Do you make $400,000 a year but feel broke?

[Anonymous]

Anonymous wrote:We're filthy rich on $400K. Of course, we still live (mortgage free) in the house we bought 15 years ago when our HHI was $184K.

it pays to be old and buy before the boom of 2000s

[Anonymous]

We are $400k HHI and I can relate to the difficulties described in this video, though we don't pay any club dues and only take one vacation a year. This a good illustration of why private schools/colleges should offer some need-based aid to people in this range, as it's really only the equity partners in BIGLAW and people on those types of ~$800k-1M annual incomes that have ample money to spend.

[Anonymous]

Anonymous wrote:We are $400k HHI and I can relate to the difficulties described in this video, though we don't pay any club dues and only take one vacation a year. This a good illustration of why private schools/colleges should offer some need-based aid to people in this range, as it's really only the equity partners in BIGLAW and people on those types of ~$800k-1M annual incomes that have ample money to spend.

Need based aid? Holy hell!

[Anonymous]

Anonymous wrote:We are $400k HHI and I can relate to the difficulties described in this video, though we don't pay any club dues and only take one vacation a year. This a good illustration of why private schools/colleges should offer some need-based aid to people in this range, as it's really only the equity partners in BIGLAW and people on those types of ~$800k-1M annual incomes that have ample money to spend.

You are funny!

[Anonymous]

Anonymous wrote:

Anonymous wrote:We are $400k HHI and I can relate to the difficulties described in this video, though we don't pay any club dues and only take one vacation a year. This a good illustration of why private schools/colleges should offer some need-based aid to people in this range, as it's really only the equity partners in BIGLAW and people on those types of ~$800k-1M annual incomes that have ample money to spend.

Need based aid? Holy hell!

Yes - I mean, first of all, there's a difference between wealth and income. Someone who has been on a $400k HHI for a few years is by no means wealthy.

That being said, when you consider the personal toll it often takes to generate that level of income, it's debatable whether it's not a better deal for you to drop to a $100k HHI level so you can get financial aid but still have more personal time. I mean, if Mr. Money Moustache is eligible for financial aid, I'd choose that over paying full freight on $400k HHI.

Again, if you're making $800k-1M that's entirely different, as full freight tuition is a drop in the bucket for what you save annually. For someone at $400k HHI, one tuition might be 1/3 of your total annual savings (including retirement). Hence, show me the need-based aid!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are $400k HHI and I can relate to the difficulties described in this video, though we don't pay any club dues and only take one vacation a year. This a good illustration of why private schools/colleges should offer some need-based aid to people in this range, as it's really only the equity partners in BIGLAW and people on those types of ~$800k-1M annual incomes that have ample money to spend.

Need based aid? Holy hell!

Yes - I mean, first of all, there's a difference between wealth and income. Someone who has been on a $400k HHI for a few years is by no means wealthy.

That being said, when you consider the personal toll it often takes to generate that level of income, it's debatable whether it's not a better deal for you to drop to a $100k HHI level so you can get financial aid but still have more personal time. I mean, if Mr. Money Moustache is eligible for financial aid, I'd choose that over paying full freight on $400k HHI.

Again, if you're making $800k-1M that's entirely different, as full freight tuition is a drop in the bucket for what you save annually. For someone at $400k HHI, one tuition might be 1/3 of your total annual savings (including retirement). Hence, show me the need-based aid!

You are out of your mind. Feel free to drop to $100k and apply for financial aid. Private school isn't a right and no one owes you the ability to send your kids there. Either pay for it (which you can easily do on $400k if it is a priority) or go public.

[Anonymous]

Anonymous wrote:You are out of your mind. Feel free to drop to $100k and apply for financial aid. Private school isn't a right and no one owes you the ability to send your kids there. Either pay for it (which you can easily do on $400k if it is a priority) or go public.

You've kind of conceded the point though when you say "pay for it or go to public." It's a huge financial burden on someone making $400k HHI (again, coming from no wealth) to afford private school tuition. There's no reason that the people on $1M HHI shouldn't be subsidizing people in this income range. Hence, a system where a small amount of need-based aid is provided seems like good policy unless you want private school to become a right only of the very rich and poor.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You are out of your mind. Feel free to drop to $100k and apply for financial aid. Private school isn't a right and no one owes you the ability to send your kids there. Either pay for it (which you can easily do on $400k if it is a priority) or go public.

You've kind of conceded the point though when you say "pay for it or go to public." It's a huge financial burden on someone making $400k HHI (again, coming from no wealth) to afford private school tuition. There's no reason that the people on $1M HHI shouldn't be subsidizing people in this income range. Hence, a system where a small amount of need-based aid is provided seems like good policy unless you want private school to become a right only of the very rich and poor.

You seem confused. I would tell someone who made $2m/year to pay for it or go public. I would not tell someone who made $65k/year that same thing. You are much more like the $2m person than the $65k person in your ability to pay for private school. If it isn't a priority for you, so be it. Public it is. And no, even wealthier people shouldn't have to subsidize you and your lifestyle. It is not a huge burden when you are making $400k to come up with $35k for public school unless you are just really terrible with money. I know. I have done it and I would be ashamed to ask someone else to foot the bill at that income level.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You are out of your mind. Feel free to drop to $100k and apply for financial aid. Private school isn't a right and no one owes you the ability to send your kids there. Either pay for it (which you can easily do on $400k if it is a priority) or go public.

You've kind of conceded the point though when you say "pay for it or go to public." It's a huge financial burden on someone making $400k HHI (again, coming from no wealth) to afford private school tuition. There's no reason that the people on $1M HHI shouldn't be subsidizing people in this income range. Hence, a system where a small amount of need-based aid is provided seems like good policy unless you want private school to become a right only of the very rich and poor.

How can a dumbass like this make 400k?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You are out of your mind. Feel free to drop to $100k and apply for financial aid. Private school isn't a right and no one owes you the ability to send your kids there. Either pay for it (which you can easily do on $400k if it is a priority) or go public.

You've kind of conceded the point though when you say "pay for it or go to public." It's a huge financial burden on someone making $400k HHI (again, coming from no wealth) to afford private school tuition. There's no reason that the people on $1M HHI shouldn't be subsidizing people in this income range. Hence, a system where a small amount of need-based aid is provided seems like good policy unless you want private school to become a right only of the very rich and poor.

You seem confused. I would tell someone who made $2m/year to pay for it or go public. I would not tell someone who made $65k/year that same thing. You are much more like the $2m person than the $65k person in your ability to pay for private school. If it isn't a priority for you, so be it. Public it is. And no, even wealthier people shouldn't have to subsidize you and your lifestyle. It is not a huge burden when you are making $400k to come up with $35k for public school unless you are just really terrible with money. I know. I have done it and I would be ashamed to ask someone else to foot the bill at that income level.

Oh, I'm not saying it can't be done, but it's definitely a burden. A family with $400k HHI in this market is probably going to save about $100k per year (between retirement and after-tax savings). A family at $1M is probably going to save about $400k. So especially if you're talking about more than one child, it's a significant burden on a $400k HHI to pay full freight private - probably about half of what they'd save. That's why many of them go public in this region.

A person with $65k HHI would never be asked to "pay for it" at that level. Believe me, I'd know, as need-based aid put me through secondary school, college and graduate school on about that exact HHI income growing up.

Again, I'm not saying everyone on $400k HHI needs aid, but I can see circumstances (especially where families have multiple kids in school and have only had that earning power for a short period of time) where some need-based aid would be appropriate.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You are out of your mind. Feel free to drop to $100k and apply for financial aid. Private school isn't a right and no one owes you the ability to send your kids there. Either pay for it (which you can easily do on $400k if it is a priority) or go public.

You've kind of conceded the point though when you say "pay for it or go to public." It's a huge financial burden on someone making $400k HHI (again, coming from no wealth) to afford private school tuition. There's no reason that the people on $1M HHI shouldn't be subsidizing people in this income range. Hence, a system where a small amount of need-based aid is provided seems like good policy unless you want private school to become a right only of the very rich and poor.

You seem confused. I would tell someone who made $2m/year to pay for it or go public. I would not tell someone who made $65k/year that same thing. You are much more like the $2m person than the $65k person in your ability to pay for private school. If it isn't a priority for you, so be it. Public it is. And no, even wealthier people shouldn't have to subsidize you and your lifestyle. It is not a huge burden when you are making $400k to come up with $35k for public school unless you are just really terrible with money. I know. I have done it and I would be ashamed to ask someone else to foot the bill at that income level.

Oh, I'm not saying it can't be done, but it's definitely a burden. A family with $400k HHI in this market is probably going to save about $100k per year (between retirement and after-tax savings). A family at $1M is probably going to save about $400k. So especially if you're talking about more than one child, it's a significant burden on a $400k HHI to pay full freight private - probably about half of what they'd save. That's why many of them go public in this region.

A person with $65k HHI would never be asked to "pay for it" at that level. Believe me, I'd know, as need-based aid put me through secondary school, college and graduate school on about that exact HHI income growing up.

Again, I'm not saying everyone on $400k HHI needs aid, but I can see circumstances (especially where families have multiple kids in school and have only had that earning power for a short period of time) where some need-based aid would be appropriate.

No. It is not a burden. Unless you are spending all of your money on other stuff. You are seriously out of touch with reality.

[Anonymous]

I guess it depends on your definition of burden. Let's say for the sake of argument that a relatively thrifty family on that HHI saves $120k* per year after tax. If they have two kids, you're now asking them to put half of their total annual savings towards tuition. I may be more fiscally conservative than others, but I'd be very cautious about allocating resources that way unless and until there was some long-term wealth behind it from multiple years of saving.

* You can quibble with the $120k amount, but I'd guess that's well over what most families in this income category save given it's probably about $250k of after-tax income.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We're filthy rich on $400K. Of course, we still live (mortgage free) in the house we bought 15 years ago when our HHI was $184K.

it pays to be old and buy before the boom of 2000s

Yes, I am lucky to be in my 40s, if that's old.

[Anonymous]

Anonymous wrote:I guess it depends on your definition of burden. Let's say for the sake of argument that a relatively thrifty family on that HHI saves $120k* per year after tax. If they have two kids, you're now asking them to put half of their total annual savings towards tuition. I may be more fiscally conservative than others, but I'd be very cautious about allocating resources that way unless and until there was some long-term wealth behind it from multiple years of saving.

* You can quibble with the $120k amount, but I'd guess that's well over what most families in this income category save given it's probably about $250k of after-tax income.

So ridiculous. You are free to allocate your resources however you choose. Just don't whine about it when you make more money in 2 months than most people make all year. It is really gross.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I guess it depends on your definition of burden. Let's say for the sake of argument that a relatively thrifty family on that HHI saves $120k* per year after tax. If they have two kids, you're now asking them to put half of their total annual savings towards tuition. I may be more fiscally conservative than others, but I'd be very cautious about allocating resources that way unless and until there was some long-term wealth behind it from multiple years of saving.

* You can quibble with the $120k amount, but I'd guess that's well over what most families in this income category save given it's probably about $250k of after-tax income.

So ridiculous. You are free to allocate your resources however you choose. Just don't whine about it when you make more money in 2 months than most people make all year. It is really gross.

What part do you find ridiculous? That I would be cautious about allocating half of annual savings toward tuition for two kids?

Just to illustrate this further, let's say a family is considering putting two kids into private school at a cost of $60k per year. For a family on $1M HHI, that's an insignificant cost... almost trivial. They can afford it and the school should expect significant donations on top of it. For a family on $65k, the school should cover 90+% of tuition with financial aid. For the family on $400k, I think a small amount of aid - let's say $5-10k - is very appropriate. Otherwise you have a system where it's only rational to attend these schools if you are at one extreme or the other. As someone who values a private school education, I think that schools with sufficient endowments should endeavor to make attending something a rational person would consider.