5 ms·

> it's not necessary to make $100k+ a year to have a solid middle class life Depends on your circumstances. 100k with one salary?

cschep 10y ago
"Obviously kids make this harder..." If you didn't have kids you would feel incredibly rich. You could pay off your house in five years and feel even richer.
- deleted 10y ago
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- johnward 10y ago
  Don't forget it's not uncommon for two college grads to have $100k in student loan debt today.
  - cschep 10y ago
    good reminder! I was assuming they were debt free, other than their mortgage.
  - mywittyname 10y ago
    It absolutely is uncommon to have that much student loan debt. http://ticas.org/posd/state-state-data-2015 http://ticas.org/posd/state-state-data-2015 The average student loan debt is $27,000. Having four times that amount makes you a massive outlier.
    - bryondowd 10y ago
      If you interpret that as $100k total rather than each, it's probably not terribly uncommon. I've got over $50k myself, so if I had a partner with similar, that's where we'd be. Median debt would be also be more useful than average, I think, or even just the top 25 percentile. Basically, anyone who paid for their education entirely with loans (say, while barely supporting themselves or even using excess loan dollars for food/rent) would be in this position.
    - awalton 10y ago
      Averages alone don't give you the full picture; surgeons can rack up >$250K of debt which is probably about as high as it goes (the average medical school debt for 2015 grads was $183K, mind you). On the other end, plenty of young adults don't have any debt coming out of college (worked numerous jobs, parents paid, scholarships paid, some schools don't charge for people under certain circumstances, etc.) It just turns out that once you take the one-and-a-quarter trillion dollar student loan debt, add the 44 million-ish college grads up and do the division, the average lands you around your number (albeit I'm seeing $28K with newer data: https://www.newyorkfed.org/microeconomics/hhdc.html https://www.newyorkfed.org/microeconomics/hhdc.html). You'd need a lot more data than I have on-hand or care to track down bit-by-bit, but from the number of doctors and lawyers we mint yearly I wouldn't be surprised if 1/10 college grads were well over $50K in debt; MBAs make up something like 10% of graduate degrees and cost around $40K on average by themselves. To me, one in ten is not all that uncommon - student loan delinquency rate more than that ;). On top of that, it's not "uncommon" for two people who are both surgeons or doctors or lawyers or MBAs to find each other and get married; these people, very much like most of the software engineers I've met, live around their jobs. The people they meet are quite often in their same fields, and have similar financial backgrounds as a result. Two young MBAs? Easily $80K in the hole together. We in the Bay Area just get this warped sense of perspective because everyone here has to make absurd gobs of money just to make rent, reenforced by the demand for good software engineers being so high. Most of the other people we deal with or interact with are either software engineers themselves or are directly in support of software. We get insulated and siloed from differing perspectives by our monocultured Silicon Valley society. (And yeah, doctors and lawyers don't usually become doctors and lawyers from the goodness of their hearts alone; they understand that eventually they will come back and get way ahead of their massive debts, especially as the government keeps piling on incentives like debt forgiveness and restructured repayment plans to keep people choosing these avenues of work.)
    - johnward 10y ago
      That would be 2x. I didn't mean 100k each. You're still technically correct but that average means there are certainly people who have $100k combined. Do these averages include living expenses outside of dorms? I know plenty of people who foolishly had to borrow to live near campus.
jimbokun 10y ago
I'm in a similar situation to you, (similar salary, 2 kids instead of 3), and think you are being hyperbolic claiming "100k is nothing honestly". I think maybe it comes down to the definition of "basic life". Sure, 100k can go very fast with kids, and it won't make you independently wealthy, but many people manage a "basic life" and even saving some money living on far less.
mustacheemperor 10y ago
The added expenses of 3 kids and a stay at home spouse completely changes the financial situation you're describing as opposed to the other poster. 100k+ not split among 4 nonworking people goes way further!
johnward 10y ago
I live paycheck to paycheck on six figures in the midwest. I'm not broke but I'm certainly not living it up. People act like 100k is life changing money. I think it depends more on circumstances before you get to $100k. If I had parents who paid for school I'd probably be living it up too.
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- niij 10y ago
  You're making 100k and complaining about paying off school? Where did you go? Do you think it was worth it compared to an in state school with a lower tuition ($7k/yr), in terms of job prospects? Edit: I'm genuinely curious and not trying to judge your situation. I live in the midwest too and $100k would go very very far with me.
- up_and_up 10y ago
  Agreed. My parents gave me nothing. Had to pay for school and save up for home loan, car etc.
  - bryondowd 10y ago
    Different experiences. I put myself through school, have $50k in student loan debt, and I'm living comfortably on $54k/yr in New Jersey. Renting a small house, and sending around 15-20% of my income to help support my mother and 5 young siblings. I eat out a few times a month, and otherwise have a modest entertainment budget. I'm only able to set aside a very small amount, if anything, right now, but overall, I'm fairly secure. Without a requirement to live in an expensive area, I don't see why anyone would have trouble living on $100k/yr even with a couple kids and a non-working spouse. May not be luxurious, but should at least be comfortable. I often wonder if it's just people who have a different concept of what is a necessity vs a luxury due to never having to go without for a significant part of their lives, or people who have just never lived outside of the cities or other expensive areas.
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sweettea 10y ago
I find the change from having a family not very large, say 2x food and perhaps to be very generous +1k clothing. The chief difference is the desire to live in a own space instead of having roommates, which are hard to find with a family. Suppose you live in Cambridge, MA and eat all organic food; rent with roommates and utilities costs perhaps 800/mo, subway costs perhaps 100/mo, food costs 300/mo, clothing is perhaps 100/mo, health insurance perhaps 1k/mo. This adds up to 1300/mo, 28k/year. Throw in a very luxurious 5k/year in travel, 4k/year in restaurants and hobbies, and your 100k salary / 67k takehome pay supports you saving 30k/year (more if you use tax advantaged accounts). Consider a family of four in such a case. Taxes run about 21k/year instead of 33k/year, so takehome is 79k. A 1br in Cambridge runs about 2k/mo, maybe 2.5k/mo for luxury. Subway is 150/mo, food costs 700/mo, clothing of say 200/mo, healthcare is perhaps 1.5k/mo; these run 5k/mo in total, 60k/year. Throw in 5k for travel, rental cars, and hobbies, and you're still saving 15k/year for emergencies. This seems like a very luxurious life, as someone who's lived it; expensive, and I found it slightly more luxurious than makes me happy. So yes, families affect saving rate, but also provide perpetual free entertainment.
- taway_1212 10y ago
  > rent with roommates and utilities costs perhaps 800/mo Ugh, for a lot of us roommates == hell. There's no way I'd subject myself to living with strangers again.
- TheCoelacanth 10y ago
  Childcare makes a huge difference. Most people with kids either have to sacrifice a huge chunk of their income or a huge chunk of their income-earning potential.

cschep 10y ago

"Obviously kids make this harder..." If you didn't have kids you would feel incredibly rich. You could pay off your house in five years and feel even richer.

deleted 10y ago
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johnward 10y ago
Don't forget it's not uncommon for two college grads to have $100k in student loan debt today.
- cschep 10y ago
  good reminder! I was assuming they were debt free, other than their mortgage.
- mywittyname 10y ago
  It absolutely is uncommon to have that much student loan debt. http://ticas.org/posd/state-state-data-2015 http://ticas.org/posd/state-state-data-2015 The average student loan debt is $27,000. Having four times that amount makes you a massive outlier.
  - bryondowd 10y ago
    If you interpret that as $100k total rather than each, it's probably not terribly uncommon. I've got over $50k myself, so if I had a partner with similar, that's where we'd be. Median debt would be also be more useful than average, I think, or even just the top 25 percentile. Basically, anyone who paid for their education entirely with loans (say, while barely supporting themselves or even using excess loan dollars for food/rent) would be in this position.
  - awalton 10y ago
    Averages alone don't give you the full picture; surgeons can rack up >$250K of debt which is probably about as high as it goes (the average medical school debt for 2015 grads was $183K, mind you). On the other end, plenty of young adults don't have any debt coming out of college (worked numerous jobs, parents paid, scholarships paid, some schools don't charge for people under certain circumstances, etc.) It just turns out that once you take the one-and-a-quarter trillion dollar student loan debt, add the 44 million-ish college grads up and do the division, the average lands you around your number (albeit I'm seeing $28K with newer data: https://www.newyorkfed.org/microeconomics/hhdc.html https://www.newyorkfed.org/microeconomics/hhdc.html). You'd need a lot more data than I have on-hand or care to track down bit-by-bit, but from the number of doctors and lawyers we mint yearly I wouldn't be surprised if 1/10 college grads were well over $50K in debt; MBAs make up something like 10% of graduate degrees and cost around $40K on average by themselves. To me, one in ten is not all that uncommon - student loan delinquency rate more than that ;). On top of that, it's not "uncommon" for two people who are both surgeons or doctors or lawyers or MBAs to find each other and get married; these people, very much like most of the software engineers I've met, live around their jobs. The people they meet are quite often in their same fields, and have similar financial backgrounds as a result. Two young MBAs? Easily $80K in the hole together. We in the Bay Area just get this warped sense of perspective because everyone here has to make absurd gobs of money just to make rent, reenforced by the demand for good software engineers being so high. Most of the other people we deal with or interact with are either software engineers themselves or are directly in support of software. We get insulated and siloed from differing perspectives by our monocultured Silicon Valley society. (And yeah, doctors and lawyers don't usually become doctors and lawyers from the goodness of their hearts alone; they understand that eventually they will come back and get way ahead of their massive debts, especially as the government keeps piling on incentives like debt forgiveness and restructured repayment plans to keep people choosing these avenues of work.)
  - johnward 10y ago
    That would be 2x. I didn't mean 100k each. You're still technically correct but that average means there are certainly people who have $100k combined. Do these averages include living expenses outside of dorms? I know plenty of people who foolishly had to borrow to live near campus.

jimbokun 10y ago

I'm in a similar situation to you, (similar salary, 2 kids instead of 3), and think you are being hyperbolic claiming "100k is nothing honestly". I think maybe it comes down to the definition of "basic life". Sure, 100k can go very fast with kids, and it won't make you independently wealthy, but many people manage a "basic life" and even saving some money living on far less.

mustacheemperor 10y ago

The added expenses of 3 kids and a stay at home spouse completely changes the financial situation you're describing as opposed to the other poster. 100k+ not split among 4 nonworking people goes way further!

johnward 10y ago

I live paycheck to paycheck on six figures in the midwest. I'm not broke but I'm certainly not living it up. People act like 100k is life changing money. I think it depends more on circumstances before you get to $100k. If I had parents who paid for school I'd probably be living it up too.

deleted 10y ago
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niij 10y ago
You're making 100k and complaining about paying off school? Where did you go? Do you think it was worth it compared to an in state school with a lower tuition ($7k/yr), in terms of job prospects? Edit: I'm genuinely curious and not trying to judge your situation. I live in the midwest too and $100k would go very very far with me.
up_and_up 10y ago
Agreed. My parents gave me nothing. Had to pay for school and save up for home loan, car etc.
- bryondowd 10y ago
  Different experiences. I put myself through school, have $50k in student loan debt, and I'm living comfortably on $54k/yr in New Jersey. Renting a small house, and sending around 15-20% of my income to help support my mother and 5 young siblings. I eat out a few times a month, and otherwise have a modest entertainment budget. I'm only able to set aside a very small amount, if anything, right now, but overall, I'm fairly secure. Without a requirement to live in an expensive area, I don't see why anyone would have trouble living on $100k/yr even with a couple kids and a non-working spouse. May not be luxurious, but should at least be comfortable. I often wonder if it's just people who have a different concept of what is a necessity vs a luxury due to never having to go without for a significant part of their lives, or people who have just never lived outside of the cities or other expensive areas.
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sweettea 10y ago

I find the change from having a family not very large, say 2x food and perhaps to be very generous +1k clothing. The chief difference is the desire to live in a own space instead of having roommates, which are hard to find with a family. Suppose you live in Cambridge, MA and eat all organic food; rent with roommates and utilities costs perhaps 800/mo, subway costs perhaps 100/mo, food costs 300/mo, clothing is perhaps 100/mo, health insurance perhaps 1k/mo. This adds up to 1300/mo, 28k/year. Throw in a very luxurious 5k/year in travel, 4k/year in restaurants and hobbies, and your 100k salary / 67k takehome pay supports you saving 30k/year (more if you use tax advantaged accounts). Consider a family of four in such a case. Taxes run about 21k/year instead of 33k/year, so takehome is 79k. A 1br in Cambridge runs about 2k/mo, maybe 2.5k/mo for luxury. Subway is 150/mo, food costs 700/mo, clothing of say 200/mo, healthcare is perhaps 1.5k/mo; these run 5k/mo in total, 60k/year. Throw in 5k for travel, rental cars, and hobbies, and you're still saving 15k/year for emergencies. This seems like a very luxurious life, as someone who's lived it; expensive, and I found it slightly more luxurious than makes me happy. So yes, families affect saving rate, but also provide perpetual free entertainment.

taway_1212 10y ago
> rent with roommates and utilities costs perhaps 800/mo Ugh, for a lot of us roommates == hell. There's no way I'd subject myself to living with strangers again.
TheCoelacanth 10y ago
Childcare makes a huge difference. Most people with kids either have to sacrifice a huge chunk of their income or a huge chunk of their income-earning potential.