Can you make it on 45-50k? (dollars, sell, live)

[Dayton Sux]

Just do the math (keep in mind this is a very rough estimate since I obviously don't know you or your situation):

$50,000/yr.
- 15% retirement (change as you see fit)
_______
$42,500/yr.
- 25% tax, etc (approx. 22-24% but I use 25% to be safe and to make the math easy)
________
$31,875/yr.
/ 12 months
________
$2,656/mo.
- 1,000 rent (not that I'd deduct rent before savings, etc, but since you gave a hard # it's easy to drop it in here)
________
$1,656/mo.
- 300 car pay. (again, not that I'd deduct rent before savings, etc, but since you gave a hard #)
________
$1,356/mo.

You have approx. $1, 356/mo. remaining for things you listed:
- usual bills phone/insurance/cable etc
- savings (house)
- savings (life's speed bumps)

As well we as things you didn't list:
- savings of a minimum of 6 months salary in case you lose your job (in this economy that has bumped up to a minimum of a years salary)
- investments in addition to contributing to your retirement account
- groceries
- clothes
- grooming
- medical insurance
- doctor bills & meds (or at least a cushion in case you get sick)
- AAA (if you have it)
- car maintenance, renewals, etc
- tolls, parking, etc.
- saving for the next car so you don't have to finance next time
- pets / vet (if you have any)
- entertainment / social activities
- gifts / holidays
- travel
- gym
- etc.

Lets say for a single person $50/week groceries for say 4 weeks, which is $200, plus say $60/month car insurance, and say $40/month phone bill, plus, say, $200/month utilities. (I'd think youd want to roll the utiltiies in with "shelter" since youd need to heat your house or apartment, plus provide heat to cook with...it is a "necessity!!!")

$1356
-500
-60
-40
-200
= $556,

...not much left! If you could cut the car payment and the housing cost you would have more left.

[freemkt]

Originally Posted by oneasterisk

One of my friends retired from the police and he wanted something to keep him busy and make a little extra cash. He started a lawn care service in his mid-50's. He's in his 3rd year with 90 clients and he's pulling in about 35k after his expenses. He's not rich by any means, but he's doing pretty good for being a first time small business owner.

You can make an excuse for any reason, but there are people out there who are making it happen. Seems like you're holding yourself back by being a naysayer.

Yes I can make an excuse, how does he move his mower(s) around from client to client? I do not have any way to do that other than on foot, which is an astonishingly inefficient way to do it, and severely limits the geographic reach of your business.

You definitely cannot transport a gas mower on a bus (I considered that), and I'm not sure about an electric mower. (That would be up to the driver, who in most cases would probably consider it to consume too much space.)

[oneasterisk]

I'm not here to solve all your logistical problems. If you want to make it happen, you'll have to figure it out. Who says you have to do a landscaping business? That was just one example.

The fact that you say it can't happen is false though.

[MrRational]

Originally Posted by freemkt

Yes I can make an excuse, how does he move his mower(s) around from client to client?
I do not have any way to do that other than on foot, which is an astonishingly inefficient way to do it,
and severely limits the geographic reach of your business.

On foot eliminates the need for a truck/trailer and all those expenses.
Profit margin aside how many fewer lawns do you have to mow if you can avoid those costs?

Focus your marketing to do all/most of your mowing in one area. Maybe two.
Rent or arrange the use of a shed to store your mower(s) and equipment near your customers.
Take the BUS to get out there in the morning.

Getting the jerry can refilled with gas is more awkward but still not impossible.
---

Like in every other post... you just don't want to do the hard work.
I've personally witnessed what I describe above done by a very nice guy.

[ncole1]

Originally Posted by no cigar

Pretty straight forward question. I'm a single 28 y/o male, no tie-downs except a $300/mo car pmt and usual bills phone/insurance/cable etc. I am anticipating overall cost of living to be high (rent ~ $1k) and am just a little worried about making it with a salary under $50k/year while trying to do things like save for retirement, house, and life's speed bumps. Thanks!

$300/month car payment? Sell it and pay cash for something you can afford without going into debt. Then put aside the same $300/mo. into a separate savings account, which you can use to upgrade to a nicer car later, again without going into debt. Once you have that, you can reduce to $200/month, but continue to put that away, and don't drive too much (more than 12,000 miles/yr). This way you will be able to buy every car with cash, never taking on a loan and wasting money on interest.

You can get rent down to $600 almost anywhere by taking on roommates.

Unless you have expensive health insurance, these things will allow you to save quite a good amount of your income, even $50k.

[jghorton]

Originally Posted by freemkt

Let's say you make $12K, do you think you could make it on that income? How exactly would you "choose" to spend less than that?

I know of people who live on a total SSI income of $760 per month ($9K) and even they make choices about how much to spend where. However, the OP asked about $40-$50K income (not $12K). Many people find that sufficient, IF they make prudent "choices". But, those who "choose" to spend $60-$75K on a $50K income don't do so well.

It's simple math, not 'rocket science!' Everyone chooses what to spend. Some choose to live within their means; ... and others (like our government) choose to spend significantly more than their income.

[Submariner]

Originally Posted by oneasterisk

I had limited experience before I got my job at a small computer shop. It was flipping burgers at McDonalds for two summers in high school and a clerk at a video store for about 2 years. While at the computer shop, I took out a loan and attended some computer training classes. Got my A+ certification and turned that into a bigger and better job. I used each job after another as stepping stones to something better while I also did self-study to attain more computer certifications. Plus my jobs at the times paid for my cert tests so that helped.

So I was making $4.15 flipping burgers at McDonalds at 16. I'm 32 making a 6 figure income now. I guess someone forgot to tell this poor immigrant kid you couldn't do that...

A lot of immigrants do well.

I have had a few Asian immigrants who were my past tenants, each family did very well.

[eastmemphisguy]

Almost nobody who makes $50k spends 15% on retirement or 25% on taxes. Both of those are wildly inflated.

[dude_reino]

Originally Posted by no cigar

Pretty straight forward question. I'm a single 28 y/o male, no tie-downs except a $300/mo car pmt and usual bills phone/insurance/cable etc. I am anticipating overall cost of living to be high (rent ~ $1k) and am just a little worried about making it with a salary under $50k/year while trying to do things like save for retirement, house, and life's speed bumps. Thanks!

Yes, I have done it for the past 8 years. I have about $40k equity in my condo and $40k in my retirement account. But I've had to work constantly, miss out on extravagent vacations and have never drove a vehicle less than 8 years old.

[Malloric]

Originally Posted by freemkt

Let's say you make $12K, do you think you could make it on that income? How exactly would you "choose" to spend less than that?

Rent would be a big one.

Plus at $12k, you qualify for a ton of welfare so your actually taking in a lot more than that. For example, you get free medical insurance, food stamps, eligible for welfare housing, EITC, etc, etc, etc. There's really not a huge difference in standard of living between someone making $12k and $40k, especially if you're talking about families rather than single individuals who qualify for less welfare.