Very high earners ($400k+), how did you do it?

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TheNightsToCome
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Re: Very high earners ($400k+), how did you do it?

Post by TheNightsToCome »

PhysicianOnFIRE wrote: Wed Dec 08, 2021 12:17 pm First, I became an anesthesiologist. I averaged right around $400k over a 13-year career.

By the time I retired from that, I had a second career as a personal finance blogger, and I now earn a similar income online. :beer
The first career was fine, but I'm much more impressed by the second. :happy
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TomatoTomahto
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Re: Very high earners ($400k+), how did you do it?

Post by TomatoTomahto »

To bring my contribution to this thread back on topic, I present this “blast from the past.” I haven’t worked for a paycheck in 20 years. For the decade or two prior, I made between $250k and $420k, probably averaging $300k. Inflation adjusted it’s roughly worth double now.

I was a software developer. This was well before the zoom in TC for tech. I viewed every increase in responsibility as an opportunity; I didn’t ask “what’s in it for me?”; I figured the money would come, and it did.

I enjoyed my work and was good at it, but I enjoyed being a SAHD even more. My wife and I missed my income for a little bit, but with a loving husband/father to make sure the kids were taken care of, she could focus on her career.
I get the FI part but not the RE part of FIRE.
jarjarM
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Re: Very high earners ($400k+), how did you do it?

Post by jarjarM »

Dusn wrote: Wed Dec 08, 2021 12:21 pm If you live in a city like SF or Manhattan, that is filled with millionaires and billionaires, it’s going to be very expensive. Even if they lowered your taxes, they’d then just increase your rent and other expenses because you can now afford it and if you move out someone else will move in. Also, it’s so expensive that none of your servants, doormen, nanny, etc could afford to live even in the bad parts of town without aid of some kind from the govt and Medicaid.

I can’t think of any cities of that caliber, anywhere in the world, that are “cheap.”

Wealth is all relative to the wealth of the people around you.
Even in SF/Manhattan, it's limited # of households pulling in >$1mil. According to 2019 IRS data (the most recent one available), only ~556k returns out of the more than 150mil returns reached AGI > $1mil.

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jarjarM
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Re: Very high earners ($400k+), how did you do it?

Post by jarjarM »

PhysicianOnFIRE wrote: Wed Dec 08, 2021 12:17 pm First, I became an anesthesiologist. I averaged right around $400k over a 13-year career.

By the time I retired from that, I had a second career as a personal finance blogger, and I now earn a similar income online. :beer
Always love your blog and good to see that your 2nd career is going well with lot more free time I hope. :beer
muffins14
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Re: Very high earners ($400k+), how did you do it?

Post by muffins14 »

Dusn wrote: Wed Dec 08, 2021 12:21 pm If you live in a city like SF or Manhattan, that is filled with millionaires and billionaires, it’s going to be very expensive. Even if they lowered your taxes, they’d then just increase your rent and other expenses because you can now afford it and if you move out someone else will move in. Also, it’s so expensive that none of your servants, doormen, nanny, etc could afford to live even in the bad parts of town without aid of some kind from the govt and Medicaid.

I can’t think of any cities of that caliber, anywhere in the world, that are “cheap.”

Wealth is all relative to the wealth of the people around you.
This is objectively wrong, and silly. I live in Manhattan and and can assure you it is not “full of millionaires and billionaires”. It is economically diverse, and most neighborhoods have a range of incomes. Not all people in the service industry live in “bad parts of town and use Medicaid” to get by, surely.

Is it cheap? No. But it’s not 50% millionaires and 50% poverty by any means
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jharkin
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Re: Very high earners ($400k+), how did you do it?

Post by jharkin »

mikejuss wrote: Wed Dec 08, 2021 12:14 pm

And yes, I agree with those who say that this is a first-world problem. But if a couple with 2 kids makes $1 million in New York City, they'll bring home, after taxes, about $500,000, and you also have homeownership costs (could easily be $75,000), private-school costs (could easily be $30,000 per kid), and the cost of maxing out your tax-deferred retirement accounts (maybe $50,000). So now you're netting $300,000--and you haven't spent a penny on food, clothing, vacations, 529s for your kids, or contributions to your taxable retirement accounts. The road to true wealth is a slow, arduous one even for those with seemingly eye-popping household incomes.
So this hypothetical couple is still netting almost 5x the median USA gross household income.
And a lot of those expenses like the 30k private school (many people don't pay that for college!!!) are choices.


These discussions are why so many people of average means are intimidated by his board. We get made to feel like un-worthy underachievers, meanwhile out in the real world I am the one that the rest of my family (all scraping by paycheck to paycheck) gets jealous of.


I said about 5 pages back I was going to bow out of the thread. My bad for not taking my own advice. I will turn off notifications and leave for good this time. sorry.
mikejuss
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Re: Very high earners ($400k+), how did you do it?

Post by mikejuss »

jharkin wrote: Wed Dec 08, 2021 1:01 pm
mikejuss wrote: Wed Dec 08, 2021 12:14 pm

And yes, I agree with those who say that this is a first-world problem. But if a couple with 2 kids makes $1 million in New York City, they'll bring home, after taxes, about $500,000, and you also have homeownership costs (could easily be $75,000), private-school costs (could easily be $30,000 per kid), and the cost of maxing out your tax-deferred retirement accounts (maybe $50,000). So now you're netting $300,000--and you haven't spent a penny on food, clothing, vacations, 529s for your kids, or contributions to your taxable retirement accounts. The road to true wealth is a slow, arduous one even for those with seemingly eye-popping household incomes.
So this hypothetical couple is still netting almost 5x the median USA gross household income.
And a lot of those expenses like the 30k private school (many people don't pay that for college!!!) are choices.


These discussions are why so many people of average means are intimidated by his board. We get made to feel like un-worthy underachievers, meanwhile out in the real world I am the one that the rest of my family (all scraping by paycheck to paycheck) gets jealous of.


I said about 5 pages back I was going to bow out of the thread. My bad for not taking my own advice. I will turn off notifications and leave for good this time. sorry.
There's no need to take this information personally; it was provided merely as a hypothetical example. This is what's going on in New York--and you may live anywhere. Adjust your expectations accordingly.
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canadianbacon
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Re: Very high earners ($400k+), how did you do it?

Post by canadianbacon »

MAKsdad wrote: Wed Dec 08, 2021 6:38 am I, on the other hand, always avoided anything challenging as much as I possibly could. Seemed silly to challenge myself when the possibility of not succeeding was involved, not to mention the extra work.
I obviously cannot endorse this entertaining work of cynicism, but your post reminded me of its existence: https://www.ribbonfarm.com/2009/10/07/t ... he-office/

Also available in Kindle form on Amazon since 2013, and who am I to judge him for cashing out?
Bulls make money, bears make money, pigs get slaughtered.
stoptothink
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Re: Very high earners ($400k+), how did you do it?

Post by stoptothink »

mikejuss wrote: Wed Dec 08, 2021 1:11 pm
jharkin wrote: Wed Dec 08, 2021 1:01 pm
mikejuss wrote: Wed Dec 08, 2021 12:14 pm

And yes, I agree with those who say that this is a first-world problem. But if a couple with 2 kids makes $1 million in New York City, they'll bring home, after taxes, about $500,000, and you also have homeownership costs (could easily be $75,000), private-school costs (could easily be $30,000 per kid), and the cost of maxing out your tax-deferred retirement accounts (maybe $50,000). So now you're netting $300,000--and you haven't spent a penny on food, clothing, vacations, 529s for your kids, or contributions to your taxable retirement accounts. The road to true wealth is a slow, arduous one even for those with seemingly eye-popping household incomes.
So this hypothetical couple is still netting almost 5x the median USA gross household income.
And a lot of those expenses like the 30k private school (many people don't pay that for college!!!) are choices.


These discussions are why so many people of average means are intimidated by his board. We get made to feel like un-worthy underachievers, meanwhile out in the real world I am the one that the rest of my family (all scraping by paycheck to paycheck) gets jealous of.


I said about 5 pages back I was going to bow out of the thread. My bad for not taking my own advice. I will turn off notifications and leave for good this time. sorry.
There's no need to take this information personally; it was provided merely as a hypothetical example. This is what's going on in New York--and you may live anywhere. Adjust your expectations accordingly.
Your hypothetical isn't remotely "normal" for New York (the 95th percentile for HHI in New York is ~$250k/yr), or anywhere. As someone in a similar situation to Jharkin, indeed the anecdotes of those in tech and finance (in the Bay and NYC) that $500k/yr income is "normal", can be attained by any shmuck with a few functioning brain cells and moderate effort, and that this level of wealth leaves little left (thanks primarily to discretionary expenses most people would never consider having) if you live in a HCOL is not only easily debunked with actual data, but it gets old really fast.
austin757
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Re: Very high earners ($400k+), how did you do it?

Post by austin757 »

Any other plumbers in this group?
MAKsdad
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Re: Very high earners ($400k+), how did you do it?

Post by MAKsdad »

canadianbacon wrote: Wed Dec 08, 2021 1:25 pm
MAKsdad wrote: Wed Dec 08, 2021 6:38 am I, on the other hand, always avoided anything challenging as much as I possibly could. Seemed silly to challenge myself when the possibility of not succeeding was involved, not to mention the extra work.
I obviously cannot endorse this entertaining work of cynicism, but your post reminded me of its existence: https://www.ribbonfarm.com/2009/10/07/t ... he-office/

Also available in Kindle form on Amazon since 2013, and who am I to judge him for cashing out?
The real secret is to use your sociopathic tendencies to engineer a way to be both lazy/unambitious and successful at the same time :moneybag
jarjarM
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Re: Very high earners ($400k+), how did you do it?

Post by jarjarM »

stoptothink wrote: Wed Dec 08, 2021 1:26 pm
Your hypothetical isn't remotely "normal" for New York (the 95th percentile for HHI in New York is ~$250k/yr), or anywhere. As someone in a similar situation to Jharkin, indeed the anecdotes of those in tech and finance (in the Bay and NYC) that $500k/yr income is "normal", can be attained by any shmuck with a few functioning brain cells and moderate effort, and that this level of wealth leaves little left (thanks primarily to discretionary expenses most people would never consider having) if you live in a HCOL is not only easily debunked with actual data, but it gets old really fast.
This is why I posted the IRS summary data (2019, the latest one available) on this thread a couple of times to bring some real-world data to the discussion. Those who's AGI > $500k is quite small (1.7 mil returns) and >$1mil is even smaller (550k returns). Some of the BHs are living in an extremely small social circle and not realizing how the rest of the country/world is like, and that includes DW as she at one point thought 50% of the bayarea tech folks are pulling in >$500k based on the offers she's being handing out to new employees. I have to use this data to enlighten her a bit :oops:
mikejuss
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Re: Very high earners ($400k+), how did you do it?

Post by mikejuss »

stoptothink wrote: Wed Dec 08, 2021 1:26 pm Your hypothetical isn't remotely "normal" for New York (the 95th percentile for HHI in New York is ~$250k/yr), or anywhere. As someone in a similar situation to Jharkin, indeed the anecdotes of those in tech and finance (in the Bay and NYC) that $500k/yr income is "normal", can be attained by any shmuck with a few functioning brain cells and moderate effort, and that this level of wealth leaves little left (thanks primarily to discretionary expenses most people would never consider having) if you live in a HCOL is not only easily debunked with actual data, but it gets old really fast.
No one's denigrating anyone else's intelligence, income, or location here; we're merely describing the situation of (an admittedly narrow) band of high-income earners. I think the main point is that, for some of these people, their net income does not feel commensurate to the stress levels they experience while working nearly around the clock. Perhaps a more fruitful discussion is whether the time spent is really worth it; I bet there is a broad spectrum of opinions here on that matter. :mrgreen:
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Re: Very high earners ($400k+), how did you do it?

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