There some minor things you can do to boost your savings like make sure to put all savings in low cost mutual funds and don't save a penny until all loans are paid off (and pay them off in order of interest rate, not in order of magnitude of the loan!) but that's the essence of it.
100k a year will probably end up being ~65k after taxes, which means living on 32.5k a year to save 50%. For a frugal single person that's doable, beyond that it gets tricky (if you're in the kind of city where 100k and above salaries are common, you're probably paying 30k a year in rent alone).
And even then, that only nets you $195k, not $300k.
By my calculation I get $74k filing single or $78k filing jointly, using a marginal rate of 9% (California) and 25% (Federal), but that's if you're married. It pays to be married.
Sales tax won't substantially change things because housing is usually the biggest expense and isn't taxed. And if you're saving and being frugal you're not buying many taxable items.
People tend to overestimate their tax burden. The difference between your gut figure and the actual numbers is almost 10% of income, which is a huge difference.
I live in Italy, you can easily get a seated dinner for under 10 euros (including tax and service) if you get pizza, or a quick lunch for 5 or under. I don't think it's really a factor of cost, it's more that a lot more people know how to cook and keep a stocked kitchen.
> Also frozen pizza is kind of an expensive meal once you have access to a kitchen.
Correct. She mentions in passing that she doesn't cook. Which is a shame since one can easily cook very large amounts of healthy, nutritious and tasty meals very cheaply.
Honestly, I don't eat out unless a client is somehow involved. They must either be at least at the table, if not covering the bill, before I bother. Anyone eating out so often either has too much money or cannot cook. (Don't talk about time. Cooking it yourself almost always takes less time than going out.)
What about all the people who actually enjoy eating out? It's fun, it's social, you potentially get to go somewhere new, you get out of the house, etc.
Cooking can be fun too. But you're definitely making a false dichotomy here.
All I'm saying is that this statement is not true and ignores a huge gulf of people:
> Anyone eating out so often either has too much money or cannot cook.
The only way this can be true is if you define "too much money" precisely to be any amount over the smallest amount necessary to fund eating out frequently, in which case I think the statement is not meaningful.
Your response is talking about something else entirely.
How does cooking take less time? I'm new to cooking so maybe that's why I'm slow but I feel like it takes much longer than going out..
You have to buy the groceries, prep them, cook, and wash your pans/dishes afterwards too. I can't imagine I'd be able to do all of that faster than going to a restaurant and eating, not to mention that while they are making your food you can be doing something else.
I love cooking but I still find it to be tiring as opposed to going out where I'm just resting waiting for someone else to prepare my food.
We have a tiny kitchen in our apartment and very poor grocery store options, which have to be local since we don't own a car. In addition, resteraunts are cheap (< $20 for a decent 3 dish dinner for two) and relatively tasty (and 5 minutes away). Yes, we do cook, but no, we aren't saving time or money when we do it.
I swear everyone here assumes everyone lives in the USA or Europe, their are other countries where eating out a lot makes a lot of economic sense, especially developing ones.
2-3 times takes a toll almost everywhere, I am a grad student in Iowa where costs are not that high. Eating out more than once a week seems like a luxury to me.
We spend more money cooking than when we eat out, just because getting access to decent produce is a bit difficult. But I live in Beijing right now, and know this combination of crappy grocery stores and decent/cheap eateries can't last when I move back to the states.
Can you clarify that a bit? The reason I ask is I work as a software engineer in NYC, and I'm single, and I eat out during work weekdays almost every day (I unfortunately don't work in one of those tech companies which give freebie lunches!)
I estimate my cost of eating out = $15 per day x 22 work days a month x 12 months ~= $4000 per year, or $330 a month. That seems reasonable to me personally.
Related... my wife and I stopped eating out three days a week when ww had a kid. We started cooking instead. The amount of money we have saved more or less paid for our childcare costs.
Postdoctoral researcher at the University of Washington with $80k in student loans and a $40k salary turned Hardware engineer at a medical device company with a $105k salary.
Plus, for the first time she cries at going debt free, and now has decided to avoid debt entirely, even for purchasing a house. She will be buying a house soon, without loan.
Right, with a $127k salary+bonus, plus her husband earning six figures as well, going from negative 80K to positive 200K net worth in six years means ... 280K / 6 ~= $50K in savings per year.
Summary: person in anecdote got a new job offer and negotiated a good salary, then paid down the debt, while ostensibly leaving their lifestyle and expenses largely unchanged from before.
Yes, in the massive London banking industry, though these are not accessible to most.
100k USD is about 76k GBP. According to [1], entry level analyst jobs in London banks pay £50k to £55k. In subsequent years, you make substantially more than 100k USD.
A first year associate makes £90k to £98k, putting them well ahead of 100k USD in year one.
Edit: I thought you were referring to debt, not salary. My mistake. I'll leave my post intact in case anyone finds it useful.
Yes, absolutely. Fees are £9000 per year. The minimum guaranteed maintenance loan, if you take it, is £3821 per year (though you may be entitled to a larger loan depending on your family circumstances).
If you're doing a four year course, this comes to 4 x £9000 + £4 x 3800 = £51200 ~= $68000.
If you come from a poor background (and so your parents cannot provide financial help), you may be entitled to a maintenance loan of up to £10700 per year. Grants (money you do not have to pay back) that used to cover most of this have recently been eliminated, leaving poorer students with larger loans.
Over four years, this would be £78800 (approximately $104k).
Having done three-year courses, many people go on to do a one-year masters at a cost of £10-15k.
On top of that, the current interest rate on the loan is 3.9% - meaning that most people will actually be in increasing debt until they earn £40-50k.
The only bright spot is that you pay 9% of any earnings over £21k towards the loan (like an extra tax). If you earn less than this, you pay nothing. The debt is wiped after 30 years. As a result there is no US-style problem of graduates struggling to make repayments. However, with the government having shown itself willing to retroactively rewrite the terms of the loan, who knows what will happen.
I don't understand the anxiety that most Americans have about paying off student debt. Correct me if I'm wrong, but isn't that interest free and structured for flexible payments? In other words, one of the best kinds of debts to have. Why not pay it down when one really does have extra, or pay it down in small amounts?
Edit: I stand corrected. It seems like only a minority of students get interest-free loans.
It's not interest free. However, for personal, federal loans, the interest only applies to the principal, which is (value of principal + interest) when the loan enters the repayment period (so 1 year after graduation). So the loan only compounds once, when it enters repayment.
My federal loans were a mix between 4.5% and 7.9%, with the 7.9% loans making up the bulk of my total amount. Additionally, I had something like a 4% "disbursement fee" added on to my loan principal for some (maybe all?) of my loans the day that the loan hit my bank account.
For a long time, Federal student loans had an interest rate of 6.8%. That's high enough that it is probably a good idea to defer investing until you can pay them off. Some private loans have rates above 9%.
The alternative, which is much easier now due to some of the fintech startups like Sofi and Commonbond, is to refinance to a lower rate. The downside is that your loans become private, so you lose various Federal loan protections such as hardship deferrals, income-based repayment plans, etc.
If you have a low income relative to your monthly payments, you should probably keep the Federal loans. But if your monthly payments are easily affordable, and you have decent savings in case you lose your job, refinancing is a no-brainer. You can get as low as 3%, which is low enough that paying the minimums and investing your extra disposable income is better than paying off the loans faster.
I know of no governmental student loan that is interest free. In addition, the options for flexible payments are limited, and generally only available to those of lower income brackets. There are payment deferral options, but interest accrues and capitalizes during deferral. Terms are comparable to that of a house mortgage, but unlike a mortgage, you can't get out of the loan if it turns out it was a bad idea. You are stuck with that debt for the next 20 years without recourse.
It's entirely possible to graduate from college, go to work, lose your job in an economic downturn, put your student loans in deferral (because sorry, you made more than $40,000 last year, you don't qualify for flexible payments) while you try to get back on your feet, only to discover that when your deferral ends because you have a job again, the accrued interest has capitalized a few times, and now you owe more principal than what you originally borrowed. The new bigger minimum monthly payment eats up a comparable portion of your new bigger salary, and you're back where you started.
Is this not just a humblebrag? I really fail to see the point of this. It is really cool to read about people who find inventive ways to overcome economic obstacles. It's somewhat boring to read that someone got a high paying job, and married someone with a high paying job, and then things worked out.
This is the third story I submitted today from a series called Into the Black: https://medium.com/tag/into-the-black which is about people paying down debt. This is the title that grabbed the HN crowd. The others got one and zero upvotes, respectively (so far).
Feel free to go read the other stuff in the series if this is not your cup of tea. I didn't think it made sense to submit the link (above) to the series as a "story" on HN. But it is hardly surprising that this is the title that would grab the HN crowd. (shrug)
Sadly enough that is considered "advice" these days. Compare this to the girl who tried to live in SanFran as a low paying worker and got fired from her job for complaining about it.
What is the point here? If you take a postdoc position that means that you are aiming for academia, and expect to be paid poorly. And if you have a PHD in electrical engineering you should be able to find a job that pays at least 100k with no problem.
Is the surprise here that postdocs aren't paid well? Because everybody and their dog knows that.
In my life I was always pretty worried about money. I put myself through school, worked full time etc etc. I didn't really splurge on anything and I just sort of lived a simple life. At this point I guess I've managed to amass enough value by having a house and a job that pays better than the jobs I worked back then, and wowee I'm not under water anymore.
I don't really live my life any differently. But I do have that feeling where I could spend a few grand on something that was meaningful to me and not really be all that bothered by it.
But isn't that just the result of playing your cards kind of right and living long enough? It just seems like there is a certain point in your life where the math of it starts working out in your favour.
Then again I guess I know people about my age who struggle a bit more...
I live in the Bay Area — just not San Francisco or Oakland — and the minimum I could live on is $2,000 per month (before taxes). But that comes to $24k per year, with is substantially less that $40k.
My 60k CHF post doc was more than enough to live in Lausanne, which is way more expensive than SF or Seattle. I was also able to save about half since eating out was too expensive to consider.
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[ 4.2 ms ] story [ 48.0 ms ] thread2. Live below your means so you can save ~50%
3. Continue for six years
4. Boom, you're up 300k from where you started.
There some minor things you can do to boost your savings like make sure to put all savings in low cost mutual funds and don't save a penny until all loans are paid off (and pay them off in order of interest rate, not in order of magnitude of the loan!) but that's the essence of it.
I think it's great that she paid it down, but on 225+k/year, it seems like the interesting story would be if she didn't pay it down.
I make great money myself and am married, and I don't even eat out that much.
100k a year will probably end up being ~65k after taxes, which means living on 32.5k a year to save 50%. For a frugal single person that's doable, beyond that it gets tricky (if you're in the kind of city where 100k and above salaries are common, you're probably paying 30k a year in rent alone).
And even then, that only nets you $195k, not $300k.
Sales tax won't substantially change things because housing is usually the biggest expense and isn't taxed. And if you're saving and being frugal you're not buying many taxable items.
People tend to overestimate their tax burden. The difference between your gut figure and the actual numbers is almost 10% of income, which is a huge difference.
Wow I thought eating out 2-3 times a week was in the normal/high range. Maybe it's one of those US vs Europe things.
Also frozen pizza is kind of an expensive meal once you have access to a kitchen.
Correct. She mentions in passing that she doesn't cook. Which is a shame since one can easily cook very large amounts of healthy, nutritious and tasty meals very cheaply.
Cooking can be fun too. But you're definitely making a false dichotomy here.
Yes. That's also why it's optional. Those struggling to get out from under debt don't have the time for such luxuries.
> Anyone eating out so often either has too much money or cannot cook.
The only way this can be true is if you define "too much money" precisely to be any amount over the smallest amount necessary to fund eating out frequently, in which case I think the statement is not meaningful.
Your response is talking about something else entirely.
You have to buy the groceries, prep them, cook, and wash your pans/dishes afterwards too. I can't imagine I'd be able to do all of that faster than going to a restaurant and eating, not to mention that while they are making your food you can be doing something else.
I love cooking but I still find it to be tiring as opposed to going out where I'm just resting waiting for someone else to prepare my food.
I swear everyone here assumes everyone lives in the USA or Europe, their are other countries where eating out a lot makes a lot of economic sense, especially developing ones.
I estimate my cost of eating out = $15 per day x 22 work days a month x 12 months ~= $4000 per year, or $330 a month. That seems reasonable to me personally.
I find eating out while single is ok, it just doesn't scale well if you're paying for multiple people.
This woman is totally out of touch.
Postdoctoral researcher at the University of Washington with $80k in student loans and a $40k salary turned Hardware engineer at a medical device company with a $105k salary.
100k USD is about 76k GBP. According to [1], entry level analyst jobs in London banks pay £50k to £55k. In subsequent years, you make substantially more than 100k USD.
A first year associate makes £90k to £98k, putting them well ahead of 100k USD in year one.
[1] http://news.efinancialcareers.com/uk-en/164/the-current-stat...
Yes, absolutely. Fees are £9000 per year. The minimum guaranteed maintenance loan, if you take it, is £3821 per year (though you may be entitled to a larger loan depending on your family circumstances).
If you're doing a four year course, this comes to 4 x £9000 + £4 x 3800 = £51200 ~= $68000.
If you come from a poor background (and so your parents cannot provide financial help), you may be entitled to a maintenance loan of up to £10700 per year. Grants (money you do not have to pay back) that used to cover most of this have recently been eliminated, leaving poorer students with larger loans.
Over four years, this would be £78800 (approximately $104k).
Having done three-year courses, many people go on to do a one-year masters at a cost of £10-15k.
On top of that, the current interest rate on the loan is 3.9% - meaning that most people will actually be in increasing debt until they earn £40-50k.
The only bright spot is that you pay 9% of any earnings over £21k towards the loan (like an extra tax). If you earn less than this, you pay nothing. The debt is wiped after 30 years. As a result there is no US-style problem of graduates struggling to make repayments. However, with the government having shown itself willing to retroactively rewrite the terms of the loan, who knows what will happen.
Edit: I stand corrected. It seems like only a minority of students get interest-free loans.
Some programs defer interest until graduation, and others defer until employment, but neither of those is universal by any stretch.
My federal loans were a mix between 4.5% and 7.9%, with the 7.9% loans making up the bulk of my total amount. Additionally, I had something like a 4% "disbursement fee" added on to my loan principal for some (maybe all?) of my loans the day that the loan hit my bank account.
The alternative, which is much easier now due to some of the fintech startups like Sofi and Commonbond, is to refinance to a lower rate. The downside is that your loans become private, so you lose various Federal loan protections such as hardship deferrals, income-based repayment plans, etc.
If you have a low income relative to your monthly payments, you should probably keep the Federal loans. But if your monthly payments are easily affordable, and you have decent savings in case you lose your job, refinancing is a no-brainer. You can get as low as 3%, which is low enough that paying the minimums and investing your extra disposable income is better than paying off the loans faster.
It's entirely possible to graduate from college, go to work, lose your job in an economic downturn, put your student loans in deferral (because sorry, you made more than $40,000 last year, you don't qualify for flexible payments) while you try to get back on your feet, only to discover that when your deferral ends because you have a job again, the accrued interest has capitalized a few times, and now you owe more principal than what you originally borrowed. The new bigger minimum monthly payment eats up a comparable portion of your new bigger salary, and you're back where you started.
Feel free to go read the other stuff in the series if this is not your cup of tea. I didn't think it made sense to submit the link (above) to the series as a "story" on HN. But it is hardly surprising that this is the title that would grab the HN crowd. (shrug)
I'll check the others out for sure, thanks for sharing.
Mentality is everything.
Is the surprise here that postdocs aren't paid well? Because everybody and their dog knows that.
I don't really live my life any differently. But I do have that feeling where I could spend a few grand on something that was meaningful to me and not really be all that bothered by it.
But isn't that just the result of playing your cards kind of right and living long enough? It just seems like there is a certain point in your life where the math of it starts working out in your favour.
Then again I guess I know people about my age who struggle a bit more...
Why not just leave off with a masters or BS and go off to get a great paying job and do actual work with a livable lifestyle?
I imagine that's part of the reason they enacted the $15 minimum wage
Also the author was a woman, just FYI.