CMM: feeling “rich” has more to do with savings than income

[Anonymous]

I see these posts all the time: is 300k HHI rich? Is 300k middle class in DC? Why 300-400k HHI isn’t enough to “feel” rich and so on with people arguing back and forth.

Why the constant focus on income? It obscures the real issue, imo, which is that “feeling” rich = knowing what’s in your bank account. I would hazard to guess that the average American wouldn’t “feel” rich without at least $3-5 million in savings/investments, excluding their primary residence (because you have to live somewhere and with housing so inflated, most can’t or don’t want to downsize).

[Anonymous]

Agreed. And I would add that the amount needed to feel rich is a multiple of their yearly expenses. So someone who spends 40K/year vs 200K/per will need a different amount to feel rich.

[Anonymous]

I feel the exact opposite. I received a large bonus in my late 20s (about $800k) to move to a new firm. The firm kept a greater percentage of my earnings than the original firm. I was miserable. The idea of getting $800k in a lump sum and "becoming a millionaire in my 20s" felt exciting, but the reality wasn't. The $800k didn't mean much to me - I mean, I could draw on it when I needed, but it felt stressful to do that.

For me, my happiness is directly tied to my earned income. In my 40s now. Earn $1M/year and elated about it. I would guess that I feel much richer than someone in retirement with a higher NW than mine. You'd need NW of $25M to duplicate my income.

[Anonymous]

Anonymous wrote:I feel the exact opposite. I received a large bonus in my late 20s (about $800k) to move to a new firm. The firm kept a greater percentage of my earnings than the original firm. I was miserable. The idea of getting $800k in a lump sum and "becoming a millionaire in my 20s" felt exciting, but the reality wasn't. The $800k didn't mean much to me - I mean, I could draw on it when I needed, but it felt stressful to do that.

For me, my happiness is directly tied to my earned income. In my 40s now. Earn $1M/year and elated about it. I would guess that I feel much richer than someone in retirement with a higher NW than mine. You'd need NW of $25M to duplicate my income.

Well that’s because 800k isn’t enough to feel rich and your job sucked. Makes perfect sense that it wasn’t worth it??

[Anonymous]

Anonymous wrote:Agreed. And I would add that the amount needed to feel rich is a multiple of their yearly expenses. So someone who spends 40K/year vs 200K/per will need a different amount to feel rich.

I make $40k a year and feel rich with my $250k investment and an annuity paying out $30k a year. If I bought a house/condo right now, I'd be back to poor again.
It is so hard to explain people that I never wanted a house and will never buy a house in US.
There are other things that make me feel rich, but the list is too long.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I feel the exact opposite. I received a large bonus in my late 20s (about $800k) to move to a new firm. The firm kept a greater percentage of my earnings than the original firm. I was miserable. The idea of getting $800k in a lump sum and "becoming a millionaire in my 20s" felt exciting, but the reality wasn't. The $800k didn't mean much to me - I mean, I could draw on it when I needed, but it felt stressful to do that.

For me, my happiness is directly tied to my earned income. In my 40s now. Earn $1M/year and elated about it. I would guess that I feel much richer than someone in retirement with a higher NW than mine. You'd need NW of $25M to duplicate my income.

Well that’s because 800k isn’t enough to feel rich and your job sucked. Makes perfect sense that it wasn’t worth it??

DP. Agreed. Making 1M/year in 40s as an attorney can feel great because that person has a solid career and longevity if it's desired. Someone making 1M in tech might not feel as great because tech doesn't have nearly the same longevity. I know plenty of lawyers who practice well into older age, depending on their practice area.

I made 1M for 2 years in a row selling something and could hardly appreciate it due to knowing that it wasn't likely I could reproduce that.

[Anonymous]

I actually think "feeling" rich has to do with spending, not savings or income. (Don't misquote me, I am not saying being rich doesn, I'm talking about the feeling.)

Think about all the DCUM posts about why 300k or 500k or whatever "isn't rich." It's not because they don't have savings. It's not because of the income number. It's because AFTER saving toward their goals, people still feel like they don't have enough left for their idea of a rich lifestyle (e.g. a fancier second home, more luxurious international trips, paying full freight for private college without feeling the impact, etc).

[Anonymous]

Anonymous wrote:I feel the exact opposite. I received a large bonus in my late 20s (about $800k) to move to a new firm. The firm kept a greater percentage of my earnings than the original firm. I was miserable. The idea of getting $800k in a lump sum and "becoming a millionaire in my 20s" felt exciting, but the reality wasn't. The $800k didn't mean much to me - I mean, I could draw on it when I needed, but it felt stressful to do that.

For me, my happiness is directly tied to my earned income. In my 40s now. Earn $1M/year and elated about it. I would guess that I feel much richer than someone in retirement with a higher NW than mine. You'd need NW of $25M to duplicate my income.

The thing about a high income is that you can be laid off or fired and not be able to get another job that pays as much.

I'm in my 50s, and ageism has hit.

We have about $3mil saved. I don't feel "rich" though because of our age (late 50s). I will probably get laid off soon, which means I will have to buy private insurance for a family of 4. We have a lot more health related issues at our age, so we are expecting to pay $20K/year for medical care. And we still have a mortgage. I don't feel poor, either, but I do worry about money. Maybe it's because I grew up lower income, and I'm just a worry wort.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I feel the exact opposite. I received a large bonus in my late 20s (about $800k) to move to a new firm. The firm kept a greater percentage of my earnings than the original firm. I was miserable. The idea of getting $800k in a lump sum and "becoming a millionaire in my 20s" felt exciting, but the reality wasn't. The $800k didn't mean much to me - I mean, I could draw on it when I needed, but it felt stressful to do that.

For me, my happiness is directly tied to my earned income. In my 40s now. Earn $1M/year and elated about it. I would guess that I feel much richer than someone in retirement with a higher NW than mine. You'd need NW of $25M to duplicate my income.

The thing about a high income is that you can be laid off or fired and not be able to get another job that pays as much.

I'm in my 50s, and ageism has hit.

We have about $3mil saved. I don't feel "rich" though because of our age (late 50s). I will probably get laid off soon, which means I will have to buy private insurance for a family of 4. We have a lot more health related issues at our age, so we are expecting to pay $20K/year for medical care. And we still have a mortgage. I don't feel poor, either, but I do worry about money. Maybe it's because I grew up lower income, and I'm just a worry wort.

That’s terrible to get laid off so young! What industry are you in?

[Anonymous]

Anonymous wrote:I actually think "feeling" rich has to do with spending, not savings or income. (Don't misquote me, I am not saying being rich doesn, I'm talking about the feeling.)

Think about all the DCUM posts about why 300k or 500k or whatever "isn't rich." It's not because they don't have savings. It's not because of the income number. It's because AFTER saving toward their goals, people still feel like they don't have enough left for their idea of a rich lifestyle (e.g. a fancier second home, more luxurious international trips, paying full freight for private college without feeling the impact, etc).

I think you’re absolutely right about this. It’s about expenses/spending. I “felt” so much richer at 23 earning $60k when I had super cheap rent and no responsibilities at home than now at $140k when I have two cats and two kids to care for. I still think of myself as rich, because I make plenty of money, have savings, am able to cover all necessities but it doesn’t “feel” as rich because I have big expenses to worry about now (daycare, college, etc).

[Anonymous]

Anonymous wrote:I see these posts all the time: is 300k HHI rich? Is 300k middle class in DC? Why 300-400k HHI isn’t enough to “feel” rich and so on with people arguing back and forth.

Why the constant focus on income? It obscures the real issue, imo, which is that “feeling” rich = knowing what’s in your bank account. I would hazard to guess that the average American wouldn’t “feel” rich without at least $3-5 million in savings/investments, excluding their primary residence (because you have to live somewhere and with housing so inflated, most can’t or don’t want to downsize).

The "average" American has only $65,000 in savings/investments. I guarantee you the average American would feel "rich" at far less than $3MM - $5MM. In the latest poll, I think the number is $1.6MM.

Perhaps you mean the average person on DCUM.

[Anonymous]

Anonymous wrote:I see these posts all the time: is 300k HHI rich? Is 300k middle class in DC? Why 300-400k HHI isn’t enough to “feel” rich and so on with people arguing back and forth.

Why the constant focus on income? It obscures the real issue, imo, which is that “feeling” rich = knowing what’s in your bank account. I would hazard to guess that the average American wouldn’t “feel” rich without at least $3-5 million in savings/investments, excluding their primary residence (because you have to live somewhere and with housing so inflated, most can’t or don’t want to downsize).

Hard for many to feel "rich" at $400K if they blow thru it all monthly on what they define as "needs", not being able to separate needs from wants/luxuries.

[Anonymous]

Not another of these tiresome threads.

If you can't afford a Park Ave coop or a Beverly Hills mansion or equivalent, you ain't rich. It's that simple. You're just a better off member of the middle classes. There's a reason why you're called upper middle class. If you can't charter a jet tomorrow and fly off for a Botswana safari and not miss a single dime of the cost, you ain't rich. As F. Scott Fitzgerald said, the rich are different from you and me.

Sheesh, the delusions people go through to pretend they're rich with their 40k salary and 250k savings

[Anonymous]

People who feel rich have run out of things to spend money on. So yes.

[Anonymous]

Anonymous wrote:Not another of these tiresome threads.

If you can't afford a Park Ave coop or a Beverly Hills mansion or equivalent, you ain't rich. It's that simple. You're just a better off member of the middle classes. There's a reason why you're called upper middle class. If you can't charter a jet tomorrow and fly off for a Botswana safari and not miss a single dime of the cost, you ain't rich. As F. Scott Fitzgerald said, the rich are different from you and me.

Sheesh, the delusions people go through to pretend they're rich with their 40k salary and 250k savings

Lol, you're a snob and a bore. The question is about FEELING rich. There's no wrong answer here.