I'll speak for my area of Houston.

100k is not pedestrian...but 80k definitely is.


It's hard to work anywhere and make less than 40k and most households have two workers.

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Also what is the opportunity cost? I (and I'm sure many others here) could work harder at making more, but I would sacrifice invaluable family time and the additional income wouldn't be worth it in the slightest. I only get one go with my young children and the time is already so fleeting

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Definitely this. I could come up with some side hustle in order to save more or buy some newer, shinier material things. But it might cost 20 hours a week. The easier route is to not buy those things. Factor in time with kids, and it's an even bigger no-brainer.

The Silverback said:

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ORAggieFan said:

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The Silverback said:

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I never understood the people who penny pinched their entire lives only to amass enough to retire by 60 and then live on fixed income the rest of their lives. It seems to me, all the effort and planning it took to live a disciplined and frugal life could have been used towards earning more income instead. Obviously personal choice and everyone is different but to me it seems so daunting to worry about where you will eat, vacations, coupons, vehicles, housing, etc etc on a day to day basis. If that energy was spent towards increasing income it seems you would be better off, not only during the journey but long term as well.

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Who's talking about doing that here?

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Not to be disrespectful for the person who said they never made more than $90k AGI and still saved $1M by their forty's, but they obviously lived a extremely frugal life to get there and kudos for them having the discipline. But just seems that takes so much work and energy to live that way as opposed to transferring that same work, energy and discipline to increasing their income instead. And not calling them out as I feel a vast amount of people are the same way, so somewhat of a general statement/observation as well.

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I'd much rather live modestly and save aggressively to be able to achieve $40k+/yr in real returns of extra income each year in perpetuity (and eventually compounded to something much larger) than worry about climbing the mythical corporate ladder to reach the glory of some arbitrary income number for a short while only to be laid off because that high title and income come with a much bigger target on your back not to mention the added stress that comes with it.

The reality is that 99% of strivers don't even make it to the promised land anyway. You won't get that huge income bump beyond your pay grade range. The title jumps won't move the needle much. And those that did would probably say it wasn't worth it if they were being honest with themselves.

Right now the expected investment returns exceed the income from my job. And guess what? While that money is at risk in the short term, over the long term it has far more permanence than a job title or temporary income where I'm actually forced to work.

So tell me what is easier to achieve, being a continual wage slave corporate drone or making intentional spending decisions that cut out 99% of the nonsense that won't make you happy anyway and allows you to achieve true financial freedom.

EE, I can see where you're coming from but people in FIRE really like to harp on cost reduction to get to retirement, but don't foresee costs in retirement. It can be a whole lot of not doing anything fun when to sit around and not do anything fun when you're retired. (playing fast and loose with the terms)

AgiEE


Self Employment. Everything you said above sounds accurate and miserable. If you bust your tail you can almost pick any industry and be successful with hard work, patience and ability to take on risk.

I think you're being a rather binary in your approach to this. I think you can do both without falling to the excess of one side.

You almost make the corporate side as some form of albatross but discount that doing well on that front can accelerate financial freedom. Why not take the increase in comp and invest in stocks or real estate vs. lifestyle creep ?

Chase the corporate money and invest in the cash flowing assets as your hedge.

I see people making a lot, but I'm not seeing wealth accumulation.

jtraggie99 said:

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The Silverback said:

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AgiEE


Self Employment. Everything you said above sounds accurate and miserable. If you bust your tail you can almost pick any industry and be successful with hard work, patience and ability to take on risk.

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That doesn't really address the underlying comment. You're solution that everyone should simply "make more money" is not practical. So everyone should just stop working salary jobs and become self-employed?

It reminds me of the old adage that if everyone had a million dollars, a million dollars would not be worth much.

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Why is making more money not practical? If finances are important to you, they are not to everyone, but if they are to you then literally anyone can make more money if they truly wanted to. The self employment was directed to AgiEE because it sounds like he hates the corporate BS (don't blame him), so instead of having the attitude of "what's the point of trying to climb up the ladder", then my suggestion would be to start a business.

This is getting derailed a bit, original point was (in my opinion) that too many people who act like they care about their finances focus too much on the defensive side of things instead of putting that focus on being proactive and finding ways to earn more income. Could be a different job, different sector, finding ways to get promoted, starting a business, side hustle, etc.

A friend of mine is a state employee who makes maybe $60k a year and has a drop shipping business on the side that makes him $70k a year on top of that. He spends 10-15 hours a week doing this, took him 3 months to learn it and started with nothing but a phone and willingness to learn the business.


Small example but if you want to make more money, anyone can.

It's called survivorship bias.

Cyp0111 said:

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I think you're being a rather binary in your approach to this. I think you can do both without falling to the excess of one side.

You almost make the corporate side as some form of albatross but discount that doing well on that front can accelerate financial freedom. Why not take the increase in comp and invest in stocks or real estate vs. lifestyle creep ?

Chase the corporate money and invest in the cash flowing assets as your hedge.

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Doing well in the corporate world can of course accelerate the path. But if your threshold for happiness is being content with smaller things in life rather than frivolous luxuries or material possessions, it won't matter much in a practical sense.

Somebody can become FIRE on 60k/year income or 250k/yr. It may take the former 15-20 years to get there while the latter could possibly make it in 10 or less.

But generally the person earning the higher income also had to sacrifice in terms of additional schooling, debt, or many years of striving at lower incomes to get where they are, so the time to FIRE may not differ all that much.

The higher earner has capacity for much higher consumption, but if that higher consumption is not an end goal then it's not going to be meaningful and you're just adding more unnecessary padding to an already sufficient stack. Essentially over solving a problem that does not exist any longer.

one MEEN Ag said:

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EE, I can see where you're coming from but people in FIRE really like to harp on cost reduction to get to retirement, but don't foresee costs in retirement. It can be a whole lot of not doing anything fun when to sit around and not do anything fun when you're retired. (playing fast and loose with the terms)

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Some may underestimate costs, but costs are included in the math for FIRE. I can think of plenty of things I'd rather do than work 60 hours a week to enrich somebody else.

I think it's more often that people think it's unachievable because they've become accustomed to spending so much precisely because that spending is used as a comforting crutch to justify why they are grinding away at a job they mostly don't enjoy

Sorry, what's fire an acronym for? Fixed income retiree?

The Silverback said:

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AgiEE


Self Employment. Everything you said above sounds accurate and miserable. If you bust your tail you can almost pick any industry and be successful with hard work, patience and ability to take on risk.

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Self employment sounds like a job.

I'd rather have my thousands of equities work for me instead. Most will fail at a small business, and it comes with many risks. Some do well with it. It's a path for sure, but a far less reliable one than reaching FIRE which can be done on a fairly average income over a sufficient length of time.

administrative errors said:

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Sorry, what's fire an acronym for? Fixed income retiree?

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Financial Independence, Retire Early, I believe

Folks like Mr. Money Mustache - many of whom are Dinks who save a crap ton during their 20s, then retire in their 30s/40s.

administrative errors said:

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Sorry, what's fire an acronym for? Fixed income retiree?

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Financial independence retire early

Save 25-35x annual expenses in a diversified portfolio

administrative errors said:

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Sorry, what's fire an acronym for? Fixed income retiree?

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Financial Independence Retire Early

one MEEN Ag said:

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South Platte said:

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Joe Boudain said:

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I own my own business so am completely insulated from the madness that is the current job market, but from what I've gathered from my friends, $100k a year is nothing to shake a stick at.

I've even heard that an upper middle class family will pull in around $300k/year, which I thought would be somewhere north of top 1%.

Is this right?

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Income is one thing, savings/wealth is another. Our AGI has never been over $90,000 for married with 2 kids yet we're upper 40's and closing in on a $1m net worth, not counting any primary residence equity.

Which brings in another discussion . . . how much is $1m net worth these days? Definitely not what it used to be.

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Congratulations! You now have enough principle to cover what is equivalent to your social security annual income just in time for the government to means test you out SS! Thanks comrade for doing your job. We are counting on you to fund the retirement of 100s of other people with big screen tvs and new cars.

Your 1 million will throw off 40k per year. You're going to need a couple more million if you want to do anything besides each cheese sandwiches and watch tv on your social security-less retirement.

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If you already have 1M, it takes far less time to make your second or third. Depends on market environment of course, but if you are well diversified this should be less of an issue.

May have taken 20 years to get 1M but only 5 to turn that into 2M, having 80k in income seems a lot more realistic for FIRE at that point.

So now your friend works 20 hrs a wk?

I assume you're an engineer by your handle ? In that profession you're relatively capped in earnings so your view is likely that of a regular engineer vs. someone pushing into mgmt ?

I think the fascinating thing about personal finance is how personal it is. I also think humans are largely meant to work in some form or fashion. The idea of deferring enjoyment to retire at 45 with $60K sounds miserable.

From my personal example I got lucky where the last 5 years my income via variable comp has grown quickly. My wife and I agreed to live on my base plus a fixed $ amt from my bonus. The net savings into real estate and stocks has knocked probably 10 years off a theoretical exit point. I think you can strive to win in business and accelerate your goals.

I think to an extent you've made up in your mind that success is a result of either taking on debt or having lifestyle creep when neither are necessary.

Medaggie said:

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So now your friend works 20 hrs a wk?

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No, don't know how he allocates but I know hasn't compromised his State job..... My guess is a couple hours extra per day, maybe a bulk of it on weekends? I don't know much about it to be honest but sounds like you can put in the hours when ever you want.

State job is prob 15 hrs a week max of work. maybe less

I was being factitious. I have a family member who "works" for the state and All I see is him walking the dog and taking naps while using some program to make his mouse move in a random pattern

So it really isn't that much work. The market has done amazingly well over the past 10 years, which has artificially made many people millionaires. Wife has re-entered the workforce after staying home for 10 years and should move our AGI to $130k.

Like I said, I made good investments, so that didn't require scraping money out of a paycheck. Also, I have a rental properly that I bought 15 years ago in a desirable part of the country which has increased in value 100% and shows no signs of stopping. When that gets paid off in a few years that will be a $400,000+ asset that I put almost zero effort into. I'll pull the trigger on another property in a year or two.

I provide the same upbringing that my parents provided me, which was middle class to upper middle class. My state pension and social security should enable me to cover most of my living costs. Rental property income will provide funding for college, leaving retirement for extra stuff.

At the end of the day, it's only money.

Having investments and making money so you can do cool stuff when you want is the goal? No?

Cyp0111 said:

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Having investments and making money so you can do cool stuff when you want is the goal? No?

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Doing cool things doesn't require a 200+K income

You can live a great life off a modest, perfectly average income