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Getting an additional $50k hits differently when you're making $300k already vs. $50k. Your first $50k is worth so much more to you than your second, or third.

Getting an additional $50k hits differently when you're making $300k already vs. $50k. Your first $50k is worth so much more to you than your second, or third... or seventh. When you already have $300k/yr, your life doesn't change by getting an additional $50k/yr. When you only have $50k/yr, your life completely changes when you get an additional $50k/yr. People who are in the $300k/yr. position have the luxury of choosing other things besides making more money, which is what this person we're talking about was able to do. To put it another way, how much longer will he live, if his stress levels are reduced substantially by opting to not take that new job?

dpark 5y ago
You’re saying that someone getting a 33% raise won’t be affected by the extra money. This is absurd for people who are making a good professional income. We’re talking about someone making $300k, not Bill Gates. This is still well within the realm of $100k/year being very meaningful. 50k post tax is enough for someone currently maxing out their retirement (including mega backdoor 401k) to nearly double their retirement investment. This could cut time to retire in half. Or it’s enough to comfortably put their kids through college in a few years. Or easily pay for private school for your kids. Or it’s enough to pay for vacations that were previously out of reach. Or enough to massively upgrade houses (assuming you want to succumb to lifestyle inflation). An extra 50k post-tax is absolutely a lot of money to someone currently bringing home about 210k post tax.
- TameAntelope 5y ago
  Sorry, but it just isn't, and I can say that from personal experience. Yes, the % amount looks high, but your 400th thousand dollar just isn't as impactful as your 100th thousand dollar. 50k post tax is not enough for someone currently maxing out their "retirement" to "nearly double their retirement investment, that isn't correct. The point is, after a certain absolute dollar number, additional dollars are incrementally less valuable, which makes questions like, "What does this do to my happiness?" a lot more relevant. Even if it allows you to retire meaningfully earlier, so what? Dying at 65 because you were stressed is definitely not worth it.
  - dpark 5y ago
    > but it just isn't, and I can say that from personal experience Do you think you’re not on a forum filled with high income earners who also have personal experience with this? It’s telling that you both assert that you would accept the job for the money and that the money would have almost no impact. Either you don’t actually believe what you say or you’re admitting that you’re not rational. > 50k post tax is not enough for someone currently maxing out their "retirement" to "nearly double their retirement investment, that isn't correct. Define maxing out, then. Max 401k plus mega backdoor is about 65k, I believe. Another 50k would indeed be nearly double. (65k is also what this person would actually take home from a 100k raise, assuming filing single, depending on state income tax of course.) > The point is, after a certain absolute dollar number, additional dollars are incrementally less valuable No one has said otherwise. Literally every dollar has declining utility so this doesn’t provide the support for your argument that you imagine. There’s no “dollar value cliff” at 300k. > Even if it allows you to retire meaningfully earlier, so what? Dying at 65 because you were stressed is definitely not worth it. You’ve gone from “it won’t affect retirement” to “money can’t buy happiness” to “gonna die from the stress”. This all seems really fake given that not only have you wildly diverged from your original claim that it won’t allow one to retire earlier, but also because you said you would accept the promotion. I’m certainly not saying anyone should take the 100k raise and the responsibility that comes with it if they don’t need/want the money or they do not want the job change it brings. I’m just saying 100k raise is a lot of money for someone currently making 300k. For a lot of people at this level, another 100k would mean their spouse could stop working.
    - TameAntelope 5y ago
      Heh! I am definitely not rational, I know this about myself. I grew up... not in poverty, but poor enough that I recognize my irrational fear of going back to that life, so $50k would be enough for me to act well beyond its utility, but I am certainly not rational. And I don't really want to argue with you about this. I'm referencing the "marginal utility of money" concept, and I think it applies here, and you don't. I'm okay with that! I think as long as we both agree that it's a thing, even if we disagree on where that line is, I'll be satisfied.
- jjav 5y ago
  > You’re saying that someone getting a 33% raise won’t be affected by the extra money. This is absurd for people who are making a good professional income. Nothing absurd about it. If you're making 300K, going up to 400K doesn't move the needle much. At that level you're already covering all your bills, paying for those vacations and investments and private school. 50K extra in pocket is nice, but nowhere enough at that level to change your life in an observable way. It's nowhere enough to move you into FU Money territory and since you were already covering all the basics, it doesn't move change much on that front either. If I had kids (and I do), there's no way I would accept a 100K pre-tax raise if the tradeoff is having to spend a lot more time on the road away from home (as the example at the top of this thread stated).
  - dpark 5y ago
    > At that level you're already covering all your bills, paying for those vacations and investments and private school. Sure. If you’re covering everything you need then another 50k/year probably lets you retire way earlier. Or $50k/year post tax pays for about a million in housing. It would pay for an au pair if you have a small child. It’s enough to have a partner earning a very good salary to stop working and stay home. > If I had kids (and I do), there's no way I would accept a 100K pre-tax raise if the tradeoff is having to spend a lot more time on the road away from home (as the example at the top of this thread stated). Well yeah, I didn’t say that it’s a good trade off for you (or anyone else in particular). I said it’s a lot of money.
- labcomputer 5y ago
  So the problem with all those examples is that they are just incremental changes to an existing lifestyle. The hypothetical person in your scenario is still going to retire, just a few years later. They’ll still send their kids to college, just with a few more loans (or maybe not because having more savings results in less financial aid). They’ll still go on vacations, just slightly less nice one. Or they’ll go on the nicer vacation, just less often. Etc etc etc. What it does not do is change your life qualitatively. You’re not going to be routinely flying on private jets or hiring a butler. Your ability to affect politics is still mainly limited to the ballot box. You’re still upper middle class. Just half a step ahead of the Joneses.
  - dpark 5y ago
    The person in this hypothetical can choose if they want the lifestyle inflation or to save an extra $50k/year for retirement. Someone socking away $65k/year who suddenly starts socking away an extra $50k/year can retire a lot earlier. That can absolutely be life changing. Someone who starts getting paid an extra $100k might also choose to have their spouse quit their job. An extra $100k is likely enough to offset a partner’s income (and a relatively high one at that). This is also a life changing event. > What it does not do is change your life qualitatively. You’re not going to be routinely flying on private jets or hiring a butler. Your ability to affect politics is still mainly limited to the ballot box. This is a very false dichotomy. There is a whole range of quality of life changes that happen before “private jet and election fraud” money. Anything over “not starving and can afford a place to live” is “incremental”.

dpark 5y ago

You’re saying that someone getting a 33% raise won’t be affected by the extra money. This is absurd for people who are making a good professional income. We’re talking about someone making $300k, not Bill Gates. This is still well within the realm of $100k/year being very meaningful. 50k post tax is enough for someone currently maxing out their retirement (including mega backdoor 401k) to nearly double their retirement investment. This could cut time to retire in half. Or it’s enough to comfortably put their kids through college in a few years. Or easily pay for private school for your kids. Or it’s enough to pay for vacations that were previously out of reach. Or enough to massively upgrade houses (assuming you want to succumb to lifestyle inflation). An extra 50k post-tax is absolutely a lot of money to someone currently bringing home about 210k post tax.

TameAntelope 5y ago
Sorry, but it just isn't, and I can say that from personal experience. Yes, the % amount looks high, but your 400th thousand dollar just isn't as impactful as your 100th thousand dollar. 50k post tax is not enough for someone currently maxing out their "retirement" to "nearly double their retirement investment, that isn't correct. The point is, after a certain absolute dollar number, additional dollars are incrementally less valuable, which makes questions like, "What does this do to my happiness?" a lot more relevant. Even if it allows you to retire meaningfully earlier, so what? Dying at 65 because you were stressed is definitely not worth it.
- dpark 5y ago
  > but it just isn't, and I can say that from personal experience Do you think you’re not on a forum filled with high income earners who also have personal experience with this? It’s telling that you both assert that you would accept the job for the money and that the money would have almost no impact. Either you don’t actually believe what you say or you’re admitting that you’re not rational. > 50k post tax is not enough for someone currently maxing out their "retirement" to "nearly double their retirement investment, that isn't correct. Define maxing out, then. Max 401k plus mega backdoor is about 65k, I believe. Another 50k would indeed be nearly double. (65k is also what this person would actually take home from a 100k raise, assuming filing single, depending on state income tax of course.) > The point is, after a certain absolute dollar number, additional dollars are incrementally less valuable No one has said otherwise. Literally every dollar has declining utility so this doesn’t provide the support for your argument that you imagine. There’s no “dollar value cliff” at 300k. > Even if it allows you to retire meaningfully earlier, so what? Dying at 65 because you were stressed is definitely not worth it. You’ve gone from “it won’t affect retirement” to “money can’t buy happiness” to “gonna die from the stress”. This all seems really fake given that not only have you wildly diverged from your original claim that it won’t allow one to retire earlier, but also because you said you would accept the promotion. I’m certainly not saying anyone should take the 100k raise and the responsibility that comes with it if they don’t need/want the money or they do not want the job change it brings. I’m just saying 100k raise is a lot of money for someone currently making 300k. For a lot of people at this level, another 100k would mean their spouse could stop working.
  - TameAntelope 5y ago
    Heh! I am definitely not rational, I know this about myself. I grew up... not in poverty, but poor enough that I recognize my irrational fear of going back to that life, so $50k would be enough for me to act well beyond its utility, but I am certainly not rational. And I don't really want to argue with you about this. I'm referencing the "marginal utility of money" concept, and I think it applies here, and you don't. I'm okay with that! I think as long as we both agree that it's a thing, even if we disagree on where that line is, I'll be satisfied.
jjav 5y ago
> You’re saying that someone getting a 33% raise won’t be affected by the extra money. This is absurd for people who are making a good professional income. Nothing absurd about it. If you're making 300K, going up to 400K doesn't move the needle much. At that level you're already covering all your bills, paying for those vacations and investments and private school. 50K extra in pocket is nice, but nowhere enough at that level to change your life in an observable way. It's nowhere enough to move you into FU Money territory and since you were already covering all the basics, it doesn't move change much on that front either. If I had kids (and I do), there's no way I would accept a 100K pre-tax raise if the tradeoff is having to spend a lot more time on the road away from home (as the example at the top of this thread stated).
- dpark 5y ago
  > At that level you're already covering all your bills, paying for those vacations and investments and private school. Sure. If you’re covering everything you need then another 50k/year probably lets you retire way earlier. Or $50k/year post tax pays for about a million in housing. It would pay for an au pair if you have a small child. It’s enough to have a partner earning a very good salary to stop working and stay home. > If I had kids (and I do), there's no way I would accept a 100K pre-tax raise if the tradeoff is having to spend a lot more time on the road away from home (as the example at the top of this thread stated). Well yeah, I didn’t say that it’s a good trade off for you (or anyone else in particular). I said it’s a lot of money.
labcomputer 5y ago
So the problem with all those examples is that they are just incremental changes to an existing lifestyle. The hypothetical person in your scenario is still going to retire, just a few years later. They’ll still send their kids to college, just with a few more loans (or maybe not because having more savings results in less financial aid). They’ll still go on vacations, just slightly less nice one. Or they’ll go on the nicer vacation, just less often. Etc etc etc. What it does not do is change your life qualitatively. You’re not going to be routinely flying on private jets or hiring a butler. Your ability to affect politics is still mainly limited to the ballot box. You’re still upper middle class. Just half a step ahead of the Joneses.
- dpark 5y ago
  The person in this hypothetical can choose if they want the lifestyle inflation or to save an extra $50k/year for retirement. Someone socking away $65k/year who suddenly starts socking away an extra $50k/year can retire a lot earlier. That can absolutely be life changing. Someone who starts getting paid an extra $100k might also choose to have their spouse quit their job. An extra $100k is likely enough to offset a partner’s income (and a relatively high one at that). This is also a life changing event. > What it does not do is change your life qualitatively. You’re not going to be routinely flying on private jets or hiring a butler. Your ability to affect politics is still mainly limited to the ballot box. This is a very false dichotomy. There is a whole range of quality of life changes that happen before “private jet and election fraud” money. Anything over “not starving and can afford a place to live” is “incremental”.