Looking for the American Dream? Be prepared to pay outrageous amounts.
A former Goldman Sachs analyst says his family of four needs 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 the age of 34 with a net worth of $3 million.
Since that time, the father of two – who is also the author of the bestselling book Buy This, Not That: How to Spend Your Way to Wealth and Freedom – has lived off passive income from stocks, bonds and real estate .
But in a candid new post for his website, Financial Samurai, Dogen revealed that he recently cashed out a significant portion of his investments to buy a property for his young family in struggling but still expensive San Francisco.
Now, the financial guru says his investments will net him just $230,000 before taxes, while his annual expenses are expected to top $288,000 in 2024. To clear that amount, Dogen estimated he would need to earn around $420,000 per annum before taxes are deducted.
Dogen stated that he was “not asking for sympathy or empathy,” freely admitting that he lives a stable upper-middle-class life with his wife and two children.
But he provided his estimated annual expenses, saying they would be comparable to those of other two-parent, two-child families living in similarly expensive places, including New York.
“The budget is based on my ideal lifestyle for a family of four in a big city,” she wrote. “Of course, there are areas that need to be cut. But overall, it’s a realistic and comfortable lifestyle.”
Dogen’s annual budget includes $80,400 for private elementary school tuition for his two children, as well as $24,000 for health care expenses.
He estimates food costs will exceed $26,000 this year, while housing costs, including property taxes, maintenance and insurance, are estimated at $68,400.
Because both my wife and I are unemployed, we have to pay for unsubsidized health care insurance ourselves, which costs $2300 a month in premiums,” Dogen explained.
As for San Francisco’s exorbitant real estate prices, the financial guru said, “The great 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 in one area. lower cost for the country to try to save money right now.”
Dogen’s budget meltdown is sure to worry the growing group of Americans struggling to cope with the rising costs of utilities, rent and groceries.
“It’s really a struggle to raise a family in an expensive city, save for retirement, figure out how to spend a lot of time with your kids before they leave for college, and enjoy life in general,” Dogen told The Post.
The former analyst, who holds an MBA from the University of California, Berkeley and also worked as an executive at Credit Suisse, says he is now considering a return to work or consulting after more than a decade in retirement.
According to Forbes, the average annual salary for a working American is currently $59,428. In Dogen’s California, the amount is slightly higher, at $73,220.
Meanwhile, a recent study conducted by Investopedia found that the average US citizen needs to earn $3,455,305 over their lifetime to live the American Dream – which was classified as “having a home, a car, a pet and sending two kids to school.”
Yet the average American — at all levels of education — earns only about $2.3 million, according to the survey.
Despite ongoing inflation, Dogen’s top financial advice is to try to save where possible and invest wisely.
“The best way to fight inflation is to save aggressively and invest consistently,” he said. History has shown that risk assets such as real estate and stocks tend to outperform inflation overtime. Therefore, it is incumbent upon everyone to save and invest as much as possible for as long as possible.”