Comments on: How to get wealthy on minimum wage http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html --- a combination of simple living, anticonsumerism, DIY ethics, self-reliance, and applied capitalism Fri, 25 May 2012 19:02:53 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Dana http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-37566 Dana Sat, 14 Apr 2012 16:28:04 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-37566 If you have a minimum wage job, odds are "I like my job" is not the reason you'd give for not leaving your city. "All my friends and family are here" would be. Why? Because you invariably depend on them financially to a certain extent, whether it's to chip in for rent, cover your expenses in emergencies/unemployment (because min-wage employment is characterized by employment instability and hours that are often cut back depending on seasonal demand shifts) Say you work at McD's in LA and decide to move to AK, where the cost of living is lower. (Minimum wage is lower as well in LCL areas, so it may be a wash) McD's is not going to transfer you to Little Rock, you'd have to quit, move, then reapply in a region with no couches to crash on while you do so, with the other 500 people who want to work there. I know a guy who changed states and lived in a homeless shelter while he worked and went to school. If you have kids, this is not a reasonable option, and you'd have to live in a motel until you could earn enough to shell out for a deposit. Because it's unskilled labor, being hired depends on proximity, networks and sheer luck. Your network would need to be rebuilt from scratch, and that's why people don't just do that. If you fail to find employment in a timely fashion at home, you're on someone's couch - someone who knows you, trusts you, and might know someone who has a new job for you. If you fail somewhere else, you're homeless, and it's even harder to find work then. If you have a minimum wage job, odds are “I like my job” is not the reason you’d give for not leaving your city. “All my friends and family are here” would be. Why? Because you invariably depend on them financially to a certain extent, whether it’s to chip in for rent, cover your expenses in emergencies/unemployment (because min-wage employment is characterized by employment instability and hours that are often cut back depending on seasonal demand shifts) Say you work at McD’s in LA and decide to move to AK, where the cost of living is lower. (Minimum wage is lower as well in LCL areas, so it may be a wash) McD’s is not going to transfer you to Little Rock, you’d have to quit, move, then reapply in a region with no couches to crash on while you do so, with the other 500 people who want to work there. I know a guy who changed states and lived in a homeless shelter while he worked and went to school. If you have kids, this is not a reasonable option, and you’d have to live in a motel until you could earn enough to shell out for a deposit. Because it’s unskilled labor, being hired depends on proximity, networks and sheer luck. Your network would need to be rebuilt from scratch, and that’s why people don’t just do that. If you fail to find employment in a timely fashion at home, you’re on someone’s couch – someone who knows you, trusts you, and might know someone who has a new job for you. If you fail somewhere else, you’re homeless, and it’s even harder to find work then.

]]> By: The Carnival of Financial Goals III | brip blap http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-21362 The Carnival of Financial Goals III | brip blap Sat, 05 Mar 2011 13:53:41 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-21362 [...] presents How to get wealthy on minimum wage posted at Early Retirement Extreme. He thinks that there is no reason why you can’t get [...] [...] presents How to get wealthy on minimum wage posted at Early Retirement Extreme. He thinks that there is no reason why you can’t get [...]

]]> By: George the original one http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-19922 George the original one Sun, 19 Dec 2010 19:21:46 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-19922 Oops, meant to say those are 2011 numbers. Oops, meant to say those are 2011 numbers.

]]> By: George the original one http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-19921 George the original one Sun, 19 Dec 2010 19:16:31 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-19921 Here are some numbers for Oregon in 2010: Min Wage $17,000 SS Tax -$714 Medicare Tax -$247 Federal Tax -$768 Oregon Tax -$894 After tax income $14,378 Rent -$4,800 Transportation -$968 Food -$1,200 Health Insurance -$1,200 Extra utils -$1,200 Total surplus $5,010 (IRA?) Here are some numbers for Oregon in 2010:
Min Wage $17,000
SS Tax -$714
Medicare Tax -$247
Federal Tax -$768
Oregon Tax -$894

After tax income $14,378

Rent -$4,800
Transportation -$968
Food -$1,200
Health Insurance -$1,200
Extra utils -$1,200

Total surplus $5,010 (IRA?)

]]> By: jc http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-19918 jc Sun, 19 Dec 2010 14:52:56 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-19918 along these same lines I am at the moment reading "Nickel and Dimed" by Barbara Ehrereich. The author takes a series of minimum wage jobs and reports on the experence, the general idea being how tough it is to get by. So far a good read. It came to my attention because a group of Christians are trying to get it banned from our local High School where it is part of the reading for the personal finance course. While I've only read the 1st part where she is a waitress in FL, she does report that she learns that customers wearing crosses and WWJD (what would Jesus do) items tend to be rude, demanding and tip poorly. along these same lines I am at the moment reading “Nickel and Dimed” by Barbara Ehrereich. The author takes a series of minimum wage jobs and reports on the experence, the general idea being how tough it is to get by. So far a good read.

It came to my attention because a group of Christians are trying to get it banned from our local High School where it is part of the reading for the personal finance course.

While I’ve only read the 1st part where she is a waitress in FL, she does report that she learns that customers wearing crosses and WWJD (what would Jesus do) items tend to be rude, demanding and tip poorly.

]]> By: Little House in the Valley http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-19917 Little House in the Valley Sun, 19 Dec 2010 13:04:14 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-19917 [...] Retirement Extreme with How to get Wealthy on Minimum Wage. The definition of “wealthy” differs from “rich” in this article making it [...] [...] Retirement Extreme with How to get Wealthy on Minimum Wage. The definition of “wealthy” differs from “rich” in this article making it [...]

]]> By: dmitry http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-19911 dmitry Sat, 18 Dec 2010 19:40:21 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-19911 Paul Navone...yes, he saved up all the money, but he also says he didn't have a life. Sometimes I feel the same way (though I'd rather work in a factory like he did, not in a cube), but societal expectation dictate that one should have a life... :) Society conditioning aside, I still think I'd rather have a life outside work - but at the same time retire early (say, at 40; I'm 33 now), though maybe without millions. Currently working on it. Paul Navone…yes, he saved up all the money, but he also says he didn’t have a life. Sometimes I feel the same way (though I’d rather work in a factory like he did, not in a cube), but societal expectation dictate that one should have a life… :)

Society conditioning aside, I still think I’d rather have a life outside work – but at the same time retire early (say, at 40; I’m 33 now), though maybe without millions. Currently working on it.

]]> By: rePete http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-19889 rePete Sat, 18 Dec 2010 15:59:38 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-19889 frugalscholar, They have their own website you can find on Jacob's sidebar. http://ourtakeonfreedom.wordpress.com/ frugalscholar,

They have their own website you can find on Jacob’s sidebar. http://ourtakeonfreedom.wordpress.com/

]]> By: frugalscholar http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-19888 frugalscholar Sat, 18 Dec 2010 15:46:56 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-19888 Could you do some updates on the person featured in your link--the one who worked in finance and retired in his 20s? Could you do some updates on the person featured in your link–the one who worked in finance and retired in his 20s?

]]> By: celtictiger http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-19884 celtictiger Sat, 18 Dec 2010 11:57:58 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-19884 I lived like that as a student but as a masters graduate I lived it up for a year and a half. Now I want to go back to my old lifestyle so I can spend more on passive income sources and eventually retire. I regret my house purchase and the commute. I will overcome! I lived like that as a student but as a masters graduate I lived it up for a year and a half. Now I want to go back to my old lifestyle so I can spend more on passive income sources and eventually retire. I regret my house purchase and the commute. I will overcome!

]]> By: bethers http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-19882 bethers Sat, 18 Dec 2010 04:04:13 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-19882 Not exactly minimum wage, but Paul Navone became a millionaire and never made more than $11 per hour. It's a great story. http://www.cbsnews.com/video/watch/?id=3730966n Not exactly minimum wage, but Paul Navone became a millionaire and never made more than
$11 per hour. It’s a great story.

http://www.cbsnews.com/video/watch/?id=3730966n

]]> By: Bits & Pieces 12/18/10 http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-19881 Bits & Pieces 12/18/10 Fri, 17 Dec 2010 23:47:34 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-19881 [...] Interesting post: How to get wealthy on minimum wage [...] [...] Interesting post: How to get wealthy on minimum wage [...]

]]> By: Maus http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-19870 Maus Fri, 17 Dec 2010 21:50:39 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-19870 @jacob Hate to burst your bubble because I like the concept of this post, but you forgot some significant payroll taxes that take the net pay down a bit: FICA 7.7% SDI (In CA anyway) 1.1% So, $1030 less. Plus FED'L 10% of 11700, less standard deduction and single exemption $235 CA 2.25% of 11700, less standard deduction and single exemption $11 But, you get some add backs: CA Nonrefundable Renter's Credit $11 of $60 for single, so no CA tax liability. FED'L EIC $130 So, $1135 in total taxes (assuming no interest, dividends, or capital gains), leaving a net of $10,565. A little closer to your $5K cushion. @jacob
Hate to burst your bubble because I like the concept of this post, but you forgot some significant payroll taxes that take the net pay down a bit:

FICA 7.7%
SDI (In CA anyway) 1.1%
So, $1030 less.
Plus
FED’L 10% of 11700, less standard deduction and single exemption $235
CA 2.25% of 11700, less standard deduction and single exemption $11

But, you get some add backs:
CA Nonrefundable Renter’s Credit $11 of $60 for single, so no CA tax liability.

FED’L EIC $130

So, $1135 in total taxes (assuming no interest, dividends, or capital gains), leaving a net of $10,565. A little closer to your $5K cushion.

]]> By: Jacob http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-12469 Jacob Thu, 10 Jun 2010 22:18:58 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-12469 @Terri - With a minimum wage income, credit should never be obtained in the first place. Sounds harsh, but it's the truth. @Terri – With a minimum wage income, credit should never be obtained in the first place. Sounds harsh, but it’s the truth.

]]> By: Racetoendtheratrace http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-3744 Racetoendtheratrace Thu, 08 Jan 2009 05:36:58 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-3744 Good post. Unlike my wife and kids will be that militant with the constrained spending. But it is doable. Many immigrants do what you are saying on a regular basis. Housing prices are low in the South. In NC we have purchased a number of good homes in decent neighborhood for less than $100K for 3 bedrooms and 2 baths. Rents are about $750-850/ mo on these. $400/ mo for a 1 bedroom is not out of the question there. Good post. Unlike my wife and kids will be that militant with the constrained spending. But it is doable. Many immigrants do what you are saying on a regular basis.

Housing prices are low in the South. In NC we have purchased a number of good homes in decent neighborhood for less than $100K for 3 bedrooms and 2 baths. Rents are about $750-850/ mo on these. $400/ mo for a 1 bedroom is not out of the question there.

]]> By: Terri healthymoms http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-3464 Terri healthymoms Sun, 28 Dec 2008 14:16:12 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-3464 Circumstances beyond my control started me on the way to living frugally, at least learning "how to". Now I am becoming obsessed with saving money every way I can, that happens when one loses half their income. What happens when you can only pay minimum on credit card bills? There's no way to be able to pay off one at a time. Circumstances beyond my control started me on the way to living frugally, at least learning “how to”.
Now I am becoming obsessed with saving money every way I can, that happens when one loses half their income.
What happens when you can only pay minimum on credit card bills? There’s no way to be able to pay off one at a time.

]]> By: moneychallenge http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-100 moneychallenge Mon, 07 Jan 2008 02:18:35 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-100 THANK you for this post, Jacob! I've been looking for articles about thriving on minimum wage. I make more than minimum wage but I find the whole idea of living and loving life on a very low income tantalizing. I just started blogging this week about some of my financial goals for the year. A secret goal that I haven't started writing about yet is to cut my expenses down to mimic life at minimum wage. And THAT is The Great Money Challenge! THANK you for this post, Jacob! I’ve been looking for articles about thriving on minimum wage.

I make more than minimum wage but I find the whole idea of living and loving life on a very low income tantalizing.

I just started blogging this week about some of my financial goals for the year. A secret goal that I haven’t started writing about yet is to cut my expenses down to mimic life at minimum wage. And THAT is The Great Money Challenge!

]]> By: Jacob http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-89 Jacob Fri, 04 Jan 2008 05:31:40 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-89 $400k in the midwest will get you a 4 bd, 4 bath, 3 car garage, 3000+ sqft house with either a couple of acres of land or "fake lake" front access. Of course, the cost of living adjustments are not the same, so there are fewer high paying jobs to pay for the upkeep. Still, housing costs are way more out of whack than incomes. A $400k house in CA could be bought for maybe $60-80k in the midwest. Does anyone know what the price levels down south are? $400k in the midwest will get you a 4 bd, 4 bath, 3 car garage, 3000+ sqft house with either a couple of acres of land or “fake lake” front access. Of course, the cost of living adjustments are not the same, so there are fewer high paying jobs to pay for the upkeep. Still, housing costs are way more out of whack than incomes. A $400k house in CA could be bought for maybe $60-80k in the midwest. Does anyone know what the price levels down south are?

]]> By: Shanti http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-88 Shanti Fri, 04 Jan 2008 04:12:33 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-88 This is a great post. I listened to Dave Ramsey talking about how to be wealthy on minimum wage last summer and I like the twist you've given it - pay the credit first. That's what I did. I am SHOCKED to learn about housing prices in the midwest! I knew they were low, but not so low. When you originally did the calculations for minimum wage at a total of about $11,000 per year, I actually laughed. That barely covers my living expenses for the year. It's funny that someone above referenced prices in Seattle - I live here. When I hear that a decent home can cost $60,000 elsewhere, it makes my boyfriend's and my decision to buy a "frugal" $400,000 home laughable. I wanted to mention though that here in Washington state the minimum wage is significantly higher than the national minimum. I don't want to bother looking it up, but I assume other high cost-of-living states or cities have this as well. Or maybe not. I should look this up... Anyway, the minimum wage here in WA is something like $7.89 and it's raising to over $8 next year. But with cost of living so high here, I don't think it could be any other way. Your posts always inspire me. Thank you! This is a great post. I listened to Dave Ramsey talking about how to be wealthy on minimum wage last summer and I like the twist you’ve given it – pay the credit first. That’s what I did.

I am SHOCKED to learn about housing prices in the midwest! I knew they were low, but not so low. When you originally did the calculations for minimum wage at a total of about $11,000 per year, I actually laughed. That barely covers my living expenses for the year. It’s funny that someone above referenced prices in Seattle – I live here. When I hear that a decent home can cost $60,000 elsewhere, it makes my boyfriend’s and my decision to buy a “frugal” $400,000 home laughable.

I wanted to mention though that here in Washington state the minimum wage is significantly higher than the national minimum. I don’t want to bother looking it up, but I assume other high cost-of-living states or cities have this as well. Or maybe not. I should look this up…

Anyway, the minimum wage here in WA is something like $7.89 and it’s raising to over $8 next year. But with cost of living so high here, I don’t think it could be any other way.

Your posts always inspire me. Thank you!

]]> By: moneymonk http://earlyretirementextreme.com/how-to-get-wealthy-on-minimum-wage.html/comment-page-1#comment-83 moneymonk Thu, 03 Jan 2008 17:42:01 +0000 http://earlyretirementextreme.com/2008/01/how-to-get-wealthy-on-minimum-wage.html#comment-83 @moneychangesThings ...""I wouldn’t advise having kids with this gameplan, so be sure to budget for contraception!" LOL @moneychangesThings

…”"I wouldn’t advise having kids with this gameplan, so be sure to budget for contraception!”

LOL

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