4 people who earn six figures and still feel broke

[Doppel]

You would be hard pressed to not find a BMW in every driveway. Classic, Dave. Any one of us saying this would know it's hyperbole, but he believes it. And, to be true to form, it's so easily proved as wrong by simply going through google street view.

WTF are you on about? 140k a year is $11,600 a month. I am self employed. I pay about $12k in tax after my write offs. (At the end of the year, as I said) Some months I make 9k some months I make 14k. Depends on how busy I get.

Double house payment is $1500, Camaro is $600, truck is $750. Another $400 in bills. I spend $4500 a month on average living in this world and eating and golfing etc.. I've done the math.

Don't be so upset because you are doing it wrong.

Your math still doesn't work. I don't buy it.

Glassdoor won't show self employment salaries. Also, income is heavily dependent on your specialty. If you have proven SAP, SharePoint, Cisco, or other business tech skills you are going to make great money. At our firm we can't hire enough ERP people at $90k for two years of relevant experience in the Midwest.

Thing is, with IT, it's quite easy to go from $50k to 80k, but going from $80k to 100k takes a while (outside rare specialities) and to get up to $140k takes a great deal longer indeed. I know a bunch of people in IT including a couple of managers and they aren't making this. They don't live in NYC, t though. It's similar to engineering. Getting close to $100k doesn't take a ton of time, but when you get above it things slow down fast.

 

[waggy]

You would be hard pressed to not find a BMW in every driveway. Classic, Dave. Any one of us saying this would know it's hyperbole, but he believes it. And, to be true to form, it's so easily proved as wrong by simply going through google street view.Your math still doesn't work. I don't buy it..

yeah i don't buy it either. no way a honest person is doing that. but he post latter how he writes off a ton of stuff because he works from home.

so the way he is doing it is being a tax cheat.

 

[xeemzor]

You would be hard pressed to not find a BMW in every driveway. Classic, Dave. Any one of us saying this would know it's hyperbole, but he believes it. And, to be true to form, it's so easily proved as wrong by simply going through google street view.Your math still doesn't work. I don't buy it.Thing is, with IT, it's quite easy to go from $50k to 80k, but going from $80k to 100k takes a while (outside rare specialities) and to get up to $140k takes a great deal longer indeed. I know a bunch of people in IT including a couple of managers and they aren't making this. They don't live in NYC, t though. It's similar to engineering. Getting close to $100k doesn't take a ton of time, but when you get above it things slow down fast.

You can not get a really high salary by just doing great work if you are not self employed. At some you will need to show you can manage people, please a client, bring in business, put out fires, network, and train new staff. In essence, you need both people and technology skills to succeed. Engineers and IT folk tend to be lacking in the former. Master both of these and you too can make it to $140k/year.

 

[alkemyst]

I've read this whole thread. Some of the cock comparing is admirable.

Regarding the initial discussion about 100k and being broke - it is easy to rack up debt, harder to pay it off (like gaining/losing weight). I know people who literally rented oversized closets in NYC and lived off well under 100k.

We live within our means. We certainly have waste, but not so much as to derail our financial goals. Our income has gone up considerably over the years but we still live in the same house, wife drives a 10yr old sedan. Detest debt. Raises have gone to savings, retirement, childcare.

We are not broke, nor do we feel broke. We are very fortunate and understand how quickly things can change. I can only imagine some of my neighbors are living on the edge with little (if any) retirement savings, new cars, boats, and frequent extravagant vacations.

One of my ex-bosses (now he already had his retirement taking care of between his parents and scoring big on public stock options at a company he worked for at the same time he decided on this path), took all raises and divided them in half. Half went directly to retirement/savings. The other half was his. Same with any bonus.

Most people can't live in an oversized closet, however; most don't want 2 hours each way or more of commuting.

$100k is not what it once was and many are still thinking of what that money meant while they were growing up, not what's real in today's society.

I think I was a lot more comfortable pulling in a combined income of $75k in 199x than more than that solo in 201x.

 

[alkemyst]

Thing is, with IT, it's quite easy to go from $50k to 80k, but going from $80k to 100k takes a while (outside rare specialities) and to get up to $140k takes a great deal longer indeed. I know a bunch of people in IT including a couple of managers and they aren't making this. They don't live in NYC, t though. It's similar to engineering. Getting close to $100k doesn't take a ton of time, but when you get above it things slow down fast.

It really depends on market. In many 80-100K is easy, but it probably scales to the markets where $50-80k is easy.

To get to $150k is hard in many markets. One has to think of billable hours in those situations if you are in production.

The easier goal at that level is management. It's a lot easier to make $150k as an experienced engineer as a manager than one that puts out the work.

Now many say managers really do nothing and just kick back. The truth is A LOT rides on you. EBITDA, retention, billable hours, customer satisfaction, customer complaints, a missed maintenance window, etc become your problems. You can lose your job because someone on your team messed up.

 

[alkemyst]

Glassdoor won't show self employment salaries. Also, income is heavily dependent on your specialty. If you have proven SAP, SharePoint, Cisco, or other business tech skills you are going to make great money. At our firm we can't hire enough ERP people at $90k for two years of relevant experience in the Midwest.

$90k <> $144k.

However; if you are contracting nothing is guaranteed. I did it many times. Sadly, you have to work lazy because if you are really good you will put yourself out of work.

I have had 3-6 month contracts I completed in less than half the time. I have had 12+ contracts that I finished even faster and had more stuff even added on.

I don't like to work dishonestly.

If that is one's game, Sales is probably the better way to go. If you know the technology and can speak even decently $300-500k is pretty low hanging fruit.

It's all about how you can sleep at night.

 

[alkemyst]

I am a self employed consultant, a contractor. A home based business. My car is my personal vehicle and my Truck is my work vehicle. I use it to drive to client sites, haul computers etc..
every penny I spend on it is a write off.

I write off 60% of all home expenses, A prorated portion, based on an estimate of how much you use for business. Half of the common areas, plus my office room and all my storage is computer junk.

And I keep receipts for EVERYTHING. My aquarium, fish food and filters etc. Vacuum cleaners, vacuum cleaner bags etc. The only thing I don't write off is groceries. I write off every time I eat out though. I was out at a client site is all I have to say. My 70" plasma because I plug computers into them so I can fix them while I watch TV etc. All my computer hobby, several upgrades a year.

This ain't rocket science and I am following the rules I read in their own government tax guides. The account concurs and away we go. Why would you not try and keep as much of your money as you can? geez.

Can you start to see why my net taxable income is so low?

If you got audited, you'd be fucked.

 

[TXHokie]

$100k is not what it once was and many are still thinking of what that money meant while they were growing up, not what's real in today's society.

Yep yep yep

Get with the times...
250k is the new $100k
Who cares about 6 figures, quarter mil is where it's at

 

[Engineer]

If you got audited, you'd be fucked.

I've been audited twice. I passed.

:hmm:

 

[alkemyst]

:hmm:

Most that abuse, speak of audits. It's VERY rare you pass without penalties even if they are just in research costs.

The OP didn't provide much detail, but claiming 60% for things like your family room TV is not going to fly today at all if you get audited.

Keep in mind that whole 7 years back is only if you had no problems. Hit year 7 and they find a problem year 1, they can go back another 7 years.

They compound the interest too.

I have a friend that still has a private business. In the beginning he did it himself as he had a tax background, he now pays for a CPA each year and their team.

He made a simple mistake in his first year of business. They audited him at the statute of limitations on it. It cost him five years of profit.

He ran it out of his home and wasn't playing the game that his TV, cable, phone, stereo, computer, furniture, etc was 100% business. That was popular back then and got crushed.

 

[7window]

yeah i don't buy it either. no way a honest person is doing that. but he post latter how he writes off a ton of stuff because he works from home.

so the way he is doing it is being a tax cheat.

I have yet to find someone who is not a tax cheat.

 

[Markbnj]

Thing is, with IT, it's quite easy to go from $50k to 80k, but going from $80k to 100k takes a while (outside rare specialities) and to get up to $140k takes a great deal longer indeed. I know a bunch of people in IT including a couple of managers and they aren't making this. They don't live in NYC, t though. It's similar to engineering. Getting close to $100k doesn't take a ton of time, but when you get above it things slow down fast.

Agreed. $140k in IT is fairly rare, and outside of cities like SF and NYC you almost never find W2 developers making that kind of cash. 1099 consultants certainly can, and IT management from the director level on up, depending on the company.

 

[alkemyst]

Yep yep yep

Get with the times...
250k is the new $100k
Who cares about 6 figures, quarter mil is where it's at

I agree, those of use that grew up in the 70's (probably even 80's) and prior that heard their parents talk about making $100k one day would have to make $250k to match that power.

In today's society a billionaire is really the millionaire of the past.

That's sort of scary.

 

[Markbnj]

I agree, those of use that grew up in the 70's (probably even 80's) and prior that heard their parents talk about making $100k one day would have to make $250k to match that power.

In today's society a billionaire is really the millionaire of the past.

That's sort of scary.

I had an eye-opener on this a few years ago. When I was in my teens in Indiana I recall us living a pretty solid middle-class lifestyle, maybe even upper middle class. We had a large (as I recalled it) home in the burbs in a small town, a tennis/pool club membership. Two cars. A lawn tractor. A small sailboat. We took vacations.

A couple years back I asked my old man what he was making around that time (say, 1972-1978) and to his recollection it was from $35-50k. The house that I recalled as large was actually small by today's standards, as was the lot, however both were very nice (had a river out back we canoed and skated on). The cars were never top of the line, but mid-range GM models. Prices for a lot of things were commensurate with today, if not more expensive. However as we talked it was clear that we have a lot of expenses today my Dad never had to deal with, or dealt with at much lower relative price points: health insurance, car insurance, internet/cable/cell phone plans, a lot of expenses related to kid activities that just didn't exist or were free when I was young, property taxes, etc.

 

[alkemyst]

I have yet to find someone who is not a tax cheat.

People today steal anything they can.

If any tax cheat ever gets audited, I can guarantee they'd never again. Even if you did everything by the books, the costs are insane.

This is one of the factors that took me out of working for myself. I didn't cheat at what I did. However; home businesses that are run at losses come under fire.

If you are reporting 6 figures of profit in a home business, I am sure you are under the radar.

I didn't get that far.

 

[Engineer]

I have yet to find someone who is not a tax cheat.

Two words that classify almost everyone who files taxes (at least state taxes) as a tax cheat: "Use tax".

 

[alkemyst]

I had an eye-opener on this a few years ago. When I was in my teens in Indiana I recall us living a pretty solid middle-class lifestyle, maybe even upper middle class. We had a large (as I recalled it) home in the burbs in a small town, a tennis/pool club membership. Two cars. A lawn tractor. A small sailboat. We took vacations.

A couple years back I asked my old man what he was making around that time (say, 1972-1978) and to his recollection it was from $35-50k. The house that I recalled as large was actually small by today's standards, as was the lot, however both were very nice (had a river out back we canoed and skated on). The cars were never top of the line, but mid-range GM models. Prices for a lot of things were commensurate with today, if not more expensive. However as we talked it was clear that we have a lot of expenses today my Dad never had to deal with, or dealt with at much lower relative price points: health insurance, car insurance, internet/cable/cell phone plans, a lot of expenses related to kid activities that just didn't exist or were free when I was young, property taxes, etc.

I agree. My dad was a Vietnam vet. I was consummated in Seattle, WA where he was Military Police and a Specialist. His parents gifted him a decent house yet my mom and him struggled while he was using his GI bill.

I always was fed and taken care of. They usually just ate pasta (no sauce, if they could afford butter they were happy...they never asked for assistance even thought they qualified).

As my dad got more college behind him, he got better jobs and ended up as a manager at a Golden Triangle (popular store in the 70's down here)

My dad finally got his BA in Business Administration (it was worth more then) and got hired as an Assistant Vice President at a Savings and Loan.

He worked his way up and we moved to a better neighborhood. Even then the housing costs and his income were so low. They didn't have the best of cars, but they weren't beaters, (this was around 1977), My dad drove a 1970 Maverick and my mom a 1975 one. (2 door vs 4 door respectively). He bought a Monte Carlo Grand Prix(???, sports car black with a white top and interior) at one point but sold it since it wasn't worth the extra cost.

Even later in my life he was making a lot less than someone today has to.

It's really messed up.

 

[JMapleton]

You would be hard pressed to not find a BMW in every driveway. Classic, Dave. Any one of us saying this would know it's hyperbole, but he believes it. And, to be true to form, it's so easily proved as wrong by simply going through google street view.Your math still doesn't work. I don't buy it.Thing is, with IT, it's quite easy to go from $50k to 80k, but going from $80k to 100k takes a while (outside rare specialities) and to get up to $140k takes a great deal longer indeed. I know a bunch of people in IT including a couple of managers and they aren't making this. They don't live in NYC, t though. It's similar to engineering. Getting close to $100k doesn't take a ton of time, but when you get above it things slow down fast.

IT is one of those professions where you can make a decent living quickly, but it's very very difficult, sometimes impossible, to get into that higher end salary range ($200k+). This is true with any "technical" profession. It's because IT people are usually not part of a company's actual business, they part of the the company that services the business. HR is the same way. So they never make it to executive roles (except for CIO position).

 

[JMapleton]

A couple years back I asked my old man what he was making around that time (say, 1972-1978) and to his recollection it was from $35-50k. The house that I recalled as large was actually small by today's standards, as was the lot, however both were very nice (had a river out back we canoed and skated on). The cars were never top of the line, but mid-range GM models. Prices for a lot of things were commensurate with today, if not more expensive. However as we talked it was clear that we have a lot of expenses today my Dad never had to deal with, or dealt with at much lower relative price points: health insurance, car insurance, internet/cable/cell phone plans, a lot of expenses related to kid activities that just didn't exist or were free when I was young, property taxes, etc.

$50k a year was a great deal of money in the 70s. $50k a year where today I live can buy you a brand new house and brand new car and vacations.

$50k in the 70s and you were bordering upperclass.

 

[IHateMyJob2004]

If I had my salary 20 years ago (adjusted for inflation), I'd be happier. I can't believe what my salary gets me (or doesn't) in Connecticut. Real Estate prices relative to home construction costs are retarded. 10% of the cost used to be land cost. Today it is more like 30%. How can anyone feel rich when 30% of their mortgage is the cost of dirt?

The other solution is to leave where I am but that just can't happen.

 

[7window]

In today's society a billionaire is really the millionaire of the past.

That's sort of scary.

Not quite there yet.

 

[alkemyst]

If I had my salary 20 years ago (adjusted for inflation), I'd be happier. I can't believe what my salary gets me (or doesn't) in Connecticut. Real Estate prices relative to home construction costs are retarded. 10% of the cost used to be land cost. Today it is more like 30%. How can anyone feel rich when 30% of their mortgage is the cost of dirt?

The other solution is to leave where I am but that just can't happen.

Real estate as always been the higher cost vs the construction.

Then they invented 0-lot lines and the like that didn't include much property but the dirt.

I'd avoid looking at oceanfront property if you feel this way.

 

[xeemzor]

IT is one of those professions where you can make a decent living quickly, but it's very very difficult, sometimes impossible, to get into that higher end salary range ($200k+). This is true with any "technical" profession. It's because IT people are usually not part of a company's actual business, they part of the the company that services the business. HR is the same way. So they never make it to executive roles (except for CIO position).

Sure it's harder to make $200k in house because you are a cost center. However, IT professionals in consulting companies are actually revenue generators. As such, it's much easier to make higher salaries. The downsides are that you work longer, harder, and travel more.

Also, I've seen many folks with a business/IT background make it to COO and a few CEO. Companies rely more and more on technology every day and you need someone with a solid understanding of technology to make effective decisions. Usually you can't make it there with just a pure tech background though.

 

[Scarinx]

Thats what i am going to aim for after college

 

[Engineer]

Not quite there yet.

I don't know...when 1 out of every 31.7 people in the US are millionaires (10,000,000 millionaires out of 317 million people), I think the statement is pretty fair.