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I wonder how many people here on hacker news live paycheck to paycheck? I make significantly more than 250k and spend all of it (single income family of four) a

I wonder how many people here on hacker news live paycheck to paycheck? I make significantly more than 250k and spend all of it (single income family of four) and my savings are my equity.

pionar 4y ago
I mean, I lived paycheck to paycheck last month after some unexpected large bills (May was a hell of a month!) but that was only because I didn't want to raid savings. I don't have sympathy for folks making as much as we do who are "broke" or up to their ears in debt. If they're fortunate and privileged enough to get to our positions, they only brought it on themselves.
- zionic 4y ago
  >or up to their ears in debt See this depends. If the following are true: 1) The interest rate on your debt is below inflation 2) The cost to service the debt is a sufficiently low percentage of your monthly take home Then taking a loan is often MUCH smarter than buying it cash, because your cash can earn interest in excess of the loan interest in most scenarios. I know people with ten houses on 30-year 2.5% notes. They could pay them all off tomorrow but it wouldn't make sense financially.
  - ivanche 4y ago
    Leverage is excellent in good times but horrible in bad ones. As they say, after an ebb you see who was swimming naked.
  - bombcar 4y ago
    The risk that you may lose your job has to be considered in the equation, taking into account how "rare" your situation is (if you're work-from-home at $250k, will you be able to find that again, or will you have to move to get a similar income?) and how much savings you have. Remember, when you take a loan you have extremely large banks on the other side of your "great idea" so either they're incredibly stupid, or they can take into account more factors.
    - zionic 4y ago
      Sure, but you can always sell assets to cover expenses. Say you have $250k in diversified assets and a $500k note. In scenario A you put $250k and have no earning power, owing $250k. If you lose your job and foreclose that downpayment is lost. In scenario B you lose your job but you still have $250k on assets, you can draw on that to pay the $500k note as it comes due. You have options.
  - deleted 4y ago
    [deleted]
- krallja 4y ago
  “I lived paycheck-to-paycheck, except I have savings” is a gross misunderstanding of the term.
  - gizmo686 4y ago
    The article is talking about people who self report as living "paycheck-to-paycheck", which means the term means whatever the surveyed population feels like it means. If you want a more controlled responce, you need to ask more specific questions and classify the responces yourself.
marcinzm 4y ago
I guess I do by their definition although it doesn't matter short/medium term since I have decent savings. And medium/long term the bonuses and equity increase that savings.
koala_man 4y ago
Are you saying that you spend your base salary but save your RSUs? If this counts as "living paycheck to paycheck" I'm much less concerned.
- crhulls 4y ago
  I’m not living paycheck to paycheck since I’ve been lucky with my company, but I do somehow spend an entire high six figure salary and I live very well but not lavishly. I guess I’m wondering if others here follow the same model of spend the dollars and save the stock.
  - neogodless 4y ago
    How are you defining "spend an entire salary" in a different way from "living paycheck to paycheck"?
    - lostmsu 4y ago
      RSUs are a form of work comp. If you are saving them, that's not "paycheck to paycheck" as at any moment you can freely convert them to cash.
      - neogodless 4y ago
        So they do not spend all of their income... got it!
      - s1artibartfast 4y ago
        It would be shocked if the original survey included RSU, 401Ks, and capital gains in the estimation.
neogodless 4y ago
Make a bit over half that. Spend about $65k / year. The rest goes into 401k / brokerage. Live in a (relatively) high cost-of-living area (HCOLA), bought large house with an acre in 2016, have 2 cars that are 7-8 years old with relatively low miles on them, paid off 5 years ago.
- bradlys 4y ago
  If you could buy an acre on $125K~ year - I don’t think you live in hcol.
  - neogodless 4y ago
    It's the most expensive county in this state (due to being outside the biggest city, but close to it, and being a lush, tree-filled area). And home prices are only one factor of a HCOLA area. But by saving up to put a down payment, and getting good interest rates (3.75% initially, refinanced to 2.99%) the overall payment is quite reasonable. Compared to the absolute most expensive places in the country (San Fran/NYC) it is not a "high" cost-of-living, but compared to much of the rest of the country it is. Median home price in the U.S. in 2016 was $225k or so, and our home was $390k. (Sales and value estimates now are approaching $600k for the same comparable homes in this area.)
    - pedrosorio 4y ago
      > And home prices are only one factor of a HCOLA area Spoken like someone who doesn't live in a HCOL area
      - neogodless 4y ago
        So... all the other things in my life other than my home that are high-cost... are not high-cost, because of your bizarre comment? That doesn't follow. And my house is high-cost compared to the median. Just not compared to the top x% of the country.
        4y ago
driverdan 4y ago
> I make significantly more than 250k and spend all of it Why? How do you justify that? Do you have no concept of how to manage money?
- crhulls 4y ago
  I spend my whole paycheck, I don’t live paycheck to paycheck, which is a huge difference. I don’t have a money management issue but it is interesting how quickly it can go. And then in California marginal tax rate goes over 50% so headline earnings is not take home.
  - mrguyorama 4y ago
    >I spend my whole paycheck, I don’t live paycheck to paycheck You keep saying this without explaining how that can possibly be true
    - s1artibartfast 4y ago
      Paycheck might be 50k a month - Spent 401k, RSUs, capital gains on investments might be another 50K - Saved.
    - stripline 4y ago
      Living "paycheck to paycheck" implies that if you miss a single paycheck (due to losing you job) then you'll no longer be able to make ends meet. If you have any savings or emergency fund built up, then you could conceivably quit/lose your job and continue paying your bills for some time, even if you had previously been spending your entire paycheck.
roflyear 4y ago
Make investing a bill. That's the easiest way to do it.
throw123123123 4y ago
Same - with a family in the bay area 250k is not a lot of money.
y-c-o-m-b 4y ago
For the month of May, total of $5,989.81 for just the "necessities". This does not include anything bought on Amazon or project stuff from HomeDepot or other misc expenses. Mortgage: 2280.07 Groceries: 2,279.13 (eat mostly vegetarian/pescetarian... fresh fruits, vegetables, fish/shrimp, beans, tortillas, eggs, cereals, healthy and beauty crap, household supplies) Medication: 22.14 Entertainment: 38.47 Restaurants: 52.94 Fuel: 234.03 Doctor: 334.07 Dentist: 257.00 Electric: 151.31 Garbage: 35 Water/Sewer: 125.77 (includes mandatory city fees for "street maintenance") Internet: 99.99 Phone: 79.89 EDIT: this is for a household of 4

I wonder how many people here on hacker news live paycheck to paycheck? I make significantly more than 250k and spend all of it (single income family of four) and my savings are my equity.

pionar 4y ago

I mean, I lived paycheck to paycheck last month after some unexpected large bills (May was a hell of a month!) but that was only because I didn't want to raid savings. I don't have sympathy for folks making as much as we do who are "broke" or up to their ears in debt. If they're fortunate and privileged enough to get to our positions, they only brought it on themselves.

zionic 4y ago
>or up to their ears in debt See this depends. If the following are true: 1) The interest rate on your debt is below inflation 2) The cost to service the debt is a sufficiently low percentage of your monthly take home Then taking a loan is often MUCH smarter than buying it cash, because your cash can earn interest in excess of the loan interest in most scenarios. I know people with ten houses on 30-year 2.5% notes. They could pay them all off tomorrow but it wouldn't make sense financially.
- ivanche 4y ago
  Leverage is excellent in good times but horrible in bad ones. As they say, after an ebb you see who was swimming naked.
- bombcar 4y ago
  The risk that you may lose your job has to be considered in the equation, taking into account how "rare" your situation is (if you're work-from-home at $250k, will you be able to find that again, or will you have to move to get a similar income?) and how much savings you have. Remember, when you take a loan you have extremely large banks on the other side of your "great idea" so either they're incredibly stupid, or they can take into account more factors.
  - zionic 4y ago
    Sure, but you can always sell assets to cover expenses. Say you have $250k in diversified assets and a $500k note. In scenario A you put $250k and have no earning power, owing $250k. If you lose your job and foreclose that downpayment is lost. In scenario B you lose your job but you still have $250k on assets, you can draw on that to pay the $500k note as it comes due. You have options.
- deleted 4y ago
  [deleted]
krallja 4y ago
“I lived paycheck-to-paycheck, except I have savings” is a gross misunderstanding of the term.
- gizmo686 4y ago
  The article is talking about people who self report as living "paycheck-to-paycheck", which means the term means whatever the surveyed population feels like it means. If you want a more controlled responce, you need to ask more specific questions and classify the responces yourself.

marcinzm 4y ago

I guess I do by their definition although it doesn't matter short/medium term since I have decent savings. And medium/long term the bonuses and equity increase that savings.

koala_man 4y ago

Are you saying that you spend your base salary but save your RSUs? If this counts as "living paycheck to paycheck" I'm much less concerned.

crhulls 4y ago
I’m not living paycheck to paycheck since I’ve been lucky with my company, but I do somehow spend an entire high six figure salary and I live very well but not lavishly. I guess I’m wondering if others here follow the same model of spend the dollars and save the stock.
- neogodless 4y ago
  How are you defining "spend an entire salary" in a different way from "living paycheck to paycheck"?
  - lostmsu 4y ago
    RSUs are a form of work comp. If you are saving them, that's not "paycheck to paycheck" as at any moment you can freely convert them to cash.
    - neogodless 4y ago
      So they do not spend all of their income... got it!
    - s1artibartfast 4y ago
      It would be shocked if the original survey included RSU, 401Ks, and capital gains in the estimation.

neogodless 4y ago

Make a bit over half that. Spend about $65k / year. The rest goes into 401k / brokerage. Live in a (relatively) high cost-of-living area (HCOLA), bought large house with an acre in 2016, have 2 cars that are 7-8 years old with relatively low miles on them, paid off 5 years ago.

bradlys 4y ago
If you could buy an acre on $125K~ year - I don’t think you live in hcol.
- neogodless 4y ago
  It's the most expensive county in this state (due to being outside the biggest city, but close to it, and being a lush, tree-filled area). And home prices are only one factor of a HCOLA area. But by saving up to put a down payment, and getting good interest rates (3.75% initially, refinanced to 2.99%) the overall payment is quite reasonable. Compared to the absolute most expensive places in the country (San Fran/NYC) it is not a "high" cost-of-living, but compared to much of the rest of the country it is. Median home price in the U.S. in 2016 was $225k or so, and our home was $390k. (Sales and value estimates now are approaching $600k for the same comparable homes in this area.)
  - pedrosorio 4y ago
    > And home prices are only one factor of a HCOLA area Spoken like someone who doesn't live in a HCOL area
    - neogodless 4y ago
      So... all the other things in my life other than my home that are high-cost... are not high-cost, because of your bizarre comment? That doesn't follow. And my house is high-cost compared to the median. Just not compared to the top x% of the country.
      - 4y ago

driverdan 4y ago

> I make significantly more than 250k and spend all of it Why? How do you justify that? Do you have no concept of how to manage money?

crhulls 4y ago
I spend my whole paycheck, I don’t live paycheck to paycheck, which is a huge difference. I don’t have a money management issue but it is interesting how quickly it can go. And then in California marginal tax rate goes over 50% so headline earnings is not take home.
- mrguyorama 4y ago
  >I spend my whole paycheck, I don’t live paycheck to paycheck You keep saying this without explaining how that can possibly be true
  - s1artibartfast 4y ago
    Paycheck might be 50k a month - Spent 401k, RSUs, capital gains on investments might be another 50K - Saved.
  - stripline 4y ago
    Living "paycheck to paycheck" implies that if you miss a single paycheck (due to losing you job) then you'll no longer be able to make ends meet. If you have any savings or emergency fund built up, then you could conceivably quit/lose your job and continue paying your bills for some time, even if you had previously been spending your entire paycheck.

roflyear 4y ago

Make investing a bill. That's the easiest way to do it.

throw123123123 4y ago

Same - with a family in the bay area 250k is not a lot of money.

y-c-o-m-b 4y ago

For the month of May, total of $5,989.81 for just the "necessities". This does not include anything bought on Amazon or project stuff from HomeDepot or other misc expenses. Mortgage: 2280.07 Groceries: 2,279.13 (eat mostly vegetarian/pescetarian... fresh fruits, vegetables, fish/shrimp, beans, tortillas, eggs, cereals, healthy and beauty crap, household supplies) Medication: 22.14 Entertainment: 38.47 Restaurants: 52.94 Fuel: 234.03 Doctor: 334.07 Dentist: 257.00 Electric: 151.31 Garbage: 35 Water/Sewer: 125.77 (includes mandatory city fees for "street maintenance") Internet: 99.99 Phone: 79.89 EDIT: this is for a household of 4