Making $500k and not feeling wealthy in NW

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's funny that people think that those making 300K or more are just lazying around.

We are constantly working and because of that we have other expensese that need to be paid because we don't have time to do them.

1) Lawn care
2) Nanny
3) Childcare
4) Cleaning


etc...

Once you add all of those things up the lifestyle at 300k is not that comfortable. Maybe once we get into the 5-600k you start experience more disposable income, but at 300k you have to pay for a bunch of stuff you have to outsource.

On top of that around 300k you lose a lot of tax deductions so you are basically in limbo in terms of wreeping the benefits of making more. The tax benefits you lose at 3-400k are the same ones that you lose at 500k and higher.

Let's see, if you spent $2000 per year on lawn care, $3000 per year on house cleaning, $50K per year on a nanny (why would you need additional childcare if you have a nanny?!?) that's still only about $55K. You're saying that taking those expenses out from $300K plus taxes of say $75K, that you cannot otherwise live on $175K per year net. There are many, many families with HHI under $100K where one or both parents are working 60-80 hours per week just to make ends meet because they have very low salaries. Those workers have many of the same problems you have, they just have to make more economical choices. I'm sorry, but if you choose a high end lifestyle and spend all of your money, that doesn't make you more sympathetic. There are many people who make significantly less than you that have all of the same demands on their time, many of whom have to pick soime of the support that you have and still make ends meet. We make $200K, both work full-time, still provide for our two children, still get housecleaners, still live in a large house and we can still save for retirement, college, yada yada yada. And we find ourselves not onloy very comfortable but very lucky instead of overentitled like you.

Taxes $75K on $875 a year? Not even in the ball park...

what idiots. The taxes are almost 50% which sucks ass.

The example above was out of 300k, in which case 75k is a reasonable estimate. The marginal tax rate may be nearly 40% (33% fed, 6% state, 1.45% med, over the limit for SS), but not every dollar is taxed at the marginal rate. The retirement savings, itemized deductions, health care, FSAs, etc lower the effective tax rate to we'll below the marginal rate.

Helps to read before you call others idiots, otherwise you come off as both rude and slow.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

What single-income minimum wage worker is renting a 2 bedroom and expecting it to cost 1/3 of their income? The only group this picture speaks to is single parents with at least two kids who earn minimum wage and don't have other financial support. Otherwise, if you're renting a 2 bedroom apt, then you probably have at least two income earners. Kind of misleading to plop a picture of the entire US in the middle of the page and then only speak to a situation that makes sense for this very specific group. Most people on minimum wage are not renting a 2 bedroom as a solo breadwinner and they're certainly not expecting it to cost them 1/3 of their income.

Well perhaps people who would like to have enough money leftover to, you know, eat, pay for bus fare, and buy medicine when they or their kids get sick, and keep the heat on. Minimum wage in Texas is 7.25 an hour, so excluding FICA, two working parents working 40 hours a week would make 27K. Even in the cheapest part of Texas, it is not easy to live a decent lifestyle as a single person, not to mention someone with kids.

One person making minimum wage at $7.25/hour working 40 hours a week for 52 weeks of the year would make $15,080 before taxes. Virginia follows the federal minimum wage. Please show me where in Northern Virginia you can find a 1 bedroom apartment or even a studio/efficiency for $418 per month or less, which would be 1/3 of their monthly income. Also keep in mind those calculations are still before taxes.

The point is that a single, minimum wage worker isn't renting out a 1 bedroom apartment or studio. They have roommates, or rent a room out of a group house, or even a basement unit from a family. That you can find for about $500, which is above the 1/3 recommendation but if you actually have ever been poor or are close to poor people, or just read up on the topic, you know that the 1/3 guideline isn't how poor people really live so you shouldn't be horrified to discover that poor people pay more than $400/month on rent, assuming they actually pay the full cost of their rent.

Now, if you're talking about a dual income household, then you have more room to work with, say $800-1000/month for rent and you definitely can get a studio in that range in NoVA. Not at great, top rated complexes, but ones that are good enough for those of us who come to DC initially poor. For all of you who can't fathom living under such conditions, did you build your wealth then move to DC? Everyone I know who came here, started out as a low-wage worker, rented a room out of a group house - some of us had unpaid internships to get experience and worked minimum wage shifts at night and on weekends with temp agencies or in retail to pay rent on our tiny room. Is that inhumane? Is that horrifying? I can't tell if you all are such die hard liberals that you can't imagine some one having to work extra hours and live within their means without some kind of subsidy or if you're just snobs and disgusted by the prospect of doing so. Maybe you're both.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's funny that people think that those making 300K or more are just lazying around.

We are constantly working and because of that we have other expensese that need to be paid because we don't have time to do them.

1) Lawn care
2) Nanny
3) Childcare
4) Cleaning


etc...

Once you add all of those things up the lifestyle at 300k is not that comfortable. Maybe once we get into the 5-600k you start experience more disposable income, but at 300k you have to pay for a bunch of stuff you have to outsource.

On top of that around 300k you lose a lot of tax deductions so you are basically in limbo in terms of wreeping the benefits of making more. The tax benefits you lose at 3-400k are the same ones that you lose at 500k and higher.

Let's see, if you spent $2000 per year on lawn care, $3000 per year on house cleaning, $50K per year on a nanny (why would you need additional childcare if you have a nanny?!?) that's still only about $55K. You're saying that taking those expenses out from $300K plus taxes of say $75K, that you cannot otherwise live on $175K per year net. There are many, many families with HHI under $100K where one or both parents are working 60-80 hours per week just to make ends meet because they have very low salaries. Those workers have many of the same problems you have, they just have to make more economical choices. I'm sorry, but if you choose a high end lifestyle and spend all of your money, that doesn't make you more sympathetic. There are many people who make significantly less than you that have all of the same demands on their time, many of whom have to pick soime of the support that you have and still make ends meet. We make $200K, both work full-time, still provide for our two children, still get housecleaners, still live in a large house and we can still save for retirement, college, yada yada yada. And we find ourselves not onloy very comfortable but very lucky instead of overentitled like you.

Taxes $75K on $875 a year? Not even in the ball park...

what idiots. The taxes are almost 50% which sucks ass.

Federal tax rate doesn't go beyond 39.6% and that's assuming all of your 500k is taxable - a lot of it isn't so your actual tax rate is going to be a lot lower than that. Add in state taxes - 6-10% for VA-MD-DC. Another 6.3% for Social Security, so sure it's possible you're paying 50% in taxes, but honestly if you are, then you're probably not managing your money well. Who really has their actual tax rate at the max amount allowed? No one I know.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's funny that people think that those making 300K or more are just lazying around.

We are constantly working and because of that we have other expensese that need to be paid because we don't have time to do them.

1) Lawn care
2) Nanny
3) Childcare
4) Cleaning


etc...

Once you add all of those things up the lifestyle at 300k is not that comfortable. Maybe once we get into the 5-600k you start experience more disposable income, but at 300k you have to pay for a bunch of stuff you have to outsource.

On top of that around 300k you lose a lot of tax deductions so you are basically in limbo in terms of wreeping the benefits of making more. The tax benefits you lose at 3-400k are the same ones that you lose at 500k and higher.

Let's see, if you spent $2000 per year on lawn care, $3000 per year on house cleaning, $50K per year on a nanny (why would you need additional childcare if you have a nanny?!?) that's still only about $55K. You're saying that taking those expenses out from $300K plus taxes of say $75K, that you cannot otherwise live on $175K per year net. There are many, many families with HHI under $100K where one or both parents are working 60-80 hours per week just to make ends meet because they have very low salaries. Those workers have many of the same problems you have, they just have to make more economical choices. I'm sorry, but if you choose a high end lifestyle and spend all of your money, that doesn't make you more sympathetic. There are many people who make significantly less than you that have all of the same demands on their time, many of whom have to pick soime of the support that you have and still make ends meet. We make $200K, both work full-time, still provide for our two children, still get housecleaners, still live in a large house and we can still save for retirement, college, yada yada yada. And we find ourselves not onloy very comfortable but very lucky instead of overentitled like you.

Taxes $75K on $875 a year? Not even in the ball park...

what idiots. The taxes are almost 50% which sucks ass.

Federal tax rate doesn't go beyond 39.6% and that's assuming all of your 500k is taxable - a lot of it isn't so your actual tax rate is going to be a lot lower than that. Add in state taxes - 6-10% for VA-MD-DC. Another 6.3% for Social Security, so sure it's possible you're paying 50% in taxes, but honestly if you are, then you're probably not managing your money well. Who really has their actual tax rate at the max amount allowed? No one I know.

With federal, state, Medicare surcharge, FICA, etc, we pay close to 50%. We max out 401(k)s, have a mortgage deduction, etc, but with a high income and the AMT, it is close to 50%. It has nothing to do with "managing your money well" and everything to do with not breaking the law and evading taxes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's funny that people think that those making 300K or more are just lazying around.

We are constantly working and because of that we have other expensese that need to be paid because we don't have time to do them.

1) Lawn care
2) Nanny
3) Childcare
4) Cleaning


etc...

Once you add all of those things up the lifestyle at 300k is not that comfortable. Maybe once we get into the 5-600k you start experience more disposable income, but at 300k you have to pay for a bunch of stuff you have to outsource.

On top of that around 300k you lose a lot of tax deductions so you are basically in limbo in terms of wreeping the benefits of making more. The tax benefits you lose at 3-400k are the same ones that you lose at 500k and higher.

Let's see, if you spent $2000 per year on lawn care, $3000 per year on house cleaning, $50K per year on a nanny (why would you need additional childcare if you have a nanny?!?) that's still only about $55K. You're saying that taking those expenses out from $300K plus taxes of say $75K, that you cannot otherwise live on $175K per year net. There are many, many families with HHI under $100K where one or both parents are working 60-80 hours per week just to make ends meet because they have very low salaries. Those workers have many of the same problems you have, they just have to make more economical choices. I'm sorry, but if you choose a high end lifestyle and spend all of your money, that doesn't make you more sympathetic. There are many people who make significantly less than you that have all of the same demands on their time, many of whom have to pick soime of the support that you have and still make ends meet. We make $200K, both work full-time, still provide for our two children, still get housecleaners, still live in a large house and we can still save for retirement, college, yada yada yada. And we find ourselves not onloy very comfortable but very lucky instead of overentitled like you.

Taxes $75K on $875 a year? Not even in the ball park...

what idiots. The taxes are almost 50% which sucks ass.

The example above was out of 300k, in which case 75k is a reasonable estimate. The marginal tax rate may be nearly 40% (33% fed, 6% state, 1.45% med, over the limit for SS), but not every dollar is taxed at the marginal rate. The retirement savings, itemized deductions, health care, FSAs, etc lower the effective tax rate to we'll below the marginal rate.

Helps to read before you call others idiots, otherwise you come off as both rude and slow.

Nice. But how would an analysis of tax on 300K really compare to $500K, which is nearly double. Or really off the topic how does it compare with minimum wage?

[Anonymous]

Let's see, if you spent $2000 per year on lawn care, $3000 per year on house cleaning, $50K per year on a nanny (why would you need additional childcare if you have a nanny?!?) that's still only about $55K. You're saying that taking those expenses out from $300K plus taxes of say $75K, that you cannot otherwise live on $175K per year net. There are many, many families with HHI under $100K where one or both parents are working 60-80 hours per week just to make ends meet because they have very low salaries. Those workers have many of the same problems you have, they just have to make more economical choices. I'm sorry, but if you choose a high end lifestyle and spend all of your money, that doesn't make you more sympathetic. There are many people who make significantly less than you that have all of the same demands on their time, many of whom have to pick soime of the support that you have and still make ends meet. We make $200K, both work full-time, still provide for our two children, still get housecleaners, still live in a large house and we can still save for retirement, college, yada yada yada. And we find ourselves not onloy very comfortable but very lucky instead of overentitled like you.

Icky humble brag. Go you! And don't even think of comparing yourselves with those "workers" with the "very low salaries"

[Anonymous]

You could make a LOT of money, but if you have a lot of expenses then the net result is that you are not rich and wealthy.

Look at all the Hollywood actors, sports stars, music idols...who made tons of money and spent it all. In the end, it was their discretionary spending that made them poor. Because they were not eating bread made of gold and diamonds.

[Anonymous]

Anonymous wrote:
It is not your income that makes you feel poor. It is your choices and your immediate circle of people.[/quote]

Yep. Change your attitude.

[Anonymous]

Anonymous wrote:You could make a LOT of money, but if you have a lot of expenses then the net result is that you are not rich and wealthy.

Look at all the Hollywood actors, sports stars, music idols...who made tons of money and spent it all. In the end, it was their discretionary spending that made them poor. Because they were not eating bread made of gold and diamonds.

Maybe, but while they were buying those diamonds they probably felt rich. Again, people here keep saying OP should save more while her problem is the exact opposite - she doesn't like the frugal lifestyle, wants lavish vacations etc. she probably saves enough, judging from the OP.

[Anonymous]

It's funny that people think that those making 300K or more are just lazying around.

We are constantly working and because of that we have other expensese that need to be paid because we don't have time to do them.

1) Lawn care
2) Nanny
3) Childcare
4) Cleaning


etc...

Once you add all of those things up the lifestyle at 300k is not that comfortable. Maybe once we get into the 5-600k you start experience more disposable income, but at 300k you have to pay for a bunch of stuff you have to outsource.

Nice try. The single mother in a low-wage job is working those crazy hours and still has cleaning and childcare and various other life obligations. She has no choice but to just deal, whether it's from not sleeping or relying on an elderly parent, or whatever. You have the choice to outsource.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's funny that people think that those making 300K or more are just lazying around.

We are constantly working and because of that we have other expensese that need to be paid because we don't have time to do them.

1) Lawn care
2) Nanny
3) Childcare
4) Cleaning


etc...

Once you add all of those things up the lifestyle at 300k is not that comfortable. Maybe once we get into the 5-600k you start experience more disposable income, but at 300k you have to pay for a bunch of stuff you have to outsource.

On top of that around 300k you lose a lot of tax deductions so you are basically in limbo in terms of wreeping the benefits of making more. The tax benefits you lose at 3-400k are the same ones that you lose at 500k and higher.

Let's see, if you spent $2000 per year on lawn care, $3000 per year on house cleaning, $50K per year on a nanny (why would you need additional childcare if you have a nanny?!?) that's still only about $55K. You're saying that taking those expenses out from $300K plus taxes of say $75K, that you cannot otherwise live on $175K per year net. There are many, many families with HHI under $100K where one or both parents are working 60-80 hours per week just to make ends meet because they have very low salaries. Those workers have many of the same problems you have, they just have to make more economical choices. I'm sorry, but if you choose a high end lifestyle and spend all of your money, that doesn't make you more sympathetic. There are many people who make significantly less than you that have all of the same demands on their time, many of whom have to pick soime of the support that you have and still make ends meet. We make $200K, both work full-time, still provide for our two children, still get housecleaners, still live in a large house and we can still save for retirement, college, yada yada yada. And we find ourselves not onloy very comfortable but very lucky instead of overentitled like you.

Taxes $75K on $875 a year? Not even in the ball park...

what idiots. The taxes are almost 50% which sucks ass.

Federal tax rate doesn't go beyond 39.6% and that's assuming all of your 500k is taxable - a lot of it isn't so your actual tax rate is going to be a lot lower than that. Add in state taxes - 6-10% for VA-MD-DC. Another 6.3% for Social Security, so sure it's possible you're paying 50% in taxes, but honestly if you are, then you're probably not managing your money well. Who really has their actual tax rate at the max amount allowed? No one I know.

With federal, state, Medicare surcharge, FICA, etc, we pay close to 50%. We max out 401(k)s, have a mortgage deduction, etc, but with a high income and the AMT, it is close to 50%. It has nothing to do with "managing your money well" and everything to do with not breaking the law and evading taxes.

One minor quibble: FICA is really not high up on the list of your tax "problems" -- they don't tax any income about $117,000, so you're only paying a maximum of about $7,200 in Social Security taxes. I suspect people making $117,000 a year notice that a lot more than people making about five times that—let alone the many people living in the D.C. area who make less than the limit.

[Anonymous]

PPs please stop with your boring tax debate or open a new thread.

[Anonymous]

Anonymous wrote:PPs please stop with your boring tax debate or open a new thread.

It's relevant to show how much money gets taken from the people making more

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's funny that people think that those making 300K or more are just lazying around.

We are constantly working and because of that we have other expensese that need to be paid because we don't have time to do them.

1) Lawn care
2) Nanny
3) Childcare
4) Cleaning


etc...

Once you add all of those things up the lifestyle at 300k is not that comfortable. Maybe once we get into the 5-600k you start experience more disposable income, but at 300k you have to pay for a bunch of stuff you have to outsource.

On top of that around 300k you lose a lot of tax deductions so you are basically in limbo in terms of wreeping the benefits of making more. The tax benefits you lose at 3-400k are the same ones that you lose at 500k and higher.

Let's see, if you spent $2000 per year on lawn care, $3000 per year on house cleaning, $50K per year on a nanny (why would you need additional childcare if you have a nanny?!?) that's still only about $55K. You're saying that taking those expenses out from $300K plus taxes of say $75K, that you cannot otherwise live on $175K per year net. There are many, many families with HHI under $100K where one or both parents are working 60-80 hours per week just to make ends meet because they have very low salaries. Those workers have many of the same problems you have, they just have to make more economical choices. I'm sorry, but if you choose a high end lifestyle and spend all of your money, that doesn't make you more sympathetic. There are many people who make significantly less than you that have all of the same demands on their time, many of whom have to pick soime of the support that you have and still make ends meet. We make $200K, both work full-time, still provide for our two children, still get housecleaners, still live in a large house and we can still save for retirement, college, yada yada yada. And we find ourselves not onloy very comfortable but very lucky instead of overentitled like you.

Taxes $75K on $875 a year? Not even in the ball park...

what idiots. The taxes are almost 50% which sucks ass.

Federal tax rate doesn't go beyond 39.6% and that's assuming all of your 500k is taxable - a lot of it isn't so your actual tax rate is going to be a lot lower than that. Add in state taxes - 6-10% for VA-MD-DC. Another 6.3% for Social Security, so sure it's possible you're paying 50% in taxes, but honestly if you are, then you're probably not managing your money well. Who really has their actual tax rate at the max amount allowed? No one I know.

With federal, state, Medicare surcharge, FICA, etc, we pay close to 50%. We max out 401(k)s, have a mortgage deduction, etc, but with a high income and the AMT, it is close to 50%. It has nothing to do with "managing your money well" and everything to do with not breaking the law and evading taxes.

One minor quibble: FICA is really not high up on the list of your tax "problems" -- they don't tax any income about $117,000, so you're only paying a maximum of about $7,200 in Social Security taxes. I suspect people making $117,000 a year notice that a lot more than people making about five times that—let alone the many people living in the D.C. area who make less than the limit.

Oh, I agree. I was just pointing out that our total tax burden is close to 50% (though not quite there). I have no problem with the taxes at all.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I understand op. my situation is somewhat different. I sah and have 2 young children. We live in the burbs and my 4 yr old thinks that we are poor because we don't live in a 10 million dollar mansion. We are by no means poor and our house is worth about 2 million but to my 4 yr old it isn't good enough. Only going to disney world once in his short life is not good enough. Private pre school I think is to blame and I am seriously considering public school for kindergarten.He told me my car which is a Honda pilot is not good enough and he feels embarrassed. I grew up middle class and never felt embarrassed or ashamed of my parents. And what baffles me the most is we are upper middle class for this area.

Wow. You have your work cut out for you with your 4 year old. If I were you, that would be keeping me up at night, literally.

We have four grown kids and one still at home. As a parent, I would feel like a complete failure if any of my kids had that kind of attitude.

By age 4 no less!