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[Marty Chinn]

Dude, 130k saved up a year for 16-17 years? That's over 2 million principal. Budgeting for myself until the age of 90 gives me about 45k to work with every year. And that's without any returns or interest.

I'm not saying I would retire (I wouldn't), but if I wanted to, I could.

I think it's a bit naive on your assumptions. Do you plan to never own a house? Do you plan to never have a family? Do you not account for inflation? Do you assume your rent will always be $735 a month? Assuming I'm doing my math right, you claim to earn about 70k before taxes. That puts you around 45k after taxes. If you put aside 30k, that leaves you 15k for the year. At 15k, you're at $1290 a month. After rent, that leaves you with $555 a month for everything else. I would think that's a bit tight after utilities, gas, food, day to day expenses and living needs, etc. But maybe I'm wrong, did I do my math right?

 

[Terrell]

Wow... all these people can go eat a giant bowl of dick.

 

[GaimeGuy]

Oh, and saving $130k a year, assuming 3% annual return (plus 130,000 added to the principal each year), I'm getting 2.424 million after 15 years. (May be off by a year or a factor of 1.03, I did this in calculator).

 

[TheExodu5]

If you're making 200k, you can easily be putting away 6 figures a year in savings.

With a family of 4? No way.

Let's take your $200K. After taxes, you're looking at around $140K (assuming that income is split over two people...even less otherwise). If you're living in an average single family home in one of the big 5 Canadian cities, you're looking at $40K-$50K a year in mortgage payments and property taxes. If you have 2 moderately priced vehicles in the family and you need to commute 30 mins to work each day, add in another $20K a year in vehicle expenses. Add in the rest of the obvious expenses like food, clothes, luxuries (eating out, entertainment, travel) and you're left with a lot less than you think.

Obviously you'd still have quite a bit of money, but you wouldn't be able to save near 6 figures. If you're making $200K by yourself and buy nothing but the essentials, then you'd just be able to do it.

 

[teh_pwn]

Oh, and saving $130k a year, assuming 3% annual return (plus 130,000 added to the principal each year), I'm getting 2.424 million after 15 years. (May be off by a year or a factor of 1.03, I did this in calculator).

At least put it in a balanced mutual fund stock/bond blend. You'll get 8% annual return while only taking up to a 25% temporary short term hit in total value during major recessions.

 

[TheExodu5]

You're saving 6 figures a year and just earning 3% off it? That's kind of wasteful.

 

[GaimeGuy]

I was using a conservative return for illustration.

 

[teh_pwn]

You're saving 6 figures a year and just earning 3% off it? That's kind of wasteful.

A lot of people, even smart people, never learned about the stock market. I have met several engineers that think the stock market is gambling. They probably watch too much news and think investing is all Enron and .COM bubbles, and have never heard of value investing. That stocks are ownership of companies, and that businesses have earnings that long term far exceed all other types of investments because they're driven by innovation. Innovation > debt.

Or he was just being lazy to make a point that you don't even need to get interest with that ridiculous amount of income.

 

[Marty Chinn]

Ok, I just threw some numbers together and I can't see how you can scrape by on 555 a month after you factor in rent. I'm really curious. This is the best I could come up with and I'd say it's being pretty generous on some of the figures:


110 gas
200 food
50 insurance
30 cell phone
30 internet
50 common everyday living items
80 misc

 

[Slayer-33]

At least put it in a balanced mutual fund stock/bond blend. You'll get 8% annual return while only taking up to a 25% temporary short term hit in total value during major recessions.

I would love to get 8% a year from what I have in my savings, damn.


Edit -

http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Category=MG&Type=&symbol=$HF

Wut?! Dat 3 year projection, am I seeing it right?

 

[GaimeGuy]

Ok, I just threw some numbers together and I can't see how you can scrape by on 555 a month after you factor in rent. I'm really curious. This is the best I could come up with and I'd say it's being pretty generous on some of the figures:


110 gas
200 food
50 insurance
30 cell phone
30 internet
50 common everyday living items
80 misc

Gas? I don't drive, at least not right now. (I live 3 miles from work).
Also, I'm including the company match as part of my savings, which is an extra 4% of my salary. that's over $200 a month there.

 

[Cyan]

I don't think it's typical to buy stock from banks.

I think your using the word "interest" may have confused people.

I also never understood the term aggressive investing in stocks. Is it aggressive not to emotionally cave in to temporary reductions in purchasing power? To think that society won't collapse and that recessions are temporary? I suppose it is 2012.

Higher risk = more aggressive.

 

[Marty Chinn]

Gas? I don't drive, at least not right now. (I live 3 miles from work).
Also, I'm including the company match as part of my savings, which is an extra 4% of my salary.

So you live a bare bones lifestyle and you expect because you can that everyone else can too? It's not feasible in many cases to not have a car.

 

[NeoUltima]

I would love to get 8% a year from what I have in my savings, damn.


Edit -

http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Category=MG&Type=&symbol=$HF

Wut?! Dat 3 year projection, am I seeing it right?

The 8% is based on the average annual return from the stock market over the last 80 years. I think the actual number is a little higher, but people plan their retirement around 8% to be more conservative. Obviously the return has been lower the past few years. But in general, you should expect to get about that.

edit: fund managers also take a cut of your return (~1%) as their fee of course

 

[GaimeGuy]

okay fine, but you're still neglecting the fact that I have basically $200-$220 more to work with per month than you factored in. Maybe 30k is an overestimate, but I can also tell you that 20k would be an underestimate.

I do not feel as though I am living frugally at all. Do I have less responsibilities than other people? Yes. Could I spend more? Yes. Am I living as frugally as I could? No.

My point is that I can live quite comfortably with my current paycheck. If you tripled it my savings would much more than triple, though. I don't think people who can live comfortably and put away significantly more, even several times more, than what most households EARN in a year, BEFORE taxes, have any right to complain.

 

[Slayer-33]

The 8% is based on the average annual return from the stock market over the last 80 years. I think the actual number is a little higher, but people plan their retirement around 8% to be more conservative. Obviously the return has been lower the past few years. But in general, you should expect to get about that.

That 1% I'm getting is some thievery man. :|

 

[Marty Chinn]

okay fine, but you're still neglecting the fact that I have basically $200-$220 more to work with per month than you factored in. Maybe 30k is an overestimate, but I can also tell you that 20k would be an underestimate.

I do not feel as though I am living frugally at all. Do I have less responsibilities than other people? Yes. Could I spend more? Yes. Am I living as frugally as I could? No.

My point is that I can live quite comfortably with my current paycheck. If you tripled it my savings would much more than triple, though. I don't think people who can live comfortably and put away significantly more, even several times more, than what most households EARN in a year, BEFORE taxes, have any right to complain.

I factored in a lowball estimate for car expenses. They can easily be more. I think you live a very barebones lifestyle that in many cases can be unreasonable. You also ignore other factors in life because you are young and haven't encountered them yet. Like what if you lose your job and the the only job you can get at the time is now 20 miles away, what do you do? Move? If you move, what if you can't get rent that cheap? Your plans assume things are static and nothing has to change which is unreasonable and naive.

 

[GaimeGuy]

I factored in a lowball estimate for car expenses. They can easily be more. I think you live a very barebones lifestyle that in many cases can be unreasonable. You also ignore other factors in life because you are young and haven't encountered them yet. Like what if you lose your job and the the only job you can get at the time is now 20 miles away, what do you do? Move? If you move, what if you can't get rent that cheap? Your plans assume things are static and nothing has to change which is unreasonable and naive.

Which is why I'm saving FFS.

Someone making 200k should have no problem putting away at least 50k a year. in SAVINGS.

 

[Marty Chinn]

Which is why I'm saving FFS.

Someone making 200k should have no problem putting away at least 50k a year. in SAVINGS.

I know you're saving which is great and more than most people do, but what I'm saying is your plans assume you always save that and don't factor in changes or things that you do to grow. Again, you never plan to own a car or a house? Never plan to have a family?

Someone making 200k can vary depending on the cost of living where they are at and what heir family situation is. I think you're being over simplified and naive if you think it's so easy to put away 50k a year.

 

[GaimeGuy]

I know you're saving which is great and more than most people do, but what I'm saying is your plans assume you always save that and don't factor in changes or things that you do to grow. Again, you never plan to own a car or a house? Never plan to have a family?

Someone making 200k can vary depending on the cost of living where they are at and what heir family situation is. I think you're being over simplified and naive if you think it's so easy to put away 50k a year.

Let's just say they need to pay 50% in total taxes (which they won't). That leaves them with $100k to use for living expenses. Can they pay rent/mortgage, food, utilities, recreation, and other bills with $50k? Can a family of 4 get through the year with $50k (after taxes) without living like complete shit?

I fully understand that my situation is different. But 200k is a lot of fucking money. It's 4 grand a week.

 

[Marty Chinn]

Let's just say they need to pay 50% in total taxes (which they won't). That leaves them with $100k to use for living expenses. Can they pay rent/mortgage, food, utilities, recreation, and other bills with $50k? Can a family of 4 get through the year with $50k (after taxes) without living like complete shit?

I fully understand that my situation is different. But 200k is a lot of fucking money. It's 4 grand a week.

It depends, in CA, I don't think they can. Average mortgage is $3k. That's already 36k out of the 50k right there before you've paid for anything else. At $14k, that gives you $1166 a month left to pay for everything else. Say both parents have to work and they each make an equal 100k before taxes. That means daycare is now involved. With one kid, you'll have no money left. With two kids, you've already gone over 50k and we haven't even gotten to food, utilities, gas, insurance.....

 

[Sharp]

I think one thing people haven't brought up in this thread (at least in the first five pages) is the issue of contractor vs. employee. A family of two contractors (as Bill's is) with four kids is not going to have a lot of breathing room even making close to $200k per year. But for many people (who are employed), the idea of $200k a year would also include benefits--sufficiently good ones would have covered a lot of Bill's expenses and moved him a little bit further up into the 'rich' category. So just because someone lists his or her family's annual income at $200k a year doesn't mean that he or she has anywhere close to the same kinds of personal costs. Just my two cents (hah).

 

[Death Dealer]

Someone making 200k can vary depending on the cost of living where they are at and what heir family situation is. I think you're being over simplified and naive if you think it's so easy to put away 50k a year.

It's certainly possible. Just takes discipline. I read on average, Americans only save something like 5% of their income, but the Chinese save 30%. Of course with most people, the more they earn, the more they spend. That's why you have people like one of those families in the OP that make close to 200k a year and still claim to be living check to check. They don't save anything.

People are usually taught those habits from their parents. I knew a guy when I was in the military that had saved almost 50 grand in just 4 years. He put over half of his monthly pay check into an account that he never touched. He was a tightwad and hated to spend money.

 

[Marty Chinn]

It's certainly possible. Just takes discipline. I read on average, Americans only save something like 5% of their income, but the Chinese save 30%. Of course with most people, the more they earn, the more they spend. That's why you have people like one of those families in the OP that make close to 200k a year and still claim to be living check to check. They don't save anything.

People are usually taught those habits from their parents. I knew a guy when I was in the military that had saved almost 50 grand in just 4 years. He put over half of his monthly pay check into an account that he never touched. He was a tightwad and hated to spend money.

I'm not saying people can't save on that income but I really do think that saving 50k is really unrealistic when you own a house and have kids in CA.

 

[Skel1ingt0n]

Can we all agree though that if you have a family of four, and have a $200K/year income, but are living paycheck to paycheck indefinitely... then you are absolutely awful at budgeting your money?

Spoiler

I know the answer to that question ;p

 

[Sharp]

Oh hey I'm gonna go ahead and say that after reading this thread... I grew up pretty damn rich. Apparently, judging from the responses to this thread, I am the only person on GAF who did? Anyway, it was glorious. Vacations every year (sometimes multiple times), eating out at nice places, taking care of huge unexpected medical bills, any camp we wanted, private school as long as we wanted, private college for all of us fully paid, private tutoring, nice big house, three cars, maid, etc., etc.... all with a family of three in a very expensive area. That's rich, guys. $200k is comfortable. Rich is "if one of the partners loses a job permanently, we're still living comfortably." Rich is "any activity you want, we'll pay for." Comfortable means not having to worry about money; rich means not having to think about money.

 

[agrajag]

if 200k a year isn't rich, what does that make people who earn 20k? Homeless?

 

[bwtw]

I don't think it's typical to buy stock from banks.

You can look up a investor calculator, but just to make my point take a single $200,000 investment over 30 years at the market average of 9% return in low cost stock index funds:
1.09^30 * 200k ~= 2.6M. That's 100% of your time sitting on your ass. No effort. At all.

Find a calculator that puts 100k per year into a portfolio with 1.12x, which is as aggressive as you can get without just crazy speculative stuff (small cap, high dividend yield, low cost index funds)

I also never understood the term aggressive investing in stocks. Is it aggressive not to emotionally cave in to temporary reductions in purchasing power? To think that society won't collapse and that recessions are temporary? I suppose it is 2012.

Where are you getting 12% returns? Assuming here that you're just investing into an index/fund of course. If you're talking about proper value investing and putting in research that's a difference scenario entirely as most people will either not have the time or skills to be able to achieve above average returns.

 

[Famassu]

I get about 7000$ in a year and (partly due to low rent & getting student discounts on University restaurants food) I'm doing just fine (can spend money on games, movies, gigs, and even travelling, though not too long distance), so... yeah... 200,000$ a year would feel like a fucking lottery win for me, I don't even know where I'd spend all that money. >_>;

 

[Casp0r]

Oh hey I'm gonna go ahead and say that after reading this thread... I grew up pretty damn rich. Apparently, judging from the responses to this thread, I am the only person on GAF who did? Anyway, it was glorious. Vacations every year (sometimes multiple times), eating out at nice places, taking care of huge unexpected medical bills, any camp we wanted, private school as long as we wanted, private college for all of us fully paid, private tutoring, nice big house, three cars, maid, etc., etc.... all with a family of three in a very expensive area. That's rich, guys. $200k is comfortable. Rich is "if one of the partners loses a job permanently, we're still living comfortably." Rich is "any activity you want, we'll pay for." Comfortable means not having to worry about money; rich means not having to think about money.

So Bill Gates isn't Rich because he could easily blow all his money on islands over night ... so you know he's gotta be careful and think about his money and what he buys.

Shut up.

If you're earning more than enough money to send your kids to private education, go on numerous holidays, you're rich. If you weren't so spoilt and irresponsible with your money, you would never have to think about it. Shit somone on 20k a year, with responsible tastes wouldn't need to think about his money.

Rich - Having a great deal of money or assets; wealthy.

 

[Antagon]

Spending 10k a year on travelling, ok. If I had the income that that guy has I'd probably do the same. But 10k a year on visiting Vegas? For that money you could be diving and sandboarding in Australia, going on Safari in the Serengeti and top it off by doing a long trip through the Himalayas, all in one year. And he spends it on playing poker and visiting some strip bars. Idiot.

 

[Antagon]

Oh hey I'm gonna go ahead and say that after reading this thread... I grew up pretty damn rich. Apparently, judging from the responses to this thread, I am the only person on GAF who did? Anyway, it was glorious. Vacations every year (sometimes multiple times), eating out at nice places, taking care of huge unexpected medical bills, any camp we wanted, private school as long as we wanted, private college for all of us fully paid, private tutoring, nice big house, three cars, maid, etc., etc.... all with a family of three in a very expensive area. That's rich, guys. $200k is comfortable. Rich is "if one of the partners loses a job permanently, we're still living comfortably." Rich is "any activity you want, we'll pay for." Comfortable means not having to worry about money; rich means not having to think about money.

I make 40k euros a year and I'm comfortable. I own a house, take one or several vacations a year (going to visit Moscow for a couple of days this year, visit the Alp D'Huez to support someone on a sponsor bike trip and planning to visit Argentine for around 3 weeks), can visit concerts and festivals when I want, etc. 200k and I feel fucking rich.

And yeah, you grew up pretty damn rich.

 

[SouthernDragon]

Uh, I'm in a family of 4 and we're living on 50k a year. In Miami.

Where the fuck are some people getting that 200k is not a lot for a family of 4? That's enough to be pretty comfortable, even in Miami, and Miami's not cheap.

Shit, if we earned 75k I'd be through the roof.

P.S. To those earlier in the thread that caught my comment about spending $30-$50 on a meal for two and "splurging" $5 on DLC for a game I play...

I was being serious. Some of you have lost sight of what's reasonable. I said that, to be clear, to someone who waved off $800 on champagne a month because he himself spent $500 on cigars.

 

[DGRE]

Uh, I'm in a family of 4 and we're living on 50k a year. In Miami.

Where the fuck are some people getting that 200k is not a lot for a family of 4? That's enough to be pretty comfortable, even in Miami, and Miami's not cheap.

Shit, if we earned 75k I'd be through the roof.

P.S. To those earlier in the thread that caught my comment about spending $30-$50 on a meal for two and "splurging" $5 on DLC for a game I play...

I was being serious. Some of you have lost sight of what's reasonable. I said that, to be clear, to someone who waved off $800 on champagne a month because he himself spent $500 on cigars.

Oh hay guyz, I'm back. Thankful that some of the sane ones are still here...a little bit sad to see there are still people who have no clue how much money 200k is.

 

[Slavik81]

if 200k a year isn't rich, what does that make people who earn 20k? Homeless?

Pretty much. Or they nearly would be without government assistance.

20k is enough for 1 person, but that's minimum wage. You can't support 4 people off a single income like that.

 

[Dash27]

The debate over the word 'rich' is pointless. It's an opinion. I don't think 200k is 'rich' either, but I can understand someone disagreeing. But everyone should agree that 200k is very well off. If you make that much you shouldn't be stressing about money, unless you are an exuberant spender.

The point is the individuals in the OP make it seem like they are just scrapping by. That's what people find ridiculous.

Do you find yourself just scrapping by? How old are those cars you drive? Did you get them new or used? There are people that cannot even afford the luxury of owning a single automobile, Kia or not.

Just scraping by, no. As I said, I'm comfortable but not rich. I dont have to worry about food and shelter, I can put my kid through college and all that. My Kia is new (and pretty sweet ride btw!) but as I said before that I had a 10 year old Jetta. The CRV is from 2009.

As for those who cant afford a car at all, few things to note:

Wealth is cyclical. When you first enter the workplace you typically dont make much. After a while that number should go up, and then clearly plateau and go away once you retire or semi retire.

Again by the relativity standard nearly everyone in the US is wealthy. Look to a third world nation and see who cant afford food much less a new smartphone and flat screen tv with internet access in the heated homes with indoor plumbing that many of our "poor" have.

Location: from the article I posted earlier

A New Yorker would have to make $123,322 a year to have the same standard of living as someone making $50,000 in Houston.
In Manhattan, a $60,000 salary is equivalent to someone making $26,092 in Atlanta.

So is 50k a year rich? Depends where you live.

 

[NinjaMouse]

A lot of posts here damning these people for not feeling rich, but I didn't see any of them complaining about being poor. I think they are all probably pretty aware that they are doing well and live very comfortable lives. A lot of people are awfully quick to jump to the offensive.

 

[captive]

I don't think it's typical to buy stock from banks.

You can look up a investor calculator, but just to make my point take a single $200,000 investment over 30 years at the market average of 9% return in low cost stock index funds:
1.09^30 * 200k ~= 2.6M. That's 100% of your time sitting on your ass. No effort. At all.

Find a calculator that puts 100k per year into a portfolio with 1.12x, which is as aggressive as you can get without just crazy speculative stuff (small cap, high dividend yield, low cost index funds)

I also never understood the term aggressive investing in stocks. Is it aggressive not to emotionally cave in to temporary reductions in purchasing power? To think that society won't collapse and that recessions are temporary? I suppose it is 2012.

This is the old way of thought.
In case you haven't noticed pretty much nothing but apple has grown over the last 12 years, and you would have had to have some serious balls to invest any substantial money in apple 12 years ago.

I watched my 401k go from 20k to 12k last year in a matter of a quarter, its now back up to 20 but so what.

Id rather take my chances with gambling in vegas, at least there's no illusion about what you are doing. (note i do neither, the only money i put in is in my 401k) There are much better ways to invest your money than gambling in the stock market and assuming your going to get a 9% return, your not though.

 

[Alucrid]

This is the old way of thought.
In case you haven't noticed pretty much nothing but apple has grown over the last 12 years, and you would have had to have some serious balls to invest any substantial money in apple 12 years ago.

I watched my 401k go from 20k to 12k last year in a matter of a quarter, its now back up to 20 but so what.

Id rather take my chances with gambling in vegas, at least there's no illusion about what you are doing.

No other stock besides apple has grown in the past year? wat? :lol

Uh, I'm in a family of 4 and we're living on 50k a year. In Miami.

Where the fuck are some people getting that 200k is not a lot for a family of 4? That's enough to be pretty comfortable, even in Miami, and Miami's not cheap.

Shit, if we earned 75k I'd be through the roof.

P.S. To those earlier in the thread that caught my comment about spending $30-$50 on a meal for two and "splurging" $5 on DLC for a game I play...

I was being serious. Some of you have lost sight of what's reasonable. I said that, to be clear, to someone who waved off $800 on champagne a month because he himself spent $500 on cigars.

We're not saying it's not a good amount, we're saying that it's not 'rich.'

 

[captive]

No other stock besides apple has grown in the past year? wat? :lol

no i said past 12 years. look it up, why do you think people in their 40s 10 years ago are worried about their 401k's they haven't grown substantial;y in that same amount of time and now they aren't sure if they will be able to retire.

 

[Subprime]

Oh and 800 on wine a month? I spend close to 500 on smokes a month. Everyone has their addictions.

Totally not your fault you're an idiot. TOTALLY.

 

[Stet]

I spend $3,000 on cocaine a month and can't afford to eat ugh I'm so poor.

 

[Subprime]

I spend $3,000 on cocaine a month and can't afford to eat ugh I'm so poor.

3000$? Thats nothing. I have my coca leaves pre digested for me by a sivet before they are made into cocaine.

 

[maximum360]

An unbelievable article posted in Toronto Life. 5 families each making 200 thousand a year claim they are not rich. Wait until you see their monthly budgets. The article author claims these people are not rich, really "just making it" after considering cost of living expenses.

http://www.torontolife.com/daily/informer/from-print-edition-informer/2012/02/15/almost-rich/

Sickening really. here is an example of three of the budgets (there are 2 more examples in the article)

Single guy making 166k

Monthly expenses | Rent: $1,750. Mortgage and property taxes on an Ottawa home he co-owns with his ex: $1,180. Groceries and eating out: $1,400. (“I often order pasta at Grazie or, if I’m in a celebratory mood, North 44°. I buy better cheese and other exotic ingredients at Pusateri’s, and because I cook at home a lot I pack leftovers for lunch.”) Wine: $800. (“I’ll spend anywhere from $15 on a Rhône to $100 on an Amarone, and I open a bottle almost every night. I’m one course away from sommelier certification, and they practically know my name at the Summerhill LCBO. “) Rogers Internet: $40. Clothes at Harry Rosen and shoes from online collectible sneaker stores: $1,000. (“My big buy last year was a couple of Zegna suits for $1,500 each.”) Live music: $200. (“I go to all kinds of concerts. Last year, I saw The Weeknd at Lee’s Palace as well as Gordon Lightfoot at Massey Hall.”)

Annual expenses | Lease, maintenance and insurance for a 2010 Honda Civic: $7,000. (“I’m at an age now that I don’t care as much about what kind of car I drive.”) Travel: $10,000. (“I go to Vegas three or four times a year, though not because I have a gambling problem—my perfect day in Vegas is spent poking around the city’s downtown nooks and dive bars, miles from the tourist zoo along the strip. And I’m a regular at the annual Coachella music festival in Southern California.”) RRSP contributions: $20,000.


Family of four making 200k

Monthly expenses | Mortgage on their three-bedroom home: $2,000. Mortgage on their Georgian Bay cottage: $1,200. Utilities: $430. Gas for their Chevy Avalanche and BMW 328xi: $300. Groceries at Highland Farms: $1,200. Eating out, mostly at Swiss Chalet and Jack Astor’s: $840. Rogers for home phone, cable and Internet: $200. Clothes: $1,000. (“I drive across the border to Buffalo all the time on business,” says Antonella. “I shop a lot when I’m over there, mostly at stores like Guess.”) Vitamins, creams and lotions at Shoppers: $400. Books and magazines: $100. (“I get Men’s Health, new business books, and a novel now and then,” says Anthony.) Gifts: $250. (“The kids are constantly going to birthday parties. And there’s always a christening or confirmation to attend.”)

Annual expenses | Insurance for cars, house and cottage: $3,640. Kids’ RESPs: $4,000. RRSPs and blue-chip stocks: $20,000. Donations to Princess Margaret Hospital, SickKids and women’s shelters: $1,500. Vacations: $7,000. (“In February, we take the kids to an all-inclusive in the Dominican or Mexico,” Anthony says. “Sometimes my wife and I will go to the Bahamas for four days in the winter and leave the kids at home with their grandparents.”) Season tickets to the Leafs for Anthony: $2,000. Hockey league fees, tournament fees and new equipment for Marcus: $1,500. Dance classes for Angelina: $700.


Another family of four making 200k

Monthly expenses | Mortgage payment for a three-bedroom house: $2,500. Utilities: $500. Gas for their Jeep Commander and Ford F-150 truck: $440. (“The Jeep was a mistake. We shouldn’t have bought it; we could have used the extra money for travel.”) Street parking and two parking permits: $200. Home and car insurance: $300. Cleaning lady: $160. Groceries: $1,000. (“We like Whole Foods and try to eat organic as much as we can. We love the new Leslieville store Hooked for fish. For everything else, Loblaws.”) Baby supplies and toiletries at drugstores: $75. Wine: $400–$500. (“We try to get the better $11 bottles, but they go fast.”) Eating out: $400. Home phone, cable, Internet and two cellphones: $280. Dry cleaning: $50. Haircuts, nails and waxing: $170. Gifts: $200. (“You have kids, you spend money on toys for other kids. That’s how it goes.”) Daycare for both kids: $2,500.

Annual expenses | Property tax: $3,800. Upgrades and maintenance on their house: $5,000. Clothes: $3,000. (“When you have young kids you really cut back on stuff for yourself.”) RRSPs and investments: $0. (“Ha! We live month to month. When we have money left over, we go out.”) Savings accounts for the kids: $1,500. (“We put money in on birthdays and special occasions.”) Hockey league fees for Thomas: $500. Gym classes for Suzanne: $900. Swimming and music lessons for the kids: $900.

Edit: since the thread got so many responses I'm adding in the other 2 case studies:


Family of 2 (seniors) income 160k

HOW THEY SPEND IT
Monthly expenses | Condo fees: $900. Gas for their Mercedes E320: $150. (“We buy a new Mercedes every three years; it’s our big indulgence,” says Doug. “We always pay cash. This one was $80,000.”) Groceries: $600. (“We mainly shop at Longos and Metro,” says Shirley. “Doug’s a vegetarian and eats like a rabbit: he can go through a lot of broccoli.”) Costco: $300. (“We get everything there. Prescriptions. Fruit. Laundry soap. They have great trout, too.”) Eating out: $200. (“We like Swiss Chalet and Great Chefs on Eight in The Bay.”) Rogers home phone and Internet service: $70. Skype fees: $2.50. (“We use it for long-distance calls to the kids.”) Bathing suits, T-shirts, socks and tennis shoes for the gym: $100. Gym fees at the Mayfair Club: $125. (“I’m there every morning at 7:30,” says Doug.) Newspapers, books and magazines: $70.

Annual expenses | Gifts: $1,000. (“We have two grandkids, and we give them presents for birthdays, Christmas, special occasions.”) Insurance for car and condo: $2,400. Slots at Casino Rama and Casino Niagara: $100. (“I take $50 and go with friends in our building,” says Shirley.) Four-month trip to Myrtle Beach: $15,000. A trip to visit their son Brock in Denver: $2,500. Travel insurance: $8,000. (“At our age? And with pre-existing medical conditions? It’s a huge expense. But we don’t want to be in the States and not be covered.”)


Family of 3 (all adults) 166k

HOW THEY SPEND IT
Monthly expenses | Mortgage on their four-bedroom house, purchased in 2010: $2,500. Utilities: $300. Rogers for home phone, cable, Internet and two cellphones: $350. Gas for their Chevy Equinox and Chevy Cobalt: $300. Groceries at Loblaws, Metro, Fortino’s and the Oriental Food Mart on Finch West: $1,600. (“I like to cook dishes that I used to make in Nigeria,” Margaret says. “I often make spinach and okra soup and moin-moin, which is black-eyed beans with peppers.”) Eating out: $100. (“We sometimes go to Mandarin or Mr. Greek to celebrate.”) Lunches and coffees: $50. (“I pack a lunch basket for the family almost every day,” Margaret says. “For our health, we try to avoid eating sugary snacks and drinking coffee. I do occasionally like a Timbit, however.”) White wine, usually consumed with Sunday dinner: $80. Books and magazines: $100. Hair salon: $400. Grooming products for Emmanuel and Iyiope: $75.

Annual expenses | Clothing: $3,000. (“I don’t buy as many new outfits as I used to, since I have several nice suits I haven’t worn more than once,” says Margaret. “My new weakness is shoes and bags. I have a red Coach patent leather bag I love that I got for only $379.”) Furniture and furnishings, mostly from The Brick and HomeSense: $1,000. Vacations: $0. (“We have not been on vacation since coming to Canada. It has been work-work-work.”)


Gawker ripped them a new one.

Family of four here. As of this year we'll be making about 140k a year. All is not rosy though when you have a mortgage in D.C. (not as much house for your money). School loans for both of us approaches what we pay just on our mortgage (undergrad and grad school for both us wasn't cheap). Day care for 2 kids is pretty insane these days (looking forward towards getting them in public school). My son was born with BWS so he's had 2 surgeries, probably spent a total of almost 3 weeks in the ICU, and has enormous medical bills as a result.

 

[siddx]

200K is not rich, it's very comfortable though and anyone complaining about financials with 200K a year is either a whiny prat or terrible with his or her money (save for extraordinary situations like massive unexpected medical bills). That's about what my father makes and despite putting three kids through college and two through grad school he is very financially sound. However he is also smart with his money and invests and saves wisely, something the majority of people don't seem to be able to do. We really need a finances class in every high school in the US.

 

[Risk Breaker]

Wow... all these people can go eat a giant bowl of dick.

Yeah, basically.

The worst part is how they pay only $160 to the cleaning lady.

 

[Desavona]

Uh, I'm in a family of 4 and we're living on 50k a year. In Miami.

Where the fuck are some people getting that 200k is not a lot for a family of 4? That's enough to be pretty comfortable, even in Miami, and Miami's not cheap.

Shit, if we earned 75k I'd be through the roof.

P.S. To those earlier in the thread that caught my comment about spending $30-$50 on a meal for two and "splurging" $5 on DLC for a game I play...

I was being serious. Some of you have lost sight of what's reasonable. I said that, to be clear, to someone who waved off $800 on champagne a month because he himself spent $500 on cigars.

cigarettes not cigars. They are $18-19USD for a pack of 25.

http://www.abc.net.au/news/2012-02-15/australian-cities-most-expensive-in-the-world/3831324/?site=sydney

Look it's nice that you can call spending $30 for a meal for 2 a big weekend, that's great i wish i could do the same but going to a fast food chain to grab a snack is not an acceptable evening out for an adult couple nor is it all that healthy. And you support 4 on 50k that's great too. Lucky you live in Miami.

In Sydney 50k would be about $700-750 after tax. Take out $400 a week for rent on a 2 bedroom apartment and $250-300 for groceries and you have $50 left for the week. I'm not sure what you do for a living but $50k is not a bad single wage in Sydney. It's about avg for someone who has no tertiary education and has not completed a trade.

Again i'm not trying to say $200k a year is poor, it just isn't rich when you have 2-3 kids and is nowhere near rich in a city with a high cost of living. And no you can't just move to a cheaper city, cheap city's are cheap for a reason.

 

[SteveMeister]

Take 3: Rich people don't have to worry about money. They don't have to worry about bills. They have so much money that the money itself makes money (capital gains, interest) and if they do work, it's by choice. Rich people have no mortgages, unless they finance solely for the tax break. They don't have to worry about getting laid off or fired.

If you are making $200k a year, you are almost certainly not in that position. I'd submit that for most people at that income level, it'd be hard to generate real wealth without a windfall (such as writing Minecraft or selling a company, or getting in on the ground floor of a company like Facebook).

People making $200k, if they live austerely, could certainly save a large amount of money, but if you're earning that much, chances are you live in an area where the cost of living is commensurate with that level of income, so your housing costs are likely high. Especially if it's not all that unusual for people to have that income level (such as is the case in the DC area). It may not be the majority, but it's certainly not unusual, and there are many, many families earning a lot more.

Someone earning $200k where that IS unusual would be in a better position to put money away.

But you're still going to be depending on that income. It can't end or dry up or suddenly be cut in half because a partner is no longer working for whatever reason, unless you are living well below your means (which is extremely rare).

 

[Marty Chinn]

Uh, I'm in a family of 4 and we're living on 50k a year. In Miami.

Where the fuck are some people getting that 200k is not a lot for a family of 4? That's enough to be pretty comfortable, even in Miami, and Miami's not cheap.

Shit, if we earned 75k I'd be through the roof.

P.S. To those earlier in the thread that caught my comment about spending $30-$50 on a meal for two and "splurging" $5 on DLC for a game I play...

I was being serious. Some of you have lost sight of what's reasonable. I said that, to be clear, to someone who waved off $800 on champagne a month because he himself spent $500 on cigars.

The median house in Miami currently is $155k. The median house in San Francisco is $625k. How do people not understand that cost of living differs drastically and can affect what income means? Paying a mortgage like that is $36k a year and we haven't even gotten to property tax yet. If you make 50k, you just spent all your money on the house and have nothing left over; not even money for food.

 

[malingenie]

Yeah, basically.

The worst part is how they pay only $160 to the cleaning lady.

That's the one thing i am paying more for...makes me want to renegotiate. Currently at 200$ pet month.