What salary makes one wealthy in Iowa?

[Tre4ISU]

:yes:

The $3M number is actually a fairly low net worth for many farmers in this state. But, as someone mentioned earlier, that is the difference between liquid and non-liquid assets.

Thats not necessarily that true anymore. A lot of retired farmers and beneficiaries maybe, but anymore there is a lot of imbalance in these large farming operations when there is a lot of renting and not much owning. A lot of equipment also never really gets paid off due to upgrades and such.

 

[Bobber]

We have lived in central Iowa since graduating from ISU in 94. We started our family right away without financial planning or responsibility. We had two kids early, and excelerated from around 45K combined to a current peak of around $150 not including bonus.

We probably went a little overboard on our current house, but have never really been crazy about cars, boats, or other things. We ran up credit cards when we were younger, but have paid them off, and don't use them anymore.

I would say before the current recession we were a little more comfortable, but we were also able to get a better mortgage on our house after the collapse.
We have had stretches were we didn't really worry about money, and times when we didn't know what we were going to do. Even at $150K, I would say most Iowa families are a major repair (furnace), car, or health issue away from living pay check to pay check, or worse. We finally feel like we are catching up but now our kids are getting ready to enter college.

Looking back, I would say having some one help you with financial planning and responsibility could have an exponential impact on your wealth in later life. (duh I guess) After living through it and paying taxes, I feel like I have learned it's not how much you make, but what you spend. When I graduated from college, I would have never thought that I would be paying $150 month for a cell phone, $150.00 a month for cable for years and never really question it. Our first car payment was $265.00

Also, part of the real estate bubble burst was based on people defaulting on their homes. Many of these people were families making $150-300K a year, but spending way to much. They figured out that it was much easier to pay off their 8 credit card bills, cable, phone, etc, each month if they just skipped paying their mortgage. They also figured out that they could take half their mortgage and save it for rent or even a smaller house before, or once the bank decided to take their house, sometimes living rent free 12-18 months. They sad thing (smart for them) is that those people will probably come out with a better credit rating doing that than if they had be consistently late on all their credit cards.

Really liked your post, but the high lited statement blew me away...

Do you realize most people make far less than that and most of them do a good job of living within their means?

I remember meeting with a financial planner about 10 years ago and reviewing my finances with him. We've always made good money, but nothing excessive. He told me at the time that we were better savers than some Doctors he worked with.

Maybe I look at life too simple, but I think most people are either spenders or savers. You can make a lot or a little money and people will figure out a way to be in one of those two groups.

 

[bawbie]

I think some random psych class I took back in the day said that everybody thinks they're middle class and they'd be just about right if they made 25%-50% more than they currently do ... and that people that make 75-100% more than they currently do are the wealthy.

apparently the same attitude existed for the guy making $25K as the guy making $250K.

Well said. I agree. Nobody (or very few) thinks they are wealthy.

 

[dmclone]

Wealthy has always been about 10% more than I make.

The toys get bigger, the houses get more expensive, there is more money in savings/retirement, etc but at the end of the pay period I still manage to only have $50 in our checking account. I'm big into auto withdrawals out of my check so that I never see the money. If it's not in my checking account, I don't spend it.

 

[acgclone]

It seems that most here are confusing income with wealth. A high income doesn't equate to wealth, IMO because it's not how much you make that will make you wealthy, it's how much you save.

I've know a lot of high income earners, that are highly leveraged with debt and although they may have a few toys to show for it, they are a lay off away from bankruptcy.

On the flip side there are those that make a modest living, but because they live way below their means, they are able to accumulate wealth.

It also seems there are a lot of young people on here because many people have said that $50-100k/yr salary is a lot of money. Really with a family, it's very easy to blow through that amount in a year, without living a high-roller lifestyle.

I would tend to agree, that wealth is a relative term. It certainly means something different in Iowa, than it does in Florida, California, etc or on the flip side, Haiti, Mexico, etc.

IMO, if you don't have (or don't need) a mortgage/car payment, and you have enough savings/stock/equity to provide cash flow if you were to lose your job, then you're wealthy. You don't need any certainly income level to achieve that but obviously for most people their incomes are their primary way of building to that point.

 

[RandomFan]

Thats not necessarily that true anymore. A lot of retired farmers and beneficiaries maybe, but anymore there is a lot of imbalance in these large farming operations when there is a lot of renting and not much owning. A lot of equipment also never really gets paid off due to upgrades and such.

I'm just saying, a "small" farmer who has been farming for 20 years and owns 400 acres and does it with small, old, crappy machinary probably has a net worth over $3 Million. Especially if he has any sort of livestock operation.

 

[dmclone]

I think it's a common misconception that everyone that makes a high income is in debt. There are a lot of people who have high incomes and are also big savers. They just don't stick out like the people who overspend. I know a lot of people at work that have very high incomes and at the same time are some of the tightest people you've ever known.

I know a couple who just retired that had an income north of a million a year. They lived in a $250K house, both worked into their 60's, bought their clothing from Wal-Mart, etc. The only thing I ever saw them spend money on was on vacations.

 

[Bobber]

It seems that most here are confusing income with wealth. A high income doesn't equate to wealth, IMO because it's not how much you make that will make you wealthy, it's how much you save.

I've know a lot of high income earners, that are highly leveraged with debt and although they may have a few toys to show for it, they are a lay off away from bankruptcy.

On the flip side there are those that make a modest living, but because they live way below their means, they are able to accumulate wealth.

It also seems there are a lot of young people on here because many people have said that $50-100k/yr salary is a lot of money. Really with a family, it's very easy to blow through that amount in a year, without living a high-roller lifestyle.

I would tend to agree, that wealth is a relative term. It certainly means something different in Iowa, than it does in Florida, California, etc or on the flip side, Haiti, Mexico, etc.

IMO, if you don't have (or don't need) a mortgage/car payment, and you have enough savings/stock/equity to provide cash flow if you were to lose your job, then you're wealthy. You don't need any certainly income level to achieve that but obviously for most people their incomes are their primary way of building to that point.

Good Analysis.

 

[clonedude]

Obviously it depends on how much debt you have and how happy you are, but in general terms.... you SHOULD be quite wealthy in Iowa if you're total household income is 100k or higher. After taxes and insurance etc, you should be taking home around 5k a month if you're household income is 100k.

House: a very nice new home for $1500/month.
Car: two nice new vehicles for $800/month.
Food: $800 per month including eating out.

That's only 3100 a month for your biggest expenses. That still leaves 1900 left for everything else. That's wealthy in my eyes.

My wife and I get by on combined household income of less than 45k. So 100k should be a pretty good life!

 

[Wesley]

I think it's a common misconception that everyone that makes a high income is in debt. There are a lot of people who have high incomes and are also big savers. They just don't stick out like the people who overspend. I know a lot of people at work that have very high incomes and at the same time are some of the tightest people you've ever known.

I know a couple who just retired that had an income north of a million a year. They lived in a $250K house, both worked into their 60's, bought their clothing from Wal-Mart, etc. The only thing I ever saw them spend money on was on vacations.

And then there is Warren Buffet making a $100k a year, living in an older house, driving a normal car.

 

[Wesley]

Obviously it depends on how much debt you have and how happy you are, but in general terms.... you SHOULD be quite wealthy in Iowa if you're total household income is 100k or higher. After taxes and insurance etc, you should be taking home around 5k a month if you're household income is 100k.

House: a very nice new home for $1500/month.
Car: two nice new vehicles for $800/month.
Food: $800 per month including eating out.

That's only 3100 a month for your biggest expenses. That still leaves 1900 left for everything else. That's wealthy in my eyes.

My wife and I get by on combined household income of less than 45k. So 100k should be a pretty good life!

A $200k family might pay $37k in taxes for fed and state. If a family is making $50k, the taxes they pay by proportion and rightfully are much less. Taxes is one equalizer. Sometimes the people with the largest income are paying off their houses much fast with their extra income.

No doubt if cars and house are paid off, a small income will suffice.

One big money spender is to fund/put multiple kids through college and let them come out the other side with little or no debt.

So when a family pulling in good bucks reach 55, they may be piling up a lot of extra savings.

 

[AllBig12Drinker]

I think only 5% of individuals in the country make North of 225K. That being said it doesn't define wealth as many have pointed out.

A simple exercise:
Net income 60,000/Expenses 30,000=Wealthy
Net income 250,000/Expenses 300,000=Poor

The book Rich Dad, Poor Dad does a better job of explaining and places importance on passive income.

IMO, if you have enough assets to support your livelihood and have a little left over, you are wealthy, regardless of income.

 

[MoreCowbell]

Obviously it depends on how much debt you have and how happy you are, but in general terms.... you SHOULD be quite wealthy in Iowa if you're total household income is 100k or higher. After taxes and insurance etc, you should be taking home around 5k a month if you're household income is 100k.

House: a very nice new home for $1500/month.
Car: two nice new vehicles for $800/month.
Food: $800 per month including eating out.

That's only 3100 a month for your biggest expenses. That still leaves 1900 left for everything else. That's wealthy in my eyes.

My wife and I get by on combined household income of less than 45k. So 100k should be a pretty good life!

Which would be ideal for a DINK family (dual-income, no kids). That $1900 leftover? cut down to $500 or less after daycare costs are factored in. There are just too many external factors to consider.

Obviously, wealth is subjective. I would say that substantial savings, little to no debt and the ability to buy "splurge" items if so desired without taking a hit on your lifestyle would be my personal consideration of wealthy. We are definitely not there yet!

 

[usedcarguy]

That's not "wealthy", that's filthy rich.

$3M isn't squat in the grand scheme of things. It may be to the guy who only has $50k, but not to a guy worth $50M or $200M. But then again, I also know many who would look at the guy with $50k in his bank account as rich.

FWIW, Albaugh was estimated by Forbes to be around $1.3B. (that's $1400M for you playing along at home)

 

[usedcarguy]

In the most simple of terms:

Income = what you make.

Wealth = what you keep.

"Rich" = Anyone who makes more than you do.

 

[clonedude]

"I think only 5% of individuals in the country make North of 225K."

Correct. I don't think a lot of people realize this fact.

It does not require 200k a year to be wealthy. Far from it.

Problem is, most people spend way too much money and don't save any. Go look at how bad off the majority of this country is as far as their retirement savings. It's almost non-existent. Not good.

 

[CyPride]

I would only consider one wealthy or financially independent if their passive income exceeds their living expenses. Salaries come & go so I view them as temp income.

First response hit the ball over the fence.

Salary does not equal wealth.

 

[Tre4ISU]

I'm just saying, a "small" farmer who has been farming for 20 years and owns 400 acres and does it with small, old, crappy machinary probably has a net worth over $3 Million. Especially if he has any sort of livestock operation.

OK, I understand now. Sadly there are very few of those left. The Agricultural world has been great consolidated over the past ten or so years and in the next ten there will be even more consolidation. It is a very different world and it will get worse. I just hope I am in the right shape to keep in a solid position.

 

[AllBig12Drinker]

OK, I understand now. Sadly there are very few of those left. The Agricultural world has been great consolidated over the past ten or so years and in the next ten there will be even more consolidation. It is a very different world and it will get worse. I just hope I am in the right shape to keep in a solid position.

yaman3, If you can set yourself up to own 500 acres free and clear by the time you are 45 or 50, you will be very happy. I would consider this a very solid position, keep your eye on the prize.

 

[RandomFan]

I think only 5% of individuals in the country make North of 225K. That being said it doesn't define wealth as many have pointed out.

A simple exercise:
Net income 60,000/Expenses 30,000=Wealthy
Net income 250,000/Expenses 300,000=Poor

The book Rich Dad, Poor Dad does a better job of explaining and places importance on passive income.

IMO, if you have enough assets to support your livelihood and have a little left over, you are wealthy, regardless of income.

While I agree that Rich Dad, Poor Dad does a good job of explaining the importance of passive income, I would also say it is one of the most unethical things I've ever read. Just my $0.02.