scrabbler1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Nov 20, 2009
- Messages
- 6,703
What always confuses me are we talking about before or after tax spending.
For example, I make about 120k a year, but after fully funding 401 k and taxes my take home pay is about 5k/month. Of that 5 k, my house payment alone is 2.5 k. So theoretically if the house was paid off I should be able to keep my life style as is and make it on 30k.
I am assuming my income would have to be at least 40k before taxes assuming all funds are taxable.
So when people discuss what they need or spend are we talking before or after taxes?
I include some income taxes but not all of them. What I include are the income taxes based on my reliable monthly and quarterly dividends from my stock and bond funds. What I exclude are the income taxes from the less frequent and more erratic (and sometimes non-existent) cap gain distributions. Any additional income taxes due from those distributions come from the distributions themselves, so I will always be able to pay them and will not affect my general budget.