The 6-Figure Job Myth - For decades now, there has been this ongoing, farcical expectation of "making it" once you finally take home six figures in compensation from your job. I'm here to tell you that this is purely a myth.
Let's think about this for a second. Do you know anyone who lives in LA, NYC, Boston, or really any major city and thrives on $100k these days?
For those of you doing the hourly math, $100k is basically $50/hr based on a 2000-hour work year.
If you live in NYC and make $100K, think about your marginal tax rate. Right now, you fork over 24% to the IRS, then another 6.33% to the state, and another 3.876% to the city. Then, you're forking over 6.2% for social security and 1.45% for Medicare.
Add them all up, and it ain't pretty.
Sure, you get some deductions, which preclude the government from squeezing you just a bit, but this working man's salary in the city doesn't go that far.
If my math is right, when the dust settles, you're looking at around $2600 bucks every two weeks. I dunno about you, but when I hear $100k a year, I think it's going to be a lot more than that.
The average rent in Manhattan is over $4k a month. Lucky for you, hot water is included in your rent because of government overreach, but when it comes to your electric bill, you pay 40% more than the average cost of utilities in the rest of the country.
Do you like to go out to eat? The cost of going out in NYC is more than double the national average. If you live close to your office in Manhattan, you've hit the jackpot: it's probably the most expensive place to grab a bite to eat in the North East.
Add in a cell phone, internet, your Ubers, and your nights out, and it looks like you might want to start thinking about roommates or even a fake marriage (not financial advice).
Now consider the greatest tax: inflation. It has been eating away at this $100k myth ever since it started to gain popularity in the last century.
The funny part about this myth is that we, as humans, have an innate tendency to attach meaning or value to a specific number. This financial line in the sand allows us to feel secure and boost our self-esteem.
Well, I have news for you: it's probably time to move the target. If our wallets continue to get pillaged by the macroeconomic environment, maybe we'll write about a $150k salary myth next quarter.