I live in Vancouver Canada, married with 2 kids. We own our house.

We save 48% of our take home pay, so spend 52%. We live the extreme early retire lifestyle, not for everyone. Some extreme early retire people would laugh at our savings rate (only 48%!).

The breakdown of the 52% spend is

- 27% goes to housing (mortgage, property taxes, house insurance)

- 5% goes to fixed costs (car insurance, life insurance, internet, cell phones, utilities, Skype phone, Netflix, VPN service, etc.)

- 20% goes to variable costs (groceries, gasoline, supplies like toilet paper, light bulbs, entertainment like restaurants, bars, movies, sport league fees, etc.).

I know variable costs are big, but we only loosely keep track of this. We control it by only allowing ourselves so much spend cash per month for these variable things and we stick to it, if we get low, we don’t do it or we have a serious discussion. We’ve tried to lower it more, but this seems the right level for our lifestyle.

I know I know, we own a house in Vancouver. Hey, we bought fixer upper years ago and got lucky with the market. I don’t count house equity in our extreme retirement plan, as far as I am concerned, it will be icing on top of the cake. Our only debt is mortgage (student loans paid off, 1 car that we paid cash for).

Im with you. I save about 55%-60% (depending on month) because it provides me with peace of mind. I enjoy the simple life and have always shunned away from luxury. But dont confuse me with a penny pincher. I make sure to enjoy life.

damn you beat me on savings rate...please tell me you don't have kids so I at least have an excuse.

by my math we could get to a 55% savings rate, but we would have to really cut out somethings we enjoy.

Wow, if I end up moving to Vancouver next I should get advice from you. That's awesome. What's the tech scene like in Vancouver btw? I am visiting again in a couple months and am curious.

Its a mixed bag, not as good as san francisco. lots of small outfits. ea is here. microsoft started an outpost here.

That's awesome. When are you planning to retire? What will you do with your time? Will you stay in Vancouver or move somewhere cheaper?

oh retire has many meanings. i should say work by choice. not worry so much about salary, try new fields/areas, etc. we are still 13.5 years away from work by choice, 10 years if my wife goes back to work. not sure, if there is interesting work i would stay in vancouver.

mrfusion as in General Fusion? Or Andrea Rossi ecat?

Shoot me an email if you want (in profile). I'd love to chat more about this.

In Vancouver, of all places, that's impressive. How are you housing costs so low?!

My housing costs are low in Vancouver because I bought several years ago before prices were too crazy. So my starting mortgage was much lower than it would be for a first time home buyer today. I also made accelerated payments on my mortgage.

So timing and a bit of luck. I could not afford to enter the Vancouver housing market today.

When they speak about the percent income required to own a house in Vancouver, they only speak about first time home buyers entering the market today. The housing costs for current owners who have been in the market for some time (like me) or current owners selling and buying are not as high because their starting mortgages were much lower and they have lots of equity for a down payment.

But I do sometimes feel the pain of people trying to enter the market or renters. For example, I’ve had a couple great job offers in the SF bay area in the last few years, but I turned them down because the cost of renting would have eaten away more than the salary increase. I was not willing to sell my house in Vancouver to remedy this (i.e. have a big down payment for a house there).

Would you mind sharing how many years ago it was that you bought, and what your estimated % increase is in your house since then?

> I don’t count house equity in our extreme retirement plan, as far as I am concerned, it will be icing on top of the cake.

If that turns out to be true, you are doing very well indeed with your saving. For typical income in Vancouver vs typical housing price (and even in other parts of Canada, but to a lesser extent), your house is the cake and everything else is a rounding error. There is a vast net worth chasm in this country between those who purchased before housing started going nuts vs those who did not, regardless of your saving level.

> There is a vast net worth chasm in this country between those who purchased before housing started going nuts vs those who did not

Housing has gone up nation-wide, but not everywhere is nearly as crazy as the major urban centers (Vancouver, Toronto, etc). For mid-sized cities or smaller, I don't think the gap can be called a "chasm".

sure. i bought 10 years ago. i would say the value of my house has climbed 262%.

if i sold my house today and found a place to rent for the same housing costs, we would only have to work 4.5 years before "retiring" (work by choice, earn enough interest to cover expenses) compared to the 10 to 13.5 years I mentioned above.

but i don't want to sell right now to "retire" earlier. my kids are still young and in school and we love our place. We can walk and bike almost everywhere. My current job is still interesting. If things change (jobs, health, etc.) then maybe I would sell and move.

Wow, good for you, and you seem pretty grounded about it.

My prediction is you'll find holding turns out to be a wise financial move as well, I think another doubling of housing (houses, not condos) prices will happen, within 10 years if not much sooner.

thanks, but really just timing, i am not any smarter than the next person. financial i do hope my equity continues to rise, but i do worry about the negative effects on our neighborhoods and society.

regarding savings rate, i do believe it is the only thing that matters, not how much you make, when it comes to obtaining financial freedom.

sure there are extremes, one should be making a multiple above the poverty line. but if you assume this is the case, then how much you make can either be translated into earlier financial freedom through an increased savings rate or "nicer things".

here is an ouput of my simple retirement calculator:

https://drive.google.com/file/d/0B8k8RO7VeaIbc0JlUExLZmktSkE...

I agree, but this normally correct theory is less valid in societies that have simultaneously decided that median housing costs should be be 3,40,50%+ of the median salary.

Sorry, just a little bitter that I lived below my means and actually saved, unlike those who stretched dangerously to buy as much house as possible, and essentially won the lottery in the process.

I live in SF and make 140 k$/yr in pretax income.

On a per month basis:

  * 11.67 k$ in pretax earning

  * 7.85 k$ in posttax earning

  * 4.85 k$ in savings

    * In order, maxing out Roth IRA, then Roth 401k, then non-tax-advantaged brokerage account

  * 3 k$ in spending

    * 1 k$ in rent + utilities (I live in a dump with 3 roommates)

    * 400 $ on food

    * 300 $ on transportation

    * 1300 $ on miscellany (entertainment, clothes, travel)

I could probably put effort into tracking that last item better, but I'm happy enough just tracking the top line.

If you are making 140k, aren't you above the limit for a Roth IRA?

"Backdoor" Roth. See: http://www.bogleheads.org/wiki/Backdoor_Roth_IRA

No 401k match? (assuming since you prioritize it after ira)

I make around $58k before taxes. Currently near 100% of that is going into a savings fund to buy an apartment. My parents generously offered to let me live in their street level basement for free until I can afford buying my own place, so I moved in last summer after I finished university. I am close to having enough money to get a loan, and I am looking for a suitable place now. Trading some of my privacy and independence at 27 years old is probably hard for some, but I have a good enough relationship with my parents that living with them is not a huge problem, even if my social life (i.e having people over) has been somewhat diminished.

This does not answer much of what you asked for though, since you are not in the same situation.

When I was in university I worked part-time, and I also got a loan&stipend from the government (as all students do in Norway). I usually made enough to save 40-50% of my income, which is why I have money saved up now. I made maybe $15k before taxes from work and got about the same in student loans. 40% of the student loans gets converted to a stipend if you pass your exams.

By the budget I have planned for when I buy an apartment, it will look something like this:

- Rent/Loan: 40%

- Groceries: 12%

- Utilities/Electricity/Stuff: 16%

And then there are probably more expenses I have not accounted for, but hopefully I will be able to save some money, but probably less than 32%

just curious, what are your reasons for buying an apartment? I never understood why people bought homes when their parents already own a house.

I do not plan on living with my parents forever. Basically I can either pay like $1000++ per month to rent, which would be money I never see again, or if you have saved up money like I have, I can get a loan and buy something and spend about the same paying down the mortage. Money well spent, because at some point (like 25-30 years) I will own the apartment outright. Of course I will probably not remain in that apartment for the next 25 years, but it is basically an investment. There are only so many places to live in central Oslo, and the demand is always going up. And even if the market crashes and I lose a lot of money, the prices of all the other apartments will be lower as well, so I would be able to buy another place at an equally lower price.

Loan interest is very low at the moment, around 2.7-2.9%, and to counter everyone loaning way too much, you need to have 15% of the loan sum in order to qualify. I can expect to pay maybe $320k for a apartment in Oslo, depending on how big and where it is. $320k would typically be >50m2 somewhat central, or 30-40m2 very central (those go for even more). I will need to have about $48k in cash to be able to get a loan at that price.

I also have some student loans, but I have basically my whole life left to pay them off at a very low interest, so I pay like $154 every two months or something I think. It is the best interest loan I am ever going to get, so there is no point just paying it down immediately even if I have the cash for it.

TL;DR: Paying for a mortage is better than paying someone else rent, and I do not want to live in my parents basement forever.

Cool. I guess in your case it makes sense because of the low interest rate. I didn't mean that you would live with your parents forever. What I meant was since your parent's already own a home, its already an investment by them that you are going to inherit.

I never understood why buying a home is a good investment option since ROI is very low for a very long time unless you sell the house for a higher price or you make all the money through rent, which is probably never happening considering other costs that come with owning a home.

This article makes all the point I was going to write and some more.

http://www.jamesaltucher.com/2011/03/why-i-am-never-going-to...

I live in the bay area (not the city) and make ~$300k per year. A chunk of that is bonus and RSUs and is paid out in increments because of that.

$300,000 (work income)

+22,000 (rental income)

-----------

$322,000 income

-90,000 (~30% effective tax rate for CA + Federal taxes + SSI, ignoring rental income)

-18,000 (401k contribution)

-----------

$108,000 taxes and pre-tax investment

-36,000 (rent)

-17,000 (home mortgage, insurance, property taxes)

-8,000 (miscellaneous expenses, shopping)

-5,000 (groceries)

-5,000 (restaurants and bars)

-4,000 (property manager)

-2,500 (public transit, auto: gas, car insurance, maintenance)

-2,000 (vacation)

-1,800 (utilities)

-1,000 (pet)

-----------

$82,300 spending

$322,000 - 108,000 - 82,300 = 131,700 savings per year

So, my total savings per year is $131,700 into taxable investment vehicles + $18,000 401k (+ additional company match money) + equity in my rental property

If I made $130,000, my spending would be at about 60% of my income, my taxes would be at about 20-25%, so my savings would be at 15-20%. However, I'd likely cut back some of my spending pretty substantially if that were the case.

NYC, living single, making a bit less than the "West Coast" salary specified. All percentages approximate, but pretty close.

Breaking down the original amount provided by the company:

28.5% - Tax

3.5% - Pre-tax contributions for healthcare and transportation

17% - 401k Savings

2.79% - ESSP Savings

3.67% - Direct Savings

23% - Rent

21% - monthly expenses

After taking out taxes and pre-tax deductions (the money I have more control over):

17% - 401k Savings

5.5% - ESSP Savings

7% - Direct Savings

44% - Rent (it could be as low as ~33% if 401k contributions are eliminated)

27% - monthly expenses

I make USD 17187 annually and save an average of 25%. I have a 2.0 liter car, I rent a house and I do not live with my parents.

Unmarried 30-something here, no kids.

When I made 100K, my monthly expenses were ~$3000, but I took home about $5000, which left me with a little over 2K in savings each month. The #1 expense is rent (SF Bay Area is bad), followed by food (I eat out for lunch every day, and I don't cook often in my shitty apartment).

One thing to consider is that $1 is $1 anywhere in the country. Consider the following scenario:

50K salary = 37K take-home pay - 50% expenses (keep the math simple) = ~18K savings

100K salary = 65k take-home-pay - 50% expenses = ~32K savings

In my experience, even though the cost of living is higher, the salary-to-expenses ratio is roughly the same (give or take a few K). In other words, even if I have to pay $2500/mo for my 1BR apartment in San Francisco, and my monthly expenses reach $4000, I'm still saving at least $1000/mo, which is more than I'd be able to save making a comparable salary (~40K) back home in Alabama.

No kids. I telecomute from Wyoming so my cost of living is quite low but I'm paid comparible to developers in the research triangle area (NC). I do not own a house, so no mortgage but I do have some large student loans. Most of my leisure spending goes into groceries since I like to cook and everything else that I do is pretty much free at this point (camping, hiking, biking, kyaking. Once I bought the equipment I'm pretty much set for life).

Running the numbers quick. Based on my take-home paycheck, I have a cash savings each month of 20% and on top of that I'm putting about 10% into retirement. So 30% savings.

Full break down:

20% Cash savings

10% Retirement

30% Student Loans

5% Housing/Utilities/Phone/Internet

15% Groceries

20% Misc & Vehicle Expenses

I live in Oakland with my girlfriend and we rent a 1 bedroom apartment.

My roughly 7k (pre-tax) a month goes to:

28% Taxes

10% Rent

15% ESPP

7% 401k

4% Vanguard

Most of that is automatically deducted (except for rent), and I usually end up with only a few hundred at the end of the month, meaning I'm saving about 25%. The rest goes towards groceries, car insurance, student loans, and way too many concerts/restaurants/nights out with friends.

I should probably increase my savings considerably but I like the lifestyle I'm living too much.

Living in Cologne, Germany in a 2kid family, working as a lead software engineer, saving about 25%/month of salary. Wish I could save more.

Will be making 44,4k USD each year starting september (student now). I will according to my budget save around 28% of that. 35% goes to rent. Although this is a trial employment, after i get a real employment (after 6 months assuming i won't fuck up) i will make 53k USD. I am from Sweden, btw.

me: junior/medium sw developer in Belgrade, Serbia. I'm saving around 25% per month, or 15% if i buy something new for myself. I don't know what a mortgage is but I guess it's a loan for buying a place to live, which would probably dry out all my savings I guess. My expenses are: around 20% to rent, 10% for electricity, water, internet, phone and training expenses combined, 40% for food and 10% just get lost somewhere without a trace :)

There are jobs with greater salary, but I'm suggesting a medium perspective in the region of eastern Europe. I used to have a job in a smaller city which left me with 0% savings, and I had to live without internet for that, it's just the way it is/was, I'm just glad it's getting better for some cities and young engineers.

Correct, a mortgage is a loan with a house/apartment as collateral. It's often taken out to finance the buying of a home but if you already own a house can be taken out for other reasons (paying for college or financing a business). You generally have a number of years to pay it off (15-30 I think)

Thanks for clearing that, it is exactly what I thought it was. But still, I am curious: how do you solve the problem when you got only a house that your parents own but its price its close to nothing, due to bad location? Basically, you don't have much to guarantee for the mortgage. How do people that get from low into middle class solve that? Save for decades until you have enough? I am clueless of the options...

You don't have to have much or any collateral really to begin with. The house you are purchasing becomes the collateral. So you don't have to put up a previous house to get a new house. Essentially, you find a house you like. Let's say it costs $100,000 USD. You go to a bank and tell them you want a loan for this amount with which to purchase the house. This is where it gets a little muddy - depending on the loan type, some want 3% down, some 10% down, etc etc. My most recent loan was 0% down, but a higher interest rate. The reason that lenders are willing to do this is two-fold. Firstly, if you don't pay, they will take the house back. So they generally make sure the house is worth equal to or more than the loan amount - hence why many want a down payment - so that the loan amount is less than the purchase price, in case they have to take it back and resell it. Secondly, they stand to make much interest over time. You can run the numbers, but that $100,000 house you'll end up paying 50-60,000 or more in interest over the course of the loan. Hope this helps.

It helps a lot, very informational, thanks!

US rust belt. I think I'm saving about 15% of my take home pay, which is after a 10% 401k deduction, which my company matches 5% + 1% automatic. So, it works out to about 26% total. I don't include bonuses in this, but I generally end up not spending those.

US East Coast; after-tax net pay ~100k -- 9.21% in pure savings; another 9% goes into 401k. We have kids, so we have much higher expenses in housing, food, daycare, etc., compared to DINKs; plus impacts from higher than usual (even in the US) healthcare costs.

When my checks come in I tend to split them in thirds:

* 1/3 goes to tax withholdings (I'm a 1099 contractor so my taxes are a bit higher than normal)

* 1/3 goes to living expenses

* 1/3 goes to saving and investing

Amsterdam dev here, only 500e/m but I live well.

Sounds very much like you are badly underpaid. Also, congrats on making that work in Amsterdam. If it is true, that is.

500 euros per month in Amsterdam? I find that hard to believe. Isn't it per week?

Should be doable if he doesn't have to pay for the rent (already owning his house or staying with his parents) and has a modest life style.

Starting salaries in the UK and Spain are usually around double that.

I thought he was talking about how much he was spending. 500 euros/month is possible if you are very frugal.

I agree that 500 euros/month seems very low for a salary in Netherlands.

That's how much he's saving. He just answered the question posted in the title.

Ooops, my wrong.

But also how much you make? You don't make in EU as much as in US (reading from HN)

London contractor, saving >80% of my post-tax income.

Do you live in London?

Yep. I rent a small room in Zone 1.

You are getting rich! Keep doing it!

iOS dev, 90k. saving 0% cause I'm an idiot.