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Comment by usaar333 | Hacker News Reader

Well, except for how difficult that is. Living on only 35% of after tax income requires you either A) live extremely cheaply or B) make tons of cash. Roughly speaking, in California, this requires living off of 20% of pre-tax income.

As an example, to live off $35k/year in SF as a single person (which would be considered modest in tech circles), you'd need to earn $175k/year.

With a family, this gets more unrealistic. Living off $100k/year (combined) would require earning something like $500k/year.

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Living on a low percentage of income seems like a great strategy if you're optimizing for dying with the maximum amount of money in the bank.

I think many people in this thread need to consider if that really is the game they want to be playing. I'd think people would be better off maximizing their total happiness. There's research showing that having good memories from the past positively affects momentary happiness in the present [1]. With that in mind, it seems like spending money on great experiences now is a good idea, while excessive saving could be counter productive.

[1]: http://www.wjh.harvard.edu/~dtg/DUNN%20GILBERT%20&%20WILSON%...

But money don't buy good memories. I have much better memories of camping with friends for near zero euros, than expensive hotels.

You need to consider the opportunity cost too. While you were camping in the bush, you weren't earning.

I don't know why you were downvoted, your statement is right. For example, if someone have financial problems for some reason and have to work 2 jobs to deal with it, he/she hardly could get out camping with friends. Money can buy you spare time which you can fill with uncostly memories.

Money doesn't buy good memories, but it sure helps finance many opportunities to make them. It's neither necessary nor sufficient, but that doesn't make it highly enabling.

Yea, it's good relationships with people. I'll throw pets in there too. Some of my best friends have been dogs, and cats.(Some might consider this pathetic, but my pets were important part of my life, and I miss them all. Hell--I don't consider them as pets--they were family members.)

security is a thing. When I went into freelancing I did it easily since I lived so cheaply. My monthly bills were under $1k and I was making an above average wage for software dev in my area.

I knew a guy who wanted to get into freelancing but wouldn't do it because his expenses were too high.

There's happiness, but there's also planning and self control.

>Living on a low percentage of income seems like a great strategy if you're optimizing for dying with the maximum amount of money in the bank.

MMM/ERE [1][2] are not about maximizing money at all. They are about obtaining only a sufficient level of capital, so that they are no longer obligated to work for income to continue living happily. The numerical value of "sufficient" gets lower as your expenses decrease.

>I'd think people would be better off maximizing their total happiness.

Based on your comments, to you, happiness comes from experiences which require money, which is perfectly fine. Therefore, MMM and ERE are not for you, which again is perfectly fine.

For others who find happiness in experiences requiring little to no funds, MMM/ERE is an exceptional strategy. I would love to spend my days coding, studying chess, reading books, cooking, mentoring youth, and spending time with the small group of people I am close with (I'm rather introverted).

[1] http://www.mrmoneymustache.com/

[2] http://earlyretirementextreme.com/

To be fair, you picked one of the world's highest cost of living locations to live in, let alone retire in.

I'm on track to retire in my thirties, or earlier, here in North Carolina. Not hard at all on a mechanical engineer salary.

Can you explain a bit your strategy? Something like MMM?

Yep, pretty much MMM strategy. I've also incidentally got a bit of bitcoin investment that might be a 'shortcut' if it goes to the moon. Otherwise the slow and steady wins the race.

Except that you don't need to live off $100K/year.

It all depends on what you define as 'comfortably' and how well you are able to control your spending on things you don't strictly need. That way you can build up some capital, make that work for you and relax your spending constraints when you are making more money passively.

"in SF" - that is not affordable. If you are trying to save money you live somewhere on the BART or Caltrain and take the train into the city every day. My rent in East Palo Alto the year I was there was $400/month all utilities and internet included, for example. Is commuting into big cities like SF and NYC every day by bus and train miserable? Yes. But thousands and thousands of people do it because it is affordable and they have families or retirement they care more about.

to some degree you're right, commutes are a good way to trade time for rent money. many people don't have that time luxury, sadly, especially if dealing with a 9-5 job, caltrain irregularities and school/daycare schedules. many people don't have an extra 3+ hours to spare each day and necessarily trade that for a rent increase or proximity to a daycare or school. as a current resident of epa, i can say that the rents are becoming comparable with regular palo alto, especially if you're not living alone, which is really when these budget issues become much more complex.

Perhaps that means SF might not be a great place to work in spite of 6 figure salaries.

Work remotely. Get paid a SF salary; live in back-of-beyond, Arkansas. Retire at 30.

haha.

not adjusting your employee's wages based on their work location, which company is that delusional?

Companies that claim to be desperate for developer talent?

Why is it delusional? The company should be willing to pay an amount based on the benefit they're receiving. Does a feature developed by someone living in NYC or SF make the company more money than the same feature developed by someone living in Ann Arbor or Atlanta? Offering a premium for people to work on-site versus remotely makes sense. Discounting the value based on expected difficulties with linguistic or cultural misunderstandings makes some sense. But I really don't see why you should be adjusting based on the work location in a more general sense.

wages are not absolute, they vary by location, for the same kind of work. cost of living are taken into account when offering salaries. taxes ditto. this applies to the US as well as Europe.

it is about fairness among workers. there should be no penalty for living close to the HQ or major office hubs, which practically always are in high-cost areas.

counter-example being SAP with Waldorf, but that is ending its lifespan for the inverse reason (no one sane wants to move there).

If you're demanding that the workers live somewhere particular then of course you're going to be paying more when that "somewhere particular" is more expensive. For remote work of comparable quality, it does not make sense to me that it should be adjusted based on where the worker decides to live.

Living really cheaply in SF is really just a question of cheap rent and never eating out. If your willing to have roommates you can get below 1k/month rent making 25k/year living expenses doable.

Granted, Heath issues, dependents, or debt can make this a non starter. But, just because most people you work with spend most of what they make every month means you need to do the same.

25k / year living expenses still works out to about 40k per year. And you have a lot of room mates. But now if it's only a quarter of your income, you need...

100k / (1 - (0.28[1] + 0.093[2])) = 159,489.

Plus if you retire, you're going to be managing your own health insurance, so the required living expenses number increases, probably by thousands of dollars a year. And it's not like you can flip from a frugal living style to a more flagrant one afterward, so you're going to have to live with room mates for the rest of your life, and never eat out, still.

[1] http://federal-tax-brackets.net/2014-federal-tax-brackets.ht...

[2] http://www.tax-rates.org/California/income-tax

There is little reason to stay in a high cost of living area while retired and even 600$/month can get you a nice place in much of the US let alone the rest of the world with the difference covering health insurance. As to income some people really do make more than 200k/year. And it’s such high income earners where such savings rates really become not just viable, but a reasonable choice.

More importantly the goal is not necessarily full retirement. Plenty of things are entertaining and make some money. Perhaps you only make 5k/year as a writer or painter well on its own that might not mean much but it can easily boost your nest egg over the next 20 years. Or perhaps teach a class at the local collage or even some of those short training classes. Not to mention long shot’s like trying your hand at acting.

PS: Your expenses often rise as you age but even just working 10 years entitles you to some Social Security benefits.

>Living on only 35% of after tax income requires you either A) live extremely cheaply or B) make tons of cash. Roughly speaking, in California...

How about C) Move to a different state? If the goal is to do this in California, then yes, it's probably not possible.

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