Somewhat of a tangent, but I moved to Boston 3 years ago and have come to realize how punitive tax policy is towards high cost of living cities. $100k in Boston gets you the same quality of living as maybe $40k in Des Moines (my estimate), but the $100k earner in Boston pays more than 2.5x the tax of the $40k earner in Des Moines. Besides the cost of housing, I think this is the second most important factor in cost of living analysis, but I don't think most calculators figure it in.
What salary makes one wealthy in Iowa?
- Thread starter Chipper
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Yes, I realize this but in all likelihood this will become my one and only career within the next 10-15 years. I would like that to be profitable. It also isn't likely that I will own 500 acres in that time span therefor I will not have said land for a large portion of my career. Sure, you can live off that 500 acres if you own it free and clear or you gave an amount that still leaves it profitable. My family, fortunately got into the position they are in right now because of the fact that my grandfather had been a very smart and efficient man going into the 80s and my father had started off well by working his *** off when he was younger. My grandpa had the ability to buy land well below it's value because of the farm crisis and the fact that when everyone was going nuts spending he was not.
I think the farm crisis of the 80s relates very well to what we have seen in the general economy over the past few years. When things were great people went wild and left themselves very vulnerable to tough times. You always have to keep in mind that the economy is usually cyclical. There will be good times and bad times. The key is knowing how to manage for both when you are on the other end of the cycle.
My only comment is live cheap and you can be rich.
examples:
5 year old cell phone and 5 year old basic contract $60/month for 2 phones
no cable or satellite
drive old cars till they die
stop going out to eat
pay down all debt
I figure the average family pays upwards of $1000-$2000 in interest servicing debt per month.
Minimize or eliminate items above will could save a family $2500 per month. That's cash money!
Like my dad always says, "figure out how to get people to write checks to you, not the other way around"
examples:
5 year old cell phone and 5 year old basic contract $60/month for 2 phones
no cable or satellite
drive old cars till they die
stop going out to eat
pay down all debt
I figure the average family pays upwards of $1000-$2000 in interest servicing debt per month.
Minimize or eliminate items above will could save a family $2500 per month. That's cash money!
Like my dad always says, "figure out how to get people to write checks to you, not the other way around"
This turned out to be a very good thread. Most posters on here get it, I've noticed that people that are interested and comment in Thread topics like Investing, Household Income, Wealth, etc. are already keenly aware of what it takes to make ends meet and prepare financially.
As most have pointed out, Salary does not equal Wealth. Income generation is an important factor in accumulating wealth. But, its hard to save if too little is coming in.
1. Make more than you spend.
2. Eliminate all debt. That includes tax deductible debt.
3. Save 15% of your income for retirement.
4. Enjoy being healthy.
Never ever have a car loan, buy used and move up over time. Paying +5% annually on $25K on a depreciating asset drives me crazy. Car dealerships make far more on financing than they do on the actual sale of the car.
As most have pointed out, Salary does not equal Wealth. Income generation is an important factor in accumulating wealth. But, its hard to save if too little is coming in.
1. Make more than you spend.
2. Eliminate all debt. That includes tax deductible debt.
3. Save 15% of your income for retirement.
4. Enjoy being healthy.
Never ever have a car loan, buy used and move up over time. Paying +5% annually on $25K on a depreciating asset drives me crazy. Car dealerships make far more on financing than they do on the actual sale of the car.
I somewhat disagree with this. If you can buy that asset correctly, you will be just fine with a car loan. The problem is that far too many people don't push hard enough when buying these new cars. The last one I bought, I paid 71% of sticker. I can live with that. When penciled out, I cannot see myself ever getting upside down on that vehicle.
Even though I've bought a ton of new cars in my life, I have to disagree. It sounds like you got a heck of a deal on a car but I'd be willing to bet that any car that can be discounted by 30% off sticker is going to have lousy resale value. I could be wrong but you don't see too many $20K cars being sold for $14K. The other question I have is could you sell it today for what you bought it for when new? Just because you're not upside down doesn't mean that it's not a bad investment. If I paid cash for a $60K corvette I would never be upside down but you can bet that I would lose $15K as soon as I drove off the lot. Once again, nothing wrong with it but I've yet to see a new car that's a good investment.
I bought my pickup six months ago and I would bet I could very close to what I paid. I have heard of two people who bought a year older used pickup like mine for about a thousand dollars less. I have no idea how I got the deal I did, honestly, I am sure I won't ever get that kind of deal again. I don't buy the whole blue book thing. What you have is worth what someone will give you. That's it. I get sick of trying to buy something and someone telling me what it books for. What some book says is really irrelevant.
Typically, any vehicle that is more than something that will only get you to and from where you need to go is a bad investment. Vehicles are always that way.
I was hell bent the next vehicle I owned was going to be brand new and exactly what I wanted. It wasn't that I thought it was a better deal.
Here's something else I think about this argument. I will spend money now. I am young, I want to do things and I want to be able to do it now. I don't have a huge interest in traveling the world or doing a lot of the same things normal retired people do when I get older. In fact, I will likely never really retire. I want to be able to have my motorcycle, nice snowmobile and go on my snowmobile trips while I can. I actually see myself really living cheaper later in life. I have worked hard since I was in high school to get where I am now and while I have the opportunities I will take them rather than have a **** ton of money when I am old and don't have the ability. In the end, it depends on what you want to do and when you want to do it. After all, money means nothing if you don't use it to enjoy it. How you enjoy it is your prerogative.
The premise of the thread is set up incorrectly by asking what salary makes one wealthy. Salary is only a small part of what it means to be wealthy (and if you're truly wealthy....are you really needing to earn a salary?)
Live boring life but you're debt free. Get hit by bus tomorrow say to self, "Self why didnt we do more fun things in life?" Costs too much
- Mar 27, 2006
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Live boring life but you're debt free. Get hit by bus tomorrow say to self, "Self why didnt we do more fun things in life?" Costs too much
This is a good point.
Frugality for frugality's sake is just as pointless as extravagance for extravagance's sake.
Agree, it isn't salary, its net worth that makes one fiscally wealthy. Salary is just a means to acquire the money to build your wealth. If you squander it trying to look weathy to others, it just becomes fool's gold.
Just the parts where he advocates insider trading and fraud. Otherwise it's all good.
Live boring life but you're debt free. Get hit by bus tomorrow say to self, "Self why didnt we do more fun things in life?" Costs too much
My life is not boring because I drive a crappy car and have a crappy cell phone. I actually do alot of things, but you are right, for a relatively short period of time it could suck. It is all about what excites you.
Travel and family activities excite me, not cell phones and cars...
Your house, your car. If you can get by cheap on those two and make as a household 50 to 70 K, take home. You can have your million dollars in 25 to 30 years. But like anything else, sacrifice and discipline. car and house payment 1100 dollars. utilities 300 dollars. 2400 dollar a month budget x 12 months gives 28,800 dollars of expenses. The rest is discretionary. Save early, pay yourself first. If you get a 5% raise be sure to deduct more to your savings, (if you save 15%, and get a 5 percent raise, raise your percentage to 16 %, especially if your employer matches). Don't borrow for refrigerators, furniture, etc., save it first.
Try and sell that car 6 months after you buy it. Make a graph of your debt and asset both car related. Chart it every month for the rest of your life. That debt takes you backwards every time you buy a new car. Buy cheaper and the setback isn't as noticeable. Take the savings and save it for your next replacement vehicle. I have charted all of my finances since 1989!! (I know it's kind of anal) Don't forget the savings on taxes and insurance.
Well I am not actually going to sell it, but I did some research and the same year same model is listed around $1000-$1500 higher than what I gave. I asked a guy I know that goes to a lot of auctions what something like mine was bringing and he said at the auction they are bringing what I paid. It books for about $5,000 more than I gave for it. I am not saying there is a cheaper way, but right now I hold a highly depreciating asset that is still worth more than I paid for it.
My definition of wealthy: zero financial stress. Otherwords, no alarm clock (free time), no schedule (go wherever and do whatever) & no boss ( call your own shots). Example#1 : I have a friend who owns the sky box on the 50 yard line at Jack Trice, he bought Johnny Orr's place in town when Johnny left so he would have a place to stay on Saturdays. Owns several homes in several locations in US. Travels world wide extensively. Retired in his 50's. Example #2 : we go South in the Winter and I visit with local fulltime habitants. There are people "living the life" of no stress with not much net worth but little needs in exotic places. Bottom line=wealth is dependant upon individual consumption/wants.
