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Living on $100k a Year

81 pointsby santaclausover 7 years ago

29 comments

rayinerover 7 years 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.<p>In Germany, for example, a two-income couple making 84,000 Euro ($100,000) in Bavaria nets 57% of their income: <a href="https:&#x2F;&#x2F;www.icalculator.info&#x2F;germany.html" rel="nofollow">https:&#x2F;&#x2F;www.icalculator.info&#x2F;germany.html</a>. In Maryland, a relatively high-tax state, they net 76% of their income. And that doesn&#x27;t adjust for the additional upper middle class tax benefits like the mortgage interest deduction, which don&#x27;t exist in Germany, which would take the net income over 80% on a typical house.<p>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%).<p>I live on the east coast, but about an hour east of D.C. Around here, you can live very comfortably on $100,000&#x2F;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).
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d4mi3nover 7 years ago
&gt; &quot;And now I&#x27;m one of those coastal elites, a term, you know, that people in Middle America use. And it feels like betrayal,&quot; he says. &quot;But what I&#x27;ve learned in moving to the coast is there&#x27;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.&quot;<p>It saddened me to read that snippet. Growing up on the west coast, I was aware of some ideological&#x2F;cultural differences between urban metros and the Middle America, but I was not aware of that sense of classism.<p>A take-away I had from Trump&#x27;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&#x2F;or the willingness to move towards greener pastures. Is there anything that can be done to improve the situation?
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Y7ZCQtNo39over 7 years ago
I&#x27;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.<p>$100k still goes far in a high cost of living, coastal area. However, I drive a used car. I&#x27;m a renter, and probably will be for awhile. If I wanted to be a homeowner, a good portion of my retirement savings &#x2F; investments would be going towards that.<p>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.<p>I don&#x27;t have a lot, but I&#x27;m also a minimalist. And I realize that, income wise, probably 80% of society has it worse than me. I don&#x27;t know how households earning around $50k would feel any semblance of having a future financially. Growing my savings&#x2F;investments is the only way I feel like I&#x27;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.
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mberningover 7 years ago
I really cannot sympathize. My father raised a family of 6 making ~$30k&#x2F;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.<p>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.<p>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.<p>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.
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abalashovover 7 years 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&#x2F;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.<p>That&#x27;s something a lot of people on salary don&#x27;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&#x27;t been the case since I went self-employed about ten years ago.<p>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&#x27;s not how reality works, I take a bath in late fees, interest, overdraft fees, no access to credit due to bad rating, etc.<p>Some of those things are more avoidable than others depending on the choices one makes, but that&#x27;s not the point. The point is that W-2 and SE income are not equivalent. Unless you&#x27;ve devised some compensation scheme that is substantially similar to salary as a contractor, you can&#x27;t afford anywhere near a $100k lifestyle as a consultant earning $100k+. There are many days I&#x27;d happily trade places with folks who get a lower, but steady paycheck every two weeks for doing more or less one job.
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stanmancanover 7 years ago
The article even touches on how everyone is trying to keep up with the Joneses instead of living within their means.<p>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.<p>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.
incadenzaover 7 years ago
I don&#x27;t mean to sound unsympathetic, but it would be nice to hear what is eating into their income so much.<p>My thought pattern here is that if you can&#x27;t manage on $100,000 a year then you&#x27;ll have the same problem at $200,000 a year, so on and so forth.
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jandrewrogersover 7 years ago
I read the article and I still don&#x27;t know why these people can&#x27;t live comfortably on $100k. It is never explained, and I have lived reasonably comfortably with a household income of &lt;$100k in some of the mentioned locales. You don&#x27;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.<p>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.<p>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&#x27;d probably have to cut back on the luxury a bit if I had kids).
paulddraperover 7 years ago
&gt; &quot;People feel like they haven&#x27;t been getting ahead for a long time,&quot; says Jim Tankersley, who covers taxes and the economy for The New York Times.<p>I won&#x27;t say this can&#x27;t be true, but by experience casts doubt on trusting what people &quot;feel&quot;.<p>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).<p>Lots of people feel they aren&#x27;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 &quot;household wages&quot;.)<p>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.<p>Lots of people feel cost of living is rising. And yet, there are 10% <i>more</i> people living in urban areas since 1980, which tend to be far more expensive than rural ones.<p>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.<p>---<p>In reality, I suspect these feelings are grounded much more with keeping up with the Jones&#x27; (+ Facebook), rather than the objective quality of living.
kuschkuover 7 years ago
There is a very relevant set of articles right now on reddit on this topic.<p>It started when an Austrian software engineer published his entire spending, and where every cent of his taxes goes, in this post: <a href="https:&#x2F;&#x2F;www.reddit.com&#x2F;r&#x2F;dataisbeautiful&#x2F;comments&#x2F;7h2idb&#x2F;what_my_gross_income_of_60000year_is_actually&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.reddit.com&#x2F;r&#x2F;dataisbeautiful&#x2F;comments&#x2F;7h2idb&#x2F;wha...</a><p>Other users, employed in all industries, quickly responded, some from Japan <a href="https:&#x2F;&#x2F;redd.it&#x2F;7h99vj" rel="nofollow">https:&#x2F;&#x2F;redd.it&#x2F;7h99vj</a> , Seattle <a href="https:&#x2F;&#x2F;redd.it&#x2F;7h6bsr" rel="nofollow">https:&#x2F;&#x2F;redd.it&#x2F;7h6bsr</a> , Brisbane, Australia <a href="https:&#x2F;&#x2F;redd.it&#x2F;7h9gpe" rel="nofollow">https:&#x2F;&#x2F;redd.it&#x2F;7h9gpe</a> , New York City <a href="https:&#x2F;&#x2F;redd.it&#x2F;7has76" rel="nofollow">https:&#x2F;&#x2F;redd.it&#x2F;7has76</a> , rural TN <a href="https:&#x2F;&#x2F;redd.it&#x2F;7hbhe9" rel="nofollow">https:&#x2F;&#x2F;redd.it&#x2F;7hbhe9</a> , London, UK <a href="https:&#x2F;&#x2F;redd.it&#x2F;7h9tjf" rel="nofollow">https:&#x2F;&#x2F;redd.it&#x2F;7h9tjf</a> , a Major in the US Air Force <a href="https:&#x2F;&#x2F;redd.it&#x2F;7ha2q0" rel="nofollow">https:&#x2F;&#x2F;redd.it&#x2F;7ha2q0</a> , and another one from Switzerland <a href="https:&#x2F;&#x2F;redd.it&#x2F;7hbehc" rel="nofollow">https:&#x2F;&#x2F;redd.it&#x2F;7hbehc</a><p>There’s dozens more posts, I can’t link them all, you can find the rest at <a href="https:&#x2F;&#x2F;www.reddit.com&#x2F;r&#x2F;dataisbeautiful&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.reddit.com&#x2F;r&#x2F;dataisbeautiful&#x2F;</a> – but many of them show how people can live very successfully on low wages, and others yet struggle with much more money.
neomover 7 years ago
The article isn&#x27;t great, but the audio snippets are a lot better.<p>I&#x27;ve posted this book a zillion times on HN, but &quot;$2.00 a Day: Living on Almost Nothing in America&quot; really changed a lot of my thoughts and feelings about what is going on in America today. Highly recommend reading it:<p><a href="https:&#x2F;&#x2F;www.amazon.com&#x2F;2-00-Day-Living-Nothing-America&#x2F;dp&#x2F;054481195X" rel="nofollow">https:&#x2F;&#x2F;www.amazon.com&#x2F;2-00-Day-Living-Nothing-America&#x2F;dp&#x2F;05...</a>
njarboeover 7 years ago
The article would become useful with the addition of the budgets of each of the people&#x2F;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&#x2F;yr and not just voice one&#x27;s current issues.
ben_jonesover 7 years ago
I&#x27;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&#x27;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.
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cypherpunks01over 7 years ago
FYI I think $100,000 of income puts your household in the top 20% of earners in the US.
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larrykwgover 7 years 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&#x27;t even have their basic human rights guaranteed by their hyper capitalist government.<p><a href="https:&#x2F;&#x2F;www.theguardian.com&#x2F;world&#x2F;2017&#x2F;dec&#x2F;01&#x2F;un-extreme-poverty-america-special-rapporteur" rel="nofollow">https:&#x2F;&#x2F;www.theguardian.com&#x2F;world&#x2F;2017&#x2F;dec&#x2F;01&#x2F;un-extreme-pov...</a>
pjc50over 7 years ago
Without any kind of breakdown, this is really uninformative.<p>Is this due to housing cost? Student debt? Medical debt? Bad decisions? Good decisions that were invalidated by events? Who knows?
nprisntthebestover 7 years ago
It would have been nice if they included anything about family size and details besides “kids”, budget, lifestyle, etc.
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fadyover 7 years ago
A lot our missing the point. 100k&#x2F;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.<p>&quot;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.&quot; <a href="https:&#x2F;&#x2F;www.theatlantic.com&#x2F;business&#x2F;archive&#x2F;2017&#x2F;04&#x2F;savings-money-emergency&#x2F;522036&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.theatlantic.com&#x2F;business&#x2F;archive&#x2F;2017&#x2F;04&#x2F;savings...</a>
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pishpashover 7 years ago
I would just like to point out that using median income to define the middle class is part of the problem. That&#x27;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.
nunezover 7 years ago
We live in Dallas on about $185k&#x2F;year cumulative. Despite $1200&#x2F;mo in rent, &gt;$1500&#x2F;mo student loan repayments, $500&#x2F;mo car payments and $1350&#x2F;mo credit card debt (i’m aware of how dumb that was), we are living comfortably. My plan is to earn a $200k&#x2F;year income in less than four years so that my fiancee can go back to school without sacrificng our current lifestyle.<p>However, we live in an apartment and don’t have kids.<p>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)
jorblumeseaover 7 years 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.<p>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.<p>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.<p>If it&#x27;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.
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feralmoanover 7 years ago
Someone making $100k should easily be able to save $1k a month <i>wherever</i> they are living in the world and put it into a fund making at least 15% a year.<p>Here&#x27;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&#x27;re so empty inside. How they went so far but did so little.<p>This years black friday&#x2F;cyber monday sales were extraordinary - because people are idiots.<p>It&#x27;s not a mystery. Make conscious choices in your life and you won&#x27;t be a victim. Someone making 6 figures is the last person anyone should feel sad for.
ErikVandeWaterover 7 years 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?
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apple4everover 7 years 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.<p>This is why lowering taxes is great.
rboydover 7 years ago
I&#x27;ve only ever heard the term &quot;coastal elites&quot; from people the live near the coast and wish they were elites.
ThrowProgrammerover 7 years 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&#x27;t feel like it such a high salary.
jerrycabbageover 7 years 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
Overtonwindowover 7 years ago
I lived very well on $100k in the DC area. It&#x27;s all about budgeting.
pagealdover 7 years ago
This is ridiculous. It&#x27;s one thing to claim that 100k is &quot;not enough&quot; 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&#x27;s not enough for you in Kansas, the fact is that you&#x27;re living far beyond your means.<p>I think it&#x27;s telling that one family cited credit card debt like it&#x27;s an act of nature instead of a conscious choice. And just because you qualify for a million dollar mortgage doesn&#x27;t mean you should get one. Spend that big salary on a home near your workplace and sell the $40,000 SUV.<p>The sooner we wake up from the &quot;dream&quot; 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&#x27;ll be.
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