollers, without blinking an eye. And as soon as we had that SS#, we were able to get the UTMA started since we knew private schooling was necessary based on where we live
Posted on 8/22/22 at 11:01 am to BadatBourre
I went from $65k to $105k in 2018-ish, and it was huge for our family of 5. We were able to keep our head above water at the time, but credit card bills I'd had from school 8 years prior were getting paid down a tiny bit at a time; the big raise allowed us to get all of it paid off in about a year. Since then my salary has crept up a bit, but dang if the kids don't get more expensive as they get older, along with everything else. For us that jump didn't really change our lifestyle too much (still in the same house and still driving used cars) but it feels so much nicer to be able to not worry about credit card debt, and if you don't want to cook once in awhile or you need to send your kid to basketball camp, you can do so without checking your budget to make sure you won't spend more than you made that month.
Totally agree with other folks though on upping your retirement contributions with each raise. Definitely means that a $25k raise won't mean an extra $2k though.
Totally agree with other folks though on upping your retirement contributions with each raise. Definitely means that a $25k raise won't mean an extra $2k though.
Posted on 8/22/22 at 11:26 am to JohnnyKilroy
FIRE only makes sense to me if you hate your career and it’s too late for you to do something else. FIRE for the sake of financial independence is one thing, but retiring at 45 doesn’t make a ton of sense if you do a white collar job. Your mind still needs something to challenge it and occupy it long term. Humans were designed to have some type of work long term. People that retire early and stop doing anything mentally challenging get dimentia faster
My goal is FIRE for the sake of financial independence, then I have the backing to quit my job if I ever don’t like where I’m working and have the freedom to take my time finding the right job. The extra money will offset the income portion of FIRE until I’m actually ready to retire, if that ever comes. But having the nest egg required for FIRE status would be a huge mental relief
My goal is FIRE for the sake of financial independence, then I have the backing to quit my job if I ever don’t like where I’m working and have the freedom to take my time finding the right job. The extra money will offset the income portion of FIRE until I’m actually ready to retire, if that ever comes. But having the nest egg required for FIRE status would be a huge mental relief
Posted on 8/22/22 at 11:42 am to BadatBourre
your expenses will quickly increase to match your new income. Youll be dreaming of the next pay raise and wishing you had that extra 2K a month
Posted on 8/22/22 at 11:50 am to Pelican fan99
quote:
100k aint what it used to be bruh especially with a family. It's pretty nice if you're a single guy like me though
This. And if you earn enough over that to make up for inflation, you start losing deductions like the child tax credit. I have gotten zero benefit from having kids since I was 26 yo. Not to mention bumping up in tax brackets. I'd say $175k is the new $100k. BUT an extra 2k/month once all your basic bills are covered and savings are maxed is nice. It's just hard to avoid lifestyle drift.
Posted on 8/22/22 at 11:55 am to NEMizzou
quote:
Totally agree with other folks though on upping your retirement contributions with each raise. Definitely means that a $25k raise won't mean an extra $2k though.
Financial security is definitely >>>> than living bigger. Take care of that first. Make sure you're adequately, but not over-insured, max out those tax advantaged accounts, make sure you have at least 3 full months of living expenses set aside. 6 months if you don't have a disability policy that kicks in at 3. May seem like alot but you'll sleep better at night.
Posted on 8/22/22 at 12:08 pm to Upperdecker
quote:
FIRE for the sake of financial independence is one thing, but retiring at 45 doesn’t make a ton of sense if you do a white collar job. Your mind still needs something to challenge it and occupy it long term.
While the bolded part is correct, if you think staying in your white collar career is the only way to do this you have a crap imagination.
There is a LOT of shite in this world I'd love to sink my time and mind into but those things don't really fit in to the small handful of hours I have per week outside of work and family responsibilities.
God willing I will be retired somewhere around 50. Maybe a little before maybe a little after. I'm not worried about finding things to occupy my time. I would rate my enjoyment of my career at about a 6 or a 7 out of ten on any given day. I don't hate it at all. But I'm pretty confident I could fill my days with stuff in the 8 to 10 out of 10 range pretty easily.
To each his own, but I have never understood the people who expect to be bored in retirement. Unless your day job is driving race cars or flying fighter jets get out of here with that crap
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