Poll

What's your income level and savings rate?

$0-$50k - 0%-20%
$0-$50k - 20%-50%
$0-$50k - 50%+
$50-$75k - 0%-20%
$50-$75k - 20%-50%
$50-$75k - 50%+
$75-$100k - 0%-20%
$75-$100k - 20%-50%
$75-$100k - 50%+
>$100k - 0%-20%
>$100k - 20%-50%
>$100k - 50%+

Author Topic: What's your income level and savings rate?  (Read 54390 times)

gerardc

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Re: What's your income level and savings rate?
« Reply #250 on: July 14, 2017, 09:45:56 PM »
~$335k (including employer match), ~82% savings rate
1 person, HCOL area

Around 71% (sigh) of my total expenses goes to rent. I'm renting almost the cheapest I can get 3 miles from work (most important criteria) and with no roommates. I'm pretty frugal other than that.

I may revisit the "no roommates" clause but I'd save ~$10k more a year, i.e. 3 more weeks of work per year, so I'm not sure it's worth the headache.


My theory to compare saving rates in HCOL vs LCOL (I've said this a few times before):

Salary is roughly proportional to COL in your area, so if COL doubles, your salary approximately doubles, and your savings per year double too, and your savings rate is the same, for the same level of effort. Using formulas in "the simple math to early retirement" purely as a function of savings rate will thus give you the same time to retire. However, the magic happens if you plan to leave the HCOL to a LCOL on FIRE, which can cut your work years roughly in half if you move to an area with half COL.
« Last Edit: July 14, 2017, 10:47:12 PM by gerardc »

VolcanicArts

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Re: What's your income level and savings rate?
« Reply #251 on: July 14, 2017, 10:50:57 PM »
I recently downloaded the money pro app, and have been using it religiously. It tracks every expense as well as income and has a lot of really good graphs that give you an idea of your net worth as well as savings rate. I was feeling really upbeat last week and was near the 60% savings rate, but then I got slammed with all types of unexpected stuff this week that knocked my savings rate for the month way down. Kind of a bummer, but this app is really good, and I want to see how much I am spending per month on average, as well as my average savings percent per month over at least a year and then I can get a better idea f how close to FI I really am. My current estimate is I'm about 50% FI, and about 6 years off from FIRE, but this may change based on the numbers that Money Pro gives me. I've also been working on some pretty detailed spreadsheets that calculate almost exactly my after tax and fee dividend amount, and I've been graphing this out as I plan to eventually just live off the dividend yield without ever touching the principal.

gerardc

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Re: What's your income level and savings rate?
« Reply #252 on: July 14, 2017, 10:52:42 PM »
~$335k (including benefits), ~82% savings rate
1 person, HCOL area
Around 71% (sigh) of my total expenses goes to rent.

This is exactly why the poll will be inconclusive.  Any job with great benefits throws everything else off.  For example, my job pays OK, but covers healthcare premiums 100%.  My former job paid really well and 150% OT, but had crap healthcare.

Oh sorry, by benefits I meant 401k employer matching, I didn't include health or other perks. I should have been more clear.

Without employer matching it would be ~$325k income, about same savings rate, so not much difference. I'm not tracking any of that to the dollar, that's just an approximation.

ETA: Just did a more precise calculation. By counting 401k/HSA contributions as both savings and net income, I get 83% savings rate. By not counting them neither as savings nor net income, I get 80%, so again not much difference. I actually prefer counting them.
« Last Edit: July 14, 2017, 10:58:06 PM by gerardc »

Classical_Liberal

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Re: What's your income level and savings rate?
« Reply #253 on: July 15, 2017, 10:27:51 AM »
Salary is roughly proportional to COL in your area, so if COL doubles, your salary approximately doubles, and your savings per year double too, and your savings rate is the same, for the same level of effort. Using formulas in "the simple math to early retirement" purely as a function of savings rate will thus give you the same time to retire. However, the magic happens if you plan to leave the HCOL to a LCOL on FIRE, which can cut your work years roughly in half if you move to an area with half COL.

Or manufacture a system in which you can earn the upper end of your fields pay-scale, but live in a LCOL area.  This is possible with many careers. (remote work, travel work, ect)

Or manufacture a system to live in a HCOL with high salary and spend more like you live in a LCOL. (See Herbert Derp's journal, ERE)

Or do both and live at 1/2 the LCOL areas expenses!!  I worship the ground this person walks on.

Lmoot

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Re: What's your income level and savings rate?
« Reply #254 on: July 16, 2017, 06:25:01 PM »
Salary is roughly proportional to COL in your area, so if COL doubles, your salary approximately doubles, and your savings per year double too, and your savings rate is the same, for the same level of effort. Using formulas in "the simple math to early retirement" purely as a function of savings rate will thus give you the same time to retire. However, the magic happens if you plan to leave the HCOL to a LCOL on FIRE, which can cut your work years roughly in half if you move to an area with half COL.

Or manufacture a system in which you can earn the upper end of your fields pay-scale, but live in a LCOL area.  This is possible with many careers. (remote work, travel work, ect)

Or manufacture a system to live in a HCOL with high salary and spend more like you live in a LCOL. (See Herbert Derp's journal, ERE)

Or do both and live at 1/2 the LCOL areas expenses!!  I worship the ground this person walks on.

It seems like employers are getting hip to this method and are insisting on paying a different wage depending on where you are based. Possibly you can start in a HCOL area and move to a LCOL area, retaining salary, but that might be reserved for seniority and negotiation skills. Unfortunately/ fortunately, working remotely has become more mainstream, and so companies are doing things to cut costs, even using remote employees in LCOL areas.

SimpleCycle

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Re: What's your income level and savings rate?
« Reply #255 on: July 16, 2017, 09:26:11 PM »
We're in the $100k+, sub 50% savings rate crowd.  I'm pretty new to the forums, all about becoming FI, less sure about RE in the near term.  Our lifestyle is a work in progress, and I would hate to think people think I don't belong here because I'm still new to optimizing.

We go to an in home daycare and have two children.  If daycare was going into savings we'd be well above 50%.  We try to make Mustachian choices, but daycare in our city the choice is expensive or really expensive.

I think facepunches are most useful when the recipient is a somewhat willing recipient.  Namely, when they have asked for advice rather than when they are unsolicited.

StarBright

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Re: What's your income level and savings rate?
« Reply #256 on: July 17, 2017, 11:13:16 AM »
Re-read some of this thread after it surfaced again and it is funny how it now seems boil-downable to the following:

Does providing for kids (and therefor by having kids) mean you are a "consumerist sucker"?

I say that mostly tongue in cheek - but paying for daycare and saving for college were basically equated with buying BMWs and going out to eat :) Most high income folks that saved more than 50% seemed to be non parents, and equivalent incomes that saved under 50% seemed to have children. SO . . . kids are expensive and (I would say) necessarily so if you give them a step up from the basics.

But really - it looks like we are talking about people saving in the 30% range of their income with kids to those saving closer to 50% without - none of that reads as consumerist to me.
« Last Edit: July 17, 2017, 07:17:52 PM by StarBright »

caracarn

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Re: What's your income level and savings rate?
« Reply #257 on: July 17, 2017, 12:01:09 PM »
@SimpleCycle, in the end there are just people in this world what like to grumble that no matter that you do it's not good enough.  Everyone who's here belongs here.  It's not Mar-a-Lago with a membership fee and an income thermometer shoved up your arse to see if you qualify. 

StarBright boiled it down to how I certainly feel about my situation.  I could easily be saving 60% if I did not have kids, but I do and that is not free, but it's ridiculous of me to think of it as a terrible expense I have incurred and therefore must free myself of as quickly as possible, perhaps by drowning them in a bag in the river like unwanted puppies.  I simply moved on from the complaints of those who felt I was not working hard enough.  I'd do the same thing with your child care expenses.  I am originally from your neck of the woods, so I get the expensive to really expensive.  There are less expensive alternatives but you might not get your kids back with those.

Roboturner

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Re: What's your income level and savings rate?
« Reply #258 on: July 17, 2017, 12:05:23 PM »
Just did my bi-yearly SR checkup, as of this week:

-115k+bonus (18k in march)
-82% SR

my yearly goal is 80%+ so looks like im doing ok

Monkeytennis

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Re: What's your income level and savings rate?
« Reply #259 on: July 17, 2017, 03:54:12 PM »
Joint income of £200,000 so about $260,000, saving rate of 45%, should increase we've only recently increased our incomes and adopted MMM philosophy.

Classical_Liberal

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Re: What's your income level and savings rate?
« Reply #260 on: July 17, 2017, 04:58:47 PM »
Just did my bi-yearly SR checkup, as of this week:

-115k+bonus (18k in march)
-82% SR

my yearly goal is 80%+ so looks like im doing ok

Boom! Now that's what I'm talking about!

Roboturner

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Re: What's your income level and savings rate?
« Reply #261 on: July 17, 2017, 05:19:26 PM »
Thanks! I owe it all to my absolute hatred I feel for my job.

I suspect if I even felt a modicum of satisfaction from working for the man I'd be a bit more lax with the finances.

silver-lining, folks.

GenXbiker

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Re: What's your income level and savings rate?
« Reply #262 on: July 17, 2017, 07:11:30 PM »
It looks like savings rate is calculated different ways, so I'll try to cover some common bases here.

My 2016 final figures:

Just over $100,000 gross income from wages

Preferred method:
Savings rate = (savings including employee & employer 401K contributions) / (net income + employee & employer 401K contributions)

I personally do not include home payments or home appreciation as savings because that is NOT part of your stache.

I get slightly different savings rates depending on which method I use:

80% savings rate as % of take home pay only (retirement investments are excluded)

82% including my retirement fund contributions in savings and dividing by (net income + 401K contributions)

83% including employer partial match retirement fund contributions and adding that to my income above for calculating as shown in the formula I called "preferred method."

85% including dividends on my NON-retirement accounts, which I re-invested.

I haven't figured anything for 2017 yet, but I'm sure it will be less due to some additional expenses I have to deal with this year.  70%+ may still be possible.

On the plus side, I like my job quite a bit.
« Last Edit: August 09, 2017, 07:54:59 AM by GenXbiker »

onewayfamily

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Re: What's your income level and savings rate?
« Reply #263 on: July 17, 2017, 09:52:32 PM »
Pre FIRE:
Salary Income: ~$140k   Side-hustle Income: ~$50k
Savings Rate: ~70%

Post FIRE:
Total Income: ~$50-70k (depending on fluctuating interest rates, rental returns and side-hustle income streams)
Savings Rate: ~5-25% depending on how much travel we do (we're doing a lot at the moment)