Author Topic: Lifetime earnings vs 'stache cash  (Read 12063 times)

SpicyMcHaggus

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Lifetime earnings vs 'stache cash
« on: May 01, 2015, 12:08:19 AM »
I checked my lifetime taxed earnings using the social security portal:  http://www.ssa.gov/myaccount/
I'm 31 and have earned a lifetime income of just under $400k.  My net worth of mostly investments and a small amount of home equity is approx $260k.
Using the actual numbers, I still have 66.5% of each dollar I have earned, despite my younger self working as hard as possible to spend every penny. How are my fellow 'stachers doing? Do I need to up my game?

velocistar237

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Re: Lifetime earnings vs 'stache cash
« Reply #1 on: May 01, 2015, 06:45:31 AM »
My net worth is about 50% of my lifetime earnings. If it weren't for student loans, I'd be at about 70%.

rubybeth

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Re: Lifetime earnings vs 'stache cash
« Reply #2 on: May 01, 2015, 07:16:26 AM »
I'm 34 and DH is 33. Our lifetime combined earnings is $539k (mine $368k, his $171k). Current net worth is just about $140k, so only about 25% has been saved. We both had protracted schooling (graduate degrees) so low earning during many of those years and nearly $54k in student loans taken and paid off between 2006-2013, no other debts, no house. I honestly think we're doing really well, and we're only going to save more as DH graduates and starts earning a bit more.

clarkevii

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Re: Lifetime earnings vs 'stache cash
« Reply #3 on: May 01, 2015, 08:32:20 PM »
That's incredible

Congrats

SpicyMcHaggus

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Re: Lifetime earnings vs 'stache cash
« Reply #4 on: May 02, 2015, 09:09:58 AM »
I'm not even sure if this ratio means anything. Just an excuse to make me feel better about some recent short term setbacks.
Carry on, 'stachers.

JenniferOnFIRE

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Re: Lifetime earnings vs 'stache cash
« Reply #5 on: May 03, 2015, 01:18:11 PM »
I'm at around 72%.  That's over 30 years, including about 8 early years of pittances and zeroes during undergrad and grad school.  I'm calling that pretty good for a mostly-clueless cube monkey.

forummm

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Re: Lifetime earnings vs 'stache cash
« Reply #6 on: May 03, 2015, 01:42:32 PM »
Interesting way of thinking about that. I think I'm probably around 80%. Probably 30% of that is due to investment gains. I've always been an aggressive saver. But the market has really helped out.

forummm

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Re: Lifetime earnings vs 'stache cash
« Reply #7 on: May 03, 2015, 01:53:01 PM »
Maxing out retirement accounts helps too. All those taxes I didn't pay. :)

Able was I ERE

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Re: Lifetime earnings vs 'stache cash
« Reply #8 on: May 05, 2015, 02:05:17 PM »
I'm at 70% after 11 years of working. 

I'd estimate 5-10% is due to 401k matching (which isn't included in SSA earnings) and at least 20% is due to market gains.

2Birds1Stone

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Re: Lifetime earnings vs 'stache cash
« Reply #9 on: May 05, 2015, 03:00:17 PM »
$240k earned
$98k current portfolio
40.8% of earnings saved.

freeedom

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Re: Lifetime earnings vs 'stache cash
« Reply #10 on: May 05, 2015, 04:53:38 PM »
Lifetime earnings 400k. Net worth is 100k. However, earnings from 14-20 were survival level only as I had to fend for myself, I also paid for my own college and still owe 7k. Once those loans are paid the savings go into overdrive.

Edit: I am 30.

SpicyMcHaggus

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Re: Lifetime earnings vs 'stache cash
« Reply #11 on: May 05, 2015, 05:06:02 PM »
Lifetime earnings 400k. Net worth is 100k. However, earnings from 14-20 were survival level only as I had to fend for myself, I also paid for my own college and still owe 7k. Once those loans are paid the savings go into overdrive.

Edit: I am 30.

It's a good start!

MrMath

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Re: Lifetime earnings vs 'stache cash
« Reply #12 on: May 05, 2015, 05:39:07 PM »
145% for me, as I'm just graduating college and don't have much "earned income."

Pooperman

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Re: Lifetime earnings vs 'stache cash
« Reply #13 on: May 07, 2015, 03:34:15 PM »
Total lifetime income and gifts for fiancée and I is about $175k. We have $35k to show for it. 20%. We are 25 and 24. This includes gifts and off the books stuff, so the ssa version is closer to 50%. School not counted because I would have done things differently if I were paying vs parents paying.

v10viperbox

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Re: Lifetime earnings vs 'stache cash
« Reply #14 on: May 07, 2015, 03:53:27 PM »
I was actually wondering about this a few weeks back, did not know you could look it up on a website.

33 Years old 115% net-worth to income over the last 18 years found but I have had some seller real estate flips in that time and the market has done really really well.

sisto

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Re: Lifetime earnings vs 'stache cash
« Reply #15 on: May 07, 2015, 04:49:10 PM »
If I had found MMM sooner I'd be in much better shape, but I'm currently at 46%. Kind of sad to think about now, but I try to look forward. I've learned from my past mistakes.

SpicyMcHaggus

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Re: Lifetime earnings vs 'stache cash
« Reply #16 on: May 07, 2015, 05:51:25 PM »
Worth noting that i believe this only tracks earned W2 income. It's for social security, so no investment/rental income counted.

jalidi

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Re: Lifetime earnings vs 'stache cash
« Reply #17 on: May 07, 2015, 06:48:01 PM »
$650K gross, $435K net, $198K investments after 9 years of full-time MLT work from 30-38. So about 45% going from net income to net worth. Before I typed this post up, I thought it was going to be alot higher, but I guess life is expensive.

arebelspy

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Re: Lifetime earnings vs 'stache cash
« Reply #18 on: May 07, 2015, 11:15:37 PM »
Previous threads on this topic:
http://forum.mrmoneymustache.com/welcome-to-the-forum/social-security-earnings-vs-net-worth/
http://forum.mrmoneymustache.com/ask-a-mustachian/mustachians-what%27s-your-net-worth-as-a-percentage-of-total-earnings/
http://forum.earlyretirementextreme.com/topic.php?id=2828

I hit over 100% net worth to lifetime earnings a year and 1/2 ago (Dec 2013), completing item #3 on my Financial Goals list:
http://forum.mrmoneymustache.com/journals/arebelspy's-financial-goals/

So I am worth more than all the money I've made.  Or, as I put it there: "[W]e've (in essence) invested 100% of the money we've ever earned, and we've lived essentially for free, all our spending/expenses has been covered by profits from our investments."

It's a useless, but very fun goal, IMO.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Money Badger

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Re: Lifetime earnings vs 'stache cash
« Reply #19 on: May 10, 2015, 08:45:37 PM »
Considered both my and wife's incomes and the net result is total equity today equals 43% of gross lifetime wages.   Not bad considering she was stay at home mom about 10 years of 25 total thus far.   

Looked at the last 5 years and savings rate in comparison which increased from 15% to 28% in this timeframe that will improve this almost meaningless, but fun metric as assets appreciate.    It's at least an indicator for sure of long term savings and total equity appreciation skills...

Of course, the money Gods have a sense of humor and I'll be paying 2 college tuitions and probably 2 weddings in the next 10 years.    Oh well, fun time is over... back to work!

amberfocus

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Re: Lifetime earnings vs 'stache cash
« Reply #20 on: May 13, 2015, 10:40:15 PM »
Age: 30
SS: $653,253*
NW: $849,381**

*Since I'm using a current NW figure, I've also added in YTD earnings to keep the comparison fair.

**This includes the value of my stock options, which wasn't strictly saved from earned income, although it's a legit part of my compensation.

So I'm at 130% if I include my options, and 82% without.

arebelspy

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Re: Lifetime earnings vs 'stache cash
« Reply #21 on: May 14, 2015, 07:36:09 AM »
Age: 30
SS: $653,253*
NW: $849,381**

*Since I'm using a current NW figure, I've also added in YTD earnings to keep the comparison fair.

**This includes the value of my stock options, which wasn't strictly saved from earned income, although it's a legit part of my compensation.

So I'm at 130% if I include my options, and 82% without.

300k is stock options is pretty decent; hope you get a chance to cash that out pretty soon.  :D
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

James

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Re: Lifetime earnings vs 'stache cash
« Reply #22 on: May 14, 2015, 07:58:09 AM »
Wow, pretty sad to look at the amount made in my lifetime compared to current net worth. I have a net worth of 27% of lifetime earnings...


Since my income is pretty high, that still comes out fairly decent net worth, just so sad that with just slight changes early in life I could be FI right now. I also got hurt really bad in the housing crash, so that took a good chunk of net worth. Overall a helpful but sad review of my current situation... :D

amberfocus

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Re: Lifetime earnings vs 'stache cash
« Reply #23 on: May 14, 2015, 08:14:38 AM »
Age: 30
SS: $653,253*
NW: $849,381**

*Since I'm using a current NW figure, I've also added in YTD earnings to keep the comparison fair.

**This includes the value of my stock options, which wasn't strictly saved from earned income, although it's a legit part of my compensation.

So I'm at 130% if I include my options, and 82% without.

300k is stock options is pretty decent; hope you get a chance to cash that out pretty soon.  :D

And I'm not even fully vested. By year's end, if the share price holds steady, that'll grow by another $100K, and the total worth of all of my options is currently north of half a million. High on my to-do list is trying to figure out the most tax-efficient way to extract that value into a more diversified investment vehicle. Readiing about the AMT is kind of stressful, but I know -- #RichPeopleProblems. :D

BlueHouse

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Re: Lifetime earnings vs 'stache cash
« Reply #24 on: May 14, 2015, 08:38:22 AM »
I checked my lifetime taxed earnings using the social security portal:  http://www.ssa.gov/myaccount/
I'm 31 and have earned a lifetime income of just under $400k.  My net worth of mostly investments and a small amount of home equity is approx $260k.
Using the actual numbers, I still have 66.5% of each dollar I have earned, despite my younger self working as hard as possible to spend every penny. How are my fellow 'stachers doing? Do I need to up my game?
What are we checking against?  SS earnings? or Medicare earnings?  I'm at 75% and 53%. 
Like James, if I had only known earlier, I'd be FIRE by now.  Oh well, still nothing to sneeze at.

Mississippi Mudstache

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Re: Lifetime earnings vs 'stache cash
« Reply #25 on: May 14, 2015, 09:02:51 AM »
I'm at 33% of lifetime earnings. Didn't really get serious about saving until two years ago. During that time, I've saved 70% of earnings (if you include gains on investments as savings, but not earnings, which is, after all, essentially what we are doing for this exercise).

I'm impressed by the folks that got serious about saving and investing so early. I was never a spendthrift, but unfortunately I took the crappy "save 15% of your income" advice to heart for the first 5 years of my career.

Zoot

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Re: Lifetime earnings vs 'stache cash
« Reply #26 on: May 14, 2015, 02:01:46 PM »
What are we checking against?  SS earnings? or Medicare earnings?  I'm at 75% and 53%. 

So glad you asked this--I was thinking the same thing.  As ARS pointed out, it's a useless but VERY VERY VERY fun thing to calculate and even track--and I love the idea of having a goal of 100%!  :)  But I'm still left wondering:  what philosophy would be best to use for this kind of calculation?

One way to do it would be gross earnings--of which the government takes some (Federal tax, state tax if any, Medicare, SS), of which we spend some (pre-tax deductions like health insurance), and of which we save some (401k/403b, and so on).  But then that's almost not fair--we didn't ever get to touch the government portion, so can we really count that as "earnings" when we never actually got it into our hands?

Another way to do it would be a money-we-touch rate:  your net take-home after all deductions.  But then some of the money you didn't take home was either spent for your benefit (insurance) or saved for your benefit (401k), so that money was "yours" even though it never hit your account.

I'm kind of on the gross earnings bandwagon, myself--not just because it makes the calculations easier, but because you DID earn all the money; it's just that some of it was "spent" on taxes and insurance, and some of it was "saved," even if those dollars never hit your bank account.

arebelspy

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Re: Lifetime earnings vs 'stache cash
« Reply #27 on: May 14, 2015, 02:11:10 PM »
I'm kind of on the gross earnings bandwagon, myself--not just because it makes the calculations easier, but because you DID earn all the money; it's just that some of it was "spent" on taxes and insurance, and some of it was "saved," even if those dollars never hit your bank account.

Exactly. You paid for roads and firefighters and other services with that portion.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Tjat

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Re: Lifetime earnings vs 'stache cash
« Reply #28 on: May 14, 2015, 02:42:23 PM »
Ugh, 31%

But climbing... admittedly mostly due to increases in compensation.


texaslady22

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Re: Lifetime earnings vs 'stache cash
« Reply #29 on: May 15, 2015, 09:48:14 AM »
What's counted in "net worth?"

Retirement? Equity in a house? Bank account? Stocks, bonds? I'm guessing all of these?

Would you also include the values of your vehicles?

SpicyMcHaggus

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Re: Lifetime earnings vs 'stache cash
« Reply #30 on: May 15, 2015, 10:19:35 AM »
What's counted in "net worth?"

Retirement? Equity in a house? Bank account? Stocks, bonds? I'm guessing all of these?

Would you also include the values of your vehicles?

Yes, all except the vehicles. They are a depreciating asset, so I generally don't count them.

CommonCents

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Re: Lifetime earnings vs 'stache cash
« Reply #31 on: May 15, 2015, 10:24:15 AM »
What's counted in "net worth?"

Retirement? Equity in a house? Bank account? Stocks, bonds? I'm guessing all of these?

Would you also include the values of your vehicles?

My vehicle is cheap enough that including it wouldn't move the needle much.  I'd hope the same for most MMMs.  I don't include it.

SpicyMcHaggus

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Re: Lifetime earnings vs 'stache cash
« Reply #32 on: May 15, 2015, 12:06:05 PM »


My vehicle is cheap enough that including it wouldn't move the needle much.  I'd hope the same for most MMMs.  I don't include it.

Just hashed this out over $50k pickup trucks in another thread. IF anyone on MMM does count their vehicles as an asset, they need to go back and read the whole blog over. Cars only cost you money(for 99% of us), and the 1% who have a "work" vehicle that helps generate income should look at it as a tool that costs money to own, even if not using it.

I think my car is worth $8500 according to mint; I paid less than that, but it is only going to go down, so i count it as $0.

arebelspy

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Re: Lifetime earnings vs 'stache cash
« Reply #33 on: May 15, 2015, 12:15:38 PM »


My vehicle is cheap enough that including it wouldn't move the needle much.  I'd hope the same for most MMMs.  I don't include it.

Just hashed this out over $50k pickup trucks in another thread. IF anyone on MMM does count their vehicles as an asset, they need to go back and read the whole blog over. Cars only cost you money(for 99% of us), and the 1% who have a "work" vehicle that helps generate income should look at it as a tool that costs money to own, even if not using it.

I think my car is worth $8500 according to mint; I paid less than that, but it is only going to go down, so i count it as $0.

(Emphasis added.)

Gold only costs you money (to store it safely), but it's still an asset.

I'm fine not counting cars in NW (I don't, personally), but to argue they shouldn't be because they aren't assets is to show a fundamental misunderstanding of what an asset is.

(I blame Kiyosaki mostly for this, and his * up definition of asset as "something that puts money in your pocket" and a liability as "something that takes money out of your pocket" -- it can be good to think of things on those terms, but that's not what an asset and liability are.  And often one thing may be both an asset and have an offsetting liability, such as a house, especially a primary residence, with a mortage.  To think of it as only one or the other shows a misunderstanding of the true definitions of these terms.)
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Pooperman

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Re: Lifetime earnings vs 'stache cash
« Reply #34 on: May 15, 2015, 12:16:39 PM »


My vehicle is cheap enough that including it wouldn't move the needle much.  I'd hope the same for most MMMs.  I don't include it.

Just hashed this out over $50k pickup trucks in another thread. IF anyone on MMM does count their vehicles as an asset, they need to go back and read the whole blog over. Cars only cost you money(for 99% of us), and the 1% who have a "work" vehicle that helps generate income should look at it as a tool that costs money to own, even if not using it.

I think my car is worth $8500 according to mint; I paid less than that, but it is only going to go down, so i count it as $0.

So I should count my equities at what their value will be? Int hat case, I'm a multi-millionaire. Seriously though, Net Worth is just a snapshot in time of the value of everything you have if you were to convert all of it into a common item (in our case, dollars). Because of this, the car, the house, etc are all worth counting, as are any debt obligations. At some point in the future, the car might be worth $2,000. However, today it is worth $8,500. Count that $8,500 in your net worth because it's just a snapshot. The car doesn't make you money, but it has value regardless.

Money Badger

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Re: Lifetime earnings vs 'stache cash
« Reply #35 on: May 16, 2015, 04:50:24 AM »
Good point about the "equity" in vehicles that should be included despite the automobile's propensity to drain the 'stache...    Considering 3 vehicles w/no liens, it bumps us up dramatically to (dramatic pause please)...   a whopping increase of half a percent which ticks us up to 44% lifetime!

As lavish as our new-ish fleet of vehicles is by MMM standards (2014, 2012, 2010), our cars "suck less" in comparison to the number of 12MPG Suburbans, $50K+ Lexus and 75K+ Mercedes, etc. I see on the road.   I can only imagine the drain of payments, upkeep expenses and general transfer of wealth those "reverse annuities" are having on lifetime wealth accumulation.

libertarian4321

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Re: Lifetime earnings vs 'stache cash
« Reply #36 on: June 14, 2015, 05:20:24 AM »
My rough guess is that our net worth is higher than our lifetime earnings.

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Re: Lifetime earnings vs 'stache cash
« Reply #37 on: June 14, 2015, 07:37:40 AM »
Maybe that's what you need to FIRE - net worth > lifetime earnings?

rubybeth

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Re: Lifetime earnings vs 'stache cash
« Reply #38 on: June 15, 2015, 02:23:46 PM »
Maybe that's what you need to FIRE - net worth > lifetime earnings?

I think you should start a post on this and ask all of the FIRE'd folks if this is true. It could be another way of thinking about minimum required stash, but it would definitely freak out non-mustachians. ;)

cripzychiken

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Re: Lifetime earnings vs 'stache cash
« Reply #39 on: June 15, 2015, 03:15:32 PM »
Just me:

Age: 29
$330k earned/taxed.
NW:  $100k  (1/2 of all assets, just my student loans not wife's)

So about 30%.

Now if you add in the wife's stuff, we're still negative :(

4alpacas

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Re: Lifetime earnings vs 'stache cash
« Reply #40 on: June 15, 2015, 05:11:32 PM »
Previous threads on this topic:
http://forum.mrmoneymustache.com/welcome-to-the-forum/social-security-earnings-vs-net-worth/
http://forum.mrmoneymustache.com/ask-a-mustachian/mustachians-what%27s-your-net-worth-as-a-percentage-of-total-earnings/
http://forum.earlyretirementextreme.com/topic.php?id=2828

I hit over 100% net worth to lifetime earnings a year and 1/2 ago (Dec 2013), completing item #3 on my Financial Goals list:
http://forum.mrmoneymustache.com/journals/arebelspy's-financial-goals/

So I am worth more than all the money I've made.  Or, as I put it there: "[W]e've (in essence) invested 100% of the money we've ever earned, and we've lived essentially for free, all our spending/expenses has been covered by profits from our investments."

It's a useless, but very fun goal, IMO.
I'm at 99%!