What would you do with a $124,000 Annual Salary

It all depends. I live outside of Chicago in Kenilworth. The average salary is ~600k and the average house price is close to $2,000,000. With a 124k salary, you wouldn't be able to afford a tiny lot of land. Even neighboring Winnetka has a house starting price of 600k so you couldn't live in either community, let alone comfortably. It is all relative, there are places all over the US much cheaper than where I live in the midwest.

Piss it away.

Struggle is Real wrote:

That is a great salary if you are single. After taxes, SS and medicare, you are taking home around $100,000.

I'm not sure how your math works. I am single, I will make $175,000 this year and will max out my 401K (so take $18,500 off my gross, so I am still $156K) and my take home for the year will be $100K. I do pay around $13K in state income tax.

Take home on 124K is probably like $75-80K

I make about 135K working part-time (nearly full-time - about 30 hours a week.) Anyway, I'm the second earner - my husband is the primary earner. I pay about 35% in tax - 47K. That leaves 88K. Then I spend about 44K in childcare. That leaves 44K. I put 19K in my 401K. That leaves 25K. I max out Roth (backdoor). That leaves 20K. I pay for our healthcare - don't remember exactly how much, but probably another 5K, including maxing out HSA contributions. That leaves 15K. I spend about 5K on myself, whatever frivolous things I feel like buying, from running shoes to quilting supplies. Another 5K goes to my kids non-core expenses, like clothes, school supplies, toys, etc. The other 5K goes to gas and whatever else comes up.

Both kids will be in (private) school next year, and I'll probably save about 15K. Tropical vacation, perhaps?

I wish I earned this much. I'm only getting $21,000k at the moment so this sounds like an incredible lot. I would buy a really nice Ferrari if I was that much. I would have no problems finding girls if they saw me parking a Ferrari outside Starbucks when I go for a coffee.

I would go fuccking beserk.

No, not really. I would save it all.

I'd love to buy a studio flat or one bedroom apartment in the city centre and try out living there for a few months.

I'd basically take out enough money each month to live on, a set amount. And then I would get a financial advisor and I would put the rest into a variety of things including a small amount in cryptocurrency (relatively new ones).

I would buy some new clothes. I would get my hair cut. I would get my toilet fixed, my sink fixed, my washing machine fixed, my ceiling fixed.

Invest it

Make that much....Still have no money. Of course I have 3 kids.

Other than traveling more, going on cruises and all-inclusive vacations I don’t see how it would change how I live. Similar things happened when going from 30k to 70k a year. I don’t check the bank balance very often because we are comfortable living like we’re making slightly less. This helps when you have ‘oh sh!t’ moments and keeps you out of debt. We have a couple small students loans we are about to pay off, one car payment, one car we paid cash for, one credit card they keep raising my limit on (10k now I think). If we actually had a plan we could throw $500 a month in something....but meh I would rather have ‘oh sh!t’ and ‘vacation’ money.

Alan

Wolf's Bane wrote:

Ya, people on letsrun are in lala land when they talk about salaries. Nowhere is 124k anywhere near average besides SF and NY. My job requires a degree and no one makes close to 124k. People might hit 6 figures at the end of their careers, working as much overtime as possible. Almost no one I went to school with went on to make 6 figures.

Anywho, I figure most of the people talking about these kind of salaries are college kids who assume they'll be hired by the top firm in their field or they're just trolling.

Well, first off, there are over 60M people who live in NY and California. So roughly 1/5 of the US population live in places where low six figures is a pretty average income. Throw in MA, CT, DC, the Seattle metro area, the Chicago metro area, and a few others and you very quickly get to 1/3rd or more of the population who live in high COLA areas. Not exactly an isolated phenomenon.

Second, the median household income in the US was $62K in 2017. That includes everyone - single moms, retired seniors, recent graduates, some students, etc. If we’re to calculate a median income for households with two prime age adults it would be very close to six figures nationally, and well into the six figures in high COLA areas. So again, nothing extraordinary or unusual about $124K in income. It is very much a normal income level for an adult in the middle of their career.

If I had to put it in running terms, that level of income is like a 19 min 5K. Sure it is worlds better than the average of all people, but it is nothing special for an open age group male who actually trains.

This thread makes me feel inadequate! I make almost exactly the listed salary, and I always thought it was pretty good. I live in central Ohio, work for a big company, and I know that the majority of people here make less than that (job titles equate to pay bands for which salary ranges are public).

It helps that my wife also makes an additional 80k, so between the two of us, we have a nice enough life to where we can go on multiple vacations a year and have relatively nice things.

Unless I come up with the next big mobile app, I'm going to be stuck around this salary, as it is hard to make much more as a programmer (unless of course I go somewhere with much higher cost of living).

I wish you could programme me to be like Bekele or an alpha or something

jklkj wrote:

You know "retirement" is a ponzi scheme, right?

...

The most successful people I know have never retired. They continue to pursue their passions. They just have more freedom, but are just as driven.

Those are two very different things.

(1) How is not working a Ponzi scheme in any way? All it means is that you have enough money to live off your accumulated wealth.

(2) Most successful people at anything are the people who don't put limitations on themselves when pursuing their goals. The most successful people you know have gotten there because they do not see retirement as a goal; Their goals are all success-driven so they keep moving the retirement goalposts because they don't want the success train to end...only once their success or health starts fading will they consider retirement.

A quick analogy since we're a running community -- The fastest runners don't decide "Yeah, I'll run a 4:30 mile and enjoy that accomplishment for the rest of my life". They train to see how fast and far they can go and blow past 4:30 (or whatever would be the "retirement mile" for them.

There's nothing wrong with working to live or living to work...both are equally rewarding but it's ridiculous to think they are interchangeable.

The only thing it really did for my family was make my children decide against Ivy League educations because we raised them to be too good at decision making. We could have afforded it but the children did the research and decided that it wasn't worth the cost. Had we been at the $124k mark without significant savings, the cost would have been minimal. Ivies should be need blind in admissions as well as cost.

Some of the times I felt the most 'rich' was in school. My expenses were covered and an overpaid summer internship/job was pure discretionary funds.

I make quite a bit more than the $124k. It goes quickly. I've learned to spend to my income. But the first thing I do is put the max into retirement and a bit into savings. I avoid loans generally unless it's a good deal. The exception is my mortgage which isn't too much longer.

I'd have to make significant lifestyle changes if I was making $124k but it would be manageable. I certainly made due on a lot less on my career path. I'm skeptical that my kids will make that much. They're just not that driven. I'm not there to provide anything more than an education financially.

Don't buy too much house or car, or get divorced. Although my divorce was worth every cent.

I'd have to move to a flyover state, and that would make me sad.

I anon. admit to making 4-5 times that, but I still consider 124k to be good money, if one manages it and lives within it. I own a business and live in a large city in the South and don't consider us "rich". Live in a house worth about 500k, nice vehicles, lots of travel to great places when we want to do so, but still regret the lifestyle creep upward. I have put two kids through state universities, took them all over the US and the world and am glad we did. I save plenty, but we have no idea how much healthcare will cost when we get older. Having kids is a great gift in life, and I am very thankful to have them, but it cost a lot to raise and educate them. I wish I had made this kind of money when they were younger. My wife and kids don't really know my full income and that is a good thing. Trust me, the more they know you earn, the more 'needs' they have.

For those who are ready to sling the insults, it didn't come easy. Years of private school paid for by my parents who sacrificed, then private college and private grad school later in life. I was always the first to the office and last to leave, worked weekends if needed, scrambled to compete against much smarter counterparts. Moved all over the country to advance, finally invested all I had in a business in the downturn and nearly lost it all, only to have the economy pick back up in 2013. I advise my kids to live lean and simple, but time will tell if they follow that advice.

Runningart2004 wrote:

Pay more taxes.....:)

It’s interesting to me as you progress through life how your standards or benchmarks change. Coming from a dirt poor family I thought 30k a year was something special.

I’ve realized as my job and salary changed that all I do is have more money to buy more useless stuff to throw in a house that I only really use about 60% of. Who TF needs a formal living and dining room? Two extra rooms full of crap. 4th bedroom is a multipurpose room. Who needs that?

Even those making 100k are living “week to week”in some instances because of the false idea that they need to constantly increase the amount of useless crap in their lives.

Alan

Good post.

Still driving the Honda?

When you make $124k, the flyover states are California and New York because the only time wealthy Midwesterners see those states is when flying over them on the way to Europe or Australia or Japan for vacations. You poor guys on the coasts have to fly over the Midwest on the way to the other coast for business.