Scraping By On $500,000 A Year: Why It’s So Hard For High Income Earners To Escape The Rat Race
I’ve highlighted in a previous article how living off $200,000 a year in an expensive city is really just an average lifestyle. In this article, I’ll discuss how one couple is living paycheck to paycheck while making a combined $500,000 a year. They are a real couple who shared with me their financial details to anonymously share with you. Judging others, after all, is an American pastime!
$500,000 a year or higher is a level which I think is considered rich. Anybody who thinks otherwise has no concept of financial reality. Even the government almost agrees after compromising by raising the income level for when the highest marginal tax bracket kicks in to ~$400,000 from $200,000 back in 2013. But things are going to get more painful for the upper middle class in 2018 with the proposed elimination of state income taxes, capping mortgage interest deduction, and limiting property tax deduction to $10,000.
Although making $500,000 a year may sound like a Herculean task, you’ll be surprised to know there are plenty of regular folks who hit the half million mark every year. I literally get e-mails and comments from similar income-earning couples every week asking for financial help. This article will discuss why many folks who earn a large income won’t be retiring any time soon.
Various Combinations Of $500,000 Households
1) A couple 30 year old lawyers in their fourth year at a big law firm
2) A couple 32 year old second year associates at an investment bank after business school
3) A single 31 year old VP at a private equity shop two years out of business school
4) A 35 year old senior project leader at a management consulting firm and her schoolteacher husband
5) A couple 35 year old doctors (cardiologist and anesthesiologist) three years after their fellowships
6) A 46 year old Chief Marketing Officer and her 52 year old police officer husband
7) A couple online marketing consultants in their mid-30s
8) A 41 year old super frugal personal finance blogger who preaches riding a bike, doing your own home construction, and living off $30,000 a year or less and his wife
9) An engineer at Google who has been there eight years and his partner at Salesforce
10) A 22 year old rookie professional basketball or football player and his product manager wife.
11) A junior partner at a law firm and her Silicon Alley engineer husband
12) A Bay Area janitor and his elevator technician spouse
