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What salary hits the sweet spot?

  • Last Updated:
  • Aug 15th, 2019 1:08 pm
[OP]
Newbie
Mar 19, 2018
29 posts
11 upvotes

What salary hits the sweet spot?

Most people think the higher the salary the better, but I question whether the opportunity cost (i.e. more education, more hours, more stress, more undesirable tasks and responsibilities) of a higher salary is worth it.

They did a few studies that showed there is a "sweet spot" in terms of salaries and life satisfaction. If I recall correctly it was somewhere around 70k, although I don't remember if it was US OR CAD.

Honestly, I think even if you live in a big and expensive city, like the GTA, in 2018, 5 grand after taxes a month (aka around 75k a year before taxes) should be more than enough. Now, due to the housing crisis, it depends if you are ok with living in a condo though. If you want a house, then you would need at least a 100k salary. But if you are a bachelor or living with a partner and are ok with a 1 bedroom condo, then even a 60k salary (4k a month after taxes) should be sufficient, as long as you are a smart and mentally balanced individual (i.e. you are not crazy about wasting money on numerous vacations a year and don't have the need to go to fancy restaurants every few days and are not obsessed with buying clothes). In this scenario, a 60k salary would allow you to pay for the mortgage of your condo, a car, food and other basic expenses and bills, reasonable entertainment, and still have at least a grand left over for saving/investing at the end of the month.

So I don't know why so many people are obsessed with working 50+ hours a week in high stress jobs just to make that 100k and not being happy then having to spend even more money on taking more vacations just to offset their stress.

I don't think it is worth it to hussle so hard just to have a house as opposed to a condo. I mean the opportunity cost is just too high. You would need AT LEAST a 100k salary, and you would also need a partner with also AT LEAST a 100k salary, and you would both have to live a lifestyle consistent with a 60k salary yet work hard enough for a 100k salary, and save for at least 10+ years, and invest smartly, then finally you can put the hundreds of thousands of dollars you saved just as a downpayment, and also probably in a crappy suburb that is still too far and you would still have a 1.5+ hour commute daily, and still pay mortgage for another 20-30 years. I don't think all the trouble is worth it just to have a house as opposed to a condo.

A lot of people think that being a doctor or lawyer means you are smart. Well, being a doctor or lawyer is something that society pressures you into being, because society needs doctors and lawyers. How smart are you really in the first place if you can't think independently and follow the pressured advice of people who have an interest in making you do what they want you to do, and all for a return that might not be worth it?
234 replies
Deal Fanatic
User avatar
Mar 23, 2008
9749 posts
6137 upvotes
Edmonton
I struggle to understand your question. I’ve got a 2 year diploma, work 40 hours a week, live in one of the best neighbourhoods in the city (12 minute commute), and make mid $1xx,xxx per year. Making 70k isn’t going to make my life better/easier. I guess I could work 20 hour weeks, but I’m not ready to retire.

C
Deal Fanatic
Dec 11, 2008
9586 posts
1268 upvotes
Depends on work/life balance and responsibility.

If I plan to stay at my current company, I have no desire to be a manager. The extra pay is not worth the extra mandatory hours in addition to working evenings/weekends etc. Not to mention you lose the DB Pension and you don't earn more vacation etc.

Having said that, I do have a good salary so that is why there is no incentive and the management income to me doesn't justify the extra work.
Last edited by speedyforme on Mar 20th, 2018 6:00 pm, edited 1 time in total.
[OP]
Newbie
Mar 19, 2018
29 posts
11 upvotes
CNeufeld wrote:
Mar 20th, 2018 5:57 pm
I struggle to understand your question. I’ve got a 2 year diploma, work 40 hours a week, live in one of the best neighbourhoods in the city (12 minute commute), and make mid $1xx,xxx per year. Making 70k isn’t going to make my life better/easier. I guess I could work 20 hour weeks, but I’m not ready to retire.

C
Well my friend, you are the exception not the norm. What job do you have that makes 150k a year with a 2 year diploma? And approximately when did you get your diploma?
Deal Fanatic
User avatar
Mar 23, 2008
9749 posts
6137 upvotes
Edmonton
dinofeline wrote:
Mar 20th, 2018 6:00 pm
Well my friend, you are the exception not the norm. What job do you have that makes 150k a year with a 2 year diploma? And approximately when did you get your diploma?
15+ years of software/BI experience.

C
Newbie
Oct 9, 2017
39 posts
22 upvotes
OP, I would like to see what a breakdown of monthly expenses would look like if you think you could live off of $4,000 net every month. Mortgage and car payments could take up almost half that amount. That's not even taking into account the strata fees, home insurance, property tax, car insurance and gas. Then you get to other basic expenses like food, hydro, cable/internet and phone. That doesn't leave much or anything for entertainment/discretionary spending or even savings.
Jr. Member
Jan 12, 2010
149 posts
37 upvotes
Looks like legalizing cannabis is working, kids everywhere are feeling high and good about themselves making 60k in GTA....
Millennials are too busy getting high to complain about generational wealth transfters/ theft/ inequality / social justice
q buy more cannabis stocks
[OP]
Newbie
Mar 19, 2018
29 posts
11 upvotes
kalso87 wrote:
Mar 20th, 2018 6:19 pm
OP, I would like to see what a breakdown of monthly expenses would look like if you think you could live off of $4,000 net every month. Mortgage and car payments could take up almost half that amount. That's not even taking into account the strata fees, home insurance, property tax, car insurance and gas. Then you get to other basic expenses like food, hydro, cable/internet and phone. That doesn't leave much or anything for entertainment/discretionary spending or even savings.
Just off the top of my head so if any are unreasonable or if i missed something say which:

Mortgage + maintenance fee of a 1 bedroom condo= 1700
property tax= 250
Utilities not covered by maintenance fee: 150
Food=300
Internet+phone: 120
Car insurance+gas+maintenance= 400
Clothes= 200
Entertainment= 300
Misc.= 100

3520

you would still have 500 for saving/investment. keep in mind that a car is not a necessity. If you buy a condo in good transit you can get a monthly pass for less then 150, and lets say the occasional uber or GO train ride would bump it up to 200-250 so you would still be saving hundreds compared to a car.
Newbie
Oct 9, 2017
39 posts
22 upvotes
dinofeline wrote:
Mar 20th, 2018 6:47 pm
Just off the top of my head so if any are unreasonable or if i missed something say which:

Mortgage + maintenance fee of a 1 bedroom condo= 1700
property tax= 250
Utilities not covered by maintenance fee: 150
Food=300
Internet+phone: 120
Car insurance+gas+maintenance= 400
Clothes= 200
Entertainment= 300
Misc.= 100

3520

you would still have 500 for saving/investment. keep in mind that a car is not a necessity. If you buy a condo in good transit you can get a monthly pass for less then 150, and lets say the occasional uber or GO train ride would bump it up to 200-250 so you would still be saving hundreds compared to a car.
What about vacations? Also, those are just the basic expenses and you haven't into account any unforeseen huge expenditures like replacing broken furniture/appliances or strata levies. I was just hit with a $300 strata levy to fix the fire extinguisher glass panel, and the strata is now thinking of replacing the roof. Early estimates look like I'll have to fork over $6,000.

So yeah, that $500/month could disappear pretty quickly.
Newbie
Jul 8, 2017
90 posts
111 upvotes
dinofeline wrote:
Mar 20th, 2018 6:47 pm
Just off the top of my head so if any are unreasonable or if i missed something say which:

Mortgage + maintenance fee of a 1 bedroom condo= 1700
property tax= 250
Utilities not covered by maintenance fee: 150
Food=300
Internet+phone: 120
Car insurance+gas+maintenance= 400
Clothes= 200
Entertainment= 300
Misc.= 100

3520

you would still have 500 for saving/investment. keep in mind that a car is not a necessity. If you buy a condo in good transit you can get a monthly pass for less then 150, and lets say the occasional uber or GO train ride would bump it up to 200-250 so you would still be saving hundreds compared to a car.
Not sure which province you are from but 60k salary does not result in 4k take home monthly where I'm from (ONT). More like 1.7k and maybe less if you factor in a pension deduction/union fees. So you're working with 3500 more or less.

And, 300 a month to eat? lol

But to answer your question, I'd say 85k is very comfortable for a single person without having to restrict yourself.
Deal Addict
Jul 7, 2013
1138 posts
632 upvotes
North York
dinofeline wrote:
Mar 20th, 2018 6:47 pm
Internet+phone: 120
Thanks to rfd, my internet (Rogers 500u-$25) and phone (Koodo 6gb-$40) = $65+tax

Allows funds to be allocated over to foods lol
Newbie
Feb 14, 2018
29 posts
19 upvotes
I can already tell people are going to disagree with me, but I think 85-90k is the sweet spot to live in Toronto.

With rent hovering very close to $2000 a month for a 1 bedroom condo, anything below 65k becomes stressful. I could be frugal, rent with a room mate, etc to save money. But thats not exactly what I would call a sweet spot. I'm talking about having complete independence with enough money leftover to enjoy life, go out with friends, order a beer with dinner, go on a vacation every year instead of wasting vacation days at home. 85-90k would allow me to do that.
[OP]
Newbie
Mar 19, 2018
29 posts
11 upvotes
YoungPostiefrom92 wrote:
Mar 20th, 2018 8:00 pm
Not sure which province you are from but 60k salary does not result in 4k take home monthly where I'm from (ONT). More like 1.7k and maybe less if you factor in a pension deduction/union fees. So you're working with 3500 more or less.

And, 300 a month to eat? lol

But to answer your question, I'd say 85k is very comfortable for a single person without having to restrict yourself.
I rounded the 4000 figure using a general guess. Let's do the math:

Federal:
15% on the first $46,605 of taxable income, +
20.5% on the next $46,603 of taxable income (on the portion of taxable income over 46,605 up to $93,208)
https://www.canada.ca/en/revenue-agency ... years.html

0.15x46 605= 6991
.205x17 040= 3493

Ontario:
5.05% on the first $42,960 of taxable income, +
9.15% on the next $42,963,

0.0505x42 960= 2169
0.0915x17 037= 1559

= 14 212 tax.

60 000-14 212= 45 788
45 788/12= $3816 per month. so pretty close to the $4000 figure.

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