I've thought about this also. Don't get me wrong, we make more than an average couple, but lets look at this realistically - it's not like we're making OMG WTF money. There are couples that are lawyers, doctors, or one has an extremely high paying job.

The problem is that most people make X amount of money and then promptly upgrade everything in their life spending 80-90%, or even more, of what they bring in.

We've all seen it. The kid who graduates college and lands a 50k job and buys a 35k new car, saying "they deserve it". A person who is bringing in 3,000 a month and lives in a $1600 dollar a month condo is destined to have problems. They don't have enough extra money every month to really do the things they want to do, or to save at the proper rate. They are constantly having money problems because they "must" have that car, or they "must" live in that condo.

The reality is they don't. They can really live in a worse neighborhood for a few years until they start making more money. They can really drive a cheaper car. I worked with a kid (24 or so) who was making approx 65k a year. Not a huge amount of money at all. He was one of those hipster type guys, but a cool guy and we got along really well. He lived in a modest apartment and drove a lol-type car. (10 year old Honda). He rarely spent money, but after 2 years he had something like 40k saved up. I remember him telling me and I did a double take, but he mentioned "I'd rather save my money than spend it on stupid things and then go on exotic vacations. I want to see the world and have good experiences rather than have an awesome apartment". Most people are unwilling to do that.

Now if you're making 12 bucks an hour at Home Depot, I agree you're simply screwed. But if you have a decent college degree and make an acceptable amount of money, as long as you can lower your fixed costs per month, you can save at a decent rate. Over time that adds up, and if you invest it and don't touch it, 5-10 years in you'll have a surprising amount of money. You won't be in the Bill Gates category, but you can probably ensure a good retirement.

And someone mentioned my salary doesn't add up, and they are kinda right. My net pay is 2.2k every 2 weeks but that doesn't include my bonus. My yearly bonus is 12-20k so that comes in once a year but I include it in my estimated yearly salary, my base is 78k, with a shift differential (6k). I pay 804 every 2 weeks in taxes. (Philadelphia has a city wage tax) and dump in 300 a month into my 401k.

You might make sure your tone doesn't come off too cocky when you are giving an answer like that at an interview. A reasonable person (which maybe they weren't) should see your thought process if you didn't come across too arrogant/cocky.

I would probably have given a very similar answer to you and if the response I got was something like "do you think you're the richest guy here?" I would have been very taken aback by that and probably said "whoa, I must have come off the wrong way because my point was simply that I'm willing to take risk when I think the rewards justify it and the cost of failure isn't catastrophic." If they were still insulted then I'd know it's not the right fit for me.

There is probably a definition gap here because the math on this is not hard. Most people can't afford to save $2500/month but even if we doubled that to $5,000/month and assumed a after tax rate of return that is 2% above inflation it would take 50 years to reach the equivalent of $5M in today's dollars.

With respect to expensive stuff I think overspending can be an issue but I also feel that people greatly underestimate the value that fancy stuff has on your psychological well-being and thus your motivation. Some guy trapped in traffic for an hour twice a day who goes home to a blah apartment is not going to be motivated and have the same drive as someone who doesn't lose those two hours a day and doesn't start and end his day with such a soul killing activity.

There are also the opportunities that you don't get because living modestly closes a lot of doors that would have been open if you lived differently. My position is you can always work harder and make more money but you can't manufacture opportunities so closing doors to save money isn't necessarily beneficial.

My point here is that you don't need to get to 5 million through savings, or even anywhere remotely close to that. You simply need to get to saving and making it grow. The savings is important at first, but the growth becomes much more important later. Over time, it'll grow to levels where the return outweighs what you put in a year. 10% return on 10k isn't much, but 10% return on 300k is.


Very person-dependent though Henry. I'm in no way motivated by my house or car. Don't get me wrong, I want both to be as nice as I'm willing to pay, but whenever I've gotten a new car I've always felt good about it at first, and afterwards simply said "ok, well, it's just a car" after a few weeks. It's not a Yugo, but it's not a spaceship either. In reality, I know a 50k car just isn't all that much nicer than a 30k car. It's nicer, but not by the price differential (meaning a 50k car isn't 75% nicer than a 30k car in my opinion). Everytime I get in our Lexus I say to myself "This is just an expensive Camry. Wtf."

Not sure if you're talking about spending habits or living habits. Unless you are a person who entertains at home a lot (and I don't know many people who do, even wealthier people) this shouldn't matter much. Now, if you're talking about spending habits, I would agree. There are times when you simply spend more money than usual, whether that's expensive dinners or trips/get-togethers that are more expensive than usual in a social setting (not a vacation). If 10 guys are going out to a very expensive steakhouse and you simply won't spend the money to go, you very well miss out on small things that could turn into mutually beneficial business agreements. I've seen very little things like this turn into big things, or a situation where one person was helped tremendously by meeting the other. So in spending habits, I'd agree, but living habits probably not so much.

that is something i need to work on. my natural tone isn't "friendly" enough. i think there's something about my appearance that naturally seems standoffish initially to some people too, but i'm not sure there's much i can do about that (i do need to smile more, but i think there's more to it).

one thing i didn't mention about the betting question was that it was a multiplayer game that involved making assumptions about what the other players (interviewers) would be willing to wager. i based my answer assuming they'd be willing to risk as much as i would, although i suspected that not to be true. i don't think there's any way to justify an honest answer that is an order of magnitude higher than what your interviewers would answer in the same spot without coming off like a complete tool when you're just a grad student interviewing for your first job. the correct play would have been to lie.

The same kind of mutually beneficial relationships happen in neighborhoods through the course of interacting with neighbors. My cousin got a great job that way, and it most likely would've never happened if he was living in a neighborhood way below his means. I know, lol sample size, but I don't think it's that uncommon.

I didn't really consider this. Yes, I guess living in a more afluent area could possibly help, it couldn't hurt. I was just considering things like country clubs or things along that nature being more under "social circles", not really thinking of how talking to neighbors could help.

I don't talk to any of my neighbors (because I couldn't be bothered and in all honesty can't stand BS'ing with people who just happen to live next to me), so it's something I didn't consider.

Rent/Park/Util - $1200
I own my car but maintenance and insurance - $350
food and drink - $1250 (disgustingly high, but I eat and drink well and I constantly take co-workers out for meals - but they help me make $$$)
"entertainment" & other randoms - $700

standard monthly expenses = $3500 (not including 1 time expenses)

monthly income:
base - $4500
commish - $2000-$3000
bonus - $500

Call it $7000. I also put $700 / month off my gross pay into my companies stock and pension plan, I would normally not be a buyer of this stock but they give me $350 for free so I cant pass it up.

standard income to expense ratio 2:1. Includes a monthly weekend trip (usually by plane) with the gf to some other city, or a new suit, or some other fairly large expense. Occasionally ratio goes a little more than that (for example when going on a week long trip somewhere).

Helps that I don't own a car (so no car payments, car insurance, gas, repairs, etc), a low cost high deductible health insurance policy, and split rent in a 1 bdrm in a great location for below market rate (and well below what our combined incomes can afford).

stinky,

If it makes you feel any better, I would instantly hire you if I was the interviewer.

Also, if you haven't, give compliments. It helps a lot.

I included that in my calculations. Remember even if you are getting a 10% return what matters for this calculation is the difference between your rate of return after taxes and the rate of inflation. I used 2% but with lower income tax in the States I would accept 3%.

You are in the top 5% of Household incomes in the US, so to most people you are making OMG WTF money.

comparing yourself to loosers is one way to think you're rich
hey, average world yearly income is ~7k

You can't look at it like that because of the vast disparity in the distribution. Look at it in the perspective of starting salary of a college degree. Engineers, some business majors, some IT degrees. They have good starting salaries. If you start off making 55k out of college, is making 90k 5-10 years later really all that much of a stretch? No.

These are simply normally educated people. When you start talking about advanced degrees and people making multiple hundreds of thousands, or even millions, you start talking of extreme ends of the spectrum. Making 100k simply isn't all that difficult, at least not as much as people make it out to be. I'm not highly educated or even highly talented, but I work hard and am reliable (I think, anyway). So is my wife. We both have bachelor's degrees, we're nothing special by any means.

You can only compare yourself to your peers. People in poor environments and economies aren't your peers.

Wil, here's the kicker: