What $150,000 A Year Does For You In Middle (Median) America

In a solid exchange pursuant to yesterday’s newsletter installment, I said this—

Because the reality is that the baseline should not be a $150,000 salary. And that's what it is if you take a median home price of $450,000 at a 7% interest rate. And $150,000 in this situation doesn't make you comfortable. It merely allows you to get by.

In today’s installment, let’s quantify that, quite methodically and rigorously, in fact. Doing so is a personal financial eye opener, especially if you have kids just starting out, are looking to buy a home today (particularly for the first time) or find yourself willfully in pursuit of the American dream.

To that last point, just as I welcome challenges to my prevailing points of view, I don’t believe there’s only one way to do things. As I noted the other day, as much as I love and advocate self-employment and freelance work, sometimes the dumbest decision in the world is quitting your 9-to-5 job—

Ben Le Fort talks about this all of the time. He’s the best side hustler I know and he works a 9-to-5!!

If you’ve got it made in a traditional setup—and you’re truly happy and content—why mess with it? It might just be your meal ticket to whatever you want to do in the next phase of your life.

That’s why when people—myself included—talk about the downsides of working traditionally for somebody other than yourself, don’t take it as universal. For every person who absolutely should get out of a conventional work situation, there’s at least one other person who would be insane to give it up. Just as you definitely shouldn’t succumb to the pressure of buying a house before you’re financially ready, you shouldn’t be swayed by the flavor of the day on work and lifestyle.

So, we’ll first consider how a $150,000 annual salary shakes out if you’re living the American dream.