Ok can we stop saying $300k is "rich" in DC?

[Anonymous]

Anonymous wrote:Married with 1 kid, living in NWDC. HHI is about $275k gross. We feel pretty dang well-off. Here is where our money goes:

- Taxes: $65k (includes federal, DC, and FICA)
- House: $40k (includes PITI plus HOA plus utilities)
- Daycare: $22k
- Student loans+kid's 529: $16k
- Restaurants: $11k
- Travel: $9k
- Groceries: $8k
- Insurance + Medical: $8k
- Clothing: $6k
- Cable and Cell phones: $5k
- Discretionary/uncategorized/entertainment: $12k
- Savings: $73k (includes 401k, IRA, brokerage, etc.)

It's hard to feel anything other than "rich" when you're living well and still saving $70k per year. I don't know how the rest of you feel, but spending nearly $1k every month on restaurants is downright luxurious. (We like to cook generally, but when we go out to eat we usually go somewhere nice).

This isn't to brag but rather aims to give a reality check to people who say $300k is "middle class" in NW DC. It isn't. It's extremely comfortable and privileged.

You may have good cash flow, but you are not rich. You are one job layoff, illness, or stock market crash away from a financial crisis.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Married with 1 kid, living in NWDC. HHI is about $275k gross. We feel pretty dang well-off. Here is where our money goes:

- Taxes: $65k (includes federal, DC, and FICA)
- House: $40k (includes PITI plus HOA plus utilities)
- Daycare: $22k
- Student loans+kid's 529: $16k
- Restaurants: $11k
- Travel: $9k
- Groceries: $8k
- Insurance + Medical: $8k
- Clothing: $6k
- Cable and Cell phones: $5k
- Discretionary/uncategorized/entertainment: $12k
- Savings: $73k (includes 401k, IRA, brokerage, etc.)

It's hard to feel anything other than "rich" when you're living well and still saving $70k per year. I don't know how the rest of you feel, but spending nearly $1k every month on restaurants is downright luxurious. (We like to cook generally, but when we go out to eat we usually go somewhere nice).

This isn't to brag but rather aims to give a reality check to people who say $300k is "middle class" in NW DC. It isn't. It's extremely comfortable and privileged.

You may have good cash flow, but you are not rich. You are one job layoff, illness, or stock market crash away from a financial crisis.

DP, but she didn't say they only have $73k in savings. She said they are saving that amount every year - and that's after they put away for retirement and 529! If they've been doing this for even five years, and yielding the average, they have nearly half-a-mill in the bank, and that's excluding retirement. Plus, it's unlikely that both would suffer a job layoff at the same time. They could hold off temporarily on the savings and entertainment, and get by indefinitely.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Married with 1 kid, living in NWDC. HHI is about $275k gross. We feel pretty dang well-off. Here is where our money goes:

- Taxes: $65k (includes federal, DC, and FICA)
- House: $40k (includes PITI plus HOA plus utilities)
- Daycare: $22k
- Student loans+kid's 529: $16k
- Restaurants: $11k
- Travel: $9k
- Groceries: $8k
- Insurance + Medical: $8k
- Clothing: $6k
- Cable and Cell phones: $5k
- Discretionary/uncategorized/entertainment: $12k
- Savings: $73k (includes 401k, IRA, brokerage, etc.)

It's hard to feel anything other than "rich" when you're living well and still saving $70k per year. I don't know how the rest of you feel, but spending nearly $1k every month on restaurants is downright luxurious. (We like to cook generally, but when we go out to eat we usually go somewhere nice).

This isn't to brag but rather aims to give a reality check to people who say $300k is "middle class" in NW DC. It isn't. It's extremely comfortable and privileged.

You may have good cash flow, but you are not rich. You are one job layoff, illness, or stock market crash away from a financial crisis.

No I disagree. They are putting away $73k a year plus some amount for a 529, plus they are spending nearly $1k a month on restaurants. All
Of that could be cut back in the event of a crisi. Easily.

[Anonymous]

Semantics, people.

Fine, you're not rich with $300k/year if that makes you happy to say it.

You are, however, upper class. If you define class by where on the spectrum of income you fall. And $300k/year even in DC puts you well above the $75 median income. $300k is not middle. It's not even upper middle.

I grew up what I consider to be a middle class life. I always had hand-me-downs, and we only went on 4 vacations my entire childhood before I turned 18. We kept cars for years and they weren't fancy. I shared a room with my 2 sisters. We had 2 bathroom in our house, had no central air. Going out to dinner was a huge treat. I paid for college with a combination of scholarship, Pell grants, loans, and work study, and just a little bit from my parents for living expenses. We weren't poor, we were middle class and solidly so. We never went hungry, even if my parents sometimes worried about paying the bills.

Now my HHI is $250, we have a beautiful house with 3 bathrooms and 3 bedrooms, go on vacation every year, I buy organic food, we have close to a million socked away in retirement accounts, are paying off a 15 year mortgage (so the monthly payment is higher than a 30 year), are paying into our kids' college funds every month, have a huge stash of liquid cash for emergencies, can go out to dinner if we choose, and can buy things here or there without having to think, will this bust my budget? I feel extremely well-to-do, and definitely am better off than my parents.

Here's the thing: my house is actually a bit smaller than my parents's house (despite the extra bathroom and bedroom - but we have no front hall, the rooms are smaller, etc), and our plot of land is a lot smaller. But for me, that's to be expected: In any popular urban area, people trade square feet for the luxury of living in that area. I grew up in mid-America and remember moving to NY and realizing that rich people lived in brownstones with no land. That was quite a shock for me, having grown up in a neighborhood with half-acre plots. But it's the same in Paris, or London, or Tokyo. You can't expect to have the fantastic houses that are affordable in areas that people aren't clamoring to live in when you choose to live in a place that's in demand like DC or NY or Paris. Most people live in condos in most big cities, not SFHs.

So again, fine if you want to call yourself not rich with $300k HHI. Just don't call yourself middle class because you're not.

[Anonymous]

Anonymous wrote:Semantics, people.

Fine, you're not rich with $300k/year if that makes you happy to say it.

You are, however, upper class. If you define class by where on the spectrum of income you fall. And $300k/year even in DC puts you well above the $75 median income. $300k is not middle. It's not even upper middle.

I grew up what I consider to be a middle class life. I always had hand-me-downs, and we only went on 4 vacations my entire childhood before I turned 18. We kept cars for years and they weren't fancy. I shared a room with my 2 sisters. We had 2 bathroom in our house, had no central air. Going out to dinner was a huge treat. I paid for college with a combination of scholarship, Pell grants, loans, and work study, and just a little bit from my parents for living expenses. We weren't poor, we were middle class and solidly so. We never went hungry, even if my parents sometimes worried about paying the bills.

Now my HHI is $250, we have a beautiful house with 3 bathrooms and 3 bedrooms, go on vacation every year, I buy organic food, we have close to a million socked away in retirement accounts, are paying off a 15 year mortgage (so the monthly payment is higher than a 30 year), are paying into our kids' college funds every month, have a huge stash of liquid cash for emergencies, can go out to dinner if we choose, and can buy things here or there without having to think, will this bust my budget? I feel extremely well-to-do, and definitely am better off than my parents.

Here's the thing: my house is actually a bit smaller than my parents's house (despite the extra bathroom and bedroom - but we have no front hall, the rooms are smaller, etc), and our plot of land is a lot smaller. But for me, that's to be expected: In any popular urban area, people trade square feet for the luxury of living in that area. I grew up in mid-America and remember moving to NY and realizing that rich people lived in brownstones with no land. That was quite a shock for me, having grown up in a neighborhood with half-acre plots. But it's the same in Paris, or London, or Tokyo. You can't expect to have the fantastic houses that are affordable in areas that people aren't clamoring to live in when you choose to live in a place that's in demand like DC or NY or Paris. Most people live in condos in most big cities, not SFHs.

So again, fine if you want to call yourself not rich with $300k HHI. Just don't call yourself middle class because you're not.

You are 100% right - I think people on this board, perhaps also in real life, just have this weird idea that if they aren't eating gold-encrusted steak for every meal that means they're struggling.

[Anonymous]

Anonymous wrote:$2 million HHI PP here again. I dont understand how a smart, ambitious 40's plus couple working full time both highly educated earns only $300,000 or $500,000. Basically every couple we know with 2 fulltime workers makes seven figures or minimum very high six figures. $300k-$500k is good at late 20's early 30's. The numbers you read in these statistics include single family households and people with no education. Of course that brings the average way down. But most people in NW DC are two parent, 2 income
Households and making 7 figures HHI by early 40's, regardless of what this article says.

I'm pretty sure you're a troll. But just in case there are people out there who agree with you, I give you me as an example of someone with a graduate degree (Ph.D.) who earns $100k at an academic job (just got there and I'm 50) married to a guy with a JD who works in non profit and makes $150k. We both love our jobs.

Not all of us worship at the altar of money but actually care about what we do and think about doing good in the world.

[Anonymous]

Funny how folks quote HHI. I worked on Wall Street 30 years before taking a job in the D.C. Area. Folks always would rate rank on your income alone. Spouses income and investment income etc don't count. I say a guy making 350k starts a good income, 500k is next level and a one million salary is holy grail. HHI is not a good indicator of how well someone is doing.

Also middle class is a lifestyle not an income level. My old CEO lived in same house he always lived in since his 20s and gave 90 percent of income to charity. Most of rest was a trust for kids. He lived a blue collar lifestyle complete with a small split level on a 69x100 plot. Nice guy. The year we did IPO he made more than Oprah Winfrey or any pro player or singer. Still drove a minivan. His pay was around 100 million that year. Most stock as he founded company that did IPO.

[Anonymous]

Anonymous wrote:Funny how folks quote HHI. I worked on Wall Street 30 years before taking a job in the D.C. Area. Folks always would rate rank on your income alone. Spouses income and investment income etc don't count. I say a guy making 350k starts a good income, 500k is next level and a one million salary is holy grail. HHI is not a good indicator of how well someone is doing.

Also middle class is a lifestyle not an income level. My old CEO lived in same house he always lived in since his 20s and gave 90 percent of income to charity. Most of rest was a trust for kids. He lived a blue collar lifestyle complete with a small split level on a 69x100 plot. Nice guy. The year we did IPO he made more than Oprah Winfrey or any pro player or singer. Still drove a minivan. His pay was around 100 million that year. Most stock as he founded company that did IPO.

That's just because most people in Manhattan spend ALL of their money. All of it. You can easily blow through a million, as you know, when your lifestyle requires a nice classic six, private schools, hamptons rental, winter ski trips, etc

[Anonymous]

Seriously? You don't get how two well educated don't bring in a million a year? Easy. We work for the government or government contractors. We have MAs in a social science, we have had periods of unemployment, we took time off to have kids...

[Anonymous]

Anonymous wrote:

Anonymous wrote:Married with 1 kid, living in NWDC. HHI is about $275k gross. We feel pretty dang well-off. Here is where our money goes:

- Taxes: $65k (includes federal, DC, and FICA)
- House: $40k (includes PITI plus HOA plus utilities)
- Daycare: $22k
- Student loans+kid's 529: $16k
- Restaurants: $11k
- Travel: $9k
- Groceries: $8k
- Insurance + Medical: $8k
- Clothing: $6k
- Cable and Cell phones: $5k
- Discretionary/uncategorized/entertainment: $12k
- Savings: $73k (includes 401k, IRA, brokerage, etc.)

It's hard to feel anything other than "rich" when you're living well and still saving $70k per year. I don't know how the rest of you feel, but spending nearly $1k every month on restaurants is downright luxurious. (We like to cook generally, but when we go out to eat we usually go somewhere nice).

This isn't to brag but rather aims to give a reality check to people who say $300k is "middle class" in NW DC. It isn't. It's extremely comfortable and privileged.

You may have good cash flow, but you are not rich. You are one job layoff, illness, or stock market crash away from a financial crisis.

Actually, there's a lot here that could be cut back in case of job loss: the restaurants, the travel, the cable/phones, the savings, the clothing, the other entertainment. And you'd still eat well with that grocery budget.

[Anonymous]

Anonymous wrote:

Anonymous wrote:$2 million HHI PP here again. I dont understand how a smart, ambitious 40's plus couple working full time both highly educated earns only $300,000 or $500,000. Basically every couple we know with 2 fulltime workers makes seven figures or minimum very high six figures. $300k-$500k is good at late 20's early 30's. The numbers you read in these statistics include single family households and people with no education. Of course that brings the average way down. But most people in NW DC are two parent, 2 income
Households and making 7 figures HHI by early 40's, regardless of what this article says.

I'm pretty sure you're a troll. But just in case there are people out there who agree with you, I give you me as an example of someone with a graduate degree (Ph.D.) who earns $100k at an academic job (just got there and I'm 50) married to a guy with a JD who works in non profit and makes $150k. We both love our jobs.

Not all of us worship at the altar of money but actually care about what we do and think about doing good in the world.

Yup, double income nonprofit couple here with master's degrees from top schools. $185K income, though I'm underpaid. Nonetheless we do just fine (vacations every year, saving for retirement, etc.) We are out to make the world a better place and set a good example for our offspring.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Funny how folks quote HHI. I worked on Wall Street 30 years before taking a job in the D.C. Area. Folks always would rate rank on your income alone. Spouses income and investment income etc don't count. I say a guy making 350k starts a good income, 500k is next level and a one million salary is holy grail. HHI is not a good indicator of how well someone is doing.

Also middle class is a lifestyle not an income level. My old CEO lived in same house he always lived in since his 20s and gave 90 percent of income to charity. Most of rest was a trust for kids. He lived a blue collar lifestyle complete with a small split level on a 69x100 plot. Nice guy. The year we did IPO he made more than Oprah Winfrey or any pro player or singer. Still drove a minivan. His pay was around 100 million that year. Most stock as he founded company that did IPO.

That's just because most people in Manhattan spend ALL of their money. All of it. You can easily blow through a million, as you know, when your lifestyle requires a nice classic six, private schools, hamptons rental, winter ski trips, etc

I spent way way less on housing in NY. When I lived in Manhattan had a rent stabilized apartment when the first kid came move to a small house in surburbs with low taxes. And it depends on your age my cousin made Partner at 40, two years later firm IPO'd and bought a nice Gramercy Park Browstone in 1993 for one million cash from his Partnership pay out. My other cousin in 1979 bought a Brooklyn brownstone for 40k cash. My beach house I paid cash. Bonuses ebb and tide on Wall Street in good years we buy stuff cash. As bad years you get canned.

I was actually surprised house hunting recently in the D.C. Maryland area all the mortgage commitment letters needed to bid. In NY it is assumed you have the funds or they ask for proof of funds. I am treasure of a condo association in NY where I have an investment property and I say 60-70 percent sales are cash. In NY jobs are far less secure and higher paying. So folks like me are scared of mortgages

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Funny how folks quote HHI. I worked on Wall Street 30 years before taking a job in the D.C. Area. Folks always would rate rank on your income alone. Spouses income and investment income etc don't count. I say a guy making 350k starts a good income, 500k is next level and a one million salary is holy grail. HHI is not a good indicator of how well someone is doing.

Also middle class is a lifestyle not an income level. My old CEO lived in same house he always lived in since his 20s and gave 90 percent of income to charity. Most of rest was a trust for kids. He lived a blue collar lifestyle complete with a small split level on a 69x100 plot. Nice guy. The year we did IPO he made more than Oprah Winfrey or any pro player or singer. Still drove a minivan. His pay was around 100 million that year. Most stock as he founded company that did IPO.

That's just because most people in Manhattan spend ALL of their money. All of it. You can easily blow through a million, as you know, when your lifestyle requires a nice classic six, private schools, hamptons rental, winter ski trips, etc

I spent way way less on housing in NY. When I lived in Manhattan had a rent stabilized apartment when the first kid came move to a small house in surburbs with low taxes. And it depends on your age my cousin made Partner at 40, two years later firm IPO'd and bought a nice Gramercy Park Browstone in 1993 for one million cash from his Partnership pay out. My other cousin in 1979 bought a Brooklyn brownstone for 40k cash. My beach house I paid cash. Bonuses ebb and tide on Wall Street in good years we buy stuff cash. As bad years you get canned.

I was actually surprised house hunting recently in the D.C. Maryland area all the mortgage commitment letters needed to bid. In NY it is assumed you have the funds or they ask for proof of funds. I am treasure of a condo association in NY where I have an investment property and I say 60-70 percent sales are cash. In NY jobs are far less secure and higher paying. So folks like me are scared of mortgages

You're clueless. You're using examples of people purchasing properties in 1979 as an example? Rent stabilized property? Of course your rent was less than it would be here if you had a below market rate property.

Suburbs in NY with low taxes? Except for some tax abated properties in Brooklyn that doesn't exist.

Condo association in NY? Most good properties are coops and limit borrowing. Also Manhattan apartments are way more expensive than condos here. Of course people aren't taking out $3 million dollar loans. After you pass a certain price point in real estate anywhere it's more common to have a large percentage down in cash. Also a lot of the cash comes from bonus payments, not salary.

In terms of a mortgage commitment lettter. Have you looked for an apartment in NY? I had to provide almost as much paperwork as I did for a mortgage. I definitely had to provide a tax return, proof of funds, employment verification, etc.

[Anonymous]

I bought a place last month for 1.4 million in the DC area for a pied a tier for now and move family later if job is worth it.

My family collects houses my cousin in Brooklyn has round 300 properties in Brooklyn and Manhattan and another cousin has around 700 properties in California and Seattle.

I don't buy much, a coop in NYC at time of RTC in 1992 I rented out as I had a rent stabilized unit. A house Christmas week 1999 as folks were worrying about y2k and a beach house right after Sandy. Cash flow is important and I spend very little in housing. The D.C. Place was only market price place I bought but had a relocation check to help.

[Anonymous]

Anonymous wrote:I bought a place last month for 1.4 million in the DC area for a pied a tier for now and move family later if job is worth it.

My family collects houses my cousin in Brooklyn has round 300 properties in Brooklyn and Manhattan and another cousin has around 700 properties in California and Seattle.

I don't buy much, a coop in NYC at time of RTC in 1992 I rented out as I had a rent stabilized unit. A house Christmas week 1999 as folks were worrying about y2k and a beach house right after Sandy. Cash flow is important and I spend very little in housing. The D.C. Place was only market price place I bought but had a relocation check to help.

Huh? This is relevant how?