Author Topic: How many of you have every dollar you ever earned?  (Read 9528 times)

BTDretire

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How many of you have every dollar you ever earned?
« on: July 20, 2015, 03:06:26 PM »
 A while back I used my SS record and added up all the years since we started saving money.
Same year I got married ;-)
I then compared it to my financial assets. I have 83% of every dollar I earned.
Throw in the house and I have every dollar.
I'll bet many have every dollar you ever earned and more.
Or maybe I have it backwards, it has taken us 34 years to build our nest egg,
so the stock market contributed much more to our egg then some of you looking to RE.
Anybody want to share their numbers?
                                         



mathlete

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Re: How many of you have every dollar you ever earned?
« Reply #1 on: July 20, 2015, 03:08:58 PM »
So I guess by earned you mean earned through labor right? As in social security wages?

So your percentage is Net Worth / Social Security Wages?

BTDretire

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Re: How many of you have every dollar you ever earned?
« Reply #2 on: July 20, 2015, 03:49:16 PM »
So I guess by earned you mean earned through labor right? As in social security wages?

So your percentage is Net Worth / Social Security Wages?

 Yes. That is the calculation I made, mostly because the SS wages were easily available.

immocardo

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Re: How many of you have every dollar you ever earned?
« Reply #3 on: July 20, 2015, 03:57:10 PM »
Interesting calculation unless you have people that received a large inheritance.

forummm

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Re: How many of you have every dollar you ever earned?
« Reply #4 on: July 20, 2015, 04:16:44 PM »
Between the 2 of us we're at around 96%. I had some income while in school (don't know exactly, but it would be less than 10% I would think) that is not SS taxable that is not included in this.

mathlete

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Re: How many of you have every dollar you ever earned?
« Reply #5 on: July 21, 2015, 07:41:57 AM »
Counting the house as 100% my property (it is in my name) and the mortgage as 100% my responsibility (which it legally is), I'm at about 46%.

Counting neither the house nor the mortgage it's around 25%.

BTDretire

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Re: How many of you have every dollar you ever earned?
« Reply #6 on: July 21, 2015, 12:59:49 PM »
Interesting calculation unless you have people that received a large inheritance.

This calculation also gets skewed for business owners that receive shareholder distributions.  I've had years where my distributions from an S-Corp (which don't get hit with SS taxes) were higher than my W2 wages.

 Ya, maybe not a very good general question. I just got curious one day after looking at my SS statement.
So I added up both my numbers and my wifes and realized it was pretty close to our net worth.
  Ok, limited interest.

gReed Smith

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Re: How many of you have every dollar you ever earned?
« Reply #7 on: July 21, 2015, 01:03:37 PM »
My current net worth isn't even equal to my earnings last year, let alone the other years.  My assets may be close, but I'm still working on my student loans, and I have a mortgage.

Gone Fishing

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Re: How many of you have every dollar you ever earned?
« Reply #8 on: July 21, 2015, 01:04:33 PM »
We might be a hair over 100%...

rocketpj

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Re: How many of you have every dollar you ever earned?
« Reply #9 on: July 21, 2015, 02:24:47 PM »
Nowhere near.  I made and squandered a lot of money in my 20s, as did my wife.  I doubt we'll ever get close.


Zikoris

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Re: How many of you have every dollar you ever earned?
« Reply #10 on: July 21, 2015, 05:17:33 PM »
Well, that's depressing. 33%. $87628/$267,940.

My excuses:

I'm 28 and moved out on my own at 18, for a total of 10 years in the working world so far. Of those, the first three years were fairly subsistence-level income (average around $15,000 for those years). I've only been Mustachian for the last almost-four years. And I had to learn everything from the ground up, because I did not grow up in a frugal household or learn how to budget, grocery shop well, cook, or make smart financial decisions at all growing up.

I sure wouldn't mind having a bit more of that in my pocket - that was HARD-EARNED money since I was doing things like manual labour.

Zamboni

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Re: How many of you have every dollar you ever earned?
« Reply #11 on: July 21, 2015, 05:28:05 PM »
You are doing great!

I have under 50% of what I have earned over my life time so far. Meh, water under the bridge. I'm not really worried about it since compound interest will eventually put me at least close if not ahead.

Bajadoc

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Re: How many of you have every dollar you ever earned?
« Reply #12 on: July 21, 2015, 07:18:42 PM »
Depends how old you are I suppose. I am 57 and saved and invested 50% of everything I earned for 24 years. I have way more than I ever earned working. I think that is what investing is about. Most people here seem younger than me but are on the same path. I am the only one of my peer group that does not work and has no worries about money. Save and invest what you earn, you will be very happy about it later. In other words, don't give your wealth away for junk.

forummm

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Re: How many of you have every dollar you ever earned?
« Reply #13 on: July 21, 2015, 07:26:28 PM »
I realized that those of us having about 100% are benefiting even more from market gains than I initially thought. Not only has the market given us back whatever we spent. But it also gave us back the amount of tax we had to pay when we earned that money!

deborah

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Re: How many of you have every dollar you ever earned?
« Reply #14 on: July 21, 2015, 07:31:49 PM »
I wouldn't be surprised if everyone who is FIRE has every dollar they ever earned. Comparing your net worth with what you have earned seems to me to be another measure you can use to check how close to FIRE you are.

forummm

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Re: How many of you have every dollar you ever earned?
« Reply #15 on: July 21, 2015, 07:40:59 PM »
I wouldn't be surprised if everyone who is FIRE has every dollar they ever earned. Comparing your net worth with what you have earned seems to me to be another measure you can use to check how close to FIRE you are.

It's a nice idea, and my be true often, but I don't think that bears out in general. As an extreme example, you could have someone who made a billion dollars, spent $998 million of it, and now is FIRE by spending $80k/year from his $2M remaining.

deborah

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Re: How many of you have every dollar you ever earned?
« Reply #16 on: July 21, 2015, 08:13:49 PM »
How many people could become mustashian after that profligacy?

Merrie

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Re: How many of you have every dollar you ever earned?
« Reply #17 on: July 21, 2015, 08:50:39 PM »
I definitely don't. Our net worth is somewhere around -$100k because we have a gazillion student loans and a large mortgage. And I don't think I ever will because I expect to make ~$120k a year for the next 20 years (give or take a couple) and then be able to retire with a nest egg ~1 million and a paid-off house. Unless I have outrageous gains in the stock market.
« Last Edit: July 21, 2015, 09:48:34 PM by Merrie »

johnny847

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Re: How many of you have every dollar you ever earned?
« Reply #18 on: July 21, 2015, 09:16:59 PM »
So we're using gross earned income then right?

I'm sitting at 72.8%.

I've been investing ~50% of my net income, so in a decade that ratio will be far past 100% - the market can earn me so much more than I can ever earn working.

arebelspy

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Re: How many of you have every dollar you ever earned?
« Reply #19 on: July 31, 2015, 12:17:57 PM »
I crossed above 100% in Dec 2013.  That was one of my 5 financial goals (can be found in my journal, in sig).

We've had many threads on this.  Here's a couple:
http://forum.mrmoneymustache.com/welcome-to-the-forum/social-security-earnings-vs-net-worth/
http://forum.mrmoneymustache.com/share-your-badassity/lifetime-earnings-vs-'stache-cash/

:)
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sisto

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Re: How many of you have every dollar you ever earned?
« Reply #20 on: July 31, 2015, 01:13:09 PM »
The only way I will ever have what I've earned in my lifetime will be if I stay way below my SWR and/or the market performs extremely well. I'm sitting around 55% right now. Sad, but true. Nothing I can do about the past only the future. I'm 6 years from FIRE.

TheLazyMan

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Re: How many of you have every dollar you ever earned?
« Reply #21 on: July 31, 2015, 01:39:48 PM »
Using Medicare earnings, 69%.

Using SS earnings, well over 100%.


arebelspy

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Re: How many of you have every dollar you ever earned?
« Reply #22 on: July 31, 2015, 01:40:35 PM »
Using Medicare earnings, 69%.

Using SS earnings, well over 100%.

Why are those so different?  Have you had jobs where you didn't pay into SS?
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
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forummm

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Re: How many of you have every dollar you ever earned?
« Reply #23 on: July 31, 2015, 01:49:23 PM »
Using Medicare earnings, 69%.

Using SS earnings, well over 100%.

Why are those so different?  Have you had jobs where you didn't pay into SS?

A lot of jobs for governments don't pay into SS. I had some of those in grad school working for the university (a state school).

johnny847

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Re: How many of you have every dollar you ever earned?
« Reply #24 on: July 31, 2015, 01:53:01 PM »
Using Medicare earnings, 69%.

Using SS earnings, well over 100%.

Why are those so different?  Have you had jobs where you didn't pay into SS?

Well you don't pay SS for income above $118k (exclusion adjusts every year) each year. So if TheLazyMan regularly earned enough over the SS tax exclusion amount, then this can easily occur (but he's supposed to be lazy! haha).

Using Medicare earnings, 69%.

Using SS earnings, well over 100%.

Why are those so different?  Have you had jobs where you didn't pay into SS?

A lot of jobs for governments don't pay into SS. I had some of those in grad school working for the university (a state school).

But you paid into Medicare while not paying into SS? As a grad student I'm exempt from FICA (SS + medicare) altogether.

arebelspy

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Re: How many of you have every dollar you ever earned?
« Reply #25 on: July 31, 2015, 02:07:59 PM »
Using Medicare earnings, 69%.

Using SS earnings, well over 100%.

Why are those so different?  Have you had jobs where you didn't pay into SS?

A lot of jobs for governments don't pay into SS. I had some of those in grad school working for the university (a state school).

I know this; I had one of those jobs.  :)

I was asking if he did.

Using Medicare earnings, 69%.

Using SS earnings, well over 100%.

Why are those so different?  Have you had jobs where you didn't pay into SS?

Well you don't pay SS for income above $118k (exclusion adjusts every year) each year. So if TheLazyMan regularly earned enough over the SS tax exclusion amount, then this can easily occur (but he's supposed to be lazy! haha).

Gotcha. Thanks!
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

Moostache

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Re: How many of you have every dollar you ever earned?
« Reply #26 on: July 31, 2015, 02:14:22 PM »
After 27 years in the workforce I am sitting at about 89%.  Obviously that doesn't leave me hurting but I sure do wish I had listened to my mother and saved more right out of college and the first few years of my career... :)

Market permitting and with changes to my 401k plan this year I should be there soon enough.  Currently pushing 50% of my income into my retirement account.
« Last Edit: July 31, 2015, 02:19:42 PM by Moostache »

TheLazyMan

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Re: How many of you have every dollar you ever earned?
« Reply #27 on: August 01, 2015, 12:26:05 PM »
Using Medicare earnings, 69%.

Using SS earnings, well over 100%.

Why are those so different?  Have you had jobs where you didn't pay into SS?

It's because of the cap on SS earnings.  I did have some earnings without SS as a grad student.

« Last Edit: August 01, 2015, 12:27:40 PM by TheLazyMan »

Psychstache

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Re: How many of you have every dollar you ever earned?
« Reply #28 on: August 01, 2015, 03:26:21 PM »
Using Medicare earnings, 69%.

Using SS earnings, well over 100%.

Why are those so different?  Have you had jobs where you didn't pay into SS?

It's because of the cap on SS earnings.  I did have some earnings without SS as a grad student.

Or a gov job. Most school district employees in my state don't pay into SS, but do pay into Medicare (present poster included).