Author Topic: If you made precisely $400,000 a year how would you live differently?  (Read 12489 times)

ThreeWheeler

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Spotted this on Reddit yesterday.
https://www.reddit.com/r/AskReddit/comments/cfbxhz/if_you_made_precisely_400000_a_year_how_would_you/

A lot of questions that boil down to 'spend more' mostly on the usual suspects of cars, homes, vacations, boats etc.

What really caught my eye were a few comments from people who claim to be making about 400k / year.
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If you count my wife and I as a unit, we're pretty close to 400k and started from nothing. To answer that question: it is kind of scary. We can afford a big house and nice cars but as soon as you buy them you get stressed out because although we are crushing it right now, I can't guarantee you I can afford the life I live right now in 2023.

There were also some answers that remind me there are sane people out there:
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My wife and I earn around 1mm a year. The short answer is that if you are smart you don’t live differently. You save a ton and don’t stress about money.

Now of course, at 1mm/year it's super easy to 'save a ton' while still being decades away from FI.

BFive55

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If I were making $400,000/year suddenly:

The first year or so I could try to save as much as I could for a maximum cushion before buying anything. It's $250,000 after taxes so the first year I'd take $150,000 and put it into various retirement/savings accounts.

I'd probably go buy a $600,000-700,000 home with no money down. Then get a Tesla and one other "beater" car like a used truck.

$250,000 in take home pay:

Expenses: $45,000 yearly mortgage+ taxes on a $700,000 home (30 year mortgage)
Home Expenses: Assume like $15,000 for heating/cooling/repairs high end
Savings: $75,000/year  (at 25 years this will give me nearly $4.9 million at 6% interest)
New Car Fund: $5,000/year
College fund: $10,000/year
Vacations: 2 vacations/year with $10,000 total budget

With that stuff it comes out to $150,000 which leaves $90,000 to play around with. I would not send my kids to private school because I dislike private schools.

$90,000 a year to play around with means being able to take the family out to dinner every weekend, to the movies, to a day trip to the theme park a few times every summer, send the kids to a few weeks of summer camp, buy good food, and buy good clothes and presents.

I assume the goal here is to work and not FIRE. Of course with $400,000 a year you could just find a nice place with a $1,5000/month mortgage and throw in a lot more money into savings and retire pretty fast. I think with the $400,000 salary and saving $75,000 of your take home (and there'd be more money with the mortgage interest deduction but whatever) and getting around $180,000 into your child's college savings (plus whatever it makes) would set anyone up pretty good. IMO.

former player

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"Making" implies "earning" which implies "work".  So no.  Premise not accepted.

Cheers.

Just Joe

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We'd pay off our only remaining debt - the house. Yeah, yeah - I know, better to invest but mortgages weigh on us.

Then maybe buy an EV and a lake boat. Vacation/travel more often, more varied destinations. Hire out some home maintenance that needs to be done (painting, minor renovation) that I am putting off.

If the $400K was passive income then obviously retire. Otherwise we'd keep working until FI/RE

Rural

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Spend exactly what we spend now, save the rest, FIRE in a year. Or, better plan, pave our driveway first (~$50K) so my husband won't have to be working on it in his dotage, FIRE in 1.25 years.

Sibley

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Pay off debt, couple house projects. I like my lifestyle.

Uturn

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Easy.  Still live on my $3k/mo and pull the FIRE date in.  Well, the first month would be a bit over $5k so the boat can have A/C. 

Bloop Bloop

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My partner and I currently make about 60% of that figure. Hopefully in a few years we will get there (in Australian dollars unfortunately. I'd estimate at these income ranges 1AUD = 0.6USD because our purchasing power is not nearly as good - our min wage is much higher than yours, so our goods/services cost more).

I don't anticipate anything will change. I've promised myself if I hit my income target of $350k a year I'll save 10% of that each year to buy my "dream car" - 4 years of saving and I'll get there. Otherwise I plan to keep living on combined $45k a year till we have kids then my budget with kids is about $70k a year and that is on the assumption that my partner and I will be making approx $400k a year by my mid 30s.

MonkeyJenga

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My favorite answer from over there:

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I would live more expensively.

then bitch because I wasn't making enough money.

I see they've been hanging out with the Bogleheads. :P

mountain mustache

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I'd buy a $250k house in the town I want to move to, pay it full in cash. Work 5 years, spending around $25k a year as I do now, and retire after the 5 years and never work again.

Parizade

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #10 on: July 21, 2019, 08:21:52 PM »
"Making" implies "earning" which implies "work".  So no.  Premise not accepted.

Cheers.

Yep, if the $400000/yr requires going back to work I'm not interested.

davisgang90

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #11 on: July 22, 2019, 04:24:38 AM »
Assuming it meant going back to work, I'd do two years.  Pay off the mortgage, update/repair the house to our complete liking and fluff up our nestegg .

Then back to Fat(ter)FIRE.

Freedomin5

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #12 on: July 22, 2019, 06:06:32 AM »
If I were making $400k a year, I’d probably be in a high stress job working crazy hours. I probably wouldn’t have time to spend all that money, or I’d be so stressed I’d be stress-shopping. My family relationships would probably suffer, so my life would be pretty miserable. Financially, I’d just sock away 90% of my income, and retire in three years, which isn’t much different from what I’m doing now.

A Fella from Stella

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #13 on: July 22, 2019, 07:01:45 AM »
I'd have a cleaning person. So much of my time is spent cleaning.

I'd have a 50% savings rate after paying off the house.

iris lily

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #14 on: July 22, 2019, 08:17:41 AM »
I would buy multiple houses and more cars.

Well, you asked!

iris lily

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #15 on: July 22, 2019, 08:18:22 AM »
"Making" implies "earning" which implies "work".  So no.  Premise not accepted.

Cheers.

Yep, if the $400000/yr requires going back to work I'm not interested.

Oh well yeah. No way going back to work.

TheGrimSqueaker

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #16 on: July 22, 2019, 10:05:51 AM »
My life would be different because I'd be fielding more appeals from broke relatives. I use the term "relatives" loosely because they're mostly my daughter's bio-family. Never before have I seen a pool of people with more non-working adults of working age who are not also FI. It's like there's a tradition of trying to live off other people. Fuck that.

A Fella from Stella

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #17 on: July 23, 2019, 12:31:50 PM »
My life would be different because I'd be fielding more appeals from broke relatives. I use the term "relatives" loosely because they're mostly my daughter's bio-family. Never before have I seen a pool of people with more non-working adults of working age who are not also FI. It's like there's a tradition of trying to live off other people. Fuck that.

I was asked recently if I ever play Lotto. Yes, but only when the prize is small, like a $2,000,000 state Lotto, because I don't want to be bothered.

I also have a plan if I won a huge jackpot. At the conference where you have to stand there like an idiot and answer questions like "what will you buy," I'm going to introduce representatives from 10 charities (a variety of different ones) and let them say something about their orgs. Maybe they'll get $1,000,000 each.

While they talk, I'm going to beat feet out of there.

Also, I have a very common name, so I'd hire a professional makeup artist to change my appearance and maybe get voice lessons to practice my short speech.

I don't want fame, and I certainly don't want it from being a Lotto winner.

Just Joe

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #18 on: July 23, 2019, 12:59:04 PM »
Fame via lotto sounds like a nightmare. Not unlike being a celebrity. Nope.

biggrey

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #19 on: July 24, 2019, 06:26:56 PM »
Your life is very different because it takes a huge amount of energy, focus and time to earn that amount of money.  Something like an exceptional professional role (top surgeon, very senior lawyer or tax specialist, corporate executive, etc.) or you run/own/partner in a very successful business. 

I spent much of my career doing these things and was at and above that income level for a chunk of it. 

Unless you are really exceptional in terms of self control and discipline, your lifestyle expands because it can.  Especially if you grew up poor and because most of us outsource and create leverage to get to this level.  It might be impossible to avoid it during the scale up.

When it's over, hopefully at a good FIRE age, if you are well grounded, you come back to earth.  You can be rich, free and live simplified.  But, if it got into your head and you come out affected, well then, you will likely live that way the rest of your life.

TheAnonOne

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #20 on: July 25, 2019, 09:49:16 AM »
I already live the life I want, it is more expensive than some here, closer to 50-60k a year PLUS mortgage stuff. I suppose I would FIRE in 2-3 years instead of 5ish. We are moving into a larger home already so I don't expect we would move again.

Our HHI is not really THAT far off from that anyway pushing around 250K, more than we need already. I could see this being a bigger deal if you made under 100k it would life changing.

JAYSLOL

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #21 on: July 29, 2019, 09:16:53 AM »
If I'm assuming I suddenly make 400k/y from the same job I have now (which won’t happen, not even close), and that the money is pre-tax, Id buy the house I’m currently renting and fix it up a bit, spend about the same as I usually do, other maybe a bit more travel.  I’d be FI in 5 years or so, and RE a couple years after that with a very healthy safety margin. 

bluebelle

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #22 on: July 29, 2019, 09:51:14 AM »
I'm afraid I would get more tightly entangled in the OMY syndrome I'm struggling with now.   And well, spendy DH would encourage me working an extra year.   

jinga nation

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #23 on: July 31, 2019, 08:22:29 AM »
My life would be different because I'd be fielding more appeals from broke relatives. I use the term "relatives" loosely because they're mostly my daughter's bio-family. Never before have I seen a pool of people with more non-working adults of working age who are not also FI. It's like there's a tradition of trying to live off other people. Fuck that.
yeah but you gotta keep the pie hole shut and not change a thing so as to not alert the FSA (Free Shit Army).

DaMa

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #24 on: July 31, 2019, 10:23:24 AM »
I'm already FIREd, but it's fairly lean.  That would be like a lottery win for me.   I would spend winters somewhere warm every year, buy a house by the park, and take my 4 kids and their families on an annual vacation (like cruises, Hawaii, Europe, etc.).

JLee

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #25 on: July 31, 2019, 10:29:31 AM »
Well, I would probably splurge and order the upcoming mid-engine Corvette.

Other than that, my life wouldn't change all that much - the timeline of my house projects would be accelerated, but otherwise I'd mostly just save a lot more money.

talltexan

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #26 on: July 31, 2019, 01:44:30 PM »
It's tricky to plan because--proportionally--taxes are a big chunk of the increase. I think the average HH at $100,000 pays about $15,000 a year in taxes, increasing to $400,000 a year would imply $120,000 of next taxes.

bluebelle

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #27 on: July 31, 2019, 02:35:20 PM »
It's tricky to plan because--proportionally--taxes are a big chunk of the increase. I think the average HH at $100,000 pays about $15,000 a year in taxes, increasing to $400,000 a year would imply $120,000 of next taxes.
Be happy you're not in Ontario Canada then.....a taxable income of $400,000 would have to pay $176,305 in taxes for the year 2019....an average tax rate of 44.08%, and a marginal tax rate of 53.35%, I think the tipping point is around $214,000 in taxable income - where the government gets more than HALF of every dollar after that you make......plus the taxes on my taxable investment accounts......
If working for megacorp wasn't enough to want me to retire early and have a lower yearly 'income', a tax rate of over 50% sure is.....2019 is the year where  raise and bonus will bump me into the top tax bracket (barely).....if I thought the air was blue will I was doing my 2018 taxes, it will be for the taxation year 2019.
« Last Edit: August 16, 2019, 08:08:48 AM by bluebelle »

CarolinaGirl

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #28 on: August 16, 2019, 07:56:32 AM »
I’d work for 2 years then Fat Fire!  (My husband wants to keep working)

I *might* put in a pool since it’s been a lifelong dream.  Other than that..life would go on the same.

talltexan

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #29 on: August 16, 2019, 01:18:49 PM »
Also, taxes are higher in Ontario, but I was there a few years ago (London, specifically), and everyone seemed so incredibly happy to be there.

In case anyone asks, I was there in the month of May.

bluebelle

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #30 on: August 16, 2019, 02:36:55 PM »
Also, taxes are higher in Ontario, but I was there a few years ago (London, specifically), and everyone seemed so incredibly happy to be there.

In case anyone asks, I was there in the month of May.
do you know Joe?
https://www.youtube.com/watch?v=BRI-A3vakVg

mm1970

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #31 on: August 16, 2019, 05:03:56 PM »
My life would be different because I'd be fielding more appeals from broke relatives. I use the term "relatives" loosely because they're mostly my daughter's bio-family. Never before have I seen a pool of people with more non-working adults of working age who are not also FI. It's like there's a tradition of trying to live off other people. Fuck that.
Yeah.  My sister's inlaws are like that. So, you know I grew up rural, and "everybody knows somebody who knows somebody" who is gaming the system.  But nobody ACTUALLY knows anybody gaming the system.

Except my sister, who has such inlaws.  It's amazing her husband escaped the cycle.  Guy works like a dog, too hard actually. His body is wrecked.

You know as a couple, we aren't terribly far off that.  If my pay were actually median for what I do (instead of paying the female and shitty company tax), we'd be super close.

But the answer is, it changes nothing.  We still drive old, paid for cars.  We still cook at home.  We just find that our bank account gets fatter every year.  And now my kids are getting cheaper (sure, they eat more but childcare costs are dropping by thousands.  From $20k+ a year a few years ago to $6k this year to probably <$4k next year.)  So, I guess it means that my kids can go to more expensive colleges some day?

Zamboni

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #32 on: August 17, 2019, 06:28:21 PM »
^The kids will start costing more again in the few years before they go to college if you want to let them drive . . .

norajean

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #33 on: August 19, 2019, 05:37:59 AM »
Probably trim back the shopping a bit...

ysette9

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #34 on: August 19, 2019, 12:25:00 PM »
I'm afraid I would get more tightly entangled in the OMY syndrome I'm struggling with now.  And well, spendy DH would encourage me working an extra year.
This thread is interesting to me because on one hand it feels like “hot damn, like winning the lottery, that is a ton of yearly income!”. And on the other hand, we have really been blessed in our career trajectories and we are those people now. Granted, in a HCOL area do our expenses are more than average, but still. Gobs of money. But no fancy vacations yet or Teslas or pools in the back yard. And my burning desire is FIRE or at a minimum FI with part-time work. Is it foolish to want to step away from the firehose of cash as soon as we hit “the number”?

I am close enough that I battle between wanting the extra freedom to not stress and spend more time with my family and doing what I want to do, versus all the things I could do if I worked a bit more. What if I worked one more year and took all of that money and put it on the mortgage, just to see what sort of dent I could make? Or if I gave it to my sister who works harder than us but will never earn as much? Or set up a scholarship with the proceeds at our old junior college? Or set a plush travel spending account for touring the world with my kids? Or remodeled the house to make it exactly how my dream is in my mind’s eye? Or finally took those hang gliding lessons I’ve wanted for years?

See it is such a slippery slope. How do you deal with the endless possibilities?

bluebelle

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #35 on: August 19, 2019, 01:00:15 PM »
I'm afraid I would get more tightly entangled in the OMY syndrome I'm struggling with now.  And well, spendy DH would encourage me working an extra year.
This thread is interesting to me because on one hand it feels like “hot damn, like winning the lottery, that is a ton of yearly income!”. And on the other hand, we have really been blessed in our career trajectories and we are those people now. Granted, in a HCOL area do our expenses are more than average, but still. Gobs of money. But no fancy vacations yet or Teslas or pools in the back yard. And my burning desire is FIRE or at a minimum FI with part-time work. Is it foolish to want to step away from the firehose of cash as soon as we hit “the number”?

I am close enough that I battle between wanting the extra freedom to not stress and spend more time with my family and doing what I want to do, versus all the things I could do if I worked a bit more. What if I worked one more year and took all of that money and put it on the mortgage, just to see what sort of dent I could make? Or if I gave it to my sister who works harder than us but will never earn as much? Or set up a scholarship with the proceeds at our old junior college? Or set a plush travel spending account for touring the world with my kids? Or remodeled the house to make it exactly how my dream is in my mind’s eye? Or finally took those hang gliding lessons I’ve wanted for years?

See it is such a slippery slope. How do you deal with the endless possibilities?
at some point, you have to decide what 'enough' is, how much of your time you're willing to trade for things.   I know I'm working an extra year to give myself peace of mind.  And I'm pretty sure that sometime in my 60s, I'll figure out that I have 'too much', I'll decide then.....but helping out my niece and nephew are on the list, maybe an extended family 'trip of a lifetime'.   The scholarship or donations to charity will probably wait until after my death.

I'm not the one to answer.   I know I have OMY syndrome.

jinga nation

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #36 on: August 19, 2019, 03:22:40 PM »
I know how much and how hard one has to work to make 400k+ a year. A couple of family members make that.
They work very hard, at the expense of missing out on family time. And missing out on time for exercise or activities to maintain health.
They carry a lot of business debt and are responsible for the jobs of their employees.
They do live differently from most people. I'd not want that lifestyle, even though I love them.
I'm a simple guy of simple means who needs little. It's literally "more money, more problems".

magnet18

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #37 on: August 21, 2019, 10:05:06 AM »
I would fix the breaks on my truck sooner instead of putting it off.  (They just pull a bit to the right is all)

...

Yep that's about it

Metalcat

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #38 on: August 21, 2019, 10:27:41 AM »
I would be miserable, overworked, deeply unhealthy, and probably end up divorced.
I already walked away from the kind of career that results in that kind of income, so thanks, but no thanks.

Raenia

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #39 on: August 21, 2019, 11:12:44 AM »
Assuming it was in my current job, with current hours?  Fix a few things at the house sooner/faster/with more professional help and less DIY.  Maybe take a honeymoon (married over a year, no trips since then).  Then, FIRE faster.

If it was the type of job that usually makes that kind of salary?  Quit and go back to my current job (or similar).  Don't need that kind of stress in my life.

Just Joe

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #40 on: August 23, 2019, 08:48:59 AM »
Assuming it was in my current job, with current hours?  Fix a few things at the house sooner/faster/with more professional help and less DIY.  Maybe take a honeymoon (married over a year, no trips since then).  Then, FIRE faster.

If it was the type of job that usually makes that kind of salary?  Quit and go back to my current job (or similar).  Don't need that kind of stress in my life.

What Raenia said.

I've watched middle aged people endanger their health for their careers. Middle aged people with medical problems of an older person. Also suffering can be children and marriage.

seattlecyclone

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #41 on: August 23, 2019, 11:32:40 AM »
I would be miserable, overworked, deeply unhealthy, and probably end up divorced.
I already walked away from the kind of career that results in that kind of income, so thanks, but no thanks.


Yes, this. I think you need to take a look at what kinds of jobs actually result in this level of compensation. Getting to that level is one thing, staying there is another.

I just FIREd from a software engineering job. I know full well what it takes to earn $400k in that industry, less so in others. To get a $400k base salary, the most common way is to be an upper-level manager at a big company, probably with at least 100 highly-paid people under you. Those folks have their days packed wall-to-wall with meetings, making expensive decisions in most of them. They must surely put in quite a few hours outside the office keeping up with everything they need to do to prepare for said meetings. Meanwhile there are a dozen people gunning for their job, so they can't make too many mistakes with those expensive decisions they have to make about how their highly-paid underlings will spend their time.

Sounds absolutely exhausting.

Add in equity pay and it's not too farfetched to get $400k as a mid-level manager in a big tech firm, maybe with only a couple dozen people working for you. Your day is almost as full of meetings, and the pressure is almost as great. Not only do you need to make sure your team executes on what you've told them to do, but you need to decide on impactful things for them to do, and also advocate with your upper-level management for the impactful work to be tossed your team's way in the first place. Fail at any of these things and you won't be getting the stock grants you need to keep your total compensation at the $400k level going forward.

If you're someone who would rather spend some time writing code (as opposed to organizing teams of people to write code), your best bet at $400k is probably to join a pre-IPO company and get lots of stock options. This also isn't easily sustainable. You might get $400k for a few years after the IPO, but once those options vest you'll need to correctly identify and move on to the next big thing. Even then you'll be taking a pay cut until your next employer has an IPO and your stock vests there.

While earning $400k is possible, you really have to work for it, and keep working for it, and have a fair bit of luck too. The quote in the OP about the family worrying about whether they'd be able to maintain their new lifestyle in five years is really quite reasonable. If you're making $400k and your standard of living depends on maintaining that income indefinitely, there's a pretty high chance you're going to have a bad time.

Bloop Bloop

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #42 on: August 23, 2019, 05:38:54 PM »
In a lot of professions you can make $400k without sacrificing your health - but you have to be willing to put in time, which a lot of us aren't. The average income in my profession for those with 20+ years of practising experience exceeds $400k but god knows I would never work for that long.

norajean

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #43 on: August 23, 2019, 06:03:30 PM »
I would be miserable, overworked, deeply unhealthy, and probably end up divorced.
I already walked away from the kind of career that results in that kind of income, so thanks, but no thanks.


There are a lot of ways to make $400k per year. Some are difficult and others are pretty easy (although usually less obvious).  It is also possible to do it in a megacorp and end up in a quiet staff job with minimal responsibilities and plenty of free time, although it usually takes some time and effort to get there.

ysette9

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #44 on: August 23, 2019, 08:50:07 PM »
As an individual making $400k seems like it comes with some level of stress and responsibility, and plenty of invested time to get to that point. As a household it is much easier between two professionals.

seattlecyclone

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #45 on: August 23, 2019, 09:17:57 PM »
Sure, $200k x 2 is probably easier to attain and maintain than $400k x 1. Either way, spending the whole $400k is super duper unwise. Making $400k gives you a ton of choices, but only if you spend like a normal person. If you've already taken out enough mortgages and car loans to make a continued $400k income a necessity, the idea of (for example) having kids and one spouse cutting back on work responsibilities to make that work better isn't an option anymore.

Sibley

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #46 on: August 31, 2019, 07:57:50 PM »
Pay off debt, couple house projects. Buy a very specific piece of property, tear down 2 buildings, and plant about 100 trees. I like my lifestyle.

I'd like to modify my answer.

Taran Wanderer

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #47 on: September 01, 2019, 10:52:45 PM »
If I made $400,000 per year, I would retire all debt as quickly as possible and avoid taking on any new debt at all. I’m finally realizing that with a decent income and today’s low interest rates, a person can easily afford fairly small payments on an immense amount of debt. While the payment is manageable at current incomes levels, if it for a long term loan like a 30-year mortgage, any effort to accelerate the principal payments is a major undertaking.

For example, the newly earning $400k person could easily save up $200k in a couple of years for a down payment on a million dollar home. Borrow $800k at 4%, and the monthly payment is $3,820. (Adding taxes and insurance takes it to $5,000... at least.). $5,000 or even $6,000 per month seems pretty affordable on a gross of $33k a month, or even a net of $20k per month. But let’s say you want to pay that house off in 5 years because you’re not sure the huge annual salary is going to last forever. Now you have to pay $14,733 per month (not including taxes and insurance). With $20k take-home pay, maybe it’s still doable, but good luck building your savings in any meaningful way at the same time.

Big income allows you to qualify for big debt. If you want to work forever to slowly chip away at that debt, that’s one thing. If you want to retire early, it’s probably best to avoid the big debt in the first place.

Redhotdog

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #48 on: September 08, 2019, 03:55:01 AM »
We make more than that (nearly double). We save 80pct of takehome.The most important part is to forget about how much you make and hence avoid lifestyle creep. Esp as we rent in crazy HCOL area. That costs 4k/mo, ouch. We may actually downsize from the 1500 sqft to 1000 further away, saving 1500/mo, not that we cant afford it here but I get so angry at 50 THOUSANDS per year thrown out the window.
The only other thing outside norm is travelling, experiences and skiing, we spend 1k/mo on that. But that is it, one car, 10 yo. I shake my head when I hear people talk abort new cars, designer clothes, eating out, electronics, furniture/stuff, expensive alcohol/wine.. we really try to minimize.
We focus on living healty, eating mainly vegetarian, lots of sports and to get outside whenever we can. Investing in your health is underrated, what good is it to make a lot of money or FIRE if you are in bad health. So good healthcare and to spend time on the trails instead the couch is best advice I can give, funny though how that is overlooked esp by us high-earners.

ender

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Re: If you made precisely $400,000 a year how would you live differently?
« Reply #49 on: September 08, 2019, 07:08:28 AM »
In all honestly, if my income jumped up that much we would probably save more and give away a ton more.

We'd probably spend more on housing as we've talked some about wanting to build a dream home on an acreage someday anyways. If we had that kind of income we could save enough cash to do it in about a year or two anyways.