Say someone makes 150% or more of what I make (ergo are valued 150% superior in a fair labor market) and they can save far more and build a their net worth significantly faster even with a more luxurious lifestyle.
The person earning 150% more than _them_ is coveting the latest Bell Jetranger, or Gulfstream G700.
The obsession for more is the same at all levels.
I think there are a lot of people that are not concerned with the luxuries you reference but are deeply concerned with their base needs and random setbacks life throws at them. They basically want to save for a rainy day so as avoid stress when they encounter bumps in the road.
It's like asking someone who works for minimum wage why their worried about moving up to a salaried position because compared to the people in Sudan, they have a life of luxury.
No matter how much you have, there is always the opportunity to be envious of others who have more. Acquiring more will not stop the envy or satiate that need.
But you can decide that you have enough right now. Or you can set a goal and say "that is enough for me". That goal might be really high, or it might be really simple, that doesn't matter. The part that matters is deciding that you have enough at some point.
I've been homeless, and having a warm safe place to sleep was enough. Now my sights are somewhat higher, but comparing myself to a friend who exited a few years ago is a constant source of misery. I have to keep reminding myself that I have enough at the moment, and to be grateful and enjoy what I have.
I make 75k and save almost half my income while having all the material items that I want. Granted I don't want a lot, but I actually believe quite strongly that not having that constant desire for more and nicer material items makes me much happier than those who are stuck in that cycle.
Not to sound douchy but I think that kind of materialism that is so extremely common across all levels of society seems to me like such an enormous and obvious problem that most people fall into for some reason regardless of how smart they are, and they would almost all be significantly happier just not caring about such sh*t. It's a crutch and prevents people from finding real meaning and happiness and for most it lasts their whole life or at least until they are too old to change.
I know this isn't a novel idea, any slightly rebellious teenager can and will point out the obvious harm of this kind of mindset, but that only makes people disregard it even more. It's such an obvious problem, and most people even agree when you point it out, but then those same people live out the rest of their lives without doing anything about it.
I blame social pressure and peoples tendency to not wander to far from the norm, combined with some conditioning and of course the addiction-mimicking dopamine effects
This community skews very hard towards high earners though, so people here probably view that as something that goes without saying, but that isn't within the purview of this particular discussion about the rat race in tech.
Among this community, it's probably true that a significant raise wouldn't significantly change their day to day lives, although obviously that is less and less true as their baseline income goes down.
Startups in tech aren’t paying close to family raising salaries in the Bay. FANG does albeit reliant on stock continuing to grow like it did last decade. I am personally studying math/algos/leetcode and getting good at interviews. Its sad because it takes up all of my free time that I could spend building. It sucks to make $170k and feel like you can’t make it somewhere.
I finally had a breakthrough with my fiance last night and we are talking about moving to Salt Lake City! My current job would allow me to go remote and there does seem to be a scene there. $170k is more than enough.
The Bay Area has a combined population of over 7 million, with a mean household income of $137k. It sounds like you have unreasonable expectations if you need at least $300k to live comfortably.
https://sf.curbed.com/2019/2/25/18239828/report-middle-class...
https://smartasset.com/retirement/average-salary-in-san-fran...
https://www.sfgate.com/expensive-san-francisco/article/SF-ho...
It sounds like you either don't live in the Bay Area or you make about what I make and haven't realized if you don't make $300k and your options aren't very pleasant.
Also, Phoenix is pretty reasonable cost of living wise and they have a growing number of opportunities tech wise. June 15 - Oct 15 suck but you get used to it.
https://censusreporter.org/profiles/31000US41860-san-francis...
Median household income: $108k
Owner-occupied dwellings: 55%
They are mostly hiring fresh grads anyway, who won't be raising a family anytime soon, so it's not a huge problem for them.
I could pretty comfortably raise a family of 6 on $100K in a midwestern city, or a family of 6 on $80K in the rural midwest/south. Without sufficient retirement savings, mind you, and my safety net would be non-exisent. I'd need at least another $30K-$50K on those numbers to build a strong safety net (remember, it's a safety net for 2 parents + 4 kids, not for one person...).
Doing the same in SFBA would probably require at least $250K. Maybe more.
> Surely you don't believe less than 1% of people in the US can live comfortably and have a safety net, do you?
The number is larger than 1%, but probably still smaller than you think.
The average American definitely doesn't have a sufficient safety net. IME, the average American raising more than 1 or 2 kids almost certainly doesn't have a sufficient safety net.
So, no, you don't need to be in the top 1% of earners in the US to have a safety net. But if you have a large family, you probably have to be in the top 10% to live comfortably and have a safety net and retirement.
Why? Each child might consume, generously, an extra 5k of food and 2.5k of clothes and other inputs per year. This is an increment of $30k on top of housing. For housing, you could add one or at most two bedrooms for four children. This does substantially raise housing costs, but there are still places in Sunnyvale for $1M or just above that that have three bedrooms. They may not be the nicest houses, but they would do.
So, before you have kids, save your downpayment. On a 250k salary, this would take one to three years if you're thoughtful about it. Then buy the house and start popping out babies. Times will be tight if you need to pay for childcare, but that's a defined and short period of the childrens' lives. You're not going to be taking lavish vacations, but if you wanted those, you wouldn't have four kids anyway.
Ego seems to be at play here, a bit. No one wants to admit that they're in the same boat as the people sending their kids to "those schools," but they are. The numbers don't lie. Looking on the bright side: admissions look at class rank. An outstanding student at a mediocre school has better odds than a mediocre student at a "good" school.
My elementary and middle schools were 4/10 and 5/10 on "Greatschools" in North Carolina.
Judging by this subthread, it's a school where people who 'merely' make 170k/year send their children to.
You really don't want to get your kids mixed up with that kind of hoi polloi. /snark
Ultimately the super-rich that can afford those things are still orders of magnitude richer than people that just save/conservatively invest.
Of course, my bread costs about as much as their bread, so they could probably getaway with a bit more. It's all about making good financial decisions, right?
>Before or after taxes?
>What year?
>Where did you live?
>What was your monthly rent?
>Did you rely on your family/friends for ANYTHING (including something as innocuous as "storing your childhood possessions")?
>Did you have any chronic or acute health issues?
>How far did you have to drive for work?
>Did you have friends or family you were obliged to support, even occasionally?
>Did you have a side hustle?
And so on.
Broadly-speaking, making $35k before taxes in 2020 in any major metropolitan area is a tightrope walk at best. The best way to encourage saving is to pay people enough money that they feel comfortable charting out a plan to save. That's a sliding scale, but I would say you hit 80% around the median wage, which is not $35k/yr.
IME the people giving this advice have a critical misunderstanding of either costs or the value of cash relative to when they started out.
Before, median household income for my city at that time was mid-50ks. Of course median household income is with 1.5-2 workers. I wasn't married, but I did split rent on a house with friends... so adjust accordingly I guess.
>What year?
circa 2005
>Where did you live?
A 2nd tier major metro. Not NY/SF/LA, but a city you've definitely heard of.
>What was your monthly rent?
I don't remember
>Did you rely on your family/friends for ANYTHING (including something as innocuous as "storing your childhood possessions")?
No. My parents did have my childhood possessions but I grew up in an abusive household and never went back to retrieve those items.
>Did you have any chronic or acute health issues?
No
>How far did you have to drive for work?
30 mins
>Did you have friends or family you were obliged to support, even occasionally?
Yes, I helped friends pay rent a few times if that counts.
>Did you have a side hustle?
No
IME people will look for any excuse not to face their own personal failings. These are all the wrong kinds of questions. Instead of seeking an excuse for bad behavior, the right kinds of questions are about strategies for achieving better outcomes.
I'll just stop now to point out that this would be enough alone to allow you to drop 10% - and then some - into retirement savings, without living any more or less comfortably than I did. As I said before, the best way to encourage saving is to increase pay.
I assume you were paying less than my $900/month in rent (a studio price in a similar market to the one you describe), between your having the privilege of being able to split rent, and dealing with rents that were ~5% lower on average. This, again, would allow for a hefty savings rate compared to my baseline of losing roughly $100/month on necessities, even without the higher pay rate.
Considering all of this, I have to conclude that you were actually a poorer financial steward of your income than I was - again, even though I was losing money every month. Living under circumstances similar to yours (higher pay, lower rent), I could easily have put away 20%+ of "my" earnings - you only managed 10%. However, the truth is that we lived under different circumstances, yours much more forgiving of carelessness or mistakes.
Dropping all this nonsense about the labour market being "fair" will help you deal with the reality of it. Interviews have a huge arbitrary element in them of personal preference, and end up selecting for "looks and sounds like the interviewer" or "went to the right school" far more often than they would like. And remember the era of noncompete agreements?
This isn't valid for 100% of the folks obviously, but say 90% fall into this trap one way or the other. It is paradoxically easiest for folks already burdened with ie mortgage, because usually the motivation to pay it back sooner trumps the need for some extra gadgets and to show off.
You know what's funny? Their overall long term happiness and life satisfaction doesn't improve a bit. In fact, in many cases it goes down due to ie extra worries about good investments, plus you earn cash by doing extra work.
Myself I increased my net income compared to my first full time IT job more than 20x in last 15 years, and I can tell you happiness comes from different place. Money just help a tiny bit on the path to it, that's all. Some folks, especially those competitive that article talks about, will never be truly happy. Of course is you live in like US with utterly broken healthcare, in some cases money can actually mean saved/improved life, but that's a bit special use case.
Let's say that I'm getting by, but only just. There's things I'd like to do - take a vacation, or replace the carpet, or trade up to a better car - but I don't bother thinking much about them, because there's no point. Those things I can't do bother me a bit, but I don't dwell on them very much.
Now my circumstances improve. Now I can take that vacation, or replace the carpet, or trade up to a better car. But note that I said "or", not "and". I can do one of the things I want, but only one. Now each of those things is realistically possible, and I can seriously consider doing it. But in the end, I can only do one of them.
In this way, it's possible to have more money, and therefore more options, and still feel worse about the things you can't do because you don't have enough money.
Not even self-employed, which is great but goes opposite to stability, and some goals I have in life are not financial.
Pro tip: I am a negative example; don't do what I did. If you are success and prestige oriented, do not chase hard problems. Go after easy problems that are well compensated. Hard problems run the risk of failure, from which it is difficult to "catch up", and typically aren't all that well paid.
That person thinks the same way about someone who earns 150% more than them... this cycle never stops
>Nobody cares if you can make pasta from scratch and it’s not going to make any money
I don't live up to other peoples expectations, their expectations are irrelevant to me. I have my own expectations.
I did learn to make the macaroni and perfect it. Since perfection is personal preference it's better than the fancy restaurant.
The horse is behind the cart. We make the money to buy the macaroni. I go straight for the macaroni. There is no money in learning to tie your own shoes or make your own bed? ha-ha
This isn't valid for 100% of the folks obviously, but say 95% fall into this trap one way or the other. It is paradoxically easiest for folks already burdened with ie mortgage, because usually the motivation to pay it back sooner trumps the need for some extra gadgets and to show off.
You know what's funny? Their overall long term happiness and life satisfaction doesn't improve a bit. In fact, in many cases it goes down due to ie extra worries about good investments.