How much compensation is enough?

I see compensation threads on WSO all the time and will see ranges from $100k - $1m. Understood, we all have to earn our way to the top tier, but curious to hear how much would you be satisfied with to live your version of a comfortable / “well-off” life? This will totally differ based on your city and if you’re single or married. I’ll give my two cents first.

Status: Single
City: NYC
Base/bonus: $350k

Status: Married
City: NYC
Base/bonus: $700k

 

Gotta say.... it's always relative, and no matter what you make, you will feel behind those making more (maybe this isn't universal, but my lived experience tbh). Without giving personal details, I am making an amount today my like 22 year old self would have been very happy making. But my late 30s self doesn't suddenly feel like I thought I would in my 20s (maybe the wife and kids has something to do with lol). That said, there was a point somewhere that I realized like making more was really just fueling savings/investing, maybe some wild expenditures (I try to live decent but frugal personally), but not life changing. I think that is good place to get, but I can't really say how to put a number on it. 

 

Agree completely. Comparison is the thief of joy, and it’s very ease to be depressed on WSO if you’re constantly comparing to other’s comp. Being based in Europe, I earn a lot less than the numbers frequently quoted on WSO. 1st year Associates in my firm’s US offices are taking home more cash comp than I am. It’s easy to be jealous of their numbers. But, I earn a lot relative to the low pay in my country, have good WLB and I get 5+ weeks of holidays a year. I have enough to live a decent life so anything more would be going into an investment account as you’ve noted, and I’m not willing to trade WLB for that.

 

Echoing both comments before me, I'm making money that easily eclipses what I thought I'd be making when I started my career with even more runway in front of me. Having a growing family puts some strain on that income but I'm still living comfortable where I don't need to check my account before I go out for drinks. That said, money provides optionality and I'm sure I could use another 20-30% before I'd be satisfied, knowing that I'm never going to make millions in a single year.

 

More is always better, but only marginally. Jumping from 100k to 300k comp is going to bring you more happiness than 300k to 500k.

I agree with you numbers. 350k for single and 700k for HH income is a good (assuming normal hours 40-60) line - anything more than that is just cherries on top. At this level, one can have all the common luxuries that a so-perceived "successful" person can have - nice house, cars, multiple comfortable vacations every year and saving some chunk for the kiddos and doggos. 

Dont get me wrong, incentives to earn more is always there. I'm just not as hungry as before when I was in my early 20s given the marginal difference, if that makes sense...

 

No amount is ever “enough” honestly that’s just human nature. The more we get the more we want. If I had to “settle” on a number I’d be comfortable with making I’d have to base it on where I currently work. Late twenties and early 30’s folks pull 600-700k (this is openly communicated between seniors and juniors) with about 25% being deferred (may give away where I work idc). To me, at that age that sounds lovely and definitely something to strive for especially if ur not working 100 hours per week. 

 

When I lived in the DFW area 5-10 years ago, $300k+ was a solid upper-middle class lifestyle. I didn't make that much when I lived there, but from friends and family who did, that was a really solid quality of life. Except for Austin, if you make $300k+ in Texas, you're living a comfortable life unless you're trying to keep up with the Joneses

 

Houston 

$350k household income

2 kids, nanny, and private school

top decile neighborhood

nice vacations
put away max 401k ($40k/yr)

never never worried about covering any expenses 
But feel like just getting by and only feel wealthier with appreciation of invested assets

maybe will feel like I’m accumulating more once we get rid of nanny ($40k/yr after tax is a big expense)

 

Hope I can be half as smart/financially set as this. I live in Houston suburbs, so my cost of living is dramatically lower. I'd revise my earlier post if you want to live more in-city to be $500k-$600k a year in Houston, at a minimum. If you want River Oaks, then $1 million or more a year.

Current household income is about $200k. Wife stays home with the 2 kids, and feel like we're just getting by. Have a long ways to go to get kids 529's funded, and throwing everything I can at retirement. 

 
Most Helpful

I lived in a MCOL city on $200k base. Had a new 1BR apartment for $1700, didn’t need/have a car, meals were comped at work, and TBH I never felt so rich. I basically had $9k after rent/taxes to blow each month (although I could never actually spend that much despite being reckless) and then a modest $50k bonus for savings.

I make a little bit more than that now but with $125k base+ $3k apartment (moved cities) and I feel significantly poorer.

There’s something mentally soothing about getting a ton of money each month instead of having to wait for the year end bonus. Although I’m technically making more now, and have cut my credit card bill in half compared to my time in [MCOL City] via meal prep, I feel poor.

Anyways, long way of saying my number is $9k per month after rent/taxes to spend on whatever + a $150k bonus for saving at least.  You can really ball out on that amount 

 

This is interesting. Did you move from like a REIT (traditionally pretty base-heavy) to brokerage/advisory? 

About four years ago, I made a move in the opposite direction: I gave up a bit of total comp in favor of a much higher base salary. I've since caught up to where I was, but at the time I made the transition, I felt way richer in the same way you describe despite making less overall.

I used to work on the brokerage side, and I think this surety and psychological comfort coming with a base salary (lack thereof) is the same reason why my broker buddies were always complaining about expenses, but at the same time it wasn't exactly uncommon to see them buy a house for cash when they decided it was time to move after they had a decent year.

 

Actually the opposite, moved from an IB shop with $200k base to a PE shop that basically never raises base (although total pay is still very generous and all cash).

I think I’m going to set aside $24k after YE bonus to spend throughout the year on top of base. Hopefully will give me that same high base feeling. It’s just very hard to do that when I could stick it in a market that may very well be down 30% from ATH by Feb when bonus hits 

 

work at a large international firm known for RE (e.g. blackstone / goldman / etc). a lot of MDs make $2mm+. $2mm in NYC is only ~$1mm after tax (vs say $1.27mm in Florida). still a lot of money, don't get me wrong. but not that much compared to a lot of other professions in nyc / ppl that inherit money that also want to live in tribeca / west village / etc.

 

I’m in NYC, and for single, I would say like 1M+ to be comfortable. Over here, that’s a very reasonable number, wouldn’t even say it means your rich, just means that money won’t ever be a problem unless you’re completely stupid with it, and that peace of mind would definitely be great.
 

It’s also a very possible compensation to get in my industry/field - I have already been headhunted for these roles but I’m not prepared for these interviews yet because they tend to be 8+ rounds and you basically need to ace all of them. 
 

For the married life, it’s way too dependent on a variety of unknown factors. How much is my wife earning? Is she from the Hamptons? Does she spend a lot (high-maintenance)? Does she wants kids? To be safe, I’ll say 3M+.
 

Both of these numbers also depend on if inflation is going to continue to be a whopping 9-10% per year. 

 
ConfusedGuru

I'm in NYC, and for single, I would say like 1M+ to be comfortable. Over here, that's a very reasonable number, wouldn't even say it means your rich, just means that money won't ever be a problem unless you're completely stupid with it, and that peace of mind would definitely be great.
 

It's also a very possible compensation to get in my industry/field - I have already been headhunted for these roles but I'm not prepared for these interviews yet because they tend to be 8+ rounds and you basically need to ace all of them. 
 

For the married life, it's way too dependent on a variety of unknown factors. How much is my wife earning? Is she from the Hamptons? Does she spend a lot (high-maintenance)? Does she wants kids? To be safe, I'll say 3M+.
 

Both of these numbers also depend on if inflation is going to continue to be a whopping 9-10% per year. 

Like with all of these threads, people need to define “comfortable”. $3mm a year is a boatload, even in nyc. Maybe you are factoring in the risk of your career where you don’t expect multiple $3mm+ paydays, but at $3mm life is more than comfortable (multiple homes, fancy car, spend money on essentially anything you want, first class vacations, etc). 

 

Can give a Dallas perspective: 

Was making $170k as a single guy in uptown and that was more than enough. Lived in a new apartment, saved money, and was able to eat/spend how I wanted.  I think the magic number to truly not have to ever worry and fulfill long-term goals would be 200k assuming no kids and SO working.

Kids + wife not working would likely be 300-350k to maintain the QOL I had on 170k

 

I live in a major expensive east coast metro (not NYC) and make $300-350, single, and i feel solidly middle class. Mainly due to cost of living. I also put $5-6K a month into investing/retiring. I try to pay myself first. When I will start to feel wealthy is when I can pay myself first and still have an extra $1,500-3,000/net a month to play. I don't have that yet. I think another $100-150K would be ideal. 

 
REPE8

I live in a major expensive east coast metro (not NYC) and make $300-350, single, and i feel solidly middle class. Mainly due to cost of living. I also put $5-6K a month into investing/retiring. I try to pay myself first. When I will start to feel wealthy is when I can pay myself first and still have an extra $1,500-3,000/net a month to play. I don't have that yet. I think another $100-150K would be ideal. 

LOL at "middle class".  I know it's how you feel, and that is your prerogative, but there is no place in the world with a high enough COL to bump you down from anything other than very wealthy.  Your income puts you in the top ~5% of Americans - even assuming a reasonably large number of people with smaller salaries but lots of passive income from assets, you're still probably in the 93rd or 94th percentile.  You probably save more in a year than the average American makes.

 

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