Rich v Affluent

[Anonymous]

Anonymous wrote:I live in Beverly Hills. The housing is so expensive here that even with our $1 million income, after paying a $20,000 mortgage, exclusive private schools for the three kids, the carrying costs on our ski cabin in Aspen, and the nanny, we don't have enough left to pay for the Ivy League educations our kids will have. So we are middle class.

Get it?

Is this a joke?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Truly wealthy people can save for retirement and kids' college and still have money left over at the end of the month. The vast majority of people can't.

Plenty of people on DCUM would if they would just move that's why all of this is so sad/hilarious

Move where? My job is tied to major urban areas and is not transferable to some lower COL area. Not just I wouldn't get paid as much as I do here, but the job that I do literally does not exist outside the DC/NYC/SF/Chicago areas in decent enough numbers to risk relocating. I know someone who moved for an industry job to a smaller city, and, when laid off from that job, had no other opportunities in the field and was unemployed for a year despite having excellent references, skills, and professional presence. Move further from the city? I already have an hour-long commute, and I live in a house that I'm pretty sure would be described as a "shitshack" by many people here.

Believe me, I am saving my pennies to get the hell out of here as soon as I possibly can, but the idea that people can just pick up their DC-centric jobs and move is sad/hilarious. I don't stay because I love DC, I stay because this is where the high-paying jobs in my field are.

Further out from DC. Drive. See also: smaller house.

I don't live in North Arlington/McLean/Potomac in a $1M+ house. I live outside the Beltway in a 40-year-old house that is neither cramped nor spacious. We have reached a point where any further out is going to exceed mortgage cost savings with commuting costs, and we're balancing a mid-point on two commutes in opposite directions. My commute is an hour each way on a good day. I have elementary-school-aged children I like to see on a daily basis.

But, please, tell me more about moving to a tiny house in West Virginia or something.

[Anonymous]

Anonymous wrote:I live in Beverly Hills. The housing is so expensive here that even with our $1 million income, after paying a $20,000 mortgage, exclusive private schools for the three kids, the carrying costs on our ski cabin in Aspen, and the nanny, we don't have enough left to pay for the Ivy League educations our kids will have. So we are middle class.

Get it?

Yes, 1 million is middle class in Beverly Hills. You need to troll better though- 1 mill doesn't buy all the things you listed even in DC, much less Beverly Hills.

[Anonymous]

Anonymous wrote:The big differentiators are kids and debt...a couple with no kids, no student loan debt, that has a mostly paid-off mortgage is going to have a much better lifestyle on 200k than the couple with three kids, student loan debt, and a mortgage on 400k.

Agree. We have kids, but no mortgage or other debt and live like kings on 400K.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Oh an employer match. How nice. So, you are worth 10X your gross income? How much do you need to accumulate before you retire?

Yes - and my current employer matches 10%!

The nearly $1 million includes home equity. I've got about $600k in savings, and I figure I need $800k. That would give me $32,000 from investments (4% recommended withdrawal) plus almost $30,000 in SS (once I reach that age.) My house should be paid off by then, so I figure I'd be fine with $60k.

You can't count the $10,000 a year from your employer match as savings, though it boosts your net worth. Congratulations.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I was a poster who used the term "affluent" to describe myself. So yes, I'll bite.

The problem with the word "rich" is that it conjures images of extreme wealth. You don't need to work, you have riding horses, you vacation in Europe every summer without sweating, private school is expected, and so the picture continues. Pick your favorite idyllic picture. There is a very clear difference between those who are in, say, the upper half of one percent and a 15 percenter. It also matters where the money comes from -- assets? or is it all dependent on showing up at the office next week? We do need a word to describe the freedom and power that comes with large amounts of income *and* wealth in the form of assets (acquired or inherited).

However, we also shouldn't be grouping everyone who isn't posh-rich in with "the middle class."

Upper middle class? Affluent? Pick your favorite word. But we need a word.

I do all these things (including having multiple horses and taking multiple international trips per year) and we make way less than OP's brackets. I have to wonder if people just buy too much useless shit, or homes outside a budget than enables them to live with all these luxuries which are in fact available to them given their income.

Or it could be that a small minority is just saving a lot, rather than spending it on horses, international trips or anything else.

[Anonymous]

Anonymous wrote:I make about $200k, and I definitely feel very rich. We can pay for any college our kids get accepted to out of cash flow - even if it's $70k a year.

We receive catalogues by mail for some crazy cruises with a price of $95k per person for a 3-week cruise. Who is taking a 3-week cruise paying $200k for a couple? Definitely nobody like us, yet that doesn't prevent me from feeling rich. I'm so far from thinking that if I can't afford that cruise, I must be a middle class.

I don't understand how you could pay $70K a year out of $200K cash flow. Or does your spouse work? $200K is about, what, $130K after taxes, so your net spend is only $60K annually now, so you could pay $70K for college?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Truly wealthy people can save for retirement and kids' college and still have money left over at the end of the month. The vast majority of people can't.

Plenty of people on DCUM would if they would just move that's why all of this is so sad/hilarious

I didn't realize there was a huge demand for international contracts attorneys in Nebraska.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I make about $200k, and I definitely feel very rich. We can pay for any college our kids get accepted to out of cash flow - even if it's $70k a year.[u]

We receive catalogues by mail for some crazy cruises with a price of $95k per person for a 3-week cruise. Who is taking a 3-week cruise paying $200k for a couple? Definitely nobody like us, yet that doesn't prevent me from feeling rich. I'm so far from thinking that if I can't afford that cruise, I must be a middle class.

I don't understand how you could pay $70K a year out of $200K cash flow. Or does your spouse work? $200K is about, what, $130K after taxes, so your net spend is only $60K annually now, so you could pay $70K for college?

This. Your math is off somewhere. You wouldn't have that cash flow unless you made that money, paid taxes on it, and then sat in a home that was paid off, paid your minimalistic utilities and did virtually nothing to incur any expenses or debt in order to afford that.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I was a poster who used the term "affluent" to describe myself. So yes, I'll bite.

The problem with the word "rich" is that it conjures images of extreme wealth. You don't need to work, you have riding horses, you vacation in Europe every summer without sweating, private school is expected, and so the picture continues. Pick your favorite idyllic picture. There is a very clear difference between those who are in, say, the upper half of one percent and a 15 percenter. It also matters where the money comes from -- assets? or is it all dependent on showing up at the office next week? We do need a word to describe the freedom and power that comes with large amounts of income *and* wealth in the form of assets (acquired or inherited).

However, we also shouldn't be grouping everyone who isn't posh-rich in with "the middle class."

Upper middle class? Affluent? Pick your favorite word. But we need a word.

I do all these things (including having multiple horses and taking multiple international trips per year) and we make way less than OP's brackets. I have to wonder if people just buy too much useless shit, or homes outside a budget than enables them to live with all these luxuries which are in fact available to them given their income.

Or it could be that a small minority is just saving a lot, rather than spending it on horses, international trips or anything else.

No kidding..the multiple horses sounds like "useless shit" to me, to use PP's language. Wonder what kind of home she lives in, and where?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I live in Beverly Hills. The housing is so expensive here that even with our $1 million income, after paying a $20,000 mortgage, exclusive private schools for the three kids, the carrying costs on our ski cabin in Aspen, and the nanny, we don't have enough left to pay for the Ivy League educations our kids will have. So we are middle class.

Get it?

Is this a joke?

Yes, of course it's a joke. It's exaggerating what the $400k+ posters are claiming - that after they pay for their expensive NW house and the costly private schools, the contributions to the 401k, college, and investment accounts, they don't have a lot left over - and hence they say they're middle class. What they fail to get is that the middle class can't afford the lifestyle/location they enjoy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Oh an employer match. How nice. So, you are worth 10X your gross income? How much do you need to accumulate before you retire?

Yes - and my current employer matches 10%!

The nearly $1 million includes home equity. I've got about $600k in savings, and I figure I need $800k. That would give me $32,000 from investments (4% recommended withdrawal) plus almost $30,000 in SS (once I reach that age.) My house should be paid off by then, so I figure I'd be fine with $60k.

You can't count the $10,000 a year from your employer match as savings, though it boosts your net worth. Congratulations.

Actually, I think I CAN count the match as savings. From my research, I've learned that one should aim to save 15% (minimum) of one's salary, which includes any matches. So my 10% plus the 10% match means I'm saving 20% of my salary.

It's semantics, in any event. I figure if I continue saving at this rate, I should have the nest egg I'll need to retire in about five years. (FWIW, as I get closer, I'm moving into more secure, albeit boring, investments. The last thing I need is a market crash the year before I retire!)

[Anonymous]

Anonymous wrote:

Anonymous wrote:I make about $200k, and I definitely feel very rich. We can pay for any college our kids get accepted to out of cash flow - even if it's $70k a year.

We receive catalogues by mail for some crazy cruises with a price of $95k per person for a 3-week cruise. Who is taking a 3-week cruise paying $200k for a couple? Definitely nobody like us, yet that doesn't prevent me from feeling rich. I'm so far from thinking that if I can't afford that cruise, I must be a middle class.

I don't understand how you could pay $70K a year out of $200K cash flow. Or does your spouse work? $200K is about, what, $130K after taxes, so your net spend is only $60K annually now, so you could pay $70K for college?

I am not the PP mentioning 200k and possibly paying 70k in tuition. However, I have an income / basic budget a bit similar to what you just described. It is possible.

My basic budget looks like this:

Mortgage, Property Tax, and Utilities: 1585/m ---> admittedly, my costs here are unusually low, I drive a long way to work
Transportation (we have two car loans, drive a long way, etc): 1188/m
Food, clothes, recreation, eating out: $1560/m
Communication (cell phones, internet): 185/m
Student Loans: 855/m (gah!)
Total: $5373/m net, or $64,476/yr net

Our take-home, after payroll taxes, health insurance, and 5 percent to retirement [the least I'd ever consider] are subtracted, is roughly $9800/m or roughly $117,000/yr.

In an idyllic world, where I follow sager advice, my spending would stop at $65,000 and I'd bank 52k.

However, I have a child and education is important to me. Our relatives all live far away. As a result, the following items are also in my operating budget:

Travel to grandma and grandpas house: $2000/yr
Private school tuition and summer camp / after school: $28,000/yr [in the past we had infant care, daycare, et al]
My "living large" total: $95,000.

Ergo, for me personally 50-70k net equals security; 95k net buys the option for excellent private schools or a move to a better school district; anything over 95k net provides additional savings/retirement.

Could I find 70k for tuition? That might be pushing it. But I know I can find 20-30k (already been in that position for 6 yrs), and potentially I could drum up 40 to 50k if I had a good reason.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I make about $200k, and I definitely feel very rich. We can pay for any college our kids get accepted to out of cash flow - even if it's $70k a year.

We receive catalogues by mail for some crazy cruises with a price of $95k per person for a 3-week cruise. Who is taking a 3-week cruise paying $200k for a couple? Definitely nobody like us, yet that doesn't prevent me from feeling rich. I'm so far from thinking that if I can't afford that cruise, I must be a middle class.

I don't understand how you could pay $70K a year out of $200K cash flow. Or does your spouse work? $200K is about, what, $130K after taxes, so your net spend is only $60K annually now, so you could pay $70K for college?

I am not the PP mentioning 200k and possibly paying 70k in tuition. However, I have an income / basic budget a bit similar to what you just described. It is possible.

My basic budget looks like this:

Mortgage, Property Tax, and Utilities: 1585/m ---> admittedly, my costs here are unusually low, I drive a long way to work
Transportation (we have two car loans, drive a long way, etc): 1188/m
Food, clothes, recreation, eating out: $1560/m
Communication (cell phones, internet): 185/m
Student Loans: 855/m (gah!)
Total: $5373/m net, or $64,476/yr net

Our take-home, after payroll taxes, health insurance, and 5 percent to retirement [the least I'd ever consider] are subtracted, is roughly $9800/m or roughly $117,000/yr.

In an idyllic world, where I follow sager advice, my spending would stop at $65,000 and I'd bank 52k.

However, I have a child and education is important to me. Our relatives all live far away. As a result, the following items are also in my operating budget:

Travel to grandma and grandpas house: $2000/yr
Private school tuition and summer camp / after school: $28,000/yr [in the past we had infant care, daycare, et al]
My "living large" total: $95,000.

Ergo, for me personally 50-70k net equals security; 95k net buys the option for excellent private schools or a move to a better school district; anything over 95k net provides additional savings/retirement.

Could I find 70k for tuition? That might be pushing it. But I know I can find 20-30k (already been in that position for 6 yrs), and potentially I could drum up 40 to 50k if I had a good reason.

Insurance (health, life, medical)? Vacations? Charity? Gifts?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I make about $200k, and I definitely feel very rich. We can pay for any college our kids get accepted to out of cash flow - even if it's $70k a year.

We receive catalogues by mail for some crazy cruises with a price of $95k per person for a 3-week cruise. Who is taking a 3-week cruise paying $200k for a couple? Definitely nobody like us, yet that doesn't prevent me from feeling rich. I'm so far from thinking that if I can't afford that cruise, I must be a middle class.

I don't understand how you could pay $70K a year out of $200K cash flow. Or does your spouse work? $200K is about, what, $130K after taxes, so your net spend is only $60K annually now, so you could pay $70K for college?

I am not the PP mentioning 200k and possibly paying 70k in tuition. However, I have an income / basic budget a bit similar to what you just described. It is possible.

My basic budget looks like this:

Mortgage, Property Tax, and Utilities: 1585/m ---> admittedly, my costs here are unusually low, I drive a long way to work
Transportation (we have two car loans, drive a long way, etc): 1188/m
Food, clothes, recreation, eating out: $1560/m
Communication (cell phones, internet): 185/m
Student Loans: 855/m (gah!)
Total: $5373/m net, or $64,476/yr net

Our take-home, after payroll taxes, health insurance, and 5 percent to retirement [the least I'd ever consider] are subtracted, is roughly $9800/m or roughly $117,000/yr.

In an idyllic world, where I follow sager advice, my spending would stop at $65,000 and I'd bank 52k.

However, I have a child and education is important to me. Our relatives all live far away. As a result, the following items are also in my operating budget:

Travel to grandma and grandpas house: $2000/yr
Private school tuition and summer camp / after school: $28,000/yr [in the past we had infant care, daycare, et al]
My "living large" total: $95,000.

Ergo, for me personally 50-70k net equals security; 95k net buys the option for excellent private schools or a move to a better school district; anything over 95k net provides additional savings/retirement.

Could I find 70k for tuition? That might be pushing it. But I know I can find 20-30k (already been in that position for 6 yrs), and potentially I could drum up 40 to 50k if I had a good reason.

Insurance (health, life, medical)? Vacations? Charity? Gifts?

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I make about $200k, and I definitely feel very rich. We can pay for any college our kids get accepted to out of cash flow - even if it's $70k a year.

We receive catalogues by mail for some crazy cruises with a price of $95k per person for a 3-week cruise. Who is taking a 3-week cruise paying $200k for a couple? Definitely nobody like us, yet that doesn't prevent me from feeling rich. I'm so far from thinking that if I can't afford that cruise, I must be a middle class.

I don't understand how you could pay $70K a year out of $200K cash flow. Or does your spouse work? $200K is about, what, $130K after taxes, so your net spend is only $60K annually now, so you could pay $70K for college?

I am not the PP mentioning 200k and possibly paying 70k in tuition. However, I have an income / basic budget a bit similar to what you just described. It is possible.

My basic budget looks like this:

Mortgage, Property Tax, and Utilities: 1585/m ---> admittedly, my costs here are unusually low, I drive a long way to work
Transportation (we have two car loans, drive a long way, etc): 1188/m
Food, clothes, recreation, eating out: $1560/m
Communication (cell phones, internet): 185/m
Student Loans: 855/m (gah!)
Total: $5373/m net, or $64,476/yr net

Our take-home, after payroll taxes, health insurance, and 5 percent to retirement [the least I'd ever consider] are subtracted, is roughly $9800/m or roughly $117,000/yr.

In an idyllic world, where I follow sager advice, my spending would stop at $65,000 and I'd bank 52k.

However, I have a child and education is important to me. Our relatives all live far away. As a result, the following items are also in my operating budget:

Travel to grandma and grandpas house: $2000/yr
Private school tuition and summer camp / after school: $28,000/yr [in the past we had infant care, daycare, et al]
My "living large" total: $95,000.

Ergo, for me personally 50-70k net equals security; 95k net buys the option for excellent private schools or a move to a better school district; anything over 95k net provides additional savings/retirement.

Could I find 70k for tuition? That might be pushing it. But I know I can find 20-30k (already been in that position for 6 yrs), and potentially I could drum up 40 to 50k if I had a good reason.

Insurance (health, life, medical)? Vacations? Charity? Gifts?

Medical, dental, vision, life are taken out of my paycheck pre-tax, so they're already counted before I gave my "net" figures.

Vacation is just the $2000 to grandma and grandpas. We also camp/hike, but that comes out of the recreation budget. We nixed all other travel when we decided on a relatively expensive private school for our son. We give to church / charity. So our yearly savings diminishes by however much we am donating that year.

I'm not so sure my budget decisions are great ones btw - I'm just offering it as an example of what is working for me. My own case is the only case I know in intimate detail.