Anonymous wrote:

Anonymous wrote:Can I ask a follow up--- we are likely to be in a similar situation in the next year or two, currently at 350k with 180k bonus, wondering when you were at 350k what did your savings look like---

I am assuming maxing out 401k for each spouse, funding ira for each, and contributing to 529 for each kid? Paying monthly PITI and contributing some to a brokerage account??We are trying to figure out what to do with the bonus monies we are now going to be getting. I am assuming some of the other posts make sense in terms of topping off 529s and then upping vacation budgets.

I recognize that these are such first world issues, just want to make sure we are making the right decisions.

We went from $200k to almost $700k. Let me tell you my guiding principle: I do not assume it will last. Yes I max out 410k and the measly 529s, but I have not added a cent to vacation funds. There is actually good data on this. Lots of people will briefly be in the top 1%, but few people stay. We're very focused on investments and savings, but still live like we make $350k. Among other reasons, I've watched other families fall out of the tippy top class and it was hard on their kids.

Would it be harder on the kids or on the parents? I think the biggest impact would be moving the kids from private school to public but kids often change schools if the parents move anyway so that's not necessarily just falling out of 1%--one could also change schools if you moved into the 1% from below if you moved neighborhoods to move to a nicer house?

I would save the increase for three years then quit and do some nonprofit work that was more fulfilling to me but pays much less.

I would definitely get rid of your car loan. We don't have car loans at half your current income, let alone $900,000 income. And a $800,000 mortgage is significant debt. I would have a vacation home if my income went up to $900,000.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:.

We went from $200k to almost $700k. Let me tell you my guiding principle: I do not assume it will last. Yes I max out 410k and the measly 529s, but I have not added a cent to vacation funds. There is actually good data on this. Lots of people will briefly be in the top 1%, but few people stay. We're very focused on investments and savings, but still live like we make $350k. Among other reasons, I've watched other families fall out of the tippy top class and it was hard on their kids.

We have a similar view. We’ve been making around 500k and may hit 600k this year. We have a mortgage based on assuming we’d drop to about 300-350.. We send our kids to public school and take nice, but not $$$ vacations. We have spent some money on our home and a couple of nicer things, but private school, mortgage and other fixed expenses are things we are avoiding.

For you OP, I think taking an international vacation or buying a new wardrobe is no big deal. It is getting used to private school, a very large mortgage payment, expense car leases, those things when your income drops - that is hard. Personally, I’d pay off the house after saving a seven figure post-tax nest egg. But first a huge post-tax nest egg.

Interesting question - why save first, and pay off mortgage second? I'd likely reverse them, or at least split up investable income between mortgage and savings, under the theory that if the mortgage is paid off, we need a lot less income to maintain our very nice lifestyle.

Because if you need cash in a hurry, it's easier to withdraw from your investment accounts than to sell your house or get a HELOC.

I'm not suggesting leaving your bank accounts bare, but there's a word of difference between having a healthy, six figure emergency find and a "seven figure post-tax nest egg." That's the part I have questions about.

I just did our taxes last night so I can report we're at $980k and have been $900+ for a couple years. We hired a financial planner (yes, those people that DCUM hate nearly as much as realtors) to come up with a plan and invest our money, and we also rewrote our wills and increased both life insurance and balloon insurance coverages to match our lifestyle and wealth.

I think our spending on mortgage, everyday expenses, etc is $250k including nanny. Then we put an additional $100k/year to pay down our mortgage, mostly for peace of mind. We also did an extensive home renovation ($1mln+). For vacations, we budget $10-15k depending on destination, but we have toddlers so we're not staying in 5-star hotels anyway -- we never really hit that limit.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:.

We went from $200k to almost $700k. Let me tell you my guiding principle: I do not assume it will last. Yes I max out 410k and the measly 529s, but I have not added a cent to vacation funds. There is actually good data on this. Lots of people will briefly be in the top 1%, but few people stay. We're very focused on investments and savings, but still live like we make $350k. Among other reasons, I've watched other families fall out of the tippy top class and it was hard on their kids.

We have a similar view. We’ve been making around 500k and may hit 600k this year. We have a mortgage based on assuming we’d drop to about 300-350.. We send our kids to public school and take nice, but not $$$ vacations. We have spent some money on our home and a couple of nicer things, but private school, mortgage and other fixed expenses are things we are avoiding.

For you OP, I think taking an international vacation or buying a new wardrobe is no big deal. It is getting used to private school, a very large mortgage payment, expense car leases, those things when your income drops - that is hard. Personally, I’d pay off the house after saving a seven figure post-tax nest egg. But first a huge post-tax nest egg.

Interesting question - why save first, and pay off mortgage second? I'd likely reverse them, or at least split up investable income between mortgage and savings, under the theory that if the mortgage is paid off, we need a lot less income to maintain our very nice lifestyle.

Because if you need cash in a hurry, it's easier to withdraw from your investment accounts than to sell your house or get a HELOC.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:.

We went from $200k to almost $700k. Let me tell you my guiding principle: I do not assume it will last. Yes I max out 410k and the measly 529s, but I have not added a cent to vacation funds. There is actually good data on this. Lots of people will briefly be in the top 1%, but few people stay. We're very focused on investments and savings, but still live like we make $350k. Among other reasons, I've watched other families fall out of the tippy top class and it was hard on their kids.

We have a similar view. We’ve been making around 500k and may hit 600k this year. We have a mortgage based on assuming we’d drop to about 300-350.. We send our kids to public school and take nice, but not $$$ vacations. We have spent some money on our home and a couple of nicer things, but private school, mortgage and other fixed expenses are things we are avoiding.

For you OP, I think taking an international vacation or buying a new wardrobe is no big deal. It is getting used to private school, a very large mortgage payment, expense car leases, those things when your income drops - that is hard. Personally, I’d pay off the house after saving a seven figure post-tax nest egg. But first a huge post-tax nest egg.

Interesting question - why save first, and pay off mortgage second? I'd likely reverse them, or at least split up investable income between mortgage and savings, under the theory that if the mortgage is paid off, we need a lot less income to maintain our very nice lifestyle.

Anonymous wrote:

Anonymous wrote:.

We went from $200k to almost $700k. Let me tell you my guiding principle: I do not assume it will last. Yes I max out 410k and the measly 529s, but I have not added a cent to vacation funds. There is actually good data on this. Lots of people will briefly be in the top 1%, but few people stay. We're very focused on investments and savings, but still live like we make $350k. Among other reasons, I've watched other families fall out of the tippy top class and it was hard on their kids.

We have a similar view. We’ve been making around 500k and may hit 600k this year. We have a mortgage based on assuming we’d drop to about 300-350.. We send our kids to public school and take nice, but not $$$ vacations. We have spent some money on our home and a couple of nicer things, but private school, mortgage and other fixed expenses are things we are avoiding.

For you OP, I think taking an international vacation or buying a new wardrobe is no big deal. It is getting used to private school, a very large mortgage payment, expense car leases, those things when your income drops - that is hard. Personally, I’d pay off the house after saving a seven figure post-tax nest egg. But first a huge post-tax nest egg.

Anonymous wrote:I would sock a ton away, then buy a second home somewhere.

But my DH would probably want to spend it on a Porsche and a bunch of gadgets.

Ha, sounds like my DH.

OP, we would also buy property. Probably not a second home, but a duplex, something rent producing.

Have fun and congrats.

Save it so you can stop worrying about all of this in the future.

Anonymous wrote:

Anonymous wrote:Can I ask a follow up--- we are likely to be in a similar situation in the next year or two, currently at 350k with 180k bonus, wondering when you were at 350k what did your savings look like---

I am assuming maxing out 401k for each spouse, funding ira for each, and contributing to 529 for each kid? Paying monthly PITI and contributing some to a brokerage account??We are trying to figure out what to do with the bonus monies we are now going to be getting. I am assuming some of the other posts make sense in terms of topping off 529s and then upping vacation budgets.

I recognize that these are such first world issues, just want to make sure we are making the right decisions.

We went from $200k to almost $700k. Let me tell you my guiding principle: I do not assume it will last. Yes I max out 410k and the measly 529s, but I have not added a cent to vacation funds. There is actually good data on this. Lots of people will briefly be in the top 1%, but few people stay. We're very focused on investments and savings, but still live like we make $350k. Among other reasons, I've watched other families fall out of the tippy top class and it was hard on their kids.

OP- yes this is what I am afraid of and why we save most of it yet we still live a great lifestyle in terms of experiences- vacations, going out, theater and sports tickets, and generally not worrying about a budget. Kids go to a great public school so no private tuition. We just don’t have fancy cars (a minivan and a 10 year old car) we don’t have a fancy new house that everyone is buying... I don’t have super nice clothes... so I’m just secretly wondering if we should upgrade a little!

Anonymous wrote:

Anonymous wrote:I am so jealous OP. Congratulations!

Thanks, it is a bit unnerving, and a strange feeling. Like it's too good to be true. I guess that's why we just want to save it.

Enjoy it too though. Life is short.

Anonymous wrote:Can I ask a follow up--- we are likely to be in a similar situation in the next year or two, currently at 350k with 180k bonus, wondering when you were at 350k what did your savings look like---

I am assuming maxing out 401k for each spouse, funding ira for each, and contributing to 529 for each kid? Paying monthly PITI and contributing some to a brokerage account??We are trying to figure out what to do with the bonus monies we are now going to be getting. I am assuming some of the other posts make sense in terms of topping off 529s and then upping vacation budgets.

I recognize that these are such first world issues, just want to make sure we are making the right decisions.

We went from $200k to almost $700k. Let me tell you my guiding principle: I do not assume it will last. Yes I max out 410k and the measly 529s, but I have not added a cent to vacation funds. There is actually good data on this. Lots of people will briefly be in the top 1%, but few people stay. We're very focused on investments and savings, but still live like we make $350k. Among other reasons, I've watched other families fall out of the tippy top class and it was hard on their kids.

How TF is everyone making so much money?

Can I ask a follow up--- we are likely to be in a similar situation in the next year or two, currently at 350k with 180k bonus, wondering when you were at 350k what did your savings look like---

I am assuming maxing out 401k for each spouse, funding ira for each, and contributing to 529 for each kid? Paying monthly PITI and contributing some to a brokerage account??We are trying to figure out what to do with the bonus monies we are now going to be getting. I am assuming some of the other posts make sense in terms of topping off 529s and then upping vacation budgets.

I recognize that these are such first world issues, just want to make sure we are making the right decisions.