Considering he would only take home about $50k from that $100k, I bet many of us would have done the exact same thing.
Particularly, because the employer is going to expect >$100k in value from the employee to make up for the raise and the employee barely receives half.
The middle class is being destroyed through taxes and inflation, while wealthy asset holders see their assets outpace inflation while taxed at much lower rates.
I'd probably still take it, but I'll admit I'm a bit more money motivated than the average person.
if someone has a relationship where there are not shared goals of more money and change/excitement?
Well, if you think you’d end up ahead on the money side at the end of that fallout, you’d be fooling yourself.
Your argument about an extra 50k could be applied to literally any raise.
When you already have $300k/yr, your life doesn't change by getting an additional $50k/yr. When you only have $50k/yr, your life completely changes when you get an additional $50k/yr.
People who are in the $300k/yr. position have the luxury of choosing other things besides making more money, which is what this person we're talking about was able to do.
To put it another way, how much longer will he live, if his stress levels are reduced substantially by opting to not take that new job?
50k post tax is enough for someone currently maxing out their retirement (including mega backdoor 401k) to nearly double their retirement investment. This could cut time to retire in half. Or it’s enough to comfortably put their kids through college in a few years. Or easily pay for private school for your kids. Or it’s enough to pay for vacations that were previously out of reach. Or enough to massively upgrade houses (assuming you want to succumb to lifestyle inflation). An extra 50k post-tax is absolutely a lot of money to someone currently bringing home about 210k post tax.
50k post tax is not enough for someone currently maxing out their "retirement" to "nearly double their retirement investment, that isn't correct.
The point is, after a certain absolute dollar number, additional dollars are incrementally less valuable, which makes questions like, "What does this do to my happiness?" a lot more relevant.
Even if it allows you to retire meaningfully earlier, so what? Dying at 65 because you were stressed is definitely not worth it.
Do you think you’re not on a forum filled with high income earners who also have personal experience with this?
It’s telling that you both assert that you would accept the job for the money and that the money would have almost no impact. Either you don’t actually believe what you say or you’re admitting that you’re not rational.
> 50k post tax is not enough for someone currently maxing out their "retirement" to "nearly double their retirement investment, that isn't correct.
Define maxing out, then. Max 401k plus mega backdoor is about 65k, I believe. Another 50k would indeed be nearly double. (65k is also what this person would actually take home from a 100k raise, assuming filing single, depending on state income tax of course.)
> The point is, after a certain absolute dollar number, additional dollars are incrementally less valuable
No one has said otherwise. Literally every dollar has declining utility so this doesn’t provide the support for your argument that you imagine. There’s no “dollar value cliff” at 300k.
> Even if it allows you to retire meaningfully earlier, so what? Dying at 65 because you were stressed is definitely not worth it.
You’ve gone from “it won’t affect retirement” to “money can’t buy happiness” to “gonna die from the stress”. This all seems really fake given that not only have you wildly diverged from your original claim that it won’t allow one to retire earlier, but also because you said you would accept the promotion.
I’m certainly not saying anyone should take the 100k raise and the responsibility that comes with it if they don’t need/want the money or they do not want the job change it brings. I’m just saying 100k raise is a lot of money for someone currently making 300k. For a lot of people at this level, another 100k would mean their spouse could stop working.
And I don't really want to argue with you about this. I'm referencing the "marginal utility of money" concept, and I think it applies here, and you don't. I'm okay with that! I think as long as we both agree that it's a thing, even if we disagree on where that line is, I'll be satisfied.
Take care and enjoy the weekend.
Nothing absurd about it. If you're making 300K, going up to 400K doesn't move the needle much. At that level you're already covering all your bills, paying for those vacations and investments and private school.
50K extra in pocket is nice, but nowhere enough at that level to change your life in an observable way. It's nowhere enough to move you into FU Money territory and since you were already covering all the basics, it doesn't move change much on that front either.
If I had kids (and I do), there's no way I would accept a 100K pre-tax raise if the tradeoff is having to spend a lot more time on the road away from home (as the example at the top of this thread stated).
Sure. If you’re covering everything you need then another 50k/year probably lets you retire way earlier.
Or $50k/year post tax pays for about a million in housing. It would pay for an au pair if you have a small child. It’s enough to have a partner earning a very good salary to stop working and stay home.
> If I had kids (and I do), there's no way I would accept a 100K pre-tax raise if the tradeoff is having to spend a lot more time on the road away from home (as the example at the top of this thread stated).
Well yeah, I didn’t say that it’s a good trade off for you (or anyone else in particular). I said it’s a lot of money.
The hypothetical person in your scenario is still going to retire, just a few years later. They’ll still send their kids to college, just with a few more loans (or maybe not because having more savings results in less financial aid). They’ll still go on vacations, just slightly less nice one. Or they’ll go on the nicer vacation, just less often. Etc etc etc.
What it does not do is change your life qualitatively. You’re not going to be routinely flying on private jets or hiring a butler. Your ability to affect politics is still mainly limited to the ballot box.
You’re still upper middle class. Just half a step ahead of the Joneses.
Someone who starts getting paid an extra $100k might also choose to have their spouse quit their job. An extra $100k is likely enough to offset a partner’s income (and a relatively high one at that). This is also a life changing event.
> What it does not do is change your life qualitatively. You’re not going to be routinely flying on private jets or hiring a butler. Your ability to affect politics is still mainly limited to the ballot box.
This is a very false dichotomy. There is a whole range of quality of life changes that happen before “private jet and election fraud” money. Anything over “not starving and can afford a place to live” is “incremental”.
Which is about 50%
That raise is on top of their salary so the additional dollars are taxed at the highest rate. For taht example executive, federal tax alone on the additional dollars is 35% most likely (35% for sure if single, probably 35% if married with a working spouse earning less). Then add state tax which here would likely be 10.5% and then add medicare tax at 2.35% and there may also be unemployment insurance tax and perhaps other assorted smaller deductions.
So yes, for additional dollars from a raise a good rule of thumb is that only 50% can reach you.