Is anyone here still actually aiming for under MMM's original 25k a year figure?

[roomtempmayo]

Congrats on your saving rate and condolences on the taxes. America’s work horses are those who do it on W2s and 1099s…

Thanks and you are correct! This year with my last company having sold, I'll pay more than double that in taxes for 2021

You know, I have always taken taxes in stride. Part of the cost…

But I’ve had a few friends over the years—mostly small business owners and doctors, people who tell the government what they earned instead of having to deal with W2s/1099s that are reported by companies and brokerages—who really get me started. They write their lives off as a business expense. Cars, vacations, dinners out, etc. and have their accountants tell them the minimum acceptable income to take to keep them under the radar. And then they bitch about high taxes!

Gotta love it.

I've long thought the only way that a Ford F150 can cost $50k+ and remain the #1 selling vehicle in America is that a high percentage of them are toys written off as business expenses.

That's just a visible example of our screwed up tax code that treats W2 income as a uniquely disfavored path to building wealth.

[innkeeper77]

...FI could  actually be defined by a dollar range, e.g., $700,000 to $1.2M. They could argue that anyone could Frugal FIRE with invested assets in that range—but respect those who may choose a different FIRE path, with assets in the millions.

This part pissed me off the most: the idea that "anyone" can FIRE with upwards of 700k. Maybe anyone whose income is already in the top 25% of the US population. Someone on minimum wage would have to live very frugally just to get to 700k by traditional retirement age!!! A "different FIRE path with assets in the millions" is not a choice for even middle class mustachians. Implying that its something people choose is just insulting. One must be very lucky indeed to have that choice available. The idea that those lucky individuals deserve our respect because of their "choice" smacks of meritocracy.

Middle class can't amass millions? My family just now passed the MEDIAN (not average- we are FAR below the average) income for our state- and could easily go from 0 to $1M in less than 13 years on that income even with our current EXPENSIVE lifestyle (thanks daycare). I think that would be considered "middle class" for our area. Make that a 25 year career and millionS would be relatively easy to amass thanks to compounding returns. I will not deny that we are lucky and privileged, but having multiple millions by your 40's or early 50's is relatively doable by much of the middle class. (Remember "in the millions" can be two or three million, we aren't talking 15 million for most people here)

[BookLoverL]

...FI could  actually be defined by a dollar range, e.g., $700,000 to $1.2M. They could argue that anyone could Frugal FIRE with invested assets in that range—but respect those who may choose a different FIRE path, with assets in the millions.

This part pissed me off the most: the idea that "anyone" can FIRE with upwards of 700k. Maybe anyone whose income is already in the top 25% of the US population. Someone on minimum wage would have to live very frugally just to get to 700k by traditional retirement age!!! A "different FIRE path with assets in the millions" is not a choice for even middle class mustachians. Implying that its something people choose is just insulting. One must be very lucky indeed to have that choice available. The idea that those lucky individuals deserve our respect because of their "choice" smacks of meritocracy.

Middle class can't amass millions? My family just now passed the MEDIAN (not average- we are FAR below the average) income for our state- and could easily go from 0 to $1M in less than 13 years on that income even with our current EXPENSIVE lifestyle (thanks daycare). I think that would be considered "middle class" for our area. Make that a 25 year career and millionS would be relatively easy to amass thanks to compounding returns. I will not deny that we are lucky and privileged, but having multiple millions by your 40's or early 50's is relatively doable by much of the middle class. (Remember "in the millions" can be two or three million, we aren't talking 15 million for most people here)

If someone earns, say, $50,000 a year and manages an impressive 75% savings rate of $37,500, then ignoring interest it's gonna take them over 25 years to get to a million. If they invest and get interest it'd be a bit faster of course. I'd definitely think that a $50,000 income is somewhere within the middle class, given that a 40 hours a week federal minimum wage works out to around $15,000 a year.

[the_fixer]

...FI could  actually be defined by a dollar range, e.g., $700,000 to $1.2M. They could argue that anyone could Frugal FIRE with invested assets in that range—but respect those who may choose a different FIRE path, with assets in the millions.

This part pissed me off the most: the idea that "anyone" can FIRE with upwards of 700k. Maybe anyone whose income is already in the top 25% of the US population. Someone on minimum wage would have to live very frugally just to get to 700k by traditional retirement age!!! A "different FIRE path with assets in the millions" is not a choice for even middle class mustachians. Implying that its something people choose is just insulting. One must be very lucky indeed to have that choice available. The idea that those lucky individuals deserve our respect because of their "choice" smacks of meritocracy.

Middle class can't amass millions? My family just now passed the MEDIAN (not average- we are FAR below the average) income for our state- and could easily go from 0 to $1M in less than 13 years on that income even with our current EXPENSIVE lifestyle (thanks daycare). I think that would be considered "middle class" for our area. Make that a 25 year career and millionS would be relatively easy to amass thanks to compounding returns. I will not deny that we are lucky and privileged, but having multiple millions by your 40's or early 50's is relatively doable by much of the middle class. (Remember "in the millions" can be two or three million, we aren't talking 15 million for most people here)

If someone earns, say, $50,000 a year and manages an impressive 75% savings rate of $37,500, then ignoring interest it's gonna take them over 25 years to get to a million. If they invest and get interest it'd be a bit faster of course. I'd definitely think that a $50,000 income is somewhere within the middle class, given that a 40 hours a week federal minimum wage works out to around $15,000 a year.

~15 years to reach 1 million @ 7% return and that is assuming they never get a raise and invest more.

However someone in that scenario would not need to amass a million to replace their spending as they spend much less than 40k a year ;)


Sent from my iPhone using Tapatalk

[Morning Glory]

...FI could  actually be defined by a dollar range, e.g., $700,000 to $1.2M. They could argue that anyone could Frugal FIRE with invested assets in that range—but respect those who may choose a different FIRE path, with assets in the millions.

This part pissed me off the most: the idea that "anyone" can FIRE with upwards of 700k. Maybe anyone whose income is already in the top 25% of the US population. Someone on minimum wage would have to live very frugally just to get to 700k by traditional retirement age!!! A "different FIRE path with assets in the millions" is not a choice for even middle class mustachians. Implying that its something people choose is just insulting. One must be very lucky indeed to have that choice available. The idea that those lucky individuals deserve our respect because of their "choice" smacks of meritocracy.

Middle class can't amass millions? My family just now passed the MEDIAN (not average- we are FAR below the average) income for our state- and could easily go from 0 to $1M in less than 13 years on that income even with our current EXPENSIVE lifestyle (thanks daycare). I think that would be considered "middle class" for our area. Make that a 25 year career and millionS would be relatively easy to amass thanks to compounding returns. I will not deny that we are lucky and privileged, but having multiple millions by your 40's or early 50's is relatively doable by much of the middle class. (Remember "in the millions" can be two or three million, we aren't talking 15 million for most people here)

If someone earns, say, $50,000 a year and manages an impressive 75% savings rate of $37,500, then ignoring interest it's gonna take them over 25 years to get to a million. If they invest and get interest it'd be a bit faster of course. I'd definitely think that a $50,000 income is somewhere within the middle class, given that a 40 hours a week federal minimum wage works out to around $15,000 a year.

Yes. Additionally, if 12,500 is enough for them to live comfortably then why would they continue working until they got to 1 million? They could retire well on 312,500.

For me a key part of the FIRE movement is knowing what "enough" means, and stopping when you get there.

[BookLoverL]

...FI could  actually be defined by a dollar range, e.g., $700,000 to $1.2M. They could argue that anyone could Frugal FIRE with invested assets in that range—but respect those who may choose a different FIRE path, with assets in the millions.

This part pissed me off the most: the idea that "anyone" can FIRE with upwards of 700k. Maybe anyone whose income is already in the top 25% of the US population. Someone on minimum wage would have to live very frugally just to get to 700k by traditional retirement age!!! A "different FIRE path with assets in the millions" is not a choice for even middle class mustachians. Implying that its something people choose is just insulting. One must be very lucky indeed to have that choice available. The idea that those lucky individuals deserve our respect because of their "choice" smacks of meritocracy.

Middle class can't amass millions? My family just now passed the MEDIAN (not average- we are FAR below the average) income for our state- and could easily go from 0 to $1M in less than 13 years on that income even with our current EXPENSIVE lifestyle (thanks daycare). I think that would be considered "middle class" for our area. Make that a 25 year career and millionS would be relatively easy to amass thanks to compounding returns. I will not deny that we are lucky and privileged, but having multiple millions by your 40's or early 50's is relatively doable by much of the middle class. (Remember "in the millions" can be two or three million, we aren't talking 15 million for most people here)

If someone earns, say, $50,000 a year and manages an impressive 75% savings rate of $37,500, then ignoring interest it's gonna take them over 25 years to get to a million. If they invest and get interest it'd be a bit faster of course. I'd definitely think that a $50,000 income is somewhere within the middle class, given that a 40 hours a week federal minimum wage works out to around $15,000 a year.

Yes. Additionally, if 12,500 is enough for them to live comfortably then why would they continue working until they got to 1 million? They could retire well on 312,500.

For me a key part of the FIRE movement is knowing what "enough" means, and stopping when you get there.

Yeah, basically I was too lazy to do the proper maths right then, definitely they could stop well before if they can live on that much. But the typical consumer earning the same amount will not be saving 75% but more like 25% at most. The point was to make up a number within the right region to show that it's not easy to reach a million for everyone. Saving 75% of $50,000 would be a relatively hardcore accomplishment by the standards that seem to go around here.

[Linea_Norway]

Sorry, I haven't read the whole thread yet.

I have stopped tracking expenses in detail, but continue to spend in a pretty similar way. We check once a year how much we spent. Two years ago we were under 25.000 euro for normal expenses, in an owned house without a mortgage. Currently we are living in a rental and therefore last year's spending was higher spending because of that. We also bought an almost new car, and count 10% of that as yearly expenses.

The plan is to find a new house to buy and live in. And grow vegetables for own consumption. Maybe saving a bit more.

I am not intending to start spending tons more. We cannot afford that without starting working again. And I have never been a big spender, so it isn't natural. I also try to have a smallish footprint in this world.

[magus]

...FI could  actually be defined by a dollar range, e.g., $700,000 to $1.2M. They could argue that anyone could Frugal FIRE with invested assets in that range—but respect those who may choose a different FIRE path, with assets in the millions.

This part pissed me off the most: the idea that "anyone" can FIRE with upwards of 700k. Maybe anyone whose income is already in the top 25% of the US population. Someone on minimum wage would have to live very frugally just to get to 700k by traditional retirement age!!! A "different FIRE path with assets in the millions" is not a choice for even middle class mustachians. Implying that its something people choose is just insulting. One must be very lucky indeed to have that choice available. The idea that those lucky individuals deserve our respect because of their "choice" smacks of meritocracy.

Middle class can't amass millions? My family just now passed the MEDIAN (not average- we are FAR below the average) income for our state- and could easily go from 0 to $1M in less than 13 years on that income even with our current EXPENSIVE lifestyle (thanks daycare). I think that would be considered "middle class" for our area. Make that a 25 year career and millionS would be relatively easy to amass thanks to compounding returns. I will not deny that we are lucky and privileged, but having multiple millions by your 40's or early 50's is relatively doable by much of the middle class. (Remember "in the millions" can be two or three million, we aren't talking 15 million for most people here)

Yup - Middle class can easily amass $700k-$1M over a career without trying hard - simply doing the 6-7% 401k + 3-4% match over a career will get you there (just run the math in excel from 22 to 65 starting at $30-40k/yr and raise 3% a year with 7-8% annual return). My parents never made it to median household income in their career, was massively in debt till 35 and still just retired with a net worth of $600k this year. Most people are in dire financial straights through poor spending habits.

And hardly anyone is on minimum wage - and the overwhelming majority that are on min wage are HS/college kids or retirees. Starting wages even at MCDs these days is around $14-$16/hr and rising 8-10% annually at the moment. Amazon is starting folks at $20+/hr. And anyone worth anything as an employee quickly moves off starting wages. I got promoted 8 times in 3 years after I started off of as a cashier as a college dropout at 20 years old, going from $1/min wage to $50k/yr equiv in today's $ at the age of 23 at a local grocery store. Hard work, flexibility and a good attitude go a long way.

[magus]

...FI could  actually be defined by a dollar range, e.g., $700,000 to $1.2M. They could argue that anyone could Frugal FIRE with invested assets in that range—but respect those who may choose a different FIRE path, with assets in the millions.

This part pissed me off the most: the idea that "anyone" can FIRE with upwards of 700k. Maybe anyone whose income is already in the top 25% of the US population. Someone on minimum wage would have to live very frugally just to get to 700k by traditional retirement age!!! A "different FIRE path with assets in the millions" is not a choice for even middle class mustachians. Implying that its something people choose is just insulting. One must be very lucky indeed to have that choice available. The idea that those lucky individuals deserve our respect because of their "choice" smacks of meritocracy.

Middle class can't amass millions? My family just now passed the MEDIAN (not average- we are FAR below the average) income for our state- and could easily go from 0 to $1M in less than 13 years on that income even with our current EXPENSIVE lifestyle (thanks daycare). I think that would be considered "middle class" for our area. Make that a 25 year career and millionS would be relatively easy to amass thanks to compounding returns. I will not deny that we are lucky and privileged, but having multiple millions by your 40's or early 50's is relatively doable by much of the middle class. (Remember "in the millions" can be two or three million, we aren't talking 15 million for most people here)

If someone earns, say, $50,000 a year and manages an impressive 75% savings rate of $37,500, then ignoring interest it's gonna take them over 25 years to get to a million. If they invest and get interest it'd be a bit faster of course. I'd definitely think that a $50,000 income is somewhere within the middle class, given that a 40 hours a week federal minimum wage works out to around $15,000 a year.

Yes. Additionally, if 12,500 is enough for them to live comfortably then why would they continue working until they got to 1 million? They could retire well on 312,500.

For me a key part of the FIRE movement is knowing what "enough" means, and stopping when you get there.

Why work when you hit the 4% threshold? For me, Margin of error (especially in an elevated inflation environment and who knows if the ACA will be around as is forever), ability to change spending in retirement as taste change (increase travel, experiences, etc), less concern about spending in general is good for mental health, there are likely expenses that come up infrequently you dont normally budget for and lastly, because going from $312k to a much higher # won't take that long. 2 more years would get you to $450k, 5 to $700k and 8 years to $1 million in the example we're discussing.

[Metalcat]

...FI could  actually be defined by a dollar range, e.g., $700,000 to $1.2M. They could argue that anyone could Frugal FIRE with invested assets in that range—but respect those who may choose a different FIRE path, with assets in the millions.

This part pissed me off the most: the idea that "anyone" can FIRE with upwards of 700k. Maybe anyone whose income is already in the top 25% of the US population. Someone on minimum wage would have to live very frugally just to get to 700k by traditional retirement age!!! A "different FIRE path with assets in the millions" is not a choice for even middle class mustachians. Implying that its something people choose is just insulting. One must be very lucky indeed to have that choice available. The idea that those lucky individuals deserve our respect because of their "choice" smacks of meritocracy.

Middle class can't amass millions? My family just now passed the MEDIAN (not average- we are FAR below the average) income for our state- and could easily go from 0 to $1M in less than 13 years on that income even with our current EXPENSIVE lifestyle (thanks daycare). I think that would be considered "middle class" for our area. Make that a 25 year career and millionS would be relatively easy to amass thanks to compounding returns. I will not deny that we are lucky and privileged, but having multiple millions by your 40's or early 50's is relatively doable by much of the middle class. (Remember "in the millions" can be two or three million, we aren't talking 15 million for most people here)

Yup - Middle class can easily amass $700k-$1M over a career without trying hard - simply doing the 6-7% 401k + 3-4% match over a career will get you there (just run the math in excel from 22 to 65 starting at $30-40k/yr and raise 3% a year with 7-8% annual return). My parents never made it to median household income in their career, was massively in debt till 35 and still just retired with a net worth of $600k this year. Most people are in dire financial straights through poor spending habits.

And hardly anyone is on minimum wage - and the overwhelming majority that are on min wage are HS/college kids or retirees. Starting wages even at MCDs these days is around $14-$16/hr and rising 8-10% annually at the moment. Amazon is starting folks at $20+/hr. And anyone worth anything as an employee quickly moves off starting wages. I got promoted 8 times in 3 years after I started off of as a cashier as a college dropout at 20 years old, going from $1/min wage to $50k/yr equiv in today's $ at the age of 23 at a local grocery store. Hard work, flexibility and a good attitude go a long way.

I'm sorry, what?

Hardly anyone is on minimum wage? I just read a book called "Invisible Women" that talks about the enormous stats of low income working mothers. There's a giant population of parents trying to support families on minimum to near minimum wage.

At least that was my understanding from the data.

[magus]

...FI could  actually be defined by a dollar range, e.g., $700,000 to $1.2M. They could argue that anyone could Frugal FIRE with invested assets in that range—but respect those who may choose a different FIRE path, with assets in the millions.

This part pissed me off the most: the idea that "anyone" can FIRE with upwards of 700k. Maybe anyone whose income is already in the top 25% of the US population. Someone on minimum wage would have to live very frugally just to get to 700k by traditional retirement age!!! A "different FIRE path with assets in the millions" is not a choice for even middle class mustachians. Implying that its something people choose is just insulting. One must be very lucky indeed to have that choice available. The idea that those lucky individuals deserve our respect because of their "choice" smacks of meritocracy.

Middle class can't amass millions? My family just now passed the MEDIAN (not average- we are FAR below the average) income for our state- and could easily go from 0 to $1M in less than 13 years on that income even with our current EXPENSIVE lifestyle (thanks daycare). I think that would be considered "middle class" for our area. Make that a 25 year career and millionS would be relatively easy to amass thanks to compounding returns. I will not deny that we are lucky and privileged, but having multiple millions by your 40's or early 50's is relatively doable by much of the middle class. (Remember "in the millions" can be two or three million, we aren't talking 15 million for most people here)

Yup - Middle class can easily amass $700k-$1M over a career without trying hard - simply doing the 6-7% 401k + 3-4% match over a career will get you there (just run the math in excel from 22 to 65 starting at $30-40k/yr and raise 3% a year with 7-8% annual return). My parents never made it to median household income in their career, was massively in debt till 35 and still just retired with a net worth of $600k this year. Most people are in dire financial straights through poor spending habits.

And hardly anyone is on minimum wage - and the overwhelming majority that are on min wage are HS/college kids or retirees. Starting wages even at MCDs these days is around $14-$16/hr and rising 8-10% annually at the moment. Amazon is starting folks at $20+/hr. And anyone worth anything as an employee quickly moves off starting wages. I got promoted 8 times in 3 years after I started off of as a cashier as a college dropout at 20 years old, going from $1/min wage to $50k/yr equiv in today's $ at the age of 23 at a local grocery store. Hard work, flexibility and a good attitude go a long way.

I'm sorry, what?

Hardly anyone is on minimum wage? I just read a book called "Invisible Women" that talks about the enormous stats of low income working mothers. There's a giant population of parents trying to support families on minimum to near minimum wage.

At least that was my understanding from the data.

According to the BLS for 2020, less than 1% of workers in the US make minimum wage and only 1.5% of hourly paid workers, and of those, a very large chunk get tipped. Of those that are on minimum wage, half are under 25 (aka college and HS kids). Full working age adults 25-65, less than one half of 1% are on minimum wage. Plus all of those with kids will also qualify for EITC, Child tax credit, food stamps, WIC, medicaid and other things that boost their real income by well over $10k/yr. This myth of the struggling minimum wage worker simply doesn't exist in quantity in the US. Frankly, many of them are better off than those making $18-$20/hr that don't quality for EITC, Food stamps, etc once you do the math. 

[former player]

...FI could  actually be defined by a dollar range, e.g., $700,000 to $1.2M. They could argue that anyone could Frugal FIRE with invested assets in that range—but respect those who may choose a different FIRE path, with assets in the millions.

This part pissed me off the most: the idea that "anyone" can FIRE with upwards of 700k. Maybe anyone whose income is already in the top 25% of the US population. Someone on minimum wage would have to live very frugally just to get to 700k by traditional retirement age!!! A "different FIRE path with assets in the millions" is not a choice for even middle class mustachians. Implying that its something people choose is just insulting. One must be very lucky indeed to have that choice available. The idea that those lucky individuals deserve our respect because of their "choice" smacks of meritocracy.

Middle class can't amass millions? My family just now passed the MEDIAN (not average- we are FAR below the average) income for our state- and could easily go from 0 to $1M in less than 13 years on that income even with our current EXPENSIVE lifestyle (thanks daycare). I think that would be considered "middle class" for our area. Make that a 25 year career and millionS would be relatively easy to amass thanks to compounding returns. I will not deny that we are lucky and privileged, but having multiple millions by your 40's or early 50's is relatively doable by much of the middle class. (Remember "in the millions" can be two or three million, we aren't talking 15 million for most people here)

Yup - Middle class can easily amass $700k-$1M over a career without trying hard - simply doing the 6-7% 401k + 3-4% match over a career will get you there (just run the math in excel from 22 to 65 starting at $30-40k/yr and raise 3% a year with 7-8% annual return). My parents never made it to median household income in their career, was massively in debt till 35 and still just retired with a net worth of $600k this year. Most people are in dire financial straights through poor spending habits.

And hardly anyone is on minimum wage - and the overwhelming majority that are on min wage are HS/college kids or retirees. Starting wages even at MCDs these days is around $14-$16/hr and rising 8-10% annually at the moment. Amazon is starting folks at $20+/hr. And anyone worth anything as an employee quickly moves off starting wages. I got promoted 8 times in 3 years after I started off of as a cashier as a college dropout at 20 years old, going from $1/min wage to $50k/yr equiv in today's $ at the age of 23 at a local grocery store. Hard work, flexibility and a good attitude go a long way.

I'm sorry, what?

Hardly anyone is on minimum wage? I just read a book called "Invisible Women" that talks about the enormous stats of low income working mothers. There's a giant population of parents trying to support families on minimum to near minimum wage.

At least that was my understanding from the data.

According to the BLS for 2020, less than 1% of workers in the US make minimum wage and only 1.5% of hourly paid workers, and of those, a very large chunk get tipped. Of those that are on minimum wage, half are under 25 (aka college and HS kids). Full working age adults 25-65, less than one half of 1% are on minimum wage. Plus all of those with kids will also qualify for EITC, Child tax credit, food stamps, WIC, medicaid and other things that boost their real income by well over $10k/yr. This myth of the struggling minimum wage worker simply doesn't exist in quantity in the US. Frankly, many of them are better off than those making $18-$20/hr that don't quality for EITC, Food stamps, etc once you do the math.

Are your figures based on all workers or only full-time workers?  Because a lot of women are unable to have full-time paid because of other responsibilities (child rearing, caring for elderly/disabled relatives, supporting a man in a full-time role) and so are earning the equivalent of minimum wage in fewer paid hours.

You also need to account for households where one or more people of working age have a disability that either prevents them from working or means that they are working less than full time.

[Morning Glory]

...FI could  actually be defined by a dollar range, e.g., $700,000 to $1.2M. They could argue that anyone could Frugal FIRE with invested assets in that range—but respect those who may choose a different FIRE path, with assets in the millions.

This part pissed me off the most: the idea that "anyone" can FIRE with upwards of 700k. Maybe anyone whose income is already in the top 25% of the US population. Someone on minimum wage would have to live very frugally just to get to 700k by traditional retirement age!!! A "different FIRE path with assets in the millions" is not a choice for even middle class mustachians. Implying that its something people choose is just insulting. One must be very lucky indeed to have that choice available. The idea that those lucky individuals deserve our respect because of their "choice" smacks of meritocracy.

Middle class can't amass millions? My family just now passed the MEDIAN (not average- we are FAR below the average) income for our state- and could easily go from 0 to $1M in less than 13 years on that income even with our current EXPENSIVE lifestyle (thanks daycare). I think that would be considered "middle class" for our area. Make that a 25 year career and millionS would be relatively easy to amass thanks to compounding returns. I will not deny that we are lucky and privileged, but having multiple millions by your 40's or early 50's is relatively doable by much of the middle class. (Remember "in the millions" can be two or three million, we aren't talking 15 million for most people here)

Yup - Middle class can easily amass $700k-$1M over a career without trying hard - simply doing the 6-7% 401k + 3-4% match over a career will get you there (just run the math in excel from 22 to 65 starting at $30-40k/yr and raise 3% a year with 7-8% annual return). My parents never made it to median household income in their career, was massively in debt till 35 and still just retired with a net worth of $600k this year. Most people are in dire financial straights through poor spending habits.

And hardly anyone is on minimum wage - and the overwhelming majority that are on min wage are HS/college kids or retirees. Starting wages even at MCDs these days is around $14-$16/hr and rising 8-10% annually at the moment. Amazon is starting folks at $20+/hr. And anyone worth anything as an employee quickly moves off starting wages. I got promoted 8 times in 3 years after I started off of as a cashier as a college dropout at 20 years old, going from $1/min wage to $50k/yr equiv in today's $ at the age of 23 at a local grocery store. Hard work, flexibility and a good attitude go a long way.

I'm sorry, what?

Hardly anyone is on minimum wage? I just read a book called "Invisible Women" that talks about the enormous stats of low income working mothers. There's a giant population of parents trying to support families on minimum to near minimum wage.

At least that was my understanding from the data.

According to the BLS for 2020, less than 1% of workers in the US make minimum wage and only 1.5% of hourly paid workers, and of those, a very large chunk get tipped. Of those that are on minimum wage, half are under 25 (aka college and HS kids). Full working age adults 25-65, less than one half of 1% are on minimum wage. Plus all of those with kids will also qualify for EITC, Child tax credit, food stamps, WIC, medicaid and other things that boost their real income by well over $10k/yr. This myth of the struggling minimum wage worker simply doesn't exist in quantity in the US. Frankly, many of them are better off than those making $18-$20/hr that don't quality for EITC, Food stamps, etc once you do the math.

I found your source:
https://www.bls.gov/opub/reports/minimum-wage/2020/home.htm

Your are talking about the federal minimum wage here. Of course it's less than 1% of the population,  because most states have a higher minimum wage than the federal rate of 7.25.  Failing to state this in your post was disingenuous at best.

[Morning Glory]

...FI could  actually be defined by a dollar range, e.g., $700,000 to $1.2M. They could argue that anyone could Frugal FIRE with invested assets in that range—but respect those who may choose a different FIRE path, with assets in the millions.

This part pissed me off the most: the idea that "anyone" can FIRE with upwards of 700k. Maybe anyone whose income is already in the top 25% of the US population. Someone on minimum wage would have to live very frugally just to get to 700k by traditional retirement age!!! A "different FIRE path with assets in the millions" is not a choice for even middle class mustachians. Implying that its something people choose is just insulting. One must be very lucky indeed to have that choice available. The idea that those lucky individuals deserve our respect because of their "choice" smacks of meritocracy.

Middle class can't amass millions? My family just now passed the MEDIAN (not average- we are FAR below the average) income for our state- and could easily go from 0 to $1M in less than 13 years on that income even with our current EXPENSIVE lifestyle (thanks daycare). I think that would be considered "middle class" for our area. Make that a 25 year career and millionS would be relatively easy to amass thanks to compounding returns. I will not deny that we are lucky and privileged, but having multiple millions by your 40's or early 50's is relatively doable by much of the middle class. (Remember "in the millions" can be two or three million, we aren't talking 15 million for most people here)

Yup - Middle class can easily amass $700k-$1M over a career without trying hard - simply doing the 6-7% 401k + 3-4% match over a career will get you there (just run the math in excel from 22 to 65 starting at $30-40k/yr and raise 3% a year with 7-8% annual return). My parents never made it to median household income in their career, was massively in debt till 35 and still just retired with a net worth of $600k this year. Most people are in dire financial straights through poor spending habits.

And hardly anyone is on minimum wage - and the overwhelming majority that are on min wage are HS/college kids or retirees. Starting wages even at MCDs these days is around $14-$16/hr and rising 8-10% annually at the moment. Amazon is starting folks at $20+/hr. And anyone worth anything as an employee quickly moves off starting wages. I got promoted 8 times in 3 years after I started off of as a cashier as a college dropout at 20 years old, going from $1/min wage to $50k/yr equiv in today's $ at the age of 23 at a local grocery store. Hard work, flexibility and a good attitude go a long way.

I'm sorry, what?

Hardly anyone is on minimum wage? I just read a book called "Invisible Women" that talks about the enormous stats of low income working mothers. There's a giant population of parents trying to support families on minimum to near minimum wage.

At least that was my understanding from the data.

According to the BLS for 2020, less than 1% of workers in the US make minimum wage and only 1.5% of hourly paid workers, and of those, a very large chunk get tipped. Of those that are on minimum wage, half are under 25 (aka college and HS kids). Full working age adults 25-65, less than one half of 1% are on minimum wage. Plus all of those with kids will also qualify for EITC, Child tax credit, food stamps, WIC, medicaid and other things that boost their real income by well over $10k/yr. This myth of the struggling minimum wage worker simply doesn't exist in quantity in the US. Frankly, many of them are better off than those making $18-$20/hr that don't quality for EITC, Food stamps, etc once you do the math.

Are your figures based on all workers or only full-time workers?  Because a lot of women are unable to have full-time paid because of other responsibilities (child rearing, caring for elderly/disabled relatives, supporting a man in a full-time role) and so are earning the equivalent of minimum wage in fewer paid hours.

You also need to account for households where one or more people of working age have a disability that either prevents them from working or means that they are working less than full time.

Ther are also many employers in the US that purposefully keep people under 30 hrs/week to avoid having to pay benefits.

[magus]

...FI could  actually be defined by a dollar range, e.g., $700,000 to $1.2M. They could argue that anyone could Frugal FIRE with invested assets in that range—but respect those who may choose a different FIRE path, with assets in the millions.

This part pissed me off the most: the idea that "anyone" can FIRE with upwards of 700k. Maybe anyone whose income is already in the top 25% of the US population. Someone on minimum wage would have to live very frugally just to get to 700k by traditional retirement age!!! A "different FIRE path with assets in the millions" is not a choice for even middle class mustachians. Implying that its something people choose is just insulting. One must be very lucky indeed to have that choice available. The idea that those lucky individuals deserve our respect because of their "choice" smacks of meritocracy.

Middle class can't amass millions? My family just now passed the MEDIAN (not average- we are FAR below the average) income for our state- and could easily go from 0 to $1M in less than 13 years on that income even with our current EXPENSIVE lifestyle (thanks daycare). I think that would be considered "middle class" for our area. Make that a 25 year career and millionS would be relatively easy to amass thanks to compounding returns. I will not deny that we are lucky and privileged, but having multiple millions by your 40's or early 50's is relatively doable by much of the middle class. (Remember "in the millions" can be two or three million, we aren't talking 15 million for most people here)

Yup - Middle class can easily amass $700k-$1M over a career without trying hard - simply doing the 6-7% 401k + 3-4% match over a career will get you there (just run the math in excel from 22 to 65 starting at $30-40k/yr and raise 3% a year with 7-8% annual return). My parents never made it to median household income in their career, was massively in debt till 35 and still just retired with a net worth of $600k this year. Most people are in dire financial straights through poor spending habits.

And hardly anyone is on minimum wage - and the overwhelming majority that are on min wage are HS/college kids or retirees. Starting wages even at MCDs these days is around $14-$16/hr and rising 8-10% annually at the moment. Amazon is starting folks at $20+/hr. And anyone worth anything as an employee quickly moves off starting wages. I got promoted 8 times in 3 years after I started off of as a cashier as a college dropout at 20 years old, going from $1/min wage to $50k/yr equiv in today's $ at the age of 23 at a local grocery store. Hard work, flexibility and a good attitude go a long way.

I'm sorry, what?

Hardly anyone is on minimum wage? I just read a book called "Invisible Women" that talks about the enormous stats of low income working mothers. There's a giant population of parents trying to support families on minimum to near minimum wage.

At least that was my understanding from the data.

According to the BLS for 2020, less than 1% of workers in the US make minimum wage and only 1.5% of hourly paid workers, and of those, a very large chunk get tipped. Of those that are on minimum wage, half are under 25 (aka college and HS kids). Full working age adults 25-65, less than one half of 1% are on minimum wage. Plus all of those with kids will also qualify for EITC, Child tax credit, food stamps, WIC, medicaid and other things that boost their real income by well over $10k/yr. This myth of the struggling minimum wage worker simply doesn't exist in quantity in the US. Frankly, many of them are better off than those making $18-$20/hr that don't quality for EITC, Food stamps, etc once you do the math.

I found your source:
https://www.bls.gov/opub/reports/minimum-wage/2020/home.htm

Your are talking about the federal minimum wage here. Of course it's less than 1% of the population,  because most states have a higher minimum wage than the federal rate of 7.25.  Conservative media manipulates data in the same way,  to support their talking points.

To the prior person - that was all US workers. 1.1 million people work a job that pays the Federal minimum wage, and a huge percentage of those are tipped, and half are under 25.

The federal minimum wage is a better barometer of poverty levels than say $15/hr min wage in a state or city. Most states with higher minimum wage still allow tipped employees below that (and a few other exceptions), though, and would be included in the #s I provided, hence why California still has 40k people at or below Fed Min wage. Also, the federal tax code does not care what your states minimum wage is. I did not look up conservative media or any media - I simply went straight to the BLS, but nice try.

Having worked for 3 companies that employ a lot of entry level employees, there simply isn't a large chunk working minimum wage - we can't find folks for double minimum wage in most of the country anymore - only smaller, more rural areas, that make up a small piece of our business are even still near $12. And those wages are rising high single digits and have been for several years now, with 2021 the highest at 10%+.

[MudPuppy]

And some pay them $7.50 so they can say that none of their workers make minimum wage. That quarter means anything in terms of buying power though. But hey, it’s good for the bootstrap mythology talking points!

[magus]

Ther are also many employers in the US that purposefully keep people under 30 hrs/week to avoid having to pay benefits.

This was a lot more common a few years ago, but still happens. These days, the only reason most firms are getting by is converting as many willing bodies as possible to full time with as many hours they want, including over 40. You'd have seen far more stores close permanently or much earlier in the day if they hadn't.

[StarBright]

Just to add numbers, because I consider us a relatively low-spend family. We are in a LCOL state, but a MCOL area and we are here for a job so relocation is not happening.

Our 2020 numbers are weird because of COVID, but in 2019 we spent just over 50k for a family of four. Honestly, other than charity, a vacation and a bad luck health year, going any lower would have been a squeeze for us that year:

11k is mortgage
8.5k of that is property taxes and insurances, town income taxes  (Property taxes have almost tripled since we moved in 5 years ago, our frugal house isn't so frugal anymore!).
8.4k food (in a pinch I can get this number way lower, but it is still better than most Americans)
6.8k health insurance and towards deductible (unfortunately we had to go to the doctor in 2019 so that added a couple k here)
5.3k for utilities (cell, water, sewer, electric, gas, internet, life insurance)
3.9k part time childcare for youngest
3.6k to charity
1k school fees (full day kindergarten still costs in our township)
600 to cars

3.5k for everything else: vacation, haircuts, Christmas, summer camp for older kid, clothes, fun stuff, DH's various academic fees (most of this was a vacation and big kid's summer camp).

I guess the numbers don't quite add up because we paid the health deductible out of an old HSA that I funded back in the pre-child days and most of my tracking is paycheck in, payments out - but yeah around 50k for a family of four in 2019.
 

[magus]

And some pay them $7.50 so they can say that none of their workers make minimum wage. That quarter means anything in terms of buying power though. But hey, it’s good for the bootstrap mythology talking points!

Seriously, you all should go look at payroll and hiring data. There simply are not many jobs in the US below $10 (once you include tips) period anymore and only a small piece below $12/hr. Fast food around me is starting at $15 and higher with sign on bonuses - and this is in the Carolinas - with retail (walmart, target) higher than that. And even with these higher wages, they simply can't find people - there are several million more jobs posted in the US than there are unemployed currently - and wages are skyrocketing. And all of these minimum wage studies ignore the massive subsidies they get once they have kids.

For example, a 2 child parent making minimum wage will receive at a minimum:
$4-5k EITC
$6k+ Child tax credits
$5k in SNAP benefits
$2k+ in WIC depending on ages
Free healthcare (medicaid)
Possibly Section 8 (free housing)

There is a reason median household income in the US is now over $70k and its not because there a lot of minimum wage jobs.

[innkeeper77]

...FI could  actually be defined by a dollar range, e.g., $700,000 to $1.2M. They could argue that anyone could Frugal FIRE with invested assets in that range—but respect those who may choose a different FIRE path, with assets in the millions.

This part pissed me off the most: the idea that "anyone" can FIRE with upwards of 700k. Maybe anyone whose income is already in the top 25% of the US population. Someone on minimum wage would have to live very frugally just to get to 700k by traditional retirement age!!! A "different FIRE path with assets in the millions" is not a choice for even middle class mustachians. Implying that its something people choose is just insulting. One must be very lucky indeed to have that choice available. The idea that those lucky individuals deserve our respect because of their "choice" smacks of meritocracy.

Middle class can't amass millions? My family just now passed the MEDIAN (not average- we are FAR below the average) income for our state- and could easily go from 0 to $1M in less than 13 years on that income even with our current EXPENSIVE lifestyle (thanks daycare). I think that would be considered "middle class" for our area. Make that a 25 year career and millionS would be relatively easy to amass thanks to compounding returns. I will not deny that we are lucky and privileged, but having multiple millions by your 40's or early 50's is relatively doable by much of the middle class. (Remember "in the millions" can be two or three million, we aren't talking 15 million for most people here)

If someone earns, say, $50,000 a year and manages an impressive 75% savings rate of $37,500, then ignoring interest it's gonna take them over 25 years to get to a million. If they invest and get interest it'd be a bit faster of course. I'd definitely think that a $50,000 income is somewhere within the middle class, given that a 40 hours a week federal minimum wage works out to around $15,000 a year.

Others have brought up the timeframe if 15 years for your example given 7% returns, im just going to point out that median income in the US is actually $67k, and a lot of the actual middle class makes significantly more than that.

[Morning Glory]

And some pay them $7.50 so they can say that none of their workers make minimum wage. That quarter means anything in terms of buying power though. But hey, it’s good for the bootstrap mythology talking points!

Seriously, you all should go look at payroll and hiring data. There simply are not many jobs in the US below $10 (once you include tips) period anymore and only a small piece below $12/hr. Fast food around me is starting at $15 and higher with sign on bonuses - and this is in the Carolinas - with retail (walmart, target) higher than that. And even with these higher wages, they simply can't find people - there are several million more jobs posted in the US than there are unemployed currently - and wages are skyrocketing. And all of these minimum wage studies ignore the massive subsidies they get once they have kids.

For example, a 2 child parent making minimum wage will receive at a minimum:
$4-5k EITC
$6k+ Child tax credits
$5k in SNAP benefits
$2k+ in WIC depending on ages
Free healthcare (medicaid)
Possibly Section 8 (free housing)

There is a reason median household income in the US is now over $70k and its not because there a lot of minimum wage jobs.

Do you think it's ethical for companies to pay wages so low that a person working 40 hrs/ week must rely on taxpayer subsidies to survive? Isn't the company the one taking advantage of government handouts,  in this scenario?

[magus]

And some pay them $7.50 so they can say that none of their workers make minimum wage. That quarter means anything in terms of buying power though. But hey, it’s good for the bootstrap mythology talking points!

Seriously, you all should go look at payroll and hiring data. There simply are not many jobs in the US below $10 (once you include tips) period anymore and only a small piece below $12/hr. Fast food around me is starting at $15 and higher with sign on bonuses - and this is in the Carolinas - with retail (walmart, target) higher than that. And even with these higher wages, they simply can't find people - there are several million more jobs posted in the US than there are unemployed currently - and wages are skyrocketing. And all of these minimum wage studies ignore the massive subsidies they get once they have kids.

For example, a 2 child parent making minimum wage will receive at a minimum:
$4-5k EITC
$6k+ Child tax credits
$5k in SNAP benefits
$2k+ in WIC depending on ages
Free healthcare (medicaid)
Possibly Section 8 (free housing)

There is a reason median household income in the US is now over $70k and its not because there a lot of minimum wage jobs.

Do you think it's ethical for companies to pay wages so low that a person working 40 hrs/ week must rely on taxpayer subsidies to survive? Isn't the company the one taking advantage of government handouts,  in this scenario?

No, because both the government and the person and the company are all better off than the job not existing, which is the real minimum wage ($0 - no job) which is a huge problem in a lot of Europe now with 15-20%+ unemployment rate for < 30-35 year olds. And I'm telling you, the dynamics of employee - employer relations have changed so much in the last 3-4 years its nearly the exact opposite situation of 2010-2011 when employers had all the power that a lot of folks in your shoes simply cannot comprehend it - As someone who has led budgeting and has access to payroll data for 10k+ people at two firms in the last year, its been unbelievable move. There just aren't low paying jobs anymore. We have zero at federal minimum wage and less than 10% are below $12/hr. There are more than 10 million jobs posted in the US currently and only about 7 million unemployed workers, and if employers thought they actually could hire folks, there would likely be 15 million jobs posted right now. 2000-2016 was a terrible time for lower paid US workers but 2017-today is rapidly making up for that - and will continue for at least 2-3 more years IMO, possibly for a lot longer. We had one city in Illinois (not Chicago) where we were competing with a MCDs paying $18/hr and $3k 3 month signing bonus.

[GodlessCommie]

I feel like one of the biggest disconnects between old timers and new arrivals is this: old timers see facepunches as a service, as a benefit of being on this forum. New arrivals see them as a personal attack.

[GodlessCommie]

No, because both the government and the person and the company are all better off than the job not existing

There is an assumption that a subsidized job would not exist without a subsidy. Alternative assumption: a job would still exist, but dividends would be lower, and taxpayers would come ahead. If Walmart can't employ a person w/o relying on food stamps, it will be Costco or Aldi or Wegmans or whatnot.

This is not to say that the alternative assumption is correct, but it is to say that the matter is complex and subject to serious economic research. Two things are certain, though: corporate subsidy is not the stated purpose of safety net programs, and if it was framed this way, it would not have public support.

The reference to youth unemployment in Europe is misleading. Europe is not homogeneous, and youth unemployment isn't universal there. There are baked in inefficiencies that lead to it, stemming from the quirks of political systems of affected countries; but there is no data that I know of that would point to corporate subsidies as the single best solution.

[BookLoverL]

FWIW, I just looked it up and here in the UK then apparently in April 2019 around 7% of UK workers were on the UK minimum wage, and in the year April 2019 to March 2020 the median UK income was £29,900.

[Ron Scott]

And some pay them $7.50 so they can say that none of their workers make minimum wage. That quarter means anything in terms of buying power though. But hey, it’s good for the bootstrap mythology talking points!

Seriously, you all should go look at payroll and hiring data. There simply are not many jobs in the US below $10 (once you include tips) period anymore and only a small piece below $12/hr. Fast food around me is starting at $15 and higher with sign on bonuses - and this is in the Carolinas - with retail (walmart, target) higher than that. And even with these higher wages, they simply can't find people - there are several million more jobs posted in the US than there are unemployed currently - and wages are skyrocketing. And all of these minimum wage studies ignore the massive subsidies they get once they have kids.

For example, a 2 child parent making minimum wage will receive at a minimum:
$4-5k EITC
$6k+ Child tax credits
$5k in SNAP benefits
$2k+ in WIC depending on ages
Free healthcare (medicaid)
Possibly Section 8 (free housing)

There is a reason median household income in the US is now over $70k and its not because there a lot of minimum wage jobs.

Do you think it's ethical for companies to pay wages so low that a person working 40 hrs/ week must rely on taxpayer subsidies to survive? Isn't the company the one taking advantage of government handouts,  in this scenario?

The US ying-yangs on this point constantly—IMO to the detriment of employees, their employers, and our society. My personal opinion is that elected lawmakers should develop the rules of the game that employers must follow (including minimum wages), that ensure employees are treated fairly and our corporations remain healthy and competitive.

I don’t know the numbers but I believe there are more than 1 million firms in the United States that employ more than 10 people. We cannot rely on ethical behavior among so many firms and if we do we are only fooling ourselves. Reasonable regulations…

To your second point, you can argue that companies “take advantage” of government handouts to their employees but you then get mired in a) what constitutes a handout that the government protects the companies from (SS? Unemployment insurance? Medicare? Roads and public transportation?), and b) whether US corporations would be disadvantaged vs. their international competitors if forced to provide every benefit the government does.

Elected lawmakers (I know we’re in a disastrous period now) must achieve the balance.

[Morning Glory]

No, because both the government and the person and the company are all better off than the job not existing

There is an assumption that a subsidized job would not exist without a subsidy. Alternative assumption: a job would still exist, but dividends would be lower, and taxpayers would come ahead. If Walmart can't employ a person w/o relying on food stamps, it will be Costco or Aldi or Wegmans or whatnot.

This is not to say that the alternative assumption is correct, but it is to say that the matter is complex and subject to serious economic research. Two things are certain, though: corporate subsidy is not the stated purpose of safety net programs, and if it was framed this way, it would not have public support.

The reference to youth unemployment in Europe is misleading. Europe is not homogeneous, and youth unemployment isn't universal there. There are baked in inefficiencies that lead to it, stemming from the quirks of political systems of affected countries; but there is no data that I know of that would point to corporate subsidies as the single best solution.

The idea that a job is a net good no matter how low paying should be subject to some scrutiny: why should a corporation profit off of life energy that they acquire at a steep discount while relying on government programs to keep people fed and housed? A business that can't afford to pay a living wage is a bad business that should fail. Of course a person who makes their living at the top of such an organization might be subject to some bias

I'm not against safety net programs, but corporate subsidy is an unintended consequence of them, if only because they prevent the kind of civil unrest that usually occurs when people are getting starvation wages.

[Morning Glory]

And some pay them $7.50 so they can say that none of their workers make minimum wage. That quarter means anything in terms of buying power though. But hey, it’s good for the bootstrap mythology talking points!

Seriously, you all should go look at payroll and hiring data. There simply are not many jobs in the US below $10 (once you include tips) period anymore and only a small piece below $12/hr. Fast food around me is starting at $15 and higher with sign on bonuses - and this is in the Carolinas - with retail (walmart, target) higher than that. And even with these higher wages, they simply can't find people - there are several million more jobs posted in the US than there are unemployed currently - and wages are skyrocketing. And all of these minimum wage studies ignore the massive subsidies they get once they have kids.

For example, a 2 child parent making minimum wage will receive at a minimum:
$4-5k EITC
$6k+ Child tax credits
$5k in SNAP benefits
$2k+ in WIC depending on ages
Free healthcare (medicaid)
Possibly Section 8 (free housing)

There is a reason median household income in the US is now over $70k and its not because there a lot of minimum wage jobs.

Do you think it's ethical for companies to pay wages so low that a person working 40 hrs/ week must rely on taxpayer subsidies to survive? Isn't the company the one taking advantage of government handouts,  in this scenario?

The US ying-yangs on this point constantly—IMO to the detriment of employees, their employers, and our society. My personal opinion is that elected lawmakers should develop the rules of the game that employers must follow (including minimum wages), that ensure employees are treated fairly and our corporations remain healthy and competitive.

I don’t know the numbers but I believe there are more than 1 million firms in the United States that employ more than 10 people. We cannot rely on ethical behavior among so many firms and if we do we are only fooling ourselves. Reasonable regulations…

To your second point, you can argue that companies “take advantage” of government handouts to their employees but you then get mired in a) what constitutes a handout that the government protects the companies from (SS? Unemployment insurance? Medicare? Roads and public transportation?), and b) whether US corporations would be disadvantaged vs. their international competitors if forced to provide every benefit the government does.

Elected lawmakers (I know we’re in a disastrous period now) must achieve the balance.

Of course.  Even the very most respected nonprofit institutions are guilty of working in their own self-interest, at the expense of others. A company whose mission is to make a profit is expected to do so without consideration for collateral damage. That's modern capitalism.

This is why I just can't comprehend why Republicans are against a national Healthcare plan. It would help corporations just as much as individuals.  I don't know why big business lobbyists aren't all over it.

[Metalcat]

...FI could  actually be defined by a dollar range, e.g., $700,000 to $1.2M. They could argue that anyone could Frugal FIRE with invested assets in that range—but respect those who may choose a different FIRE path, with assets in the millions.

This part pissed me off the most: the idea that "anyone" can FIRE with upwards of 700k. Maybe anyone whose income is already in the top 25% of the US population. Someone on minimum wage would have to live very frugally just to get to 700k by traditional retirement age!!! A "different FIRE path with assets in the millions" is not a choice for even middle class mustachians. Implying that its something people choose is just insulting. One must be very lucky indeed to have that choice available. The idea that those lucky individuals deserve our respect because of their "choice" smacks of meritocracy.

Middle class can't amass millions? My family just now passed the MEDIAN (not average- we are FAR below the average) income for our state- and could easily go from 0 to $1M in less than 13 years on that income even with our current EXPENSIVE lifestyle (thanks daycare). I think that would be considered "middle class" for our area. Make that a 25 year career and millionS would be relatively easy to amass thanks to compounding returns. I will not deny that we are lucky and privileged, but having multiple millions by your 40's or early 50's is relatively doable by much of the middle class. (Remember "in the millions" can be two or three million, we aren't talking 15 million for most people here)

Yup - Middle class can easily amass $700k-$1M over a career without trying hard - simply doing the 6-7% 401k + 3-4% match over a career will get you there (just run the math in excel from 22 to 65 starting at $30-40k/yr and raise 3% a year with 7-8% annual return). My parents never made it to median household income in their career, was massively in debt till 35 and still just retired with a net worth of $600k this year. Most people are in dire financial straights through poor spending habits.

And hardly anyone is on minimum wage - and the overwhelming majority that are on min wage are HS/college kids or retirees. Starting wages even at MCDs these days is around $14-$16/hr and rising 8-10% annually at the moment. Amazon is starting folks at $20+/hr. And anyone worth anything as an employee quickly moves off starting wages. I got promoted 8 times in 3 years after I started off of as a cashier as a college dropout at 20 years old, going from $1/min wage to $50k/yr equiv in today's $ at the age of 23 at a local grocery store. Hard work, flexibility and a good attitude go a long way.

I'm sorry, what?

Hardly anyone is on minimum wage? I just read a book called "Invisible Women" that talks about the enormous stats of low income working mothers. There's a giant population of parents trying to support families on minimum to near minimum wage.

At least that was my understanding from the data.

According to the BLS for 2020, less than 1% of workers in the US make minimum wage and only 1.5% of hourly paid workers, and of those, a very large chunk get tipped. Of those that are on minimum wage, half are under 25 (aka college and HS kids). Full working age adults 25-65, less than one half of 1% are on minimum wage. Plus all of those with kids will also qualify for EITC, Child tax credit, food stamps, WIC, medicaid and other things that boost their real income by well over $10k/yr. This myth of the struggling minimum wage worker simply doesn't exist in quantity in the US. Frankly, many of them are better off than those making $18-$20/hr that don't quality for EITC, Food stamps, etc once you do the math.

I found your source:
https://www.bls.gov/opub/reports/minimum-wage/2020/home.htm

Your are talking about the federal minimum wage here. Of course it's less than 1% of the population,  because most states have a higher minimum wage than the federal rate of 7.25.  Conservative media manipulates data in the same way,  to support their talking points.

To the prior person - that was all US workers. 1.1 million people work a job that pays the Federal minimum wage, and a huge percentage of those are tipped, and half are under 25.

The federal minimum wage is a better barometer of poverty levels than say $15/hr min wage in a state or city. Most states with higher minimum wage still allow tipped employees below that (and a few other exceptions), though, and would be included in the #s I provided, hence why California still has 40k people at or below Fed Min wage. Also, the federal tax code does not care what your states minimum wage is. I did not look up conservative media or any media - I simply went straight to the BLS, but nice try.

Having worked for 3 companies that employ a lot of entry level employees, there simply isn't a large chunk working minimum wage - we can't find folks for double minimum wage in most of the country anymore - only smaller, more rural areas, that make up a small piece of our business are even still near $12. And those wages are rising high single digits and have been for several years now, with 2021 the highest at 10%+.

Yeah, it looks like we're comparing apples to oranges. Federal minimum wage is irrelevant when there are state minimum wages that are higher.

Also, I specifically said minimum wage or near minimum wage.

If you want to compare apples to apples maybe let's use language like "livable wage" to be clear as to what we're comparing.

[secondcor521]

I also don't currently have a car and have medical thru the VA so minimal cost.

Thanks for the detailed reply, @spartana.

The above seems to be most of the difference - if I subtract those categories out, I'm down to about $16K per year.

At some point in the future when my kids have flown the coop I'll probably downsize.  Silly for me to live in a 1800 sqft 4 bedroom house.  But I don't know if that will save me any money because I'll probably half the size and double the price per square foot.

I think your expenses are pretty impressively low. Especially with kids! I'm always impressed when people manage to save with kids as they seem to be adorable little high expenses ;-).

I FIREd fairly lean in terms of actual stash-size compared to most here (and probably worked more years then the high earners did) but had a paid off house in a HCOL area I knew I'd eventually sell and downsize from plus a small future pension I get at 50 around 10 or so years after FIREd so those were a bit of a safety net and would put me into fatter FIRE later. Like a lot of others over 40 here I lost 50% of my total NW during the Great Recession but having low expenses (dropped down to spending only $1000/month with little sacrifice but a bit of belt tightening for awhile as my base expenses were much lower then now) allowed me to leave much of the stash alone to rebound without it effecting me much if at all.

To be fair, two of my three kids are away at college right now, and I did exclude my largest budget category ("College") and my fourth largest budget category ("Kids") already.  And I halved my "Food" category because the one kid living at home easily eats half of that food.

I'm just glad I'm not missing anything major (that would be hard; I've been working my frugality muscles for at least 25 years).  Thanks again!

[uwp]

This is one of my biggest pet peeves about the so-called frugality of MMM. 

Go back to that original post about living on only 27k.  He also mentions his paid off house, a 2,600sq/ft 4 br home in one of the nicest areas of the city, which he estimated to be worth double what he calls the average home in Longmont. If you take his 27k spend, and inflate it to todays numbers of roughly 32k/year, then check in on what a similar home would cost (Pete has helpfully updated that post with an estimate that his house would be around 700k today) that looks like a 3k/month mortgage payment even with 140k down.

So, 36k housing expenses plus 32k non-housing expenses, is 68k total expenses to live as "frugal" as MMM (if you are still paying off your house).
Would anyone say that 68k/yr is living cheaply?
What is the median family income for Longmont?  A quick google gives a few different answers, but generally seems around 80k.
Plug that into a simple tax calculator (married, one kid) and you probably take home around 75% of that after federal/state/FICA taxes... 60k/yr.

The headline number sounds shocking, but ultimately spending 30k ex-housing is likely more spending than the majority of families in the US.

[nereo]

This is one of my biggest pet peeves about the so-called frugality of MMM. 

Go back to that original post about living on only 27k.  He also mentions his paid off house, a 2,600sq/ft 4 br home in one of the nicest areas of the city, which he estimated to be worth double what he calls the average home in Longmont. If you take his 27k spend, and inflate it to todays numbers of roughly 32k/year, then check in on what a similar home would cost (Pete has helpfully updated that post with an estimate that his house would be around 700k today) that looks like a 3k/month mortgage payment even with 140k down.

So, 36k housing expenses plus 32k non-housing expenses, is 68k total expenses to live as "frugal" as MMM (if you are still paying off your house).
Would anyone say that 68k/yr is living cheaply?
What is the median family income for Longmont?  A quick google gives a few different answers, but generally seems around 80k.
Plug that into a simple tax calculator (married, one kid) and you probably take home around 75% of that after federal/state/FICA taxes... 60k/yr.

The headline number sounds shocking, but ultimately spending 30k ex-housing is likely more spending than the majority of families in the US.

This is at the core of why MMM has frequently talked about how his life is ridiculously luxurious (“an exploding volcano”), why he takes issue when people suggest he or his family live a life of deprivation, how he constantly points out how he still has the typical fancy-pants “toys” so typical of the middle class, and how if you think his blog is about extreme frugality you missed the point.

From day 1 the message has been that one can escape the requirement to work while leading a life very similar to most middle class families by avoiding the dumbest financial mistakes and being more financially smart overall. Early on he talked about how he preferred a paid off house, and that’s always been clear in his budgets. It’s one of the main points that has split the longtime community here.

Yet somehow these points get completely overlooked again and again, as evidenced in this very thread. YES it assumes a paid off home. YES this is a very comfortable lifestyle for most. Subtract out the PI for an equivalent home, retirement savings, the extra one pays on income taxes, interest on debt and work-related costs and this mirrors the spending for many households that earn $60-85k/year. It is NOT early-retirement-extreme or a tightwad-clique.

[Metalcat]

This is one of my biggest pet peeves about the so-called frugality of MMM. 

Go back to that original post about living on only 27k.  He also mentions his paid off house, a 2,600sq/ft 4 br home in one of the nicest areas of the city, which he estimated to be worth double what he calls the average home in Longmont. If you take his 27k spend, and inflate it to todays numbers of roughly 32k/year, then check in on what a similar home would cost (Pete has helpfully updated that post with an estimate that his house would be around 700k today) that looks like a 3k/month mortgage payment even with 140k down.

So, 36k housing expenses plus 32k non-housing expenses, is 68k total expenses to live as "frugal" as MMM (if you are still paying off your house).
Would anyone say that 68k/yr is living cheaply?
What is the median family income for Longmont?  A quick google gives a few different answers, but generally seems around 80k.
Plug that into a simple tax calculator (married, one kid) and you probably take home around 75% of that after federal/state/FICA taxes... 60k/yr.

The headline number sounds shocking, but ultimately spending 30k ex-housing is likely more spending than the majority of families in the US.

This is at the core of why MMM has frequently talked about how his life is ridiculously luxurious (“an exploding volcano”), why he takes issue when people suggest he or his family live a life of deprivation, how he constantly points out how he still has the typical fancy-pants “toys” so typical of the middle class, and how if you think his blog is about extreme frugality you missed the point.

From day 1 the message has been that one can escape the requirement to work while leading a life very similar to most middle class families by avoiding the dumbest financial mistakes and being more financially smart overall. Early on he talked about how he preferred a paid off house, and that’s always been clear in his budgets. It’s one of the main points that has split the longtime community here.

Yet somehow these points get completely overlooked again and again, as evidenced in this very thread. YES it assumes a paid off home. YES this is a very comfortable lifestyle for most. Subtract out the PI for an equivalent home, retirement savings, the extra one pays on income taxes, interest on debt and work-related costs and this mirrors the spending for many households that earn $60-85k/year. It is NOT early-retirement-extreme or a tightwad-clique.

Exactly, this has always been very transparent and self evident. He's gone over this repeatedly, in detail.

[vand]

$25k/yr (£18k) is around my sort of ThinFI level of expenditure that I could quite happily live on and enjoy life, and I'm in UK so cost comparisons for OP are reasonable.
But I think more around £26k/yr would be a very nice retirement level of spending, and FatFIRE would be up around £34k/yr.

But that's for the "basic plan" assuming paid off home, so only everyday bills and discretionary expenditure covered. Real life will be more complicated than that as I plan to carry a sizeable mortgage for as long as possible.

I did meticulously record all my discretionary spending in 2019 and it came in embarassingly low (around 9k purely discretionary, or 13k with bills), but I think that when you're doing that you tend to batton down the hatches and go into minimalist mode, and it's no fun way to be living.

[Metalcat]

$25k/yr (£18k) is around my sort of ThinFI level of expenditure that I could quite happily live on and enjoy life, and I'm in UK so cost comparisons for OP are reasonable.
But I think more around £26k/yr would be a very nice retirement level of spending, and FatFIRE would be up around £34k/yr.

But that's for the "basic plan" assuming paid off home, so only everyday bills and discretionary expenditure covered. Real life will be more complicated than that as I plan to carry a sizeable mortgage for as long as possible.

I did meticulously record all my discretionary spending in 2019 and it came in embarassingly low (around 9k purely discretionary, or 13k with bills), but I think that when you're doing that you tend to batton down the hatches and go into minimalist mode, and it's no fun way to be living.

I'm sure some people do, but plenty of people here meticulously track expenses and don't "go into minimalist mode" and end up miserable.

It sounds like you are suggesting that tracking is bad and very low spends are embarrassing, and I'm kind of confused by that messaging.

[BookLoverL]

$25k/yr (£18k) is around my sort of ThinFI level of expenditure that I could quite happily live on and enjoy life, and I'm in UK so cost comparisons for OP are reasonable.
But I think more around £26k/yr would be a very nice retirement level of spending, and FatFIRE would be up around £34k/yr.

But that's for the "basic plan" assuming paid off home, so only everyday bills and discretionary expenditure covered. Real life will be more complicated than that as I plan to carry a sizeable mortgage for as long as possible.

I did meticulously record all my discretionary spending in 2019 and it came in embarassingly low (around 9k purely discretionary, or 13k with bills), but I think that when you're doing that you tend to batton down the hatches and go into minimalist mode, and it's no fun way to be living.

Interesting. I think £20k a year post-tax would be FatFIRE for me for sure.

[Dicey]

I am thoroughly enjoying this thread. So much so, I forgot to answer. Um, hell no. We pay more than that in property taxes. Yeah, some of that tax bill is for the rentals, and offset by rental income, but still... writing those checks is painful.

Our goal has always been for our retirement income to equal DH's working income. We're just about there and DH will be pulling the plug as soon as their current contract negotiations are concluded. Can't wait for him to join me in FIREland!

[Cool Friend]

I ran the numbers using a particularly spendy month, and my expenses excluding housing costs is $20,000. I think I could easily cut that to $15,000. Boy I wish I weren’t permanently priced out of the housing market.

[Morning Glory]

I ran the numbers using a particularly spendy month, and my expenses excluding housing costs is $20,000. I think I could easily cut that to $15,000. Boy I wish I weren’t permanently priced out of the housing market.

How are you permanently priced out of the housing market? I assume you live in expensiveville, but you never know what the market will do. Look at Detroit.

BTW I just want to thank everyone for making this a place where a variety of opinions can be shared and ideas debated!! I love the mentality of questioning perceived wisdom and "common knowledge", even if I occasionally burn my pancakes because I'm arguing about politics with you all.

[Cool Friend]

I ran the numbers using a particularly spendy month, and my expenses excluding housing costs is $20,000. I think I could easily cut that to $15,000. Boy I wish I weren’t permanently priced out of the housing market.

How are you permanently priced out of the housing market? I assume you live in expensiveville, but you never know what the market will do. Look at Detroit.

BTW I just want to thank everyone for making this a place where a variety of opinions can be shared and ideas debated!! I love the mentality of questioning perceived wisdom and "common knowledge", even if I occasionally burn my pancakes because I'm arguing about politics with you all.

Bingo! Expensiveville USA with outrageous housing prices. Trouble is, I'm from here and have lived here most of my life--it's where all my family, friends, and other connections are. So every time I start fantasizing about moving somewhere with more reasonable housing costs, I think about the sacrifice of my human network, which is probably the most valuable thing I have.

Permanently was a strong word though. You're right of course, I have no idea what the future of real estate holds. It just often feels like I was born in the wrong place at the wrong time, with housing prices soaring beyond what I can save and I get really pessimistic about it.

[Morning Glory]

I ran the numbers using a particularly spendy month, and my expenses excluding housing costs is $20,000. I think I could easily cut that to $15,000. Boy I wish I weren’t permanently priced out of the housing market.

How are you permanently priced out of the housing market? I assume you live in expensiveville, but you never know what the market will do. Look at Detroit.

BTW I just want to thank everyone for making this a place where a variety of opinions can be shared and ideas debated!! I love the mentality of questioning perceived wisdom and "common knowledge", even if I occasionally burn my pancakes because I'm arguing about politics with you all.

Bingo! Expensiveville USA with outrageous housing prices. Trouble is, I'm from here and have lived here most of my life--it's where all my family, friends, and other connections are. So every time I start fantasizing about moving somewhere with more reasonable housing costs, I think about the sacrifice of my human network, which is probably the most valuable thing I have.

Permanently was a strong word though. You're right of course, I have no idea what the future of real estate holds. It just often feels like I was born in the wrong place at the wrong time, with housing prices soaring beyond what I can save and I get really pessimistic about it.

Ah. Being from cheapville has it's downside too. My human network is scattered to the four winds because nobody stayed there after they graduated. I actually bought a house there for $45k when I was in college. Probably better to be a renter, and have connections.

[K_in_the_kitchen]

I ran the numbers using a particularly spendy month, and my expenses excluding housing costs is $20,000. I think I could easily cut that to $15,000. Boy I wish I weren’t permanently priced out of the housing market.

How are you permanently priced out of the housing market? I assume you live in expensiveville, but you never know what the market will do. Look at Detroit.

BTW I just want to thank everyone for making this a place where a variety of opinions can be shared and ideas debated!! I love the mentality of questioning perceived wisdom and "common knowledge", even if I occasionally burn my pancakes because I'm arguing about politics with you all.

Bingo! Expensiveville USA with outrageous housing prices. Trouble is, I'm from here and have lived here most of my life--it's where all my family, friends, and other connections are. So every time I start fantasizing about moving somewhere with more reasonable housing costs, I think about the sacrifice of my human network, which is probably the most valuable thing I have.

Permanently was a strong word though. You're right of course, I have no idea what the future of real estate holds. It just often feels like I was born in the wrong place at the wrong time, with housing prices soaring beyond what I can save and I get really pessimistic about it.

I grew up in Expensiveville USA and still live here -- we were lucky to buy 21 years ago or rather we made a huge financial leap of faith that paid off.  At the time all of our family (both sides) were here.  Since then we've lost a few to death and a two have moved across the country, but most of us are here, as are the majority of our friends.  Both of us being kids who moved often as children , we wanted something different and we've planted deep roots in our community.  Now we face the reality of our young adult children having almost no way to buy a house here.

Right now my plan is to wait out the market and if/when it drops we'll start looking for something to buy as a potential for either our kids or for us.  If their plans don't end up including staying here (for example if they can't find work in their fields or they meet someone who wants to live elsewhere), we'll have rentals or can sell when they market goes up again.  Or it may be that we switch up the house we have to be more friendly to multigenerational living.  And we aren't the only ones we know who are thinking along these lines -- we know people building ADUs specifically to create homes for their young adult children.

[mm1970]

In 2020, 9.4% of all households were making <$15k per year

https://www.statista.com/statistics/203183/percentage-distribution-of-household-income-in-the-us/

[American GenX]

I did meticulously record all my discretionary spending in 2019 and it came in embarassingly low (around 9k purely discretionary, or 13k with bills)

??  Embarrassing low?  That sounds like a lot to me.  I've averaged closer to $2K/yr discretionary spending for several years.  I certainly haven't been miserable.

[PDXTabs]

I did meticulously record all my discretionary spending in 2019 and it came in embarassingly low (around 9k purely discretionary, or 13k with bills)

??  Embarrassing low?  That sounds like a lot to me.  I've averaged closer to $2K/yr discretionary spending for several years.  I certainly haven't been miserable.

Discretionary is pretty poorly defined in my book. I'd be interested to see what both of you count as "discretionary" and in particular what one of you counts as a necessity but the other doesn't (possible examples include: meat, cell phone, car, fresh produce, extra insurance, a car, etc).

[MudPuppy]

I’m over here hoping someone else admits to spending more on pet care than on their mortgage…

(No face punches, I understand I am the Nair spokesperson here)

[innkeeper77]

I’m over here hoping someone else admits to spending more on pet care than on their mortgage…

(No face punches, I u defat and I am the Nair spokesperson here)

Pet insurance has served me well. $44 a month for a puppy where they paid out $3900 in the first year.. the cats are self insured, and we will pay for anything that is in the best interest of the animal. Enev though we could afford the bill I’m quite glad I took the advice to get insurance for the dog!

[secondcor521]

I’m over here hoping someone else admits to spending more on pet care than on their mortgage…

(No face punches, I u defat and I am the Nair spokesperson here)

I do, but it's not hard with one cat and a paid off home.

[Dicey]

I feel like one of the biggest disconnects between old timers and new arrivals is this: old timers see facepunches as a service, as a benefit of being on this forum. New arrivals see them as a personal attack.

Not sure who or what you were responding to, but that's an excellent observation.

[MudPuppy]

I’m over here hoping someone else admits to spending more on pet care than on their mortgage…

(No face punches, I u defat and I am the Nair spokesperson here)

Pet insurance has served me well. $44 a month for a puppy where they paid out $3900 in the first year.. the cats are self insured, and we will pay for anything that is in the best interest of the animal. Enev though we could afford the bill I’m quite glad I took the advice to get insurance for the dog!

I knew mine were lemons when I took them in, unfortunately! Their illnesses are why they hadn’t been adopted.