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

[Anonymous]

I find complaining that you can't spend money on private school ridiculous and that you think you should get financial aid. I can guarantee you that the average family with a child in private school makes less than $400k/year. You may choose to save money and spend the rest on finding your lifestyle. That is fine. Life comes with choices. Obviously private education isn't that important to you or you would cut back in other areas of your life. But to say that someone should subsidize your choices/lifestyle is so out of touch with reality and is pretty disgusting.

[Anonymous]

So, look - anyone who makes a certain amount of money, but tries to live at a level that is pricier than that amount, will feel as if they are overburdened.

If you're making $400k and hanging around with people making $2 mil, yes, you will feel relatively unwealthy. But you're an idiot if you think that means you should be getting financial aid. You are still among the WEALTHIEST people in this whole country, at that income.

Being among the wealthiest does not mean that you can buy everything you want without giving it a second thought. That's insane. You still have to prioritize.

But, goddamn, you really can't be serious when you say that someone with a HHI of $400k should be getting subsidized.

My recommendation would be to make friends outside the $2 million per year circle. You'll be happier.

[Anonymous]

Anonymous wrote:I find complaining that you can't spend money on private school ridiculous and that you think you should get financial aid. I can guarantee you that the average family with a child in private school makes less than $400k/year. You may choose to save money and spend the rest on finding your lifestyle. That is fine. Life comes with choices. Obviously private education isn't that important to you or you would cut back in other areas of your life. But to say that someone should subsidize your choices/lifestyle is so out of touch with reality and is pretty disgusting.

Well, I've been clear in my example that I'm talking about two kids in private. I don't think a family on $400k HHI (again, with only recent earning power, so no wealth accumulated) needs any aid to send a one child to private.

A $5k grant on a $60k tuition bill is a very small amount. In fact, it's smaller that the subsidy we've created as a society for these families given that they are only in the third highest marginal tax bracket. By your logic our federal tax code is pretty disgusting.

[Anonymous]

Anonymous wrote:

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.

And yet there are plenty of families with kids in private school who make less than $400k/year who are full pay.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I find complaining that you can't spend money on private school ridiculous and that you think you should get financial aid. I can guarantee you that the average family with a child in private school makes less than $400k/year. You may choose to save money and spend the rest on finding your lifestyle. That is fine. Life comes with choices. Obviously private education isn't that important to you or you would cut back in other areas of your life. But to say that someone should subsidize your choices/lifestyle is so out of touch with reality and is pretty disgusting.

Well, I've been clear in my example that I'm talking about two kids in private. I don't think a family on $400k HHI (again, with only recent earning power, so no wealth accumulated) needs any aid to send a one child to private.

A $5k grant on a $60k tuition bill is a very small amount. In fact, it's smaller that the subsidy we've created as a society for these families given that they are only in the third highest marginal tax bracket. By your logic our federal tax code is pretty disgusting.

If you can't come up with that extra $5k and that is really what is stopping you from sending your kids to private school on your income, then it obviously isn't a priority. Public it is.

I have no idea what your point is about our tax system. I think a progressive tax system is fair and appropriate.

[Anonymous]

Anonymous wrote:So, look - anyone who makes a certain amount of money, but tries to live at a level that is pricier than that amount, will feel as if they are overburdened.[/q]
A family that earns $400k and saves $120k (about half of their total after tax income) is not going to be living a lavish lifestyle in this region. That's a comfortable income, but it's not luxury cars and McMansions in Potomac. It's a modest townhome income. So it's not a question of living above their means - it's really a question of whether you think it's appropriate to ask someone in that position to pay full freight for multiple kids.

Just to take the example further, I know a colleague with four kids (all in public). If that person wanted to send all four kids to private, and there was no discount (let's assume no headline tuition reduction for multiple children), it would be absurd to think they should pay every last dime of savings each year to the point that they are accumulating almost nothing.

[q]If you're making $400k and hanging around with people making $2 mil, yes, you will feel relatively unwealthy.[/q]
To make $400k annually, you're almost certainly going to in professional circles with colleagues in that salary range, so it's really unavoidable.

[q]Being among the wealthiest does not mean that you can buy everything you want without giving it a second thought. That's insane. You still have to prioritize.[/q]
Why would giving someone $5-10k of aid off of a $60k bill at that level be equivalent to allowing them to "buy everything they want without giving it a second thought?" A family considering spending $50k of a total $120k savings (which again requires them to be living pretty frugally) is definitely going to prioritizing school over other things if they make that choice.

[Anonymous]

This has taken an unexpected turn. Saving $100k per year, which is more than most save or even earn!, is now reason for financial aid. So OP says they spend one third of the 100k savings on tuition. That's 33k annual tuition plus 67k left in savings. I'm missing something. OP wants to save more? Wouldn't everyone like to save more? It's a trade off.

[Anonymous]

Anonymous wrote:

Anonymous wrote:So, look - anyone who makes a certain amount of money, but tries to live at a level that is pricier than that amount, will feel as if they are overburdened.[/q]
A family that earns $400k and saves $120k (about half of their total after tax income) is not going to be living a lavish lifestyle in this region. That's a comfortable income, but it's not luxury cars and McMansions in Potomac. It's a modest townhome income. So it's not a question of living above their means - it's really a question of whether you think it's appropriate to ask someone in that position to pay full freight for multiple kids.

Just to take the example further, I know a colleague with four kids (all in public). If that person wanted to send all four kids to private, and there was no discount (let's assume no headline tuition reduction for multiple children), it would be absurd to think they should pay every last dime of savings each year to the point that they are accumulating almost nothing.

[q]If you're making $400k and hanging around with people making $2 mil, yes, you will feel relatively unwealthy.[/q]
To make $400k annually, you're almost certainly going to in professional circles with colleagues in that salary range, so it's really unavoidable.

[q]Being among the wealthiest does not mean that you can buy everything you want without giving it a second thought. That's insane. You still have to prioritize.[/q]
Why would giving someone $5-10k of aid off of a $60k bill at that level be equivalent to allowing them to "buy everything they want without giving it a second thought?" A family considering spending $50k of a total $120k savings (which again requires them to be living pretty frugally) is definitely going to prioritizing school over other things if they make that choice.

You are such a whiner

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

And yet there are plenty of families with kids in private school who make less than $400k/year who are full pay.

I don't think that's disputed (though some schools do provide a discount for multiple kids at the same school) - the debate is what's appropriate policy. Also, in many of those cases, the families are likely to have significant wealth accumulated in addition to the income, whether they come from a wealthy background, or they have had time to accumulate it because the HHI level has been consistent for several years. For example, let's take a 45yo couple on a $400k HHI. Example A they have $1.5M of total retirement / savings / home equity. Example B is $500k because the income level is a recent phenomenon our the couple took out a lot of student debt to invest in their future earnings power.

I would tell the family in Example B that they are insane to pay full freight on two kids with no discount no matter how much they value education or how frugal they may be.

Wealth v. income... two different things.

[Anonymous]

Anonymous wrote:This has taken an unexpected turn. Saving $100k per year, which is more than most save or even earn!, is now reason for financial aid. So OP says they spend one third of the 100k savings on tuition. That's 33k annual tuition plus 67k left in savings. I'm missing something. OP wants to save more? Wouldn't everyone like to save more? It's a trade off.

No, the example is two kids, which would be $67 tuition (with no aid) and $33k savings (assuming $100k).

[Anonymous]

Who's mandating the 100k savings? Look, I paid 36k per year in childcare costs making much less than 400k. We had to cut back savings to do that. Choices. You don't get to save that much and tell the school to work with the remainder. This is bizarre.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

And yet there are plenty of families with kids in private school who make less than $400k/year who are full pay.

I don't think that's disputed (though some schools do provide a discount for multiple kids at the same school) - the debate is what's appropriate policy. Also, in many of those cases, the families are likely to have significant wealth accumulated in addition to the income, whether they come from a wealthy background, or they have had time to accumulate it because the HHI level has been consistent for several years. For example, let's take a 45yo couple on a $400k HHI. Example A they have $1.5M of total retirement / savings / home equity. Example B is $500k because the income level is a recent phenomenon our the couple took out a lot of student debt to invest in their future earnings power.

I would tell the family in Example B that they are insane to pay full freight on two kids with no discount no matter how much they value education or how frugal they may be.

Wealth v. income... two different things.

I just can't debate it with you any more. Your viewpoint is just wrong. And the schools agree with me. So pay up or go private. Have a lovely day!

[Anonymous]

Anonymous wrote:I have no idea what your point is about our tax system. I think a progressive tax system is fair and appropriate.

The point is that a $400k HHI puts you in the 33% marginal rate for your last dollar. If no distinction should be made between a $400k and $1M HHI because they're both gushing with disposable income, it's curious why the 35% and 39.6% marginal rates aren't applied to the $400k family.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I have no idea what your point is about our tax system. I think a progressive tax system is fair and appropriate.

The point is that a $400k HHI puts you in the 33% marginal rate for your last dollar. If no distinction should be made between a $400k and $1M HHI because they're both gushing with disposable income, it's curious why the 35% and 39.6% marginal rates aren't applied to the $400k family.

And we have section 8 housing, SNAP and lots of other subsidies for people with lower incomes. And yet not for people who make $400k or $2m per year. Curious why we treat them the same and don't subsidize the $400k family. Maybe you should start lobbying Congress.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I have no idea what your point is about our tax system. I think a progressive tax system is fair and appropriate.

The point is that a $400k HHI puts you in the 33% marginal rate for your last dollar. If no distinction should be made between a $400k and $1M HHI because they're both gushing with disposable income, it's curious why the 35% and 39.6% marginal rates aren't applied to the $400k family.

Well, there is your subsidy. Use to pay for private school.