$350k per yr not enough???
sweetjamesjones
I support the naked hustle
I didn't know you fellas in the $300k+ club had it so rough.
https://www.marketwatch.com/story/this-b…
https://www.marketwatch.com/story/this-b…
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A mortgage of 3900 / month equates to about a 825,000 loan, or about 1 Million dollars home assuming 15 to 20 percent down. Which is about 250,000 higher than what a person with that income level would buy. The article mentions a 1.8 million dollar home, which is even more than a family that makes 350K / year would even consider. 1.6 Million median home price is also wrong. Median home price in NYC is 399K. I know people who work in a Phily, San Francisco and NYC, and decent sized homes for a family of four are around 500 to 700K, not 1.6 Million.
Employer subsidized health care is also about 150 / month too high based off a family of 4.
Pre-school and child care for a 4-year old and two year old is also too high. If couple made that much money, one or the other likely makes 2/3 of that which puts them reporting to a VP at a fortune 500 company, many of which offer pre-school.
I’ve known, and worked with, dozens of people who made $350,000 and up. Some had financial discipline that allowed them to live comfortably and retire young. Some spent all their income, plus more, on huge houses, clubs, cars, clothes, and all manner of things they didn’t need.
It’s not a matter of $350,000 not being enough. The problem is that some people, even those with high incomes, are fucking morons.
Here’s a first lesson. Homes are not an investment, they are an expense. Buy just enough house to meet your needs then invest as much as you can in stocks. You’ll live longer, retire earlier, and enjoy life more.
Advice for anyone looking to save: spend less than you have coming in (duh!) and invest the difference in low cost, index mutual funds with a good split of US to international (80% US ans 20% int'l) and stocks to bonds based on your age and time remaining until retirement. 70% or more in stocks (while applying US / int'l splits) if under 50 years old and the balance in bond funds. Gradually shift to more in bonds as you age so that by 65 you have closer to 50% in bonds.
This just gives high level direction. There's more info out there than one can consume on these topics. Vanguard and Fidelity are good companies to use for basic yet effective support on setting these investments up. The expenses that I pay on funds are all .11% or less. If you are paying 1% or higher in expenses on your investments think about how much better your returns have to be to get ahead.
The best thing you can do to get ahead.....when you get promoted and/or start earning more money don't change your spending habits. Instead, pump as much of the additional money into investments. It's fun to ball out when you get a raise and bite off that big car payment or buy a much nicer apt/house but even better to save enough at an early age that you won't have to worry about money when you're old.
Still, I learned a lot more about finance from self study, and school of hard knocks than I did in school.
A few "guidelines" I've gleaned over the years:
1) Don't buy a house that exceeds 2.5 times your annual salary.
2) If renting, monthly rent shouldn't exceed 25% of your monthly pay.
3) Mortgage payments plus other credit payments ( car, credit card, etc.) should not exceed 30 - 36% of monthly pay.
4) Don't buy a car whose sticker price is greater than 1/3 your annual income. If you make $60K, only cars $20K or less belong on your shopping list.
5) Remember the rule of 72. Divide 72 by the interest rate, and you come up with roughly the amount of time it will take to double your money. Assuming you buy a long term bond yielding 3%, it will take ~ 24 years to double your money.
With above in mind, why do some people load themselves down with credit card debt paying 12 - 18% or more ? If they made no payments, it would only take 4 - 6 years to double their debt. Shit piles up faster than they can shovel themselves out of it.
Of course, tuscl $350K club knows this already...……………...
Live below your means. Invest early and massively in a low cost index fund. Never try to time the market. Retire early. Enjoy life.
JL Collins
The Simple Path to Wealth.
No doubt living in certain cities is very expensive, but I agree with others in that this article seems to have an agenda (or at least a slanted-view) in that it seems to kinda take the worst-case scenario as if people don't have any ability to adjust
SJG
I agree - the breakout of the spending is questionable.