Nyc couple with $0.5m in income who feels average
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Looking for advice to stop spending $$...
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These are always so completely and comically out of touch lol
This is my favorite form of literature. When rich or high income people come up with the idea that they don’t actually make a lot, then show exactly what they spend it on, step back and go yeah see it’s not that much.
That’s us - we make 700k TC and similar, feel average in HCOL jurisdiction.
Subject Expert
Living a middle class lifestyle on $300k a year with one child. https://i2.wp.com/financialsamurai.com/wp-content/uploads/2018/03/300K-Household-Budget-Financial-Samurai.png?fit=1456,9999
24% is the marginal tax rate, not the effective tax rate. The effective tax rate is 18%. They have more money in their budget than they realize.
Subject Expert
Here is something I dug up from an old article from the early 2000s. 2003 maybe.
Subject Expert
Somebody updated it in 2004 with a more realistic mortgage amount. http://www.mybudget360.com/wp-content/uploads/2008/11/family-budget-100k.png
They are doing their taxes wrong if the effective tax rate is 40%. Also the math works out to 37%...
Subject Expert
If you want to see low, run your own small business and write nearly everything off. A Lamborghini Urus qualifies as a “work truck” because they look at weight class and vehicle type. Not brand.
I love that they think that maxing out the 401k is average.
The expenses are reasonable categories. But the amounts are all splurge territory. If they could just use that 7k left over to get a financial planner, next year will be a lot better.
Comments indicate the context is missing…
Source is financialsamurai - seemingly competent member of FIRE community (former finance) - who writes these as 1) clickbait for CNBC to pickup + drive traffic and 2) demonstrative examples of “typical” American dream categories (saving some, giving some, some fun, cars, house, doing well by kids, etc).
We can debate the amounts as it relates to saving more + comparison to “average” (in this theoretical) but point is more so highlighting how $500k households are still striving to emulate what parents/grandparents provided and not living some lifestyle driving Ferraris + flying first class to Fiji.
Mentor
Yes, but he’s done this for years and made the same stupid as shit things that are just simple - I don’t know is he’s intentionally obtuse or doesn’t know what the fuck he’s taking about.
His tax issue on this hypo is somewhere in the realm of $40-50k in additional tax over what a similar couple should pay. 50k goes a long way.
Also $1.5M home and $75-100k cars are not what historical depictions of a normal American dream are.
Note: for the price of a land cruiser there are a number of exotics in good condition.
The numbers are so off that it destroys the point. He had one 7-8 years ago for the Bay Area that was similarly fucked.
43.6% of their income goes to taxes and charity
Seems fairly generous
Nothing in that budget is average
They save $43,000 a year, that’s really good.
Could spend less on vacations if they wanted to. Idk, seems pretty fine.
They lease luxury vehicles, childcare and violin lessons, is their 4 year old playing violin? Makes no sense.
Mentor
Thats fine if that is what M4 intended, but that’s really low on the list of things I’d say that they’re out of their minds for thinking is average. You know that whole $1.5M house thing… or $35k in annual student loan payments on a 20 yr repayment.
Where they get a 1.5m house with only 20k in property taxes 😂
Mentor
1.3% is a pretty normal property tax rate.
Mine is 1.25% of assessed value where assessments generally trail fair value by a good 20-25%.