Author Topic: Portfolio making more than salary question  (Read 1140 times)

merlin7676

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Portfolio making more than salary question
« on: June 07, 2018, 08:22:43 AM »
This is probably a dumb question, but curious what people mean when they say "my portfolio makes more money than I make in salary"?

If, for example, someone makes a 50K salary a year but their investments make 60K a year, then that makes sense.

But, to dig deeper, how is that defined?  Is it just 50K gross, or what is left (net-after taxes, 401k contributions, health care, ect).

As for investments making more money, would that just be the dividends from 401k and vtsax or are you looking at dollar amount in accounts on jan 1 and dec 31 of a given year?  What about contributions you've make throughout the year into those accounts? Are those included or subtracted out?

I'm sure everybody has their own way of looking at this but I'm just curious how one would go about calculating this to make the statement true?

Spitfire

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Re: Portfolio making more than salary question
« Reply #1 on: June 07, 2018, 08:29:33 AM »
For me it would be dividends and capital gains for the year vs gross salary. I would not include contributions.

Miss Piggy

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Re: Portfolio making more than salary question
« Reply #2 on: June 07, 2018, 08:32:58 AM »
"I'll take overthinking things for a thousand, Alex."   :)

Seriously, you are overthinking this. That said, in my mind, if my salary is $100,000 (pre-tax, pre-401(k), etc.) and my investments earned $101,000 (without me adding more to the accounts on my own), then my investments are earning more than I am.

merlin7676

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Re: Portfolio making more than salary question
« Reply #3 on: June 07, 2018, 08:56:49 AM »
"I'll take overthinking things for a thousand, Alex."   :)

Seriously, you are overthinking this. That said, in my mind, if my salary is $100,000 (pre-tax, pre-401(k), etc.) and my investments earned $101,000 (without me adding more to the accounts on my own), then my investments are earning more than I am.

I am not overthinking it thank you very much. I'm not even close to reaching that point. I was just curious is all.