My family of four cannot live comfortably on $230,000 a year.

human interest

by andrew coat

Are you looking for the American dream? Be prepared to pay a nightmare amount.

The former Goldman Sachs analyst says a family of four would need to earn more than $230,000 a year to live comfortably in California's San Francisco Bay Area.

Sam Dogen, now 46, made headlines in 2012 after retiring at age 34 with a net worth of $3 million.

Since then, the father of two, who is also the author of the best-selling book Buy This, Not That: How to Spend Your Way to Wealth and Freedom, has invested in passive income from stocks, bonds and real estate. I make a living from my income. .

But in a candid new post on his website, Financial Samurai, Dogen recently revealed that he has invested a significant portion of his investment to buy real estate in tough but expensive San Francisco for his young family. It was revealed that the portion was converted into cash.

Today, Dogen, a financial guru, earns just $230,000 before taxes on his investments, while his annual expenses are projected to exceed $288,000 by 2024. says. To deduct that amount, Dougen estimates he would have to earn about $420,000 a year before taxes.

Dogen declared that he was “not looking for pity or pity,” and freely admitted that he lived a solid upper-middle-class life with his wife and two children.

But he detailed a breakdown of the estimated annual expenses, saying they are comparable to those of other families of two parents and two children living in similar expensive areas, such as New York City.

“This budget is based on my ideal lifestyle as a family of four living in a large city,” he writes. “Of course, there are areas to cut back on. But overall, it's a realistic and comfortable lifestyle.”

Dougen's annual budget includes $80,400 for private elementary school tuition for his two children and $24,000 for medical expenses.

He expects his food expenses to be more than $26,000 this year, while he estimates his housing costs, including property taxes, maintenance and insurance, will be a whopping $68,400.

“My wife and I don't have day jobs, so we have to pay for our own unsubsidized health insurance, which costs $2,300 a month,” Dougen explained.

Commenting on San Francisco's sky-high real estate prices, a financial guru says: “The good thing about living in San Francisco is that there are so many career and money-making opportunities… there's just too much excitement to leave it to a lower-cost area.” The country should try to save money at this time. Should. ”

Mr. Dougen's budget breakdown is sure to worry groups of Americans struggling to cope with soaring utility bills, rent and groceries.

“It's really hard to raise a family in an expensive city, save for retirement, find a way to spend more time with your kids before they go to college, and just enjoy life in general.” Dogen told the Post.

The former analyst, who holds an MBA from the University of California, Berkeley and also served as an executive director at Credit Suisse, said he is now considering returning to work or consulting after being retired for more than a decade. .

According to Forbes, the average annual salary for working Americans today is $59,428. In Mr. Dougen's California, the total was slightly higher, at $73,220.

Meanwhile, a recent study conducted by Investopedia found that for the average American citizen to achieve the American Dream (“owning a house, car, pets, and sending two children to school)” It turns out you need to earn a whopping $3,455,305 over your lifetime. ”

However, research shows that the average American at all levels of education earns only about $2.3 million.

Despite ongoing inflation, Dogen's top financial tip is to save as much as possible and invest wisely.

“The best way to combat inflation is to save aggressively and invest consistently,” he said. History shows that risky assets like real estate and stocks tend to outperform inflation over time. Therefore, it is everyone's duty to save and invest as much money as possible for as long as possible. ”