Taxes at his salary range, take a huge hit to your income. I don't think it's even possible to reach that goal in five years due to taxes alone.
shit man--$500k in savings and he made $750k last year?
I would reach his $3 million goal in about 5 years, maybe less, with that salary.
I'll assume he is married, that the TOTAL household income is $750k/year, and that he has $50k/year that isn't taxable (deductions, exemptions, etc). Then he'd pay $222,866.30 in federal taxes (30% net rate) and $67,751.6 in California state taxes (9% net rate). That leaves him with $459,382/year after taxes. If he spent $100k/year, then it would take him 7 years to reach his goal of $2.5M additional cash.Taxes at his salary range, take a huge hit to your income. I don't think it's even possible to reach that goal in five years due to taxes alone.
Ok, that makes a lot more sense.$3 million cash is his goal. He also owns three homes, two of which are in the seven figure range in the Bay Area that he'll be renting out. He also has options, 401k, etc. I'm sure he's done all the calculations and knows exactly what he needs.
The guy does better than you financially so it sounds like your criticism is uneeded and even irrelevant.
Being less happy than you would otherwise (or worse being a miserable miser) for ~40 years of working just to die shortly into retirement is not smart. And neither is having a retirement in poverty because you under-saved. It is all about balance.
I think your "friend" sounds made up.
He sounds fishy. I don't go around telling people I'm sitting on 500K cash if I did.
I'll assume he is married, that the TOTAL household income is $750k/year, and that he has $50k/year that isn't taxable (deductions, exemptions, etc). Then he'd pay $222,866.30 in federal taxes (30% net rate) and $67,751.6 in California state taxes (9% net rate). That leaves him with $459,382/year after taxes. If he spent $100k/year, then it would take him 7 years to reach his goal of $2.5M additional cash.
Move that cash into reasonable investments and it would likely be closer to 6 years or less (depending on the investment performance).
Zinfamous isn't that far off.
he sounds like one of those guys that's going to die with 7 million in the bank, driving a used 2003 kia.
Considering my leased Honda Fit was $234/mo, a Genesis for $300/mo is amazing.
It is easy to spend a lot of money on food if you eat out all the time. Some people just do not like to cook. Food could also include alcoholic beverages like wine, beer or scotch, etc.
His wife is essentially helpless.
Correct. He goes out to fancy, nice restaurants frequently. But he's spending $100 per day on GROCERIES alone! That's what is mind-blowing to me. I can't imagine what he's buying, which is why I jokingly asked if his wife could be skimming off the top.
I'll assume he is married, that the TOTAL household income is $750k/year, and that he has $50k/year that isn't taxable (deductions, exemptions, etc). Then he'd pay $222,866.30 in federal taxes (30% net rate) and $67,751.6 in California state taxes (9% net rate). That leaves him with $459,382/year after taxes. If he spent $100k/year, then it would take him 7 years to reach his goal of $2.5M additional cash.
Move that cash into reasonable investments and it would likely be closer to 6 years or less (depending on the investment performance).
Zinfamous isn't that far off.
wait, he spends $100/day on groceries but won't spend $300/month on a car?
I mean for reference, $100/day on groceries is 5 pounds of king crab legs every fucking day
...or 2 pizzas delivered in SF.
According to him, they only buy all that organic, free-range, grown by hippies using unicorn manure stuff. I guess that adds up.
According to him, they only buy all that organic, free-range, grown by hippies using unicorn manure stuff. I guess that adds up.
Recently a friend asked me to look for a good lease for him. Thanks to those in the Garage forum, I suggested the Genesis for $300 per month, which I think is a great deal.
He responded that he'd have to save up for a few months to be able to afford it. My reaction was WTF.
He is an executive at a global company. Last year he made $750,000 and he is sitting on $500,000 in cash.
To me it's mind-blowing that he won't spend such a trivial amount of money for that car and asked why he's being so tight-fisted. From his point of view, he won't feel financially comfortable until he accumulates $3 million (so that he could retire if necessary). Since he is way more financially savvy than me, I'll give him the benefit of the doubt. But I can't help feeling that he should enjoy life more.
What do you guys think.
According to this tax calculator, his annual take home pay is $400K.
http://www.taxformcalculator.com/tax/750000.html
$400K x 5 = $2 million.
It is impossible for him to save that much in five years even assuming no other expenses.
Assuming Zin lived Tridentboy-poor in the Bay Area, he'd be able to save about $300K per year, so it would take him about 10 years to save up to $3 million.
Yeah but Tridentboy poor is spending money on Dance lessons and trashcans.
I spend money on Index funds at the very minimum so at 300k/yr with ~6% returns is 9.5 years.
But $100k/yr in the Bay Area living expenses? That's nuts! I lived there for the last 8 years at $50k and less and went out boozing most weekends, vacations every other year or so (the long fun ones; shorter ones various times of each year) and did well. ...But I didn't have much saved after that. Not at all. I ate out for lunch nearly every day. Hell, an extra free $50k on top of that you are giving me would be $$ in the bank.
According to apartment rental startup Zumper, rent in San Francisco for a one-bedroom apartment fell to $3,500, a 4.6% drop from the highest rental price of $3,670, this past October.
How on earth did you pull that off?
Assuming you're not buying high end vacuums and bespoke suits, the rent alone would be almost half that $100K, and that's for a ONE bedroom apartment!
http://www.sfgate.com/bayarea/article/San-Francisco-rent-cost-drop-rental-6690357.php