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

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have a household income of $250k in northern Virginia with three kids and we are unquestionably rich.

Only financial worry I have is how to pay for college when all three are in college at the same time in a few years.

Everything else in my life is free of financial worry.

Aww. A middle class wine mom pretending she's rich on her 250k.

Honey, let me tell you what rich is. Rich people don't worry about paying for college. Rich people pay 90k tuition checks without blinking or worrying about opportunity costs. That's rich. You're middle class.

It’s true. I think what’s happening is people are “counting their blessings” and thinking how truly advantaged they are compared to the poorest in our country.

Which is contentious to do, and of course compared to the average HHI (which is shockingly low) you are indeed well-off. But rich? Well. Like PP said, rich don’t worry about how to pay for college. I myself am luckier than many, but I know rich, and at 300k I am much closer to the poorest than to the wealthy. The rich in this country are loathsome on a whole.

Wait… at 250k you’re agreeing they’re middle class but at 300k you “know you’re rich”. So is the cut off 275k? Someone explain.

No one is rich until they have accumulated at least 10M. The law partner making $2M isn't rich if they only have a few million saved. I do my 40yr old SIL's taxes and she makes 900k and has about 200k to her name. She's more or less broke and I laugh about it every year because she thinks she's "rich". I am years younger than her make not too far off from her, have accumulated enough money for two lives, but she thinks we are probably so behind her.

Agree $10M is a good cut off point for transitioning into rich. at $10M you can have a 4% draw giving you a 400k HHI (taxed at capital gains!) without working, plus you have access to all that capital if you want to, which is different from a working 400k HHI whose main capital is 2M in retirement savings plus 500k in equity. And of course it goes up greatly from there.

If your net worth is below $10M you're just in the upper parts of the upper middle classes.

Not perfect but as good a rule of thumb as any.

This is just a random, arbitrary line you have drawn in the sand.

DP here:
It's not that far from the truth. Maybe $7m in invested assets? The entire point is that being "rich" means having money/assets work for you in order to free up your time while still enjoying a high standard of living. You probably need a corpus of $7m+ in order to kick off a sizable amount of annual income to maintain an UMC lifestyle. $10M is the number you want in order to maintain an UMC lifestyle in NYC, SF, Palm Beach or other VHCOL locales.

DP. Where is the definition of rich coming from? Can you provide a cite?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Uh.

We make $450ish (more like $410 last year) and it's pretty rich.

We live in a $1m+ house.
We do not typically think about, nor do we have to, groceries or gas or coffee or takeout or summer camp.
We haven't prioritized college savings, but we could pay cash, yes, even for a $70K school (we don't want to but we'll see).
We get new cars when we want them.
If we want to renovate or something, we would just pay cash or take a HELOC or stop contributing to one of the many many investment or savings accounts we have temporarily. This would feel BAD but it is a blessing.
If we aren't going to Europe this summer it's because it's our choice and we want to prioritize cash savings. It's not because we can't.

We are lucky and relatively, rich. In the upper-middle class no worries relative to others sense. And there are MANY families richer than us at our W school.

Get some perspective if you think 400K isn't well off. Unless you have 7 kids and 3 parents in assisted living that you pay for, you should be more than OK.

This is us too. Though more like $510K last year....its the first time we've ever been over $450K. We don't really budget and all our investments are on auto-pilot so we are not even missing it. Finally had to start moving money out of two bank accounts because we were nearing the FDIC limit. That said, we don't spend much. Vacations are visiting family and staying with them. Or beach rental with three generations at OBX. Still shop mostly at TJs and Costco. Kids clothes are Old Navy, Target, or Carters. No real fancy hobbies except solo ski trips with a friend or two (and almost always using points for flights/hotels). Biggest expense is mortgage ($4K + $500 extra toward principal) and daycare ($2.3K). Oldest kid in public school.

We are in the top 98th percentile for income in the U.S., but it doesn't really feel the way I thought it would. No nice cars (2019 Subaru + hand-me-down Lexus that is fifteen years old). No country club. No fancy shopping trips. No paying for business class. I guess we could splurge on that stuff, but I'd like us to retire before age 60 and that's when my kids will be hitting college. So I need college paid up in advance.

So yeah, even if you have a high income you tend to (1) not have time for the nice stuff and (2) you're likely a worrier by nature and concerned about college + retirement + elder care. Most Americans just blow off those concerns and buy a $65K truck on credit for 60 months. *shrug*

UGGGGH. You are insufferable.

You are filthy rich. You are investing and saving thousands and thousands of dollars every month to become RICHER. And yet because you buy some clothes at Costco you are frugal? You are hoarding wealth. Which is your right. But your last sentence is not the problem with why most people are struggling.

PP here: I'm not filthy rich; I'm a working stiff who has to show up for a job everyday. Someone else is buying our time. The "filthy rich" control their schedules, whereas my schedule is dictated to me. When you have to document a leave request for vacation, there's no way in hell you're "filthy rich."

Yes, we are accumulating assets. But that's because we will have to pay full freight for college and I would like us to retire while still physically healthy and active instead at 65+. I'm buying time with my assets.....hopefully I don't kick the bucket before then.

You know who is filthy rich? Someone with a trust that contains a 7- or 8-figure corpus that distributes 6-figure income every year. "Rich" is having assets that free up your time. I don't have those assets (yet). Maybe one day, by my late 50s.

Exactly this

Why is this “exactly right?” Under what standard is this particular definition of rich the exact right definition?

As another PP said, is rich defined only as the top 0.25% wealthiest people in the US? Or in the world?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have a household income of $250k in northern Virginia with three kids and we are unquestionably rich.

Only financial worry I have is how to pay for college when all three are in college at the same time in a few years.

Everything else in my life is free of financial worry.

Aww. A middle class wine mom pretending she's rich on her 250k.

Honey, let me tell you what rich is. Rich people don't worry about paying for college. Rich people pay 90k tuition checks without blinking or worrying about opportunity costs. That's rich. You're middle class.

It’s true. I think what’s happening is people are “counting their blessings” and thinking how truly advantaged they are compared to the poorest in our country.

Which is contentious to do, and of course compared to the average HHI (which is shockingly low) you are indeed well-off. But rich? Well. Like PP said, rich don’t worry about how to pay for college. I myself am luckier than many, but I know rich, and at 300k I am much closer to the poorest than to the wealthy. The rich in this country are loathsome on a whole.

Wait… at 250k you’re agreeing they’re middle class but at 300k you “know you’re rich”. So is the cut off 275k? Someone explain.

No one is rich until they have accumulated at least 10M. The law partner making $2M isn't rich if they only have a few million saved. I do my 40yr old SIL's taxes and she makes 900k and has about 200k to her name. She's more or less broke and I laugh about it every year because she thinks she's "rich". I am years younger than her make not too far off from her, have accumulated enough money for two lives, but she thinks we are probably so behind her.

Agree $10M is a good cut off point for transitioning into rich. at $10M you can have a 4% draw giving you a 400k HHI (taxed at capital gains!) without working, plus you have access to all that capital if you want to, which is different from a working 400k HHI whose main capital is 2M in retirement savings plus 500k in equity. And of course it goes up greatly from there.

If your net worth is below $10M you're just in the upper parts of the upper middle classes.

Not perfect but as good a rule of thumb as any.

This is just a random, arbitrary line you have drawn in the sand.

DP here:
It's not that far from the truth. Maybe $7m in invested assets? The entire point is that being "rich" means having money/assets work for you in order to free up your time while still enjoying a high standard of living. You probably need a corpus of $7m+ in order to kick off a sizable amount of annual income to maintain an UMC lifestyle. $10M is the number you want in order to maintain an UMC lifestyle in NYC, SF, Palm Beach or other VHCOL locales.

DP. Where is the definition of rich coming from? Can you provide a cite?

Me, myself, and I.

Here's another hint: if you get an annual review at your job, you're not "rich."

[Anonymous]

Real question:
Is a family with a single parent earning 300K richer than one with both parents making 150K each?

[Anonymous]

Yes, if the single income family has another parent who stays at home and provides unpaid labor for house maintenance/family logistics.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Uh.

We make $450ish (more like $410 last year) and it's pretty rich.

We live in a $1m+ house.
We do not typically think about, nor do we have to, groceries or gas or coffee or takeout or summer camp.
We haven't prioritized college savings, but we could pay cash, yes, even for a $70K school (we don't want to but we'll see).
We get new cars when we want them.
If we want to renovate or something, we would just pay cash or take a HELOC or stop contributing to one of the many many investment or savings accounts we have temporarily. This would feel BAD but it is a blessing.
If we aren't going to Europe this summer it's because it's our choice and we want to prioritize cash savings. It's not because we can't.

We are lucky and relatively, rich. In the upper-middle class no worries relative to others sense. And there are MANY families richer than us at our W school.

Get some perspective if you think 400K isn't well off. Unless you have 7 kids and 3 parents in assisted living that you pay for, you should be more than OK.

This is us too. Though more like $510K last year....its the first time we've ever been over $450K. We don't really budget and all our investments are on auto-pilot so we are not even missing it. Finally had to start moving money out of two bank accounts because we were nearing the FDIC limit. That said, we don't spend much. Vacations are visiting family and staying with them. Or beach rental with three generations at OBX. Still shop mostly at TJs and Costco. Kids clothes are Old Navy, Target, or Carters. No real fancy hobbies except solo ski trips with a friend or two (and almost always using points for flights/hotels). Biggest expense is mortgage ($4K + $500 extra toward principal) and daycare ($2.3K). Oldest kid in public school.

We are in the top 98th percentile for income in the U.S., but it doesn't really feel the way I thought it would. No nice cars (2019 Subaru + hand-me-down Lexus that is fifteen years old). No country club. No fancy shopping trips. No paying for business class. I guess we could splurge on that stuff, but I'd like us to retire before age 60 and that's when my kids will be hitting college. So I need college paid up in advance.

So yeah, even if you have a high income you tend to (1) not have time for the nice stuff and (2) you're likely a worrier by nature and concerned about college + retirement + elder care. Most Americans just blow off those concerns and buy a $65K truck on credit for 60 months. *shrug*

UGGGGH. You are insufferable.

You are filthy rich. You are investing and saving thousands and thousands of dollars every month to become RICHER. And yet because you buy some clothes at Costco you are frugal? You are hoarding wealth. Which is your right. But your last sentence is not the problem with why most people are struggling.

PP here: I'm not filthy rich; I'm a working stiff who has to show up for a job everyday. Someone else is buying our time. The "filthy rich" control their schedules, whereas my schedule is dictated to me. When you have to document a leave request for vacation, there's no way in hell you're "filthy rich."

Yes, we are accumulating assets. But that's because we will have to pay full freight for college and I would like us to retire while still physically healthy and active instead at 65+. I'm buying time with my assets.....hopefully I don't kick the bucket before then.

You know who is filthy rich? Someone with a trust that contains a 7- or 8-figure corpus that distributes 6-figure income every year. "Rich" is having assets that free up your time. I don't have those assets (yet). Maybe one day, by my late 50s.

+1.

[Anonymous]

Anonymous wrote:Real question:
Is a family with a single parent earning 300K richer than one with both parents making 150K each?

Yes

[Anonymous]

Well yeah if you want to live in a $2m house and send your kids to private and drive nice cars and take fancy vacations, you’ll feel poor.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Real question:
Is a family with a single parent earning 300K richer than one with both parents making 150K each?

Yes

Of course. You are saving all of the social security and Medicare tax on thar salary.

[Anonymous]

Anonymous wrote:Well yeah if you want to live in a $2m house and send your kids to private and drive nice cars and take fancy vacations, you’ll feel poor.

I went to a parochial private elementary + middle school in the 1990s with my brother and sister. My dad was a union electrician at the utility company and my mom worked at a chain hotel in marketing/sales. Neither had a college degree.

That school now charges $30K per year for tuition + fees per kid. No way in hell an electrician and a hotel sales rep are affording $90K per year post tax to send 3 kids to that school.

Yeah, it’s harder today.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have a household income of $250k in northern Virginia with three kids and we are unquestionably rich.

Only financial worry I have is how to pay for college when all three are in college at the same time in a few years.

Everything else in my life is free of financial worry.

Aww. A middle class wine mom pretending she's rich on her 250k.

Honey, let me tell you what rich is. Rich people don't worry about paying for college. Rich people pay 90k tuition checks without blinking or worrying about opportunity costs. That's rich. You're middle class.

Wow, what a snotty response.

And also wrong. 250k HHI is rich. Not being able to write 90k tuition checks doesn’t make one “middle class”. Americans have completely lost their minds about what is needed vs what is wanted and 250k gets you well into the “want” category of consumption.

Another poor person struggling with the concept of rich that she thinks everyone who makes a dollar more than she does is rich. This forum never fails to amuse me.

Yes, please show us we’re you can buy now on a $250k HHI with good schools? I’ll wait.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have a household income of $250k in northern Virginia with three kids and we are unquestionably rich.

Only financial worry I have is how to pay for college when all three are in college at the same time in a few years.

Everything else in my life is free of financial worry.

Aww. A middle class wine mom pretending she's rich on her 250k.

Honey, let me tell you what rich is. Rich people don't worry about paying for college. Rich people pay 90k tuition checks without blinking or worrying about opportunity costs. That's rich. You're middle class.

Wow, what a snotty response.

And also wrong. 250k HHI is rich. Not being able to write 90k tuition checks doesn’t make one “middle class”. Americans have completely lost their minds about what is needed vs what is wanted and 250k gets you well into the “want” category of consumption.

Another poor person struggling with the concept of rich that she thinks everyone who makes a dollar more than she does is rich. This forum never fails to amuse me.

Yes, please show us we’re you can buy now on a $250k HHI with good schools? I’ll wait.

While you wait, could you go walk many, many miles? Far away from your keyboard?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I get what OP is saying. We make more than OP and have a nice net worth. We live in an expensive house that carries a high property tax burden. Affording our house is no problem, but I acknowledge that a $25K tax bill on the house every year is not insignificant. We own our cars outright and don't carry debt. Technically we are in the top 1% of earners, but we consider ourselves 'working rich', meaning if the gravy train comes to a halt tomorrow we would be pressed to make some lifestyle decisions if the cashflow changes. My family enjoys life, but we know money is not to be taken for granted. Yes, we have savings, retirement accounts, college funded, as well as taking very nice vacations, we can eat out whenever we want, buy any groceries we want, attend any ticketed events/activities we want, wear any clothes we want, but with inflation and rising costs, I stop and ask if these things are worth the inflated costs. $100 today isn't what it was 5 or 10 years ago. DMV is not a cheap area.

The taxes on your big fancy house doesn’t exclude you from being rich. Buy a smaller house with a lower tax burden if you can’t afford it. Seems like money management 101

Your mindset shrieks to the whole world you are a poormo. You don't understand what wealth really is. Babbling about money management 101 is meaningless when yur argument equally applies to someone making 50k a year and telling them to live on a budget. Hint, the rich really don't need to have budgets.

More bs striving. How old are you?

The concept that the rich don’t have budgets and somehow aspiring to be that rich because that really means something is possibly the most nouveau riche mindset presented on this absurd thread.

You can be rich and spend your money unwisely and then you’re not rich anymore.

No Rich is when you have so much money that if you spend it unwisely it doesn’t impact you. That’s rich. Stop acting like professional UMC people are part of the “rich” class….we are just pegs in the system like everyone else

You are poor and it shows. You are clueless. There are many millionaires and billionaires who have lost their fortune due to mismanagement, poor choices or unforeseen market events.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have a household income of $250k in northern Virginia with three kids and we are unquestionably rich.

Only financial worry I have is how to pay for college when all three are in college at the same time in a few years.

Everything else in my life is free of financial worry.

Aww. A middle class wine mom pretending she's rich on her 250k.

Honey, let me tell you what rich is. Rich people don't worry about paying for college. Rich people pay 90k tuition checks without blinking or worrying about opportunity costs. That's rich. You're middle class.

Wow, what a snotty response.

And also wrong. 250k HHI is rich. Not being able to write 90k tuition checks doesn’t make one “middle class”. Americans have completely lost their minds about what is needed vs what is wanted and 250k gets you well into the “want” category of consumption.

Another poor person struggling with the concept of rich that she thinks everyone who makes a dollar more than she does is rich. This forum never fails to amuse me.

Yes, please show us we’re you can buy now on a $250k HHI with good schools? I’ll wait.

Name your good schools and I’ll show what you can buy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have a household income of $250k in northern Virginia with three kids and we are unquestionably rich.

Only financial worry I have is how to pay for college when all three are in college at the same time in a few years.

Everything else in my life is free of financial worry.

Aww. A middle class wine mom pretending she's rich on her 250k.

Honey, let me tell you what rich is. Rich people don't worry about paying for college. Rich people pay 90k tuition checks without blinking or worrying about opportunity costs. That's rich. You're middle class.

It’s true. I think what’s happening is people are “counting their blessings” and thinking how truly advantaged they are compared to the poorest in our country.

Which is contentious to do, and of course compared to the average HHI (which is shockingly low) you are indeed well-off. But rich? Well. Like PP said, rich don’t worry about how to pay for college. I myself am luckier than many, but I know rich, and at 300k I am much closer to the poorest than to the wealthy. The rich in this country are loathsome on a whole.

Wait… at 250k you’re agreeing they’re middle class but at 300k you “know you’re rich”. So is the cut off 275k? Someone explain.

No one is rich until they have accumulated at least 10M. The law partner making $2M isn't rich if they only have a few million saved. I do my 40yr old SIL's taxes and she makes 900k and has about 200k to her name. She's more or less broke and I laugh about it every year because she thinks she's "rich". I am years younger than her make not too far off from her, have accumulated enough money for two lives, but she thinks we are probably so behind her.

Agree $10M is a good cut off point for transitioning into rich. at $10M you can have a 4% draw giving you a 400k HHI (taxed at capital gains!) without working, plus you have access to all that capital if you want to, which is different from a working 400k HHI whose main capital is 2M in retirement savings plus 500k in equity. And of course it goes up greatly from there.

If your net worth is below $10M you're just in the upper parts of the upper middle classes.

Not perfect but as good a rule of thumb as any.

This is just a random, arbitrary line you have drawn in the sand.

DP here:
It's not that far from the truth. Maybe $7m in invested assets? The entire point is that being "rich" means having money/assets work for you in order to free up your time while still enjoying a high standard of living. You probably need a corpus of $7m+ in order to kick off a sizable amount of annual income to maintain an UMC lifestyle. $10M is the number you want in order to maintain an UMC lifestyle in NYC, SF, Palm Beach or other VHCOL locales.

DP. Where is the definition of rich coming from? Can you provide a cite?

Me, myself, and I.

Here's another hint: if you get an annual review at your job, you're not "rich."

There are people at my company with NW well in excess of 10M, some probably in excess of 50M, who have annual reviews.

I think you’re poor and striving and don’t really know what wealthy means and instead have some skewed perception in your head of what it will be like when you “finally make it” probably by day trading and crypto.