What’s Our Income?

Commenter Rummy on my last net worth update asks a good question – What’s our income? After all, I sure spill a lot of financial beans on this blog. You guys know how much debt I have, how much savings, even where my money is invested. Why not disclose income? I agree, it would help complete the financial picture and give things context.

The main reason why I’m not giving out exact numbers is that this blog is not a completely anonymous anymore. If it were, I think I would share. But family, friends, and co-workers know about it now. And for some reason income is very, very personal. Even more personal than net worth. If our co-workers knew our salaries, there is a good chance it could create tension, and I *hate* office politics. My old boss specifically asked me not to mention my salary to others.

But how do you know that we’re not just some super-awesome-stingy-gruel-eating-miserly-savers living on $20k a year? Or high-powered lawyers blowing most of our $300,000 a year salaries and only managing to save a couple grand a month?

For the year of 2006, I expect our combined personal income to be between $55,000 and $85,000 gross a year. Wife works full-time, while I go to school and will work part-time during the year and full-time during the summer. No kids. I hope that helps add some detail to the picture.

If you’re looking for risque bloggers that do reveal all, check out these posts at Sparing Change ($48.5k) and My Open Wallet ($83k + 10% bonus).

However, if you’d like to share your own income and/or job title, be my guest and leave a comment 🙂

Note that from now on, e-mail addresses will not be displayed to the public. It will serve only to identify yourself to me, and to possibly allow me to reply to your comments in private.

Comments

  1. Awesome, I’ve been wondering this as well as a long time reader and am thankful you’ve revealed it. I fully understand why you don’t want to be too specific, and I think the range you provided is absolutely more than fair.

    My guess on your actual income is about 85k 🙂

  2. Jon – I’m the same way, I tell all except income… call us weird. 🙂

  3. I work for the government, plus have a side business. All government employee salaries are somewhat public. Basically, if you know the job title, you can request the pay for that job title. Plus, if you know the person has worked there a long time, he’s probably at the top of the scale.

    Anyway, I’m currently earning 77k/year. Not bad for someone who didn’t go to college. My side business brings in another 20k/year, so I’m getting close to crossing the 100k/year mark.

    Hard work can and will pay off.

  4. Just curious, what are you attending school for again? I thought you already had your Master’s; are you in the middle of a doctoral program?

  5. Anonymous says:

    Yeah, by reading your blog for a while, I can reasonablly figure out your background, race, and so forth. It’s kind of scary. Good that you are not a hotty on myspace.com…

  6. Income is so overrated, what matters is how much of it can be saved (or spent to invest in the improvements of one’s job skills or an education). Since you are careful with the smaller expenses, I can bet that even if you guys become big shot lawyers earning $300K a year each, you will never blow through the money, another reason why most of the rich who have earned their wealth stay rich and become richer (they are careful about the small stuff, the big things take care of themselves), much to the chagrin of the liberals who want to play class politics and increase taxes…oops did I just wander off !

  7. I’m at 200k and my wife doesn’t working right now. You probably think “wow” or “cool”, but it hasn’t been smooth because I’ve worked for small companies or startups – meaning the pay hasn’t been on a gradual increase. 125 one year, 50 the next, then 150, back to 75, etc. With any luck I can keep this up until I semi-retire at 45 or 50.

  8. 24 year old, future CPA (almost there) with a Master’s degree engaged to a future teacher (also almost certified, alomst a Master’s degree) who currently is an assistant teacher. We made about 85K last year combined. We hope that once we become cerfified in our professions and established in our fields to make about 150K together.

  9. your only 24? I thought you were about 27/28.

    good for you though….100k at your age. Fabulous.

    I have about half that and Im about to go spend 20k traveling around the world for 13 months…i saved it, might as well spend it!

  10. Well, income figures alone do not really tell the truth. The living cost really counts. Combining both, one then can more accurately figure out the real savings.

  11. ‘Jon’ is not me 😉

  12. I wonder if your old boss is familiar with the following:

    “The Board has held that, in the absence of a business justification for it, a rule requiring that employee salaries be kept confidential and not be disclosed to other employees constitutes a clear restraint on the employees? Section 7 right to engage in concerted activities for mutual aid and protection concerning an undeniably significant term of employment. E.g., Leather Center, Inc., 312 NLRB 521, 527 (1992); Heck?s, Inc., 293 NLRB 1111, 1119 (1989).”

    http://www.lawmemo.com/nlrb/vol/331/92.htm

  13. There was no rule. He simply said it would be a good idea not to, and I think it was perfectly reasonable and also a good piece of advice for a young employee not acquainted with office politics.

  14. I was the one who asked you the question – pleasantly surprised to see a post about it 🙂

    Thanks for giving us the rough figures… I’m 30 work in software, have Masters and gross about 95k… have pretty much the same savings as you.. but since i am an immigrant dont have 401k and all that jazz… all my money is sitting pretty in high yield savings @ ED, Presidential and HSBC…and have around 30K+ on 0% cc float…

    ha! now i feel better – never thot will tell all in public forum.. (hope my email id *is* private 🙂

    rummy

  15. jonathan-

    emigrant raised their rate to 5%.

    FYI

  16. 22, work in consulting. Expect to gross about $70k this year, aim to save about $6k (living expenses suck). Love the advice on funds; I keep most of mine at Vanguard with a bit more of a small-cap bent than Jon. Not such a good time over the past few months, but hoping for a recovery 3rd and 4th q’s 06.

  17. “There was no rule. He simply said it would be a good idea not to, and I think it was perfectly reasonable and also a good piece of advice for a young employee not acquainted with office politics.”

    At first this sounds like a good idea, but in reality, keeping people in the dark is your bosses best tool to keep everyone’s salary as low as he can. Your personal ego aside, you’re actually hurting your chances when negotiating because you don’t have perfect information that he has. Ideally, you would know what all the other people in your position make so you know what you can get.

    Interestingly, thanks to the internet, anonymous boards are increasingly set up to share this information helping all employees negotiate better terms for themselves.

  18. 50k in the Midwest is like 100k in the East/West coast, so income doesn’t show much without looking at living expense.

  19. Since there appears to be a bit of “Controversy” when it comes to whether or not employees should share their compensation numbers with each other, I’ll go ahead and present two sides of the story that occured to me personally within a six-month span, all within the same workplace.

    First off – I’m a Mgt. Consultant, I typically work independently (I’m self employed via my own S-corp). Since I’m just a one-man shop, the majority of my engagements typically involve working with 3rd party consulting firms for reasons related to sales/marketing, or due to a certain large local company no longer allowing new companies into their vendor program.

    During my last engagement, I was told by the 3rd party firm that I couldn’t get my normal rate as the client wasn’t paying enough (they’re notorious for low-balling/abusing vendors; the claim was that my rate was about what the client was paying) – BUT, I could get commissions for bringing on additional consultants + this was the start of a long-term partnership so they’d make it up to me down the road. I know the owners of this firm personally and figured, I’d take the short-term hit and benefit long-term.

    I developed pretty good friendships with my fellow consultants on this gig, found out that they all made about 33% more than I did – E.g. Right about my usual rate. Making it worse, was the fact I was the Sr. Consultant. SO, using this information I went back to the 3rd party firm and said: “The people I manage are out-earning me by about 33%, I need a raise to continue on here”. They instantly gave in and just paid me – later, I was able to see the actual invoices and figured I could’ve squeezed another $5/hr out of them, but figured, okay, no big deal, close enough.

    So that party of the story shows how sharing information with your colleagues can help you, no?

    Well, there is a negative side too.

    The Employees found out how much the consultants were making, which created a VERY bad situation – where the employees started looking for ways to get the consultants sacked. Looking back, I realize that the reason that there was no animosity between the consultants was because were all making the EXACT same amount per hour. Plus, by the time we shared data – we were all very good friends.

    That’s not the only bad outcome though –

    As the engagement was winding down, I had a discussion with a manager at the 3rd party firm about joining his consulting team. He asked me how much I was earning and his response was **** you’re making that much, good for you. Well – later on, at a networking function it just came out again: “**** I can’t believe you’re making that much, you’re living situation is ****** and mine is *****”

    I chalked up the exchange to a brief tinge of jealousy, or maybe a guy stressed out over his own financial obligations. Besides, he had a lot to drink that night and was generally stressed out about a lot of things. I figured, nothing would come of it, I’ve known this guy for a couple of years, worked with him a lot, always known him to be honorable, particularly when dealing with me.

    Wrong.

    Without going into the details, this person proceeded to screw me over/stab me in the back on several fronts and as a result, I’m out 7-weeks billings and have since gone on to work with a different firm.

    It was a pretty disturbing situation and it all started when I shared my income with him.

    Going back further, I’ve had some bad experiences with friends after telling them how much I earned and I’ve had bad experiences with co-workers in other situations when people either figured it out, I told them, etc.

    SO – my take is as follows: Yes, knowing the numbers is quite useful for negotiating your own salary.

    BUT – at the same time, sharing your income information with colleagues almost always leads to bad blood, back-stabbing and a ton of other negative outcomes. In short, it’s often not worth it.

    Even in the situation I described above, my colleagues volunteered their hourly rates to me as they were simply concerned that my firm might be screwing me over. Based on a comment I made about the client putting the screws to our agencies when it came to our billing rates.

    My advice – keep your income to yourself, it’s always best. Personally, I wouldn’t share net worth information either.

  20. AA, 50k is a bit low. I went to Salary.com to compare my area to Iowa:

    The cost of living in Sioux City, IA is 18.3% lower than in Hartford, CT. Therefore, you would have to earn a salary of $81,651 to maintain your current standard of living. Employers in Sioux City, IA typically pay 15.8% less than employers in Hartford, CT. Therefore, if you take the same type of job in the same type of company in Sioux City, IA you are likely to earn $84,226.

    (based on a 100k Hartford, CT salary)

  21. yeap agree with AA. An engineer in Houston earn much lesser than his coworker in California. But the housing price is extremely lower than California too.

  22. Gregory says:

    We are 27 and 28. Our househould income is $48k a year and our goal is to increase that number to $55k+ over the next 2 years with my wife working less. We live in Texas, so that income allows us to live comfortably here (house, cars, kids).

  23. Programmer I in the US:

    Location—Average Salary—Average Home Price
    Midwest (Chicago)—55k—270k
    West (LA)—57k—500k
    East (NYC)—60k—500k

  24. Hmm, I think you’re right that it causes issues. I just found out a guy I work with, who has easily 7 years experience on me, makes the same as I do. In other words, he’s getting cheated.

    So I’m actually worried now that he knows what I make. Especially since it’s a firing offense for us to share our salaries.

    What’s strange is in my circle of friends, we all know what one another make. We have been open about it as long as I can remember. And there’s no animosity or jealousy.

  25. Bigmouth says:

    c’mon, guys, salary differences certainly cause jealousy among co-workers. But in the end, it was the employer?s unfair treatment of the employees that poisoned the environment. The job market, after all, is still a market. It should follow the same principles as the regular market places. Can you imagine that all the competitors asking you not to disclose prices when you buy their products?

    Basically, an employee should be compensated fairly. In other words, if this employee is more productive and harder working than the others, he should make more. Seniority and loyalty should play a little role in the person’s pay rate, but it should not get in the way of promoting the younger and more talented newcomers. I know evaluation of employee?s performance is not exact science; there are a lot of subjectivities involved. But at least the employers should make an effort to maintain fairness (like the American legal system, there are plenty of unjust outcomes, but the overall impression of this system is still much fairer than most other legal systems of the world.)

    On the other hand, office politics is quite another matter. It has nothing to do with people disclosing their salaries. Instead, it has everything to do with human socialization. In other words, even in North Korea, where everyone makes the same pay (or no pay whatsoever), there are still office politics going on in every corner. You guys should watch this Soviet comedy called ?The Office Story?. In that movie, everyone knows everyone else?s pay. But they still get into these petty mind games on everything else.

    All I am saying is that income, like sex, is marked as a taboo in America. Because we are told to not talk about them, so we actually talk more about them. It?s like we are the most righteous (or self-righteous) and immoral people at the same time.

  26. I am not shy about sharing my financial information with friends who are willing to share with me. It has never been a problem with the people I know. I wouldn’t share it with people I thought would be weird about hearing how much I make. I would not share my salary with people I work with.

    That being said, I am an accounting/HR person at a small aerospace company in SoCal and I make $66K/year in salary, about $5K+ in profit sharing and have a couple other perks that equate to about $8-9K per year, so I’m in the $80K range.

  27. Since this is totally anon, why the heck not.

    My income ranges between $400K to $800K, and this year it will be closer to the top end of the range. My salary is close to $200K, so the rest is bonus, with some of the bonus coming in the form of deferred stock in my employer. This has actually been a boon, since the stock just keeps going up and away.

    I am a Wall Streeter, living in NYC. Married to stay-at-home wife, no kids, early 40’s. My networth is nearly $3mm, with half that being the equity in my home. My mortgage is around $800K, with total housing costs of about $5200/month, partly offset by rental income of $1800/month.

    Though most of you will wonder aloud why a guy like me has to read PF blogs and such, let me tell you that I have many of the same issues, despite the high income & NW. Money doesn’t go very far in NYC, and truth be told, we cannot live on salary alone, not without making some significant compromises to life style. Definately, our home is a big drag on finances, not just the mortgage, but the insurance, taxes, maintenance, and upkeep, not to mention furnishing it, etc.

    We eat out a lot, and love to travel. That plus the aforementioned home expenses, absorb a lot of dollars. Plus, we live in an extremely high tax area, and on top of that get hit with AMT every year.

    So, there you have it. My objective is to reach $5mm networth within the next 5 years, which is my tipping point for financial independence without any significant changes to lifestyle.

  28. I’ve know cases of jealousy about salary in previous locations where a few people discussed there income, it left a few people feeling undervalued and did have an effect on their morale.

    The worst cases of this however have been with end of year bonuses, when these are discussed it seems no-one is happy and can cause serious arguments.

  29. Yeah, since its anon, why not right?

    HH income little over $300k living in NYC. No kids, mid 30’s and both of us work for investment banks (me in IT her in exec. training). We own our home, $3200/month payments and have a nest egg of about $300k + another $300k in equity.

    NYC is expensive – living, taxes and always something to entice you to spend money. Fortunately we don’t have car payments.

    The ideal situation is to live in NYC, build up significant savings and then move to a much less costly location. NYC is a great place to live, make money, and have a great time but I’m not if you could raise kids here.

    Like everyone, my realistic magic number is a lifestyle slightly above my own (unlike the other guy, the $3mm sounds pretty ideal) I’ll bet others probably think the same of me…

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