lifestyle for $500K HHI

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:the problem is you work so hard to get up to that sort of income, only to realize that is buys you jack shit. same dumpy house, same dumpy cars, maybe you eat out a bit more or take a nicer vacation, but quality of life stays the same.

Apart from the house, I think a lot of what people spend their money on is stuff you can't see. Being able to retire at 57, being able to pay for your kid's college, nice vacations, private school for the kids, expensive summer camps or hobbies for the kids, giving more to charity etc. They are also outsourcing things like lawn services and cleaning service. I think you can still do something similar on less than 500K but maybe not all those things or on a different scale, like maybe you retire later or your quality of life when you retire doesn't allow for lots of travel, or you can pay for public college not private college for your kids.

What were you hoping would happen when you made more money? If I made 500K (coming from 200K) it would basically change private school and college savings for the kids and maybe getting a vacation home. We wouldn't want to move at this point since we are established in the neighborhood. I would have to make enough to retire early and maintain the same lifestyle for more money to be a game changer and I'm not sure that would happen at 500K.

vacation home is on my list. need to decide where. I expect to work into my 70s, which is ok with me, so savings is not as critical.

Do you own your business, or do you plan to? Simply "planning" on working into your 70s is not a great idea. Older workers face discrimination and health problems can pop up at any age.

[Anonymous]

Anonymous wrote:

Anonymous wrote:the problem is you work so hard to get up to that sort of income, only to realize that is buys you jack shit. same dumpy house, same dumpy cars, maybe you eat out a bit more or take a nicer vacation, but quality of life stays the same.

Apart from the house, I think a lot of what people spend their money on is stuff you can't see. Being able to retire at 57, being able to pay for your kid's college, nice vacations, private school for the kids, expensive summer camps or hobbies for the kids, giving more to charity etc. They are also outsourcing things like lawn services and cleaning service. I think you can still do something similar on less than 500K but maybe not all those things or on a different scale, like maybe you retire later or your quality of life when you retire doesn't allow for lots of travel, or you can pay for public college not private college for your kids.

What were you hoping would happen when you made more money? If I made 500K (coming from 200K) it would basically change private school and college savings for the kids and maybe getting a vacation home. We wouldn't want to move at this point since we are established in the neighborhood. I would have to make enough to retire early and maintain the same lifestyle for more money to be a game changer and I'm not sure that would happen at 500K.

This is so true. As we moved up the income scale our house, cars, and clothes haven't really changed. First we started saving so that when the job that pays so much ends at around age 55 we will be fine, then we started the kids in private school (one at a time -- there are 3 DCs). More recently we added expensive residential summer camps and a country club. If you saw me on the street in my beat up minivan and in my mom clothes, you would never expect the HHI, for better or worse.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:the problem is you work so hard to get up to that sort of income, only to realize that is buys you jack shit. same dumpy house, same dumpy cars, maybe you eat out a bit more or take a nicer vacation, but quality of life stays the same.

Apart from the house, I think a lot of what people spend their money on is stuff you can't see. Being able to retire at 57, being able to pay for your kid's college, nice vacations, private school for the kids, expensive summer camps or hobbies for the kids, giving more to charity etc. They are also outsourcing things like lawn services and cleaning service. I think you can still do something similar on less than 500K but maybe not all those things or on a different scale, like maybe you retire later or your quality of life when you retire doesn't allow for lots of travel, or you can pay for public college not private college for your kids.

What were you hoping would happen when you made more money? If I made 500K (coming from 200K) it would basically change private school and college savings for the kids and maybe getting a vacation home. We wouldn't want to move at this point since we are established in the neighborhood. I would have to make enough to retire early and maintain the same lifestyle for more money to be a game changer and I'm not sure that would happen at 500K.

vacation home is on my list. need to decide where. I expect to work into my 70s, which is ok with me, so savings is not as critical.

Do you own your business, or do you plan to? Simply "planning" on working into your 70s is not a great idea. Older workers face discrimination and health problems can pop up at any age.

lawyer. geezers work here until they drop. and by "work", I mean they take 5-6 weeks off a year, etc.

[Anonymous]

Anonymous wrote:

Anonymous wrote:the problem is you work so hard to get up to that sort of income, only to realize that is buys you jack shit. same dumpy house, same dumpy cars, maybe you eat out a bit more or take a nicer vacation, but quality of life stays the same.

Apart from the house, I think a lot of what people spend their money on is stuff you can't see. Being able to retire at 57, being able to pay for your kid's college, nice vacations, private school for the kids, expensive summer camps or hobbies for the kids, giving more to charity etc. They are also outsourcing things like lawn services and cleaning service. I think you can still do something similar on less than 500K but maybe not all those things or on a different scale, like maybe you retire later or your quality of life when you retire doesn't allow for lots of travel, or you can pay for public college not private college for your kids.

What were you hoping would happen when you made more money? If I made 500K (coming from 200K) it would basically change private school and college savings for the kids and maybe getting a vacation home. We wouldn't want to move at this point since we are established in the neighborhood. I would have to make enough to retire early and maintain the same lifestyle for more money to be a game changer and I'm not sure that would happen at 500K.

to answer your question, I expected my house to be less of a dump, my cars to be nicer and to have some money in the bank. So I'm going to fix up the basement first, save more and then decide the next step.

[Anonymous]

$450k HHI, mid 40s, dual incomes with two elementary aged kids

- Mortgage: $4300 per month. $850k home we bought for $580k in '02. Refied to 15 year mortgage in 2012 and will off in about 5 years.
--Kids are in FCPS now but spent a lot on preschool through K.
--Retirement: Save $68,000 annually in 401ks & deferred comp plan, plus DS will have a FERS pension.
--College: Save $1500 monthly in 529s
-- Vacation: 1 week OBX plus 1 week elsewhere with relatives, nice spring break trip every other year.
--Cleaners every other week
--Landscaper for mowing and all major yard work
--Two modest cars: 7 year old minivan and a 6 year only non-luxury import – both paid for in cash but getting the itch to buy myself a toy.
--Spend way too much eating out too often
-- Lots of activities, camps, and sports for the kids
--Non Mortgage debt: $0. Paid off $140k in student loans a long time ago

[Anonymous]

We net about 18K per month after taxes and pre-tax retirement contributions and insurance.

Monthly Expenses

$900 taxes and insurance on house (mortgage paid off)
$1000 utilities and insurance other than house
$1200 groceries and meals out

Spend $4,000 a year on vacation, about $700 a year on car maintenance.

No childcare expenses or debt of any kind.

We save about $8 - $9K a month.

[Anonymous]

Anonymous wrote:We make $300k a year and save about $75k of it. There are a few things if get if I made more (housekeeper, maybe going out more) but those are things that cost a relatively modest amount (say $1,000 more a month). I've prioritized savings over this for now - and if I were to jump to $500 I'd likely be banking 90% of it. It wouldn't surprise me if a lot of people in the $500k bracket are saving $100 or even $200 a year. Guess my point is that more than stuff I suspect tht income affords you earlier retirement and security.

We grossed $430 K in 2013 and saved just over $100K in taxable investments, plus maxing our 401(k)s and nondeductible IRAs.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Here You can live a traditional middle class lifestyle in a good area for about 350. The biggest bills are housing and childcare.

I don't want to get baited into this, but, wth are you talking about? I love the "middle class lifestyle" argument. At 500k, your are clearing, wait for it, about $25k per month after fed and state taxes/self employment tax/AMT etc. Donna Reed didn't have a $5k month blow habit. The Beaver's mom didn't spend 3 weeks in Africa at an point in her life (even flying coach). This ain't middle class. Middle class is spending a week in a crappy house, that isn't on the beach, in Ocean City. No flying. No cleaning service. No weekend getaways or Acuras. You're all nuts.

Amen!!!!
You chose to live in this area -- this is what you get for the money! You want more -- well so do I -- deal with it!
You are not homeless or starving.
Get a life!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think part of the problem is expectations. When we bought, our income was 1/4 of that (~125k), which was decent at the time. We could afford a 1800 sqft 4 bedroom house that was built in the mid-60's and not updated. Those houses now cost about 3x what we paid, but the people who make 3x what we made don't want a 40 year old fixer upper. They think they should have the fancy 3-4000sqft new build.

They need to reset their expectations. This isn't a new phenomenon. I blame HGTV.

ITA.

In fact, as the COL has risen in this area, people's expectations should have been lowered. Instead, they have inexplicably been raised. It makes no sense AT ALL. A recipe for unhappiness and financial disaster.

That doesn't make sense. You always want to provide a better or at least the same life you grew up in for your current generation.

Lifestyle is your main expectation??

Geez!!!

[Anonymous]

I'm impressed with the HHIs most people have (though not so much by the expenses)! Maybe I'm in the wrong field! Mind sharing what kind of jobs you folks are in or what you do for a living?

pls. share HHI, ages of couple, job(s).

Ourself - 150K (one unemployed), 48&45, U.E/IT manager.

[Anonymous]

Me: director of corp strategy, $250k. Wife, director of financial analytics $250k

[Anonymous]

DH: Surgeon
Me: Finance

[Anonymous]

Both myself and DH are entrepreneurs...

[Anonymous]

you need to treat yourself to something to keep you motivated.

[Anonymous]

We make closer to $400k/year but get a lot of extras (example: college is paid for by work). 1 toddler.

We do per month
$4000 mortgage
$4000 nanny
$1500 food and eating out (we love fancy food)
$200 clothes - nice but not upscale designer - business casual at work
$400 car maintenance + gas (we drive old cars, buy used)
$1500 credit card -- stuff for kids, etc.
$3000-4000 savings
$500 utilities
$1000 home renovations and maintenance (on average)
No student loans -- savings includes education since we don't need to pay for college.


Probably a few other things, we vacation but not at resorts - maybe a beach weekend and extend a work trip to somewhere nice. Generally use frequent flyer miles to go and stay in simple places or visit family. We love "experience" trips but resorts, cruises or the Four Seasons are not our style.

We plan on private school where we live, which will replace the nanny cost.

I think the biggest affects to lifestyle for a particular income are moving (selling a house in this bracket costs 6 figures in lost expenses) and divorce. Also our city is expensive but slightly lower COL than DC. That is, the fanciest private schools cost $25k a year, not $40k, for example.

I agree that if you are not feeling comfortable and secure on $500k/year you should consider getting a financial manager to help you out.

Even in DC or Manhattan you should be doing most of what you want on that money (reality check, that's better than 99% of the population of one of the richest countries on earth), although you won't have a private jet, a closet full of Hermes bags or a Bentley, and maybe that's harder if your friends are all richer than you.