If you are middle class (<150k HHI), how would things be different if you were rich (>400k HHI)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes it is middle class. I standard government or military salary is middle class. If you have to live far from the city and have a long commute to work in order to comfortably afford housing, you are middle class.

The point is that people in the >400k range don’t need to make those compromises. That is the difference. Whdd we n you are rich you can have what you want.

$150 is Not middle class. You don't have to have a far commute, you just get a smaller house, like we did. And very few people need to live close to DC/city. We don't.

At under $150K we live very comfortably. Kids are in multiple activities (expensive), private weekly music lessons, almost paid off house, college savings (at this point enough to pay for a state school, room and board and extras), retirement savings, paid cash for our last vehicle and will for our next. And, we do things like carry out a few times a week. Its how you spend your money. If you choose crazy high housing costs, sure, you can be house poor but is poor financial decisions not middle class.

PP, when did you buy your home? You say it's almost paid off, so did you buy a long time ago, put down a huge downpayment, or double-up on payments? What is your PITI?

You don't want to double up on payments or do an extra payment a year. If you double up, you are also paying interest. You want to pay down the principal. You want to refinance if you have a high interest rate. If your interest rate is good and you are paying in extra, you want to regularly recast it. I wish I knew about recasting years ago but thankfully someone spoke of it here. With the recasting we've maybe saved $600-700 a month (but it depends on our property taxes and insurance that get taken out although we could pay it separately). For recasting, we have only had to pay a $250 fee each time. Some make you do a lump sum but they didn't require us to as we paid in extra each month consistency to principal. Google recasting. Thats made a huge difference for us. First time we did a recast, we reduced our payment maybe $500, and the second recast, was $100 a month. We also refinanced to a 15 year mortgage maybe 4 years into our 30 as we got a big rate drop. We put down 20%. Our actual mortgage now might be $1400 or so. I haven't looked as we continue to pay the original amount which was usually $2000-2400.

We bought the cheapest house on the market when it was high years ago. Its tiny and was a complete dumb so not the normal bidding war as many people didn't want it as it was a project house. We've had to redo everything (although we still have stuff to do) but mainly DIY except the big things like the roof/siding, so that has saved a lot of money.

It is almost paid off. We could pay it off now but I'd rather use the money to buy my spouse a really nice car and pay cash as that's what we did a few years ago for me (they take my car so eventually I'll want it back - or they'll keep it and I'll get a new one).

[Anonymous]

We are right around $150k (not sure of exact amount but it's gone up slightly and we were in mid-140s gross last year). Honestly, I WOULD spend the marginal difference on housing. We live at the very end of a long commuter rail line from my job in DC because my partner's job is in our cheaper city, and even this far out, we live in a 1500 sq ft townhouse so we can catch up on retirement savings. So if our income more than doubled, I would absolutely buy an SFH with a nice yard, central AC, and possibly an extra full bathroom and more bedrooms for guests and an office. No question.

Otherwise, I guess we'd shop at Wegmans instead of Aldi and go to nicer restaurants the one time a year we have someone else watch the kids? We'd sleep easier at night about college and retirement. But I don't see our day to day changing immensely outside of housing because even in DC, $120-150k is enough to get by with your needs met.

[Anonymous]

Our HHI is <150K and we live in DC. 3 kids, I currently SAHM but will go back to work once they’re all in school. If we made more we’d probably save more for college and retirement, hire house cleaners, and probably outsource some meals/go out to dinner more frequently. Maybe some extra vacations or PT childcare. We consider ourselves middle class for the DC area but definitely grasp that DH’s salary is 2x the national average for families.

[Anonymous]

I am confused how the ability to buy a small home in poor condition that is “not that far out” makes you NOT middle class.

150k is middle class. Upper end, but yes.

[Anonymous]

We're at 400K and don't have a Nanny or outsource everything. We don't stress about money, but my job (the higher paying one) is stressful. We have cash to do large projects (100K reno to a second home) and looking at buying the 4th home. I also have the freedom to start new businesses. Plenty of money to fund retirement and hope to do so by 50 or 55. We both drive older cars and used to do cool vacations but not with COVID and young kids. So we don't live a lavish lifestyle by any means, but my goal is to retire early and not work for a lavish lifestyle.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don’t conceptualize it because it doesn’t apply to me, since I make what I make. What an odd question.

If it doesn't apply to you, why answer at all?

We are under 150k HHI (one kid, live in DC), and I think the three biggest difference overall would be just less stress. But it would come in two forms. The bigger one would be less stress about the long term future, just worrying less about retirement, and being able to pay for or help our kid with college or getting started in life. Right now that's just a constant underlying stress and the biggest motivator for me to increase my income.

But at 400k we'd also have more freedom to reduce day to day stress which would be nice. We cook 95% of our meals at home, we don't have house cleaners, we don't get our car detailed, we do most of our home maintenance and upkeep ourselves, we have to be frugal about child-care, etc. We do all that because we are serious about saving and at our income we really have to pay attention to where our money goes. It would be nice to have a bit more leeway to just order in two nights in a row because we feel like it, or get a sitter for every Saturday night, or have someone come clean the house every month or so. Just things that would take the load off and make it easier to relax and enjoy our home and our time together. Though I'm also guessing many jobs that would pay enough to put us in that bracket would also inhibit relaxation and enjoyment to some degree. So it would depend a bit on the tradeoff there.

I honestly don't even know if we'd move or buy a nicer car or anything. We have a small family and a small house and a practical car, and it works for us. We'd probably take slightly nicer vacations, but it's not like suddenly we'd be flying first class or staying at luxury resorts, because that's a good way to just piss away all your money and while those things sound lovely, I'd much rather have a solid savings and be able to pay for college anywhere our kid gets in, then experience super high end air travel or eat at obscenely expensive restaurants.

We made this jump from $150k to almost $400k and you're pretty spot on. I would say the big change came around $250k. At $200k, all our major needs and comforts were met but we weren't saving as much as I'd have liked (got a late start). We were still pretty thoughtful and frugal about everything we spent. At $250k, we were finally saving enough for retirement and college. Once above $250k we started paying for all the stress busters you mentioned - house cleaners, takeout, grocery delivery if we're busy, a daycare that was more expensive but close to our house, etc. And also we save even more just in case we're forced out of the job market early. Our general lifestyle hasn't changed - same house and mortgage, same Toyotas. We could afford to buy a bigger house now, but we like the financial freedom we have.

[Anonymous]

We are juuust above $150k with two kids in moco.
The jump to $400k would immediately add the following:
-no more FA required for private school
-we’d go back to eating out once/week
-next year we’d be able to attend the family wedding out of state AND have a vacation of our own choosing (nothing elaborate but we really can’t right now based on expensive out of state wedding)
-I would 100% be planning to retire happily at 58, instead of 50% hoping to retire from FT work and maybe go PT at 58

[Anonymous]

If we jumped to 400k we could also:
- have a house cleaning service
- go out to eat
-take a really nice vacation once a year
- live in a nicer house
- replace our 15 and 18 year old cars with new cars
- save significantly more for retirement

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes it is middle class. I standard government or military salary is middle class. If you have to live far from the city and have a long commute to work in order to comfortably afford housing, you are middle class.

The point is that people in the >400k range don’t need to make those compromises. That is the difference. Whdd we n you are rich you can have what you want.

$150 is Not middle class. You don't have to have a far commute, you just get a smaller house, like we did. And very few people need to live close to DC/city. We don't.

At under $150K we live very comfortably. Kids are in multiple activities (expensive), private weekly music lessons, almost paid off house, college savings (at this point enough to pay for a state school, room and board and extras), retirement savings, paid cash for our last vehicle and will for our next. And, we do things like carry out a few times a week. Its how you spend your money. If you choose crazy high housing costs, sure, you can be house poor but is poor financial decisions not middle class.

PP, when did you buy your home? You say it's almost paid off, so did you buy a long time ago, put down a huge downpayment, or double-up on payments? What is your PITI?

100% thus person bought 20+ years ago. That is not the reality of someone today warning 150K. There are 0 homes or condos under 400K.

[Anonymous]

save a lot for college and retirement, early retirement

[Anonymous]

Our HHI is 100k and we are a family of five. We are both 32 and have 3 young kids. We live in a lower COL area but not in a middle of nowhere cheap, cheap area.

We live in a cute 3 bed home in a lovely neighborhood and it works for now but we would definitely move to a larger house. We would eat out more, we would hire a weekly house cleaner, I’d buy more new, quality stuff (furniture, clothes, etc), I wouldn’t be as concerned about price shopping when I’m at the grocery store, we’d continue saving for retirement and college but be able to save more faster, we’d go on more vacations and to nicer places…the list could really go on and on.

I think one of the biggest differences would be that we could put less time and effort towards budgeting, price shopping, and prioritizing needs over wants. We wouldn’t have to choose between getting a new water heater or going on a very modest vacation.

[Anonymous]

Anonymous wrote:Our HHI is 100k and we are a family of five. We are both 32 and have 3 young kids. We live in a lower COL area but not in a middle of nowhere cheap, cheap area.

We live in a cute 3 bed home in a lovely neighborhood and it works for now but we would definitely move to a larger house. We would eat out more, we would hire a weekly house cleaner, I’d buy more new, quality stuff (furniture, clothes, etc), I wouldn’t be as concerned about price shopping when I’m at the grocery store, we’d continue saving for retirement and college but be able to save more faster, we’d go on more vacations and to nicer places…the list could really go on and on.

I think one of the biggest differences would be that we could put less time and effort towards budgeting, price shopping, and prioritizing needs over wants. We wouldn’t have to choose between getting a new water heater or going on a very modest vacation.

Oh, and I’d buy nice cheese not the orange store brand “sharp cheddar” blocks they sell at the chain grocery store.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Our HHI is 100k and we are a family of five. We are both 32 and have 3 young kids. We live in a lower COL area but not in a middle of nowhere cheap, cheap area.

We live in a cute 3 bed home in a lovely neighborhood and it works for now but we would definitely move to a larger house. We would eat out more, we would hire a weekly house cleaner, I’d buy more new, quality stuff (furniture, clothes, etc), I wouldn’t be as concerned about price shopping when I’m at the grocery store, we’d continue saving for retirement and college but be able to save more faster, we’d go on more vacations and to nicer places…the list could really go on and on.

I think one of the biggest differences would be that we could put less time and effort towards budgeting, price shopping, and prioritizing needs over wants. We wouldn’t have to choose between getting a new water heater or going on a very modest vacation.

Oh, and I’d buy nice cheese not the orange store brand “sharp cheddar” blocks they sell at the chain grocery store.

NP Would you really consider yourself middle class or poor?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Our HHI is 100k and we are a family of five. We are both 32 and have 3 young kids. We live in a lower COL area but not in a middle of nowhere cheap, cheap area.

We live in a cute 3 bed home in a lovely neighborhood and it works for now but we would definitely move to a larger house. We would eat out more, we would hire a weekly house cleaner, I’d buy more new, quality stuff (furniture, clothes, etc), I wouldn’t be as concerned about price shopping when I’m at the grocery store, we’d continue saving for retirement and college but be able to save more faster, we’d go on more vacations and to nicer places…the list could really go on and on.

I think one of the biggest differences would be that we could put less time and effort towards budgeting, price shopping, and prioritizing needs over wants. We wouldn’t have to choose between getting a new water heater or going on a very modest vacation.

Oh, and I’d buy nice cheese not the orange store brand “sharp cheddar” blocks they sell at the chain grocery store.

NP Would you really consider yourself middle class or poor?

Pp. where I live (and probably in most places?) I would be firmly in the middle class category based on HHI and family size. I do think many rich people who view themselves as middle class would see me as poor.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Yes it is middle class. I standard government or military salary is middle class. If you have to live far from the city and have a long commute to work in order to comfortably afford housing, you are middle class.

The point is that people in the >400k range don’t need to make those compromises. That is the difference. Whdd we n you are rich you can have what you want.

$150 is Not middle class. You don't have to have a far commute, you just get a smaller house, like we did. And very few people need to live close to DC/city. We don't.

At under $150K we live very comfortably. Kids are in multiple activities (expensive), private weekly music lessons, almost paid off house, college savings (at this point enough to pay for a state school, room and board and extras), retirement savings, paid cash for our last vehicle and will for our next. And, we do things like carry out a few times a week. Its how you spend your money. If you choose crazy high housing costs, sure, you can be house poor but is poor financial decisions not middle class.

PP, when did you buy your home? You say it's almost paid off, so did you buy a long time ago, put down a huge downpayment, or double-up on payments? What is your PITI?

100% thus person bought 20+ years ago. That is not the reality of someone today warning 150K. There are 0 homes or condos under 400K.

There are plenty of houses in Wheaton, Silver Spring and other areas of MoCo for that price. We have a 900 square foot house. Its very doable. Buying a condo is dumb as you have HOA fees. But, there are plenty of condos for that price or less too. Maybe not in DC but not everyone wants to live in DC and you live where you can afford, not always where you want. We also bought a shack that no one else except builders and flippers wanted and had to invest money in repairs.