Are most of the members here high earners?

[highwayskies]

Chiming in for the modest-earners. 

(Excluding real estate, which, until we move out of our SFH will be a wash in terms of returns,) I earn around $30k, my wife earns in the $30's too.  I hear you about fleeting feelings of envy, reading about people with more coming in, but we are quite happy, I'm my own boss, I have lots of control over my time, and we really know how to live cheaply.  We'll retire in 2020 if my current plan comes together.

[teen persuasion]

Just to make any other low earners feel less alone:  We qualified for the EITC this year. (Housing is provided gratis by husband's employer, so we are much better off than that sounds.) He's a teacher, I made under $10K working from home (and spent most of that on day care--two toddlers, part-time child care saves my sanity).

We qualify for the EITC, too, and have for years. In fact, I actively work on maximizing that and other credits, since I use our refunds to fund our Roths.

We are late to the FIRE party; we've always been frugal, by necessity. DH is a teacher, and I was SAHM to our 5 kids for nearly 20 years. In the early years I used the refunds and any found money to pay down our mortgage. About 5 years ago things began to align: youngest entered school, oldest went to college, mortgage gone, I returned to work part time. That's when I began working toward having DH max his 401k and opened Roths for both of us. Even with two kids in college, we are saving 50%. Of course, low incomes are useful for financial aid purposes. I try to make the best use of everything at my disposal.

[Roland of Gilead]

It isn't all roses at higher incomes.  70 hour weeks, long commutes, pretty high taxes ($77,000 in fed, state, medicare, and SS).

I am very much looking forward to zero hour weeks and living on $30,000 to $40,000.

[Peter]

I'll chime in for the high earners, then.

I have no idea how you folks that make 40k/year manage to save so much; it's DAMN impressive. I netted 95k last year, spent 27k, and had the luxury to save 68k.

If I made 40k, 35k after tax, and wanted to save half so I could retire in 15 years I'd need to only spend 17k. I don't think I could sustain that level of spending for more than a few years.

[Roland of Gilead]

The wife and I don't make that combined (for our base salaries - we do extra work like summer school and tutoring that push us up there, but still not even close for our individual income).

Yet we'll ER in our early 30s with a 50k+ annual income.

As others have said, it's all about your savings rate.  We don't make a lot, but we save nearly all of it.

I can't see you having much of a pension or SS check waiting if you retire in your early 30s.  If you started seriously working right out of college, that is only 10 to 12 years paying into either of those systems which would be a pretty small credit.

Did you really manage to save enough to draw $50,000 a year for the next 40+ years on a sub $100,000 income in 12 years?

[arebelspy]

The wife and I don't make that combined (for our base salaries - we do extra work like summer school and tutoring that push us up there, but still not even close for our individual income).

Yet we'll ER in our early 30s with a 50k+ annual income.

As others have said, it's all about your savings rate.  We don't make a lot, but we save nearly all of it.

I can't see you having much of a pension or SS check waiting if you retire in your early 30s.  If you started seriously working right out of college, that is only 10 to 12 years paying into either of those systems which would be a pretty small credit.

We don't pay into social security, so we'll have $0 of that.  Our pensions will be quite small due to the fact that inflation will erode them over the next few decades until we take them (they'll have a COLA adjustment after that, but will be based on our today's income, which will seem quite small at that time by comparison).  So neither of those are factored into our plan/

Did you really manage to save enough to draw $50,000 a year for the next 40+ years on a sub $100,000 income in 12 years?

Yes.  We graduated college in 2007, current plan is to FIRE two years from now in 2016. It'll actually it'll end up being closer to 6 years from net worth 0 (in 2010) to FI (due to some colossal mistakes - including a six figure one in 08/09) - our first 3 years were net negative.

Our income will be more than 50k.  But it also will be higher than a traditional SWR, due to rental returns.

Note that our base salary has been roughly 36k-42k annually each (this final amount is only recently, and it's only that high because we both have Master's Degrees and multiple steps up the experience ladder) but we've done other things to earn money.  If you've read my posts you know I spend a lot of time on Real Estate and have made money at that, and other side gigs.  It's a lot of fun though.  :D

[Ottawa]

It isn't all roses at higher incomes.  70 hour weeks, long commutes, pretty high taxes ($77,000 in fed, state, medicare, and SS).

I am very much looking forward to zero hour weeks and living on $30,000 to $40,000.

Not true (necessarily)!  We work 75 hours per week (COMBINED!), each bike 5/6 miles each way (all year round).  Taxes are high..but not that high - for instance:

2007
Gross = 146,925
Net = 113,299
Total taxes ~ 22.9%

2013
Gross =  267,005
Net = 212,578
Total taxes ~ 20.4%

In general 18% - 24% depending...on a number of factors - such as income sources (cap gain/eligible divs), deductions etc...

I am very much looking forward to zero hour weeks and living on $30,000 to $40,000

I agree with this!!  30K would be our base...40K would be the deluxe travel package!

[Roland of Gilead]

Yes.  We graduated college in 2007, current plan is to FIRE two years from now in 2016. It'll actually it'll end up being closer to 6 years from net worth 0 (in 2010) to FI (due to some colossal mistakes - including a six figure one in 08/09) - our first 3 years were net negative.

Our income will be more than 50k.  But it also will be higher than a traditional SWR, due to rental returns.

Ok, that is pretty darn amazing.  We also started our FIRE plan around 2007 and started tracking our net worth and really saving.  We will reach FI in 2015 at age 45 so are quite a bit older than you.  I don't know real estate so we have just been putting $120,000 a year into the stock market and crossing our fingers.  So far so good.   I am shooting for $50K with a 3.5% SWR but we may end up only spending $35K to $40K like we do now.

[awakenedsoul]

I've lived on approximately $20,000. for most of my adult life. I did have a year when my income went up 33% and I spent it all. (I wasn't aware or responsible with my spending at that stage of my life.) I've not been a high earner, but have always kept my expenses low. I still make it a goal to live on half of my budget. I try to live on $1,000. a month. I don't, but it keeps me in check. I've backed into retirement unexpectedly. I inherited some money, and I have a 567 square foot house. I bought it for $89,500. My dad taught me to only live on the interest of any money you inherit. Because my home has increased in value, I've been able to achieve that on paper. I read books on how people survived in the Depression and I use their techniques. I have a nice plot of land and I grow all types of fruit. (That was my biggest grocery expense.) I knit my own clothes, but sell a lot of what I make. I turned the hobby into a home based business. Quality yarn is expensive, so this way I stay on top of those costs. This has also almost eliminated what I spent on clothes. Anything else I buy brand new at the Salvation Army. (except shoes.) They have a lot of really nice clothes donated from stores that have gone out of business. The tags are still on them. I take care of my things so they last forever.
When you retire, your expenses really drop. No more commute, or need for work clothes. Your car needs less oil changes, repairs, etc. I ride the bike a lot, and use the car once a week.  I mend my clothes, darn my socks, and cook everything from scratch. I like doing all that stuff.
I've found that the saying "Money follows money" is true. I also believe debt creates debt. The formulas work, regardless of your income. Low earners spend a lot less in taxes and (in America,) health insurance.         

[GuitarStv]

What do you consider a high earner?

An individual income in the 90's or higher.

OK, then HEEEELLLLLLL no.  Not a high earner.

[NinetyFour]

Just curious, arebelspy, when you said that your combined incomes (yours and your wife's) are less than $90K, were you including your rental income?

[arebelspy]

Just curious, arebelspy, when you said that your combined incomes (yours and your wife's) are less than $90K, were you including your rental income?

As I said, that is our base salaries.

Rental income should be no more included than dividend income is included in one's income.  It's return on capital, not labor.

I do count a wage for myself for the properties I self-manage that is a return on labor, but that's side-gig income, not counted as part of our base salaries.

[Forcus]

We are DINK's, and will be for the foreseeable future. We gross around 150k / yr, I am 32 and she is 27. We've been incredibly lucky / fortunate to have the jobs we do. I totally agree that high income is NOT a cure-all for savings. It makes it easier, by definition, but I have less nice stuff now then I did when we grossed less than half what we do now (this would be pre-MMM). We could easily expand our spending to match the latest income so it takes a fair amount of restraint to keep from doing so.

[NinetyFour]

Just curious, arebelspy, when you said that your combined incomes (yours and your wife's) are less than $90K, were you including your rental income?

As I said, that is our base salaries.

Rental income should be no more included than dividend income is included in one's income.  It's return on capital, not labor.

Got it.  Thanks.

[Nothlit]

We have an income in early $80k but it does seem like there are a lot of higher earners on here.

Why are there so many engineers on here?:) I'm from the UK and don't really understand the cultural significance of being an engineer in the US.

Many software developers or computer programmers call themselves engineers even though "software engineering" has not historically been a licensed professional engineering discipline in the U.S. (although that is beginning to change).

[Carrie]

One income of less than $90k (base in the upper $70's), one income of $0-$10k, other small sources come in sometimes - child support (which ends next month), small disbursement from a small trust (which will be tapped dry in just a couple of years).   So while we're not high earners, we cobble together enough to pay down our mortgage and save for retirement.  We have three kids, will be having another baby a week before the oldest leaves for college this summer. 

I keep thinking my DH is underpaid for what he does -- seems a lot of folks in his line of work are making well into the six figures.  We do live in a poor state with a fairly low COL, so the money he does make seems to go farther than if we lived in an IT hotspot.  Eventually I'd like for him to be able to telecommute so that we can live in an even lower COL area. 
Our biggest expense (the house & property taxes) is fairly low due to putting a lot down when we bought, everything else we control by our habits (utilities/groceries), so I feel like we make the income we have go a long way.

[Cheddar Stacker]

We could easily expand our spending to match the latest income so it takes a fair amount of restraint to keep from doing so.

+1

This can certainly be difficult. I think of these as levels of saver/spender: mustachian, typical consumer who doesn't mind saving a bit, typical consumer who loves to spend all they have, hyper consumer who needs the best of everything and is willing to finance everything, and I'm sure many other levels in between.

An increasing wage and a wife somewhere in that typical consumer range led our family to lifestyle inflation for many years. It can be hard for me to justify not buying something my wife wants for the family when we clearly have enough money to do so. It's a tough balance, but we've reached our Goldilocks family spending level over the last 6 months. It seems to be working quite well.

[Russ]

We have an income in early $80k but it does seem like there are a lot of higher earners on here.

Why are there so many engineers on here?:) I'm from the UK and don't really understand the cultural significance of being an engineer in the US.

Many software developers or computer programmers call themselves engineers even though "software engineering" has not historically been a licensed professional engineering discipline in the U.S. (although that is beginning to change).

you don't have to be a licensed PE to be an engineer though

[libertarian4321]

Am I the only electrical engineer around here who makes under $50k?

Perhaps not, but I'll bet I'm the only engineer around here who makes under $50k and loves his job.

I'm an engineer, and make something like $86k/year, I think (I really never look at my paychecks- but that's probably pretty close), which is far below average for someone with my education and experience.  I've been doing this for the better part of 28 years (other than a 4 year semi early retirement).

But that's fine, because I work for a great company that pretty much leaves me the Hell alone, which is the way I prefer to work, so it's worth it.

There are far more important things when it comes to work than the size of the pay check.  Once your needs are covered, is it really worth being miserable for an extra $10k, $20k, or $30?  I don't think so.  I could go out tomorrow and get a job earning well over $100k, but I wouldn't even consider doing it.

[SisterX]

Seriously low earner here.  Family of 3, husband in school for a second degree.  I'm the "breadwinner", bringing home (after taxes and whatnot) about $27,000/year PLUS free tuition for the husband.  He's got a part-time student job (about 12 hours a week) and an even more part-time job on weekends (anywhere from 3-7 hours a weekend, usually around 4 or a little less) that gives him free coffee and a free flatbread each shift.  :)  Total, we currently bring home about $30,000, which is only slightly more than we have left to pay for student loans.
And rent is $1000/month in our area.  BUT, we don't have to pay for childcare.  :)
So, yeah.  You're not the only one thinking, "Holy shit, if we made that kind of money we'd be on easy street!"  I'm reminding myself that when we have made more money it's been really, really easy for us to save it all, and that we're developing good habits for when we're making more money in the future.

[anisotropy]

We could easily expand our spending to match the latest income so it takes a fair amount of restraint to keep from doing so.

+1

This can certainly be difficult. I think of these as levels of saver/spender: mustachian, typical consumer who doesn't mind saving a bit, typical consumer who loves to spend all they have, hyper consumer who needs the best of everything and is willing to finance everything, and I'm sure many other levels in between.

An increasing wage and a wife somewhere in that typical consumer range led our family to lifestyle inflation for many years. It can be hard for me to justify not buying something my wife wants for the family when we clearly have enough money to do so. It's a tough balance, but we've reached our Goldilocks family spending level over the last 6 months. It seems to be working quite well.

+1

ya, definiately a huge range. everyone's situation is different. ultimately it's all about the saving rate.

[Exflyboy]

We have an income in early $80k but it does seem like there are a lot of higher earners on here.

Why are there so many engineers on here?:) I'm from the UK and don't really understand the cultural significance of being an engineer in the US.

Many software developers or computer programmers call themselves engineers even though "software engineering" has not historically been a licensed professional engineering discipline in the U.S. (although that is beginning to change).

Actually that depends.. The State of Oregon is now imposing penalties on folks who call themselves engineers even if they have engineering batchelor's degrees and no PE license!!!

I think this is way overkill (even though I do have a PE license).. No degree yes, but no PE and not being able to use the term "engineer" is stupid IHMO.

Frank

you don't have to be a licensed PE to be an engineer though

[skunkfunk]

We have an income in early $80k but it does seem like there are a lot of higher earners on here.

Why are there so many engineers on here?:) I'm from the UK and don't really understand the cultural significance of being an engineer in the US.

Many software developers or computer programmers call themselves engineers even though "software engineering" has not historically been a licensed professional engineering discipline in the U.S. (although that is beginning to change).

you don't have to be a licensed PE to be an engineer though

Around here you can't call yourself an engineer or do "engineering" without a PE (or supervision by a PE). You will get fined by the board and given a cease and desist order. They actually do it, too, and tell everyone about who they wrist-slapped in the newsletter.

Edit: I suppose I should clarify that engineering work is stuff that only a PE is supposed to do. If you are a programmer and call yourself a software engineer, they aren't going to care. For that matter, an electrical engineer working for a manufacturer isn't required to have a PE despite probably being more technically demanding a job than the PE specifying his products. So, whatever I guess.

[fantabulous]

Many software developers or computer programmers call themselves engineers even though "software engineering" has not historically been a licensed professional engineering discipline in the U.S. (although that is beginning to change).

Related, "Engineer" as a title is pretty common for non-development IT roles as well. As an example, I am a "systems engineer" (not to be confused with the actual engineering discipline) as I primarily design IT systems. I even have an IT certification with the word "engineer" in it. I refer to myself as a fake engineer.

[greaper007]

We have a household income north of $110,000, but it took until my wife was 37  (she's currently 37) to really break $75,000 and I'm a stay at home dad.    Add to that mondo student debt and other debts we incurred while working in seriously low paying jobs and starting a business and it really doesn't feel like we make 6 figures.

Now that we're finally making money, I'm spending less than ever (being at home really helps in that arena).    Now I feel like we have to catch up to the 10+ years we've been out of school making crap wages.    Sometimes I wish I had just been able to make $40,000 out of school and had modest raises over the years instead of grabbing for the brass ring.   We'd probably be in a better financial position right now.

[Roland of Gilead]

Edit: I suppose I should clarify that engineering work is stuff that only a PE is supposed to do. If you are a programmer and call yourself a software engineer, they aren't going to care. For that matter, an electrical engineer working for a manufacturer isn't required to have a PE despite probably being more technically demanding a job than the PE specifying his products. So, whatever I guess.

I worked as an electrical engineer before getting my degree for several years.  I didn't lie to the company, I just showed them five of the boards I had designed, including a RF amplifier for a CO2 laser and a brushless servo controller.  I also asked a few questions in their interview that the resident electrical engineer who was leaving couldn't answer (that probably was not a wise idea in hindsight).

[dragoncar]

We have an income in early $80k but it does seem like there are a lot of higher earners on here.

Why are there so many engineers on here?:) I'm from the UK and don't really understand the cultural significance of being an engineer in the US.

Many software developers or computer programmers call themselves engineers even though "software engineering" has not historically been a licensed professional engineering discipline in the U.S. (although that is beginning to change).

you don't have to be a licensed PE to be an engineer though

Around here you can't call yourself an engineer or do "engineering" without a PE (or supervision by a PE). You will get fined by the board and given a cease and desist order. They actually do it, too, and tell everyone about who they wrist-slapped in the newsletter.

Edit: I suppose I should clarify that engineering work is stuff that only a PE is supposed to do. If you are a programmer and call yourself a software engineer, they aren't going to care. For that matter, an electrical engineer working for a manufacturer isn't required to have a PE despite probably being more technically demanding a job than the PE specifying his products. So, whatever I guess.

Don't we have an engineering thread for this type of discussion?  I've never heard of anyone fined for calling themselves an engineer.  Nobody here is calling themselves a PE or claiming to have a license, but that doesn't make them not an engineer.

Afaic, if you have an engineering degree or get paid as an engineer, you are an engineer.  That's a very common title for non-licensed engineers at real engineering firms

[taekvideo]

I'm one of the below average earners here... I make about $16k/year, working 30hrs/week for about 40 weeks a year (online math tutor).
Also going to be renting out rooms in my new-to-me house soon which should add about $8500 more a year in gross income.
I'm in a very low COL neighborhood though, and don't have a car, and practice very good Mustaschian/ERE habits so I should be able to retire sometime in my late 30's or early 40's regardless of low income.
And in the meantime I absolutely love my job (see Life is Awesome!).

[skunkfunk]

We have an income in early $80k but it does seem like there are a lot of higher earners on here.

Why are there so many engineers on here?:) I'm from the UK and don't really understand the cultural significance of being an engineer in the US.

Many software developers or computer programmers call themselves engineers even though "software engineering" has not historically been a licensed professional engineering discipline in the U.S. (although that is beginning to change).

you don't have to be a licensed PE to be an engineer though

Around here you can't call yourself an engineer or do "engineering" without a PE (or supervision by a PE). You will get fined by the board and given a cease and desist order. They actually do it, too, and tell everyone about who they wrist-slapped in the newsletter.

Edit: I suppose I should clarify that engineering work is stuff that only a PE is supposed to do. If you are a programmer and call yourself a software engineer, they aren't going to care. For that matter, an electrical engineer working for a manufacturer isn't required to have a PE despite probably being more technically demanding a job than the PE specifying his products. So, whatever I guess.

Don't we have an engineering thread for this type of discussion?  I've never heard of anyone fined for calling themselves an engineer.  Nobody here is calling themselves a PE or claiming to have a license, but that doesn't make them not an engineer.

Afaic, if you have an engineering degree or get paid as an engineer, you are an engineer.  That's a very common title for non-licensed engineers at real engineering firms

From my state board's statutes -

"In order to safeguard life, health and property, and to promote the public welfare, the practice of engineering and the practice of land surveying in this state are hereby declared to be subject to regulation in the public interest. It shall be unlawful to practice or to offer to practice engineering or land surveying in this state, as defined in the provisions of Section 475.1 et seq. of this title, or to use in connection with any name or otherwise assume or advertise any title or description tending to convey the impression that any person is an engineer, professional engineer, land surveyor or professional land surveyor, unless such person has been duly licensed under the provisions of Section 475.1 et seq. of this title. The practice of engineering or land surveying shall be deemed a privilege granted by the state through the State Board of Licensure for Professional Engineers and Land Surveyors, based on the qualifications of the individual as evidenced by a certificate of licensure, which shall not be transferable."

http://www.ok.gov/pels/Regulations/Statutes/index.html

And yeah, they do actually hit people with fines for it. They are usually firms that had their licenses lapse or contractors trying to get away with not having a proper engineer. By that definition I'm a designer, not an engineer, though colloquially I still tell people I'm an engineer.

[Roland of Gilead]

I'm one of the below average earners here... I make about $16k/year, working 30hrs/week for about 40 weeks a year (online math tutor).
Also going to be renting out rooms in my new-to-me house soon which should add about $8500 more a year in gross income.
I'm in a very low COL neighborhood though, and don't have a car, and practice very good Mustaschian/ERE habits so I should be able to retire sometime in my late 30's or early 40's regardless of low income.
And in the meantime I absolutely love my job (see Life is Awesome!).

Hmmm, that is some pretty good coin for being a online tutor, considering you could do that while you are "retired".  I wonder if there is a possibility to tutor for software programmers (wife) or electrical engineering (me)?

[skunkfunk]

Hmmm, that is some pretty good coin for being a online tutor, considering you could do that while you are "retired".  I wonder if there is a possibility to tutor for software programmers (wife) or electrical engineering (me)?

I know some people who would pay for tutoring if it helped them pass the electrical PE.

I would if I fail it once.

[NinetyFour]

I'm one of the below average earners here... I make about $16k/year, working 30hrs/week for about 40 weeks a year (online math tutor).
Also going to be renting out rooms in my new-to-me house soon which should add about $8500 more a year in gross income.
I'm in a very low COL neighborhood though, and don't have a car, and practice very good Mustaschian/ERE habits so I should be able to retire sometime in my late 30's or early 40's regardless of low income.
And in the meantime I absolutely love my job (see Life is Awesome!).

Do you mind sharing how you got into this gig?  I'd be interested in possibly transitioning to something like this when I retire.  Thanks!

[dragoncar]

From my state board's statutes -

"In order to safeguard life, health and property, and to promote the public welfare, the practice of engineering and the practice of land surveying in this state are hereby declared to be subject to regulation in the public interest. It shall be unlawful to practice or to offer to practice engineering or land surveying in this state, as defined in the provisions of Section 475.1 et seq. of this title, or to use in connection with any name or otherwise assume or advertise any title or description tending to convey the impression that any person is an engineer, professional engineer, land surveyor or professional land surveyor, unless such person has been duly licensed under the provisions of Section 475.1 et seq. of this title. The practice of engineering or land surveying shall be deemed a privilege granted by the state through the State Board of Licensure for Professional Engineers and Land Surveyors, based on the qualifications of the individual as evidenced by a certificate of licensure, which shall not be transferable."

http://www.ok.gov/pels/Regulations/Statutes/index.html

And yeah, they do actually hit people with fines for it. They are usually firms that had their licenses lapse or contractors trying to get away with not having a proper engineer. By that definition I'm a designer, not an engineer, though colloquially I still tell people I'm an engineer.

Yeah, that's kinda my point -- they aren't fining every Seagate employee for putting "Staff Engineer" on their resume.  But if you are handing out cards saying "Bob Smith, Engineer" and soliciting bridge design jobs, then that would be a problem.

Anyways, the fact that you don't have a license to practice engineering does not imply that you aren't an engineer.  I don't have a license to drive my car, but when I get behind the wheel I'm a driver nonetheless.

[face-punched]

Low earner here. My wife and I together will be lucky to break 35k this year together. We are just getting started, but we are on pace to be able to knock out about a third of our 30k debts this year and then work in FIRE. I am joining the Navy to have better earnings, but long story short take heart. This stuff works, from poverty to wealth level, it works just the same. The only difference is how fast. :)

[Albert]

It's all about savings rate for sure, but let's not kid ourselves - it's so much easier and more enjoyable to do it with a high income. I've started my independent life with a scholarship of ca 18k, now I get low six figures (a single guy with no debt). Big difference in lifestyle even though I managed to save a bit of my scholarship money too...

[gobius]

My fiancee and I make about $110K + 401K matches so we, together, would be high earners.  We have saved a decent amount but not as much as I would like; we have improved greatly though and will improve even more.

I've felt like a relatively low earner at times on here as well, so don't feel bad.  I remember reading one where a girl said she made $110K/year and her husband made even more.  Sometimes it seems a lot of high earners ask for financial advice.  We aren't doing bad by any means but I have to tell myself it isn't a race when I see people on here with ridiculously high NW's.

[szmaine]

45k here and not FIRE either, 47yo...but this is a great site for frugality and so much more...I'm sure what I learn here will help me maximize our personal best.

[Gen Y Finance Journey]

Here's something to think about:

My husband and I are both frugal, but we have very different perspectives on people who spend a lot of money. When I see someone with a $50k car or a massive house, I assume they're probably living at or above their means. My husband assumes they're rich. As a result, I'm not envious in the slightest of people will all that stuff, but my husband is.

Could the same type of shift of perspective be applied to saving? Instead of assuming that people who save a lot of money must make a lot of money, can you focus on the idea that people who save a lot of money are just really good at not spending it?

By focusing on the behavior of others instead of their income, you're letting go of all that cynicism and envy, and you have the opportunity to learn from them. Besides, as others have pointed out, it's the people on here who don't have high incomes that are the true badasses. They're the ones I want to learn from.

[Roland of Gilead]

I don't get envious of high earners but I do admit a little envy for people who luck into a big inheritance.

[Exflyboy]

Here's something to think about:

My husband and I are both frugal, but we have very different perspectives on people who spend a lot of money. When I see someone with a $50k car or a massive house, I assume they're probably living at or above their means. My husband assumes they're rich. As a result, I'm not envious in the slightest of people will all that stuff, but my husband is.

Could the same type of shift of perspective be applied to saving? Instead of assuming that people who save a lot of money must make a lot of money, can you focus on the idea that people who save a lot of money are just really good at not spending it?

By focusing on the behavior of others instead of their income, you're letting go of all that cynicism and envy, and you have the opportunity to learn from them. Besides, as others have pointed out, it's the people on here who don't have high incomes that are the true badasses. They're the ones I want to learn from.

I remember having to teach my Wife's Neice and nephew about this... Come from a family of "spend everything and more". We were sat on our back deck and they looked across our pasture at the 5000sq ft Mc Mansion and exclaimed..

"Woah, look at that house they MUST be rich".. Then I asked them if they knew what a Mortgage was?... Nope!.. Do they know who ACTUALLY owns that house... Nope!

When they pull up alongside someone in a fancy car do they assume they are rich?.. well.. yeah!

Half an hour later and they think I must be someone who is a complete idiot!

Very sad.

[mm1970]

We have an income in early $80k but it does seem like there are a lot of higher earners on here.

Why are there so many engineers on here?:) I'm from the UK and don't really understand the cultural significance of being an engineer in the US.

A professional engineer (PE) in the U.S. has a college degree, years of experience, has passed the required tests, and is entrusted with supervision of items critical for public safety. That said, the term is losing some of its punch lately as it is being applied to fields where none of this is the case. Technically, in my state (Oklahoma), one must meet these requirements to call themselves a professional engineer. For instance, I must call myself an engineer intern because I have not met the experience requirement to take the final test.

Yeah but most engineers don't have a PE. My husband and I got ours way back when, but finally let them lapse because we weren't using them.

In our industries, the prof eng exam is pretty useless.

[Cassie]

My hubby is a PE engineer and many engineers are never able to pass the exam. It is the gold standard for this occupation.  I really doubt anyone would let that go unless they never intended to work again-ever!

[MDM]

See http://en.wikipedia.org/wiki/Regulation_and_licensure_in_engineering for a good overview of licensing for engineers.  The "'industrial exemption' that permits engineers to work internally for an organization without licensure" is sometimes called the "large company exception".  In other words, if you work for a large company (Ford, Exxon, etc.) you can go your whole career without getting a PE license.

As the wiki article states, "One American engineering society, the National Society of Professional Engineers has sought to extend a single professional license and code of ethics for all engineers, regardless of practice area or employment sector."  One reason for this could be, similar to "passing the bar" for attorneys, to reduce the supply of engineers and thus increase the price each can command.  No idea if that will gain traction.

[Blindsquirrel]

 Not a PE but both STEM undergrad degree holders. Well, we have a GD firehose of cash handed to us. The DW is not really on to the FIRE plan but not wasteful as far as the grand scheme of things. Paid income from jobs is 228K last year, down from 255K the year before ( mind blowing income that year) and we tack on 33K in tax deferred income. Rentals grossed $130,100 last year and we hope to grow that by 28k or so this year. We are both mid 40's  chemists. We support parents to the tune of (A GD huge truck load of money for an Alzheimer's care facility but our parents will never be destitute hopefully as long as I can prevent it, though the cost is a shocker. )   a year and get torched for about 100K+ in taxes when RE tax is included. We are relatively new to the   super high income range in that our pay has gone up dramatically in the last 5 years. The life style inflation has been confined to a huge personal residence that we bought half off during the great financial crises. We are in a  low COL area so it is all good. I used to live on not very much so our savings rate is still pretty high. Sadly, not super confident on retiring until the parental cash suck ends and we are in an absolutely rock solid finance situation. I do think that the range of incomes and debt loads at this site really has a huge spread which I like. There are everyone from -100K NW folks here to multimillionaires and a spread of ages from high school (boy do those kids have a clue and a giant leg up) to genuine geezers. Truly a cross section.

[Exflyboy]

My hubby is a PE engineer and many engineers are never able to pass the exam. It is the gold standard for this occupation.  I really doubt anyone would let that go unless they never intended to work again-ever!

While I agree the Exams are hard (I did the FE 25 years out of school and the PE the following year), keeping up the registration while you are retired is tough to do. The 30 hours of professional development when you don't have a job can be very expensive. You can however retire your PE license in Oregon for 5 years and get it back without too much trouble.

Frank

[zataks]

Crazy to hear that "many engineers never pass the PE."  I was talking to one of our young engineers (note: not an engineer but I work in an engineer-dense field) a couple weeks ago and he was expressing concern because there is discussion of making a PE (in CA at least) require a master's degree because the PE is so common.  Seems like so few engineering jobs here require a PE.  There are plenty that DO require it but I'm always surprised to see the listings that don't list it as a requirement.

I don't consider myself a high-earner but am starting to look at my income that way (no face punches, new to MMM!).  Just completing my first year at a new job (but over 8-years in field) plus modest rental income from another state puts me very near $100k.  The plan is to be retired in my early-mid 40's--27 now.    The problem/fear I'm running into is that if (when!) I retire at that age, my personal retirement/investments won't be large enough to last me the rest of my life.  The funds will easily last until I can start taking my pension and probably at least 25 years into taking my pension.  Working an extra couple years/reducing my spending a bit will allow that fund to not only last my whole life but let me leave something for those to come.  Just still hard to wrap my head around not working but making money.

[aj_yooper]

I've lived on approximately $20,000. for most of my adult life. I did have a year when my income went up 33% and I spent it all. (I wasn't aware or responsible with my spending at that stage of my life.) I've not been a high earner, but have always kept my expenses low. I still make it a goal to live on half of my budget. I try to live on $1,000. a month. I don't, but it keeps me in check. I've backed into retirement unexpectedly. I inherited some money, and I have a 567 square foot house. I bought it for $89,500. My dad taught me to only live on the interest of any money you inherit. Because my home has increased in value, I've been able to achieve that on paper. I read books on how people survived in the Depression and I use their techniques. I have a nice plot of land and I grow all types of fruit. (That was my biggest grocery expense.) I knit my own clothes, but sell a lot of what I make. I turned the hobby into a home based business. Quality yarn is expensive, so this way I stay on top of those costs. This has also almost eliminated what I spent on clothes. Anything else I buy brand new at the Salvation Army. (except shoes.) They have a lot of really nice clothes donated from stores that have gone out of business. The tags are still on them. I take care of my things so they last forever.
When you retire, your expenses really drop. No more commute, or need for work clothes. Your car needs less oil changes, repairs, etc. I ride the bike a lot, and use the car once a week.  I mend my clothes, darn my socks, and cook everything from scratch. I like doing all that stuff.
I've found that the saying "Money follows money" is true. I also believe debt creates debt. The formulas work, regardless of your income. Low earners spend a lot less in taxes and (in America,) health insurance.       

Pretty amazing!  Good work on your cash expenses, especially.

[mm1970]

My hubby is a PE engineer and many engineers are never able to pass the exam. It is the gold standard for this occupation.  I really doubt anyone would let that go unless they never intended to work again-ever!

Especially important in civil engineering or construction.

Semiconductors?  Not so much.  And my PE is (was) in chemical engineering in VA.  But I live in CA.

[awakenedsoul]

 
[/quote]

Pretty amazing!  Good work on your cash expenses, especially.
[/quote]

Thanks. Where I live, property taxes can only go up 2% a year, so that helps. I read what other people are paying and it's shocking. I also keep in mind what I could do if I had to: use the Internet at the library at no charge, go car free, (I'm a block from the bus stop,) have one dog instead of two, etc.

The little things really do add up.

 

[taekvideo]

I'm one of the below average earners here... I make about $16k/year, working 30hrs/week for about 40 weeks a year (online math tutor).
Also going to be renting out rooms in my new-to-me house soon which should add about $8500 more a year in gross income.
I'm in a very low COL neighborhood though, and don't have a car, and practice very good Mustaschian/ERE habits so I should be able to retire sometime in my late 30's or early 40's regardless of low income.
And in the meantime I absolutely love my job (see Life is Awesome!).

Do you mind sharing how you got into this gig?  I'd be interested in possibly transitioning to something like this when I retire.  Thanks!

I just applied online... was initially going to use it as temp work but decided I liked it and wanted to go long-term.
There seems to be an unlimited demand for tutors in the upper level subjects... calculus, discrete math, etc.  You'd need to look into what subjects you're an expert in that are in high demand.
There's a lot of sites for it... I work for tutor.com, but I think instaedu.com and homeworkhelp.com pay more (the first didn't exist when I started less than a year ago and the latter just ignored my application).  I've been trying to add some hours with instaedu but it's a lot harder to get started there... you can't just schedule hours and get assigned students like you can at tutor.com.