The divide gets bigger as you get older...

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's becoming apparent in my family. My brother lives in central PA and is a civil engineer. For various reasons, he never got all the certs required so he works a job that pays on the lower scale of civil engineering. His wife is a SAHM and has never been to college. Contrast that with a dual income professional family.

I don't think it bothers him but it bothers my SIL immensely that we can afford a nice house, vacations, etc.

He can buy a nice house in central PA if he really wants one.

-Pa native

Seriously. Central PA prices are amazing! And I love the woods, the hills, the skiing, it's great. Maybe he should get some certs.

He's tried to get them and has failed the tests. They do own a house but it's not as nice as others who make more money. The point was that decisions made early by him and his wife (not passing the certs, not going to college, moving to an area with low COL) and decisions made by my husband and I (professional degrees, moving to a HCOL) are proving to be divisive as we get older.

Why can’t he pass the certs? Do you think he would have done well in college if he can’t pass exams?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is the divide because your friends shoot up last 250k in income or prudent investing? 31 year old who just transitioned to health tech from consulting, bringing my salary from 110 to 150k. Hoping to keep growing or transition to big pharma because I don't want to be priced out. First gen college grad here that's just trying to understand the world.

Seems like it is really hard to plan to make more than that unless you're a law /business partner or owner or a senior tech lead or physician. Getting to 200 otherwise isn't impossible if you're motivated.

Basically what is the income that you see the divergence?

Another first gen here and I think investing certainly has something to do with it. I'm a bit surprised at all the people saying stuff like "it never occurred to me that I'd have to save for retirement." It makes me think that they took for granted that the money would be there, which was certainly not the case in my family. If you wanted something, it was entirely on you to earn it and retirement was meticulously planned. I make a good but not massive salary, but I have more money in the bank and more overall wealth than many people who out-earn me because I still have the frugal streak from my parents and I've spent very little on stuff to make myself look rich. The divergence is way more complex than who has the biggest salary.

Much of the divergence stems from getting onto the right track as early as possible. The sooner you're in the right place, the more that accrues to you down the road. Why so many well off people can look like they've always done the right thing is because their families provide the institutional knowledge of how to get onto the right track, including even connections. So many of the kids who went into finance right after college and who studied "business" in college came from families where the fathers worked in finance. I knew numerous kids with parents in finance, so the kid went to a decent college, and in the summers the fathers got them internships at some local finance firm, setting the stage for getting recruited to work on Wall Street after college, or if they weren't Wall Street quality, still get an analyst job at a regional city financial institution, setting up the trajectory for their 20s to end up in a generic but well paid financial consulting or oversight gig by their 30s.

Then you have families (common among Asian American families) who clearly direct their children into professional tracks early on so the kids are coming out of med school or other programs by age 25/26/27, which means by 30 they've finished residency and are now drawing large six figure incomes.

It's the people who took their 20s to figure out "what to do" or to explore different careers that have a much longer time getting established. This is how you find very intelligent people ending up in lowly paid minor roles while the dullards from HS seem to cruise through life in cushy financial or corporate roles.

This is spot on. However, some people are just late Bloomers. Also, many people who start off great financially get stagnant. This is very common with women who marry men who become permanently unemployed. This is far more common than people want to admit.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:As long as you're happy and have a fulfilling career, so what?

That's exactly what I thought at 25, but I didn't realize how much of a difference income makes on every area of your life. Where you can live, where your kids go to school, when or if you can ever retire, if you can travel, if you can afford certain types of healthcare, how you live, the security you feel, the security you can offer your family (parents or children), etc.

It never ends.

My best friend from college and I both got advanced degrees the same year, she went to a top MBA program and I went to a top public policy school. Fast forward over 20 years and she has a luxurious vacation home, huge savings, multiple kids in private school, and lots of luxuries. I’m doing fine as a GS-15 but our paths diverged a little and then a lot.

Major life decisions and accomplishments that look subtle compound overtime.

Unfortunately so do losses, mistakes and regrets.

agree.

By age 26-28, people should come to a realization about the life they really want and course correct if they need to do regarding their careers and major life decisions that impact their finances.

[Anonymous]

This is a pretty common scenario especially if you went to any kind of highly selective college etc. I'm divorced with a good but not next-level high paying job and I often need to skip out on some of the $200 multi-course dinners my long-time college friends and their spouses sometimes want to do.

[Anonymous]

Agree with the sentiment. From my college/post-college friend group there are three tracks. All three sets are in the top 20% of national income, but reflect the realities of a post-ivy education.

1) Non-profit world or similar. Lower incomes, but interesting jobs. But clearly needs to watch spending, and can't really do blow out european trips regularly. Can't afford expensive housing markets like DC and either rent or move to further out suburbs. We're talking <150K/year, so not poor by any means.

2) successful, but not too stressed. got that law degree or med school degree, but in-house or is a HMO pediatrician. good incomes and a decent amount of time to enjoy their lives. Travels frequently abroad (but not always first class, unless they have lots of airline miles) and own a home in nice inner suburbs or the city. Is thinking about a modest vacation cabin on the lake or a small boat. Usually still married to first spouse. Can afford an elite private school, but it is their biggest expense. Think more like 400K/year as a midpoint for a dual-income couple, with one spouse on a 'parent-track' job.

3) uber-professionally successful. went into private equity or is a high stress surgeon type with their own practice. honestly I don't see these friends much anymore, but most have had multiple weddings. They don't really see their kids too often, but their trips seem to be first class/private vacations to exotic locals. Eats out very frequently at the best places. Not clear if they own or rent properties, but they live in great locations. We're in the 2M+ range of salary. Note: a few friends are in the category since they inherited wealth.

We're in the middle of the pack. I do sometimes get resentful of the last category when my flight gets delayed and I wish I could just charter my own jet. But I'm very happy with our life. We own a nice 4bd/3ba on a leafy street that is walking distance to the office and schools. I'm not just cut out for the high stress life.

[Anonymous]

There are a whole lot of people between $150K and $400K.

[Anonymous]

Anonymous wrote:There are a whole lot of people between $150K and $400K.

And a reasonable number between 400K and 2M.

[Anonymous]

Anonymous wrote:Agree with the sentiment. From my college/post-college friend group there are three tracks. All three sets are in the top 20% of national income, but reflect the realities of a post-ivy education.

1) Non-profit world or similar. Lower incomes, but interesting jobs. But clearly needs to watch spending, and can't really do blow out european trips regularly. Can't afford expensive housing markets like DC and either rent or move to further out suburbs. We're talking <150K/year, so not poor by any means.

2) successful, but not too stressed. got that law degree or med school degree, but in-house or is a HMO pediatrician. good incomes and a decent amount of time to enjoy their lives. Travels frequently abroad (but not always first class, unless they have lots of airline miles) and own a home in nice inner suburbs or the city. Is thinking about a modest vacation cabin on the lake or a small boat. Usually still married to first spouse. Can afford an elite private school, but it is their biggest expense. Think more like 400K/year as a midpoint for a dual-income couple, with one spouse on a 'parent-track' job.

3) uber-professionally successful. went into private equity or is a high stress surgeon type with their own practice. honestly I don't see these friends much anymore, but most have had multiple weddings. They don't really see their kids too often, but their trips seem to be first class/private vacations to exotic locals. Eats out very frequently at the best places. Not clear if they own or rent properties, but they live in great locations. We're in the 2M+ range of salary. Note: a few friends are in the category since they inherited wealth.

We're in the middle of the pack. I do sometimes get resentful of the last category when my flight gets delayed and I wish I could just charter my own jet. But I'm very happy with our life. We own a nice 4bd/3ba on a leafy street that is walking distance to the office and schools. I'm not just cut out for the high stress life.

My friend group is different. I would say low end is 200k, mid is 500 and high is $1m+. We are in the higher group and I guess we are working rich. We look at people who sold a company or made a killing in crypto and know we will never earn that much. We probably earn the most but we are not the richest. I consider ourselves UMC. I feel the rich are mostly generational wealth or the crypto millionaires.

[Anonymous]

Anonymous wrote:

My friend group is different. I would say low end is 200k, mid is 500 and high is $1m+. We are in the higher group and I guess we are working rich. We look at people who sold a company or made a killing in crypto and know we will never earn that much. We probably earn the most but we are not the richest. I consider ourselves UMC. I feel the rich are mostly generational wealth or the crypto millionaires.

Are these HHI or individual?

[Anonymous]

I feel pretty happy with our 400k HHi, and felt like I made it big when I hit that. Then I started reading DCUM! And I melted into a puddle like the witch from the wizard of oz.

[Anonymous]

Anonymous wrote:I feel pretty happy with our 400k HHi, and felt like I made it big when I hit that. Then I started reading DCUM! And I melted into a puddle like the witch from the wizard of oz.

Lol! I feel the same way. I just did my tax return and during the pandemic we made 150k/yr less than before. ...and I work a boring corporate job. When my peers are ramping income up, mine is seriously dropping and I've done nothing differently. (Cash bonuses and stock incentives were just awful).

[Anonymous]

We have done much better than close friends from collage even though we have similar job prospects. The reason was that their young DS was diagnosed with an aggressive cancer earlier on. They exhausted every avenue for treatment and from what I can tell the child went into remission and is doing well. This destroyed their savings (retirement and other.) They are now playing catch up. We are doing much better than they are, but I don't feel that I did anything special. Life can turn on a dime.

[Anonymous]

Anonymous wrote:What you can't see on the surface is which people are in soul-killing jobs, whether they are paid well or not.

This is a cope.

[Anonymous]

Anonymous wrote:In our 20s, my peer group consisted of non-profits, consultants, law school students, first and second-year lawyers, and a few engineers. The differences between us didn't seem huge, we went to bars, lived in apartments and group houses, dated, went on lame vacations with our parents or not at all... you all know that life. Were all basically kind of the same poor"ish". A few of my friends threw down lots of money shopping, or had slightly nicer apartments, but the financial differences between us all seemed minimal.

But I'm 45 now, and the discrepancies between those who chose high-paying careers and those who didn't seem huge. The differences in earnings just compounded over time. If I had been able to fully internalize and visualize the difference between a for-profit and non-profit career.

The real punch in the gut is when many of your friends in their 40s and 50s get massive inheritances. Even "just" a million bucks cash can totally change their lifestyle. I have a few friends who received in the $3-7 million range and I never had any idea their parents were that well off.

[Anonymous]

I think this is true. Early start is key. Focus on careers that help you establish yourself and are the best /most profitable match for your skill set.

We both went to a top 15 school - met after college through friends - big law/finance dual income in 20s and 30s. By mid 40s, we are senior in our respective careers with hhi of $4-7m per year.
Money is a non issue in our life.
Time is a more valuable commodity.