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I think that you grossly overestimate what a $200k income actually gets you in terms of ability to aggregate wealth. If you're hoping to work until you're 65 an

by iplaw 10y ago

I think that you grossly overestimate what a $200k income actually gets you in terms of ability to aggregate wealth. If you're hoping to work until you're 65 and live off of a meager 401(k), then sure. Have at it. If you want an early and fat retirement, you'll need at least $300k salary. Large annual bonuses ($100k-$250k range) with a $200k salary would also be sufficient. $200k salary alone is solidly middle class.

dlp211 10y ago
This is absolutely nuts to me. At 200k you should be able to put away 80k+/yr if you are even semi-serious about FIRE. At that rate with a 7 percent return, adjusted for inflation, after 20 years you'd have 3.5MM in assets which would provide a safe withdraw rate of 140k/yr. This assumes that you make not a single dollar more adjusted for inflation than that 200k. 140k/yr is nearly 3x median income in America. This is solidly upper middle class and I would say quite affluent. For posterity, if you did this for 30 years you'd have over $8MM and a SWR of over $320k/yr.
- IdontRememberIt 10y ago
  A 7 percent return is impossible without investing in crazy ultra risky financial products. The only vehicule where everybody (especially people close to retirement or retired) is investing is real estate (which is also ultra risky). Please thanks the FED for that.
  - gizmo 10y ago
    How much the market returns varies wildly between decades, but 7% is what you will get on average through passive investing. You don't need to take big risks -- plain index funds will do. Millenials are unlikely to see the stock market drop by more than 40% during their lifetime.
  - throwaway2016a 10y ago
    I get 7% on several "robo-advisors" (financial advisors that use algorithms instead of people. It's not unheard of... not even uncommon. As another posted mentioned, if you invest it is widely considered what you should have as a target for your average (some years better, some years worse)
  - dlp211 10y ago
    I challenge you to find a 20-year period that the S&P 500 did not return 7+% annualized returns AFI. There are some, but not many. I further challenge you to find a 30-year period where the S&P 500 did not return 7+% annualized returns AFI, there are even fewer. And the few that you will find are almost all between 6-7%.
- iplaw 10y ago
  So let me get this right. This hypothetical includes a $200k salary. Once you consider Federal income tax, FICA, and State income tax, you're sitting $130k in CA and NY, $135k in OK, etc. You want to "put away" $80k/year. Haha.
  - dlp211 10y ago
    That is literally if you do nothing to shield yourself from taxes AND you are single. Do you plan on being single your entire life? and never investing in any tax advantage accounts?, never tax loss harvesting?, never being semi-serious about FIRE? You are so out of touch it is beyond unreal. There are people that live and work in every single one of those locales on 1/3rd and less just fine.
    - iplaw 10y ago
      I have a CPA tax attorney who handles this for me. As I said in the other reply, I don't think that I am out of touch. $200k isn't as much as people make it out to be. It's enough to not worry about monthly commitments, but it's not enough for much else. A new construction home in a middle class part of Dallas runs $700k, or $3300/month + another $13k in tax = $50k annually. Add your 5-Series for $500/month for another $6000. Plus insurance. Meh. And as I said before, at $200k, you can utilize a 401(k).
  - micahbright 10y ago
    I make $110k per year. I pay, $15k in child support, and save $40k per year. Yes, you can easily save $80k per year on a $200k salary. It just depends on how you decide to spend your money.
- iplaw 10y ago
  Don't get me wrong, I am all for FIRE, which is why I chose the career path that I have. I could have retired 3 years ago after brokering one lucrative patent deal and collecting my brokerage fee. But earning $200k will not get you there without living a miserable existence.
  - dlp211 10y ago
    This is another lie. I make $150k/yr and could retire in a decade (barring a black swan event) and I just started my career 2 years ago. I live in a luxury townhome that is less than a 15 minute commute by bike or car to work, a trader joe's that is literally around the corner, and more restaurants then I can count on my hands within a 5 minute walk. I want for nothing, drive a BMW 5 series, I have a second car that is an older Accord. And I do it with a wife and 2 kids and we vacation twice a year, and I'm probably in a top 5 COL areas. You have no idea what a miserable existence is and you have either always been privileged and never knew it, or you have forgotten what it means to live a miserable existence.
    - iplaw 10y ago
      Probably the latter, I've forgotten what it means to live a miserable existence. I grew up in a family of four with a combined income of $30k, which linearly grew over 15 years to $100k and plateaued while I was in high school. It wasn't miserable, but I was sheltered by my parents. Bills were stressful. While I was in law school and my girlfriend was in medical school, we were pretty damn broke and racking up debt. That was miserable. Fast forward. I start working, and she is a resident. We're making $200k combined and it's a struggle. Student loan debt allowed us to realize these salaries, but they also inhibit financial growth. Trust me, there were no luxurious purchases or apartments. And then ... I brokered a deal that netted me 8-figures and paid off all debt, bought a house, etc. The end. For others making $200k while paying off student loan debt, the struggle is real. You'd be able to considering focusing on retirement after 10, 15, or even 30 years of student loan repayment. But I figure that the LAST thing a person would want to do is willingly continue to divert large sum of income to future financial well being after so many years of pinching.

by iplaw 10y ago

dlp211 10y ago

This is absolutely nuts to me. At 200k you should be able to put away 80k+/yr if you are even semi-serious about FIRE. At that rate with a 7 percent return, adjusted for inflation, after 20 years you'd have 3.5MM in assets which would provide a safe withdraw rate of 140k/yr. This assumes that you make not a single dollar more adjusted for inflation than that 200k. 140k/yr is nearly 3x median income in America. This is solidly upper middle class and I would say quite affluent. For posterity, if you did this for 30 years you'd have over $8MM and a SWR of over $320k/yr.

IdontRememberIt 10y ago
A 7 percent return is impossible without investing in crazy ultra risky financial products. The only vehicule where everybody (especially people close to retirement or retired) is investing is real estate (which is also ultra risky). Please thanks the FED for that.
- gizmo 10y ago
  How much the market returns varies wildly between decades, but 7% is what you will get on average through passive investing. You don't need to take big risks -- plain index funds will do. Millenials are unlikely to see the stock market drop by more than 40% during their lifetime.
- throwaway2016a 10y ago
  I get 7% on several "robo-advisors" (financial advisors that use algorithms instead of people. It's not unheard of... not even uncommon. As another posted mentioned, if you invest it is widely considered what you should have as a target for your average (some years better, some years worse)
- dlp211 10y ago
  I challenge you to find a 20-year period that the S&P 500 did not return 7+% annualized returns AFI. There are some, but not many. I further challenge you to find a 30-year period where the S&P 500 did not return 7+% annualized returns AFI, there are even fewer. And the few that you will find are almost all between 6-7%.
iplaw 10y ago
So let me get this right. This hypothetical includes a $200k salary. Once you consider Federal income tax, FICA, and State income tax, you're sitting $130k in CA and NY, $135k in OK, etc. You want to "put away" $80k/year. Haha.
- dlp211 10y ago
  That is literally if you do nothing to shield yourself from taxes AND you are single. Do you plan on being single your entire life? and never investing in any tax advantage accounts?, never tax loss harvesting?, never being semi-serious about FIRE? You are so out of touch it is beyond unreal. There are people that live and work in every single one of those locales on 1/3rd and less just fine.
  - iplaw 10y ago
    I have a CPA tax attorney who handles this for me. As I said in the other reply, I don't think that I am out of touch. $200k isn't as much as people make it out to be. It's enough to not worry about monthly commitments, but it's not enough for much else. A new construction home in a middle class part of Dallas runs $700k, or $3300/month + another $13k in tax = $50k annually. Add your 5-Series for $500/month for another $6000. Plus insurance. Meh. And as I said before, at $200k, you can utilize a 401(k).
- micahbright 10y ago
  I make $110k per year. I pay, $15k in child support, and save $40k per year. Yes, you can easily save $80k per year on a $200k salary. It just depends on how you decide to spend your money.
iplaw 10y ago
Don't get me wrong, I am all for FIRE, which is why I chose the career path that I have. I could have retired 3 years ago after brokering one lucrative patent deal and collecting my brokerage fee. But earning $200k will not get you there without living a miserable existence.
- dlp211 10y ago
  This is another lie. I make $150k/yr and could retire in a decade (barring a black swan event) and I just started my career 2 years ago. I live in a luxury townhome that is less than a 15 minute commute by bike or car to work, a trader joe's that is literally around the corner, and more restaurants then I can count on my hands within a 5 minute walk. I want for nothing, drive a BMW 5 series, I have a second car that is an older Accord. And I do it with a wife and 2 kids and we vacation twice a year, and I'm probably in a top 5 COL areas. You have no idea what a miserable existence is and you have either always been privileged and never knew it, or you have forgotten what it means to live a miserable existence.
  - iplaw 10y ago
    Probably the latter, I've forgotten what it means to live a miserable existence. I grew up in a family of four with a combined income of $30k, which linearly grew over 15 years to $100k and plateaued while I was in high school. It wasn't miserable, but I was sheltered by my parents. Bills were stressful. While I was in law school and my girlfriend was in medical school, we were pretty damn broke and racking up debt. That was miserable. Fast forward. I start working, and she is a resident. We're making $200k combined and it's a struggle. Student loan debt allowed us to realize these salaries, but they also inhibit financial growth. Trust me, there were no luxurious purchases or apartments. And then ... I brokered a deal that netted me 8-figures and paid off all debt, bought a house, etc. The end. For others making $200k while paying off student loan debt, the struggle is real. You'd be able to considering focusing on retirement after 10, 15, or even 30 years of student loan repayment. But I figure that the LAST thing a person would want to do is willingly continue to divert large sum of income to future financial well being after so many years of pinching.