What's a good yearly salary? (Parents edition)

Parent Cafe
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<p>You’re giving me flashbacks to long nights spent with the Marx-Engels Reader for class, Oldfort.</p>

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<p>What’s the difference between income and salary?</p>

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<p>

Well depending on what field you’re in you may have income on top of your salary… a bonus for example. And in some cases those bonuses can be a significant percentage of, if not much more than, ones salary. (e.g. you have a $120k salary but get a $200k end of year bonus)</p>

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<p>Meant to put this here and not in the other thread:</p>

<p>The CEO of Blackstone said, a number of years ago when he was just very rich and not mega-rich, that the way to be rich was to have poorer neighbors. And, generally, he is right: If you are in a community or neighborhood in which you are doing somewhat better than your neighbors, you feel well off. With the same income in a neighborhood where people have higher income than you, you feel poor.</p>

<p>From my perspective, the best approach (which I am not currently taking but may at some point) would be to earn a NY or London level income while living in a relatively low cost-of-living area like Albuquerque.</p>

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<p>Wait 'till these kids find out that they’re going to have to work for a living, and that their college degree, in the end, will not influence what they’ll make, or the success they’ll enjoy in their respective careers. A few years down the road it’s all about individual effort, and whether you went to the State U. or a national elite university or LAC doesn’t matter.</p>

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<p>What’s the difference between income and salary? “Salary” is the pre-arranged amount your employer pays you for doing your job. “Income” is what you end up reporting to the IRS, and it could include dividends from your stock holdings or proceeds from stock sales (capital gains). Our case: my D had no salary since she has not worked for any employer, but she will have reportable (to the IRS) income for this year since I sold her stocks in her custodial account to pay for her college.</p>

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<p>

</p>

<p>a foundational read.
[Google</a> Image Result for <a href=“The Entrepreneur's Journal: Image”>The Entrepreneur's Journal: Image](<a href=“http://www.google.com/imgres?imgurl=http://entrepreneursjournal.files.■■■■■■■■■■■■■/2008/04/cashflow_quadrant.jpg&imgrefurl=http://entrepreneursjournal.■■■■■■■■■■■■■/2008/04/03/cash-flow-quadrant-robert-kiyosaki/&h=288&w=278&sz=11&tbnid=JMF62Kh4TLsJ::&tbnh=115&tbnw=111&prev=/images%3Fq%3Dcashflow%2Bquadrant&hl=en&sa=X&oi=image_result&resnum=1&ct=image&cd=1]Google”>http://www.google.com/imgres?imgurl=http://entrepreneursjournal.files.■■■■■■■■■■■■■/2008/04/cashflow_quadrant.jpg&imgrefurl=http://entrepreneursjournal.■■■■■■■■■■■■■/2008/04/03/cash-flow-quadrant-robert-kiyosaki/&h=288&w=278&sz=11&tbnid=JMF62Kh4TLsJ::&tbnh=115&tbnw=111&prev=/images%3Fq%3Dcashflow%2Bquadrant&hl=en&sa=X&oi=image_result&resnum=1&ct=image&cd=1)</a></p>

<p>I like to see the brain cell’s flash in peoples eyes when they truly get it. Amazing revelations.</p>

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<p>Wait, so is it possible to be making 100k out of college, if you go into a lucrative field like Ibanking? I know I sound like one of the total clueless kids you guys were talking about…but I sorta want to know!</p>

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<p>

</p>

<p>Yap. Actually a friend’s son started at $125,000, don’t remember if it included bonus or not. Graduated from NYU’s Sloan. </p>

<p>To put it in perspective, he lives in NYC, currently he shares an apartment with 6 others, and pay $800 in rent, but he wants to pay back his parents who footed the whole college bill for him($180,000?). A small dinky apartment in NYC would cost $2500 + and I am sure eventually he would want his own place. He works about 100 hours a week. Had been like that since sophomore summers doing internships.</p>

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<p>There are billboards in our area recruiting students for a 2 year Process Technology program at the local cc. We live along the Texas Gulf Coast where there are many refineries and chemical plants, and people to work in these highly technical plants are sought after. The billboard says starting salaries are $60k. The link from the college says starting salaries are $45K, so maybe the $60K includes overtime or maybe the website is out of date. In any case, it’s pretty amazing that you can spend less than $7,000 for that 2 year degree and get a job like that.</p>

<p>[Process</a> Technology - Process Technology](<a href=“http://www.alvincollege.edu/Current/Process_Tech.cfm]Process”>http://www.alvincollege.edu/Current/Process_Tech.cfm)</p>

<p>With the cost of living relatively low here, I think those guys working at the plant will be living better than the $125K guy in NYC.</p>

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<p>correction NYU Sloan = NYU Stern</p>

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<p>I’m not greedy – I’d settle for whatever Oprah Winfrey makes.</p>

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<p>iBanking was all the rage for a while, but given that the industry has basically imploded over the last year I don’t think it’s quite as attractive for new grads anymore</p>

<p>In regards to the original question I think it’s completely relative… it depends on where you live, it depends on how much debt you have from college…</p>

<p>As a rule of thumb, if you have enough income to comfortably live the lifestyle you want to live and still have enough left over to set aside and save 15% of your annual income in savings and retirement funds then you’re doing well. Anything better than that is a bonus</p>

<p>On the subject of saving it’s often hard for grasp the idea of saving for retirement but the cold hard facts are quite sobering. Starting early makes a HUGE difference. Someone that saves X amount per year every year from 25-35 and then stops and does no additional saving will have more at retirement than someone who saves X amount every year from 35-65</p>

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<p>“2 incomes of $50K is equal to one income of $100K (minus some extra costs in attaining the extra salary)”</p>

<p>Strictly speaking, this isn’t true. If you have one income of $100K, the other person could get a job if needed or desired and therefore increase the overall income in the household.</p>

<p>Salary vs Income. Income can include bonuses, employee stock purchase programs, employee stock option programs, proceeds from investments, etc. Other aspects to the topic that I like to call compensation:</p>

<ul>
<li>Flex time</li>
<li>Casual work environment (saves money on dry-cleaning)</li>
<li>Traffic situation (a five minute easy commute provides a lot of value to me over a 1.5-hour commute in heavy traffic)</li>
</ul>

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<p>

</p>

<p>That’s the whole point of my post #2. So often, income increases precipitate spending increases. My SIL is a CPA and says she has some clients who make $600K/year, but spend $700K and have no savings. Recommended reading: [The</a> Millionaire Next Door](<a href=“http://www.amazon.com/Millionaire-Next-Door-Thomas-Stanley/dp/0671015206/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1216302167&sr=8-1]The”>http://www.amazon.com/Millionaire-Next-Door-Thomas-Stanley/dp/0671015206/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1216302167&sr=8-1)</p>

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<p>Exactly. </p>

<p>Someone who earns 40k per year, spends 35k and saves 5k is ‘richer’ than someone that earns 200k a year, but spends 205k (thanks to debt). </p>

<p>The person with the 200k income thinks they’re the one that’s richer… that is of course until all that stuff they purchased but can’t pay for get repossessed or when they go to retire and realize they have no savings to get by (let alone keep living the lifestyle they’ve been living). This is how, for example, these hotshot hollywood types get from riches to rags overnight (Ed McMann being the most recent example). </p>

<p>A bit of humility and common sense goes a long long way when it comes to personal finances! ;-)</p>

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<p>Ed lived a great fun life and probably did as he pleased with spending and enjoyed it. So now he is old and maybe broke. But he also can’t enjoy all those good times at this age that he has all the fond memories of having. There is no substitute for a life enjoyed and dying broke. You can’t take it with you.</p>

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<p>barrons - that’s a different thread.:)</p>

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<p>“You can’t take it with you.”</p>

<p>You can pass it on to your heirs. Or create a foundation for others.</p>

<p>I get a lot of pleasure and enjoyment at what others would consider work.</p>

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<p>“Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”</p>