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You need a lot more ca$h than you might think

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BlueMoon

Bronze Contributor
Jun 3, 2018
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Earth
According to my friends, family and those around me I was doing very well. I knew I wasn't and I just want to demonstrate what I mean so hopefully everyone here will shoot a lot higher. I know I will, I'm gunning for at least $10MM after this horrible mistake I made.

You see, the last 2 years I made about $100k each year through various hustles as a freelancer (not a CENTS business I know) and through some small investments. Where I live this means that I make about 2.5x the average national income.

The government tells me I'm doing amazing, especially for me age, so do my friends and family. But it's bullshit let me show you why:
- $100k after taxes here comes down to about $60k
- $35k of that goes to living a very normal and dare I say frugal lifestyle
- $5k goes to unforeseen costs (had a small accident + medical costs and stuff like this)
- $10k went into a new venture/side hustle that just didn't work out

Now you got about $10k left. And made basically zero progress.

Mind you: I'm in my late twenties, no kids, no liabilities, no real debt, and not married so I can only imagine how tricky it is for people who are in those types of situations.

This is just a reminder that it's imperative you aim HIGH.

This experience has also proven to me that if you don't adhere to the CENTS commandments you are screwed eventually. The only exception would be being a high paid actor, singer or athlete.

So yes I can confirm, 100%, making $100k/year is bullshit. The only difference would be when this $100k would be 90%-100% passive flowing from assets but I'm not there yet.

TLDR; made $100k last two years, want to show that it's nothing and illustrate the need for aiming a lot higher.
 

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ZF Lee

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100K is very little especially when you have a family.
And it's not all take-home cash, right, even after taxes?

Where I come from, regular folks have a retirement fund. Sure, they can put in some cash and get some interest, but they can't use the money before they retire. They can draw out, but up to a certain amount, the office starts calling and want answers.

And insurance. My parents started to cut back on that after realising they didn't need that many. I guess they bought one too many to 'help out' insurance friends.
Where I live this means that I make about 2.5x the average national income.
I really hate this measure of financial success. Too bad too many people still count on it to gauge their lives.

Not to get political, but I get more riled up when governments use this as a statistic whenever they want to raise wages or fight 'wealth inequality'.

Sampling? Population? Did you include business owners, small and corporate? What kind of trades? After taxes? But the folks with the stats don't tell you plenty. For what? o_O
Probably the only reason folks still use averages is because even a primary-school kid can calculate an average...and maybe that's the only mathematical thing that most folks can comprehend.

I usually pay little attention to national statistics such as these, especially when the national budget pops up. I glance at the papers, groan and go away. A huckster earning $6000 (where an assumed average national income is $5000) may be better by $1000 more, but in reality, does that little bump in dough make any difference?

To OP , not that I am bashing you, but well done on your success in freelancing! I haven't hit that amount yet!
 

Silver Silk

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May 10, 2017
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According to my friends, family and those around me I was doing very well. I knew I wasn't and I just want to demonstrate what I mean so hopefully everyone here will shoot a lot higher. I know I will, I'm gunning for at least $10MM after this horrible mistake I made.

You see, the last 2 years I made about $100k each year through various hustles as a freelancer (not a CENTS business I know) and through some small investments. Where I live this means that I make about 2.5x the average national income.

The government tells me I'm doing amazing, especially for me age, so do my friends and family. But it's bullshit let me show you why:
- $100k after taxes here comes down to about $60k
- $35k of that goes to living a very normal and dare I say frugal lifestyle
- $5k goes to unforeseen costs (had a small accident + medical costs and stuff like this)
- $10k went into a new venture/side hustle that just didn't work out

Now you got about $10k left. And made basically zero progress.

Mind you: I'm in my late twenties, no kids, no liabilities, no real debt, and not married so I can only imagine how tricky it is for people who are in those types of situations.

This is just a reminder that it's imperative you aim HIGH.

This experience has also proven to me that if you don't adhere to the CENTS commandments you are screwed eventually. The only exception would be being a high paid actor, singer or athlete.

So yes I can confirm, 100%, making $100k/year is bullshit. The only difference would be when this $100k would be 90%-100% passive flowing from assets but I'm not there yet.

TLDR; made $100k last two years, want to show that it's nothing and illustrate the need for aiming a lot higher.
What are your freelance areas? web developing & computer science? Youve still got to a milestone many of us havent yet reached, share the story bro!
 

Jguy91

New Contributor
Oct 5, 2018
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Agree with all this... I went from a 45-50k job last year to a 90-100k this year yet my weekly take home only went from 700 a week to 1,100ish. I’m in Louisiana so 100k is considered big money. But that extra 400 bucks a week almost isn’t worth the extra headaches...


Sent from my iPhone using Tapatalk
 

Silver Silk

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Web dev & concept development. Trust me, you don't wanna go there, I'm looking to get out myself.
Really you're looking to get out! im learning the basics right now with the long term vision that it'll let me quit my job and ill scale up the online business. Why would you say the downsides are to what you're doing right now
 

AgainstAllOdds

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According to your calculations, you're paying:
  • $40,000 in taxes.
  • $35,000 living a normal lifestyle.
You're left with $25,000 in disposable income.

Is it possible for you to do your freelancer job from a different country? Have you considered that?

Because if so, you'll triple the amount of money you're taking home. Here's the math.

$100,000 Income
-$0 Taxes
-$24,000 Decent Lifestyle in Bali/Thailand/Etc

= $76,000 in disposable income

It's something worth thinking about.
 

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OP
OP
BlueMoon

BlueMoon

Bronze Contributor
Jun 3, 2018
38
107
120
Earth
Really you're looking to get out! im learning the basics right now with the long term vision that it'll let me quit my job and ill scale up the online business. Why would you say the downsides are to what you're doing right now
Yea so they are useful skills definitely but consulting or freelance design is just a pain in the a$$ and definitely not fastlane. Good skills to learn though so dont worry keep at it.
 
OP
OP
BlueMoon

BlueMoon

Bronze Contributor
Jun 3, 2018
38
107
120
Earth
According to your calculations, you're paying:
  • $40,000 in taxes.
  • $35,000 living a normal lifestyle.
You're left with $25,000 in disposable income.

Is it possible for you to do your freelancer job from a different country? Have you considered that?

Because if so, you'll triple the amount of money you're taking home. Here's the math.

$100,000 Income
-$0 Taxes
-$24,000 Decent Lifestyle in Bali/Thailand/Etc

= $76,000 in disposable income

It's something worth thinking about.
Could be an option yes but right now it isnt unfortunately. A big reason for that is because I'm in a great relationship with a woman I love and she doesn't have this flexibility.
 

garyfritz

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Jul 16, 2011
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Is it possible for you to do your freelancer job from a different country?
Because if so, you'll triple the amount of money you're taking home. Here's the math.
$100,000 Income
-$0 Taxes
The OP is fortunate he's not a US citizen or that wouldn't work. The US and Eritrea are the only countries on the planet that tax your income regardless of where you make it -- and the US tax rate is 10-20x higher than Eritrea's expat tax. So those of us in the land of the "free" are held hostage by Unca Sam no matter where we go.
 

pkom79

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The US and Eritrea are the only countries on the planet that tax your income regardless of where you make it -- and the US tax rate is 10-20x higher than Eritrea's expat tax. So those of us in the land of the "free" are held hostage by Unca Sam no matter where we go.
"If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is adjusted annually for inflation; $100,800 for 2015). In addition, you can exclude or deduct certain foreign housing amounts."
Foreign Earned Income Exclusion | Internal Revenue Service
 

garyfritz

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You are absolutely right -- I forgot about that $100k exclusion. So if you move out of the US and start/run a business there, it looks like you can exclude the first $100k of those foreign earnings from US taxes. However if your income comes from US-based investments, rentals, or businesses, I believe you'll still pay. The US may not be unique in that regard.
 

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