s/o - feeling "poor" at these ludicrously high incomes. what are they actually missing?

[Anonymous]

Anonymous wrote:I felt "rich" when I landed a job paying $105k in 2009, even though I had six-figure student debt. I was a 27 y/o, single, and living in an apartment in DC. I lived a very comfortable life, and felt very fortunate.

I'm now 34, with a wife and a young child. Our income has gone up and down over the past several years, but with a general upward trend. HHI is currently $260k. I still have the student debt, but I still feel very well off and very fortunate. We don't have to worry about paying our bills every month, we can afford most of the luxuries that we really want, and we're able to save a lot of our income to build wealth. With luck, we'll have a second kid in a year or two, and I think we'll still be financially comfortable and continue to build wealth.

I know that my wife and I worked hard for what we have, but I also understand that most people aren't afforded the opportunities that we've been given. Overall, I just feel fortunate and grateful.

I also don't understand people who make 300k/year but feel "poor" or strapped for cash. But, I don't get too wrapped up in other people's problems.

A refreshing voice of reason indeed.

[Anonymous]

I haven't read the entire thread, but to answer your question about 300k or 600k HHI people saying they feel poor, I'll just say that as your income goes up, expenses typically go up. And expenses add up. If you have 2-3 kids in private schools and need to pay for braces, music lessons, sports, family vacations, and the mortgage/cleaning/maintenance on a 1.5-2m house, I can see how these high HHI folks can say they feel poor.

I'm nowhere near that HHI, but understand the mindset because I'm sure that while my SIL and BIL think I am "rich," in the DC area I "only" live in a 750k house and am watching many people my age buy 1.1m+.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think it's that simple. Lots of people in this area are not from here and are not from any competitive market like SF or NYC or even NJ or Mass. So they think by making it to DC and making 300k, they have ARRIVED. Then they look around and realize there are people making 400k, 500k, 1 million etc. They look around at the Jones and realize that at 300k, they may have to think about private school and it's no fair that their friends making 500k have to give zero thought to whether to enroll their 3 kids in private school.

And then they look back home to Wisconsin or Arkansas or wherever and realize that it's no fair that their old high school classmates -- who weren't even class valedictorian and weren't ivy bound land are grads of the local non flagship u are making 150k in sales and living in a McMansion style house with 2 brand new cars, whereas they HAVE ARRIVED in DC but "only" have a 700k brick home from the 1960s to show for it.

I haven't seen the same insecurity from people coming from say Long Island or NJ or the Bay Area bc they are used to be around A LOT of money and are also from competitive places so they never expected that they would be "the one" in their group of peers who'd be the success.

There may be some of this, but these HCOL coastal cities aren't the only places where people make high salaries. My parents are MDs in "flyover country", and they easily pull in a 7 figure HHI.

What I've noticed on DCUM is that people have a skewed perception of "rich", that seems to look more like "Lifestyles of the Rich and Famous" (i.e. .1%). They don't think that having a house in a good part of town, maybe paying for private school and/or a nanny, having cars that work, having a savings, and having enough discretionary income to not have to worry too much about what/where they eat makes them UMC or even "rich" by most definitions. What's funny is that growing up in a LCOL area with parents who had a 7 figure income, that's more or less the lifestyle we lived...and I was very aware that we were rich. The additional things we did was have luxury cars, take international trips (we didn't necessarily stay in 5 star hotels, though, and those trips were typically to my parents' country of origin), and not stress about extra curricular activity spending. My parents were also able to pay full price for college for all of us. We still mostly shopped sales and discount stores/outlets.

I think another thing people miss is how much on the edge some people live, even with high incomes. My parents, especially my dad, are pretty conservative when it comes to savings. It's actually to the point where we sometimes wonder why he works so hard, given that all of his kids also earn good livings so we aren't depending on an inheritance from him (and he's not the type of parent to let us live off of a trust fund while he's alive). But a very good friend of his died relatively young (late 60s), after receiving an aggressive cancer diagnosis. My dad helped his wife sort out the financial details. It was clear that despite his friend also being a doctor who lived in the same part of town and spent, if anything, a bit more than my parents while certainly earning less on a single income, he hadn't planned his future as well. His wife who was a SAHM for 40+ years had to sell their house and start working again. I asked my dad the state of their mortgage, and he told me he had paid it off early around the time they turned 60 so there would be nothing for us to worry about whenever the time comes.

I think if people accept that rich means having a lot of choice in how you get the basics plus some variable amount of extra, then they would be a lot happier. Most MC people don't have a ton of choices and they do worry about how they are going to get the basics. Remember "Roseanne"? That's MC. Not sending your kids to one of the best public schools, affording a nanny, and having a car that's less than 10 years old.

Roseanne was not middle class. More like working or lower-middle class. Ugh, I hated that show and all the characters in it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think it's that as you move into different circles you become aware of additional things to desire/covet. Growing up, I never knew anyone with a beach house so it never occurred to me that I was missing out. But now that I know people who have them, I wonder if my kids are missing out because we don't.

Same with super-expensive sleep away camps, a boat, etc. The list of things to desire just gets bigger.

Also, we took music lessons with the little old lady around the corner growing up. But we found a serious teacher for our kid, which eventually moved to the world of expensive summer music camps, more expensive instruments, etc. That is probably the same with sports, etc. You grew up playing games in the neighborhood and now you know people who have three year olds taking private swimming lessons.

Also, I think a lot of is stems from the cut-throat competitive atmosphere. Kids who don't take private lessons don't get into the orchestra at your high school; kids who don't take private lessons don't make the baseball team; you worry that your kids can't compete with the kids who have had math tutoring beginning in first grade and you start to panic that it's not just that you're being stupid and spoiled but that your child is being actively left behind compared to the people who appear ot have unlimited resources to spend on their children.

This is really true too. At our NW DC elementary 95% of the kids went to a top preschool and comes from a super educated household and started playing soccer/t-ball at age 4 and began taking piano lessons at age 5 or 6.
The kids who stand out and actually make the middle school team all played travel sports beginning at age 9. The really good ones started private lessons at age 9. It's just the way it is. I'm sure once in a while a true athletic or musical
prodigy comes along but by in large, the kids getting the team spots, orchestra seats, etc. are those with a ton of money being thrown at them from an early age. The baseline for parenting here is really high. To excel (even enough to get a spot on a school roster) you have
to really, really invest a TON (mostly in money since pretty much all of this is hired out). [/quot

This perfectly describes the path of several young adults we know who went on to prestigious colleges. Most of them, (now in their late 20s or early 30s) are still in graduate school, doing Teach for America or Peace Corps, or being supported by their parents because they wouldn't consider accepting an "ordinary" job. My kids went to public school, played rec sports. Both are college grads who are supporting themselves. We're not poor. We're comfortable, partly because we weren't always trying to keep up appearances.

[Anonymous]

Read "The Two Income Trap" by Elizabeth Warren, which explains just why so many high earners feel poor and some of them are, and end up in bankruptcy as a result of spending everything they make, then foundering when one spouse loses a job or a medical crisis crops up.

[Anonymous]

Anonymous wrote:Read "The Two Income Trap" by Elizabeth Warren, which explains just why so many high earners feel poor and some of them are, and end up in bankruptcy as a result of spending everything they make, then foundering when one spouse loses a job or a medical crisis crops up.

That book also assumes that if the breadwinner gets laid off, the stay at home spouse can quickly find a job that supports the entire family. In theory, sure but in reality it is very far fetched.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Read "The Two Income Trap" by Elizabeth Warren, which explains just why so many high earners feel poor and some of them are, and end up in bankruptcy as a result of spending everything they make, then foundering when one spouse loses a job or a medical crisis crops up.

That book also assumes that if the breadwinner gets laid off, the stay at home spouse can quickly find a job that supports the entire family. In theory, sure but in reality it is very far fetched.

Yeah, this was the part of the book that made no sense.

[Anonymous]

This is not a new phenomenon, as Charles Dickens wrote in David Copperfield,
"Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

[Anonymous]

What are they missing? As others have said:
Time.

We are so fortunate to make a great income and have healthy kids, but like others have said, we are exhausted.
We have very little extra time. Well, we go on a couple vacations annually, which are great, but I would love to have extra time to relax with my family on a daily basis.

I take the train home from work and ride by some lower middle class areas and see the families hanging out on their front porch or in their garage, and part of me says "oh that looks so nice and simple and peaceful"
I don't know what the right answer or balance is, but I would gladly pay some for more time.