Earning 50K vs 500K vs 50 million

[Anonymous]

Anonymous wrote:We make 450 HHI and you are delusional if you think that is anything like 5m or 50m a year. My life would be completely different. I would start a business or pursue a passion, instead of a paycheck. I would hire my nanny full time without stressing about how much she costs. I could support my family better who needs help without it affecting my life or retirement plans.

I just wanted to add I still stress about money and saving enough or losing my job or my DH's job. Maybe it is because I come from nothing and got here all on my own. I think the calmer people I know have lots more family support and have been earning long enough to save more money. Also, the only time I've even spent 5k a week was for my honeymoon - no idea how you can afford that even on this income!

[Anonymous]

Anonymous wrote:I make a similar HHI to you and I wouldn't spend $20K a week on a vacation. So, at least for me, that would be one difference if I made a lot more.

Wow, we are a family of five and have never once spent anything close to $20k on a week's vacation (5-7k is more like it). Then again, our HHI is $150k so we're "poor" by comparison.

[Anonymous]

Anonymous wrote:I agree with OP. Our HHI is $300k. Nice home, late model cars, private school. No beach house, but nice vacations 2-3 times a year. We fly (not first class), stay in hotels... My brother makes closer to 50k. His cars are 10+ years old. Public school. The only vacations they drive and stay with family. They do not have health insurance (until ACA kicks in). No college savings for kids, no retirment savings for them. I know they haven't paid some medical bills because occasionally a collector will call me and ask for my brother (his wife and I have the same name). Worrying about medical care is a far stretch from not having my own yacht or plane. I don't worry about not having a yacht when I go to bed at night. I don't worry about paying the enormous heating bill due to the cold winter. These are things people on 50k worry about. Wondering if you saved enough for kids college or retirment is very far from this reality.

I think there are numerous unfair provisions in the tax code. 140k in a lower cost of living area is better than 160 in the DMV. Plus the educational tax benefits at 140.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I would enjoy having a private plane. Other than that, I am very happy with my lifestyle and wouldn't change much.

My friend who is a licensed pilot, has a plane and a very old minivan (duct-taped too). Instead of buying an expensive car, he prefers to own a plane. This is very doable with even a smaller HHI. Just saying.

I want a jet with 2 pilots. I don't want a little Cessna prop that I will crash JFK Jr style.

[Anonymous]

Anonymous wrote:I make a similar HHI to you and I wouldn't spend $20K a week on a vacation. So, at least for me, that would be one difference if I made a lot more.

I could easily spend $20k on vacation. We spend $10k for a pretty ordinary ski trip to CO or Utah each Christmas. Airfare alone this year was $3000. We share a house/condo with another family usually in town. If it's a nice house its far from the mountain. If it's a small condo it might be walkable. Cook in most nights. So if I had more to spend we'd stay in a ski in ski out house or a hotel at the base and eat out every night. Easily $20k, even with coach airfare.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I make a similar HHI to you and I wouldn't spend $20K a week on a vacation. So, at least for me, that would be one difference if I made a lot more.

I could easily spend $20k on vacation. We spend $10k for a pretty ordinary ski trip to CO or Utah each Christmas. Airfare alone this year was $3000. We share a house/condo with another family usually in town. If it's a nice house its far from the mountain. If it's a small condo it might be walkable. Cook in most nights. So if I had more to spend we'd stay in a ski in ski out house or a hotel at the base and eat out every night. Easily $20k, even with coach airfare.

Yeah I agree with this. We typically spend 10k on a very run of the mill vacation for 5 people. I could easily do 15-20k just by bumping everything up a notch.

[Anonymous]

Anonymous wrote:For us, somewhere between $200 and $300k suffices for all of our whims (except early retirement). Any more, we are donate more (as %).

For me the difference between $500k and $50M would be donating to existing charities and creating our own. That, and I would spring for first class on all long haul plane trips.

OP here. Seems like most of you want to step it up a notch. Similar to the PP above, I feel like $500K per year is as much as I can responsibly spend. Anything more than that is excessive. If I made millions more, everything above $500K would probably go to charity.

I think many multi millionaires live the same way. I'm pretty sure Warren Buffet spends less than $500K a year and happily donates billions each year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:For us, somewhere between $200 and $300k suffices for all of our whims (except early retirement). Any more, we are donate more (as %).

For me the difference between $500k and $50M would be donating to existing charities and creating our own. That, and I would spring for first class on all long haul plane trips.

OP here. Seems like most of you want to step it up a notch. Similar to the PP above, I feel like $500K per year is as much as I can responsibly spend. Anything more than that is excessive. If I made millions more, everything above $500K would probably go to charity.

I think many multi millionaires live the same way. I'm pretty sure Warren Buffet spends less than $500K a year and happily donates billions each year.

You would be wrong. Buffet donates very little to charity and has most of his wealth locked up in unrealized long term capital gains. I don't know why the masses think he is a common guy just because his house isn't that fancy. He was just in the news for supporting Dimon's 75% raise as CEO of JPMC the year they paid record fines. Yeah Buffet is a real man of the people.

[Anonymous]

Please cite your source about Buffet. Here are Wikipedia excerpts. I agree with his logic on wealth:
His 2006 annual salary was about $100,000, which is small compared to senior executive remuneration in comparable companies. In 2007 and 2008, he earned a total compensation of $175,000, which included a base salary of just $100,000. He lives in the same house in the central Dundee neighborhood of Omaha that he bought in 1958 for $31,500, today valued at around $700,000 (although he also owns a $4 million house in Laguna Beach, California). In 1989, after having spent nearly $6.7 million of Berkshire's funds on a private jet, Buffett named it "The Indefensible". This act was a break from his past condemnation of extravagant purchases by other CEOs and his history of using more public transportation.
The following quotation from 1988 highlights Warren Buffett's thoughts on his wealth and why he long planned to re-allocate it:
I don't have a problem with guilt about money. The way I see it is that my money represents an enormous number of claim checks on society. It's like I have these little pieces of paper that I can turn into consumption. If I wanted to, I could hire 10,000 people to do nothing but paint my picture every day for the rest of my life. And the GDP would go up. But the utility of the product would be zilch, and I would be keeping those 10,000 people from doing AIDS research, or teaching, or nursing. I don't do that though. I don't use very many of those claim checks. There's nothing material I want very much. And I'm going to give virtually all of those claim checks to charity when my wife and I die.
From a NY Times article: "I don't believe in dynastic wealth", Warren Buffett said, calling those who grow up in wealthy circumstances "members of the lucky sperm club". Buffett has written several times of his belief that, in a market economy, the rich earn outsized rewards for their talents:
A market economy creates some lopsided payoffs to participants. The right endowment of vocal chords, anatomical structure, physical strength, or mental powers can produce enormous piles of claim checks (stocks, bonds, and other forms of capital) on future national output. Proper selection of ancestors similarly can result in lifetime supplies of such tickets upon birth. If zero real investment returns diverted a bit greater portion of the national output from such stockholders to equally worthy and hardworking citizens lacking jackpot-producing talents, it would seem unlikely to pose such an insult to an equitable world as to risk Divine Intervention.
His children will not inherit a significant proportion of his wealth. This is consistent with statements he has made in the past indicating his opposition to the transfer of great fortunes from one generation to the next. Buffett once commented, "I want to give my kids just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing".

[Anonymous]

Buffet made a ton of money in the financial crisis off of companies like Goldman Sachs - god you are so naive.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:For us, somewhere between $200 and $300k suffices for all of our whims (except early retirement). Any more, we are donate more (as %).

For me the difference between $500k and $50M would be donating to existing charities and creating our own. That, and I would spring for first class on all long haul plane trips.

OP here. Seems like most of you want to step it up a notch. Similar to the PP above, I feel like $500K per year is as much as I can responsibly spend. Anything more than that is excessive. If I made millions more, everything above $500K would probably go to charity.

I think many multi millionaires live the same way. I'm pretty sure Warren Buffet spends less than $500K a year and happily donates billions each year.

You would be wrong. Buffet donates very little to charity and has most of his wealth locked up in unrealized long term capital gains. I don't know why the masses think he is a common guy just because his house isn't that fancy. He was just in the news for supporting Dimon's 75% raise as CEO of JPMC the year they paid record fines. Yeah Buffet is a real man of the people.

In 2006, Buffet made history when he donated 37 Billion dollars to the Bill and Melinda Gates Foundation.

[Anonymous]

Anonymous wrote:We make 450 HHI and you are delusional if you think that is anything like 5m or 50m a year. My life would be completely different. I would start a business or pursue a passion, instead of a paycheck. I would hire my nanny full time without stressing about how much she costs. I could support my family better who needs help without it affecting my life or retirement plans.

Oh, please. First world problems, boo hoo. What a sickening thread.

[Anonymous]

Things start looking the same after a million

[Anonymous]

This is a dumb question--how can you truly compare?

But I'll bite. 50 vs 500 definitely. I was a single making $50k, then our family expanded to 4 on $200k. I honestly believe that the quality of life was identical in the two cases, in terms of luxury, purchasing power, stress... $50k was quite comfortable for one person and $200k with 2 kids, and neither permits much extravagances.

At $350k now, our spending isn't very different compared to at $200k. We actually spend less now that the kids are older.

[Anonymous]

Anonymous wrote:Buffet made a ton of money in the financial crisis off of companies like Goldman Sachs - god you are so naive.

Everyone likes to make money. My point is that warren and I don't have the need to spend all of it.