"#8 | Posted by LampLighter"
$500K or more. If you are making $250K at 30 and married, you need to grind for another 15 years+ to stack a $1.0M+ in assets. At $250K in Wisconsin (say Milwaukee), your after tax net is ~$170K or $14K/month.
Average home price: ~$700K in the suburbs, monthly payment including PTI: $5,500
Home maintenance (1%/year) = $7000/year = $600/month
Cellphone and cable/internet = $200/month
Assume student loan payment of $500/month X 2 people = $1,000
Assume care payment at $1000/month X 2 people = $2,000
Gas for cars: $150/month X 2 people = $300
Assume heat/gas at $300/month
Average cost for meals: $300/month X 2 = $600
So, after these typical bills, you are at $3,500/month or ~$42,000 per year before any other spending on vacation, buying household items, clothing, or kids, etc. That is not living rich AT 30. But, once they are 45 and your income goes from $250K to $389K in 15 years (3% yearly increase), and the house payment is now only 17% of gross income rather than 26%. Also, their savings start to compound. Assuming they could save 50% of their $42,000/year (assume loans paid off after 5 years with yearly increases), that should be worth $1.025M at 10% savings rate. Also, their house should be worth (3% yearly increase) $1.1M and the remaining mortgage will be ~$480K meaning they will have $620K in home equity. So, savings + home equity = $1.65M AT 45 so they can start to feel a little more rich. However, any job insecurities, overspending, or kids will put a big dent in this. I should note, that $1.65M in net worth would be ~$1.1M in today's money assuming 2.5% annual inflation.
