Why do people who make 500k + not "feel" rich?

[Anonymous]

Anonymous wrote:Because they are spoiled. We make just shy of $500k, and don't feel at all deprived or pinched. It's absurd to think otherwise. When you earn this much, making changes is easy to feel less stretched.

+1.

[Anonymous]

They never met anyone really poor. Isolation breeds greed.

[Anonymous]

Anonymous wrote:400k is the new 100k

Yes, I think so. Remember when we were kids and 100k salary was a lot? The “six figure” income....well that was 30 years ago! Now, in 2019, it’s been replaced by a $400k-$500k income. You can choose to live frugally on it or spend it all (which is easy to do!). But, yes, it’s a hefty salary. Not rich, but you can be very comfortable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Lots of posts on this so I believe it but I don't understand it.

Is it really true that the .01% is that much better off than everyone else so it's them and everyone else? I feel like that is the underlying argument about high earners not being rich.

Because human greed knows no end.

Not really. Because people who make 500K are often in the company of people who make 1m and more. We always see the people who are wealthier, nobody focuses on the secretary or the janitor making less.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Because 85% of my pay is spent on taxes, savings, childcare, mortgage and education.

One day I’ll be rich when the kids go off to college. Until then most of my money is going to the future full pay college, childcare required to keep my high paying job and savings.

All that money that you are saving? That's not spending. You may have earmarked it in your head as untouchable, but it's still your money.

NP, but the question was why don't they "feel" rich. The question was answered and it makes sense. The poster isn't saying they are not well or or that they are middle class.

[Anonymous]

My boss makes around 1.5M and is always complaining he's broke, hounding me on when his expense reports are due to be reimbursed because his credit card payment is due, etc. I just don't get it.

[Anonymous]

People are terrible with money and allow all their expenses to creep up.

People are hellbent on getting what they “deserve” even if no one deserves a 2 million dollar house and multiple international vacations a year.

People think anyone else cares what they do or what they own.

[Anonymous]

Because of high cost of living and lifestyle creep. Also taxes paid on 500k is a lot.

[Anonymous]

Anonymous wrote:It's about income stability I think. A specialist MD who makes $500k from 30 hours of cash pay patient work is a lot different than a lawyer who works 80 hours/week and could see work dry up at any time. I didn't feel rich when I made $500k from my job because I knew it could end at any time. I started to feel rich when I made $500k from SPY dividends.

+1

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I always thought that rich was making more than your brother/sister-in-law! Teddy Roosevelt was right though that "comparison is the thief of joy" and who we compare ourselves to matters as the following articles attest:

https://petetheplanner.com/comparison-is-a-costly-habit/

https://www.psychologytoday.com/us/blog/multiple-choice/201903/is-comparison-really-the-thief-joy

I think social media has had a huge impact on this since you're no longer comparing yourself to your neighbors but to the proverbial Kardashians and others online through a neverending stream of posts and articles showing others having their "best life."

This! Husband and I grew up in lower middle class families. Went to public school, took one vacation a year close by to the OBX or went camping. We got our groceries from Walmart and celebrated birthdays at Chili’s. We are a young couple with a HHI of 400k now which will continue to grow. Our lifestyle has changed designer shoes and clothes, trips to Europe, and skiing in Colorado, shopping at Whole Foods and never checking prices. Eating out at fancy restaurants once a week. We don’t have kids yet, but when we do I’m sure we will put them in private. We are constantly surrounded by people trying to be better than the next person...showing off vacations on social media....posting pics of them drinking champagne in Cartier bracelets. This world is focused on materialism and who has the best/ who is the happiest/ prettiest. When you make more you spend more to “keep up”. Hubby is surrounded by people at work who make 1 mil +. We go on vacations with them and it can be hard to feel like we “fit in”

You are spending way too much for your income. Way too much.

We live in a modest condo right now. With no kids. When we move and start a family that will obviously change and we won’t be going out spending money on vacations and clothing like before.

If I were you, I'd be saving as much as possible right now because when you have kids, you won't be saving very much if you plan on doing a 45k a year private.

[Anonymous]

Anonymous wrote:400k is the new 100k

I was going to say 300k is.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I've thought about this a lot because it is SO prevalent and it drives me nuts. I've landed on two reasons:

1) Money is always finite. It doesn't matter if you're Warren Buffet, you still only have X amount of money. I bet even he sometimes has to make difficult decisions about, say, what company to invest in or whatever, because you can't have everything. I think people think of "rich" as meaning "I can buy anything I need and just about anything I want within reason" and by that definition, almost no one is rich. It's like the guy above who says he spends all his money on taxes, savings, childcare, mortgage and education. Those are all very reasonable wants and needs! But being rich isn't about comparing what you want to what you can get. Being rich is about having way more money than other people. And guess what? Most people don't have money to save. Lots of people have to pay for childcare that they're not really comfortable with because it's all they can afford, or have to work split shifts with their spouses, or just stay home for a few years and take a career hit because their income can't cover the cost of childcare. Many people can't afford to buy a home, and those who do have smaller ones in worse neighborhoods. Only about half of people go to college, and lots of those go to community college or state schools, and take out loans to do so. So yeah dude, you're rich. You just still have to make tough financial choices like everybody else. And guess what else? Plenty of those people living on $50k are happy and fulfilled, and are raising happy and fulfilled kids.

2) Social bubbles. Most people who make $500k per year hang out with some people who make $200k-$400k, a lot of people who make $400k-$600k, and some people who make $600k plus. So they aren't comparing themselves to people who make $50k per year (the median household income in this country). A big reason for this is income determines which towns and neighborhoods are available to you, where you socialize, and where your kids go to school. And it doesn't seem physically possible to pay even basic expenses on $50k when you live WOTP, so you don't even consider that, not realizing that could be you - and you'd just have to live in Anacostia. Or some small town in West Virginia. Instead, you see that you make $500k, but your neighbor who makes $700k can afford to have four kids in private school with a full time nanny and you think "wow I can't afford a fourth kid" not realizing how many people in poor neighborhoods are making do with four kids on $50k in a lifestyle that's just completely unfamiliar to you and way outside your frame of reference.

We are in the make 500K plus camp (probably going to clear 600K for the first time this year) and this is correct. We've moved to a neighborhood where everyone is rich. I just don't regularly interact with people who are not well off and so when someone makes 1M plus or has substantial family money, it seems like we are not rich in comparison. I know compared to the rest of the world we are extremely well off, but not in our bubble. It feels like we spend our money on the same things everyone else does - childcare, mortgage, food, etc. It's just that we do it at a higher level (nanny plus school, $10,000 PITI, Whole Foods instead of a regular supermarket). I am not asking anyone to feel sorry for me but I am just explaining why we don't feel "rich."

I agree with this. We make about $500,000, and many of our closest friends make double or triple that, and have family money to boot. In the grand scheme of things, of course we're rich. But in our daily live, we're in the lower half of HHI among our close friends.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Because 85% of my pay is spent on taxes, savings, childcare, mortgage and education.

One day I’ll be rich when the kids go off to college. Until then most of my money is going to the future full pay college, childcare required to keep my high paying job and savings.

I will truly never understand the attitude that “I don’t feel rich because I’m busy saving so much money and paying for my giant house.” Saving huge amounts of money and living in a huge house are what being rich is all about.

Exactly. We make 380k and yes it does get tight bc we have a large house, Max our our 401k and save for college but I fell
Lucky to be able to do all that

[Anonymous]

Who are all these people who make 2 million + a year? I always come into threads where people are bragging about their husbands making that or more and then saying how they live so modestly despite that.

[Anonymous]

We are in our early 50s, both retired. We make approximately $220K in pension benefits and dividend income. We finally feel "rich" now (vs earning est $600K at time of retirement) because the $220k is GUARANTEED, with built in increases. No mortgages, college expenses, other kids expenses, etc. etc. We are in a lower tax bracket as well.