I may die poor

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protagonist
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Re: I may die poor

Post by protagonist »

deleted
Last edited by protagonist on Tue Nov 17, 2020 2:31 pm, edited 1 time in total.
Marseille07
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Re: I may die poor

Post by Marseille07 »

protagonist wrote: Tue Nov 17, 2020 2:24 pm
JoeRetire wrote: Tue Nov 17, 2020 2:17 pm
cheese_breath wrote: Tue Nov 17, 2020 9:33 am
Anonymous122 wrote: Tue Nov 17, 2020 1:41 am ... My rent is 2750k a month....
???
VVHCOL...
I was thinking that it was quite reasonable for the Bay area given his income. It still leaves OP with 104K pre-tax. which should be plenty.
Look again, it's a joke on the typo. 2750k = 2.75M per month.
finite_difference
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Re: I may die poor

Post by finite_difference »

I think it’s generally a seller’s market for houses.

Alternatively, since you work for a small start up, I also wonder if they’d let you work remotely and live in your NV house?

If your NV house mortgage is $2k/month, then you’d increase cash flow by $1k/month right there. Probably a lot more since everything in the Bay Area is so expensive.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
herbert_21
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Joined: Tue Nov 17, 2020 10:41 am

Re: I may die poor

Post by herbert_21 »

Anonymous122 wrote: Tue Nov 17, 2020 1:41 am I need some help.

I have been reading threads for awhile, and every time I feel I am making progress, I read some more then feel like I am really behind.

Just a run down:

I am 40yo - making 140k a year and live in the bay area. My rent is 2750k a month.

I do own a house in NV (currently renting it out) (owe $260k) but I am upside down $250 a month

So between my upside down mortgage and rent I am spending 3k a month there.

I have all my old 401k's ($150k) in a separate Vanguard VWELX (not contributing to this) current employer 401k is at $20k (VBIAX) and I am contributing $600 per check.(they don't match.. small start up)

I have an emergency fund of $11k - I do have CC debt of $9k (inherited most from my ex) luckily my interest is only 7% (had the card for a while, always pay on time, and have a credit score around 780) it used to be 19k so I am putting a dent in it.

I guess my question is, what am I doing wrong? I feel like most people my age have at least 300+k in the bank, and at this rate I will have to work until I am 80 and pray social security will be available. Side note: I should be thankful, I became a father at 18, handled my business, took care of him and I am about to help pay off his tuition with an old ROTH. But still feel like I need a little guidance. Should I get out of balanced funds? Do the 80% in a VFIAX and 20% in a short term bond fund like the Oracle recommends?
Here are my three suggestions:

1. Start an online business

2. Calculate how much risk you could take, and think about what risk you are willing to take.

3. If you want to make money, become an enterpreneuer. What is your profession? Think, how could you make a different? Do you see any demand that is not filled? Go, and try out, while you still have your jobs

4. Work 80hrs and don't stop until you know the answer for 3.
herbert_21
Posts: 68
Joined: Tue Nov 17, 2020 10:41 am

Re: I may die poor

Post by herbert_21 »

Anonymous122 wrote: Tue Nov 17, 2020 1:41 am I need some help.

I have been reading threads for awhile, and every time I feel I am making progress, I read some more then feel like I am really behind.

Just a run down:

I am 40yo - making 140k a year and live in the bay area. My rent is 2750k a month.

I do own a house in NV (currently renting it out) (owe $260k) but I am upside down $250 a month

So between my upside down mortgage and rent I am spending 3k a month there.

I have all my old 401k's ($150k) in a separate Vanguard VWELX (not contributing to this) current employer 401k is at $20k (VBIAX) and I am contributing $600 per check.(they don't match.. small start up)

I have an emergency fund of $11k - I do have CC debt of $9k (inherited most from my ex) luckily my interest is only 7% (had the card for a while, always pay on time, and have a credit score around 780) it used to be 19k so I am putting a dent in it.

I guess my question is, what am I doing wrong? I feel like most people my age have at least 300+k in the bank, and at this rate I will have to work until I am 80 and pray social security will be available. Side note: I should be thankful, I became a father at 18, handled my business, took care of him and I am about to help pay off his tuition with an old ROTH. But still feel like I need a little guidance. Should I get out of balanced funds? Do the 80% in a VFIAX and 20% in a short term bond fund like the Oracle recommends?
Here are my three suggestions:

1. Start an online business

2. Calculate how much risk you could take, and think about what risk you are willing to take.

3. If you want to make money, become an enterpreneuer. What is your profession? Think, how could you make a different? Do you see any demand that is not filled? Go, and try out, while you still have your jobs

4. Work 80hrs and don't stop until you know the answer for 3.
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BolderBoy
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Re: I may die poor

Post by BolderBoy »

bloom2708 wrote: Tue Nov 17, 2020 9:10 am Pay off the credit cards today. Having $2k cash is enough to get rolling again.

Sell the NV house.
+1. These should be the two priorities. You need to become cashflow positive overall in order to see progress. Even slow progress is better than where you are now.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect
keanoz
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Location: Sunnyvale, CA

Re: I may die poor

Post by keanoz »

If you are alone, cant you rent a room for less than half that price? Also get rid of the NV house
DIYtrixie
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Re: I may die poor

Post by DIYtrixie »

arcticpineapplecorp. wrote: Tue Nov 17, 2020 11:01 am
Do you need to cash out your Roth to pay remainder of kid's college?

Could kid assume remaining debt and be happy with having most of college paid for by you?

[...]

Kid has time to pay off that debt and save for retirement.
+1!
Topic Author
Anonymous122
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Joined: Fri Apr 17, 2020 1:55 pm

Re: I may die poor

Post by Anonymous122 »

Can you lay out your expenses in more detail beyond rent/mortgage? Where is the rest going?

Thank you,

See edit.
Topic Author
Anonymous122
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Re: I may die poor

Post by Anonymous122 »

finite_difference wrote: Tue Nov 17, 2020 2:31 pm I think it’s generally a seller’s market for houses.

Alternatively, since you work for a small start up, I also wonder if they’d let you work remotely and live in your NV house?

If your NV house mortgage is $2k/month, then you’d increase cash flow by $1k/month right there. Probably a lot more since everything in the Bay Area is so expensive.
Good point, I Would love to work remotely but I have to be onsite.
Topic Author
Anonymous122
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Re: I may die poor

Post by Anonymous122 »

Look again, it's a joke on the typo. 2750k = 2.75M per month.
[/quote]

Hahaha... typo. See edit
Topic Author
Anonymous122
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Re: I may die poor

Post by Anonymous122 »

bottlecap wrote: Tue Nov 17, 2020 7:35 am What do you net after taxes and what are your expenses every month?

I feel like $140k isn’t a super amount in the Bay Area, but then again don’t live there and you should be netting a respectable amount. Between taxes and health insurance, I’m guessing to take home about $100k and you spend a net $36,000 annually on housing, plus maybe another $5,000 on rental upkeep. That leaves $59,000. Where's it going and in what amounts?

You may be "behind" many here, but you’ve faced some headwinds, done the right thing, and actually weathered them alright. You have some retirement funds and should have equity in a house in Nevada for now. You may not be collecting your mortgage payment in rent there, but presumably you are paying down principle as well. You aren’t technically "upside down." There are many 40 yo's doing worse than you.

You don’t give your asset allocation and I haven’t memorized ticker symbols, so I can’t give advice there. But to make progress outside of home equity, you’ve got to save. There no two ways about it. Can you do that somehow?

JT
Thanks for a good response. I don't quite have 59k take home CA takes a lot. My edit on original post has better info.
KlangFool
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Re: I may die poor

Post by KlangFool »

OP,


Can you earn around 140K somewhere else? It seems to be severely underpaid to be working in the bay area.


KlangFool
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Laundry_Service
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Re: I may die poor

Post by Laundry_Service »

Call your credit card company and see if they will give you a lower rate for the short term. If the answer is no I would suggest paying 2-3k right now and do the same the next several months. This will leave you some cash and flexibility but get it taken care of as soon as you reasonably can.
GreendaleCC
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Re: I may die poor

Post by GreendaleCC »

Two thoughts:

Get cheaper phone service - find an MVNO on the same cell network you’re currently using.

Get a 0% intro rate / $0 balance transfer fee credit card to move your debt to while you pay it off - they are out there if you look
MathIsMyWayr
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Re: I may die poor

Post by MathIsMyWayr »

KlangFool wrote: Tue Nov 17, 2020 3:51 pm OP,


Can you earn around 140K somewhere else? It seems to be severely underpaid to be working in the bay area.


KlangFool
Streets are not paved with gold in the Bay area. My former employer had (still has?) an official policy of adding a fixed percentage to the base salary depending on the location . Believe it or not, those numbers are not large.

Not everyone is an MIT PhD in AI in the Bay area.
Ron Ronnerson
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Re: I may die poor

Post by Ron Ronnerson »

You say that you have an income of $6k/month (or $72k/year) after taxes. I am not sure but I don't see how you could be paying about half of what you earn in taxes on an income of $140k.

You said that you pay 13.5% in state taxes. Are you sure about this? The 13% state tax bracket starts once income is over $1 million per year in California. I would imagine that your effective state tax rate is likely quite a bit less, perhaps in the 7-8% range. You're probably paying roughly 20% for federal taxes and another 7.65% for FICA. Add it all up and it's around 35%, not 50%. That is a difference of $20k/year over what you say your taxes are. Are you paying for something else that is taken out of your paycheck such as health insurance premiums? Perhaps I'm missing something but I simply don't understand how your taxes can be so high. If you're having too much taken out of your paychecks for taxes, you should make adjustments so that is no longer the case.

Also, cash is not king when you have debt at a rate of 7%. While that may not be high in comparison to most credit cards, it is still nonetheless too high of a rate to be paying when you can avoid doing so. I would definitely pay off the card. If an emergency occurs after you do this, use the credit card to pay for the emergency. If an emergency doesn't occur, you've avoided the interest. If you're uncomfortable with this approach, see if you can move the balance to something with a lower interest rate. There are often promotions available where there is little to no interest paid for a year or 18 months on a new card.

I think you need to do a careful analysis of your budget that includes all the spending categories and you should delve into your taxes a well so that you have a clearer picture of what is going on with them. By the way, we have Mint Mobile (8 GB of data and unlimited talk and text) for $20/month per line. Switching cell phone carriers could save you $100/month right away.
FoolMeOnce
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Re: I may die poor

Post by FoolMeOnce »

Ron Ronnerson wrote: Tue Nov 17, 2020 5:24 pm You say that you have an income of $6k/month (or $72k/year) after taxes. I am not sure but I don't see how you could be paying about half of what you earn in taxes on an income of $140k.

You said that you pay 13.5% in state taxes. Are you sure about this? The 13% state tax bracket starts once income is over $1 million per year in California. I would imagine that your effective state tax rate is likely quite a bit less, perhaps in the 7-8% range. You're probably paying roughly 20% for federal taxes and another 7.65% for FICA. Add it all up and it's around 35%, not 50%. That is a difference of $20k/year over what you say your taxes are. Are you paying for something else that is taken out of your paycheck such as health insurance premiums? Perhaps I'm missing something but I simply don't understand how your taxes can be so high. If you're having too much taken out of your paychecks for taxes, you should make adjustments so that is no longer the case.
Piecing things together, I think the $6k/month is take home, so the deductions would not just be tax but and health premiums and the $600/paycheck going to the 401k, and any others (dependent care? transit plan?).
KlangFool
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Re: I may die poor

Post by KlangFool »

MathIsMyWayr wrote: Tue Nov 17, 2020 5:12 pm
KlangFool wrote: Tue Nov 17, 2020 3:51 pm OP,


Can you earn around 140K somewhere else? It seems to be severely underpaid to be working in the bay area.


KlangFool
Streets are not paved with gold in the Bay area. My former employer had (still has?) an official policy of adding a fixed percentage to the base salary depending on the location . Believe it or not, those numbers are not large.

Not everyone is an MIT PhD in AI in the Bay area.

If a person is not paid well enough to be in the bay area, why stays in the bay area?


KlangFool
40% VWENX | 12.5% VFWAX/VTIAX | 11.5% VTSAX | 16% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 40% Wellington 40% 3-funds 20% Mini-Larry
Marseille07
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Re: I may die poor

Post by Marseille07 »

I do agree with the CC debt, but with COVID am I wrong for feeling cash is king for the time being?
If you feel cash is king, then that's more reason to pay off CC because the debt is taking $500 away from you every month.
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White Coat Investor
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Re: I may die poor

Post by White Coat Investor »

vas wrote: Tue Nov 17, 2020 7:41 am Its never too late to improve your situation.

First, square away that 7% credit card. I've seen people post about 0% balance transfer cards. Perhaps you can find something like that to keep the interest down until you get it paid off.

Why do you keep the house in NV with the negative cash flow? Unless you plan to return and live there again in the near term I'd give serious consideration to selling it.

You will not get ahead on $140K a year in the Bay Area. As Woody said:

"California is a garden of Eden, a paradise to live in or see
But believe it or not you won't find it so hot
If you ain't got the do re mi"

True then, true now. Consider the financial impact of plying your trade in Austin or Salt Lake.

Good Luck Sir
Both cities have rapidly rising costs of living. 10 years ago a big fancy house here in Salt Lake was $400-500K. Now it's $800K-$1M. Nowhere near Bay Area prices, but certainly very different from many other locations in flyover country.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
TravelGeek
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Re: I may die poor

Post by TravelGeek »

Anonymous122 wrote: Tue Nov 17, 2020 1:41 am - Typo...rent here in CA is 2750 not 2750. I pay a lot in taxes here, 13.5% state tax
State income tax in CA is a lot lower - https://www.hrblock.com/tax-center/fili ... tax-rates/

- After taxes I bring home 6k a month.
- 3k goes to rent/mortgage
- 400 goes to online savings, emergency fund and an account for my niece and nephew
Only you can know if you need to provide money for your relatives, but if you have credit card debt and feel that you don’t have enough to save for your own retirement, it’s something I would revisit.
- 250 goes to bills internet, electricity, water, etc
- 225 goes to auto insurance for me and my son
-150 goes to cell phones for me and my son
Get a cheaper cellphone plan. $150 for two is way too much. Also, when is your son going to be able to pay for his own insurance and cellphone?

Use savings to work on that credit card debt.

Do you actually plan to move into the NV home you own? If that isn’t the plan or not in the near future, I would look into selling it and investing the proceeds.
oldfort
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Re: I may die poor

Post by oldfort »

Anonymous122 wrote: Tue Nov 17, 2020 1:41 am
EDIT:
- Typo...rent here in CA is 2750 not 2750. I pay a lot in taxes here, 13.5% state tax
- After taxes I bring home 6k a month.
- 3k goes to rent/mortgage
- 400 goes to online savings, emergency fund and an account for my niece and nephew
- 250 goes to bills internet, electricity, water, etc
- 225 goes to auto insurance for me and my son
-150 goes to cell phones for me and my son
- 600 goes to groceries and house stuff, going out
- 200 a month in gas
- I pay an extra 500 a month on the credit card
- I plan on moving back to NV one day, house should be paid of by retirement
- Can't refinance because it is a rental property and the rates aren't as low as primary residence

I do agree with the CC debt, but with COVID am I wrong for feeling cash is king for the time being?

That leaves me with around $500/$600 a month
It appears taxes/health insurance premiums are taking ~50% of your income. This seems high, but I don't live in CA. By far, the largest expense you have from your take home pay is rent: $2750/month. If 50% of your take home goes to rent, it doesn't leave a ton for anything else. I would look for anyway possible to reduce your rent costs, whether this means moving or looking for another job. Heck, a lot of companies are allowing WFH on what is likely to be a permanent basis. Not to sound harsh, but if you're 40, not making more than $140k a year, and can't find a job which allows WFH at least part of the time, then another area of the country might provide a better income/COL ratio for you. Why are you supporting your nieces and nephews?
Last edited by oldfort on Tue Nov 17, 2020 6:14 pm, edited 1 time in total.
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ray.james
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Re: I may die poor

Post by ray.james »

Anonymous122 wrote: Tue Nov 17, 2020 1:41 am I need some help.

I have been reading threads for awhile, and every time I feel I am making progress, I read some more then feel like I am really behind.

Just a run down:

I am 40yo - making 140k a year and live in the bay area. My rent is 2750k a month.

I do own a house in NV (currently renting it out) (owe $260k) but I am upside down $250 a month

So between my upside down mortgage and rent I am spending 3k a month there.

I have all my old 401k's ($150k) in a separate Vanguard VWELX (not contributing to this) current employer 401k is at $20k (VBIAX) and I am contributing $600 per check.(they don't match.. small start up)

I have an emergency fund of $11k - I do have CC debt of $9k (inherited most from my ex) luckily my interest is only 7% (had the card for a while, always pay on time, and have a credit score around 780) it used to be 19k so I am putting a dent in it.

I guess my question is, what am I doing wrong? I feel like most people my age have at least 300+k in the bank, and at this rate I will have to work until I am 80 and pray social security will be available. Side note: I should be thankful, I became a father at 18, handled my business, took care of him and I am about to help pay off his tuition with an old ROTH. But still feel like I need a little guidance. Should I get out of balanced funds? Do the 80% in a VFIAX and 20% in a short term bond fund like the Oracle recommends?

EDIT:
- Typo...rent here in CA is 2750 not 2750. I pay a lot in taxes here, 13.5% state tax
- After taxes I bring home 6k a month.
- 3k goes to rent/mortgage
- 400 goes to online savings, emergency fund and an account for my niece and nephew
- 250 goes to bills internet, electricity, water, etc
- 225 goes to auto insurance for me and my son
-150 goes to cell phones for me and my son
- 600 goes to groceries and house stuff, going out
- 200 a month in gas
- I pay an extra 500 a month on the credit card
- I plan on moving back to NV one day, house should be paid of by retirement
- Can't refinance because it is a rental property and the rates aren't as low as primary residence

I do agree with the CC debt, but with COVID am I wrong for feeling cash is king for the time being?

That leaves me with around $500/$600 a month
OP,

Many people who you see with 300K+ in retirements are 2 types of people. One with very high income. second - people who have been investing steadily more than an decade. Given the adjustments you have to take care of in life, you are doing ok. First before you head to investments, dig yourself out of debt. Get a hold on personal finance, expenses and getting rid of debt. You can then turn attention to investments.

Some actionable items from your post:

150 goes to cell phones for me and my son : Try a service like Mint mobile/Ting etc. It costs our family 40$ per month

Do you think you can share a 2 Bedroom apartment with someone. This should cut the cost of rent by 40%. Another way is subletting a in-law unit/dethatched granny unit from home owners for 2k per month. This will help you pay for food, shopping, eating out and utilities. Just look at impact on the budget by doing this.

cash is king. You can always turn to credit card if you other means exhausted. But right now you are paying a lot of interest on credit card. So it makes sense to pay it off and then build the emergency fund.

Your expenses are not crazy. If the job have growth opportunities, then focus to make progress on that front. Look at income/location side of things if the job has no growth prospects.
Last edited by ray.james on Tue Nov 17, 2020 6:10 pm, edited 1 time in total.
When in doubt, http://www.bogleheads.org/forum/viewtopic.php?f=1&t=79939
arf30
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Re: I may die poor

Post by arf30 »

It probably sounds strange to most people but 140k is not enough to live on in the bay area without roommates, being extremely frugal, or having a partner with an equivalent second income. Everyone I know out there are at least 300k+ dual income.
sd323232
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Re: I may die poor

Post by sd323232 »

arf30 wrote: Tue Nov 17, 2020 6:10 pm It probably sounds strange to most people but 140k is not enough to live on in the bay area without roommates, being extremely frugal, or having a partner with an equivalent second income. Everyone I know out there are at least 300k+ dual income.
if you know math, it makes sense. somehow people think if you live in bay area, you get a pass on simple math, and it is ok to pay 50% of your income for rent (or buy 1 mil house on 100k income). math does not care this is VHCOL area.
MathIsMyWayr
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Re: I may die poor

Post by MathIsMyWayr »

sd323232 wrote: Tue Nov 17, 2020 6:25 pm
arf30 wrote: Tue Nov 17, 2020 6:10 pm It probably sounds strange to most people but 140k is not enough to live on in the bay area without roommates, being extremely frugal, or having a partner with an equivalent second income. Everyone I know out there are at least 300k+ dual income.
if you know math, it makes sense. somehow people think if you live in bay area, you get a pass on simple math, and it is ok to pay 50% of your income for rent (or buy 1 mil house on 100k income). math does not care this is VHCOL area.
Salaries are generally higher in the Bay Area and may be significantly higher if you possess the right expertise. However, don’t confuse with the Cinderella story. You may use online info such as Glassdoor or indeed for reference. Bay Area streets are not paved with gold.
GreendaleCC
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Re: I may die poor

Post by GreendaleCC »

arf30 wrote: Tue Nov 17, 2020 6:10 pm It probably sounds strange to most people but 140k is not enough to live on in the bay area without roommates, being extremely frugal, or having a partner with an equivalent second income. Everyone I know out there are at least 300k+ dual income.
Yet somehow the median household income in SF last year was ~$115k. “Everyone you know” may not be the best sampling method :happy
arf30
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Re: I may die poor

Post by arf30 »

GreendaleCC wrote: Tue Nov 17, 2020 6:49 pm
arf30 wrote: Tue Nov 17, 2020 6:10 pm It probably sounds strange to most people but 140k is not enough to live on in the bay area without roommates, being extremely frugal, or having a partner with an equivalent second income. Everyone I know out there are at least 300k+ dual income.
Yet somehow the median household income in SF last year was ~$115k. “Everyone you know” may not be the best sampling method :happy
.. and they fall into one of the categories I already mentioned.
Marseille07
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Re: I may die poor

Post by Marseille07 »

Folks, please. 140K is enough in the Bay Area. The OP's problem (if there is one) is expenditure not their income.
ivgrivchuck
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Re: I may die poor

Post by ivgrivchuck »

Anonymous122 wrote: Tue Nov 17, 2020 1:41 am I need some help.
$140k is not bad, but in the Bay Area, it is not great either. You mentioned that you worked for a startup. Have you explored opportunities to move to a more mature company? Often the pay and benefits are better there.
37% VTI | 37% VXUS | 13% I-bonds | 13% EE-bonds
Ron Ronnerson
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Location: Bay Area

Re: I may die poor

Post by Ron Ronnerson »

I noticed something that sort of implies a pattern. You are paying for your son’s tuition out of your Roth account while also paying for his auto insurance and cell phone. He is in his 20s. Meanwhile, you are setting aside money for a niece and nephew even though you don’t have much cash on hand since you’ve been paying off $19k in credit card debt incurred by an ex. You’re helping a lot of people so it is not a surprise that the load seems heavy. Perhaps don’t always put others before yourself, especially if you’re feeling that you might have to work until age 80 if you keep on this path.
Marseille07
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Re: I may die poor

Post by Marseille07 »

Ron Ronnerson wrote: Tue Nov 17, 2020 7:29 pm I noticed something that sort of implies a pattern. You are paying for your son’s tuition out of your Roth account while also paying for his auto insurance and cell phone. He is in his 20s. Meanwhile, you are setting aside money for a niece and nephew even though you don’t have much cash on hand since you’ve been paying off $19k in credit card debt incurred by an ex. You’re helping a lot of people so it is not a surprise that the load seems heavy. Perhaps don’t always put others before yourself, especially if you’re feeling that you might have to work until age 80 if you keep on this path.
Yeah exactly this. On top of that he doesn't want to sell the NV house because one day he might live there. I mean, my impression is that he's trying to afford everything; got to pick their battles in my opinion.
Topic Author
Anonymous122
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Joined: Fri Apr 17, 2020 1:55 pm

Re: I may die poor

Post by Anonymous122 »

dziuniek wrote: Tue Nov 17, 2020 8:54 am Post the details of the house purchase, equity now, zillow value and what your current mortgage terms are.
Housing has been on the up and up and mortgage rates fell a lot.

I just locked a 2.375% 30year fixed yesterday! - This feels like free money.... at these rates.

Maybe refinancing is an option?

Also, I second paying off the CC with Emergency Fund or using a balance transfer for 0% on a new card. Then again, the balance is so small - I would just funnel the money there instead of the 401k - only because you don't have a match... - You could do this pretty quickly.

You're not really behind. Remember this is bogleheads.... not the real world :)

Look up / google the Net Worth and Income calculator from new york times to give you a better idea where you are compared to reak folks*. :)
Thank you, Refinancing a rental doesn't have the same rates I tried..it's considered an "investment property"

The pay off CC instead of my 401k isn't a horrible idea, but it changes my tax liability and I'll pay even more tax. I do appreciate you're reasonable response. I just feel like I could be further along, and don't feel I am really making that many mistakes. My edit explains more of where my money goes.
JS-Elcano
Posts: 258
Joined: Wed Jun 10, 2020 7:29 pm

Re: I may die poor

Post by JS-Elcano »

arf30 wrote: Tue Nov 17, 2020 6:10 pm It probably sounds strange to most people but 140k is not enough to live on in the bay area without roommates, being extremely frugal, or having a partner with an equivalent second income. Everyone I know out there are at least 300k+ dual income.
Median *household* income in San Francisco was 115k last year.
GreendaleCC
Posts: 183
Joined: Sun Dec 22, 2019 3:24 am

Re: I may die poor

Post by GreendaleCC »

arf30 wrote: Tue Nov 17, 2020 6:51 pm
GreendaleCC wrote: Tue Nov 17, 2020 6:49 pm
arf30 wrote: Tue Nov 17, 2020 6:10 pm It probably sounds strange to most people but 140k is not enough to live on in the bay area without roommates, being extremely frugal, or having a partner with an equivalent second income. Everyone I know out there are at least 300k+ dual income.
Yet somehow the median household income in SF last year was ~$115k. “Everyone you know” may not be the best sampling method :happy
.. and they fall into one of the categories I already mentioned.
Being extremely frugal?
Marseille07
Posts: 3144
Joined: Fri Nov 06, 2020 1:41 pm

Re: I may die poor

Post by Marseille07 »

Anonymous122 wrote: Tue Nov 17, 2020 9:11 pm
dziuniek wrote: Tue Nov 17, 2020 8:54 am Post the details of the house purchase, equity now, zillow value and what your current mortgage terms are.
Housing has been on the up and up and mortgage rates fell a lot.

I just locked a 2.375% 30year fixed yesterday! - This feels like free money.... at these rates.

Maybe refinancing is an option?

Also, I second paying off the CC with Emergency Fund or using a balance transfer for 0% on a new card. Then again, the balance is so small - I would just funnel the money there instead of the 401k - only because you don't have a match... - You could do this pretty quickly.

You're not really behind. Remember this is bogleheads.... not the real world :)

Look up / google the Net Worth and Income calculator from new york times to give you a better idea where you are compared to reak folks*. :)
Thank you, Refinancing a rental doesn't have the same rates I tried..it's considered an "investment property"

The pay off CC instead of my 401k isn't a horrible idea, but it changes my tax liability and I'll pay even more tax. I do appreciate you're reasonable response. I just feel like I could be further along, and don't feel I am really making that many mistakes. My edit explains more of where my money goes.
Are you even reading? Multiple people suggesting to use your emergency fund to pay the CC, not 401K. Doing so will not change your tax bracket.
sd323232
Posts: 896
Joined: Thu Jun 21, 2018 4:45 pm

Re: I may die poor

Post by sd323232 »

JS-Elcano wrote: Tue Nov 17, 2020 9:19 pm
arf30 wrote: Tue Nov 17, 2020 6:10 pm It probably sounds strange to most people but 140k is not enough to live on in the bay area without roommates, being extremely frugal, or having a partner with an equivalent second income. Everyone I know out there are at least 300k+ dual income.
Median *household* income in San Francisco was 115k last year.
i really dont understand how can anyone be financially successful paying 50% of income for housing.
Strayshot
Posts: 705
Joined: Thu Mar 05, 2015 8:04 am
Location: New Mexico

Re: I may die poor

Post by Strayshot »

I liked the clickbait title and read the post, so here is my .02

Pay off the CC
Stop saving money for niece and nephew
Don’t use retirement funds to pay sons tuition
Cell bill seems high, paying more than $40/month per line means you are getting ripped off somewhere

You made it through two large financial setbacks (having kid/s young and getting divorced) and are still doing just fine. Comparing against others is a loosing battle. You have a good income even after getting killed on rent.

Make those small changes to your financial situation and don’t do anything silly in the future and you will be just fine. Others suggested a roommate and that would save you money, but we are very close in age and no fricking way I would tolerate a roommate either so I get it.
Marseille07
Posts: 3144
Joined: Fri Nov 06, 2020 1:41 pm

Re: I may die poor

Post by Marseille07 »

sd323232 wrote: Tue Nov 17, 2020 9:47 pm
JS-Elcano wrote: Tue Nov 17, 2020 9:19 pm
arf30 wrote: Tue Nov 17, 2020 6:10 pm It probably sounds strange to most people but 140k is not enough to live on in the bay area without roommates, being extremely frugal, or having a partner with an equivalent second income. Everyone I know out there are at least 300k+ dual income.
Median *household* income in San Francisco was 115k last year.
i really dont understand how can anyone be financially successful paying 50% of income for housing.
His take-home is 95K or 7900/mo. 2750/mo rent is around 35%, perfectly affordable & reasonable. He's doing 401K and other stuff that's lowering his take-home after those busywork, but those are his choices, not forced upon him.
Topic Author
Anonymous122
Posts: 23
Joined: Fri Apr 17, 2020 1:55 pm

Re: I may die poor

Post by Anonymous122 »

celia wrote: Tue Nov 17, 2020 1:08 pm I think you're doing a lot better than you think. Remember that Bogleheads are not "average" in any way. They have saved some money, many for many, many years. Compared to the average American, they are doing better. A survey a few years ago showed that 50% of Americans would not be able to cover a $400 emergency bill.

If you don't have a written budget, I suggest you create one. If you already have one, if you post it here, we can look at it and tell you where you could cut/save money. With your high income, you should be able to afford most things. Your housing expenses of $36K a year is affordable for you.
Thanks for your time, I added an edit with more detail. Didn't know this thread would get this response.
Topic Author
Anonymous122
Posts: 23
Joined: Fri Apr 17, 2020 1:55 pm

Re: I may die poor

Post by Anonymous122 »

Marseille07 wrote: Tue Nov 17, 2020 9:55 pm
sd323232 wrote: Tue Nov 17, 2020 9:47 pm
JS-Elcano wrote: Tue Nov 17, 2020 9:19 pm
arf30 wrote: Tue Nov 17, 2020 6:10 pm It probably sounds strange to most people but 140k is not enough to live on in the bay area without roommates, being extremely frugal, or having a partner with an equivalent second income. Everyone I know out there are at least 300k+ dual income.
Median *household* income in San Francisco was 115k last year.
i really dont understand how can anyone be financially successful paying 50% of income for housing.
His take-home is 95K or 7900/mo. 2750/mo rent is around 35%, perfectly affordable & reasonable. He's doing 401K and other stuff that's lowering his take-home after those busywork, but those are his choices, not forced upon him.
My Take home is $6200 a month, 3100 per check. not $3950
Marseille07
Posts: 3144
Joined: Fri Nov 06, 2020 1:41 pm

Re: I may die poor

Post by Marseille07 »

Anonymous122 wrote: Tue Nov 17, 2020 10:08 pm
Marseille07 wrote: Tue Nov 17, 2020 9:55 pm
sd323232 wrote: Tue Nov 17, 2020 9:47 pm
JS-Elcano wrote: Tue Nov 17, 2020 9:19 pm
arf30 wrote: Tue Nov 17, 2020 6:10 pm It probably sounds strange to most people but 140k is not enough to live on in the bay area without roommates, being extremely frugal, or having a partner with an equivalent second income. Everyone I know out there are at least 300k+ dual income.
Median *household* income in San Francisco was 115k last year.
i really dont understand how can anyone be financially successful paying 50% of income for housing.
His take-home is 95K or 7900/mo. 2750/mo rent is around 35%, perfectly affordable & reasonable. He's doing 401K and other stuff that's lowering his take-home after those busywork, but those are his choices, not forced upon him.
My Take home is $6200 a month, 3100 per check. not $3950
That makes no sense. You need to check your pay stub and look for deductions. See here: https://neuvoo.com/tax-calculator/California-140000
anhonymous
Posts: 54
Joined: Sat Jan 05, 2019 11:41 am

Re: I may die poor

Post by anhonymous »

I actually think you are doing decent. Compared to others you front loaded the child education expenses. You now have 25 yrs of income to save.
the way
Posts: 439
Joined: Sat Oct 26, 2019 6:00 pm

Re: I may die poor

Post by the way »

Anonymous122 wrote: Tue Nov 17, 2020 10:08 pm My Take home is $6200 a month, 3100 per check. not $3950
Not sure why your take home is so low. That's 75k take home, 15k 401k, 10k fica, 10k state tax, 25k fed tax, 5k health ins?

But you have a rental with a loss and depreciation - wouldn't that lower your AGI by 20k-ish? And you are filing head-of-household? Plus your 401k is tax deferred? All that lowers your AGI to 100k, which puts your tax at more like 12k fed and 6k state. Ie your take home should be 17k higher.

(And btw, maybe you're not poor. You said others have 300k savings. If your rental has 100k equity, you are right in the ballpark too!)
learntoinvest123
Posts: 37
Joined: Sat Aug 29, 2020 9:20 am

Re: I may die poor

Post by learntoinvest123 »

the way wrote: Tue Nov 17, 2020 10:32 pm But you have a rental with a loss and depreciation - wouldn't that lower your AGI by 20k-ish? equity, you are right in the ballpark too!)
Passive loss does not offset job income.
Marseille07
Posts: 3144
Joined: Fri Nov 06, 2020 1:41 pm

Re: I may die poor

Post by Marseille07 »

Since OP's take-home looked ridiculously lower than what it should be, I just checked my paycheck and a big portion on my end was ESPP contributions. The OP should really check their paycheck and see what deductions are listed there. The numbers aren't adding up.
Dottie57
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Joined: Thu May 19, 2016 5:43 pm
Location: Earth Northern Hemisphere

Re: I may die poor

Post by Dottie57 »

JoeRetire wrote: Tue Nov 17, 2020 2:17 pm
cheese_breath wrote: Tue Nov 17, 2020 9:33 am
Anonymous122 wrote: Tue Nov 17, 2020 1:41 am ... My rent is 2750k a month....
???
VVHCOL...
Yeah over 2 million $ rent per month is amazingly very very high.
User avatar
BL
Posts: 9592
Joined: Sun Mar 01, 2009 2:28 pm

Re: I may die poor

Post by BL »

Good suggestions above. I wonder if you are still using the CC that you haven't paid off. This is bad, because interest starts to accrue immediately. Definitely never use a CC that has unpaid debt. Either use a different one or just freeze it in a milk carton until it is paid off and use cash for a while.
AussieDad
Posts: 165
Joined: Fri Aug 21, 2015 7:54 pm

Re: I may die poor

Post by AussieDad »

All I had to read was the title “I may die poor” and the first thread “ I am 40yo - making 140k a year”. Seriously?
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