Extremely High Income Mustachians: How much do you spend?

[The Happy Philosopher]

I'm sure we have all noticed that there is a relationship between earning and spending: The more a person earns the more he or she spends. Of course mustachinanism is all about pulling this relationship apart and realizing that money and happiness are loosely correlated at best within a reasonable range. Although we can argue all day about what the optimum spending level is in order to maximize happiness, I think we can all agree at some point the return on investment diminishes.

I've noticed that extremely high income earning people keep spending above and beyond what I would consider rational, but at the same time I spend more than what many "average income" mustachians would consider rational.

A doc I knew who probably had a household income of close to a million (two high earning specialty docs) made the interesting observation that in some ways controlling spending becomes harder at these high but not insane levels because the kind of things that are only available to the ultra rich (like 5-10 million per year range) seem like they are just out of reach, whereas if he was making 100k they wouldn't even enter his thought process. So here is my question-

For those of you with extremely high incomes (I may define this as above $200,000, but please define it however you want for purposes of this thought exercise).

What do you spend per year?

How much do you save (nominal or %)?

Where are your weak points where you get lazy because of your income?

Where have you found your optimum happiness level of spending?

Are you living more frugally than it appears because of a very high cost of living area?


Please feel free to answer in any way that makes sense to you. I'm just so darn curious as to the gigantic spread of spending that makes people happy. When I look at MMM spending it just blows my mind because I would feel very limited and deprived at those levels, yet I know some of my colleagues would look at my spending and feel the same.

[prognastat]

I'm sure we have all noticed that there is a relationship between earning and spending: The more a person earns the more he or she spends. Of course mustachinanism is all about pulling this relationship apart and realizing that money and happiness are loosely correlated at best within a reasonable range. Although we can argue all day about what the optimum spending level is in order to maximize happiness, I think we can all agree at some point the return on investment diminishes.

I've noticed that extremely high income earning people keep spending above and beyond what I would consider rational, but at the same time I spend more than what many "average income" mustachians would consider rational.

A doc I knew who probably had a household income of close to a million (two high earning specialty docs) made the interesting observation that in some ways controlling spending becomes harder at these high but not insane levels because the kind of things that are only available to the ultra rich (like 5-10 million per year range) seem like they are just out of reach, whereas if he was making 100k they wouldn't even enter his thought process. So here is my question-

For those of you with extremely high incomes (I may define this as above $200,000, but please define it however you want for purposes of this thought exercise).

What do you spend per year?

How much do you save (nominal or %)?

Where are your weak points where you get lazy because of your income?

Where have you found your optimum happiness level of spending?

Are you living more frugally than it appears because of a very high cost of living area?


Please feel free to answer in any way that makes sense to you. I'm just so darn curious as to the gigantic spread of spending that makes people happy. When I look at MMM spending it just blows my mind because I would feel very limited and deprived at those levels, yet I know some of my colleagues would look at my spending and feel the same.

We definitely don't make quite the extremely high income by your definition. However at just over 150k we are at about 3x the national average and in a relatively LCOL area. For reference if I were to scale this by COL to a place like California we would need to be earning about 300k to have a similar quality of life.

We spend about 60k last year which was before my wife was fully on board. Our goal for this year is to get that spending down to closer to 40k. This would much closer to MMM spending as about 15-20k is our mortgage which he doesn't have as part of his ~25k annual spending.

What do you spend per year? Last year 60k, aiming for closer to 40k this year.

How much do you save (nominal or %)? ~60% last year, aiming for higher this year.

Where are your weak points where you get lazy because of your income? Eating out is something hard to not do with 2 spouses working 50+ hours a week on average. This is a big improvement we are working on this year.

Where have you found your optimum happiness level of spending? I am very minimalist so I could likely live with spending only 35k a year easily. However to compromise we will likely be able to both be reasonably happy at 40-45k

Are you living more frugally than it appears because of a very high cost of living area? No, locally this is considered a HCOL area, however nationally it is quite LCOL.

[A440]

I have a salaried job where I make $250k, and then some additional consulting work. 

What do you spend per year? about $80k (around $24k in childcare)

How much do you save (nominal or %)?  I haven't calculated this.  It's whatever we don't spend or pay in taxes, health insurance, etc.

Where are your weak points where you get lazy because of your income?  house cleaning.  We have a lovely housecleaner who comes once a week. 

Where have you found your optimum happiness level of spending?  I think we are doing great right now.  At times, I would like to spend a little more on home improvement, just minor stuff that I can't seem to get to.  I do work a lot, and it is hard to find time where I will not be constantly interrupted by 3 small children to get things done.

Are you living more frugally than it appears because of a very high cost of living area?
We live in an average cost of living area.

I think one of the hardest things for me is that if people know or think they know that you have a high income, they expect things.  We have relatives that expect that we will pay for their trips, even though they have assets and jobs and could work more if they chose.  And then, they will bring lots of junky toys for the kids, but not start a 529 for them or anything.   And I don't think that they give a second thought that the reason we have money is that I am working very hard and am on call 24/7, so it takes a toll. 

[Gimesalot]

DH and I barely make it into your definition of high earning at around $210k per year including ~$27k in rental income. 

Of that 33% is saved, which is about 70% of my salary after taxes.  Another ~30% is senpt on our rental (we live in one apartment), including repairs & upgrades, mortgage payments, etc.  The rest in spent on all other expenses including taxes, healthcare, food, vacations, eating out, etc.

We spend what a lot of people consider a metric crap ton of money on eating out and vacations.  However, hubby is a chef so going out to eat several times a month and every day while on vacations is non-negotiable.  Both of us love to travel and although we use a lot of cost cutting measures, we are now willing to pay a little more for comfort such as a nicer apartments, no camping, shorter or non-stop flights, checked bags, etc.  We just end up going on more trips, usually 2-3 big trips a year, and several smaller weekend trips. 

I feel like I do have more to cut, for example house renovations and convenience foods (jar pasta sauce, pre-made pastas, ready to eat ethnic food, and the like), but then I feel like I don't have enough time to do all the things while commuting and working.

I am happy with our spending given the circumstances.  My DH does feel a little deprived.  I think if we both had more time, then we could invest effort in the things we love and would be able to derive our happiness from that instead of material goods. 

We are in a LCOL area and we probably appear to be median income if you exclude our constant travel.  To most of our friends, they think that we are not doing very well financially since our cars, house, and furniture scream low income.  We are FIRE very early next year and all we have told our friends is that we are moving.  They have all asked us how we are going to make ends meet and have shown some concern.  They figure that we'll be working full time and eventually will run out of money and come back to the States.  They have no idea that we are in fact well off and will no longer need to work. 

One thing to keep in mind is that MMM has a paid off house.  If you included housing and taxes in his spending it would be significantly higher, maybe double or more.

[eyerishgold]

Between my wife and I we make ~ $400,000 or so. With an addition $16000 in rental income. We spend around $125,000/year. We have a lot of room to cut stuff we don't need but makes life easier like lawn service and a cleaning person 2x per month. We do well on the big stuff, both drive paid off cars, live in a modest house, etc. but we live in a high col area so even our modest house is fairly pricey. Not coastal pricey but high none the less. We do splurge on travel. This income is fairly recent for me. She's been making $100,000+ for a while and my business just took off in the past few years.

Over the past few years we've spent a lot on fertility treatments. Probably around $35k total. We do have 1 child and daycare expenses just ended as well.

I imagine if we made less I couldn't justify the lawn service and cleaning person but it frees up time for me to spend with my family so that's a trade off I'm currently willing to make. Also, I mentioned we splurge on travel, we've had an agreement since we got married that money doesn't count on vacation. I don't want to skip experiences that I'll remember for a lifetime just because they're a bit more expensive than I'd like to spend.

[Chris22]

Two $100-150k incomes here, plus ~$24k in rental income (that almost exact offsets the expenses of that property).  Figure we save in the 30-35% ish range, but some of that is in things like 529 plans.  Savings will increase soon when the little one transitions out of daycare (~$1300/mo) into public schools, but most of that will redirect into 529/other savings earmarked for her college.  Plus we've spent a substantial chunk of money (~$30k) in the past 18 months on house renovations, all out of cashflow, which has tapered off dramatically. 

We're also youngish (early/mid 30s), and our income has probably double in the past 5 years, so our savings doesn't reflect our current level of income (one of my problems with the Millionaire Next Door methodology). 

We live in a medium-high COL area, which I do think distorts our level of frugality; I've mentioned before, 'frugal' to me means I bought a new $28k Acura sedan and will drive it 8-10 years before replacing it, in comparison to many of my peers who lease German luxury cars for $500/mo in perpetuity. 

Biggest failings for us is in "convenience" things like eating out/take out, and paying for services we don't have time to do (or want to waste precious free time on) like house cleaning and certain projects around that house that could be DIY. 

Our next goal is to save up enough to put down a substantial downpayment on a beach condo in the resort where we vacation; I estimate it would be self-supporting with about a 60% occupancy rate aside from the downpayment.  I'd like to pay it off over 15 years from the rental income it generates, and then "downshift" around age 50-55 to spend a substantial portion of the year there.  We'd either continue to hold onto our current smallish house in the suburbs, or sell and move to a condo in Chicago proper.

Goal is to retire to either consult or teach at some low level (community college, adjunct professor, etc) in my field (accounting/finance/business).

[AM43]

Annual household income ~ $270K

What do you spend per year?
~50K

How much do you save (nominal or %)?
50-60%

Where are your weak points where you get lazy because of your income?
No weak points here. Word "lazy"does not exist in my vocabulary.
Cook everything from scratch. No take out food. Eat out 1-2 per month tops.
No babysitters, no cleaning service, no landscaping service or any other service.
I dont let my income get into my head where I feel I "deserve" something.

Where have you found your optimum happiness level of spending?
Should def be able to spend less than 50K, but with 2 kids its tough, so 50K per year is a good number.

Are you living more frugally than it appears because of a very high cost of living area?
We live in HCOL area mostly because of R/E taxes and over rated expensive schools.

[FireHiker]

I guess we are in this range, with $261k gross combined. We spend way too damn much, but are really working to get that number down. I have my husband fully on board with the whole FIRE goal now, so I am hopeful.

Last year we spent an astronomical $143k. Of that, $60k was mortgage/property taxes (should "only" be $48k per year but the mortgage company messed up our escrow account the year before and we had a big deficit we paid off). $14k is childcare.  And we spent a whopping $22k on travel (which includes two trips for this year that we paid for last year). We also cut the cleaning lady halfway through the year and started cleaning the house ourselves, so that is $1400 that won't occur anymore. $4000 went towards a car for the oldest kid who turned 16. We also spend $31k not included in the $143k above, which was paying off the loan for solar ($6800 of this was from the tax rebate for installing the solar, not from our salaries) and extra contributions to 401k loan from buying the house. Some of this money came from savings the previous year.

After tracking our spending for the last 2-3 years, I finally started analyzing it this year and making goals, so I anticipate these numbers to be a LOT different after this year. I estimate this year that we will spend closer to $100k-$110k. Still a LOT to cut, but $62k of that is mortgage and childcare. We really want to eliminate the 401K loans from buying this house, and if we can keep our spending closer to 100k a year, then we can do that in two more years. Just in time to pay for the oldest to go to college...

[Abe]

What do you spend per year?
Taxes (all): $60k
Housing: $30k
Childcare: $30k
Everything else: $30k

How much do you save (nominal or %)?
30% now, 50% of projected with my new job. Main limitation in increasing that percentage is taxes!

Where are your weak points where you get lazy because of your income?
Definitely eating out or ordering food from grocery stores or restaurants, mostly due to our schedules and time taking care of the kid. We used to eat mostly vegetables and rice at home, but have slacked off in this regard because the savings are just not worth it to us. We spend minimal amounts in all other elective categories. Our childcare costs are high due to our long hours, but are about average for our area.

Where have you found your optimum happiness level of spending?
About where we are at. Once I'm not work 80-90 hours a week, would like to spend more time cooking healthy food. We don't spend much on entertainment because the outdoors is free. I learned this from my parents. They save huge amounts, but also spend huge amounts. I think a lot of it goes into gold, jewelry, and antiques that ostensibly have some value (but probably still are losing money). I personally think they'd be much happier living like they did before coming to the US (equivalent of middle class) and investing the rest. I've seen the high-spending life and developed a very strong aversion early in life because of the excess stress it generates.

Are you living more frugally than it appears because of a very high cost of living area? No. Medium cost area. The mortgage is a big expense, but our interest rate is so low I have no desire to pay it off early.

[Mr. Green]

Before I went to half-time we were making 330k. Now our combined income is 220k.

What do you spend per year?
About 60k a year currently, includes two mortgages and a car loan.

How much do you save (nominal or %)?
About 130k per year including employer 401k contributions.

Where are your weak points where you get lazy because of your income?
Food spending. Our fridge looks like a bachelor's fridge.

Where have you found your optimum happiness level of spending?
I think right where we are

Are you living more frugally than it appears because of a very high cost of living area?
We're DINKs in our early 30s so we have a townhouse. We live in a HCOL area but we're pretty frugal regardless.

[Chris22]

I think one of the hardest things for me is that if people know or think they know that you have a high income, they expect things.  We have relatives that expect that we will pay for their trips, even though they have assets and jobs and could work more if they chose.  And then, they will bring lots of junky toys for the kids, but not start a 529 for them or anything.   And I don't think that they give a second thought that the reason we have money is that I am working very hard and am on call 24/7, so it takes a toll.

One of the fortunate things about living in a HCOLA is that basically everyone else we know is also affluent.  And fortunately, so is most of our family.  I can only think of 2-3 times when someone blatantly or subtly suggested I should provide for them.  And for some of those times I did; I've picked up whole checks when going out with less affluent friends (for instance, a good friend of ours spent years in a PhD program making little money while my wife and I worked professional wages, didn't mind picking that up even though we get a lot of "you guys are so lucky...etc") but it irks me when one of our less fortunate relatives tries to get us to shoulder most of a shared gift or what not, and I'm vocal about it.

[itchyfeet]

We fall in this camp (for a temporary period only, FIREing soon), and spend a lot. Post FIRE we won't.

We spent about $60k USD in rent alone last year. That is the one outlay I despise the most. But housing can be really expensive here in Dubai, and we got sucked in to the expat excess when we first arrived and were unwise. Some of our friends here have nice enough apartments costing only $25K a year which erks me no end (we should be doing the same), but my DW likes where we live and doesn't want to move. TBH $60k is not a huge rent here. We live in an apartment. A house would cost more.

Last year we spent around $35-40K on travel. Some of that was travel to and from Australia from Dubai to see family amd friends. We both made 2 trips back each during the year, and flew my parents over to visit. We also took numerous overseas vacations (some very short and fairly long) to Europe, in the Middle East and central Asia last year to take advantage of where we are living. We sometimes stayed in 5 star hotels, and sometimes camped. We enjoy both, and have no issue camping post FIRE.

We hired a private guide and driver in both Iran and Georgia for the duration of our stays.

 We had an amazing time last year generally, living rich.

Sometimes we splashed out on business class air tickets, but generally only if it was a great deal or a points upgrade. I would love to fly business class always, but I can not rationalise the expense. I have debated with friends whether it would be worth working an extra year or 2 just so you would never have to fly economy again. My current answer is no. But if I ever ended up with too much money I would fly business class.

Besides housing and travel, we also eat out a lot in restaurants and spend a good sum at bars too. We did this before coming to Dubai too lol. Not a situational vice, but habitual.

I guess this is the point where my MMM account gets closed and I get exiled.

Maybe I am here to reform and get a face punch or 2.

Beyond the above, I would say we are fairly sensible, but I couldn't claim to be uber frugal.

We spend minimal amounts on clothes, jewellery and junk to fill our apartment.

We both take lunches to work from home nowadays. We own just the one car. I drive my DW to work in the morning and she car pools home.

We don't even pay for a gym membership anymore, and we clean our own place.

I am blessed to be getting paid very good money for now and we are spending a big chunk of it.

But we still save more than half of what we earn. It's the savings rate that's important right 😜

Interestingly, I was not a particularly high earner until my mid-late 30s. A mid career change/gamble, followed by hard work and some good luck changed my income completely. Once I earnt more our spending didn't really change. The move to Dubai 2 years ago triggered the excessive spending.i am 100% certain our spending will revert back to how it was once we leave here.

[little_brown_dog]

I’ll bite even though we are just shy of the 200k gross mark because we will end up over it in a couple years.
We save about 35-40% of our income, lower than many mustachians on here but I am very happy with this savings rate. I consider savings to be: 401k, 2 IRAs, emergency fund maintenance, college funds, and the extra we are saving to pay off/down our mortgage which is at 3.6%. We are looking into taxable investing as well but are currently just focusing on the mortgage as that is our personal preference. The savings rate will go up as our income increases.

Our current weak points – food, health services. We buy pricey pasture raised, humane certified, local products. With a picky toddler to feed, I happily cough up the extra money for those overpriced organic squeeze pouches because she loves eating from them and the extra money paid buys me easier meal times and healthier eating. Grocery bill is about $150 per week for 2 adults and a toddler. We also eat out once a week because my husband works long hours and sometimes I just need a break from cooking and feeding everyone. I also attend acupuncture for fertility reasons (pricey, $50 a week, every week) and get massages every couple months due to chronic muscle tension that causes migraines when not handled. These health services are totally worth it and have really improved my health, ability to conceive, and quality of life, but they are damn expensive.

Possible weak point coming up – cleaning service. I’m a sahm but I work part time while baby naps so it can be hard for me to find the time to deep clean the house. This isn’t a problem right now, but we are trying for our second baby and I am honestly considering bringing in a cleaning service every other week once I deliver again. It wouldn’t be forever, but sleep deprived new mamas with a toddler and a newborn need all the freakin help they can get. My husband is a great help with the kids, but he absolutely hates cleaning. If I want help, we are going to pay for it and I’m not going to feel bad about it because hell, what is having awesome finances for if not to improve your quality of life?

Optimal happiness/spending – I think we are there right now. Other than bringing in some extra cleaning help, we have absolutely everything we want. That’s great because as our income increases there literally isn’t anything else we want or are tempted to buy. It all just goes into savings or towards our financial goals. We are expecting another income increase this year…the money is already earmarked for mustachian savings purposes.

COL - Our area is very HCOL, and we know many couples who live almost pay check to pay check because they are not frugal enough in this environment despite their high incomes. Around here, just a couple questionable decisions like a more expensive house and a financed car, can really screw you even if you make alot. You have to really make sure those fixed expenses are reasonably low if you want to do well on anything but an extremely high income. Compared to our similar earning peers around here, we would definitely be classified as frugal if not extremely frugal. Most people with our incomes live in 450-500k homes in upscale neighborhoods. We live in a modest little 2 bed in a middle-middle class area and drive two old but reliable toyotas. We don't have a cable package. We DIY our renovations and upgrades to our home. Almost all of my clothes come from Target. I shop sales and calculate out unit prices to find the best deals even though the idea of someone making 200k and worrying about saving $10 bucks on a shopping trip seems laughable. Whatever, it works :)

[starguru]

DW and I are in this weird (for us) scenario where our income just seems to keep increasing.  We were making 200-300k a year 7-8 years ago and last year we eclipsed 600k.  Our spending has not risen as fast as our income. 

What do you spend per year?

I assume you are not including taxes.   :)

Our core spending, including mortgage of 32k, is 60k-80k a year.  It seems like there is always some one-off thing bringing our spending up to 120k-150k.  Last year we had to replace our cars (we bought Hyundais).  Our kid went to private school (we have since put him in public).  This year we remodeled our kitchen and put hardwood floors in our house.   A few years ago we finished the basement, etc.  These are for the most part, completely optional choices, but with our income we just do it.  Most of these things have to do with the house.

How much do you save (nominal or %)?

As our income has risen, so has our savings.  When we moved into our home we were saving upwards of 100k a year (back when our income was around 300k).  Last year we probably saved between 250k to 300k.  Our NW increased by 400k last year.

Where are your weak points where you get lazy because of your income?

We do a good job not letting our lifestyles inflate.  With 600k+ I could easily be driving an E-class or something similar, but we have Hyundais.  That said, when we see something we really do want we just get it (kitchen remodel, some jewelry for the wife, an occasional watch form me).  We also don't optimize as much as we could -- I lessened our cable package a while ago, but could optimize further.  Do I really care if I save an extra $200 a year?  Nope.  No fucks given.  And that's on me. 

Where have you found your optimum happiness level of spending?

We are pretty happy now.  I will say that certain things definitely bring quality of life improvements.  Our new fridge is definitely superior to our old one (bigger and quieter).  The new dish washer is super efficient and quiet, which is nice (I could hear the previous one from the bedroom).  Our new cars have that auto-stop feature which is reassuring (it's warned me, but never actually stopped the car before).  Back-up cameras are super nice; I was recently driving my  mom's old car and was surprised how much easier it is with a back up camera. 

The key is recognizing that things are just things.  Some things I have a passion for (watches) but am careful not to let it get out of hand.  My desire to save is greater than my desire to own a Patek Phillipe (for now). 

I think I might splurge on whatever the next Tesla is. 

Are you living more frugally than it appears because of a very high cost of living area?

I'm not sure.  We live outside DC, which is reasonable high cost but certainly not NYC or SF.  We certainly have lesser cars compared to our neighbors, but I don't know what they make.  They could make as much as us but I doubt it.  I think people would probably think we are just average earners.  We have reasonable cars, don't look like we are depriving ourselves etc.  We certainly aren't mustache frugal, but probably are pretty frugal for our income.

[Much Fishing to Do]

So I for many years made about $80-110k (after tax) and would spend about $60k.  I started a business and that level of income was similar for a few years (sometimes less, sometimes more), but for the last 4 years I've had years like $250k, $350k, $220k (after tax numbers), maybe not the level you;re talking about but more money than I thought I'd ever earn in my lifetime....  Our annual spending has increased from $60k to more like $90k over the last five years, obviously a big increase.  A lot of that is due to increase medical/insurance costs and a just the natural costs of adding members to a growing family (maybe half of the increase), the other $15k probably an equal split between increased vacation spending and then just looser spending. 

The only place before that we felt we were depriving ourselves was travel which we wanted to do, and we feel we do everything we care to now.  So I guess our current $90k for our family of 5 seems optimal to me.

I guess the uncertainty of the income of the business helps keep down any thoughts about spending more, but I don't think we'd increase it that much anyway.  If I could cut (obviously I "can") our expenses back down to $70k year I'd be FI, at $90k I'm not.   And frankly I'm not sure I'm ready to end the business, there would be little ramping down so the move would be a big one.  I work out of the home 99% of time so as frustrating and anxiety ridden as it often makes me, it doesn't take me away from my family daily, if it did I probably would have decreased expenses and FIREd already

[Franklin]

In general terms:

Income:  300K
Taxes: 100K
Invest: 100K
Expenses: 80K including college tuition
Charity: 12K
The rest: Disposable but purposeful, like home improvement, self improvement, wanderlust.

My biggest weak point is $1.80 for coffee and $6.00 lunch every work day, and a Verizon data plan.

[Laura33]

I could have written Chris22's post about a decade ago.  We have the same issue with the MND calculation methodology -- we have never saved less than a good 25% of income, but we had a fairly recent period of dramatic upward trajectory that means that all of that prior savings represents a much lower portion of our current income (and we also live in a higher COL area now than for many of those years, so our projected RE are higher than we would have guessed then, too).  We also had significant home remodel/garage expenses that came along with my preferred neighborhood, but it was worth it to me to have a short commute and allow the kids to walk everywhere. 

Also agree about the impact of taxes -- ours are close to 50% with federal/state/local. 

Current savings are @46% for last year; I hope to do better this year.  Figuring out our spend/savings is a little difficult in advance because we both get a significant chunk of our income as annual profit-sharing/bonuses/etc., all of which is not guaranteed and can be highly variable (we made $100K less in 2016 than 2015).  So part 1 of my savings plan is always to live within the normal monthly takehome, so that the end-of-year is pure savings. 

Part 2 of the savings plan is then the standard savings out of the monthly take-home -- 529s, EF/car fund, and extra post-tax investments (Vanguard).  Then part 3 of my savings plan is my "game" to manage DH's spendypants tendencies (he would probably be fine with putting away 15% and working forever) and, honestly, my own temptations.  Over time, I have sort of learned to pre-commit a lot of our monthly outflow to "useful" stuff so that we don't have a whole lot left at the end of the month to fritter -- IOW, I make sure our monthly budget "feels" tight to control the frivolity.  :-)  So every year, if we get raises on the base pay, I up the Vanguard so we don't see it; when they gave us that FICA rebate, I added that to Vanguard, and then just never undid that when it went away; this fall, when DS leaves daycare for good, I will again add the delta to Vanguard; etc.  We also refi'd to a 15-year mortgage on our primary home, which increases the monthly outflow but means we will have no mortgage in retirement.  We also bought our retirement condo after the crash and are paying off that mortgage out of cashflow (we are renting it out, but it's slightly cash-flow-negative).  I see both of those as "prepaying retirement expenses with current high cash flow."  Yes, I know that over time the returns would be better if we invested that money, but DH thinks we are already saving enough, so this way at least the money goes to something that I think is useful. 

My own personal failing is eating out/doing takeout, or cooking with fancy ingredients -- I have always been a cook and enjoy it, but with two jobs and two kids, it gets very tempting to say "eh, we can afford it," and suddenly you're spending $1200/mo. on groceries and takeout.  I am cutting this back significantly this year, because it's just sheer laziness, and I don't like that me.  We do also like eating out, and I am not willing to cut that out, but I am cutting the frequency back, because it loses it's special-ness when you do it too much.  DH's current fixation is wine (he has amassed a couple hundred bottles) -- mostly it's not fancy stuff (our last purchase was $14/bottle), it's more that I have very limited taste in wine, so when he finds something we both like, he buys a case.  I semi-rationalize this as more prepaying retirement expenses, as we are currently buying more than we drink, so I'll have a nice stash to "spend" down in a few years.  :-) 

We also spend too much on travel, but this is an area DH and I agree on, and in fact a large part of the reason why our RE budget is higher than most is because we are planning to do a lot more of that.  I also like cars.  Always wanted a convertible, so after we hit FI, DH convinced me to buy one (didn't take a tremendous amount of arm-twisting).  At some point, we may buy an even stupider one, but for now our daily drivers are a 9-yr-old TL and a 6-yr-old SUV (both of which I got deals on).

What we don't worry about is keeping up with the Joneses.  Probably the best move we made was to buy in an area where our income is maybe double that of those around us.  So we can live a very nice lifestyle without constantly being surrounded by lots of more/better/fancier (I believe there is one Lexus on our street -- and that is in the next block), and our kids don't have friends who are always doing super-swanky stuff.  We do spend far more than we need to, but it is on things that we get enjoyment from, and we could cut back significantly if necessary.

[Camarillo Brillo]

I make $800,000 per year.  I save $500,000 between actual savings and tax deferred income (401K and deferred comp plans). 

Of the amount not deferred/saved I net $13,000/month.   From that I spend $2,500/month on housing, $500 on insurance, I give my mom $750, and I blow the rest on living expenses.  We carry no debt other than mortgage and we pay our credit cards off in full each month.  We live a very middle class life and none of our friends would guess we make this kind of jack. We each drive 8 year-old cars, live in a $650,000 house, and live in a LCOL area.

Because we save so much, I no longer even bother with a budget.  I know we are probably blowing at least $5,000/month that probably could be saved through frugality, but what's the point? 

My wife is high maintenance and spends shitloads on her hair, upkeep, nails, etc.  And, she doesn't work. That's probably an opportunity cost of at least $80,000/year.  But, in her defense, she got lucky with a job early in her career and netted about $1,000,000 in stock options that we've also saved.

I am done working in 2 years, when our younger son is just about out of high school.

[Melisande]

My husband earns $220,000/year + about $10-15,000 extra expenses covered via grant $$$. We live in a moderately low COL area. According to COL calculators, we would need a little more than $500,000/yr to have similar spending power in Manhattan.

We spend a little over $100,000/year with only $1,390 per mo. going towards the mortgage payment and no consumer debt. Our largest spending category is actually travel with $2,130 per mo. or about $25,000/year. We also opted to not have children which eliminates a big spending category right there (my sister and brother-in-law are struggling to pay for their kids' college).

We save about $60,000/year.

We are not a pure mustachian family. I grew up mustachian -- well, mustachian, avant-la-lettre. I love being frugal and saving merely for the sake of being frugal and saving. It's like a game. Also, I simply dislike buying things. Purchasing big ticket items feels almost physically painful.

However, my husband is what you would call the normal, financially responsible, non-mustachian American. As long as you avoid consumer debt and save enough for retirement, money is for spending. Whee!

I rarely spend money on clothes and virtually never on make-up, jewelry, home decorating or random stuff. I almost never go shopping or buy souvenirs when we travel. I love to cook and try to avoid eating out as much as possible. I do all the cleaning myself. I just walk/run around the neighborhood and use an exercise bike at home rather than having a gym membership.

Where do I fall down? I love books, actual books, not books on a kindle. So, about 1x a month a buy a new book instead of using the library. I don't use coupons when I food shop. I just buy whatever healthy nourishing interesting things I want without worrying about cost (although I typically don't buy organic).  I don't go to Costco or other super saver stores. I spend about $200/month on voice lessons and another $100/ month on therapeutic massage (but I could almost file this under medical necessity since it helps me keep my chronic back pain in check). I also get my hair professionally cut and dyed about 5x/year.

My husband, the non-mustachian is really good about cars. He sees the folly of new cars and agrees that we should drive our reasonable cars until they are finished (We have a 2007 Toyota Prius w/160,000 miles and a 2014 Toyota Corolla with 125,000 miles.) He is also good about not wanting to eat out that much and dislikes eating in very fancy, expensive places. I've even gotten him into eating my picnic lunches. He is really non-mustachian, however, when it comes to the guy stuff (sorry, sexism) around the house. We have lawn service and pool service and call a professional whenever anything needs fixing. He also requests very expensive gifts for himself (which I sometimes give) and loves to travel as much as possible. When we travel, he likes what I would call nice, upper-middle class accommodations, but nothing too fancy. He's not  interested in AirB&B or trying to find special vacation deals. But all this doesn't bother me because a) we have more than enough for retirement b) he's the one making all the money (at this point -- there was a time when I supported him).

So, we've reached a good compromise and I feel good about our spending/saving ratio.

I get the impression that we are more financially comfortable than about 90-95% of our neighbors, friends and family. We have been hit up for money both by his family and by mine. Each time we've said no to the extravagant requests (could you pay for 1/2 of your nieces college education?) and made very nice compromises with far lesser sums. One of my neighbors makes comments like: "You aren't working? Why not? Everyone has to work!" and "You must have *some* money with all your exotic traveling!" Also, I've definitely felt pressure from our (Unitarian) church to poney up more in pledges.

[chesebert]

I'm sure we have all noticed that there is a relationship between earning and spending: The more a person earns the more he or she spends. Of course mustachinanism is all about pulling this relationship apart and realizing that money and happiness are loosely correlated at best within a reasonable range. Although we can argue all day about what the optimum spending level is in order to maximize happiness, I think we can all agree at some point the return on investment diminishes.

I've noticed that extremely high income earning people keep spending above and beyond what I would consider rational, but at the same time I spend more than what many "average income" mustachians would consider rational.

A doc I knew who probably had a household income of close to a million (two high earning specialty docs) made the interesting observation that in some ways controlling spending becomes harder at these high but not insane levels because the kind of things that are only available to the ultra rich (like 5-10 million per year range) seem like they are just out of reach, whereas if he was making 100k they wouldn't even enter his thought process. So here is my question-

For those of you with extremely high incomes (I may define this as above $200,000, but please define it however you want for purposes of this thought exercise).

What do you spend per year?

How much do you save (nominal or %)?

Where are your weak points where you get lazy because of your income?

Where have you found your optimum happiness level of spending?

Are you living more frugally than it appears because of a very high cost of living area?


Please feel free to answer in any way that makes sense to you. I'm just so darn curious as to the gigantic spread of spending that makes people happy. When I look at MMM spending it just blows my mind because I would feel very limited and deprived at those levels, yet I know some of my colleagues would look at my spending and feel the same.

You do realize MMM's spending is ex housing and some travel, correct? I think 35K is a perfectly fine spending level without taking into account housing and limited travel expenses. We spend around the same as MMM (3 person household) and we are over the income hurdle in your definition. I don't particuarly feel deprived although I do like taking Uber compared to bus - but I force myself to take the bus from time to time becuase it increaes my range of "comfort". We live in a HCOL neighborhood of  downtown Chicago.

[ysette9]

I guess we make it into your special-people club. :) This year our income should be $350k plus sign-on bonus ($30k) between two wage earners.


• What do you spend per year? I don't have my spreadsheet before me but I think we are in the $80k/year range. Biggest line items are rent ($29k) and child expenses (daycare + 529 contributions $21k)
  
  
• How much do you save (nominal or %)? Our baseline (auto) savings is $120k/ year, not including 401(k) match or 529 contributions. Any "bonus" money we get during the year like RSUs or bonuses usually get saved, but I'm not including that in this figure.
  
  
• Where are your weak points where you get lazy because of your income? We buy nice-ish food. House cleaners every 2 weeks (happy marriage insurance). We tend to be pretty frugal about stuff but we also don't hesitate to eat out as a family if we feel like it or give generous gifts when we feel like it. It is a wonderful feeling to know that we can pretty much do anything and buy anything we want if we choose to. Most of the time we don't, but we also don't pinch pennies or track a budget.
  
  
• Where have you found your optimum happiness level of spending? Not quite there yet. We rent an under-market place that has a lot of drawbacks. I really want to live in a nicer house.
  
  
• Are you living more frugally than it appears because of a very high cost of living area?
We live in a very HCOL area but are also blessed with under-market rent. Our friends and neighbors tend to all have high-paying jobs as well, but no one is ostentatious so we blend right in. Part of it is that some families choose to have one parent at home while we both work.

[Roboturner]

SO and I make ~250k/yr-300k/yr combined BTAX

What do you spend per year?
40k/yr - We spend ~20k discretionary and ~20k on mortgage

How much do you save (nominal or %)?
70-80%

Where are your weak points where you get lazy because of your income?
Don't really have major weaknesses but our high income has let us renovate portions of our house that were livable before

Where have you found your optimum happiness level of spending?
We are fine here, but are shooting for 40k/yr with no mortgage, at the moment cant image doubling our spending, itll probably settle around 30k/yr when we're done working, due to travel.

Are you living more frugally than it appears because of a very high cost of living area?
Denver is MCOL trending towards HCOL but no, I think discretionary would be about the same anywhere

[chesebert]

I make $800,000 per year.  I save $500,000 between actual savings and tax deferred income (401K and deferred comp plans). 

Of the amount not deferred/saved I net $13,000/month.   From that I spend $2,500/month on housing, $500 on insurance, I give my mom $750, and I blow the rest on living expenses.  We carry no debt other than mortgage and we pay our credit cards off in full each month.  We live a very middle class life and none of our friends would guess we make this kind of jack. We each drive 8 year-old cars, live in a $650,000 house, and live in a LCOL area.

Because we save so much, I no longer even bother with a budget.  I know we are probably blowing at least $5,000/month that probably could be saved through frugality, but what's the point? 

My wife is high maintenance and spends shitloads on her hair, upkeep, nails, etc.  And, she doesn't work. That's probably an opportunity cost of at least $80,000/year.  But, in her defense, she got lucky with a job early in her career and netted about $1,000,000 in stock options that we've also saved.

I am done working in 2 years, when our younger son is just about out of high school.

Why is your deferred comp so high? Are those RSUs or options? public or private security?Any clawback requirement?

What is your networth and proposed post RE spending level?

I feel like I can safely responsibly blow $5k in any month but not every month :)

[effigy98]

What do you spend per year?
About 12k house payment, 48k in misc stuff, and 100k in taxes (I really hate taxes).

How much do you save (nominal or %)?
60% or so. Max all tax sheltered accounts, then put rest into paying off the house as I HATE owing money.

Where are your weak points where you get lazy because of your income?
We have a big problem with buying too much food (especially from costco), average food bill is $800 and half gets thrown away. I am not in charge of the food budget so I have limited control here :).

I subsidize my aging mothers condo. We got that as a foreclosure but I pay all HOA fees and I occasionally give here large chunks of cash when she is desperate.

I also buy too much computer hardware. I have a computer in every room or some type of device. I like computer games, working on them, and the internet is almost like air to me because I thirst for knowledge.

Where have you found your optimum happiness level of spending?
75k and I pretty much have everything I want and need.

Are you living more frugally than it appears because of a very high cost of living area?
Not really. We have 10+ year old Porche and BMW and most people do not notice the age as the new models look pretty much the same. We have a 3k sqft size house in the seattle area that was a forclosure fixer upper in 2010 that we have pretty much restored to a decent house over time.

[Camarillo Brillo]

I make $800,000 per year.  I save $500,000 between actual savings and tax deferred income (401K and deferred comp plans). 

Of the amount not deferred/saved I net $13,000/month.   From that I spend $2,500/month on housing, $500 on insurance, I give my mom $750, and I blow the rest on living expenses.  We carry no debt other than mortgage and we pay our credit cards off in full each month.  We live a very middle class life and none of our friends would guess we make this kind of jack. We each drive 8 year-old cars, live in a $650,000 house, and live in a LCOL area.

Because we save so much, I no longer even bother with a budget.  I know we are probably blowing at least $5,000/month that probably could be saved through frugality, but what's the point? 

My wife is high maintenance and spends shitloads on her hair, upkeep, nails, etc.  And, she doesn't work. That's probably an opportunity cost of at least $80,000/year.  But, in her defense, she got lucky with a job early in her career and netted about $1,000,000 in stock options that we've also saved.

I am done working in 2 years, when our younger son is just about out of high school.

Why is your deferred comp so high? Are those RSUs or options? public or private security?Any clawback requirement?

What is your networth and proposed post RE spending level?

I feel like I can safely responsibly blow $5k in any month but not every month :)

my deferred comp is so high because I'm eligible for 2 different plans and I take nearly full advantage of it.  Everything is private.  They are non-qual so there is risk.

My net worth is many millions but it probably doesn't matter.  My deferred comp payout gives me $380K pre-tax per year for 10 years after I retire.  I'll probably be dead by then.  Seriously.  I have a hereditary heart disease that I've struggled with since I was young.

We blow at least $5,000/month, but it's probably more.  I know I net $13,000/month and we have a few bills, but the rest simply disappears between my high maintenance wife, kids activities, and some basic recreation.

[chesebert]

I make $800,000 per year.  I save $500,000 between actual savings and tax deferred income (401K and deferred comp plans). 

Of the amount not deferred/saved I net $13,000/month.   From that I spend $2,500/month on housing, $500 on insurance, I give my mom $750, and I blow the rest on living expenses.  We carry no debt other than mortgage and we pay our credit cards off in full each month.  We live a very middle class life and none of our friends would guess we make this kind of jack. We each drive 8 year-old cars, live in a $650,000 house, and live in a LCOL area.

Because we save so much, I no longer even bother with a budget.  I know we are probably blowing at least $5,000/month that probably could be saved through frugality, but what's the point? 

My wife is high maintenance and spends shitloads on her hair, upkeep, nails, etc.  And, she doesn't work. That's probably an opportunity cost of at least $80,000/year.  But, in her defense, she got lucky with a job early in her career and netted about $1,000,000 in stock options that we've also saved.

I am done working in 2 years, when our younger son is just about out of high school.

Why is your deferred comp so high? Are those RSUs or options? public or private security?Any clawback requirement?

What is your networth and proposed post RE spending level?

I feel like I can safely responsibly blow $5k in any month but not every month :)

my deferred comp is so high because I'm eligible for 2 different plans and I take nearly full advantage of it.  Everything is private.  They are non-qual so there is risk.

My net worth is many millions but it probably doesn't matter.  My deferred comp payout gives me $380K pre-tax per year for 10 years after I retire.  I'll probably be dead by then.  Seriously.  I have a hereditary heart disease that I've struggled with since I was young.

We blow at least $5,000/month, but it's probably more.  I know I net $13,000/month and we have a few bills, but the rest simply disappears between my high maintenance wife, kids activities, and some basic recreation.

That is a monstrous deferred comp arrangement. Are you working solely for that deferred comp? I believe you have enough to RE now if you wanted to.

[starguru]

I make $800,000 per year.  I save $500,000 between actual savings and tax deferred income (401K and deferred comp plans). 

Of the amount not deferred/saved I net $13,000/month.   From that I spend $2,500/month on housing, $500 on insurance, I give my mom $750, and I blow the rest on living expenses.  We carry no debt other than mortgage and we pay our credit cards off in full each month.  We live a very middle class life and none of our friends would guess we make this kind of jack. We each drive 8 year-old cars, live in a $650,000 house, and live in a LCOL area.

Because we save so much, I no longer even bother with a budget.  I know we are probably blowing at least $5,000/month that probably could be saved through frugality, but what's the point? 

My wife is high maintenance and spends shitloads on her hair, upkeep, nails, etc.  And, she doesn't work. That's probably an opportunity cost of at least $80,000/year.  But, in her defense, she got lucky with a job early in her career and netted about $1,000,000 in stock options that we've also saved.

I am done working in 2 years, when our younger son is just about out of high school.

Why is your deferred comp so high? Are those RSUs or options? public or private security?Any clawback requirement?

What is your networth and proposed post RE spending level?

I feel like I can safely responsibly blow $5k in any month but not every month :)

my deferred comp is so high because I'm eligible for 2 different plans and I take nearly full advantage of it.  Everything is private.  They are non-qual so there is risk.

My net worth is many millions but it probably doesn't matter.  My deferred comp payout gives me $380K pre-tax per year for 10 years after I retire.  I'll probably be dead by then.  Seriously.  I have a hereditary heart disease that I've struggled with since I was young.

We blow at least $5,000/month, but it's probably more.  I know I net $13,000/month and we have a few bills, but the rest simply disappears between my high maintenance wife, kids activities, and some basic recreation.

That is a monstrous deferred comp arrangement. Are you working solely for that deferred comp? I believe you have enough to RE now if you wanted to.

Yeah Im curious how that is even possible

[chesebert]

I make $800,000 per year.  I save $500,000 between actual savings and tax deferred income (401K and deferred comp plans). 

Of the amount not deferred/saved I net $13,000/month.   From that I spend $2,500/month on housing, $500 on insurance, I give my mom $750, and I blow the rest on living expenses.  We carry no debt other than mortgage and we pay our credit cards off in full each month.  We live a very middle class life and none of our friends would guess we make this kind of jack. We each drive 8 year-old cars, live in a $650,000 house, and live in a LCOL area.

Because we save so much, I no longer even bother with a budget.  I know we are probably blowing at least $5,000/month that probably could be saved through frugality, but what's the point? 

My wife is high maintenance and spends shitloads on her hair, upkeep, nails, etc.  And, she doesn't work. That's probably an opportunity cost of at least $80,000/year.  But, in her defense, she got lucky with a job early in her career and netted about $1,000,000 in stock options that we've also saved.

I am done working in 2 years, when our younger son is just about out of high school.

Why is your deferred comp so high? Are those RSUs or options? public or private security?Any clawback requirement?

What is your networth and proposed post RE spending level?

I feel like I can safely responsibly blow $5k in any month but not every month :)

my deferred comp is so high because I'm eligible for 2 different plans and I take nearly full advantage of it.  Everything is private.  They are non-qual so there is risk.

My net worth is many millions but it probably doesn't matter.  My deferred comp payout gives me $380K pre-tax per year for 10 years after I retire.  I'll probably be dead by then.  Seriously.  I have a hereditary heart disease that I've struggled with since I was young.

We blow at least $5,000/month, but it's probably more.  I know I net $13,000/month and we have a few bills, but the rest simply disappears between my high maintenance wife, kids activities, and some basic recreation.

That is a monstrous deferred comp arrangement. Are you working solely for that deferred comp? I believe you have enough to RE now if you wanted to.

Yeah Im curious how that is even possible

It actually gets better if the company is sold - you get paid a lump sum of the whole amount in one go, plus some sweetener on the side. God, I need to FIRE into a startup with IPO/trade sale potential :)

[MightyAl]

I am just curious what these things are that a person with a million dollar per salary would be on cusp of being able to afford?

What could they buy that I couldn't? 

At some point you are just pissing money away to piss money away. 

[chesebert]

I am just curious what these things are that a person with a million dollar per salary would be on cusp of being able to afford?

What could they buy that I couldn't? 

At some point you are just pissing money away to piss money away.

The aggregate of Art budget, wine budget, private social clubs, jet clubs (private plane time share thing), yacht clubs, significant donation so you can sit on some prestigious non-profit board (many have pay to play clause for directors - big boys ask few hundred K a year in donation) and slight bigger/better apartment ($3million + properties are dime a dozen in Chicago)

[Camarillo Brillo]

I make $800,000 per year.  I save $500,000 between actual savings and tax deferred income (401K and deferred comp plans). 

Of the amount not deferred/saved I net $13,000/month.   From that I spend $2,500/month on housing, $500 on insurance, I give my mom $750, and I blow the rest on living expenses.  We carry no debt other than mortgage and we pay our credit cards off in full each month.  We live a very middle class life and none of our friends would guess we make this kind of jack. We each drive 8 year-old cars, live in a $650,000 house, and live in a LCOL area.

Because we save so much, I no longer even bother with a budget.  I know we are probably blowing at least $5,000/month that probably could be saved through frugality, but what's the point? 

My wife is high maintenance and spends shitloads on her hair, upkeep, nails, etc.  And, she doesn't work. That's probably an opportunity cost of at least $80,000/year.  But, in her defense, she got lucky with a job early in her career and netted about $1,000,000 in stock options that we've also saved.

I am done working in 2 years, when our younger son is just about out of high school.

Why is your deferred comp so high? Are those RSUs or options? public or private security?Any clawback requirement?

What is your networth and proposed post RE spending level?

I feel like I can safely responsibly blow $5k in any month but not every month :)

my deferred comp is so high because I'm eligible for 2 different plans and I take nearly full advantage of it.  Everything is private.  They are non-qual so there is risk.

My net worth is many millions but it probably doesn't matter.  My deferred comp payout gives me $380K pre-tax per year for 10 years after I retire.  I'll probably be dead by then.  Seriously.  I have a hereditary heart disease that I've struggled with since I was young.

We blow at least $5,000/month, but it's probably more.  I know I net $13,000/month and we have a few bills, but the rest simply disappears between my high maintenance wife, kids activities, and some basic recreation.

That is a monstrous deferred comp arrangement. Are you working solely for that deferred comp? I believe you have enough to RE now if you wanted to.

Yeah Im curious how that is even possible

It actually gets better if the company is sold - you get paid a lump sum of the whole amount in one go, plus some sweetener on the side. God, I need to FIRE into a startup with IPO/trade sale potential :)

I had it setup to payout in a lump sum but for tax planning purposes I made changes to that so I get paid out over 10 years (2 different plans so I had to coordinate things).  I didn't want it all at once.  I'm not working solely for deferred comp.  I'm working because I still have kids in high school and I want to be a good example to them, and I have an incredible cool job.

[Camarillo Brillo]

I am just curious what these things are that a person with a million dollar per salary would be on cusp of being able to afford?

What could they buy that I couldn't? 

At some point you are just pissing money away to piss money away.

The aggregate of Art budget, wine budget, private social clubs, jet clubs (private plane time share thing), yacht clubs, significant donation so you can sit on some prestigious non-profit board (many have pay to play clause for directors - big boys ask few hundred K a year in donation) and slight bigger/better apartment ($3million + properties are dime a dozen in Chicago)

I'm very close to that salary and I don't want any of those things.  None of that would improve my life one iota.  It would just introduce a lot of stress, with very little upside.  On the other hand, I do have 3 Porsches and I am looking to get a 4th : - )

[chesebert]

I make $800,000 per year.  I save $500,000 between actual savings and tax deferred income (401K and deferred comp plans). 

Of the amount not deferred/saved I net $13,000/month.   From that I spend $2,500/month on housing, $500 on insurance, I give my mom $750, and I blow the rest on living expenses.  We carry no debt other than mortgage and we pay our credit cards off in full each month.  We live a very middle class life and none of our friends would guess we make this kind of jack. We each drive 8 year-old cars, live in a $650,000 house, and live in a LCOL area.

Because we save so much, I no longer even bother with a budget.  I know we are probably blowing at least $5,000/month that probably could be saved through frugality, but what's the point? 

My wife is high maintenance and spends shitloads on her hair, upkeep, nails, etc.  And, she doesn't work. That's probably an opportunity cost of at least $80,000/year.  But, in her defense, she got lucky with a job early in her career and netted about $1,000,000 in stock options that we've also saved.

I am done working in 2 years, when our younger son is just about out of high school.

Why is your deferred comp so high? Are those RSUs or options? public or private security?Any clawback requirement?

What is your networth and proposed post RE spending level?

I feel like I can safely responsibly blow $5k in any month but not every month :)

my deferred comp is so high because I'm eligible for 2 different plans and I take nearly full advantage of it.  Everything is private.  They are non-qual so there is risk.

My net worth is many millions but it probably doesn't matter.  My deferred comp payout gives me $380K pre-tax per year for 10 years after I retire.  I'll probably be dead by then.  Seriously.  I have a hereditary heart disease that I've struggled with since I was young.

We blow at least $5,000/month, but it's probably more.  I know I net $13,000/month and we have a few bills, but the rest simply disappears between my high maintenance wife, kids activities, and some basic recreation.

That is a monstrous deferred comp arrangement. Are you working solely for that deferred comp? I believe you have enough to RE now if you wanted to.

Yeah Im curious how that is even possible

It actually gets better if the company is sold - you get paid a lump sum of the whole amount in one go, plus some sweetener on the side. God, I need to FIRE into a startup with IPO/trade sale potential :)

I had it setup to payout in a lump sum but for tax planning purposes I made changes to that so I get paid out over 10 years (2 different plans so I had to coordinate things).  I didn't want it all at once.  I'm not working solely for deferred comp.  I'm working because I still have kids in high school and I want to be a good example to them, and I have an incredible cool job.

Sounds pretty sweet. I do recognize the need to continue to work (at least some semblance of working) to set a good role model for my kid. I just need to FIRE into something that resembles working (i.e., getting out of the house for x number of hours).

[Chris22]

There are plenty of hobbies that come with a certain level of expense that would be much easier to stomach with a high income; racing yachts, tracking sports cars, flying your own plane, high stakes gambling, anything to do with horses, etc etc.  Yes, you can squeak into many of these creatively on a budget, but a lot of them would be a lot easier with a high income.  Whether that's "pissing away one's money" or not is a matter of perspective.  Add an extra zero to my income and I'm getting a property on the water, probably upgrading my sports car, and maybe getting a nice boat.

[Laura33]

There are plenty of hobbies that come with a certain level of expense that would be much easier to stomach with a high income; racing yachts, tracking sports cars, flying your own plane, high stakes gambling, anything to do with horses, etc etc.  Yes, you can squeak into many of these creatively on a budget, but a lot of them would be a lot easier with a high income.  Whether that's "pissing away one's money" or not is a matter of perspective.  Add an extra zero to my income and I'm getting a property on the water, probably upgrading my sports car, and maybe getting a nice boat.

Yep.  911 Turbo S + as many track days as I could get.  Not exaggerating when I say it was the most intense experience since childbirth.  I could live up to my whole income pretty easily.

[41918]

I was divorced a few years back. I'm in commercial real estate. I gross 450-550k.  I pay about 24,000 a year in child support. I live on about 150 gross maybe 100k net. I pay a ton of tax and put away maybe 200-250k net a year. I waste money on prepared foods, eating out, maid, and travel. I'm 39 years old. Goal is to fire in the next 4-5 years. My income has not always been this high so I'm making up for the divorce and lost time.

[SwordGuy]

We're at $200k in income and that should go up about $35k this year.   

(But it will drop $160 next year when we FIRE...)

I think we're spending about $80k a year.   I don't normally track it all that close because we set saving targets and if we're making them and not racking up debt we don't need to.  About $15k of that is P&I on our mortgage.   If we pay that off in 2 years we'll be able to hit our target of $60k.

Biggest budget busters are:  (1) books, (2) eating out and (3) craft tools/supplies.

Book costs will drop after FIRE because my wife and I won't have to keep up with our professions any more and we'll have time to go to the library for casual reading.
But they'll still be higher than most Americans because we have very specific interests that our local library won't cover in the detail we want.

Eating out will be lower because we'll have more time and less exhaustion.

Craft tools will be lower because we've got most of the tools we want or need by now.   Supplies will eventually go up but we have a backlog of them to work thru that will keep us busy for a goodly while.

   

[Brawndo TQ]

Household income's around 600K. You can't really call me Mustachian at this point since our spending is so high: around $125K/yr. $75K or so to rent and child care. Spending that much does make me feel guilty but it's hard to convince either myself or my wife that we should reel it in (given the income).

When I first graduated college, I was making $80K and living in NYC and still managed to max out my 401K and Roth and put away > $10K in non retirement accounts. So at some point I was very on point (back in '05), but alas, wives are expensive. Babies are expensive. Technically FI with a $2.25 million net worth at 34, but will probably slog it out until 40 or so (ugh).

[obstinate]

I will participate in this exercise.

I'm sure we have all noticed that there is a relationship between earning and spending: The more a person earns the more he or she spends. Of course mustachinanism is all about pulling this relationship apart and realizing that money and happiness are loosely correlated at best within a reasonable range. Although we can argue all day about what the optimum spending level is in order to maximize happiness, I think we can all agree at some point the return on investment diminishes.

Specifically, I believe the science currently says that happiness is related to log income.

I've noticed that extremely high income earning people keep spending above and beyond what I would consider rational, but at the same time I spend more than what many "average income" mustachians would consider rational.

Sure. This is something I interrogate myself about all the time.

A doc I knew who probably had a household income of close to a million (two high earning specialty docs) made the interesting observation that in some ways controlling spending becomes harder at these high but not insane levels because the kind of things that are only available to the ultra rich (like 5-10 million per year range) seem like they are just out of reach, whereas if he was making 100k they wouldn't even enter his thought process. So here is my question-

I know for me there is nothing I want that I could not easily afford. This is not an aspect of why I am still working. If someone handed me a hundred million dollars, I probably wouldn't spend more than $10k of it on myself at this juncture. I could see maybe doing 100-200k on housing upgrades.

What do you spend per year?

Personal capital tells me I spent 138k last year.

How much do you save (nominal or %)?

It looks like I saved about 381k, not including the principle portion of my mortgage payment.

Where are your weak points where you get lazy because of your income?

Definitely eating out, although we are not nearly so bad as some. We have also chosen to live in the most walkable possible location to work and other amenities, which is extremely expensive and represents the majority of our spending.

Where have you found your optimum happiness level of spending?

Hard to answer. I'd say my happiness has not varied much with my spending. One mistake I did make was buying the house I'm currently in, which significantly increased my expenses. It was a mistake because it moved us away from the center of our lives before, and increased our costs. We should have bought in a different location. But now we're fixing that, as mentioned in my previous answer. The house did not end up being a financial mistake because of appreciation, but you can't count on that.

Are you living more frugally than it appears because of a very high cost of living area?

I would say that compared to my friends, I live quite frugally, but I wouldn't consider myself a saint. Non-housing, non-childcare expenses are still around 40k (although this included almost ten thousand dollars of medical expenses last year). But I'd say spending 30k on the rest is quite liberal, and I could be doing much better.

Please feel free to answer in any way that makes sense to you. I'm just so darn curious as to the gigantic spread of spending that makes people happy. When I look at MMM spending it just blows my mind because I would feel very limited and deprived at those levels, yet I know some of my colleagues would look at my spending and feel the same.

I guess we only spend about 5-10k more per year than MMM once you take out the slices he doesn't share with us (childcare and housing -- he owns his place outright). I certainly don't feel deprived, quite the opposite.

[trojans10]

mind sharing what your job title or role is people? you all have me highly interested now bahhhhhhhhhh

[firelight]

Interesting thread! We are in a HCOL and make around 300k pre-tax. Our major expenses (after tax) are rent (36k) and childcare (20k, set to increase to 35k soon). We also spend a bit on eating out (DH eats out every work day for lunch and some of dinner -$500+ per month). Our vacation expenses are also higher since we travel across the globe to see family every year($4000+). We don't buy too many gadgets or expensive clothes, watches, etc. We also give 10% to charity and support MIL upto 10k a year. Rest goes into savings.

Can we cut back? Sure. Would we want to? Not now since this level of spending gives us mental peace and happy marriage insurance (which is worth a lot).

I agree that if you remove housing and childcare expenses, we should be around the same ballpark as MMM's with our discretionary spending since we spend more on some (vacations) but compensate elsewhere (entertainment).

 We don't feel too frugal compared to neighbors since almost everyone we know earns a similar range but the money doesn't go too far in a HCOL area (average houses here are worth 1.2M+). We pay more for the rent for the advantage for a shorter commute since time is more important for us. People around us choose different ways to spend while not being over the top.

[2Birds1Stone]

We are in mid/late 20's with no kids.

Income has been as follows

2012 - $64k
2013 - $68k
2014 - $71k
2015 - $143k
2016 - $235k
2017 - $200k+ (projected)

This entire time our spending has been consistently around $45-50k/yr, as a result our savings rate has gone up from a measly 10-15% to something around 75% last year.

As our stache grows we are a bit more liberal with one off expenses like travel, experiences, etc....but have been optimizing spend in other areas, primarily fixed costs. Our rent last year represented a mere 5% of our gross income, no car payments, no subscription services, low cost health/dental plans.

We enjoy going out to eat a few times a month, do happy hours weekly, and travel as much as PTO allows.

I think the sweet spot for our spending will end up being around $60k/year when we move from current 1 bedroom basement level apartment into something a little bit nicer and above ground.

[boarder42]

we are 30 and pull aroudn 160k in LCOL.  We're tracking to spend 60k this year with our large 450k house - mortgage is 1535 of that.  I've calc'd our non mortgage expensenses around 40k and 10k of that is insurance and property tax. 

[erae]

We pull in somewhere around 300k +/- 15 annually

What do you spend per year?
Feb 2016-Jan 2017 we spent 84k
21 on rent
20 to charity and to subsidize family members
8 on groceries
6 on dining out
8 on car payments, maintenance, and gas for a shared 2015 Hyundai Santa Fe [zero percent interest]
6 on vacation/travel
remainder on shopping, entertainment, hobbies, etc

How much do you save (nominal or %)?
We hit our goal of investing 100k over the same 12 month span mentioned above

Where are your weak points where you get lazy because of your income?
Food. Some of our closest friends are low earners, so we often host dinner parties (with take-out) and pick up the tab at trivia night. We go through periods of a lot of take-out for just the two of us, too, when we're both slammed at work. A local grocery delivery service is building out their prepared foods, though, so that should help once they get their inventory sorted out and are more reliable.

We also hired a cleaning service recently. It was a big point of contention and has been the best $140/month for our marriage

If you consider FU money (and its effects) laziness, I would put that here, too. I can see recently how our income is shifting our decision-making with regard to my job. I bring in about 75 of our 300k annual income and am going through a rough patch at work. New-ish boss is pulling some douchebag moves and my stress level has been high for awhile now. We're talking through my giving notice rather than sticking it out and waiting for smoother waters (that may or may not come). If our incomes were lower - or if my income was a greater percentage of our total income - I'm be finding ways to make it work or not leaving until I had something else lined up. Walking away from 75k/year without a plan is certainly not frugal.

Where have you found your optimum happiness level of spending?
I think it's right about where we are now - we know the people we love are taken care of, most of that travel budget is to spend time with friends and family who live in fun places. We have 1100 square feet with comfortable furnishings in a neighborhood that's beautiful and walkable to running paths and restaurants. I make myself two cups of coffee each morning with fancy beans roasted down the street, we have a reliable car, enough FU money to walk away from a crummy but not horrific job situation, outsource some stuff we can't imagine outsourcing a few years ago (movers, cleaning service), and can smooth things out with money (paying expediting fees for services when needed, pre-paying 3 months rent to lock in the apartment we wanted). Our spending is aligned with our priorities.

It seems that a bit of a bell curve is forming on these posts with a lot of us clustering around 60-90k

Are you living more frugally than it appears because of a very high cost of living area?
Nope - we're living high on the hog in a LCOL area...that we hate, but are milking while we can

[Davids]

How about this question. Let's say someone makes $1M per year after taxes and has $300K of expenses per year. They have a savings rate of 70%. Do we consider them mustachian because they save 70% or are they not mustachian because they spend $300k per year.

[2Birds1Stone]

How about this question. Let's say someone makes $1M per year after taxes and has $300K of expenses per year. They have a savings rate of 70%. Do we consider them mustachian because they save 70% or are they not mustachian because they spend $300k per year.

Who cares? The argument over what is "mustachian" on these boards is getting old.

[prognastat]

How about this question. Let's say someone makes $1M per year after taxes and has $300K of expenses per year. They have a savings rate of 70%. Do we consider them mustachian because they save 70% or are they not mustachian because they spend $300k per year.

I would say it depends on multiple factors. Do they have 300k in expenses large because they have to live somewhere with exorbitant housing costs and generally extremely HCOL to make this income and would getting the same job or at leasts similarly paying job with their experience elsewhere be impossible or have such a reduced income as to make the move not beneficial then it would be a mustachian move as long as the person uses this opportunity to rake in lots of cash quickly and then gets the hell out to a lower cost of living area to FIRE.

If however they are living in an area that is within regular bound of normal in COL considerations then I would say it isn't really that mustachian. I wouldn't say it is bad, but I don't think being mustachian is solely about your savings rate.

[obstinate]

There is basically nowhere in the world that would require someone to pay 300k because of housing costs. Upthread I mentioned that we spend 140k. This is living in the heart of downtown Manhattan, which is one of the most expensive cities in the world.

[prognastat]

There is basically nowhere in the world that would require someone to pay 300k because of housing costs. Upthread I mentioned that we spend 140k. This is living in the heart of downtown Manhattan, which is one of the most expensive cities in the world.

There can very well be some cases that are uncommon places to live and can get very expensive because it is harder to get resources to those locations that may make them very expensive despite not being common HCOL areas. However you are right that these would be extreme fringe cases. In general spending 300k per year is going to be non mustchian for over 99.99% of people's situations.

[honeybbq]

I'll play.

Some things we are frugal on, some things we aren't. I don't track spending or budget, but I do track savings.

HHI ~ $450k

VHCOLA.

Savings
We max our 401/403bs, FSA/HSA, plus one of us has deferred compensation + catchup. He can squirrel away almost 80k a year pre-tax. I think mine is around 40k including matches.
We prepay mortgage extra $1500/month
We put into taxable $4000/month
college savings - around 10k-12k a year

Taxes - we file separately but in the 100k-125k range.

Mortgage: $3500/month + $1000/month taxes + insurance
Daycare: $2000/month
groceries: 1250/month (includes dog food)
College for step kids (a couple thou a year)

This we blow too much money on:
Dogs. Vet bills. Medication
Hobbies: me - races, hockey, etc. Him: car racing. Both: Skiing.
Groceries: I cook almost everything at home, but I like nice ingredients and alcohol. :)
We travel a lot, so we don't hold back on flying places.
Making things easy: I have used instant cart, Amazon delivery, etc.
Dog walker/house cleaner.
parking at work. lol. 13 bucks a day!
cable/phones/internet

Things we do well:
We eat in almost all the time. I like to cook.
Vehicles: I drive a 10+ year old Honda. His car was also purchased used.
Travel: While we fly to great places, we enjoy camping and simple things like hiking.

I think overall we live a very "middle class" lifestyle. Nothing exotic or crazy. I plan on retiring when my kiddo is out of high school. (10+ years from now).

NW is in the 3MM range.