Jumpy income

[Anonymous]

Lots of fancy DC folks go in and out of public service. They take a $60K WH job, and then go into private and make $400+ money. Some in the millions obviously. Back and forth. Same with tech people in SF- the income is erratic, ebbs and flows.

It feels excruciatingly tough to make big financial life decisions on this- namely, buying a house, sending your kids to private, how many kids to have, a nanny, vacas, etc.

Do these people just have an innate self belief that it will be “fine” and income spread? Do they all have trusts or expect some large inheritance so no big deal? Is it the confidence that if something were to go awry, grandma / grandpa could bail them out (and in all likelihood, it doesnt go awry)? Do they all have partners who in the background are making the stable money?

[Anonymous]

You sound extremely wealth. We live way below our means. No nanny, no housekeeper, small house, public school as income goes up and down. So, when it goes down, no big deal.

[Anonymous]

The folks I know who have gone in and out are lawyers. Most of them spent the first 8-10 years at a firm where they made (and presumably saved) a bunch of money. A number also have biglaw spouses. Also, when they go into government, they are making more like $180k-$220k, so while not huge money, also a lot more than $60k.

[Anonymous]

I think people who do this plan it in advance, or at least position themselves to take a lower paying opportunity (start up, public interest role), by having lower fixed costs or by amassing a large pot of gold to spend from in the future.

You can have a good life from earning a couple million over a few years and investing it for the future.

[Anonymous]

Anonymous wrote:You sound extremely wealth. We live way below our means. No nanny, no housekeeper, small house, public school as income goes up and down. So, when it goes down, no big deal.

I am the OP. I guess the question here is- are you living a smaller life than you could otherwise have? I am not wealthy, but i definitely am around a wealthier crowd. I see friends taking on these massive mortgages (like surely $10K+ monthly), they spare no childcare expense to free up time so they can prioritize work, they still seem to drive nice cars and go on nice vacas, and im like what am i missing? Are they all just house poor? Should my husband and I believe in ourselves more?

[Anonymous]

Anonymous wrote:The folks I know who have gone in and out are lawyers. Most of them spent the first 8-10 years at a firm where they made (and presumably saved) a bunch of money. A number also have biglaw spouses. Also, when they go into government, they are making more like $180k-$220k, so while not huge money, also a lot more than $60k.

Agree! These tend to be lawyers with two income families. They know that they can leverage their few years of government service into a bigger law job when they exit.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You sound extremely wealth. We live way below our means. No nanny, no housekeeper, small house, public school as income goes up and down. So, when it goes down, no big deal.

I am the OP. I guess the question here is- are you living a smaller life than you could otherwise have? I am not wealthy, but i definitely am around a wealthier crowd. I see friends taking on these massive mortgages (like surely $10K+ monthly), they spare no childcare expense to free up time so they can prioritize work, they still seem to drive nice cars and go on nice vacas, and im like what am i missing? Are they all just house poor? Should my husband and I believe in ourselves more?

You may just not have all the details. Do you know for sure they have huge mortgages? If they have family money to help them buy the house, they may not have large mortgages. Or family may be covering childcare/private school. Or they have a trust fund and they use income from the trust to pay their expenses.

[Anonymous]

Anonymous wrote:The folks I know who have gone in and out are lawyers. Most of them spent the first 8-10 years at a firm where they made (and presumably saved) a bunch of money. A number also have biglaw spouses. Also, when they go into government, they are making more like $180k-$220k, so while not huge money, also a lot more than $60k.

+1. And for a lot of people it is 1-2 years. It is not a lifetime. Hence the revolving door.