Do you make $400,000 a year but feel broke?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think HHI 400k for a family of 4 should feel broke no matter what high COL area they live in, but I really don't think it's that much money, and can easily be spent if not careful. Our HHI is around 300k and we can max out our retirement and college savings and still go on 2 vacations/year and eat out once in awhile. We drive our 10+ year old Hondas to the ground and are careful with what we buy. With daycare, student loans, mortgage on a modest house, insurances, daily living expenses, it all quickly goes. Our luxuries are we get to spend 10k on traveling, eat out 1-2x a week, max out 401ks, and contribute 24k/yr to 529s, but that's really it.

the bolded part really says it all.

I wanted to respond similarly, but I just can't type that well with my head exploding.

I still don't think it's as much as people make it out to be. To me, it's higher end of middle class because saving for 529 and retirement really shouldn't be counted as luxuries. We save on a modest house, cheap clothes, old but functional cars to travel and eat out a bit more. I'm not sure why you people think that's so much. What are your expectations for a middle class family?

Heads are exploding every where. $400k/year is not middle class. Stop being a clown.

Haters gonna hate. A person fully funding 401ks and 529s and nothing else is doing well, but they are certainly not wealthy.

I would argue that they are wealthy. some people need a reality check.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I feel the same way, but I don't want to send my kids to private school. I want a boat.

People making $400K should be entitled to a discount on boats. After maxing out retirement savings and 529s, paying student loans and mortgage, and eating out (only 1-2x per week), there simply isn't enough left to pay for a boat.

I deserve a boat. I should get a discount so I can have one.

By equating independent schools with buying a boat, you're intentionally attempting to perpetuate an exclusionary system where wealthy/legacy children are entitled to exclusive opportunities regardless of merit. According to the National Association of Independent Schools, financial aid "supports the drive to provide opportunity to the best and brightest, regardless of their economic circumstances."

I realize it's a controversial stance to suggest that every family should have an opportunity to rationally afford independent schools, but that's my position.

the key is rationally afford. i believe someone with 400k can rationally afford private school if that is their priority.

Yes, that is the key. As noted multiple times, there's unanimous agreement that a family on $400k HHI can afford one private school tuition, full stop. However, if you flip to an example of four kids, with earning power being a recent phenomenon and no real wealth/savings/equity backing it up, it's definitely conceivable that a family on $400k could not rationally afford $120k full freight.

would a private school really give FA in this case? seems like a stretch to me.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think HHI 400k for a family of 4 should feel broke no matter what high COL area they live in, but I really don't think it's that much money, and can easily be spent if not careful. Our HHI is around 300k and we can max out our retirement and college savings and still go on 2 vacations/year and eat out once in awhile. We drive our 10+ year old Hondas to the ground and are careful with what we buy. With daycare, student loans, mortgage on a modest house, insurances, daily living expenses, it all quickly goes. Our luxuries are we get to spend 10k on traveling, eat out 1-2x a week, max out 401ks, and contribute 24k/yr to 529s, but that's really it.

the bolded part really says it all.

I wanted to respond similarly, but I just can't type that well with my head exploding.

I still don't think it's as much as people make it out to be. To me, it's higher end of middle class because saving for 529 and retirement really shouldn't be counted as luxuries. We save on a modest house, cheap clothes, old but functional cars to travel and eat out a bit more. I'm not sure why you people think that's so much. What are your expectations for a middle class family?

But they are luxuries, especially when you are saving to the tune of 100k per year. You make 8X as much as the national median income. EIGHT! And don't use the DC area as an excuse, it was only 64k during the last census. You are the biggest dolt I've ran into on DCUM, and that is saying something.

You should just come out and say, I care more about saving 100k a year than I do about sending my kids to private school. There is nothing wrong with that decision, unless of course you whine that 400k is middle class and that you deserve a private school subsidy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think HHI 400k for a family of 4 should feel broke no matter what high COL area they live in, but I really don't think it's that much money, and can easily be spent if not careful. Our HHI is around 300k and we can max out our retirement and college savings and still go on 2 vacations/year and eat out once in awhile. We drive our 10+ year old Hondas to the ground and are careful with what we buy. With daycare, student loans, mortgage on a modest house, insurances, daily living expenses, it all quickly goes. Our luxuries are we get to spend 10k on traveling, eat out 1-2x a week, max out 401ks, and contribute 24k/yr to 529s, but that's really it.

the bolded part really says it all.

I wanted to respond similarly, but I just can't type that well with my head exploding.

I still don't think it's as much as people make it out to be. To me, it's higher end of middle class because saving for 529 and retirement really shouldn't be counted as luxuries. We save on a modest house, cheap clothes, old but functional cars to travel and eat out a bit more. I'm not sure why you people think that's so much. What are your expectations for a middle class family?

But they are luxuries, especially when you are saving to the tune of 100k per year. You make 8X as much as the national median income. EIGHT! And don't use the DC area as an excuse, it was only 64k during the last census. You are the biggest dolt I've ran into on DCUM, and that is saying something.

You should just come out and say, I care more about saving 100k a year than I do about sending my kids to private school. There is nothing wrong with that decision, unless of course you whine that 400k is middle class and that you deserve a private school subsidy.

I agree they are luxuries that the majority are unable to afford.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I feel the same way, but I don't want to send my kids to private school. I want a boat.

People making $400K should be entitled to a discount on boats. After maxing out retirement savings and 529s, paying student loans and mortgage, and eating out (only 1-2x per week), there simply isn't enough left to pay for a boat.

I deserve a boat. I should get a discount so I can have one.

By equating independent schools with buying a boat, you're intentionally attempting to perpetuate an exclusionary system where wealthy/legacy children are entitled to exclusive opportunities regardless of merit. According to the National Association of Independent Schools, financial aid "supports the drive to provide opportunity to the best and brightest, regardless of their economic circumstances."

I realize it's a controversial stance to suggest that every family should have an opportunity to rationally afford independent schools, but that's my position.

the key is rationally afford. i believe someone with 400k can rationally afford private school if that is their priority.

Yes, that is the key. As noted multiple times, there's unanimous agreement that a family on $400k HHI can afford one private school tuition, full stop. However, if you flip to an example of four kids, with earning power being a recent phenomenon and no real wealth/savings/equity backing it up, it's definitely conceivable that a family on $400k could not rationally afford $120k full freight.

would a private school really give FA in this case? seems like a stretch to me.

The debate isn't necessarily whether they would, but whether they should.

Again, if you assume hypothetically that a family in that situation, living modestly, has an ability to save $120k, my position the system should given them some small award - let's say $2,500 to $5,000 per kid. I think a family devoting $100-110k of a total $120k availability is being asked to do more than enough, and should not be asked to pay the exact same amount as a similar family making $1M (who can afford $120k and still save 80% of their available disposable income).

Similarly, for the poster earlier who was paying full freight with one kid on $150k HHI, I'd construct the system to give them some level of aid as well, as even paying 80% of full freight on 150k is a hundred times more burdensome than paying 100% full freight to a family making $600k-$1M.

If you take the Republican idea of reforming the tax code into two marginal tax brackets, that's basically what you have right now in the financial aid system. It's much less progressive than the tax code.

[Anonymous]

Anonymous wrote:But they are luxuries, especially when you are saving to the tune of 100k per year.

How is a family funding two 401ks and $24k of 529 saving 100k?

I'm assuming this poster is referring to 401ks with a $17,500 limit, not self-employment plans.

[Anonymous]

Anonymous wrote:

Anonymous wrote:But they are luxuries, especially when you are saving to the tune of 100k per year.

How is a family funding two 401ks and $24k of 529 saving 100k?

I'm assuming this poster is referring to 401ks with a $17,500 limit, not self-employment plans.

The total value of his savings, including 401ks and 529s = 100k.

[Anonymous]

Private school is a luxury. Not a need. You are off your rocker.

[Anonymous]

At $400K you are right on the cusp of upper middle and upper for this area. So from that perspective you get a full view of what it is like to be rich -- but not enough to be really upper. You are usually far removed from "poor" so you do not see much of that. People do tend to look up -- so they want the trappings of wealth -- private schools, big house, 2nd home, 3rd home, many vacations, luxury cars, boat and so on. If you try to be "rich" on that salary you will go broke around here. I think the expenses are about on par for someone without inherited wealth who is not really budgeting and just paying for things as they come up.

[Anonymous]

Anonymous wrote:You should just come out and say, I care more about saving 100k a year than I do about sending my kids to private school. There is nothing wrong with that decision, unless of course you whine that 400k is middle class and that you deserve a private school subsidy.

There's no need to come out and say anything as I've been very transparent. Let me repeat it one more time:

I think that a family with 4 kids in school should be permitted to save a small chunk of that $120k they'd otherwise save in this hypothetical. So they can choose between sending four kids to public and saving $120k, or they can choose to prioritize private school, but perhaps be permitted to save $20k per year and only pay $100k of their available $120k.

Anyone who is willing to devote $100k of their available $120k is prioritizing that decision at a very high level.

[Anonymous]

^^ Also many people earning that much are in some form self employed, which means save for retirement yourself.

[Anonymous]

Anonymous wrote:Private school is a luxury. Not a need. You are off your rocker.

This is a different debate. Again, I understand that most support a system that only allows the very wealthy to attend private school, sprinkled with some lower SES students for diversity purposes, but I don't agree with perpetuating that classist system.

[Anonymous]

Surely they have these in your dream scenario -

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think HHI 400k for a family of 4 should feel broke no matter what high COL area they live in, but I really don't think it's that much money, and can easily be spent if not careful. Our HHI is around 300k and we can max out our retirement and college savings and still go on 2 vacations/year and eat out once in awhile. We drive our 10+ year old Hondas to the ground and are careful with what we buy. With daycare, student loans, mortgage on a modest house, insurances, daily living expenses, it all quickly goes. Our luxuries are we get to spend 10k on traveling, eat out 1-2x a week, max out 401ks, and contribute 24k/yr to 529s, but that's really it.

the bolded part really says it all.

I wanted to respond similarly, but I just can't type that well with my head exploding.

I still don't think it's as much as people make it out to be. To me, it's higher end of middle class because saving for 529 and retirement really shouldn't be counted as luxuries. We save on a modest house, cheap clothes, old but functional cars to travel and eat out a bit more. I'm not sure why you people think that's so much. What are your expectations for a middle class family?

But they are luxuries, especially when you are saving to the tune of 100k per year. You make 8X as much as the national median income. EIGHT! And don't use the DC area as an excuse, it was only 64k during the last census. You are the biggest dolt I've ran into on DCUM, and that is saying something.

You should just come out and say, I care more about saving 100k a year than I do about sending my kids to private school. There is nothing wrong with that decision, unless of course you whine that 400k is middle class and that you deserve a private school subsidy.

I agree they are luxuries that the majority are unable to afford.

I think it is interesting that your head is exploding when they are describing a middle class lifestyle. What your grandparents took for granted in the 1950s.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:But they are luxuries, especially when you are saving to the tune of 100k per year.

How is a family funding two 401ks and $24k of 529 saving 100k?

I'm assuming this poster is referring to 401ks with a $17,500 limit, not self-employment plans.

The total value of his savings, including 401ks and 529s = 100k.

The poster will have to clarify, as they stated "max out 401ks, and contribute 24k/yr to 529s, but that's really it".

I'm interpreting that as $17,500 + $17,500 + $24,000. Good savings, but a far cry from $100k.