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#41
04-15-2007, 01:39 PM
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Re: You\'re making 800k a year now.....
[ QUOTE ]
almost no one has the discipline to put away most of the $500K you would have after taxes to the point that they would be comfortable after 4-5 years. Expenses rise to meet income. You would want a balla car and pad. You would buy a lot of expensive stuff actually. You would travel. You would take on debt because you have the cash flow to handle it (i.e. you could buy a house for a million bucks say, and plan to pay it off over 10-15 years) You would also invest money in non-liquid assets that would help your retirement but wouldn't be available to you immediately. My point is, that if you take someone making $40K/yr and bump them to $800K/yr they become an "$800K/yr person" Almost all would stay on the job as long as they could. This is somewhat analogous to a lottery winner i think. [/ QUOTE ] The most intelligent and realistic post on this thread by light years, IMHO. 
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#42
04-15-2007, 01:40 PM
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Re: You\'re making 800k a year now.....
[ QUOTE ]
[ QUOTE ] almost no one has the discipline to put away most of the $500K you would have after taxes to the point that they would be comfortable after 4-5 years. Expenses rise to meet income. You would want a balla car and pad. You would buy a lot of expensive stuff actually. You would travel. You would take on debt because you have the cash flow to handle it (i.e. you could buy a house for a million bucks say, and plan to pay it off over 10-15 years) You would also invest money in non-liquid assets that would help your retirement but wouldn't be available to you immediately. My point is, that if you take someone making $40K/yr and bump them to $800K/yr they become an "$800K/yr person" Almost all would stay on the job as long as they could. This is somewhat analogous to a lottery winner i think. [/ QUOTE ] The most intelligent and realistic post on this thread by light years, IMHO. [/ QUOTE ] Yet entirely not true. Hmmm....
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#43
04-15-2007, 01:42 PM
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Re: You\'re making 800k a year now.....
[ QUOTE ]
[ QUOTE ] "Assume you're working 5 days a week from 8:30 til 5:30. In other words, a more or less normal work week for a full time professional person. You enjoy your job to a degree, but it's not something you're passionate about. You get 4 weeks paid vacation per year. " At least 10 under this hypothetical. 4 weeks of paid vacation and a job you enjoy to a degree(at all!) are both very, very high end outcomes for the average person. For most readers this makes the job not just an increase in income but an increase in job satisfaction, which I think ruins your point. [/ QUOTE ] I don't make a point. I ask a question. [/ QUOTE ] A stupid, stupid question, and your last post definitely makes it seem like you've got some kind of poorly thought out "gotcha" planned where you will reveal that most of the people in this thread are "wrong".
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#44
04-15-2007, 01:44 PM
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Re: You\'re making 800k a year now.....
[ QUOTE ]
[ QUOTE ] almost no one has the discipline to put away most of the $500K you would have after taxes to the point that they would be comfortable after 4-5 years. Expenses rise to meet income. You would want a balla car and pad. You would buy a lot of expensive stuff actually. You would travel. You would take on debt because you have the cash flow to handle it (i.e. you could buy a house for a million bucks say, and plan to pay it off over 10-15 years) You would also invest money in non-liquid assets that would help your retirement but wouldn't be available to you immediately. My point is, that if you take someone making $40K/yr and bump them to $800K/yr they become an "$800K/yr person" Almost all would stay on the job as long as they could. This is somewhat analogous to a lottery winner i think. [/ QUOTE ] This is entirely untrue. I will very likely make $300,000 this year and even with a month long vacation to Europe, two weeks in Australia or Africa, two weeks vacation in the United States, a few week-long ski trips, and a couple of short vacations to Chile/Brasil I'd be extremely hard pressed to spend over $40,000 during this entire year. My taxes will be about $15k in self-employment tax and about $65k in federal income taxes. $180k is getting saved out of $300k pretax or out of $220k post tax. Clearly I could spend more and save less and that is what you are trying to argue has to happen, but that isn't true at all. FWIW, before I was a professional poker player I made somewhere in the neighborhood of $12,000 a year. I'm pretty sure my income increase is comparable, though in the interest in full disclosure I've made > 6 figures the last two years from poker, but not as much as I'll make this year. So there was some time to get accustomed to making more. Edit: Just realized this doesn't account for my deductions, expenses, and retirement account contributions. So adjust the tax owed down a bit (around $15-20k seems right). So $200k saved out of $300k pretax or $240k post tax. [/ QUOTE ] Congratulations to you for being financially smart and sharing your income with all of us, but his point is actually correct as applied to the vast majority of people out there. This isn't to say high earning people don't save and invest... of course they do. But people who are used to making 40k a year and living a mundane lifestyle aren't going to keep driving their 1996 honda civic, living in their quarter acre track home, and shopping for clothes at Wal-Mart if all of a sudden their income shoots up to 800k, and they know it's going to stay there. Sorry, but no way.
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#45
04-15-2007, 01:48 PM
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Re: You\'re making 800k a year now.....
[ QUOTE ]
almost no one has the discipline to put away most of the $500K you would have after taxes to the point that they would be comfortable after 4-5 years. Expenses rise to meet income. You would want a balla car and pad. You would buy a lot of expensive stuff actually. You would travel. You would take on debt because you have the cash flow to handle it (i.e. you could buy a house for a million bucks say, and plan to pay it off over 10-15 years) You would also invest money in non-liquid assets that would help your retirement but wouldn't be available to you immediately. My point is, that if you take someone making $40K/yr and bump them to $800K/yr they become an "$800K/yr person" Almost all would stay on the job as long as they could. This is somewhat analogous to a lottery winner i think. [/ QUOTE ] There are so many dumb assumptions in this post, it's hilarious. How old are you?
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#46
04-15-2007, 01:57 PM
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Re: You\'re making 800k a year now.....
[ QUOTE ]
[ QUOTE ] [ QUOTE ] "Assume you're working 5 days a week from 8:30 til 5:30. In other words, a more or less normal work week for a full time professional person. You enjoy your job to a degree, but it's not something you're passionate about. You get 4 weeks paid vacation per year. " At least 10 under this hypothetical. 4 weeks of paid vacation and a job you enjoy to a degree(at all!) are both very, very high end outcomes for the average person. For most readers this makes the job not just an increase in income but an increase in job satisfaction, which I think ruins your point. [/ QUOTE ] I don't make a point. I ask a question. [/ QUOTE ] A stupid, stupid question, and your last post definitely makes it seem like you've got some kind of poorly thought out "gotcha" planned where you will reveal that most of the people in this thread are "wrong". [/ QUOTE ] Nope, there is no gotcha here, and I don't understand why querying a group of people about their approach to this sort of scenario is stupid.
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#47
04-15-2007, 02:11 PM
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Re: You\'re making 800k a year now.....
[ QUOTE ]
But people who are used to making 40k a year and living a mundane lifestyle aren't going to keep driving their 1996 honda civic, living in their quarter acre track home, and shopping for clothes at Wal-Mart if all of a sudden their income shoots up to 800k, and they know it's going to stay there. Sorry, but no way. [/ QUOTE ] The point is that is pretty close to who I used to be. I travel more now, I live in a slightly nicer place, but I haven't blown through all the money I've made like is being suggested I would have to.
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#48
04-15-2007, 02:13 PM
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Re: You\'re making 800k a year now.....
[ QUOTE ]
[ QUOTE ] 5.25 years. I'd want to have 40k/a for 100 years before I stopped working. That's more than I would require, but would make me feel good about the future. Add a bit more working time to get a house, maybe another half year or something. [/ QUOTE ] That's less than 5.25 years (ROI, compounding, etc) [/ QUOTE ] I think OP stipulated that you don't get ROI or compounding. Something that's missing here is the quality of work. And something that sucks is the inability to work afterwards. But anyways, my best guess is something around that time period.
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