Rich v Affluent

[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?

Yes, he works and also makes about $200k. Even when I didn't work and stayed home with the kids, I felt rich because our expenses were lower.

[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?

Yes, he works and also makes about $200k. Even when I didn't work and stayed home with the kids, I felt rich because our expenses were lower.

So let's get this straight: you make $400k/year, you don't live IN D.C., and you had no childcare costs. OK, you should feel rich then.

[Anonymous]

If you have no kids, and you and your spouse have graduate degrees and work full-time, you should be a multi-millionaire by 40. Kids are the No. 1 destroyer of wealth in this country, followed closely by Stay at Homes.

[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?

Yes, he works and also makes about $200k. Even when I didn't work and stayed home with the kids, I felt rich because our expenses were lower.

So let's get this straight: you make $400k/year, you don't live IN D.C., and you had no childcare costs. OK, you should feel rich then.

First, we lived in DC when I stayed home. Second, our DC1 was in daycare at that time because she was very social, enjoyed it, and yes, we could easily afford it.

[Anonymous]

Anonymous wrote:I think the question is why do you care so much about these labels?

Taxes - if you are consideredcrich by pols and the gen pop, you are constantly in danger of being taxed more and at excessive rates

[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.

X 1000

People who don't have kids shouldn't post in threads like this. They seem to have no idea of how enormously expensive they are.

[Anonymous]

Anonymous wrote:

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.

X 1000

People who don't have kids shouldn't post in threads like this. They seem to have no idea of how enormously expensive they are.

I don't have kids, and agree with this statement. However... when I look at my budget and consider starting a family, I at least know that there needs to be a surplus to accommodate children. Maybe I don't know what that exact number needs to be, but I know that if I only have an extra $200/month in my budget, that's not going to cut it.

[Anonymous]

And the cost of raising kids increases to fit your HHI. A family that has HHI of $250k will pay less to raise kids than a family that has an HHI of $750k. And a family that has HHI of $750k will pay less to raise kids than a family with a $1.25 HHI. It's insidious.

[Anonymous]

Anonymous wrote:

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.

X 1000

People who don't have kids shouldn't post in threads like this. They seem to have no idea of how enormously expensive they are.

I'm the OP, and I don't have kids. Rather than ban us, the posts should include whether the person is a single w/o children or a family w/ children. That would explain why some posters insist they are upper-middle class with a $100k salary and have plenty of disposable income for luxuries and others are saying that they are low income and practically qualify for government assistance.

Also, in my OP, I made it very clear that the income ranges I listed were for a SINGLE person (and suggested doubling it for HHI of couples).

[Anonymous]

Anonymous wrote:And the cost of raising kids increases to fit your HHI. A family that has HHI of $250k will pay less to raise kids than a family that has an HHI of $750k. And a family that has HHI of $750k will pay less to raise kids than a family with a $1.25 HHI. It's insidious.

....and a family with a HHI of $100k will pay much less and will have to live in the suburbs where housing is more affordable. Still doesn't make them poor,; it just limits their options.

On an aside, interesting trends....back in the 1950s and 60s, the low-incime were stuck in the city and only the middle-class could buy houses in the suburbs. Now it's a complete 180.

[Anonymous]

Think of kids as fed income tax. If you don't have kids, basically you have tax free income whereas folks who have kids are paying fed income tax. It can be that dramatic of a difference. And until you have kids and start hemmoraging cash, its impossible to understand how expensive they are. We thought we knew, but in reality we had NO FUCKING IDEA.

[Anonymous]

Anonymous wrote:

Anonymous wrote:And the cost of raising kids increases to fit your HHI. A family that has HHI of $250k will pay less to raise kids than a family that has an HHI of $750k. And a family that has HHI of $750k will pay less to raise kids than a family with a $1.25 HHI. It's insidious.

....and a family with a HHI of $100k will pay much less and will have to live in the suburbs where housing is more affordable. Still doesn't make them poor,; it just limits their options.

On an aside, interesting trends....back in the 1950s and 60s, the low-incime were stuck in the city and only the middle-class could buy houses in the suburbs. Now it's a complete 180.

+1.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Can any of you who want us to believe $300K is not affluent tell me why you persist in arguing that you are "middle class"? I've asked this before on DCUM -- why are you so deeply ashamed of what you have?

Is it because you know you only have it for reasons that have nothing to do with your merit?

I'm one who thinks 300k hhi is middle class. It's been clearly explained multiple times on multiple threads why people think 300k is not affluent/rich/whatever. If you want to remain willfully ignorant on why we feel the way we do, that's on you. If you want to believe you're rich on your 100 or 300k income, go ahead. I guarantee most people in this area don't agree with you.

Your problem is that you're "thinking" something that is contrary to actual fact. The distribution of income is a mathematical reality. Regardless of how you "feel" about your affluence, you are affluent/rich if your annual HHI is $300K. That figure puts you firmly in the upper echelon in every corner of America, including DC.

I'm guessing you don't "feel" rich because you choose to spend your wealth on things that the vast majority of people who earn much less (including the vast majority of people who live in this area) either (1) pay a lot less for or (2) don't buy at all. That's your choice, but it doesn't make you any less rich.

And you still didn't answer my question: Why are you so determined to avoid being branded wealthy? What is it about your success that shames you?

Yes, I find this so interesting. Regardless of how one 'feels' about their income, someone who makes more than 95% of the people in the area is clearly, from a mathematical point of view, affluent. What does it gain you by insisting that you are not?

Because there is no COL adjustment for tax brackets, it matters a lot. My husband and I are both GS 15 and make about $300K together. A 3 bedroom cape in Arlington, purchased in 2004, cost $600K with a mortgage of $2500. The same size/quality of housing in other parts of the country is half that. Other costs are also much higher. Yet because the number is "mathematically" the same everywhere, we are consider affluent and taxed as such, even though the amount we have to contribute to retirement, college savings, etc. is less after paying for housing, food, insurance etc. due to COL (and consequently our disposable income is MUCH less) than in other parts of the country. Around here, two government wage earners should be taxed as if we are middle class, with the middle class tax breaks.

OK, I'll go half-way with you here - the taxes hurt more when your COL is higher. However, when you live a stone's throw from a major US city, a detached home + a yard is actually a bigger luxury than it is when you live in Indiana or Montana. Buying a townhome in a major urban area is probably a better rough approximation for what it "means" to own a cape in a rural area.

People always make this comparison, but it's the wrong comparison. Households making $300K in Indiana or Montana don't live in 3-bedroom cape cods on 1/6 of an acre and drive Hyundais. My in-laws live in Oklahoma, in probably the richest/most educated town in the state, and paid $165K for a 3,000 square foot house with a pool and a 3-car garage in which they store their two Lexuses. My sister lives in Kentucky, she and her husband make about $200K, and they bought a house twice the size of mine down the street from Senator McConnell and can still afford to send their kids to private school. I have a small house and a small yard and old cards and public (albeit good) schools and high local taxes. And am considered "rich," while lots of people I know with slightly lower incomes who have much nicer lifestyles, more disposable income, and more room to save are considered middle class because they live in lower COL states.

[Anonymous]

Why do people stay in super high COL areas. That's what I can't figure out..... If I ever get married I am getting the heck out of DC and going someplace like PP mentioned. Is it really that hard to find a job paying 100-150k outside of DC in these areas?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Can any of you who want us to believe $300K is not affluent tell me why you persist in arguing that you are "middle class"? I've asked this before on DCUM -- why are you so deeply ashamed of what you have?

Is it because you know you only have it for reasons that have nothing to do with your merit?

I'm one who thinks 300k hhi is middle class. It's been clearly explained multiple times on multiple threads why people think 300k is not affluent/rich/whatever. If you want to remain willfully ignorant on why we feel the way we do, that's on you. If you want to believe you're rich on your 100 or 300k income, go ahead. I guarantee most people in this area don't agree with you.

Your problem is that you're "thinking" something that is contrary to actual fact. The distribution of income is a mathematical reality. Regardless of how you "feel" about your affluence, you are affluent/rich if your annual HHI is $300K. That figure puts you firmly in the upper echelon in every corner of America, including DC.

I'm guessing you don't "feel" rich because you choose to spend your wealth on things that the vast majority of people who earn much less (including the vast majority of people who live in this area) either (1) pay a lot less for or (2) don't buy at all. That's your choice, but it doesn't make you any less rich.

And you still didn't answer my question: Why are you so determined to avoid being branded wealthy? What is it about your success that shames you?

Yes, I find this so interesting. Regardless of how one 'feels' about their income, someone who makes more than 95% of the people in the area is clearly, from a mathematical point of view, affluent. What does it gain you by insisting that you are not?

Because there is no COL adjustment for tax brackets, it matters a lot. My husband and I are both GS 15 and make about $300K together. A 3 bedroom cape in Arlington, purchased in 2004, cost $600K with a mortgage of $2500. The same size/quality of housing in other parts of the country is half that. Other costs are also much higher. Yet because the number is "mathematically" the same everywhere, we are consider affluent and taxed as such, even though the amount we have to contribute to retirement, college savings, etc. is less after paying for housing, food, insurance etc. due to COL (and consequently our disposable income is MUCH less) than in other parts of the country. Around here, two government wage earners should be taxed as if we are middle class, with the middle class tax breaks.

OK, I'll go half-way with you here - the taxes hurt more when your COL is higher. However, when you live a stone's throw from a major US city, a detached home + a yard is actually a bigger luxury than it is when you live in Indiana or Montana. Buying a townhome in a major urban area is probably a better rough approximation for what it "means" to own a cape in a rural area.

People always make this comparison, but it's the wrong comparison. Households making $300K in Indiana or Montana don't live in 3-bedroom cape cods on 1/6 of an acre and drive Hyundais. My in-laws live in Oklahoma, in probably the richest/most educated town in the state, and paid $165K for a 3,000 square foot house with a pool and a 3-car garage in which they store their two Lexuses. My sister lives in Kentucky, she and her husband make about $200K, and they bought a house twice the size of mine down the street from Senator McConnell and can still afford to send their kids to private school. I have a small house and a small yard and old cards and public (albeit good) schools and high local taxes. And am considered "rich," while lots of people I know with slightly lower incomes who have much nicer lifestyles, more disposable income, and more room to save are considered middle class because they live in lower COL states.

That was kinda my point. In a densely packed urban area, it is always a bigger luxury to have more land, than it is to have that same land in a more rural location. The typical home can be on acre, when there are plenty of acres. The minute you are packing people into a city or within commuting distance, the "average man's" dwelling gets smaller. Bigger lots are scarcer and a mark of relative wealth.

COL is also high around here, with somewhat higher incomes to boot. You can buy so much more on 300k in Indiana that it is crazy - for example, in the town where I used to live, you could get a really nice house for 100k. A budget house was half that much. However, almost nobody made 300k.