12 ms·

Living on $100k a Year

81 points by santaclaus 9y ago

ben_jones 9y ago
I'm kind of disappointed by this article. As someone who makes a little over six figures (before combined comp.) in the Bay Area I expected to relate a lot to the individuals described in this article. Instead is just had 4 testimonials from individuals who weren't happy on a six-figure income, it failed to list any of the root causes either then a small jab at the tax code.
- xt00 9y ago
  Yea I can agree that 100k is very much not what it used to be 10-15 years ago.. the main difference is that a “cheap house” in many areas that are doing economically well on the West Coast like Seattle, Portland, Bay Area, LA, are much more expensive than they were even before the 2008 crash.. so if you make 100k/year you end up with maybe 6k take home each month and if you mortgage is 3k/month, then spend saying 2k on fixed expenses per month then you realize you have very little leeway especially if you are trying to pay off student loans as well.. I think the combination of cities trying to get people to live closer by reducing investment in roads and focusing on density and local rail and bus systems has made it that it’s way more painful to live far outside the city.. so housing effectively is higher. Then the much increased cost of student loans compared to the past, you have a much greater set of fixed costs compared to people 20 years ago..
- Retra 9y ago
  Yeah, it's a lot of "100K seems good until the debt piles up", and I'm wondering where the debt came from and why they're letting it pile up. And why people making half that wouldn't have the same debt with even less ability to manage it.
  - CamelCaseName 9y ago
    Student loans to earn that 100K a year. Housing to live near a job that pays 100K a year.
- thesmallestcat 9y ago
  Sounds like two have crushing debt. The family that's "struggling" on $100k in KC (really?) wants for "educational opportunities for her high-school-aged son," whatever that means, which somehow translates to "working overtime ... to make enough money to live on" (emphasis added). The last account is absent any useful info, just some "Keeping up with the Joneses" comments. It's a puff piece so that relatively well off, comfortable families can commiserate in the shared "struggle."
d4mi3n 9y ago
> "And now I'm one of those coastal elites, a term, you know, that people in Middle America use. And it feels like betrayal," he says. "But what I've learned in moving to the coast is there's real inequality. And the biggest driver of that inequality is the tax code. The biggest social welfare has been to the rich and powerful, giving them loopholes and abilities to keep money from the government and keep money from the rest of us." It saddened me to read that snippet. Growing up on the west coast, I was aware of some ideological/cultural differences between urban metros and the Middle America, but I was not aware of that sense of classism. A take-away I had from Trump's election was that there still is a lot of economic struggle in the interior of the US. Nobody seems to be interested in improving the situation, and very few of these communities have the means and/or the willingness to move towards greener pastures. Is there anything that can be done to improve the situation?
- jimhefferon 9y ago
  > Nobody seems to be interested in improving the situation Plnty of us are interested. But people with enough money to pay for their own media, and their own politicans and party, they are really not interested.
  - SomeStupidPoint 9y ago
    I think it takes less than most of us imagine -- but more than most of us are capable of organizing. If you wanted to build complexes to stimulate the economy, you'd probably need on the order of... $100M in buildings, and another $100M in endowments for operating expenses/grants/risky loans. So 200M is a lot, but it's also only the retirement wealth of 100-200 upper-middle class families, of which there will be thousands per major metro (and perhaps a million or so across the US). I think it's mostly a logistics problem -- in those million families, there are probably 10,000 that are interested in resettling to the middle of the country and would be willing to move half of their wealth into local investments on a generational scale (while keeping the other half in say, the market). That means we could do 250-500 self-sustaining mixed-use complexes backed by endowments for operations costs, which is probably enough to target 50-100 towns. The question becomes the organizational aspects of those people finding each other, building trust (between each other and with the involved communities), and finding the appropriate legal instrument to manage the money on that scale. These are all much harder problems than finding money or media attention.
neom 9y ago
The article isn't great, but the audio snippets are a lot better. I've posted this book a zillion times on HN, but "$2.00 a Day: Living on Almost Nothing in America" really changed a lot of my thoughts and feelings about what is going on in America today. Highly recommend reading it: https://www.amazon.com/2-00-Day-Living-Nothing-America/dp/054481195X https://www.amazon.com/2-00-Day-Living-Nothing-America/dp/05...
cypherpunks01 9y ago
FYI I think $100,000 of income puts your household in the top 20% of earners in the US.
- pishpash 9y ago
  That doesn't mean anything, it depends on what the distribution looks like.
mberning 9y ago
I really cannot sympathize. My father raised a family of 6 making ~$30k/yr at his peak. Yes we struggled at times. Public school. Knock off sneakers. Cheap cost cutter food and small simple meals. Crap car. Etc. When I started working in software I made way more money right out of school than my family ever made. And I developed a lot of bad spending habits as a result. After a few years I got my head on straight. Paid off all my debt, got disciplined about saving, and cut out unnecessary expenses. It’s not that hard to live very comfortably on 100k. But you aren’t going to be eating out all the time, driving new cars, living in a gigantic mcmansion, etc. Edit: My youngest sibling was born in 93. 30k in 93 is like 50k today. HALF of what the people in this article are living on. Give me a break! These people don’t need a raise or a hand out, they need a realistic budget.
- xor1 9y ago
  >My father raised a family of 6 making ~$30k/yr at his peak If you're in the US, how are your parents faring for retirement? Are you and your siblings helping out?
  - mberning 9y ago
    My dad retired and had a modest 401k. He also gets social security now. My mom works part time in the kitchen for the local school district. They are doing ok! I imagine they will come live with my wife and I when they are ready. I won’t put them in a home.
    - deleted 9y ago
      [deleted]
    - xor1 9y ago
      What about the rest of your siblings? Are they going to help? I ask because my parents are retired, and they are nearing the age where they will need assistance. It's just going to be my sister and I when it comes time to deal with figuring out what we are going to do. My mother has been financially dependent on my father throughout their entire relationship. I currently live near them and visit once a week, but I don't see how I can afford to stay in the area if I want to start a family of my own, unless I find a partner that earns around as much as I do so that we can clear $300k+ a year. Modest starter homes in a neighborhood with both decent schools and a commute time under an hour to where the jobs start at $700k. My sister and I also have to figure out how we are going to deal with my mom's relatives, who currently barely want anything to do with her, but will be ready to take advantage of her once my dad passes (assuming he passes away first -- I'm quite sure he will), and she's the main holder of everything. I already saw it happen with both of my grandmothers, so this isn't just unfounded pessimism. Both sides of my family are full of shitty people. I absolutely do not mind every single cent in their networth being used to care for my mother in old age. I do mind that money being mismanaged and wasted, especially if that results in her needing more than what was originally set aside by my father.
pishpash 9y ago
I would just like to point out that using median income to define the middle class is part of the problem. That's really poverty today. In the middle ages when nearly everybody was a serf, would you use median income to define the middle class? Of course not.
nprisntthebest 9y ago
It would have been nice if they included anything about family size and details besides “kids”, budget, lifestyle, etc.
- taurath 9y ago
  It’s kind of inconceivable that a family in Kansas City making 100k a year can’t afford more than one car. The article is super light on details. Do they have a super expensive house? Student loan payments?
jorblumesea 9y ago
The middle class has been unfairly burdened with paying for the expenses of the entire country. The poor, unable to, the rich, unwilling to. Tax breaks are at best a very short term proposition, and if the numbers are to be believed, the current tax plan only serves to widen the gap over time. Unfortunately, many Americans have been convinced to vote against their best interests since in many places, D means Devil. Having a strong stance on hot button issues like abortion is more important than whether you will gut a union or make a fair tax code. If it's an indication about how bad things are, a probable child molester has an actual shot of being reelected, simply because of the R next to his name. We are not selecting for the best candidates.
- cperciva 9y ago
  The middle class has been unfairly burdened with paying for the expenses of the entire country. The poor, unable to, the rich, unwilling to. That's not really supported by the data. A more accurate summary would be "the poor, unable to, the rich, not numerous enough to". Raising taxes on the top 1% or the top 0.1% or the top 0.01% has very little impact on total revenues simply because you need to raise taxes 50x, 500x, or 5000x as much in order to extract as much revenue as you would get by raising taxes on the top 50%.
  - jorblumesea 9y ago
    The federal tax code is a highly unequal affair, and due to a system of complicated loopholes and itemized deductions, the wealthiest among us get the lions share of spending and deductions. While I agree that raising taxes by 500% on the rich is an absurd idea, it's really not asking much for the wealthy to pay their fair share. These deductions and "welfare for the rich" basically amount to hundreds of billions in lost revenue. This is well documented, NYT has a good run down: https://www.nytimes.com/2015/03/18/business/economy/taxes-take-away-but-also-give-back-mostly-to-the-very-rich.html https://www.nytimes.com/2015/03/18/business/economy/taxes-ta... If you're in the top 0.1%, the actual taxes you pay each year is a far lower percentage than the middle class would pay, due to this unequal system. The rich get richer, and use that money to rig the game further. Just look at the current tax bill that was passed.
pjc50 9y ago
Without any kind of breakdown, this is really uninformative. Is this due to housing cost? Student debt? Medical debt? Bad decisions? Good decisions that were invalidated by events? Who knows?
paulddraper 9y ago
> "People feel like they haven't been getting ahead for a long time," says Jim Tankersley, who covers taxes and the economy for The New York Times. I won't say this can't be true, but by experience casts doubt on trusting what people "feel". For example, lots of people feel they struggle to attain homeownership. But homeownership rates are within 1% of what they were in 1980. Meanwhile, median house sizes have increased 50% since then (or 100%!, relative to household size). Lots of people feel they aren't being paid enough. But median household income has increased ~25% over the past 40 years (50%, relative to household size). (Looking at household, not individual, child care has transitioned from one stay-at-home parent to one working parent + contracted child care and only the latter adds to "household wages".) Lots of people feel that education is too expensive, but total scholarship money has exploded. In my home state of Florida, a 970 (Math + Reading) SAT and 3.0 GPA gets you a 75% scholarship to any state school. That is well within reach for most university-bound students. Or achieve a 1270 SAT + 3.5 GPA + 75hrs community service for 100% scholarship. Lots of people feel cost of living is rising. And yet, there are 10% more people living in urban areas since 1980, which tend to be far more expensive than rural ones. Sometimes I think all some people ask is to own a home and a couple cars in a good neighborhood with good schools in a big city, travel abroad, and go to private or out-of-state school for a few months salary of a hobby job (and obviously without ROTC) after buying the new $700 smartphone every year and continue that lifestyle into government-sponsored retirement. You know...do what their parents did, but without any of the drawbacks. --- In reality, I suspect these feelings are grounded much more with keeping up with the Jones' (+ Facebook), rather than the objective quality of living.
jerrycabbage 9y ago
This is an awful article. How is it at the top of ycombinator. There is no breakdown of any costs or what their living standard ACTUALLY is. These people could very well (and likely do) have spending issues. Eat out too much, buy too many gadgets, replace their car far too often, etc. Thats the problem far too often. Boo Hoo
ErikVandeWater 9y ago
What do people think about federal taxes (mostly) not being adjusted for cost of living? It serves as a disincentive for moving to the cities, but is that a good thing or a bad thing?
- harryh 9y ago
  It's a good thing. Living is a high COL city is a luxury. One shouldn't get a tax break because of their particular luxury purchases.
  - abalashov 9y ago
    Without taking a position on the original COL-adjusted tax question: Living in a high-cost city isn't necessarily a luxury. Many people who do would prefer not to, but cities concentrate economic opportunities and that is why people migrate to them. This is why urbanisation is a byproduct of economic development pretty much everywhere. Case in point: I lived in Atlanta for ten years and recently moved back to Athens, a small university town about an hour and some change east. There's no question that it's much cheaper to live here. But if I wanted an actual job in my field, I'd pretty much have to live in Atlanta - that's why I moved there in the first place. I'm fortunate enough to be self-employed and to no longer care, as the vast majority of my customers are out of state. But make no mistake, there are vanishingly few tech job opportunities here - and this is a fairly educated college town. And as we know, IT is fairly democratic in the degree to which it can be done remotely. But if you specialise in finance, entertainment, fashion, big law, aerospace, or a variety of other areas, there are certain places you more or less have to be. The American economy is eminently decentralised compared to that of most countries, but still - the cities have the lion's share of white collar, professional middle-income jobs.
abalashov 9y ago
As someone with a six-figure self-employment income, I can also say that cash flow is a very important part of the equation. If you take an appropriate discount for bad/unsteady cash flow (and few of us do), one is led to the conclusion that $100k+ in SE income can often afford one a ~$40k lifestyle at best, in terms of recurring expenses one can reasonably commit to and consistently afford. That's something a lot of people on salary don't get. Back when I was on W-2 and had much lower compensation than I nominally have now, I had my ducks in a row, taxes paid, a positive savings rate, and good credit. That hasn't been the case since I went self-employed about ten years ago. If someone were to divide my annual revenue (less expenses) by 12 and distribute it to me on the 1st of every month, a lot of problems would be solved. But because that's not how reality works, I take a bath in late fees, interest, overdraft fees, no access to credit due to bad rating, etc. Some of those things are more avoidable than others depending on the choices one makes, but that's not the point. The point is that W-2 and SE income are not equivalent. Unless you've devised some compensation scheme that is substantially similar to salary as a contractor, you can't afford anywhere near a $100k lifestyle as a consultant earning $100k+. There are many days I'd happily trade places with folks who get a lower, but steady paycheck every two weeks for doing more or less one job.
- Consultant32452 9y ago
  It sounds like you are not budgeting appropriately for the amount and variability of your income. I just recently left the consulting game, but did so for nearly a decade. If you're truly interested in making a change I recommend reading The Total Money Makeover by Dave Ramsey.
  - abalashov 9y ago
    I'd like to think I budget appropriately, though I'll admit I didn't always when I was younger; it's an acquired skill. But you try budgeting appropriately through a divorce and absurdly expensive custody battle. But in a way, you're making my point for me; because $100k in SE income is not the same as $100k in W-2 income, it requires special budgeting considerations, to the degree that I'd benefit from reading a whole book about it. :-)
incadenza 9y ago
I don't mean to sound unsympathetic, but it would be nice to hear what is eating into their income so much. My thought pattern here is that if you can't manage on $100,000 a year then you'll have the same problem at $200,000 a year, so on and so forth.
- Y7ZCQtNo39 9y ago
  I'm a bit sympathetic to the idea that the American dream, when compared to the average paycheck, just doesn't add up for most people. I don't empathize with the poor financial choices folks make to place their expectations above their reality.
  - incadenza 9y ago
    I guess I feel the same. I'm very sympathetic to people who, when making decent financial decisions, are unable to meet their basic needs. Poverty / under-earning like that just creates a constant stress that is completely debilitating and unproductive. It has a real psychic toll. It's just difficult for me to imagine not being able to make $100,000 work, save for a bunch of kids. But after all, those are somewhat of a choice as well.
- marktangotango 9y ago
  $10k per kid per year preschool (minimum) is one thing I’ve heard. Really eats I into a salary.
- twelve40 9y ago
  in the Bay Area 100k pre-tax per family is close to poverty level. Unless you inherited/lucked out with a house, or settled for a perpetual rental, you will have to choose between shit school for your kids, with used condoms on the playground (I know because I lived in those places) or a 1.5 hour one-way daily commute. You can try to blame the 100k people for not moving to cheaper states, but who is going to do most of the work?
stanmancan 9y ago
The article even touches on how everyone is trying to keep up with the Joneses instead of living within their means. Everyone is in a different financial position but instead of recognizing that and living a life you can afford, people get jealous of what their neighbours have or their friends are doing and pursue the same lifestyle regardless of if they can afford it or not. I do not sympathize with someone struggling to make ends meet on $100K a year. That is a ton of money and if you have debt and bills you can’t handle then unless it’s just a result of horrible life circumstances, it’s most likely your own bad decisions.
Y7ZCQtNo39 9y ago
I'm one of those coastal elites. Early career, so ballpark around this salary. I have some student loan debt, but my portion of the rent is only $1,000 a month plus utilities (I split a place). I spend about $2,500 a month. And I sock away the rest (about $60k annually) into investments. $100k still goes far in a high cost of living, coastal area. However, I drive a used car. I'm a renter, and probably will be for awhile. If I wanted to be a homeowner, a good portion of my retirement savings / investments would be going towards that. If I decided to have kids, which would mean at least a place with additional bedrooms, plus additional health care coverage costs, etc., I could see it getting tight. I might have to compromise my retirement savings goals. I don't have a lot, but I'm also a minimalist. And I realize that, income wise, probably 80% of society has it worse than me. I don't know how households earning around $50k would feel any semblance of having a future financially. Growing my savings/investments is the only way I feel like I'm getting ahead. Having any sort of typical American dream goal (house, kids, etc) would basically nullify my ability to get ahead, with the exception of building some home equity.
- Spooky23 9y ago
  The difference between you and the 1987 version of you is that you are kneecapped from an earning power perspective. Barring equity compensation that appreciates, you’re likely to grow your income until around 35. Then you plateau. You’re also unlikely to retain companies or career skill set through to retirement. So you’re facing a crisis where you need to transition and maintain salary around age 40, where 1987 you would be entering peak earning years. It’s a particularly vicious cycle as professionals marry late and have kids late, so when you’re scrambling to maintain your 401k to retire, you get hit with a big college bill in your late 40s/early 50s. If you invest unwisely and don’t have a home, you’re choosing to either retire comfortably or not pay for college.
  - Y7ZCQtNo39 9y ago
    Your children can always borrow for college. You can't borrow for retirement, so it makes sense to prioritize retirement savings. I agree, though, that the purchasing power is nowhere near 1987 and that the plateau comes earlier. I suppose it's what makes saving earlier and saving more ever pertinent for the younger generation. If I can get to 200k before I plateau, I'd be happy. If I have a working spouse that makes at least 100k, I'd say we could probably keep the American dream alive for us. At least via my 401k, there are few poor options to choose, thankfully. The worst you could probably do is pick a fixed income class (and get no growth) or go too risky with international funds (if you for some reason went 100% international). But the target-date funds and index funds provided (SP500, etc) are diversified and generally considered good investments.
pageald 9y ago
This is ridiculous. It's one thing to claim that 100k is "not enough" if you live in a high cost of living (which is still dubious, considering the median income in NYC is half of that.) If that's not enough for you in Kansas, the fact is that you're living far beyond your means. I think it's telling that one family cited credit card debt like it's an act of nature instead of a conscious choice. And just because you qualify for a million dollar mortgage doesn't mean you should get one. Spend that big salary on a home near your workplace and sell the $40,000 SUV. The sooner we wake up from the "dream" of being deep underwater in debt to fund an ecologically and economically unsustainable lifestyle, all the while just a paycheck or two away from complete ruin, the better off we'll be.
- emerged 9y ago
  There's an irritatingly prevalent attitude that once you've moved to a high cost of living area (or were born there), you're forever entitled to stay there. That if you can't afford it, it's the fault of society and needs to be corrected.
  - abalashov 9y ago
    I don't know if it's the fault of society, but it's fairly natural. Humans get attached to familiar places in which they grew up, in which they have lived in a long time, etc. They plant social roots. I'm not saying that means people who can't afford to live in places like NYC or SF shouldn't move, just that there's a complex tension between economic theory and "messy" human reality. The ideal rationally self-interested agent described in economics texts would just move from place to place in search of profit-maximising opportunities, but that's not what actually existing humans do much of the time. They have relatives, friends, aesthetic preferences, social obligations, religious beliefs, and other things that "do not compute" in mathematical models.
    - SomeStupidPoint 9y ago
      > They have relatives, friends, aesthetic preferences, social obligations, religious beliefs, and other things that "do not compute" in mathematical models. They compute fine -- most models are just "lying with math" by excluding the value of those things from their calculations. It's not different than a friend who ignores those things when using words -- of course it doesn't make sense why you don't move if you don't account for the full value of where you are at present. I think if we accounted for the destroyed social value that most of these economic models have inflicted, it would be the obvious massive negative that most people anecdotally tell. I think it's very telling how rarely you see these kinds of things modeled in economic theory despite how obviously part of the way humans value things they are. Economics is merely institutionalized fixation on money, and produces precisely the psychopathic models you'd expect from that.
njarboe 9y ago
The article would become useful with the addition of the budgets of each of the people/families. Without that it is hard to understand the individual problems, besides some generic platitudes. That is if one would want to find a way to succeed on 100k/yr and not just voice one's current issues.
rayiner 9y ago
Recently, the news media seems to have developed a weird fetish for the petit bourgeoisie. The U.S. is highly atypical in how we treat the upper middle class. In Germany, for example, a two-income couple making 84,000 Euro ($100,000) in Bavaria nets 57% of their income: https://www.icalculator.info/germany.html https://www.icalculator.info/germany.html. In Maryland, a relatively high-tax state, they net 76% of their income. And that doesn't adjust for the additional upper middle class tax benefits like the mortgage interest deduction, which don't exist in Germany, which would take the net income over 80% on a typical house. A couple earning 840,000 Euro ($1 million), in contrast, net 55% of their income, barely different from the previous example. In Maryland, they net 54%, less than in Germany! In contrast, actual corporate tax rates in Germany are about 15.5%, versus 18.5% in the U.S. (and Germany is quite high compared to say Canada, at 8.5% or France, at 11.2%). I live on the east coast, but about an hour east of D.C. Around here, you can live very comfortably on $100,000/year. Certainly, more comfortably (at least, materially) than you typical middle class German family. The only reason the situation gets worse as you get closer to D.C. is expensive housing and worse schools, which are problems that are entirely inflicted by the middle class on itself (through anti-development and pro-segregation policies).
- heurist 9y ago
  Where are you seeing those US numbers? Effective rates for the wealthy in the US are often much lower than the expected rate due to deductions and loopholes.
  - rayiner 9y ago
    Paycheck city. What deductions and loopholes? For the most part, you're just talking about the favorable treatment for capital gains, which exists in Germany too. Indeed, Maryland's combined state+federal capital gains right is a touch higher than Germany's.
- killercup 9y ago
  Just a heads up: The numbers for Germany on that page include all social security contributions, including health insurance (4.7k€) and pension contributions (6k€). (Not sure if you accounted for these in your number for Maryland.)
fady 9y ago
A lot our missing the point. 100k/year is good but it takes just one major expense for that to set you back, put you in the hole, and usually leads to more interest, fees and spirals out of control. "The report, put out by Pew Charitable Trust, includes the results of surveys conducted in 2014 and 2015 to see how Americans were coping with what are referred to as financial shocks—those one-off expenses that crop up from time to time. Pew found that in large part, Americans’ ability to weather financial shocks is partially dependent on something that Americans still struggle to accumulate: savings." https://www.theatlantic.com/business/archive/2017/04/savings-money-emergency/522036/ https://www.theatlantic.com/business/archive/2017/04/savings...
- Consultant32452 9y ago
  >A lot our missing the point. 100k/year is good but it takes just one major expense for that to set you back, put you in the hole, and usually leads to more interest, fees and spirals out of control. It really should not, if you've budgeted conservatively in the way that our grandparents generation did. For example, if you don't have 3-6 months of expenses in a savings account, short term disability insurance, long term disability insurance, and a term life insurance policy of 10x your annual salary, you're living a fairly high risk financial lifestyle. Again, if you budgeted the way your grandparents did you wouldn't have any debt except MAYBE your house, so a financial setback would almost certainly not result in more interest or fees, since you wouldn't be paying any interest to begin with. You've accepted this false narrative that the banks have sold you on that being perpetually indebted to them is normal. It's not, from a historical standpoint. And you don't have to live that way.
rboyd 9y ago
I've only ever heard the term "coastal elites" from people the live near the coast and wish they were elites.
kuschku 9y ago
There is a very relevant set of articles right now on reddit on this topic. It started when an Austrian software engineer published his entire spending, and where every cent of his taxes goes, in this post: https://www.reddit.com/r/dataisbeautiful/comments/7h2idb/what_my_gross_income_of_60000year_is_actually/ https://www.reddit.com/r/dataisbeautiful/comments/7h2idb/wha... Other users, employed in all industries, quickly responded, some from Japan https://redd.it/7h99vj https://redd.it/7h99vj , Seattle https://redd.it/7h6bsr https://redd.it/7h6bsr , Brisbane, Australia https://redd.it/7h9gpe https://redd.it/7h9gpe , New York City https://redd.it/7has76 https://redd.it/7has76 , rural TN https://redd.it/7hbhe9 https://redd.it/7hbhe9 , London, UK https://redd.it/7h9tjf https://redd.it/7h9tjf , a Major in the US Air Force https://redd.it/7ha2q0 https://redd.it/7ha2q0 , and another one from Switzerland https://redd.it/7hbehc https://redd.it/7hbehc There’s dozens more posts, I can’t link them all, you can find the rest at https://www.reddit.com/r/dataisbeautiful/ https://www.reddit.com/r/dataisbeautiful/ – but many of them show how people can live very successfully on low wages, and others yet struggle with much more money.
ThrowProgrammer 9y ago
ThrowAway I live in Baltimore, MD. My salary is $100k flat (80k base + 20k bonuses). I would not say that I am king of the hill, but I am in much better position than majority of my friends, though. To be honest, I don't feel like it such a high salary.
jandrewrogers 9y ago
I read the article and I still don't know why these people can't live comfortably on $100k. It is never explained, and I have lived reasonably comfortably with a household income of <$100k in some of the mentioned locales. You don't have to be frugal, just not wasteful. It leads me to believe that it has more to do with life and lifestyle choices than income per se. It is also hard to be sympathetic given that $100k is substantially higher than the median income in many of these areas, and while not wealthy by any means, many people living a little closer to the median have a pretty decent standard of living simply by managing their finances wisely. I have many friends in this situation. Too many people refuse to live a lifestyle afforded by their income even though it would be pretty comfortable if they did. My lifestyle, which is far from austere and in Seattle, easily fits into $100k income (though I'd probably have to cut back on the luxury a bit if I had kids).
larrykwg 9y ago
Oh so terrible, how can they even survive, really heartbreaking. Meanwhile the UN is investigating the extreme poverty in the US, you know the people that don't even have their basic human rights guaranteed by their hyper capitalist government. https://www.theguardian.com/world/2017/dec/01/un-extreme-poverty-america-special-rapporteur https://www.theguardian.com/world/2017/dec/01/un-extreme-pov...
apple4ever 9y ago
Its definitely not a enough, even in a medium cost of living area. The biggest problem? Taxes. Of that 100k, 30-40K are taxes. This is why lowering taxes is great.
feralmoan 9y ago
Someone making $100k should easily be able to save $1k a month wherever they are living in the world and put it into a fund making at least 15% a year. Here's some mind blowing advice - stop buying useless ornaments that do nothing to elevate you or enhance your life in meaningful ways. People have been hoodwinked into buying junk and stand there teary eyed wondering how it all happened and why they're so empty inside. How they went so far but did so little. This years black friday/cyber monday sales were extraordinary - because people are idiots. It's not a mystery. Make conscious choices in your life and you won't be a victim. Someone making 6 figures is the last person anyone should feel sad for.
nunez 9y ago
We live in Dallas on about $185k/year cumulative. Despite $1200/mo in rent, >$1500/mo student loan repayments, $500/mo car payments and $1350/mo credit card debt (i’m aware of how dumb that was), we are living comfortably. My plan is to earn a $200k/year income in less than four years so that my fiancee can go back to school without sacrificng our current lifestyle. However, we live in an apartment and don’t have kids. There is absolutely no way we could do kids and a mortgage with this debt burden without life going to hell. Once that debt goes away, though? Not a problem at all...for one kid and a cheap house. ($250k house, which is what we wanted anyway, as we aren’t fans of big houses)
Overtonwindow 9y ago
I lived very well on $100k in the DC area. It's all about budgeting.

81 points by santaclaus 9y ago

I'm kind of disappointed by this article. As someone who makes a little over six figures (before combined comp.) in the Bay Area I expected to relate a lot to the individuals described in this article. Instead is just had 4 testimonials from individuals who weren't happy on a six-figure income, it failed to list any of the root causes either then a small jab at the tax code.

xt00 9y ago
Yea I can agree that 100k is very much not what it used to be 10-15 years ago.. the main difference is that a “cheap house” in many areas that are doing economically well on the West Coast like Seattle, Portland, Bay Area, LA, are much more expensive than they were even before the 2008 crash.. so if you make 100k/year you end up with maybe 6k take home each month and if you mortgage is 3k/month, then spend saying 2k on fixed expenses per month then you realize you have very little leeway especially if you are trying to pay off student loans as well.. I think the combination of cities trying to get people to live closer by reducing investment in roads and focusing on density and local rail and bus systems has made it that it’s way more painful to live far outside the city.. so housing effectively is higher. Then the much increased cost of student loans compared to the past, you have a much greater set of fixed costs compared to people 20 years ago..
Retra 9y ago
Yeah, it's a lot of "100K seems good until the debt piles up", and I'm wondering where the debt came from and why they're letting it pile up. And why people making half that wouldn't have the same debt with even less ability to manage it.
- CamelCaseName 9y ago
  Student loans to earn that 100K a year. Housing to live near a job that pays 100K a year.
thesmallestcat 9y ago
Sounds like two have crushing debt. The family that's "struggling" on $100k in KC (really?) wants for "educational opportunities for her high-school-aged son," whatever that means, which somehow translates to "working overtime ... to make enough money to live on" (emphasis added). The last account is absent any useful info, just some "Keeping up with the Joneses" comments. It's a puff piece so that relatively well off, comfortable families can commiserate in the shared "struggle."

d4mi3n 9y ago

> "And now I'm one of those coastal elites, a term, you know, that people in Middle America use. And it feels like betrayal," he says. "But what I've learned in moving to the coast is there's real inequality. And the biggest driver of that inequality is the tax code. The biggest social welfare has been to the rich and powerful, giving them loopholes and abilities to keep money from the government and keep money from the rest of us." It saddened me to read that snippet. Growing up on the west coast, I was aware of some ideological/cultural differences between urban metros and the Middle America, but I was not aware of that sense of classism. A take-away I had from Trump's election was that there still is a lot of economic struggle in the interior of the US. Nobody seems to be interested in improving the situation, and very few of these communities have the means and/or the willingness to move towards greener pastures. Is there anything that can be done to improve the situation?

jimhefferon 9y ago
> Nobody seems to be interested in improving the situation Plnty of us are interested. But people with enough money to pay for their own media, and their own politicans and party, they are really not interested.
- SomeStupidPoint 9y ago
  I think it takes less than most of us imagine -- but more than most of us are capable of organizing. If you wanted to build complexes to stimulate the economy, you'd probably need on the order of... $100M in buildings, and another $100M in endowments for operating expenses/grants/risky loans. So 200M is a lot, but it's also only the retirement wealth of 100-200 upper-middle class families, of which there will be thousands per major metro (and perhaps a million or so across the US). I think it's mostly a logistics problem -- in those million families, there are probably 10,000 that are interested in resettling to the middle of the country and would be willing to move half of their wealth into local investments on a generational scale (while keeping the other half in say, the market). That means we could do 250-500 self-sustaining mixed-use complexes backed by endowments for operations costs, which is probably enough to target 50-100 towns. The question becomes the organizational aspects of those people finding each other, building trust (between each other and with the involved communities), and finding the appropriate legal instrument to manage the money on that scale. These are all much harder problems than finding money or media attention.

neom 9y ago

The article isn't great, but the audio snippets are a lot better. I've posted this book a zillion times on HN, but "$2.00 a Day: Living on Almost Nothing in America" really changed a lot of my thoughts and feelings about what is going on in America today. Highly recommend reading it: https://www.amazon.com/2-00-Day-Living-Nothing-America/dp/054481195X https://www.amazon.com/2-00-Day-Living-Nothing-America/dp/05...

cypherpunks01 9y ago

FYI I think $100,000 of income puts your household in the top 20% of earners in the US.

pishpash 9y ago
That doesn't mean anything, it depends on what the distribution looks like.

mberning 9y ago

I really cannot sympathize. My father raised a family of 6 making ~$30k/yr at his peak. Yes we struggled at times. Public school. Knock off sneakers. Cheap cost cutter food and small simple meals. Crap car. Etc. When I started working in software I made way more money right out of school than my family ever made. And I developed a lot of bad spending habits as a result. After a few years I got my head on straight. Paid off all my debt, got disciplined about saving, and cut out unnecessary expenses. It’s not that hard to live very comfortably on 100k. But you aren’t going to be eating out all the time, driving new cars, living in a gigantic mcmansion, etc. Edit: My youngest sibling was born in 93. 30k in 93 is like 50k today. HALF of what the people in this article are living on. Give me a break! These people don’t need a raise or a hand out, they need a realistic budget.

xor1 9y ago
>My father raised a family of 6 making ~$30k/yr at his peak If you're in the US, how are your parents faring for retirement? Are you and your siblings helping out?
- mberning 9y ago
  My dad retired and had a modest 401k. He also gets social security now. My mom works part time in the kitchen for the local school district. They are doing ok! I imagine they will come live with my wife and I when they are ready. I won’t put them in a home.
  - deleted 9y ago
    [deleted]
  - xor1 9y ago
    What about the rest of your siblings? Are they going to help? I ask because my parents are retired, and they are nearing the age where they will need assistance. It's just going to be my sister and I when it comes time to deal with figuring out what we are going to do. My mother has been financially dependent on my father throughout their entire relationship. I currently live near them and visit once a week, but I don't see how I can afford to stay in the area if I want to start a family of my own, unless I find a partner that earns around as much as I do so that we can clear $300k+ a year. Modest starter homes in a neighborhood with both decent schools and a commute time under an hour to where the jobs start at $700k. My sister and I also have to figure out how we are going to deal with my mom's relatives, who currently barely want anything to do with her, but will be ready to take advantage of her once my dad passes (assuming he passes away first -- I'm quite sure he will), and she's the main holder of everything. I already saw it happen with both of my grandmothers, so this isn't just unfounded pessimism. Both sides of my family are full of shitty people. I absolutely do not mind every single cent in their networth being used to care for my mother in old age. I do mind that money being mismanaged and wasted, especially if that results in her needing more than what was originally set aside by my father.

pishpash 9y ago

I would just like to point out that using median income to define the middle class is part of the problem. That's really poverty today. In the middle ages when nearly everybody was a serf, would you use median income to define the middle class? Of course not.

nprisntthebest 9y ago

It would have been nice if they included anything about family size and details besides “kids”, budget, lifestyle, etc.

taurath 9y ago
It’s kind of inconceivable that a family in Kansas City making 100k a year can’t afford more than one car. The article is super light on details. Do they have a super expensive house? Student loan payments?

jorblumesea 9y ago

The middle class has been unfairly burdened with paying for the expenses of the entire country. The poor, unable to, the rich, unwilling to. Tax breaks are at best a very short term proposition, and if the numbers are to be believed, the current tax plan only serves to widen the gap over time. Unfortunately, many Americans have been convinced to vote against their best interests since in many places, D means Devil. Having a strong stance on hot button issues like abortion is more important than whether you will gut a union or make a fair tax code. If it's an indication about how bad things are, a probable child molester has an actual shot of being reelected, simply because of the R next to his name. We are not selecting for the best candidates.

cperciva 9y ago
The middle class has been unfairly burdened with paying for the expenses of the entire country. The poor, unable to, the rich, unwilling to. That's not really supported by the data. A more accurate summary would be "the poor, unable to, the rich, not numerous enough to". Raising taxes on the top 1% or the top 0.1% or the top 0.01% has very little impact on total revenues simply because you need to raise taxes 50x, 500x, or 5000x as much in order to extract as much revenue as you would get by raising taxes on the top 50%.
- jorblumesea 9y ago
  The federal tax code is a highly unequal affair, and due to a system of complicated loopholes and itemized deductions, the wealthiest among us get the lions share of spending and deductions. While I agree that raising taxes by 500% on the rich is an absurd idea, it's really not asking much for the wealthy to pay their fair share. These deductions and "welfare for the rich" basically amount to hundreds of billions in lost revenue. This is well documented, NYT has a good run down: https://www.nytimes.com/2015/03/18/business/economy/taxes-take-away-but-also-give-back-mostly-to-the-very-rich.html https://www.nytimes.com/2015/03/18/business/economy/taxes-ta... If you're in the top 0.1%, the actual taxes you pay each year is a far lower percentage than the middle class would pay, due to this unequal system. The rich get richer, and use that money to rig the game further. Just look at the current tax bill that was passed.

pjc50 9y ago

Without any kind of breakdown, this is really uninformative. Is this due to housing cost? Student debt? Medical debt? Bad decisions? Good decisions that were invalidated by events? Who knows?

paulddraper 9y ago

> "People feel like they haven't been getting ahead for a long time," says Jim Tankersley, who covers taxes and the economy for The New York Times. I won't say this can't be true, but by experience casts doubt on trusting what people "feel". For example, lots of people feel they struggle to attain homeownership. But homeownership rates are within 1% of what they were in 1980. Meanwhile, median house sizes have increased 50% since then (or 100%!, relative to household size). Lots of people feel they aren't being paid enough. But median household income has increased ~25% over the past 40 years (50%, relative to household size). (Looking at household, not individual, child care has transitioned from one stay-at-home parent to one working parent + contracted child care and only the latter adds to "household wages".) Lots of people feel that education is too expensive, but total scholarship money has exploded. In my home state of Florida, a 970 (Math + Reading) SAT and 3.0 GPA gets you a 75% scholarship to any state school. That is well within reach for most university-bound students. Or achieve a 1270 SAT + 3.5 GPA + 75hrs community service for 100% scholarship. Lots of people feel cost of living is rising. And yet, there are 10% more people living in urban areas since 1980, which tend to be far more expensive than rural ones. Sometimes I think all some people ask is to own a home and a couple cars in a good neighborhood with good schools in a big city, travel abroad, and go to private or out-of-state school for a few months salary of a hobby job (and obviously without ROTC) after buying the new $700 smartphone every year and continue that lifestyle into government-sponsored retirement. You know...do what their parents did, but without any of the drawbacks. --- In reality, I suspect these feelings are grounded much more with keeping up with the Jones' (+ Facebook), rather than the objective quality of living.

jerrycabbage 9y ago

This is an awful article. How is it at the top of ycombinator. There is no breakdown of any costs or what their living standard ACTUALLY is. These people could very well (and likely do) have spending issues. Eat out too much, buy too many gadgets, replace their car far too often, etc. Thats the problem far too often. Boo Hoo

ErikVandeWater 9y ago

What do people think about federal taxes (mostly) not being adjusted for cost of living? It serves as a disincentive for moving to the cities, but is that a good thing or a bad thing?

harryh 9y ago
It's a good thing. Living is a high COL city is a luxury. One shouldn't get a tax break because of their particular luxury purchases.
- abalashov 9y ago
  Without taking a position on the original COL-adjusted tax question: Living in a high-cost city isn't necessarily a luxury. Many people who do would prefer not to, but cities concentrate economic opportunities and that is why people migrate to them. This is why urbanisation is a byproduct of economic development pretty much everywhere. Case in point: I lived in Atlanta for ten years and recently moved back to Athens, a small university town about an hour and some change east. There's no question that it's much cheaper to live here. But if I wanted an actual job in my field, I'd pretty much have to live in Atlanta - that's why I moved there in the first place. I'm fortunate enough to be self-employed and to no longer care, as the vast majority of my customers are out of state. But make no mistake, there are vanishingly few tech job opportunities here - and this is a fairly educated college town. And as we know, IT is fairly democratic in the degree to which it can be done remotely. But if you specialise in finance, entertainment, fashion, big law, aerospace, or a variety of other areas, there are certain places you more or less have to be. The American economy is eminently decentralised compared to that of most countries, but still - the cities have the lion's share of white collar, professional middle-income jobs.

abalashov 9y ago

As someone with a six-figure self-employment income, I can also say that cash flow is a very important part of the equation. If you take an appropriate discount for bad/unsteady cash flow (and few of us do), one is led to the conclusion that $100k+ in SE income can often afford one a ~$40k lifestyle at best, in terms of recurring expenses one can reasonably commit to and consistently afford. That's something a lot of people on salary don't get. Back when I was on W-2 and had much lower compensation than I nominally have now, I had my ducks in a row, taxes paid, a positive savings rate, and good credit. That hasn't been the case since I went self-employed about ten years ago. If someone were to divide my annual revenue (less expenses) by 12 and distribute it to me on the 1st of every month, a lot of problems would be solved. But because that's not how reality works, I take a bath in late fees, interest, overdraft fees, no access to credit due to bad rating, etc. Some of those things are more avoidable than others depending on the choices one makes, but that's not the point. The point is that W-2 and SE income are not equivalent. Unless you've devised some compensation scheme that is substantially similar to salary as a contractor, you can't afford anywhere near a $100k lifestyle as a consultant earning $100k+. There are many days I'd happily trade places with folks who get a lower, but steady paycheck every two weeks for doing more or less one job.

Consultant32452 9y ago
It sounds like you are not budgeting appropriately for the amount and variability of your income. I just recently left the consulting game, but did so for nearly a decade. If you're truly interested in making a change I recommend reading The Total Money Makeover by Dave Ramsey.
- abalashov 9y ago
  I'd like to think I budget appropriately, though I'll admit I didn't always when I was younger; it's an acquired skill. But you try budgeting appropriately through a divorce and absurdly expensive custody battle. But in a way, you're making my point for me; because $100k in SE income is not the same as $100k in W-2 income, it requires special budgeting considerations, to the degree that I'd benefit from reading a whole book about it. :-)

incadenza 9y ago

I don't mean to sound unsympathetic, but it would be nice to hear what is eating into their income so much. My thought pattern here is that if you can't manage on $100,000 a year then you'll have the same problem at $200,000 a year, so on and so forth.

Y7ZCQtNo39 9y ago
I'm a bit sympathetic to the idea that the American dream, when compared to the average paycheck, just doesn't add up for most people. I don't empathize with the poor financial choices folks make to place their expectations above their reality.
- incadenza 9y ago
  I guess I feel the same. I'm very sympathetic to people who, when making decent financial decisions, are unable to meet their basic needs. Poverty / under-earning like that just creates a constant stress that is completely debilitating and unproductive. It has a real psychic toll. It's just difficult for me to imagine not being able to make $100,000 work, save for a bunch of kids. But after all, those are somewhat of a choice as well.
marktangotango 9y ago
$10k per kid per year preschool (minimum) is one thing I’ve heard. Really eats I into a salary.
twelve40 9y ago
in the Bay Area 100k pre-tax per family is close to poverty level. Unless you inherited/lucked out with a house, or settled for a perpetual rental, you will have to choose between shit school for your kids, with used condoms on the playground (I know because I lived in those places) or a 1.5 hour one-way daily commute. You can try to blame the 100k people for not moving to cheaper states, but who is going to do most of the work?

stanmancan 9y ago

The article even touches on how everyone is trying to keep up with the Joneses instead of living within their means. Everyone is in a different financial position but instead of recognizing that and living a life you can afford, people get jealous of what their neighbours have or their friends are doing and pursue the same lifestyle regardless of if they can afford it or not. I do not sympathize with someone struggling to make ends meet on $100K a year. That is a ton of money and if you have debt and bills you can’t handle then unless it’s just a result of horrible life circumstances, it’s most likely your own bad decisions.

Y7ZCQtNo39 9y ago

I'm one of those coastal elites. Early career, so ballpark around this salary. I have some student loan debt, but my portion of the rent is only $1,000 a month plus utilities (I split a place). I spend about $2,500 a month. And I sock away the rest (about $60k annually) into investments. $100k still goes far in a high cost of living, coastal area. However, I drive a used car. I'm a renter, and probably will be for awhile. If I wanted to be a homeowner, a good portion of my retirement savings / investments would be going towards that. If I decided to have kids, which would mean at least a place with additional bedrooms, plus additional health care coverage costs, etc., I could see it getting tight. I might have to compromise my retirement savings goals. I don't have a lot, but I'm also a minimalist. And I realize that, income wise, probably 80% of society has it worse than me. I don't know how households earning around $50k would feel any semblance of having a future financially. Growing my savings/investments is the only way I feel like I'm getting ahead. Having any sort of typical American dream goal (house, kids, etc) would basically nullify my ability to get ahead, with the exception of building some home equity.

Spooky23 9y ago
The difference between you and the 1987 version of you is that you are kneecapped from an earning power perspective. Barring equity compensation that appreciates, you’re likely to grow your income until around 35. Then you plateau. You’re also unlikely to retain companies or career skill set through to retirement. So you’re facing a crisis where you need to transition and maintain salary around age 40, where 1987 you would be entering peak earning years. It’s a particularly vicious cycle as professionals marry late and have kids late, so when you’re scrambling to maintain your 401k to retire, you get hit with a big college bill in your late 40s/early 50s. If you invest unwisely and don’t have a home, you’re choosing to either retire comfortably or not pay for college.
- Y7ZCQtNo39 9y ago
  Your children can always borrow for college. You can't borrow for retirement, so it makes sense to prioritize retirement savings. I agree, though, that the purchasing power is nowhere near 1987 and that the plateau comes earlier. I suppose it's what makes saving earlier and saving more ever pertinent for the younger generation. If I can get to 200k before I plateau, I'd be happy. If I have a working spouse that makes at least 100k, I'd say we could probably keep the American dream alive for us. At least via my 401k, there are few poor options to choose, thankfully. The worst you could probably do is pick a fixed income class (and get no growth) or go too risky with international funds (if you for some reason went 100% international). But the target-date funds and index funds provided (SP500, etc) are diversified and generally considered good investments.

pageald 9y ago

This is ridiculous. It's one thing to claim that 100k is "not enough" if you live in a high cost of living (which is still dubious, considering the median income in NYC is half of that.) If that's not enough for you in Kansas, the fact is that you're living far beyond your means. I think it's telling that one family cited credit card debt like it's an act of nature instead of a conscious choice. And just because you qualify for a million dollar mortgage doesn't mean you should get one. Spend that big salary on a home near your workplace and sell the $40,000 SUV. The sooner we wake up from the "dream" of being deep underwater in debt to fund an ecologically and economically unsustainable lifestyle, all the while just a paycheck or two away from complete ruin, the better off we'll be.

emerged 9y ago
There's an irritatingly prevalent attitude that once you've moved to a high cost of living area (or were born there), you're forever entitled to stay there. That if you can't afford it, it's the fault of society and needs to be corrected.
- abalashov 9y ago
  I don't know if it's the fault of society, but it's fairly natural. Humans get attached to familiar places in which they grew up, in which they have lived in a long time, etc. They plant social roots. I'm not saying that means people who can't afford to live in places like NYC or SF shouldn't move, just that there's a complex tension between economic theory and "messy" human reality. The ideal rationally self-interested agent described in economics texts would just move from place to place in search of profit-maximising opportunities, but that's not what actually existing humans do much of the time. They have relatives, friends, aesthetic preferences, social obligations, religious beliefs, and other things that "do not compute" in mathematical models.
  - SomeStupidPoint 9y ago
    > They have relatives, friends, aesthetic preferences, social obligations, religious beliefs, and other things that "do not compute" in mathematical models. They compute fine -- most models are just "lying with math" by excluding the value of those things from their calculations. It's not different than a friend who ignores those things when using words -- of course it doesn't make sense why you don't move if you don't account for the full value of where you are at present. I think if we accounted for the destroyed social value that most of these economic models have inflicted, it would be the obvious massive negative that most people anecdotally tell. I think it's very telling how rarely you see these kinds of things modeled in economic theory despite how obviously part of the way humans value things they are. Economics is merely institutionalized fixation on money, and produces precisely the psychopathic models you'd expect from that.

njarboe 9y ago

The article would become useful with the addition of the budgets of each of the people/families. Without that it is hard to understand the individual problems, besides some generic platitudes. That is if one would want to find a way to succeed on 100k/yr and not just voice one's current issues.

rayiner 9y ago

Recently, the news media seems to have developed a weird fetish for the petit bourgeoisie. The U.S. is highly atypical in how we treat the upper middle class. In Germany, for example, a two-income couple making 84,000 Euro ($100,000) in Bavaria nets 57% of their income: https://www.icalculator.info/germany.html https://www.icalculator.info/germany.html. In Maryland, a relatively high-tax state, they net 76% of their income. And that doesn't adjust for the additional upper middle class tax benefits like the mortgage interest deduction, which don't exist in Germany, which would take the net income over 80% on a typical house. A couple earning 840,000 Euro ($1 million), in contrast, net 55% of their income, barely different from the previous example. In Maryland, they net 54%, less than in Germany! In contrast, actual corporate tax rates in Germany are about 15.5%, versus 18.5% in the U.S. (and Germany is quite high compared to say Canada, at 8.5% or France, at 11.2%). I live on the east coast, but about an hour east of D.C. Around here, you can live very comfortably on $100,000/year. Certainly, more comfortably (at least, materially) than you typical middle class German family. The only reason the situation gets worse as you get closer to D.C. is expensive housing and worse schools, which are problems that are entirely inflicted by the middle class on itself (through anti-development and pro-segregation policies).

heurist 9y ago
Where are you seeing those US numbers? Effective rates for the wealthy in the US are often much lower than the expected rate due to deductions and loopholes.
- rayiner 9y ago
  Paycheck city. What deductions and loopholes? For the most part, you're just talking about the favorable treatment for capital gains, which exists in Germany too. Indeed, Maryland's combined state+federal capital gains right is a touch higher than Germany's.
killercup 9y ago
Just a heads up: The numbers for Germany on that page include all social security contributions, including health insurance (4.7k€) and pension contributions (6k€). (Not sure if you accounted for these in your number for Maryland.)

fady 9y ago

A lot our missing the point. 100k/year is good but it takes just one major expense for that to set you back, put you in the hole, and usually leads to more interest, fees and spirals out of control. "The report, put out by Pew Charitable Trust, includes the results of surveys conducted in 2014 and 2015 to see how Americans were coping with what are referred to as financial shocks—those one-off expenses that crop up from time to time. Pew found that in large part, Americans’ ability to weather financial shocks is partially dependent on something that Americans still struggle to accumulate: savings." https://www.theatlantic.com/business/archive/2017/04/savings-money-emergency/522036/ https://www.theatlantic.com/business/archive/2017/04/savings...

Consultant32452 9y ago
>A lot our missing the point. 100k/year is good but it takes just one major expense for that to set you back, put you in the hole, and usually leads to more interest, fees and spirals out of control. It really should not, if you've budgeted conservatively in the way that our grandparents generation did. For example, if you don't have 3-6 months of expenses in a savings account, short term disability insurance, long term disability insurance, and a term life insurance policy of 10x your annual salary, you're living a fairly high risk financial lifestyle. Again, if you budgeted the way your grandparents did you wouldn't have any debt except MAYBE your house, so a financial setback would almost certainly not result in more interest or fees, since you wouldn't be paying any interest to begin with. You've accepted this false narrative that the banks have sold you on that being perpetually indebted to them is normal. It's not, from a historical standpoint. And you don't have to live that way.

rboyd 9y ago

I've only ever heard the term "coastal elites" from people the live near the coast and wish they were elites.

kuschku 9y ago

There is a very relevant set of articles right now on reddit on this topic. It started when an Austrian software engineer published his entire spending, and where every cent of his taxes goes, in this post: https://www.reddit.com/r/dataisbeautiful/comments/7h2idb/what_my_gross_income_of_60000year_is_actually/ https://www.reddit.com/r/dataisbeautiful/comments/7h2idb/wha... Other users, employed in all industries, quickly responded, some from Japan https://redd.it/7h99vj https://redd.it/7h99vj , Seattle https://redd.it/7h6bsr https://redd.it/7h6bsr , Brisbane, Australia https://redd.it/7h9gpe https://redd.it/7h9gpe , New York City https://redd.it/7has76 https://redd.it/7has76 , rural TN https://redd.it/7hbhe9 https://redd.it/7hbhe9 , London, UK https://redd.it/7h9tjf https://redd.it/7h9tjf , a Major in the US Air Force https://redd.it/7ha2q0 https://redd.it/7ha2q0 , and another one from Switzerland https://redd.it/7hbehc https://redd.it/7hbehc There’s dozens more posts, I can’t link them all, you can find the rest at https://www.reddit.com/r/dataisbeautiful/ https://www.reddit.com/r/dataisbeautiful/ – but many of them show how people can live very successfully on low wages, and others yet struggle with much more money.

ThrowProgrammer 9y ago

ThrowAway I live in Baltimore, MD. My salary is $100k flat (80k base + 20k bonuses). I would not say that I am king of the hill, but I am in much better position than majority of my friends, though. To be honest, I don't feel like it such a high salary.

jandrewrogers 9y ago

I read the article and I still don't know why these people can't live comfortably on $100k. It is never explained, and I have lived reasonably comfortably with a household income of <$100k in some of the mentioned locales. You don't have to be frugal, just not wasteful. It leads me to believe that it has more to do with life and lifestyle choices than income per se. It is also hard to be sympathetic given that $100k is substantially higher than the median income in many of these areas, and while not wealthy by any means, many people living a little closer to the median have a pretty decent standard of living simply by managing their finances wisely. I have many friends in this situation. Too many people refuse to live a lifestyle afforded by their income even though it would be pretty comfortable if they did. My lifestyle, which is far from austere and in Seattle, easily fits into $100k income (though I'd probably have to cut back on the luxury a bit if I had kids).

larrykwg 9y ago

Oh so terrible, how can they even survive, really heartbreaking. Meanwhile the UN is investigating the extreme poverty in the US, you know the people that don't even have their basic human rights guaranteed by their hyper capitalist government. https://www.theguardian.com/world/2017/dec/01/un-extreme-poverty-america-special-rapporteur https://www.theguardian.com/world/2017/dec/01/un-extreme-pov...

apple4ever 9y ago

Its definitely not a enough, even in a medium cost of living area. The biggest problem? Taxes. Of that 100k, 30-40K are taxes. This is why lowering taxes is great.

feralmoan 9y ago

Someone making $100k should easily be able to save $1k a month wherever they are living in the world and put it into a fund making at least 15% a year. Here's some mind blowing advice - stop buying useless ornaments that do nothing to elevate you or enhance your life in meaningful ways. People have been hoodwinked into buying junk and stand there teary eyed wondering how it all happened and why they're so empty inside. How they went so far but did so little. This years black friday/cyber monday sales were extraordinary - because people are idiots. It's not a mystery. Make conscious choices in your life and you won't be a victim. Someone making 6 figures is the last person anyone should feel sad for.

nunez 9y ago

We live in Dallas on about $185k/year cumulative. Despite $1200/mo in rent, >$1500/mo student loan repayments, $500/mo car payments and $1350/mo credit card debt (i’m aware of how dumb that was), we are living comfortably. My plan is to earn a $200k/year income in less than four years so that my fiancee can go back to school without sacrificng our current lifestyle. However, we live in an apartment and don’t have kids. There is absolutely no way we could do kids and a mortgage with this debt burden without life going to hell. Once that debt goes away, though? Not a problem at all...for one kid and a cheap house. ($250k house, which is what we wanted anyway, as we aren’t fans of big houses)

Overtonwindow 9y ago

I lived very well on $100k in the DC area. It's all about budgeting.