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

[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.

I'd still shop at Aldi's and Lidl as nothing better about the Safeway and Giant but price. SO many better things to put money with.

But, the issue is you choose to have three kids. That's far more expensive than if you stopped at 1-2. That's a lifestyle choice and doesn't make you middle class because you are a family of five.

[Anonymous]

This is middle class - not $150K:

https://www.businessinsider.com/personal-finance/how-much-to-earn-middle-class-in-state-2021-4

[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.

I'd still shop at Aldi's and Lidl as nothing better about the Safeway and Giant but price. SO many better things to put money with.

But, the issue is you choose to have three kids. That's far more expensive than if you stopped at 1-2. That's a lifestyle choice and doesn't make you middle class because you are a family of five.

That income even with that family size is middle class in most parts of the country. NP.

[Anonymous]

Anonymous wrote:It makes an enormous difference. It means you don’t feel stressed about paying for kids camp, travel, repairs in your house or car, orthodontia, etc. The list of affordable amenities at 400k that aren’t affordable at $150k goes on and on.

Funny enough, I don’t feel any happier moving from $150k to $400k over the last few years. But objectively life is so much less stressful and easier.

NP who made the jump over the last few years. I am happier b/c of less stress and b/c now my spouse has a flex job from home while I go to a work place.

Money does solve problems and I am very lucky.

[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.

I'd still shop at Aldi's and Lidl as nothing better about the Safeway and Giant but price. SO many better things to put money with.

But, the issue is you choose to have three kids. That's far more expensive than if you stopped at 1-2. That's a lifestyle choice and doesn't make you middle class because you are a family of five.

PP. yes, obviously. According to the numbers on my state and area, we are MC. In my opinion, we lead a very typically middle class lifestyle. We own a solid home in a safe neighborhood but it is not updated or trendy. We can pay for extracurriculars and save for college but the kids go to a nearby public school. We drive reliable cars but they are not new or luxury. We price shop but never worry we can’t afford necessities.

I think one issue with this question is that so many technically wealthy people on dcum believe themselves to be middle class.

[Anonymous]

As a single who makes just under 150k, I do have no idea how families can have a middle class lifestyle on a lesser income. I don't live extravagantly, I have a modest house. I do travel and save plenty for retirement, but it is not a fancy life. Everyone I know with children bleed money and still don't live extravagantly.

There's some truth that the beau ideal of a middle class existence likely requires a 200k+ HHI in urban/suburban areas, and that's a decent house with decent schools and two decent Japanese cars and decent savings. Sub 100k is lower middle class for a family. The last time 100k was a comfortable family income was probably in 2000ish.

If my income were to jump to 400k it'd manifest itself mostly in a nicer house and a nicer car and spending more money on vacation. I'd probably explore collecting interesting artwork but I don't like clutter so who knows.

[Anonymous]

Anonymous wrote:This is middle class - not $150K:

https://www.businessinsider.com/personal-finance/how-much-to-earn-middle-class-in-state-2021-4

+1. This is a tool you can use to see where you actually fall. It accounts for HHI, family size, and location.

https://grow.acorns.com/middle-class-calculator/

[Anonymous]

Anonymous wrote:As a single who makes just under 150k, I do have no idea how families can have a middle class lifestyle on a lesser income. I don't live extravagantly, I have a modest house. I do travel and save plenty for retirement, but it is not a fancy life. Everyone I know with children bleed money and still don't live extravagantly.

There's some truth that the beau ideal of a middle class existence likely requires a 200k+ HHI in urban/suburban areas, and that's a decent house with decent schools and two decent Japanese cars and decent savings. Sub 100k is lower middle class for a family. The last time 100k was a comfortable family income was probably in 2000ish.

If my income were to jump to 400k it'd manifest itself mostly in a nicer house and a nicer car and spending more money on vacation. I'd probably explore collecting interesting artwork but I don't like clutter so who knows.

You are not middle class.

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is middle class - not $150K:

https://www.businessinsider.com/personal-finance/how-much-to-earn-middle-class-in-state-2021-4

+1. This is a tool you can use to see where you actually fall. It accounts for HHI, family size, and location.

https://grow.acorns.com/middle-class-calculator/

Thank you. Middle class isn’t a feeling. A family of 3 earning 400k isn’t middle class even if they feel that way.

[Anonymous]

We would save more for college and retirement (retire earlier), buy back time/convenience with money (housecleaners, outsourcing tasks we dlslike), and spend more on travel/vacations. Also, more money to invest in the stock market and give to charity.

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is middle class - not $150K:

https://www.businessinsider.com/personal-finance/how-much-to-earn-middle-class-in-state-2021-4

+1. This is a tool you can use to see where you actually fall. It accounts for HHI, family size, and location.

https://grow.acorns.com/middle-class-calculator/

Your family size has nothing to do with social class. Your family size is a lifestyle choice. It strictly goes by HHI.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is middle class - not $150K:

https://www.businessinsider.com/personal-finance/how-much-to-earn-middle-class-in-state-2021-4

+1. This is a tool you can use to see where you actually fall. It accounts for HHI, family size, and location.

https://grow.acorns.com/middle-class-calculator/

Thank you. Middle class isn’t a feeling. A family of 3 earning 400k isn’t middle class even if they feel that way.

I cannot imagine having $400K. And, we are very comfortable on less than 1/2 of that. So, I don't get the complaining when its about lifestyle choices. I don't worry about money. I don't think about making an amazon purchase (which is sometimes daily or multiple times a day), etc.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is middle class - not $150K:

https://www.businessinsider.com/personal-finance/how-much-to-earn-middle-class-in-state-2021-4

+1. This is a tool you can use to see where you actually fall. It accounts for HHI, family size, and location.

https://grow.acorns.com/middle-class-calculator/

Thank you. Middle class isn’t a feeling. A family of 3 earning 400k isn’t middle class even if they feel that way.

I cannot imagine having $400K. And, we are very comfortable on less than 1/2 of that. So, I don't get the complaining when its about lifestyle choices. I don't worry about money. I don't think about making an amazon purchase (which is sometimes daily or multiple times a day), etc.

Agreed and we are in a similar position to you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is middle class - not $150K:

https://www.businessinsider.com/personal-finance/how-much-to-earn-middle-class-in-state-2021-4

+1. This is a tool you can use to see where you actually fall. It accounts for HHI, family size, and location.

https://grow.acorns.com/middle-class-calculator/

Your family size has nothing to do with social class. Your family size is a lifestyle choice. It strictly goes by HHI.

It looks like a lot of sources do adjust for family size. This makes sense to me. One person earning $150k is going to have a very different experience than one adult supporting a spouse and four children. It seems not factoring in family size and location would lead to a wildly inaccurate picture of what the middle class experience is.

[Anonymous]

Anonymous wrote:

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.

I'm not sure this is true. I was just looking at Redfin in SS/Wheaton yesterday and the only house under 400k was a clear fixer upper (which may work for some but is not feasible/affordable for people who lack the ability, childcare/family help, or time to DIY).

I live in Frederick, where most single family homes are $400k or over even here. You can get a rowhome, townhouse, or 900 sq ft SFH for less. But most people, understandably, would not consider a 2 hour commute reasonable if they work in DC.