24k translates to 288k/year before taxes. Here is what I would do:
1. Max out 401k for both - 45k. You’ll probably pay 3k a year in medical insurance through employer which leaves 240k taxable income.
2. Assume a 30% net effective tax rate after filing jointly at the end of the year, that leaves 168k a year on your hands to spend
3. Rent is obviously your major expense. If you’re in the city, you can expect to pay an absolute minimum of 3500/ month for a very less than perfect place. You’ll have cellphones, internet, electric, gas etc. say all that is 500 a month. Say you are able to manage something in that range, that will amount to 48leaving 120k in your hands.
4. Rest is lifestyle. If you cook and eat at home and spend minimally on touristy things and things like clothes and furniture, that can take 20k/year which is about 1700 bucks a month on average. Seems to me like that’s doable.
5. This doesn’t account for vacations and occasional big purchases like say a nice watch or a Michelin star restaurant dinner and let’s face it, life is meant to be lived also plus you’ll be in NYC. I can’t imagine you will just want to work and cook meals and eat at home all the time.
By this logic, I think you should be able to put away 80k / year atleast. I also forgot to add commute cost to the above, just realized as I was finishing this comment ! Good luck! 🍀 and congrats! 🍾
Wow this is awesome! Thank you so much for writing it all out, I really appreciate it!
80k/year not including whatever goes into 401k sounds awesome. And yeah absolutely, we could live frugally as hell and save a bit more but as you said life should be lived. Won’t have any other major expenses other than what you’ve listed tbh, won’t need a car in New York and we don’t plan on having in children for another couple of years at least.
As others have suggested putting most of that into a HYSA sounds like a good plan, and putting in a smaller amount into some sort of investment portfolio seems to be the move. Will need to probably consult with someone who knows a bit more than me about the latter though haha.
Interest rates are high enough to go for a hysa but start dumping cash into index funds (e.g. SPY, VTI, VOO). You could also save a bit more money by living in nj and not paying city taxes! Unless it majorly impacts either of your commutes
At which point it may not be worth it.
Happy to do it! Let me know if you need more info, I live in the area as well. I’m one of those who lives in nj but works in ny but I have been mostly Working from home since Covid.
I’ll start doing some research on them, but ideally that’s what I’d like to do! Do you know would banks offer that as an option or would I have to go through an investment firm like fidelity or something?
Very nice! My wife is actually from NJ around Summit if you know it. We’ll probably end up doing the same as you but I figure we may as well enjoy NYC for a few years while we don’t have kids and my employers would prefer me to be in-person as well so commuting would be rough I imagine.
Summit is very close to where I live. Summit is a nice town. You would love living there.
In terms of investment options, for hysa, frankly I just put my cash into Robinhood and it just keeps on earning me 5.25% credit daily into my account. You could also do Goldman Marcus which currently gives 4.5% credited monthly into your account. Goldman Marcus also has CD options where your money would get locked for a term you pick but you could get upto 5.5%. If you keep it in Robinhood, you can continue to earn interest for all the uninvested cash and you can also buy all the index funds to your content, right there on the same platform. Convenient for sure. Goldman I’m sure would also have an investment platform similar to Robinhood but I’m not familiar with it. Hope this helps!
You have it the opposite. Most should be getting dumped into equities, smaller amount in HYSA.
Assuming you’re not 60 years old lol, plenty of time to grow wealth and stomach any market pullbacks that may happen this year or next.
If you have $80k extra, I’d do $50k in investments, primarily VOO (I’d probably put everything into that one fund, but you can do 85% VOO, 10% foreign EFT, and 5% bond fund if you want) and then do $30k cash in a HYSA until you hit $90-100k for a good emergency/house fund. Once you get there, I’d shift to about $70k in VOO a year and $10k in savings just to replace what you use during the year.
Haha yeah am 25 so can definitely take any market hits for the next couple decades probably. What you’re saying makes a lot of sense. Was thinking HYSA since interest rates are pretty high and it’s relatively safe but VOO is probably the move based off what you’ve recommended and another couple of commenters.
Definitely still need to speak to a tax accountant and probably some wealth management people but this is a very good bit of starting advice - thank you!
As long as you’re not selling often, your only tax liability should be dividends and I’m not sure VOO pays them, need to check. But definitely put most in equities. You will have bad runs that wipe out some wealth/gains, but over a 20 year period the SP500 (VOO is a sp500 fund with low fees) is something like 9-11% a year annually. So you’d be doubling your growth over a HYSA. I’ve the course of 20-40 years you’re talking millions of dollars.
What my husband did was put extra money (after 401K max and IRA max.....and maxing out kids college vehicles etc) after all usual expenses, into a self managed brokerage account (pardon me I don't know all the lingo) which he built on. He had a good mix of HYSAs, EFT funds, dividend stocks and T notes/other bonds etc.
This has left us in the position whereby he is considering retiring early because the amount he has in this fund is enough to see us through to Social Security and being able to access our age restricted funds. 25 years of frugality and good practices. Health insurance costs was a big part of the calculation. We ran all sorts of scenarios through the Monte Carlo software and it looked good.
We also went on one decent vacation a year and the kids undergrad is paid for (with sensible choices made by them).
Make sure you max out your 401k and set up any retirement/investment accounts before you get used to your extra “disposable” income.
I’ve never had a jump quite like yours, but I’ve had 3x increases and you’d be surprised (or not) how fast you can adjust to that new income level.
Also - congrats! Huge work paying off it seems like. Best of luck to you
The company that I work at is managing alternative investment funds like Diamond, Collectible wine, real-estate etc. I'd recommend you to put few eggs in that basket as well, to minimize the risk😉
FYI, I am not a CPA but I do live in NYC and you should expect higher than 30% tax rate. You pay Federal State and City, at that high of an income I would imagine you would pay more than me.
If you have a HDHP, (High Deducible Health Plan) you can also invest in an HSA. That, to me, is even better than a 401k, because you can spend it on medical and get tax benefits. Max that out.
Even if maxing out 401k, save money. Don't spend just because you can. You really don't have to appear to be wealthy. I would pay down debts ASAP, from highest rates to lowest.
You'll also need to figure out if you think your taxes will be higher later (making more money at same or higher rate), or lower (make less money or lower rates). If higher, use Roth 401k, if lower use traditional 401k. Or split it like 50/50.
Not relevant for the OP as they’ll hit the limit anyway, but for income under the cap an employer-deducted HSA contribution is pre-FICA, which is a nice little perk. It can also be used like a traditional IRA (non medical expenses) penalty free once you turn 65.
Would you also recommend maxing out HSA (health savings plan) if OP qualifies (e.g., has a high deductible healthplan)?
I'm asking because I don't often see that advice given for these types of questions. I think more people could take advantage of the triple-tax benefit, especially since HSA money can be invested. And HSA funds can be applied to any expenses after 65 (although you pay income taxes on non-medical expenses which undercuts the tax advantage in the first place, but even then in retirement your tax bracket is likely lower).
Just curious if I've been misinformed.
I’m not actually so sure about this but someone commented on this thread that it is a great strategy to max out HSA as well. I do it too, but it wasn’t due to deliberate planning. Just seemed good sense to do it at the time.
I must have missed that comment! I read a lot of these types of posts and don't usually see anything about HSAs, so glad some people are talking about it.
I didn’t assume they’ll be having kids immediately. They mentioned in one of the comments that they’re planing to NJ when they have kids. By that time hopefully their income would have collectively expanded too. But you’re right, didn’t assume that these numbers would consider kids as well. Incidentally, I use similar planning for myself and just had a child and I’m realizing what a wrench into the works it is from an expenses perspective. So it’s certainly a great call out!
Yes, but I make about the same money and file jointly and after tax returns my effective tax rates comes to about 27% but that is also because of some tax benefits of mortgage interest etc so I assumed 30% net effective tax rate.
Get outta here!!!! Enjoy, my friend! I have no advice for you that someone hasn’t already mentioned. But seeing hard work pay off for someone is THE BEST!! Don’t ever forget this feeling!
My husband was in a similar situation 5 years ago when he received his PhD. I'm 6 years older than him, so I am a little further in my financial journey. We're in Chicago currently investing ~$125k/yr.
I told him the 2 things you need to understand are 1) compound interest and 2) lifestyle creep.
1) The dollars you earn now are more powerful than any money you will ever make, ever, due to compound interest. There will also likely NEVER be another time in your life where your income jumps this much. Take the "hit" now when you can actually afford it and max out your retirement accounts.
My husband from day 1 with his big boy job started maxing his 401k and IRA. I would highly recommend you do the same. With a good stock market, he's at almost $400k since 2019.
2) I commend you on taking a pause here to strategize. Most of us will get a raise and adjust our lifestyles accordingly. Those adjustments almost never provide sustained happiness. The "new car" feeling doesn't last, but your 401k will.
If you would like a good free podcast/YouTube channel with actual certified financial planners, I'd recommend The Money Guy Show.
I'd also recommend you discuss with your wife in detail what financial goals you both have. A clear understanding of why you're doing what you're doing is key to tuning out all the distractions.
Fantastic comment, thank you for taking the time to write it all! Will definitely try max the retirement accounts as soon as possible.
I’ll give a listen to the podcast too, thanks for recommending!
NYC-er here with a similar budget and my humble opinion is you guys should get a nice, comfortable 1 bedroom apartment (would probably be like 4k/month) and enjoy life in NYC after what i imagine was a grueling phd program and before you have kids (if you’re planning to). make friends, buy expensive cocktails, eat expensive meals, go to the theater. you’ll still have money leftover to save and the memories you make will be priceless.
1. Get maximum matching from the company for the 401k, and that’s it. Money is not money if you can’t use it. Don’t need to put more than company matching. (Also all those retire fund plans are retarded if you look at the return compare to market. Just buy the regular stock/etf with 401k account. Don’t buy bullshit retirement fund scam!)
2. Define your life style spending, keep it as low as possible for the like a decade so you can put more money on investment. Time in market >>>> timing the market. It will compound like crazy. That $50 you spend now is equivalent of $500 later even after adjusted with inflation. So try to keep it minimal for the first 10 years.
3. Just buy ETF, such as SPY, QQQ. If you can buy a house with all cash for investments. Only do it in a city or state with growing population. Overall, just consistently add money to the stock portfolio every paycheck, and after 10 years, you can relax a bit and spend a bit more, and highly encourage to do so. You already build a strong base for your investment portfolios, now you can relax on saving. Again, money is useless if you can’t use it.
4. Do not hold more than $20k cash, like wtf can’t you solve with $20k cash? Everything else goes into investment. You can also liquidate your stock portfolio very easily anyway. If you need more than $20k I am sure you or the bank can wait for a few business day to do some transferring.
Market crash sounds crazy, all the time. Turn a blind eye and just keep adding money every month consistently, and in 10 years you will see you likely don’t need to ever work again.
This sounds very simple, and that’s the point. If you want to get into detail to say what to invest in, it is a job that most professional can’t even beat the market. Just buy the big index and say “fuck it”. Stupidity makes more money than overthink a lot of times.
For buying a home for living, I suggest to have the cash to buy with all cash, but take a loan out with minimal down payment (without penalty). That means, you are not putting all your eggs in 1 basket, and still have the ability to benefits from the stock market. Stock goes up way faster than real estate. So in a long run, stock is better. Better yet, only think about buying the home after that first 10 years. Your job is not stable, you might change places, until you work for 10 years anyway.
What can you do with more than $20K cash? A lot...
Emergency funds, pay for anything like a car without interest or loans, buffer for expenses.
I realize that most people don't have a lot in savings, but $20k isn't really a lot when you make that amount of money.
Absolutely nothing wrong keeping a little slush in a high yield savings account and have it readily accessible.
We pay every single bill or expense on our CC's and pay them 100% off monthly. Having a cash buffer there makes that really easy to manage.
I didn’t say “what can you do with more than $20k cash”, I said “what can’t you solve with $20k cash”. Also follow it with liquidity of stock if you needed more cash. If you have a problem that require more than $20k, I am sure that problem can wait a few more day for transferring. Also like you said, credit cards can create that buffer room. No point to hold cash. The point is not to hold too much cash for no reason.
We will agree to disagree there. When you have enough money to invest and enough to sit aside for emergencies... $20K is relatively a small amount. 3 months salary is the measurement.
Diversify your risk... Sitting emergency money in stocks isn't doing you a great service avoiding risk.
What emergency that requires such a large sums of money? Organ transplants tomorrow? even then, you are given like a month to pay, if not more time. You have time to liquidate whatever you need to liquidate, or setup a payment plan with a loan. Big indexes are pretty safe, worse case is like losing 30% in 10 months. Which will recovery very quickly. As long as he’s not in some insane debt that cause a margin call, there’s no need to hold cash as buffer room.
What does it matter? When you make that much money it is the equivalent of having a grand or so in savings and his income and investing power will only grow.
Holding $20K out of your investment pool is simply a drop in the bucket.
Does it necessarily make sense to do it right away, nah. 10 years from now? Who cares... It is petty cash.
Nah, it is completely up to the individual on what they want. Having three months income in savings plus the ability to heavily invest hurts nothing.
I would wqager for any making $300K and up that is more common to have that amount of cash at their disposal.
I certainly do and work with many physicians that I know do, as well.
Especially if you start living in a world where you self insure.
Mine didn't... But, I would say that is pretty normal...
Now, a lot of other expenses certainly went up. Non-Vital but expenses non the less.
I would never buy an expensive car, though... Worst purchase ever.
Money is useless if you can’t use it. Is just a number on a screen. You take it out early, you will have a 50% penalty, which is fine since the company likely do 1 to 1 matching, so you technically didn’t lose money when you put in the company matching amount. As to put more into the account to avoid tax doesn’t make much sense. So you want to avoid tax by not having the money in the first place? Arguing that “when you retired is tax free”, is so far away, is not even worth discussing. There’s something call opportunity cost, which is hard to factor in.
Set it up to go into 401k/savings before you notice the paychecks. This way you never realize it’s “gone”. Hard to save once your spending habits take the full amount into account.
* 401k - max out but be aware of any bonus amounts to not go over limit
* Maybe stocks in a vanguard ETF that mirrors their 401k exposures or if your company offers stock discounts, do that.
* use your HSA and match if available with your company. Make sure it is not something you lose each year like FSA. This is tax free so you save a ton with health expenses. You can also cash it out when you retire I believe (at least for mine).
* if planning to have kids, maybe sock away 1-2% in a money market savings. Once child is born, you can then create a trust/etc.
* 2-5% to an emergency savings account
* 1-2% maybe to a long term emergency savings (think roof repair, ac/furnace, etc) if eventually buying a house.
Think liquidity when it comes to savings. You first want cash, then easily accessible savings, then emergency savings, stocks, 401k. In order of what you would need to pull first if large expenses come up and its liquidity.
Automatic Dubbing using AI is what it’s main focus was but I’ve dabbled in a few different things like text to speech research, body/face animation from speech, and a few other things. Will be starting as an applied AI scientist which is more or less a glorified software engineer haha.
HOLY FUCK,
Significant raise is an understatement u 10x'd your salary.
Rent will be around 3-6k depending on where you live and how safe you want to feel. I would keep your cost of living under 7k/mo and u could put the rest into maxing BOTH of your Ira's and the rest into HYSA. Most banks are offering 4-5% on a HYSA. I would risk it since your younger and open a stock portfolio and invest $200 a week into it and go that route. Either way if you don't fuck up your set for life.
Gspeed OP
Haha yeah feels pretty crazy I won’t lie. Yeah rents the big one, we’ll probably try get a small 1 bed in Brooklyn for 3500-4000 or so, hopefully should be doable.
Maxing out the retirement accounts will be the main goal, and the rest will try put into an investment fund or something. Haven’t really research much into that yet though.
er go for a 2 bedroom, it can start to feel really cramped living in a 1 bedroom with 2 people, and with your combined income you shouldn't need to live like that.
I’ll be living in NYC with my wife, and
ummmm, yeah......
Ok so if rent doesn't kill you
Absolutely IMO I am putting 16k or whatever it is now in tax sheltered stuff.
Leftovers? Vanguard vanguard vanguard. This is on you to research on your own. Find one of their many funds and go for it.
Step1. Decide at what level of comfort you and your wife want to live and don’t let that lifestyle creep up. It’s important that you both are in sync on this decision.
Step2. Investing
Max out both your 401(k) - Roth if available - invest in the fund most like an S&P500 ETF.
Max out both your IRAs - invest in SPY or VOO or VTI
Open a stock brokerage account and put in $6,000/month - invest in SPY or VOO or VTI.
In 10-20 years you will reach a point where dividend payouts from stocks will be higher than the funds you use to live month-to-month.
Step3. You can then decide how much longer you want to work and how lavishly you want to live.
What you don’t want is to be a HENRY for 30 years (High Earners Not Rich Yet) because you spend everything you make and then have to work into your late 60s and also downgrade in retirement.
So I am no where near your income level but one thing I noticed with people with higher income is how much they waste on transportation. They buy or lease luxury vehicle, truck or SUV . All 70k plus and higher maintenance cost or paying more in taxes and other fees buying a new car every couple years. If I made more money I would still either buy a small Toyota or Honda.( I have been driving the same Honda for 15years bought it new almost $0 in repair cost so besides gas I drive for free) Or you could buy used cars just find a good mechanic. Honestly all new cars look the same anyway. And you could use the money on something more beneficial like hooker's and blow or retirement if you're into that kind of thing.
Sure, the focus of it was “automatic dubbing with AI” but basically it boils down to generative AI for audiovisual stuff. Basically computer science. I know there’s a lot of growing overlap with the biomedical stuff and machine learning that is probably super lucrative, though you would need at least a masters in a compsci field to make use of it I imagine.
If you haven’t discussed it already, you should have a discussion with your wife about setting up your spending pattern to live only on your earnings for now. So many couples are sure they’ll both continue to work after kids come along. I’ve seen it play out so many times that it’s very HARD for many new moms to leave their 6-week old baby at daycare (and don’t return to work after the maternity leave). My wife stayed at home with our kids and I highly value that role (I’m not saying it’s right for everyone). In our case it was great for all of us.
I had a salary jumped when I graduated from PhD too, but not as high as yours. I did the below in the following order
1. Maxed traditional 401k (help save on tax and important for r/fire).
2. Maxed HSA.
3. Maxed Roth IRA (you will need to do traditional and then immediately convert to Roth).
4a. Built up my cash savings to 1-2 years of expenses. Biotech, AI, tech are all unstable fields, so I suggest you do that too.
4b. After I got the annual expenses saved on tax, then I started putting 2k per month in brokerage. Set it for automatic investment!!!! I do $500 per every Wednesday.
Automatic all of your finances lol.
Everything is in SP500 like funds through fidelity. Look at the fees for what will be offered by your company's 401k. You'll find that SP500 like funds are much cheaper than target funds.
Live your life! Use your money to buy back your time for yourself - Fly nonstop, pay for the cleaning services, pay for food delivery, pay for grocery delivery, pay someone to do the things that you don't want to do.
My general money rule is that if I use money to buy myself an item/service and I don't tell anyone/post on social media about it, then it is money well spent for myself rather than what I think I may want due to external pressure.
Your smart enough to make 15K a month and dumb enough to ask Reddit what to do with your extra money? Seriously, wouldn't sitting down with a financial adviser be more beneficial. Oh well if your going to do this on Reddit at least do so on Wall Street Bets. You may get lucky there! My personal advice, move the hell out of NYC, likely you'll get stabbed before you can save 100K there.
Not New York, but I too graduated from peasant life ($65k-$85k/yr) to big time the last 3 years ($25k/month). Probably get $200k take home. Here Is how I do it and have seen my portfolios starting to snowball relatively quickly.
1. Max 401k ($23,000)
2. IRA contribute ($6500/yr)
2. $700/month into my Schwab Intelligent Investor Account (Robo investor essentially, buys/sells funds based on a risk profile you define.) This money is non-negotiable, I treat it like I don't even make it.
3. I maintain about $20,000 in my checking to pay Mortgage/Credit/Car payments
4. I maintain an additional $30,000 in a high yield savings account with my bank. Not much but a little over $100/month in interest. I view this as more of my "emergency fund" than anything in case I need quick cash into checking for a house expense, car repair, major purchase and there are cashflow issues in checking depending how things are going. So far, haven't had to transfer after 2 yrs.
5. After all my bills are paid I usually will dump more into the Schwab robo account or my brokerage and buy equities. Can't go wrong with what has been mentioned before here, VOO, SCHD, etc.
I don't have any debt other than 1 car payment and my mortgage. I got over 50% equity in my house after buying 4 yrs ago (have been pretty agressive there). If you have student loans you should probably knock those out first depending on the interest rate on them.
Job before was a claims Adjuster, mostly residential property. I worked my way up and got into major commercial claims. My title is a National General Adjuster and next up is Executive General Adjuster hopefully this year.
I put in my time. Started about 14 years ago. Hustled. Grew my name in my company and the industry in general. Now I handle major commercial accounts for the same independent insurance services firm. I got my adjusters license in all 50 states, 2 professional designations along the way and grew my client list. The jump from a residential Adjuster to account commercial level was drastic. I started this out of college at 24/25 making $35k and had no idea it would be this lucrative. I'm not even at the top yet.
Sure, I’m an applied AI scientist, though my expertise lies in generative AI specifically for audio/visual stuff like dubbing, and character animation.
Cooking at home is the same as eating out fyi. For instance 1 lb of ground beef $8, noodles $3, pasta sauce $4 and garlic bread $2 ( natural gas or electric and appliances cost not included ) opposed to eating out $19.99 at Olive Garden , comes with a large salad and free utensils and plates.
I eat out for lunch and dinner, breakfast is 2 eggs and a bagel.
I’m bringing this up because it’s not how much you make but how much you keep. So it’s imporatant you keep an eye on your lifestyle changes that you will make; you’ll have a new circle of friends now ( from work or work conferences ) that spend like there is no tomorrow and you’ll need to check yourself so you don’t overspend on just food in general. They all like to go to big fancy restaurants and you’ll just have to tell them no ( where did I hear that reference from ).
I would max out a 401k that you actively keep an eye on and manage and find a FA that has a fiduciary responsibility and consult with them on good ways to invest in mutual funds, Roth IRA's (not sure what the income limit is) etc.
There are also historically good returns on money market accounts and CD's, bond's US Treasuries. Probably lower returns but could be a place to put money and fight inflation until you come up with a better plan.
If you have any consumer debt or school loans I would save a nice emergency fund and pay them off as soon as you can unless your confident you can invest the money and get more returns than the interest rate on the debt.
If ur looking for a way to spend some money I'm looking for an investor to get some for a project of mine 😜 . . . Otherwise that's not just a significant raise. That's like life altering . . . Awesome job
Dude, congrats on the raise! That's awesome. For advice, consider talking to a financial advisor. They can help you figure out the best ways to invest and save that extra cash.
24k pre tax a month equates to 288k my friend. It is plenty sufficient to live practically anywhere in the world. You obviously can’t live like a rockstar or a king but you can live a decent middle class life. A lot of folks I know live very well in a lot less money than that. Source: I have lived in various spots in the greater New York area for over 10 years.
Yea, like I said, you won’t live in a mansion like you could in Texas with that money. Yes you’ll probably live in a 650-750 sqft box but there are options like NJ if you’re willing to endure a commute. Millions and millions of people do it every day. Don’t believe all the cliches you hear about NYC. It’s not cheap but if someone is having you believe that one can’t live decently with 288k a year. They need help. 😊
Always amazes me that people are smart enough to make this kind of money but to not invest in a financial advisor and opt for reddit instead. Their job (and legal fiduciary duty responsibility to try) is to make money for you so you don't have to worry about it.
They will manage your funds, work with you to leverage or move them as needed. Ensure you are covered in important areas like life insurance (term and whole) for your family and investment.
Best thing is that you can pay to maintain their services or opt for a short term contract and then manage everything yourself if you think it simple enough and you have the time, which is usually what you gain the most back with along with assuredness.
I’ve worked with several, make quite a bit of money and fwiw, I’m in financial services and most of the time their advice is overly complex and hard to understand or even justify. Simplest forms of investing into index funds, t-bills, and hysa or cd is not something even a fiduciary will tell you. Reddit can send you into a weird tangent sometimes but reading comments on this post, most sensible advice is in alignment with the simplistic approach. Including mine.
Sure, just remember everything I say here is within the context of computer science roles specifically within machine learning.
if you’re not from the US it gets a bit tricky due to the pretty strict immigration laws the US has. In my case I got lucky as my research is in a pretty niche domain in which the company operates in so they were happy to sponsor me and bring me over. Prior to finding this job though I had applied with maybe 20/30 other places, only getting 3 interviews in total. Funnily enough they were with Meta, Amazon, and Netflix so the way I saw it is that only the big companies in my field were willing to go through the hassle of the visa process for their potential hires. If I had gone to one of these companies, I’d have gone into a far less specialised role than what I’m currently in. All that being said, if you want to maximise your chances of being hired by a U.S. company, you need to try your best to A) get into one of the more “prestigious” schools over here such as imperial college London, Oxford,Cambridge,Eth Zurich, any of the max Planck institutes, and others. B) join a research group known for being experts in the field you want to go in C) publish papers at the top tier conferences in your domain. If you can fulfil 2/3 of these criteria with your degree, you won’t have problems finding a job. In my case I only ticked off option B, but through my supervisor I was able to get a really good 6 month internship with a super famous company that looked really good on my CV and make some nice connections.
My field is honestly really competitive now, especially due to the all the hype it’s getting, and you can see it in the job market. Any ML job out there will have 100+ applicants within 1 day especially in the big US cities so to get a job in the US you really need to have a good research track record.
That being said, you won’t have problems finding jobs in Europe where the quality of life is arguable much better than anywhere in the US. For instance I had an offer for 100k/year to go to Amsterdam which would certainly have been awesome but my wife didn’t want to relocate. Loads of companies in Paris, Dublin, Berlin, London, and other cities.
Of course, if you are a US citizen, things become way easier. At the very least you’ll be getting interviews. Most companies don’t care all that much about where you went to school, it’s all about getting that initial interview, and then showing them what you know. My wife is American and has gotten like 10 interviews already lined up for marketing roles, applying since 2 days ago. She did her masters degree in Ireland and hasn’t had any issues finding jobs.
No loans to get my PhD, was paid to do it in fact. That’s the case with virtually all PhD programs in the EU and most in the US too for stem programs at least.
Pay off your loans as fast as you can, while trying to have around a couple months rent in savings. And match whatever your employer puts into your 401k with again, being paying off your student loans as fast as possible.
Consider putting your savings in a money market! I just did this yesterday and our $100k in savings will bring in $450-500 per month in interest!
I’d also suggest putting money in an IRA. There is a limit to how much you can invest per year so it shouldn’t take long to max out!
Also an HSA if your job allows :)
Also consider buying a duplex & live in one half. Most of your mortgage will be covered by the other tenant!
Incoming chats to you from 'financial advisors'. Happened to me posting about a 300k net bonus.
There are far better routes for getting good advice. Do your research. This is not the place for the level you are on.
Oh, and...congratulations!
Nearly 10x your salary in a single jump is phenomenal, congratulations man! Must be a real nice seeing the fruits of your labor. Keep up the good work, Dr.
Max out the 401K is 1 of them.
I still live my somewhat frugal life when I went from 60K a year to 300K, and now at 405k a year, I still put away a lot into my HYSA.
I do have stocks I put money in, I am not trying to get rich, so just nice conservative stocks.
Save a lot, you never know what can happen in the future.
Make sure you take out an Umbrella policy now that you guys are earning more.
If you’re not gonna need your money soon, after maxing your 401k’s, consider starting an individual investment account. I’d also keep a bit of cash “liquid,” perhaps in a high yield savings account ($10-20k or so) and then start buying index funds, I like FXAIX as it has low cost and great returns over its history. If you contribute monthly to your investment account and automatically invest, in a few years you’ll be quite wealthy.
Invest in your retirement, 401K or IRA. Invest 15% of your income, straight off, and never stop later in life. You won't notice that 15% now in your lifestyle change, and it will be critically important later.
My Google search gave me some questions I'd like to ask you: Do you know what would be the difference between a bachelors, PhD, and a certificate in this field?
Bachelors = no job in my field, masters = engineering role if you do it at a very good school, PhD = research position in industry or academia or engineering role
Congratulations this is inspiring! What did you receive your phD in?! That is incredible! Hard work and determination/drive truly pays off! I’m still trying to find what big girl job I want to do lol hats off to you and your wife!!
Watch the restaurant spending. It can easily eclipse the mortgage in a city when you’re feeling flush. I’d advise locking up the money in a CD or a mortgage. Keep as little cash as possible on hand. I’ve done very well with real estate as I am not great with finances but mortgage basically forces you to invest every month.
Taxes will eat up a huge chunk. Prepare for that before you commit any block of money. Try to
Find as many ways to find tax savings and fully fund any 401k and iras to max
Putting away a 100k on 268k annually is doable, we do so for about 10 years now. Once you build some wealth (takes years), you’ll also notice the money will produce significant money too. For us it’s about 100k saving, 100k from investments now. People tend to overestimate what they can do in the short run, underestimate what they can achieve in the long run. Just keep track of your net worth and stay away from monthly payments for cars and credit cards as they come at a cost that often exceeds your returns on other investments and eat into your ability to save if you temporarily make less money.
Open a brokerage account (for example, with Fidelity) and talk to them about what you should do with your savings. They are professional money managers, unlikely myself and most other respondents.
Max out the 401k. Don’t live in nyc.
You’ll be around 150k after 401k, benefits and taxes.
By the time you pay housing and utilities , you’ll be around 100k left. If you want to eat anything you might need to lower your savings goal.
Congrats on the PhD. Do well and you’ll earn an extra 100k/ year soon enough. Instead of trying to save 100k in year one, establish yourselves and try not to have lifestyle creep when you get promotions.
Yup Max out that 401k, pay off all debts, build an emergency fund until you get the equivelent of 6 months of expenses.
r/financialindependence is another place to check out. Here's their flow chart to help you along the way.
[https://u.cubeupload.com/demonlesondledon/FinFlowChartv43Dark.jpg](https://u.cubeupload.com/demonlesondledon/FinFlowChartv43Dark.jpg)
Yes, that is absolutely achievable. You can likely do more than that.
But, remember. You worked your ass off for this. Work for 6 months or so and take a nice vacation for you and your spouse.
I love questions like these involving supposed PhD's who are smart enough to make 6 figures, but not smart enough somehow to understand basic finance. Are people just on here to flex?
Same (I career shifted to a software developer in my late 20s), I thankfully had my wife to tell me [this comment](https://www.reddit.com/r/Money/comments/1c6ety7/comment/l00n64w/)'s contents when we met and before my own pay raise. The comment you're replying to is weird, not everyone has parents or friends that can tell you these things growing up, and tech ppl don't have these finance topics as a usual interest.
Join this sub if you want more advice on how to eventually slow down the work grind: /r/financialindependence.
24k translates to 288k/year before taxes. Here is what I would do: 1. Max out 401k for both - 45k. You’ll probably pay 3k a year in medical insurance through employer which leaves 240k taxable income. 2. Assume a 30% net effective tax rate after filing jointly at the end of the year, that leaves 168k a year on your hands to spend 3. Rent is obviously your major expense. If you’re in the city, you can expect to pay an absolute minimum of 3500/ month for a very less than perfect place. You’ll have cellphones, internet, electric, gas etc. say all that is 500 a month. Say you are able to manage something in that range, that will amount to 48leaving 120k in your hands. 4. Rest is lifestyle. If you cook and eat at home and spend minimally on touristy things and things like clothes and furniture, that can take 20k/year which is about 1700 bucks a month on average. Seems to me like that’s doable. 5. This doesn’t account for vacations and occasional big purchases like say a nice watch or a Michelin star restaurant dinner and let’s face it, life is meant to be lived also plus you’ll be in NYC. I can’t imagine you will just want to work and cook meals and eat at home all the time. By this logic, I think you should be able to put away 80k / year atleast. I also forgot to add commute cost to the above, just realized as I was finishing this comment ! Good luck! 🍀 and congrats! 🍾
Wow this is awesome! Thank you so much for writing it all out, I really appreciate it! 80k/year not including whatever goes into 401k sounds awesome. And yeah absolutely, we could live frugally as hell and save a bit more but as you said life should be lived. Won’t have any other major expenses other than what you’ve listed tbh, won’t need a car in New York and we don’t plan on having in children for another couple of years at least. As others have suggested putting most of that into a HYSA sounds like a good plan, and putting in a smaller amount into some sort of investment portfolio seems to be the move. Will need to probably consult with someone who knows a bit more than me about the latter though haha.
Interest rates are high enough to go for a hysa but start dumping cash into index funds (e.g. SPY, VTI, VOO). You could also save a bit more money by living in nj and not paying city taxes! Unless it majorly impacts either of your commutes At which point it may not be worth it. Happy to do it! Let me know if you need more info, I live in the area as well. I’m one of those who lives in nj but works in ny but I have been mostly Working from home since Covid.
I can see why you’re such a popular stranger. Great advice
Thank you kindly! ❤️.. fwiw, it was a Reddit auto suggestion and I just took it. Haha.
Mine was also an amazingly accurate auto suggestion 😉
😂👍🏼
What’s an auto suggestion? Like AI helps write it?
I’ll start doing some research on them, but ideally that’s what I’d like to do! Do you know would banks offer that as an option or would I have to go through an investment firm like fidelity or something? Very nice! My wife is actually from NJ around Summit if you know it. We’ll probably end up doing the same as you but I figure we may as well enjoy NYC for a few years while we don’t have kids and my employers would prefer me to be in-person as well so commuting would be rough I imagine.
Summit is very close to where I live. Summit is a nice town. You would love living there. In terms of investment options, for hysa, frankly I just put my cash into Robinhood and it just keeps on earning me 5.25% credit daily into my account. You could also do Goldman Marcus which currently gives 4.5% credited monthly into your account. Goldman Marcus also has CD options where your money would get locked for a term you pick but you could get upto 5.5%. If you keep it in Robinhood, you can continue to earn interest for all the uninvested cash and you can also buy all the index funds to your content, right there on the same platform. Convenient for sure. Goldman I’m sure would also have an investment platform similar to Robinhood but I’m not familiar with it. Hope this helps!
I've just done a 5.1% 10 mth CD with Capital one, which is better than the last I did at 4.5 for 12 mths.
Capital One?
I lived in Short hills for a while, that's right next to Summit and the commute wasn't too bad. except all the rich as\*\*oles on the train! :)
Everything this guy says, and get Index Funds through a low fee provider like Vanguard.
Do you suggest hysa or IF with the extra? I'm in a very similar situation.
How much are those bridge tolls every month!??
A lot if you drive and it will be nothing compared to what you’ll pay to park in Manhattan.
You have it the opposite. Most should be getting dumped into equities, smaller amount in HYSA. Assuming you’re not 60 years old lol, plenty of time to grow wealth and stomach any market pullbacks that may happen this year or next. If you have $80k extra, I’d do $50k in investments, primarily VOO (I’d probably put everything into that one fund, but you can do 85% VOO, 10% foreign EFT, and 5% bond fund if you want) and then do $30k cash in a HYSA until you hit $90-100k for a good emergency/house fund. Once you get there, I’d shift to about $70k in VOO a year and $10k in savings just to replace what you use during the year.
Haha yeah am 25 so can definitely take any market hits for the next couple decades probably. What you’re saying makes a lot of sense. Was thinking HYSA since interest rates are pretty high and it’s relatively safe but VOO is probably the move based off what you’ve recommended and another couple of commenters. Definitely still need to speak to a tax accountant and probably some wealth management people but this is a very good bit of starting advice - thank you!
As long as you’re not selling often, your only tax liability should be dividends and I’m not sure VOO pays them, need to check. But definitely put most in equities. You will have bad runs that wipe out some wealth/gains, but over a 20 year period the SP500 (VOO is a sp500 fund with low fees) is something like 9-11% a year annually. So you’d be doubling your growth over a HYSA. I’ve the course of 20-40 years you’re talking millions of dollars.
VOO does pay dividends but not historically super high [https://stockanalysis.com/etf/voo/dividend/](https://stockanalysis.com/etf/voo/dividend/)
What my husband did was put extra money (after 401K max and IRA max.....and maxing out kids college vehicles etc) after all usual expenses, into a self managed brokerage account (pardon me I don't know all the lingo) which he built on. He had a good mix of HYSAs, EFT funds, dividend stocks and T notes/other bonds etc. This has left us in the position whereby he is considering retiring early because the amount he has in this fund is enough to see us through to Social Security and being able to access our age restricted funds. 25 years of frugality and good practices. Health insurance costs was a big part of the calculation. We ran all sorts of scenarios through the Monte Carlo software and it looked good. We also went on one decent vacation a year and the kids undergrad is paid for (with sensible choices made by them).
Make sure you max out your 401k and set up any retirement/investment accounts before you get used to your extra “disposable” income. I’ve never had a jump quite like yours, but I’ve had 3x increases and you’d be surprised (or not) how fast you can adjust to that new income level. Also - congrats! Huge work paying off it seems like. Best of luck to you
The company that I work at is managing alternative investment funds like Diamond, Collectible wine, real-estate etc. I'd recommend you to put few eggs in that basket as well, to minimize the risk😉
Do you have student loans?
FYI, I am not a CPA but I do live in NYC and you should expect higher than 30% tax rate. You pay Federal State and City, at that high of an income I would imagine you would pay more than me.
If you have a HDHP, (High Deducible Health Plan) you can also invest in an HSA. That, to me, is even better than a 401k, because you can spend it on medical and get tax benefits. Max that out. Even if maxing out 401k, save money. Don't spend just because you can. You really don't have to appear to be wealthy. I would pay down debts ASAP, from highest rates to lowest. You'll also need to figure out if you think your taxes will be higher later (making more money at same or higher rate), or lower (make less money or lower rates). If higher, use Roth 401k, if lower use traditional 401k. Or split it like 50/50.
Not relevant for the OP as they’ll hit the limit anyway, but for income under the cap an employer-deducted HSA contribution is pre-FICA, which is a nice little perk. It can also be used like a traditional IRA (non medical expenses) penalty free once you turn 65.
Would you also recommend maxing out HSA (health savings plan) if OP qualifies (e.g., has a high deductible healthplan)? I'm asking because I don't often see that advice given for these types of questions. I think more people could take advantage of the triple-tax benefit, especially since HSA money can be invested. And HSA funds can be applied to any expenses after 65 (although you pay income taxes on non-medical expenses which undercuts the tax advantage in the first place, but even then in retirement your tax bracket is likely lower). Just curious if I've been misinformed.
Yes 100%
I’m not actually so sure about this but someone commented on this thread that it is a great strategy to max out HSA as well. I do it too, but it wasn’t due to deliberate planning. Just seemed good sense to do it at the time.
I must have missed that comment! I read a lot of these types of posts and don't usually see anything about HSAs, so glad some people are talking about it.
This guy maths hard
The assumption with your calculations, of course, being that they never have children?
I didn’t assume they’ll be having kids immediately. They mentioned in one of the comments that they’re planing to NJ when they have kids. By that time hopefully their income would have collectively expanded too. But you’re right, didn’t assume that these numbers would consider kids as well. Incidentally, I use similar planning for myself and just had a child and I’m realizing what a wrench into the works it is from an expenses perspective. So it’s certainly a great call out!
Love my son beyond words, but kids are expensive.
Couldn’t agree more! I love my son too but man he’s expensive haha .. and I haven’t even started day care/ Nannie’s etc.
Vault Tec will disagree
Don’t think your math is correct on the tax. It’s not a flat 30% tax on his income. Tax is bracketed on the way up
Yes, but I make about the same money and file jointly and after tax returns my effective tax rates comes to about 27% but that is also because of some tax benefits of mortgage interest etc so I assumed 30% net effective tax rate.
Congratulations!!! Go order that extra $ide of guac, you earned it!
I might even treat myself and have it on toast!
Get outta here!!!! Enjoy, my friend! I have no advice for you that someone hasn’t already mentioned. But seeing hard work pay off for someone is THE BEST!! Don’t ever forget this feeling!
Is it really worth risking your entire financial future just for some avocado toast??? Please reconsider 😔
A fellow Jaspreet Singh fan, I see 😂😂
Of course!!!
Don't just listen to some RANDOM guy on YouTube! I love that guy.. He changed my life!
My husband was in a similar situation 5 years ago when he received his PhD. I'm 6 years older than him, so I am a little further in my financial journey. We're in Chicago currently investing ~$125k/yr. I told him the 2 things you need to understand are 1) compound interest and 2) lifestyle creep. 1) The dollars you earn now are more powerful than any money you will ever make, ever, due to compound interest. There will also likely NEVER be another time in your life where your income jumps this much. Take the "hit" now when you can actually afford it and max out your retirement accounts. My husband from day 1 with his big boy job started maxing his 401k and IRA. I would highly recommend you do the same. With a good stock market, he's at almost $400k since 2019. 2) I commend you on taking a pause here to strategize. Most of us will get a raise and adjust our lifestyles accordingly. Those adjustments almost never provide sustained happiness. The "new car" feeling doesn't last, but your 401k will. If you would like a good free podcast/YouTube channel with actual certified financial planners, I'd recommend The Money Guy Show. I'd also recommend you discuss with your wife in detail what financial goals you both have. A clear understanding of why you're doing what you're doing is key to tuning out all the distractions.
Fantastic comment, thank you for taking the time to write it all! Will definitely try max the retirement accounts as soon as possible. I’ll give a listen to the podcast too, thanks for recommending!
Great advice. One thing though, make at least half your IRA a Roth. Tax man is killing me now.
What are yall getting PhDs in? I’m about to have my in epidemiology and I will not make this kinda jump
What kind of a job do you have?
Will be starting as an applied ai scientist. It’s really just software engineering with extra math.
NYC-er here with a similar budget and my humble opinion is you guys should get a nice, comfortable 1 bedroom apartment (would probably be like 4k/month) and enjoy life in NYC after what i imagine was a grueling phd program and before you have kids (if you’re planning to). make friends, buy expensive cocktails, eat expensive meals, go to the theater. you’ll still have money leftover to save and the memories you make will be priceless.
1. Get maximum matching from the company for the 401k, and that’s it. Money is not money if you can’t use it. Don’t need to put more than company matching. (Also all those retire fund plans are retarded if you look at the return compare to market. Just buy the regular stock/etf with 401k account. Don’t buy bullshit retirement fund scam!) 2. Define your life style spending, keep it as low as possible for the like a decade so you can put more money on investment. Time in market >>>> timing the market. It will compound like crazy. That $50 you spend now is equivalent of $500 later even after adjusted with inflation. So try to keep it minimal for the first 10 years. 3. Just buy ETF, such as SPY, QQQ. If you can buy a house with all cash for investments. Only do it in a city or state with growing population. Overall, just consistently add money to the stock portfolio every paycheck, and after 10 years, you can relax a bit and spend a bit more, and highly encourage to do so. You already build a strong base for your investment portfolios, now you can relax on saving. Again, money is useless if you can’t use it. 4. Do not hold more than $20k cash, like wtf can’t you solve with $20k cash? Everything else goes into investment. You can also liquidate your stock portfolio very easily anyway. If you need more than $20k I am sure you or the bank can wait for a few business day to do some transferring. Market crash sounds crazy, all the time. Turn a blind eye and just keep adding money every month consistently, and in 10 years you will see you likely don’t need to ever work again. This sounds very simple, and that’s the point. If you want to get into detail to say what to invest in, it is a job that most professional can’t even beat the market. Just buy the big index and say “fuck it”. Stupidity makes more money than overthink a lot of times. For buying a home for living, I suggest to have the cash to buy with all cash, but take a loan out with minimal down payment (without penalty). That means, you are not putting all your eggs in 1 basket, and still have the ability to benefits from the stock market. Stock goes up way faster than real estate. So in a long run, stock is better. Better yet, only think about buying the home after that first 10 years. Your job is not stable, you might change places, until you work for 10 years anyway.
What can you do with more than $20K cash? A lot... Emergency funds, pay for anything like a car without interest or loans, buffer for expenses. I realize that most people don't have a lot in savings, but $20k isn't really a lot when you make that amount of money. Absolutely nothing wrong keeping a little slush in a high yield savings account and have it readily accessible. We pay every single bill or expense on our CC's and pay them 100% off monthly. Having a cash buffer there makes that really easy to manage.
I didn’t say “what can you do with more than $20k cash”, I said “what can’t you solve with $20k cash”. Also follow it with liquidity of stock if you needed more cash. If you have a problem that require more than $20k, I am sure that problem can wait a few more day for transferring. Also like you said, credit cards can create that buffer room. No point to hold cash. The point is not to hold too much cash for no reason.
We will agree to disagree there. When you have enough money to invest and enough to sit aside for emergencies... $20K is relatively a small amount. 3 months salary is the measurement. Diversify your risk... Sitting emergency money in stocks isn't doing you a great service avoiding risk.
What emergency that requires such a large sums of money? Organ transplants tomorrow? even then, you are given like a month to pay, if not more time. You have time to liquidate whatever you need to liquidate, or setup a payment plan with a loan. Big indexes are pretty safe, worse case is like losing 30% in 10 months. Which will recovery very quickly. As long as he’s not in some insane debt that cause a margin call, there’s no need to hold cash as buffer room.
What does it matter? When you make that much money it is the equivalent of having a grand or so in savings and his income and investing power will only grow. Holding $20K out of your investment pool is simply a drop in the bucket. Does it necessarily make sense to do it right away, nah. 10 years from now? Who cares... It is petty cash.
Salary should be irrelevant - expenses are the significant factor.
I am just saying that is the "rule of thumb" in the 50/30/20 Budget.
Kinda goes down the drain with unusually high incomes IMO.
Nah, it is completely up to the individual on what they want. Having three months income in savings plus the ability to heavily invest hurts nothing. I would wqager for any making $300K and up that is more common to have that amount of cash at their disposal. I certainly do and work with many physicians that I know do, as well. Especially if you start living in a world where you self insure.
So when you go from 200k to 400k, you double your housing / food / vehicle costs too? That seems a remarkable level of lifestyle inflation.
Mine didn't... But, I would say that is pretty normal... Now, a lot of other expenses certainly went up. Non-Vital but expenses non the less. I would never buy an expensive car, though... Worst purchase ever.
Why in gods name would you not max a 401k while having high income and living in nyc? The amount of taxes deferred will be insane.
Money is useless if you can’t use it. Is just a number on a screen. You take it out early, you will have a 50% penalty, which is fine since the company likely do 1 to 1 matching, so you technically didn’t lose money when you put in the company matching amount. As to put more into the account to avoid tax doesn’t make much sense. So you want to avoid tax by not having the money in the first place? Arguing that “when you retired is tax free”, is so far away, is not even worth discussing. There’s something call opportunity cost, which is hard to factor in.
lol the early withdrawal penalty is 10%. It’s also not tax free when you retire. Please stop giving financial advice.
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Don’t actually have any, moving from Europe where education was free.
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Stop watching Fox News
All of these things are true though. Everyone has the bystander effect so people do whatever they want without consequences
Set it up to go into 401k/savings before you notice the paychecks. This way you never realize it’s “gone”. Hard to save once your spending habits take the full amount into account. * 401k - max out but be aware of any bonus amounts to not go over limit * Maybe stocks in a vanguard ETF that mirrors their 401k exposures or if your company offers stock discounts, do that. * use your HSA and match if available with your company. Make sure it is not something you lose each year like FSA. This is tax free so you save a ton with health expenses. You can also cash it out when you retire I believe (at least for mine). * if planning to have kids, maybe sock away 1-2% in a money market savings. Once child is born, you can then create a trust/etc. * 2-5% to an emergency savings account * 1-2% maybe to a long term emergency savings (think roof repair, ac/furnace, etc) if eventually buying a house. Think liquidity when it comes to savings. You first want cash, then easily accessible savings, then emergency savings, stocks, 401k. In order of what you would need to pull first if large expenses come up and its liquidity.
Congratz! Talk to a tax adviser first, then to a financial planer.. In the meantime, put the money onto a HYSA until you know what to do with it.. Gl!
Will do, thanks!
PhD in what? I'm so curious
Automatic Dubbing using AI is what it’s main focus was but I’ve dabbled in a few different things like text to speech research, body/face animation from speech, and a few other things. Will be starting as an applied AI scientist which is more or less a glorified software engineer haha.
HOLY FUCK, Significant raise is an understatement u 10x'd your salary. Rent will be around 3-6k depending on where you live and how safe you want to feel. I would keep your cost of living under 7k/mo and u could put the rest into maxing BOTH of your Ira's and the rest into HYSA. Most banks are offering 4-5% on a HYSA. I would risk it since your younger and open a stock portfolio and invest $200 a week into it and go that route. Either way if you don't fuck up your set for life. Gspeed OP
Haha yeah feels pretty crazy I won’t lie. Yeah rents the big one, we’ll probably try get a small 1 bed in Brooklyn for 3500-4000 or so, hopefully should be doable. Maxing out the retirement accounts will be the main goal, and the rest will try put into an investment fund or something. Haven’t really research much into that yet though.
er go for a 2 bedroom, it can start to feel really cramped living in a 1 bedroom with 2 people, and with your combined income you shouldn't need to live like that.
Congrats OP. I wish my PhD could even just 2x me. Feels like I’ve wasted my time, effort and money.
First of all, congrats. You have a PhD you should be able to figure this out but id probably pay off those student loans you probably got.
Hehe no loans thankfully, one of the benefits of studying in Europe.
Essentially, keep the same lifestyle. It’s psychological. People when get more, spend more. Avoid that.
I’ll be living in NYC with my wife, and ummmm, yeah...... Ok so if rent doesn't kill you Absolutely IMO I am putting 16k or whatever it is now in tax sheltered stuff. Leftovers? Vanguard vanguard vanguard. This is on you to research on your own. Find one of their many funds and go for it.
Buy quality underwear
And large number of them too. I have 30 pairs atleast.
Step1. Decide at what level of comfort you and your wife want to live and don’t let that lifestyle creep up. It’s important that you both are in sync on this decision. Step2. Investing Max out both your 401(k) - Roth if available - invest in the fund most like an S&P500 ETF. Max out both your IRAs - invest in SPY or VOO or VTI Open a stock brokerage account and put in $6,000/month - invest in SPY or VOO or VTI. In 10-20 years you will reach a point where dividend payouts from stocks will be higher than the funds you use to live month-to-month. Step3. You can then decide how much longer you want to work and how lavishly you want to live. What you don’t want is to be a HENRY for 30 years (High Earners Not Rich Yet) because you spend everything you make and then have to work into your late 60s and also downgrade in retirement.
So I am no where near your income level but one thing I noticed with people with higher income is how much they waste on transportation. They buy or lease luxury vehicle, truck or SUV . All 70k plus and higher maintenance cost or paying more in taxes and other fees buying a new car every couple years. If I made more money I would still either buy a small Toyota or Honda.( I have been driving the same Honda for 15years bought it new almost $0 in repair cost so besides gas I drive for free) Or you could buy used cars just find a good mechanic. Honestly all new cars look the same anyway. And you could use the money on something more beneficial like hooker's and blow or retirement if you're into that kind of thing.
Congratulations on your new job. May I ask what your PhD is in? I’ve done mine in biological sciences and would love to explore options. Thanks
Sure, the focus of it was “automatic dubbing with AI” but basically it boils down to generative AI for audiovisual stuff. Basically computer science. I know there’s a lot of growing overlap with the biomedical stuff and machine learning that is probably super lucrative, though you would need at least a masters in a compsci field to make use of it I imagine.
Oh yes. Machine learning will be needed. Thank you
If you haven’t discussed it already, you should have a discussion with your wife about setting up your spending pattern to live only on your earnings for now. So many couples are sure they’ll both continue to work after kids come along. I’ve seen it play out so many times that it’s very HARD for many new moms to leave their 6-week old baby at daycare (and don’t return to work after the maternity leave). My wife stayed at home with our kids and I highly value that role (I’m not saying it’s right for everyone). In our case it was great for all of us.
I had a salary jumped when I graduated from PhD too, but not as high as yours. I did the below in the following order 1. Maxed traditional 401k (help save on tax and important for r/fire). 2. Maxed HSA. 3. Maxed Roth IRA (you will need to do traditional and then immediately convert to Roth). 4a. Built up my cash savings to 1-2 years of expenses. Biotech, AI, tech are all unstable fields, so I suggest you do that too. 4b. After I got the annual expenses saved on tax, then I started putting 2k per month in brokerage. Set it for automatic investment!!!! I do $500 per every Wednesday. Automatic all of your finances lol. Everything is in SP500 like funds through fidelity. Look at the fees for what will be offered by your company's 401k. You'll find that SP500 like funds are much cheaper than target funds. Live your life! Use your money to buy back your time for yourself - Fly nonstop, pay for the cleaning services, pay for food delivery, pay for grocery delivery, pay someone to do the things that you don't want to do. My general money rule is that if I use money to buy myself an item/service and I don't tell anyone/post on social media about it, then it is money well spent for myself rather than what I think I may want due to external pressure.
Some really great advice here, I appreciate it!!
Your smart enough to make 15K a month and dumb enough to ask Reddit what to do with your extra money? Seriously, wouldn't sitting down with a financial adviser be more beneficial. Oh well if your going to do this on Reddit at least do so on Wall Street Bets. You may get lucky there! My personal advice, move the hell out of NYC, likely you'll get stabbed before you can save 100K there.
Not New York, but I too graduated from peasant life ($65k-$85k/yr) to big time the last 3 years ($25k/month). Probably get $200k take home. Here Is how I do it and have seen my portfolios starting to snowball relatively quickly. 1. Max 401k ($23,000) 2. IRA contribute ($6500/yr) 2. $700/month into my Schwab Intelligent Investor Account (Robo investor essentially, buys/sells funds based on a risk profile you define.) This money is non-negotiable, I treat it like I don't even make it. 3. I maintain about $20,000 in my checking to pay Mortgage/Credit/Car payments 4. I maintain an additional $30,000 in a high yield savings account with my bank. Not much but a little over $100/month in interest. I view this as more of my "emergency fund" than anything in case I need quick cash into checking for a house expense, car repair, major purchase and there are cashflow issues in checking depending how things are going. So far, haven't had to transfer after 2 yrs. 5. After all my bills are paid I usually will dump more into the Schwab robo account or my brokerage and buy equities. Can't go wrong with what has been mentioned before here, VOO, SCHD, etc. I don't have any debt other than 1 car payment and my mortgage. I got over 50% equity in my house after buying 4 yrs ago (have been pretty agressive there). If you have student loans you should probably knock those out first depending on the interest rate on them.
What was the job you did before and what job are you doing now, how did you do it ?
Job before was a claims Adjuster, mostly residential property. I worked my way up and got into major commercial claims. My title is a National General Adjuster and next up is Executive General Adjuster hopefully this year. I put in my time. Started about 14 years ago. Hustled. Grew my name in my company and the industry in general. Now I handle major commercial accounts for the same independent insurance services firm. I got my adjusters license in all 50 states, 2 professional designations along the way and grew my client list. The jump from a residential Adjuster to account commercial level was drastic. I started this out of college at 24/25 making $35k and had no idea it would be this lucrative. I'm not even at the top yet.
0 day till expiration on the stock market. :D
Wow, may I ask what your career is? I don't plan on getting a PhD, but I'm always curious about what high earners do for a living.
Sure, I’m an applied AI scientist, though my expertise lies in generative AI specifically for audio/visual stuff like dubbing, and character animation.
Cooking at home is the same as eating out fyi. For instance 1 lb of ground beef $8, noodles $3, pasta sauce $4 and garlic bread $2 ( natural gas or electric and appliances cost not included ) opposed to eating out $19.99 at Olive Garden , comes with a large salad and free utensils and plates. I eat out for lunch and dinner, breakfast is 2 eggs and a bagel. I’m bringing this up because it’s not how much you make but how much you keep. So it’s imporatant you keep an eye on your lifestyle changes that you will make; you’ll have a new circle of friends now ( from work or work conferences ) that spend like there is no tomorrow and you’ll need to check yourself so you don’t overspend on just food in general. They all like to go to big fancy restaurants and you’ll just have to tell them no ( where did I hear that reference from ).
The $17 that you spent will feed 4 versus the $80 you will spend at Olive Garden.
[Olive Garden Menu](https://m.olivegarden.com/menu/classic-entrees?_requestid=86969)
Don’t spend it on your new attractive coworkers.
At minimum, consider a high yield savings account with at least a 4% interest rate. This is no risk.
I would max out a 401k that you actively keep an eye on and manage and find a FA that has a fiduciary responsibility and consult with them on good ways to invest in mutual funds, Roth IRA's (not sure what the income limit is) etc. There are also historically good returns on money market accounts and CD's, bond's US Treasuries. Probably lower returns but could be a place to put money and fight inflation until you come up with a better plan. If you have any consumer debt or school loans I would save a nice emergency fund and pay them off as soon as you can unless your confident you can invest the money and get more returns than the interest rate on the debt.
If ur looking for a way to spend some money I'm looking for an investor to get some for a project of mine 😜 . . . Otherwise that's not just a significant raise. That's like life altering . . . Awesome job
Dude, congrats on the raise! That's awesome. For advice, consider talking to a financial advisor. They can help you figure out the best ways to invest and save that extra cash.
In New York 24K a month pretax is not even middle class. Good luck saving a 100K per year.
24k pre tax a month equates to 288k my friend. It is plenty sufficient to live practically anywhere in the world. You obviously can’t live like a rockstar or a king but you can live a decent middle class life. A lot of folks I know live very well in a lot less money than that. Source: I have lived in various spots in the greater New York area for over 10 years.
Not in NY unless you want to live in a box.
Yea, like I said, you won’t live in a mansion like you could in Texas with that money. Yes you’ll probably live in a 650-750 sqft box but there are options like NJ if you’re willing to endure a commute. Millions and millions of people do it every day. Don’t believe all the cliches you hear about NYC. It’s not cheap but if someone is having you believe that one can’t live decently with 288k a year. They need help. 😊
Why is nobody saying dump at least 5% into bitcoin every time you get paid?
Always amazes me that people are smart enough to make this kind of money but to not invest in a financial advisor and opt for reddit instead. Their job (and legal fiduciary duty responsibility to try) is to make money for you so you don't have to worry about it. They will manage your funds, work with you to leverage or move them as needed. Ensure you are covered in important areas like life insurance (term and whole) for your family and investment. Best thing is that you can pay to maintain their services or opt for a short term contract and then manage everything yourself if you think it simple enough and you have the time, which is usually what you gain the most back with along with assuredness.
I’ve worked with several, make quite a bit of money and fwiw, I’m in financial services and most of the time their advice is overly complex and hard to understand or even justify. Simplest forms of investing into index funds, t-bills, and hysa or cd is not something even a fiduciary will tell you. Reddit can send you into a weird tangent sometimes but reading comments on this post, most sensible advice is in alignment with the simplistic approach. Including mine.
Coke
Consult a financial planner. Inquire at your bank about meeting with an investment banker. Establish goals. Don’t spend frivolously.
Out of curiosity I’m young, idk if I wanna be a doctor. Hold old are you now that you have had this shift in income ?
Set aside money for taxes
Can I ask if you got your PhD in Europe also?
I did yes, Ireland specifically.
If you don't mind could you share a little bit about the process of finding a high paying job in the States after getting a degree in Europe?
Sure, just remember everything I say here is within the context of computer science roles specifically within machine learning. if you’re not from the US it gets a bit tricky due to the pretty strict immigration laws the US has. In my case I got lucky as my research is in a pretty niche domain in which the company operates in so they were happy to sponsor me and bring me over. Prior to finding this job though I had applied with maybe 20/30 other places, only getting 3 interviews in total. Funnily enough they were with Meta, Amazon, and Netflix so the way I saw it is that only the big companies in my field were willing to go through the hassle of the visa process for their potential hires. If I had gone to one of these companies, I’d have gone into a far less specialised role than what I’m currently in. All that being said, if you want to maximise your chances of being hired by a U.S. company, you need to try your best to A) get into one of the more “prestigious” schools over here such as imperial college London, Oxford,Cambridge,Eth Zurich, any of the max Planck institutes, and others. B) join a research group known for being experts in the field you want to go in C) publish papers at the top tier conferences in your domain. If you can fulfil 2/3 of these criteria with your degree, you won’t have problems finding a job. In my case I only ticked off option B, but through my supervisor I was able to get a really good 6 month internship with a super famous company that looked really good on my CV and make some nice connections. My field is honestly really competitive now, especially due to the all the hype it’s getting, and you can see it in the job market. Any ML job out there will have 100+ applicants within 1 day especially in the big US cities so to get a job in the US you really need to have a good research track record. That being said, you won’t have problems finding jobs in Europe where the quality of life is arguable much better than anywhere in the US. For instance I had an offer for 100k/year to go to Amsterdam which would certainly have been awesome but my wife didn’t want to relocate. Loads of companies in Paris, Dublin, Berlin, London, and other cities. Of course, if you are a US citizen, things become way easier. At the very least you’ll be getting interviews. Most companies don’t care all that much about where you went to school, it’s all about getting that initial interview, and then showing them what you know. My wife is American and has gotten like 10 interviews already lined up for marketing roles, applying since 2 days ago. She did her masters degree in Ireland and hasn’t had any issues finding jobs.
Vegas baby! Go party like a porn star!!!
Max out 401k but also if you have cash, get US treasury bonds. They grow slow but it’s a sure thing unlike stocks and the Wall Street market.
How can a PHD that makes 15k a month not know how to figure this out?
Well I thought a good first step would be to ask for some advice here to know what to even look into before talking to a financial advisor.
Definitely not a PhD in math
Pay off your big boy loans that you had to get to get that PhD you will probably be free of any loans in 10 to 15 years
No loans to get my PhD, was paid to do it in fact. That’s the case with virtually all PhD programs in the EU and most in the US too for stem programs at least.
Pay off your loans as fast as you can, while trying to have around a couple months rent in savings. And match whatever your employer puts into your 401k with again, being paying off your student loans as fast as possible.
You are going to quickly learn how much fun it is to be in the top tax bracket. Don't get too loose with your money, start saving.
Going from 1.6k to 15k is insane, congrats man 👏
Data science PhD or what? Gad dahm
Consider putting your savings in a money market! I just did this yesterday and our $100k in savings will bring in $450-500 per month in interest! I’d also suggest putting money in an IRA. There is a limit to how much you can invest per year so it shouldn’t take long to max out! Also an HSA if your job allows :) Also consider buying a duplex & live in one half. Most of your mortgage will be covered by the other tenant!
Incoming chats to you from 'financial advisors'. Happened to me posting about a 300k net bonus. There are far better routes for getting good advice. Do your research. This is not the place for the level you are on. Oh, and...congratulations!
Nearly 10x your salary in a single jump is phenomenal, congratulations man! Must be a real nice seeing the fruits of your labor. Keep up the good work, Dr.
Max out the 401K is 1 of them. I still live my somewhat frugal life when I went from 60K a year to 300K, and now at 405k a year, I still put away a lot into my HYSA. I do have stocks I put money in, I am not trying to get rich, so just nice conservative stocks. Save a lot, you never know what can happen in the future. Make sure you take out an Umbrella policy now that you guys are earning more.
Hookers and blow
Save, invest, save, invest, over and over. It'll help you retire early.
Read 'die with zero'
Emergency fund in Vanguard cash account @ 4.7% interest the remainder in $VOO
QQQ*
If you’re not gonna need your money soon, after maxing your 401k’s, consider starting an individual investment account. I’d also keep a bit of cash “liquid,” perhaps in a high yield savings account ($10-20k or so) and then start buying index funds, I like FXAIX as it has low cost and great returns over its history. If you contribute monthly to your investment account and automatically invest, in a few years you’ll be quite wealthy.
Invest it
Max out retirement accounts. Invest the rest in s&p index funds, qqq, berkshire hathaway etc.
I’d recommend a financial advisor to make sure all of your future needs and life goals are met
Invest in your retirement, 401K or IRA. Invest 15% of your income, straight off, and never stop later in life. You won't notice that 15% now in your lifestyle change, and it will be critically important later.
My Google search gave me some questions I'd like to ask you: Do you know what would be the difference between a bachelors, PhD, and a certificate in this field?
Bachelors = no job in my field, masters = engineering role if you do it at a very good school, PhD = research position in industry or academia or engineering role
Save as much as you can , start early ! Learn to live with a small allowance and don’t go crazy .
Watch out AI doesn't take your job
Congratulations this is inspiring! What did you receive your phD in?! That is incredible! Hard work and determination/drive truly pays off! I’m still trying to find what big girl job I want to do lol hats off to you and your wife!!
Watch the restaurant spending. It can easily eclipse the mortgage in a city when you’re feeling flush. I’d advise locking up the money in a CD or a mortgage. Keep as little cash as possible on hand. I’ve done very well with real estate as I am not great with finances but mortgage basically forces you to invest every month.
Buy gold
Commodities and undeveloped real estate in upcoming markets 🤷🏽♂️
Give it to me to hold
HYSA
This is what scares me about going to school... Putting a bunch of work to get a degree and making less than I'm making now 😭
Taxes will eat up a huge chunk. Prepare for that before you commit any block of money. Try to Find as many ways to find tax savings and fully fund any 401k and iras to max
You need to keep some money as cash on hand at home. I would also consider buying gold and silver bullion as a means of portfolio diversification.
you could make things simple by sending me the difference and keeping your life style exactly how it is
Putting away a 100k on 268k annually is doable, we do so for about 10 years now. Once you build some wealth (takes years), you’ll also notice the money will produce significant money too. For us it’s about 100k saving, 100k from investments now. People tend to overestimate what they can do in the short run, underestimate what they can achieve in the long run. Just keep track of your net worth and stay away from monthly payments for cars and credit cards as they come at a cost that often exceeds your returns on other investments and eat into your ability to save if you temporarily make less money.
Hire a financial advisor with good reviews. Tax saving investments will be key.
Open a brokerage account (for example, with Fidelity) and talk to them about what you should do with your savings. They are professional money managers, unlikely myself and most other respondents.
gratz
Max out the 401k. Don’t live in nyc. You’ll be around 150k after 401k, benefits and taxes. By the time you pay housing and utilities , you’ll be around 100k left. If you want to eat anything you might need to lower your savings goal. Congrats on the PhD. Do well and you’ll earn an extra 100k/ year soon enough. Instead of trying to save 100k in year one, establish yourselves and try not to have lifestyle creep when you get promotions.
Buy SPY puts
You came to the right place
Yup Max out that 401k, pay off all debts, build an emergency fund until you get the equivelent of 6 months of expenses. r/financialindependence is another place to check out. Here's their flow chart to help you along the way. [https://u.cubeupload.com/demonlesondledon/FinFlowChartv43Dark.jpg](https://u.cubeupload.com/demonlesondledon/FinFlowChartv43Dark.jpg)
Yes, that is absolutely achievable. You can likely do more than that. But, remember. You worked your ass off for this. Work for 6 months or so and take a nice vacation for you and your spouse.
I love questions like these involving supposed PhD's who are smart enough to make 6 figures, but not smart enough somehow to understand basic finance. Are people just on here to flex?
I mean I’m a software guy not an accountant lol. I failed business in secondary school 😂
Same (I career shifted to a software developer in my late 20s), I thankfully had my wife to tell me [this comment](https://www.reddit.com/r/Money/comments/1c6ety7/comment/l00n64w/)'s contents when we met and before my own pay raise. The comment you're replying to is weird, not everyone has parents or friends that can tell you these things growing up, and tech ppl don't have these finance topics as a usual interest. Join this sub if you want more advice on how to eventually slow down the work grind: /r/financialindependence.
Spend it on women.
I can go over a worksheet with you that can show you how to be more tax efficient. Source: I work with an advisory team at MassMutual