Annual Household Income

[coffee]

This has been asked a couple years back, but I know we are all curious about an update
What is your total HHI?

[sadlebred]

Keep in mind that some will be an income of 1, so they may not be as high as those with a 2 income HH.

[coffee]

Mar 4, 2021 21:40:26 GMT -5 sadlebred said:

Keep in mind that some will be an income of 1, so they may not be as high as those with a 2 income HH.

Correct.
A couple years ago I was amazed as how high the MM HHI average was compared to the average HHI in real life. It makes total sense that the people who is here is (or want to be) educated about finances and make better financial choices.
I wonder if the MM average is even higher now than a couple years ago since we are most of the same “old” people here climbing up the ladder, or if it’s about the same. Can you tell I’m bored?

[Cappy]

These are always so interesting to me! I live in a LCOL area and didn't even know folks were out there making so much or what those jobs would be. I have a PhD and 20 years experience and we are way at the bottom of this poll due to our sectors (education/non-profit) so it is sort of inspiring in that we earn so very little but have still accomplished SO much.

[chpmnk1015]

live in a HCOL with dual incomes but neither one of us are making a ton.. do ok though..

[wanderingback]

Mar 4, 2021 22:03:04 GMT -5 coffee said:

Mar 4, 2021 21:40:26 GMT -5 sadlebred said:

Keep in mind that some will be an income of 1, so they may not be as high as those with a 2 income HH.

Correct.
A couple years ago I was amazed as how high the MM HHI average was compared to the average HHI in real life. It makes total sense that the people who is here is (or want to be) educated about finances and make better financial choices.
I wonder if the MM average is even higher now than a couple years ago since we are most of the same “old” people here climbing up the ladder, or if it’s about the same. Can you tell I’m bored?

We're a pretty self-selecting group that many of us started on the knot where we were planning weddings that cost 10k plus, aka privilege. It's easy to make "better" financial choices when you're starting out ahead and not living on minimum wage. 

[jwright]

Mar 5, 2021 10:34:47 GMT -5 Cappy said:

These are always so interesting to me! I live in a LCOL area and didn't even know folks were out there making so much or what those jobs would be. I have a PhD and 20 years experience and we are way at the bottom of this poll due to our sectors (education/non-profit) so it is sort of inspiring in that we earn so very little but have still accomplished SO much.

I'm on of the ones who responded with a high income.  Most of it is from investments, not wages.  I suspect that is true for others as well. 

[sadlebred]

Mar 5, 2021 11:31:22 GMT -5 wanderingback said:

Mar 4, 2021 22:03:04 GMT -5 coffee said:

Correct.
A couple years ago I was amazed as how high the MM HHI average was compared to the average HHI in real life. It makes total sense that the people who is here is (or want to be) educated about finances and make better financial choices.
I wonder if the MM average is even higher now than a couple years ago since we are most of the same “old” people here climbing up the ladder, or if it’s about the same. Can you tell I’m bored?

We're a pretty self-selecting group that many of us started on the knot where we were planning weddings that cost 10k plus, aka privilege. It's easy to make "better" financial choices when you're starting out ahead and not living on minimum wage. 

I was MM even back then. I think we spent about $5000 including my dress and his suit and his wedding ring and the honeymoon (but not my rings. Those were purchased well before the wedding).

[coffee]

Mar 5, 2021 11:49:08 GMT -5 jwright said:

Mar 5, 2021 10:34:47 GMT -5 Cappy said:

These are always so interesting to me! I live in a LCOL area and didn't even know folks were out there making so much or what those jobs would be. I have a PhD and 20 years experience and we are way at the bottom of this poll due to our sectors (education/non-profit) so it is sort of inspiring in that we earn so very little but have still accomplished SO much.

I'm on of the ones who responded with a high income.  Most of it is from investments, not wages.  I suspect that is true for others as well. 

Help me out here as I am new to investing in other than Kids' college and Retirement. When does the investments count as HHI. Is it when you actually take out the money? Sorry if its a dumb question. 

[ohgillian]

Mar 5, 2021 12:39:04 GMT -5 coffee said:

Mar 5, 2021 11:49:08 GMT -5 jwright said:

I'm on of the ones who responded with a high income.  Most of it is from investments, not wages.  I suspect that is true for others as well. 

Help me out here as I am new to investing in other than Kids' college and Retirement. When does the investments count as HHI. Is it when you actually take out the money? Sorry if its a dumb question. 

I don't think this is a dumb question. I think I need clarity on this also. I didn't answer the poll based on the change in my net worth in a given year. I answered based on our wage income. I don't have any investments that pay dividends high enough to move me to a different poll answer. 

[jwright]

Mar 5, 2021 12:56:35 GMT -5 ohgillian said:

Mar 5, 2021 12:39:04 GMT -5 coffee said:

Help me out here as I am new to investing in other than Kids' college and Retirement. When does the investments count as HHI. Is it when you actually take out the money? Sorry if its a dumb question. 

I don't think this is a dumb question. I think I need clarity on this also. I didn't answer the poll based on the change in my net worth in a given year. I answered based on our wage income. I don't have any investments that pay dividends high enough to move me to a different poll answer. 

I don't think it is a dumb question either.  I answered the poll based on the income I report on my tax return.

That includes wages, of course.  And by investment income I meant - net rental income from properties, passthrough income from activities that I am not actively involved in (passive income), interest, dividends, and capital gains recognized.

The interest/dividends/cap gains usually stay in a taxable brokerage account but you pay taxes in the year earned.  If a stock increases in income, that gain is not recognized, but I'm talking about positions that have been sold resulting in a net gain and need to be reported.  The rental and business income for the most part stays in the businesses' bank accounts but we get distributions at tax time pursuant to the operating agreements of the entity; depending on the goals of the investment and our personal needs we can take profit distributions as well.  However, you have to pay tax on the net income regardless of whether it was distributed or not. 

[wildrice]

My HHI has changed a lot in the last couple of years because my H is making 50k more per year than he was as a PhD student. Granted, he was making peanuts a couple of years ago

My income personally hasn't changed significantly, ever. It seems I only manage to get small COL raises. I find it fascinating that there are jobs where the income grows exponentially over time!

[ohgillian]

Mar 5, 2021 13:33:53 GMT -5 jwright said:

Mar 5, 2021 12:56:35 GMT -5 ohgillian said:

I don't think this is a dumb question. I think I need clarity on this also. I didn't answer the poll based on the change in my net worth in a given year. I answered based on our wage income. I don't have any investments that pay dividends high enough to move me to a different poll answer. 

I don't think it is a dumb question either.  I answered the poll based on the income I report on my tax return.

That includes wages, of course.  And by investment income I meant - net rental income from properties, passthrough income from activities that I am not actively involved in (passive income), interest, dividends, and capital gains recognized.

The interest/dividends/cap gains usually stay in a taxable brokerage account but you pay taxes in the year earned.  If a stock increases in income, that gain is not recognized, but I'm talking about positions that have been sold resulting in a net gain and need to be reported.  The rental and business income for the most part stays in the businesses' bank accounts but we get distributions at tax time pursuant to the operating agreements of the entity; depending on the goals of the investment and our personal needs we can take profit distributions as well.  However, you have to pay tax on the net income regardless of whether it was distributed or not. 

I see. This makes a lot of sense. I think the difference is that I have investments, but not income producing investments. 

[Cappy]

Mar 5, 2021 14:04:38 GMT -5 wildrice said:

My HHI has changed a lot in the last couple of years because my H is making 50k more per year than he was as a PhD student. Granted, he was making peanuts a couple of years ago

My income personally hasn't changed significantly, ever. It seems I only manage to get small COL raises. I find it fascinating that there are jobs where the income grows exponentially over time!

Same. When I met with a CPA she was telling me to consider selling off my stock now "while your income is so low" and I had to explain I'm earning the most I'll ever make in my profession.

[ohgillian]

Mar 5, 2021 14:22:50 GMT -5 Cappy said:

Mar 5, 2021 14:04:38 GMT -5 wildrice said:

My HHI has changed a lot in the last couple of years because my H is making 50k more per year than he was as a PhD student. Granted, he was making peanuts a couple of years ago

My income personally hasn't changed significantly, ever. It seems I only manage to get small COL raises. I find it fascinating that there are jobs where the income grows exponentially over time!

Same. When I met with a CPA she was telling me to consider selling off my stock now "while your income is so low" and I had to explain I'm earning the most I'll ever make in my profession.

Wow, that was not a great thing for her to say without understanding your trajectory. :/ 

[boiler717]

Mar 5, 2021 14:04:38 GMT -5 wildrice said:

My HHI has changed a lot in the last couple of years because my H is making 50k more per year than he was as a PhD student. Granted, he was making peanuts a couple of years ago

My income personally hasn't changed significantly, ever. It seems I only manage to get small COL raises. I find it fascinating that there are jobs where the income grows exponentially over time!

In my industry it’s very common to get large increases when you move companies. The recruiter calls I get now are anywhere from $25-50k+ more than I currently make.

[heygrey]

Mar 5, 2021 14:04:38 GMT -5 wildrice said:

My income personally hasn't changed significantly, ever. It seems I only manage to get small COL raises. I find it fascinating that there are jobs where the income grows exponentially over time!

My job is the same. I get a COL increase every year and that's it. People who have been in my position for 1 day make the same wage as people who have been there 20 years and have a whole lot of experience and specialized training. It really disincentivises people to work hard and be good at their job. 

H's job is also similar, but he has more potential to move to a new role within his company that could come with a pay bump. He's already made some smaller jumps to more technical positions. Becoming a supervisor would have a decent bump, but that's about as high as he'd get. 

[lilypad1126]

I’m always amazed at how much money some people/families make! And then I remember that my H basically doesn’t work, and most people my age are in a 2 full time income family. My H is a older than me and has tapered off his consulting work over the last 4 years, but we are trying not to touch his investments just yet, so it’s really just my income that’s being reported. And, until literally this month, I’ve worked in higher Ed where raises are limited. I’ll be interested to see how my income changes with my new job that has a bonus structure and the potential for real salary growth.

[froggy76]

Mar 5, 2021 11:49:08 GMT -5 jwright said:

Mar 5, 2021 10:34:47 GMT -5 Cappy said:

These are always so interesting to me! I live in a LCOL area and didn't even know folks were out there making so much or what those jobs would be. I have a PhD and 20 years experience and we are way at the bottom of this poll due to our sectors (education/non-profit) so it is sort of inspiring in that we earn so very little but have still accomplished SO much.

I'm on of the ones who responded with a high income.  Most of it is from investments, not wages.  I suspect that is true for others as well. 

Mine is wages and I have done a poor job investing. I'm curious how you got to this point where most of your income is from investments? Did it just build up that way gradually over time?

[Accountingcat]

I'm gonna need one of the 27 posters that make over $500k to chime in and tell me how.

Like I just don't get it. My HHI income is relatively high (HCOL, business owner+ a decent occupation) but even I'm not sure how to hit $500k.

Per this article: money.cnn.com/calculator/pf/income-rank/index.html
HHI over $200k = top 6% in US
over $250k = 4%
over $350k = 2%
over $450k = 1%

[RockNVoll]

Mar 6, 2021 21:48:33 GMT -5 Accountingcat said:

I'm gonna need one of the 27 posters that make over $500k to chime in and tell me how.

Some professions/industries I'm familiar with that pay very, very well:

• Strategy consulting
  
• Investment banking
  
• Private equity
  
• Hedge funds
• Certain physicians/surgeons, particularly at senior levels
• Big Law
• Mid- to senior-level executives at successful companies
• Lots of random private companies run as family/lifestyle businesses
  

If you're a dual-income household and both hold down jobs like these, you could easily be over $500k.  You also probably work a lot.

[wanderingback]

Mar 6, 2021 21:48:33 GMT -5 Accountingcat said:

I'm gonna need one of the 27 posters that make over $500k to chime in and tell me how.

Like I just don't get it. My HHI income is relatively high (HCOL, business owner+ a decent occupation) but even I'm not sure how to hit $500k.

Per this article: money.cnn.com/calculator/pf/income-rank/index.html
HHI over $200k = top 6% in US
over $250k = 4%
over $350k = 2%
over $450k = 1%

People are pretty secretive on here so I don’t think anyone is going to chime in with specifics. But maybe someone will surprise me!

I also think most people on here are in relationships so the 500k+ numbers are likely 2 people’s salaries, but I obviously could be wrong. I answered with my salary only though because my situation is complicated at the moment.

Between my circle of friends who are doctors and my partner’s circle of friends who are musicians, we definitely know people, in particular couples, who likely make over 500k. Well at least before Covid hit. But nope myself alone definitely don’t make 500k!

Obviously certain careers have salary caps, but for others "the sky is the limit" essentially.

[niq]

Mar 4, 2021 22:03:04 GMT -5 coffee said:

Correct.
A couple years ago I was amazed as how high the MM HHI average was compared to the average HHI in real life. It makes total sense that the people who is here is (or want to be) educated about finances and make better financial choices.
I wonder if the MM average is even higher now than a couple years ago since we are most of the same “old” people here climbing up the ladder, or if it’s about the same. Can you tell I’m bored?

I always like to look at median family income by state. It's gone up a lot in the past few years ... lots of states have a median HHI for families of 4 that's > $100K. These are the 2019 numbers since 2020 was such a weird year. www.justice.gov/ust/eo/bapcpa/20191101/bci_data/median_income_table.htm

MM is still ... higher than that though.

[Beeps (WOT?*)]

Mar 6, 2021 22:52:34 GMT -5 RockNVoll said:

Mar 6, 2021 21:48:33 GMT -5 Accountingcat said:

I'm gonna need one of the 27 posters that make over $500k to chime in and tell me how.

Some professions/industries I'm familiar with that pay very, very well:

• Strategy consulting
  
• Investment banking
  
• Private equity
  
• Hedge funds
• Certain physicians/surgeons, particularly at senior levels
• Big Law
• Mid- to senior-level executives at successful companies
• Lots of random private companies run as family/lifestyle businesses
  

If you're a dual-income household and both hold down jobs like these, you could easily be over $500k.  You also probably work a lot.

Add into it "time in service" or aptitude and ability to network in these types of careers. I think a lot of the folks at that range aren't just starting out. This board has been around for a while.
Also, certain types of commission sales could be added to the list.

[shakinros]

Accountingcat I know two families in my MCOL area who make a combined HHI of over $500K. In both cases, their household is a pair of doctors with two kids.

[ohgillian]

Mar 6, 2021 23:01:20 GMT -5 wanderingback said:

People are pretty secretive on here so I don’t think anyone is going to chime in with specifics. But maybe someone will surprise me!

This is true. Even the AE posts periodically where people share their budgets are like $200k max. I’d love an AE post about where the $ goes in higher paying households.

[awkwardpenguin]

Mar 7, 2021 8:53:05 GMT -5 ohgillian said:

Mar 6, 2021 23:01:20 GMT -5 wanderingback said:

People are pretty secretive on here so I don’t think anyone is going to chime in with specifics. But maybe someone will surprise me!

This is true. Even the AE posts periodically where people share their budgets are like $200k max. I’d love an AE post about where the $ goes in higher paying households.

I'd guess people are not looking for feedback on their budgets at that level.  So it'd just be informational only, which is a lot of work to be gawked at!

People I know at that level of earning are the following professions:
-one doctor, one lawyer
-one college professor, one mid-career engineer (so like 20 years of experience)
-one doctor, one health care administrator
-a mid-level tech employee and a public interest lawyer

[konapoppy]

I believe there are people here who make that much, AND there was no SS to just click and see the poll results. So, some could be from people randomly clicking to see the poll.

[bdubs419]

I’ll share a bit of info about my answer. I selected 300-350k per year for both myself and DH combined. We both work in corporate finance. We both received bonuses that were less than average this year (due to Covid/company performance being down for 2020). Likely even with an average bonus we would likely still be in this range but closer to the top. Also we received minimal raises this year due to the same reasons listed above.

[jwright]

Mar 6, 2021 21:48:33 GMT -5 Accountingcat said:

I'm gonna need one of the 27 posters that make over $500k to chime in and tell me how.

Like I just don't get it. My HHI income is relatively high (HCOL, business owner+ a decent occupation) but even I'm not sure how to hit $500k.

Per this article: money.cnn.com/calculator/pf/income-rank/index.html
HHI over $200k = top 6% in US
over $250k = 4%
over $350k = 2%
over $450k = 1%

I'm in SC, low-mid cost of living.  As a CPA, I prepared tax returns for many high net worth individuals with incomes in the high six as well as seven and eight figures.  They were business owners, A LOT of real estate owners and developers, occasionally lawyers and doctors in the $500k-$1M range.  

I'm currently helping part time and preparing a group of ten tax returns for clients in the Charleston SC area - all seven and eight figure incomes, all hedge fund investors.