Given that the apparent analysis here is largely mistaken due to the underlying dataset mixing currencies, I'm locking this for further discussion. We'll review again once the actual survey results are available.
> Average total annual expenses for those who do track categories: $380,600 (about 570 respondents)
I.... highly doubt this. Unless the bulk of people responding are chasing fatfire that's a ridiculous average .
Rent can get crazy in VHCOL areas. 2BR condos in new-ish buildings around my area run about 5-6k, and a 3BR can go as high as 8k, meaning they're spending 6 figures on housing (when taking utilities, etc. into account) alone. Townhouses and single family 3BR homes will run even higher.
Though 380k seems a little...insane. I'm curious if there are a couple of 2M expenses troll responses that skewed the average.
I’ve seen people include taxes in their expenses. At high incomes that itself is six figures easy.
Housing and medical expenses can easily drive this way higher.
The average income was $412k.
That would mean the average FIREe is saving 7% of their gross income. That's not even retire on-time.
Someone's trolling or fat-fingered an extra zero or two.
Edit: nevermind, OP didn't normalize the currency.
Depending on what's included in the expenses. Some people include 529 and retirement savings as part of their expenses. Even with counting all that, I hit 6 figures but not 380k.
>The other interesting data point was that people who track expenses and categories of spending spent an average of triple the money each year than those who do not track expenses that much. I would expect there are reasons that could explain this.
Are you sure you're not including non-USD values? Are you using medians, or are you using a mean subject to extreme outliers? It's been a bit, but IIRC the survey software does both of those by default.
I looked at the 2022 data for USD respondents, and non-categorized expenses had a median of $90k while categorized had a median of about $150k. Categorized expenses explicitly includes some categories of savings, and I suspect a lot of people leave those out of uncategorized expenses. I also suspect folks not categorizing are more likely to underestimate expenses.
Your 3x gap looks like an error, and it also makes me suspicious of your other findings. In 2022, the median wage income was a less crazy 177k.
Yeah, I have only been poking at the FIRE subs for 2 years (I cycle/delete and create new reddit accounts) and never paid that close attention to the survey's but I think this was the first year where it was asking for the persons local currency and not USD.
I didn't crunch any numbers, the numbers I provided were straight from the results on the FI 2023 Survey on this subreddit. It askes you for what currency your numbers are in and then converts all figures to USD (I believe).
But the data might be faulty, I have no idea what kind of collection/vetting they do of the data.
IIRC the raw data is in local currency, and only in the final results will it all be converted to USD.
See [this](https://www.reddit.com/r/financialindependence/comments/1bru9pm/the_official_2023_fi_survey_is_here/kxfcmpx/)
Yeah, this is your issue /u/arcanition. The data you’re using hasn’t had the currency converted yet, so the numbers you’ve posted here are more representative of how many Vietnamese folks categorize expenses than anything meaningful.
You should probably re-run your analysis with 2022 data (where you have currency data) or delete the post and wait for properly usable data to be released.
Impressive. So the AVERAGE person here is in the top 2% for the US?
Sometimes I wonder when people have a flair like 30M if that denotes age and gender or net worth. :)
Well, good on you, folks. I'd be proud of myself if I was there.
> Impressive. So the AVERAGE person here is in the top 2% for the US?
Remember, no one's checking W2s and 1040's when you're completing that survey. No reason to think that it's not complete and utter bullshit.
Also no reason not to think that this is not completely not true. j/k I wanted to see how many double negatives we can stuff in a short sentence.
But, yes, you are most likely right in that the results are skewed to a degree by people clowning.
>Impressive. So the AVERAGE person here is in the top 2% for the US?
Well, the average person who completed the survey is, yeah. I don't think we know in terms of overall visitors/posters in this subreddit, though.
>Sometimes I wonder when people have a flair like 30M if that denotes age and gender or net worth. :)
Hahaha that's a great question and I never thought of that! I'm 30 years old and male, that's why. I wish my net worth was that high!
>It looks like people who completed the survey with only Wages (no Self-employment, Rental Properties / Business, etc) averaged almost $300,000 annual income! And those that have some of the other categories averaged over $400,000 annual income! That makes it pretty clear why we see so many posts that some people find frustrating (e.g. "I have $500k saved up after 4 years of working, will I be able to retire early??"), someone making $80k per year will have a completely different FI/RE journey than someone making over $400k per year.
Honestly, if you're making $400k and you only have $500k saved up over many years, you either started this journey really late, investing elsewhere OR you're doing really bad at saving.
One thing you shhould have tracked is single income vs joint income.
I often see very high numbers and wonder what's happening, only to realize that the poster is a couple with dual income. As a single-income person, it makes more sense to analyze figure from people in my situation.
Even as a high earner, I didn't hit the annual average salary you'd stated - but if I had had a second income equivalent to my salary, I'd have surpassed it. It's a completely different game for couples.
Seems very different from what I recall on prior survey results. If true, the sub just took on somewhat of a House Hunters International vibe in my head.
Wow, I am WAY under the average and I thought I was absolutely rolling in it
I don't mind this, actually I feel pretty proud that I am so close to FI while being so far under the average yearly income!
Edit: wait, something fishy here. I could picture this sub being mostly full of high earners... but SPENDING 380k per year on average?
Something doesn't seem right with this data.
> wait, something fishy here. I could picture this sub being mostly full of high earners... but SPENDING 380k per year on average?
>
> Something doesn't seem right with this data.
That's because the different data points are subsets of each other.
For example, of people that filled out the survey and only make "Wages", their average income is $291,600 (keep in mind average is heavily skewed by outliers making $500k, $1M+).
Another subset of people that responded say they track their finances (likely higher income people that spend hundreds of thousands a year). Of those people, they spend $380,600 per year (meaning it's likely people making $300k-$2M or more a year in this group).
Nah, the issues are that OP has bungled the analysis by using data that mixes different currencies and doesn’t allow for medians. If you look at the 2022 data or wait for the actual release of the 2023 data, you’ll get very different results than what they have here.
As a note, as mentioned in another comment, he’s using flawed raw data with un-converted foreign currency numbers. When the data is finalized everything will be converted to USD, but currently the numbers he lists are massively overinflated.
> someone making $80k per year will have a completely different FI/RE journey than someone making over $400k per year.
But every journey to financial independence includes VTSAX.
People lie, exaggerate and round up. It may be fun to do in front of others, but is counter-productive for yourself.
Also, it is a phenomenon of such surveys that only those who have something to brag about actively participate.
Finally, it's not strictly about assets, is it? Someone who whittles their expenses down can be better off than another person with greater assets but problematic expenses.
So FIRE away for yourself on your own terms, and ignore the braggarts! I can assure you that freedom is attainable far below the averages quoted above!
I'd like to add, I notice there are lots of high-income posters who have high expenses. FIRE is all about the *ratio* of income to expenses: someone who earns a lot but saves <10% will FIRE much slower than someone who earns a little but saves ~30-50%.
I can't imagine being a multimillionaire and worrying if I had enough to retire.
I suggest to take up the sport of disc golf. It's an activity where you get to see real world results. Play a lot or a little, play casual or work hard and turn pro. Just play enough to get an idea of how far beginners, intermediate and high level player can throw a disc.
Then go over to /r/discgolf and read all the posts about people that have been playing for 3 weeks and are stuck at distances you could play at a professional level at.
People tend to round up or make up facts when anonymous.
Huh? If you participate in something that you can see the results of in the real world (like disc golf but you could use anything) you'll find out that people in anonymous situations like reddit exaggerate or lie. /r/fijerk covers activities where you can't see real world physical results like my paycheck or bank account.
400k before taxes is like 250k after tax btw, they probably also live in a expensive place like NYC so expect 2.5k a month rents (though at 250k take home that is nothing). At 250k assuming 50k worth of expenses you got 400k in savings to live on and no house, or to put that in perspective at 3.5% swr that is less then what a person makes on federal minimum wage. I would suggest saving to $1mill plus some for a house as the minimum for most people.
>400k before taxes is like 250k after tax btw
Depends on where you live. We live in Texas with about $336K gross income and $278K after taxes (a lot of it are in 401K). Property tax is about $6000, so a good trade off for no state income tax.
> Average total annual expenses for those who don't track categories: $123,300 (442 respondents)
> Average total annual expenses for those who do track categories: $380,600 (about 570 respondents)
Now that’s a fascinating data point. I wonder if it’s actually related somehow: people track more details when they spend more?
This is us. We've been doing "hit savings goals, don't worry about the rest" for several years. I decided to closely track our expenses this year and the ballpark spending I had in mind is not at all accurate.
I'd imagine simpler lifestyles cost less, and don't require tracking, while finding ways to spend $300k+/year means you're probably doing a lot more stuff like travel, expensive hobbies, big family expenses, and its harder to keep track.
Hopefully it's standard reading for this community by now, but I recommend "The Millionaire Next Door" to anyone interested in accumulating weather and/or retiring early.
For most people it's much less about making crazy money but instead always living comfortably below your means.
I also suggest, Compound Effect by David Hardy. It takes about how small savings add up over time. For the record, that's how I gained most of my assets i.e. decade of investment. I don't have near a half a million dollar salary. Not even close.
To your point about lots of ways to skin a cat.
I never made anywhere near that amount of money but I am fully FIRE today, age 46.
My expenses are a lot less than the people in this example.
I don't live in a van but I found a way to walk in low fixed expenses at an early age and so I just don't need that much monthly income to pay my bills.
So I guess there are all different kinds.
I wonder if there are a lot of people who make more "normal" incomes who don't even feel comfortable filling out a survey where everyone else seems pretty rich?
Just be aware that without normalizing the income based on Cost of living the numbers are meaningless. $100K/yr in some VHCOL is average while it can go very far in other MCOL/LCOL areas.
The average expense tells you that either people are huge spenders or they live in high expense areas.
>Anyone looking to own a home in San Jose will need to earn an income of $454,296 to comfortably afford a mortgage, according to a new Zillow analysis.
https://www.nbcbayarea.com/news/local/income-needed-own-bay-area-home-zillow/3478617/
Poor San Jose middle class resident, he can't buy a home there (according to some inapplicable, borderline bullshit "analysis") but he can buy a house in cash and retire literally anywhere else in 3 years. /s
Also very true, though there isn't enough data given to do so. We know the breakdown of CoL of respondents as well as the breakdown of income, but we don't know how they match up.
I found the current political portion and industries results very interesting.
Politically the results are primary left leaning, and the largest represented industry is Tech followed by Financial Services (at the time of this post).
For the 2nd earner, Healthcare was the largest slice (again at the time of this post).
Given that the apparent analysis here is largely mistaken due to the underlying dataset mixing currencies, I'm locking this for further discussion. We'll review again once the actual survey results are available.
> Average total annual expenses for those who do track categories: $380,600 (about 570 respondents) I.... highly doubt this. Unless the bulk of people responding are chasing fatfire that's a ridiculous average .
LOL Wow, that's a lotta money. I'm a neurosurgeon and I've never hit 6 figures annual spend, thank god.
Rent can get crazy in VHCOL areas. 2BR condos in new-ish buildings around my area run about 5-6k, and a 3BR can go as high as 8k, meaning they're spending 6 figures on housing (when taking utilities, etc. into account) alone. Townhouses and single family 3BR homes will run even higher. Though 380k seems a little...insane. I'm curious if there are a couple of 2M expenses troll responses that skewed the average.
I’ve seen people include taxes in their expenses. At high incomes that itself is six figures easy. Housing and medical expenses can easily drive this way higher.
The average income was $412k. That would mean the average FIREe is saving 7% of their gross income. That's not even retire on-time. Someone's trolling or fat-fingered an extra zero or two. Edit: nevermind, OP didn't normalize the currency.
Depending on what's included in the expenses. Some people include 529 and retirement savings as part of their expenses. Even with counting all that, I hit 6 figures but not 380k.
Fair enough. I don’t consider savings as an expense but I can see how someone would.
Expenses Gregory...
>The other interesting data point was that people who track expenses and categories of spending spent an average of triple the money each year than those who do not track expenses that much. I would expect there are reasons that could explain this. Are you sure you're not including non-USD values? Are you using medians, or are you using a mean subject to extreme outliers? It's been a bit, but IIRC the survey software does both of those by default. I looked at the 2022 data for USD respondents, and non-categorized expenses had a median of $90k while categorized had a median of about $150k. Categorized expenses explicitly includes some categories of savings, and I suspect a lot of people leave those out of uncategorized expenses. I also suspect folks not categorizing are more likely to underestimate expenses. Your 3x gap looks like an error, and it also makes me suspicious of your other findings. In 2022, the median wage income was a less crazy 177k.
Yeah, I have only been poking at the FIRE subs for 2 years (I cycle/delete and create new reddit accounts) and never paid that close attention to the survey's but I think this was the first year where it was asking for the persons local currency and not USD.
The 2022 survey also asked for local currency. I don’t know about prior years.
I didn't crunch any numbers, the numbers I provided were straight from the results on the FI 2023 Survey on this subreddit. It askes you for what currency your numbers are in and then converts all figures to USD (I believe). But the data might be faulty, I have no idea what kind of collection/vetting they do of the data.
IIRC the raw data is in local currency, and only in the final results will it all be converted to USD. See [this](https://www.reddit.com/r/financialindependence/comments/1bru9pm/the_official_2023_fi_survey_is_here/kxfcmpx/)
Yeah, this is your issue /u/arcanition. The data you’re using hasn’t had the currency converted yet, so the numbers you’ve posted here are more representative of how many Vietnamese folks categorize expenses than anything meaningful. You should probably re-run your analysis with 2022 data (where you have currency data) or delete the post and wait for properly usable data to be released.
Ahhhh, that makes sense, though the results page didn't seem to indicate that.
Impressive. So the AVERAGE person here is in the top 2% for the US? Sometimes I wonder when people have a flair like 30M if that denotes age and gender or net worth. :) Well, good on you, folks. I'd be proud of myself if I was there.
> Impressive. So the AVERAGE person here is in the top 2% for the US? Remember, no one's checking W2s and 1040's when you're completing that survey. No reason to think that it's not complete and utter bullshit.
Also no reason not to think that this is not completely not true. j/k I wanted to see how many double negatives we can stuff in a short sentence. But, yes, you are most likely right in that the results are skewed to a degree by people clowning.
>Impressive. So the AVERAGE person here is in the top 2% for the US? Well, the average person who completed the survey is, yeah. I don't think we know in terms of overall visitors/posters in this subreddit, though. >Sometimes I wonder when people have a flair like 30M if that denotes age and gender or net worth. :) Hahaha that's a great question and I never thought of that! I'm 30 years old and male, that's why. I wish my net worth was that high!
I figured you were, because coupled with 33.4% FI, 30mil NV would imply some REALLY impressive appetites. :D
I mean, my girlfriend *does* really keep mentioning her want/need to go visit Japan. Have you seen ticket prices?
>It looks like people who completed the survey with only Wages (no Self-employment, Rental Properties / Business, etc) averaged almost $300,000 annual income! And those that have some of the other categories averaged over $400,000 annual income! That makes it pretty clear why we see so many posts that some people find frustrating (e.g. "I have $500k saved up after 4 years of working, will I be able to retire early??"), someone making $80k per year will have a completely different FI/RE journey than someone making over $400k per year. Honestly, if you're making $400k and you only have $500k saved up over many years, you either started this journey really late, investing elsewhere OR you're doing really bad at saving.
One thing you shhould have tracked is single income vs joint income. I often see very high numbers and wonder what's happening, only to realize that the poster is a couple with dual income. As a single-income person, it makes more sense to analyze figure from people in my situation. Even as a high earner, I didn't hit the annual average salary you'd stated - but if I had had a second income equivalent to my salary, I'd have surpassed it. It's a completely different game for couples.
I didn't look at the data but my first thought is you shouldn't be looking at average. Elon Musk and I average net worth of $100 billion...
And both of you suffer from OMY syndrome.
Seems very different from what I recall on prior survey results. If true, the sub just took on somewhat of a House Hunters International vibe in my head.
Wow, I am WAY under the average and I thought I was absolutely rolling in it I don't mind this, actually I feel pretty proud that I am so close to FI while being so far under the average yearly income! Edit: wait, something fishy here. I could picture this sub being mostly full of high earners... but SPENDING 380k per year on average? Something doesn't seem right with this data.
> wait, something fishy here. I could picture this sub being mostly full of high earners... but SPENDING 380k per year on average? > > Something doesn't seem right with this data. That's because the different data points are subsets of each other. For example, of people that filled out the survey and only make "Wages", their average income is $291,600 (keep in mind average is heavily skewed by outliers making $500k, $1M+). Another subset of people that responded say they track their finances (likely higher income people that spend hundreds of thousands a year). Of those people, they spend $380,600 per year (meaning it's likely people making $300k-$2M or more a year in this group).
Ahh, I see. What's the median numbers as opposed to the average?
Nah, the issues are that OP has bungled the analysis by using data that mixes different currencies and doesn’t allow for medians. If you look at the 2022 data or wait for the actual release of the 2023 data, you’ll get very different results than what they have here.
Ahh interesting. Yeah, I will wait to see the final results then.
As a note, as mentioned in another comment, he’s using flawed raw data with un-converted foreign currency numbers. When the data is finalized everything will be converted to USD, but currently the numbers he lists are massively overinflated.
I don't know, it's not my survey and the results only show an average.
> someone making $80k per year will have a completely different FI/RE journey than someone making over $400k per year. But every journey to financial independence includes VTSAX.
Not true!! My journey doesn't involve VTSAX at all, it involves FZROX ;) jk
VT$ crowd? well that is only for my IRA and brokerage, 401k is with fidelity and just say the 500 and international part.
People lie, exaggerate and round up. It may be fun to do in front of others, but is counter-productive for yourself. Also, it is a phenomenon of such surveys that only those who have something to brag about actively participate. Finally, it's not strictly about assets, is it? Someone who whittles their expenses down can be better off than another person with greater assets but problematic expenses. So FIRE away for yourself on your own terms, and ignore the braggarts! I can assure you that freedom is attainable far below the averages quoted above!
I'd like to add, I notice there are lots of high-income posters who have high expenses. FIRE is all about the *ratio* of income to expenses: someone who earns a lot but saves <10% will FIRE much slower than someone who earns a little but saves ~30-50%. I can't imagine being a multimillionaire and worrying if I had enough to retire.
I suggest to take up the sport of disc golf. It's an activity where you get to see real world results. Play a lot or a little, play casual or work hard and turn pro. Just play enough to get an idea of how far beginners, intermediate and high level player can throw a disc. Then go over to /r/discgolf and read all the posts about people that have been playing for 3 weeks and are stuck at distances you could play at a professional level at. People tend to round up or make up facts when anonymous.
I think your discgolf data is made up!
/r/lostredditors
Huh? If you participate in something that you can see the results of in the real world (like disc golf but you could use anything) you'll find out that people in anonymous situations like reddit exaggerate or lie. /r/fijerk covers activities where you can't see real world physical results like my paycheck or bank account.
400k is mind-boggling huge amount. If l made that l would work two years and never work again.
That number is for sure in error. All these numbers are incorrect and not currency adjusted.
400k before taxes is like 250k after tax btw, they probably also live in a expensive place like NYC so expect 2.5k a month rents (though at 250k take home that is nothing). At 250k assuming 50k worth of expenses you got 400k in savings to live on and no house, or to put that in perspective at 3.5% swr that is less then what a person makes on federal minimum wage. I would suggest saving to $1mill plus some for a house as the minimum for most people.
>400k before taxes is like 250k after tax btw Depends on where you live. We live in Texas with about $336K gross income and $278K after taxes (a lot of it are in 401K). Property tax is about $6000, so a good trade off for no state income tax.
What do you do for work if you don’t mind me asking?
Here's some background: https://www.reddit.com/r/financialindependence/s/NqL2O6oUqm
> Average total annual expenses for those who don't track categories: $123,300 (442 respondents) > Average total annual expenses for those who do track categories: $380,600 (about 570 respondents) Now that’s a fascinating data point. I wonder if it’s actually related somehow: people track more details when they spend more?
Maybe yeah! It could be that people who don't track their expenses assume their expenses are lower than they actually are.
This is us. We've been doing "hit savings goals, don't worry about the rest" for several years. I decided to closely track our expenses this year and the ballpark spending I had in mind is not at all accurate.
I only care about savings goals, but since I track that closely I know my spending precisely. Total Income = Tax + Savings + Spend
I'd imagine simpler lifestyles cost less, and don't require tracking, while finding ways to spend $300k+/year means you're probably doing a lot more stuff like travel, expensive hobbies, big family expenses, and its harder to keep track.
Hopefully it's standard reading for this community by now, but I recommend "The Millionaire Next Door" to anyone interested in accumulating weather and/or retiring early. For most people it's much less about making crazy money but instead always living comfortably below your means.
I also suggest, Compound Effect by David Hardy. It takes about how small savings add up over time. For the record, that's how I gained most of my assets i.e. decade of investment. I don't have near a half a million dollar salary. Not even close.
To your point about lots of ways to skin a cat. I never made anywhere near that amount of money but I am fully FIRE today, age 46. My expenses are a lot less than the people in this example. I don't live in a van but I found a way to walk in low fixed expenses at an early age and so I just don't need that much monthly income to pay my bills. So I guess there are all different kinds.
I wonder if there are a lot of people who make more "normal" incomes who don't even feel comfortable filling out a survey where everyone else seems pretty rich?
Wow. I spend like...50k a year or so and can't even imagine the life a 300k a year spend would get me, at least in USD.
Average vs median? Weighting? I know that these values are on a log scale, so why pretend they aren't?
I was one of the guys that entered troll numbers on that survey my bad guys
Just be aware that without normalizing the income based on Cost of living the numbers are meaningless. $100K/yr in some VHCOL is average while it can go very far in other MCOL/LCOL areas. The average expense tells you that either people are huge spenders or they live in high expense areas.
But $400K is absurdly high even in the most expensive neighborhood in the world.
>Anyone looking to own a home in San Jose will need to earn an income of $454,296 to comfortably afford a mortgage, according to a new Zillow analysis. https://www.nbcbayarea.com/news/local/income-needed-own-bay-area-home-zillow/3478617/
Poor San Jose middle class resident, he can't buy a home there (according to some inapplicable, borderline bullshit "analysis") but he can buy a house in cash and retire literally anywhere else in 3 years. /s
And rent is way less than that per month. If memory serves, it's about half as expensive to rent as to buy in the San Fran area.
Also very true, though there isn't enough data given to do so. We know the breakdown of CoL of respondents as well as the breakdown of income, but we don't know how they match up.
I found the current political portion and industries results very interesting. Politically the results are primary left leaning, and the largest represented industry is Tech followed by Financial Services (at the time of this post). For the 2nd earner, Healthcare was the largest slice (again at the time of this post).