How To Earn $200,000 And Just Get By… Bogus meme

One of the unfortunate aspects of Linked In is the abundance of stupid or bogus memes.  When someone gets really bad, I disconnect them.  However, a meme that recently caught my eye was this graphic titled “How To Earn $200,000 And Just Get By” with a link to a viral-wannabe ad (that I didn’t watch).

About five minutes of research confirmed that the author of this piece needs a different kind of help.

Warning: may contain bad assumptions
Source: may contain up to 50% bad assumptions

First, the author needs to hire an accountant.  Not only are the wrong base rates being used for taxes (overestimating it by $6k), there is also no evidence they’ve taken allowed deductions (standard deduction, mortgage interest childcare).  Net salary is closer to $146k.  (Source: IRS Topic 751)

Their cost of childcare is about 2x national average for a center-based childcare.  Savings: $12k.  Source: The Boston Globe.

The author feels entitled to take two $4k vacations, which is the average cost per week for an affluent family of four.  (Source: American Express.)  Since things are so tight, perhaps a staycation for one?  Savings: $4k with virtually no effort.

Gas is too high.  Assuming $4/gallon, 20mpg, 12k miles a year, I come up with $2,400 savings.  (Gas is currently under $2.05/gallon  Source: AAA).

Mortgage seems a skosh high.  If their house is $700k (based on the property tax note), and they have 20% down and a 30-year note, they should be able to get a monthly payment of ~$2650.  (Source.)  Savings: $4,200.

So with an hour into it, I found ways to shave the “what’s left” to be closer to $48k.  With that margin, I would pay off my Consumer Debt (unspecified in this), ditch the BMW for something modest, max out my Roth IRA contributions, and add to a 529 college savings.

One hour, and I saved them $40k
One hour, and I saved them $40k

In other words, we should not be rallying to the original author’s aid.

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