Why a 300-400k salary doesn't feel rich

[Anonymous]

Anonymous wrote:300K is rich in the sense that at that level you can reasonably pay a mortgage, save for retirement, save for college, pay for daycare, and go on decent vacations. You are building wealth and buying your kids some breathing space, which is more than the vast majority of Americans can do.

It’s kind of crazy that these things are now for the “rich.” I feel like owning a home and being able to save and occasionally take a vacation or 2 should be a very middle class thing that everyone can do. It’s weird to me that with all the resources we have and technology that makes life better, we haven’t figured out a way to improve human life more. Like unless you’re born to rich parents you have to take out massive loans to get an education and may never make it on the property ladder.

[Anonymous]

Anonymous wrote:

Anonymous wrote:300K is rich in the sense that at that level you can reasonably pay a mortgage, save for retirement, save for college, pay for daycare, and go on decent vacations. You are building wealth and buying your kids some breathing space, which is more than the vast majority of Americans can do.

It’s kind of crazy that these things are now for the “rich.” I feel like owning a home and being able to save and occasionally take a vacation or 2 should be a very middle class thing that everyone can do. It’s weird to me that with all the resources we have and technology that makes life better, we haven’t figured out a way to improve human life more. Like unless you’re born to rich parents you have to take out massive loans to get an education and may never make it on the property ladder.

OP here. This is my point exactly

[Anonymous]

Stop whining and make a budget.

We are in the 96%ile nationally based on last year’s census data. I’m not throwing myself a pity party because I’m in the 96th and not the 99.5th. Grow up.

[Anonymous]

200k income, DH works full time, I work part time. Early 50s with two kids in middle school. Our house is worth 1.1M and we owe about 325k on our mortgage (monthly payment $2700 but we pay extra to pay it off faster - $3200). We have 2 older cars and a boat that are paid off. We have $2M in retirement savings at this point and $300k in college savings, in addition to the 700k+ home equity. We're super savers outside of the boat splurge and wouldn't have gone there if we couldn't pay it off. We're uninterested in most consumer crap like cars and clothes other than being comfortable.

[Anonymous]

At 300-400K, if you don't overspend on a house and have kids in public, you will live like a king.

[Anonymous]

Anonymous wrote:

Anonymous wrote:300K is rich in the sense that at that level you can reasonably pay a mortgage, save for retirement, save for college, pay for daycare, and go on decent vacations. You are building wealth and buying your kids some breathing space, which is more than the vast majority of Americans can do.

It’s kind of crazy that these things are now for the “rich.” I feel like owning a home and being able to save and occasionally take a vacation or 2 should be a very middle class thing that everyone can do. It’s weird to me that with all the resources we have and technology that makes life better, we haven’t figured out a way to improve human life more. Like unless you’re born to rich parents you have to take out massive loans to get an education and may never make it on the property ladder.

You do not have to "take massive loans to get an education" Most states have good schools that are under $30K. Take $5.5K student loan each year (max at $27K), kid works summers, all breaks and PT during the school year (10-12 hours) and your kid contributes 10-14K. That leaves $10-15K/year for the parents to assist with. If your parents cannot assist with that 10-15K (or didn't save some for it), then you do well in school and search for merit. A good student can get merit at many privates and state schools, just not the Top tier ones.

Or you start at CC (while living at home) and transfer to 4 year.
There are ways to do it

[Anonymous]

Anonymous wrote:200k income, DH works full time, I work part time. Early 50s with two kids in middle school. Our house is worth 1.1M and we owe about 325k on our mortgage (monthly payment $2700 but we pay extra to pay it off faster - $3200). We have 2 older cars and a boat that are paid off. We have $2M in retirement savings at this point and $300k in college savings, in addition to the 700k+ home equity. We're super savers outside of the boat splurge and wouldn't have gone there if we couldn't pay it off. We're uninterested in most consumer crap like cars and clothes other than being comfortable.

This is how it should be done! Congrats!

You live within your budget and don't get extras/luxuries unless you can actually afford it/plan for it. It doesn't matter your income, you simply must live within a budget.

[Anonymous]

Anonymous wrote:I have a 300k HHI and I agree with OP … sort of, but with a different perspective.

Basically our income at 300k doesn’t cover everything I would have dreamt 300k can afford. I’m constantly surprised by how much stuff costs and that even with a fairly good income, things like childcare, saving for college, saving for retirement, owning a home, and taking a few vacations per year adds up quickly. Growing up, these were all the things that seemed like normal parts of a regular UMC life, but they were attainable on a much lower income.

But my key takeaway isn’t to feel bad for myself. I realize my family is so lucky. I mostly have sympathy for families trying to make it on less, often a lot less. Daycare, groceries, housing etc. must take up such a huge portion of their budget. I have no idea how regular middle class people are even doing it right now.

I feel this way too.

I grew up MC/UMC and the things I had or did growing up are a lot nicer than the things I have/do now, even though our combined income is a lot more than my parents'. We aren't struggling by any means. But I thought things would be easier once we hit a $300K threshold. But stuff just got more expensive.

[Anonymous]

We are at 300k as well. I have no idea how people have million dollar homes on that. We bought when we made half of that but for 400k. Between that and just one low car payment, we are able to save well, but we also don't really eat out, don't own luxury anything, do our own small repairs and yard work. We could not live large and save well on our income.

[Anonymous]

Anonymous wrote:Overall quality of life is decreasing for everyone, from the lower class to the upper class. Even though percentage wise this income puts you in the 97-99th, it doesn't feel that great because a top 3% lifestyle now is different from a top 3% lifestyle 50 years ago. Going down to the 90th percentile which is under 200k/yr, most families who make that are barely getting by. To really be comfortable nowadays you need to be in the top 0.5%, not even a 1% income feels that rich.

it doesn't feel rich because the elite over-competition is getting insane. 40 years ago you could be a factory worker and support 3 kids with a stay at home wife and that was the norm, the public education system was decent so private school was a true luxury. Nowadays in the big cities, you need two people working and it is a struggle to provide just for one kid on 200k HHI the same quality of life someone could've had with 60k in HHI 40 years ago.

[Anonymous]

Anonymous wrote:

Anonymous wrote:300K is rich in the sense that at that level you can reasonably pay a mortgage, save for retirement, save for college, pay for daycare, and go on decent vacations. You are building wealth and buying your kids some breathing space, which is more than the vast majority of Americans can do.

It’s kind of crazy that these things are now for the “rich.” I feel like owning a home and being able to save and occasionally take a vacation or 2 should be a very middle class thing that everyone can do. It’s weird to me that with all the resources we have and technology that makes life better, we haven’t figured out a way to improve human life more. Like unless you’re born to rich parents you have to take out massive loans to get an education and may never make it on the property ladder.

No, no, no. Please stop it. It’s not just for the “rich”. Many middle class Americans own homes, send kids to college and occasionally go on vacation.
They own average homes, have modest vacations and send kids to average colleges.

It was never, never and never a time when the middle class could afford to live in the best neighborhood in town, send kids to the best schools in town, and go to the best vacation spots. This was always reversed to the “rich”.

The median home price in the DC area is now about 550k. Higher than it used to be, but a middle class family can manage to afford it.
It won’t allow you to buy a SFH in NW DC or Arlington. It won’t allow you to send your kids to a 10/10 school. But that’s not what middle class means in the first place. That’s for the upper class.

It won’t allow tou to save for college enough to afford private ivy league colleges. But that’s not for the middle class. That’s for the rich elite.
The middle class sends kids to community colleges or public in-state colleges.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:300K is rich in the sense that at that level you can reasonably pay a mortgage, save for retirement, save for college, pay for daycare, and go on decent vacations. You are building wealth and buying your kids some breathing space, which is more than the vast majority of Americans can do.

It’s kind of crazy that these things are now for the “rich.” I feel like owning a home and being able to save and occasionally take a vacation or 2 should be a very middle class thing that everyone can do. It’s weird to me that with all the resources we have and technology that makes life better, we haven’t figured out a way to improve human life more. Like unless you’re born to rich parents you have to take out massive loans to get an education and may never make it on the property ladder.

No, no, no. Please stop it. It’s not just for the “rich”. Many middle class Americans own homes, send kids to college and occasionally go on vacation.
They own average homes, have modest vacations and send kids to average colleges.

It was never, never and never a time when the middle class could afford to live in the best neighborhood in town, send kids to the best schools in town, and go to the best vacation spots. This was always reversed to the “rich”.

The median home price in the DC area is now about 550k. Higher than it used to be, but a middle class family can manage to afford it.
It won’t allow you to buy a SFH in NW DC or Arlington. It won’t allow you to send your kids to a 10/10 school. But that’s not what middle class means in the first place. That’s for the upper class.

It won’t allow tou to save for college enough to afford private ivy league colleges. But that’s not for the middle class. That’s for the rich elite.
The middle class sends kids to community colleges or public in-state colleges.

this is a very boomer way of thinking. I grew up in a very wealthy area back in the 90s, the type of lifestyle you could achieve 30 years versus now is night and day. My extra curicular used to consist of just playing pick up basket ball games at the local park. Now every kid in the same neighborhood has 2-3 sports/coaches + piano/art/russian math and maybe 1/3 go to private school. The amount it takes to raise a child that is competitive in today's market has gone up at a minimum 5-10x fold. While real estate affordability has gone up 3-4x fold. The same type of house my parents generation could afford based on a 130k HHI income in the 90s is completely unattainable based on 300-400k HHI today. we are talking about a 4-5x increase in home prices for the exact same homes.

The middle has fallen apart, and the UMC/LUC(lower upper class) is engaged in a crazy arms race of their kids to get into the few ivy/big tech/big law/med school slots.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:300K is rich in the sense that at that level you can reasonably pay a mortgage, save for retirement, save for college, pay for daycare, and go on decent vacations. You are building wealth and buying your kids some breathing space, which is more than the vast majority of Americans can do.

It’s kind of crazy that these things are now for the “rich.” I feel like owning a home and being able to save and occasionally take a vacation or 2 should be a very middle class thing that everyone can do. It’s weird to me that with all the resources we have and technology that makes life better, we haven’t figured out a way to improve human life more. Like unless you’re born to rich parents you have to take out massive loans to get an education and may never make it on the property ladder.

No, no, no. Please stop it. It’s not just for the “rich”. Many middle class Americans own homes, send kids to college and occasionally go on vacation.
They own average homes, have modest vacations and send kids to average colleges.

It was never, never and never a time when the middle class could afford to live in the best neighborhood in town, send kids to the best schools in town, and go to the best vacation spots. This was always reversed to the “rich”.

The median home price in the DC area is now about 550k. Higher than it used to be, but a middle class family can manage to afford it.
It won’t allow you to buy a SFH in NW DC or Arlington. It won’t allow you to send your kids to a 10/10 school. But that’s not what middle class means in the first place. That’s for the upper class.

It won’t allow tou to save for college enough to afford private ivy league colleges. But that’s not for the middle class. That’s for the rich elite.
The middle class sends kids to community colleges or public in-state colleges.

I think the only way that's true is if you have a SAHP. Say your middle class family earns a $100K HHI and contributes 10% to retirement and pays $5K per year for health insurance so pretax $85K. Let's say of that $85K pretax there is a total of 15% for all taxes (federal/state/payroll taxes) so $72.2K net. PITI on a $400K loan (assuming about 20% downpayment) would be around $2.1K PI, $500 taxes and $100 insurance of $2.7K total ($32.4K per year). That leaves the family with about $40K per year for everything else. Say 1% of house value for repairs that brings it down to $35K annual net or about $3K per month for everything else. Let's say average utilities (all in water/electric/gas and including cell phones) of $200 per month, groceries of $500 per month and college savings (state school) of $300 per month brings it down to $2K left most of which would be consumed by childcare if both parents work. You still have car insurance, car repairs and either a car payment or a car replacement fund in addition to clothes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:300K is rich in the sense that at that level you can reasonably pay a mortgage, save for retirement, save for college, pay for daycare, and go on decent vacations. You are building wealth and buying your kids some breathing space, which is more than the vast majority of Americans can do.

It’s kind of crazy that these things are now for the “rich.” I feel like owning a home and being able to save and occasionally take a vacation or 2 should be a very middle class thing that everyone can do. It’s weird to me that with all the resources we have and technology that makes life better, we haven’t figured out a way to improve human life more. Like unless you’re born to rich parents you have to take out massive loans to get an education and may never make it on the property ladder.

No, no, no. Please stop it. It’s not just for the “rich”. Many middle class Americans own homes, send kids to college and occasionally go on vacation.
They own average homes, have modest vacations and send kids to average colleges.

It was never, never and never a time when the middle class could afford to live in the best neighborhood in town, send kids to the best schools in town, and go to the best vacation spots. This was always reversed to the “rich”.

The median home price in the DC area is now about 550k. Higher than it used to be, but a middle class family can manage to afford it.
It won’t allow you to buy a SFH in NW DC or Arlington. It won’t allow you to send your kids to a 10/10 school. But that’s not what middle class means in the first place. That’s for the upper class.

It won’t allow tou to save for college enough to afford private ivy league colleges. But that’s not for the middle class. That’s for the rich elite.
The middle class sends kids to community colleges or public in-state colleges.

This is mostly true, but Arlington used to be affordable for the middle class.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:300K is rich in the sense that at that level you can reasonably pay a mortgage, save for retirement, save for college, pay for daycare, and go on decent vacations. You are building wealth and buying your kids some breathing space, which is more than the vast majority of Americans can do.

It’s kind of crazy that these things are now for the “rich.” I feel like owning a home and being able to save and occasionally take a vacation or 2 should be a very middle class thing that everyone can do. It’s weird to me that with all the resources we have and technology that makes life better, we haven’t figured out a way to improve human life more. Like unless you’re born to rich parents you have to take out massive loans to get an education and may never make it on the property ladder.

No, no, no. Please stop it. It’s not just for the “rich”. Many middle class Americans own homes, send kids to college and occasionally go on vacation.
They own average homes, have modest vacations and send kids to average colleges.

It was never, never and never a time when the middle class could afford to live in the best neighborhood in town, send kids to the best schools in town, and go to the best vacation spots. This was always reversed to the “rich”.

The median home price in the DC area is now about 550k. Higher than it used to be, but a middle class family can manage to afford it.
It won’t allow you to buy a SFH in NW DC or Arlington. It won’t allow you to send your kids to a 10/10 school. But that’s not what middle class means in the first place. That’s for the upper class.

It won’t allow tou to save for college enough to afford private ivy league colleges. But that’s not for the middle class. That’s for the rich elite.
The middle class sends kids to community colleges or public in-state colleges.

I disagree-- 30 years ago, middle class could live in a 10/10 school. I don't think someone making $300K today can get into a Montgomery County 10/10 school cluster without parent help or sacrificing retirement savings and vacations.