Where are all the high income folks?

[Anonymous]

Anonymous wrote:I think first generation wealth tends to be more conservative with debt than multi-generational wealth.

That's because the people who earned it have more respect for the hard work it took to get it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I think first generation wealth tends to be more conservative with debt than multi-generational wealth.

That's because the people who earned it have more respect for the hard work it took to get it.

Dc is full of professionals who come from affluent backgrounds so no. People with a safety cushion are more willling to take risks financially.

[Anonymous]

Anonymous wrote:

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Anonymous wrote:You can make a ton of money and still think certain things are a lot of money.

My parents have an HHI of $1M or so and a net worth of several million. They own property in Manhattan. My mom still won't usually pay for Acela tickets to go from NYC to BWI because she thinks they're too expensive.

Sorry to break it to you, $1M isn't much in Manhattan anymore

They're doing just fine. They have a beautiful apartment in a completely renovated pre-war building and just bought a Steinway baby grand.

Also, these graphs would suggest that $1M is still quite good: https://statisticalatlas.com/county-subdivision/New-York/New-York-County/Manhattan/Household-Income

I'm wondering just how you got that idea, seeing how the graph tops out at $250k

The graph shows that $250k is in the top 5% of household income in Manhattan. So it stands to reason that $1M, which is higher than that, is "still quite good," as PP said. How is this confusing?

I can't believe a graph that says the lower level top 5% of Manhattan incomes is $250k or that the median is $800k.


Who's buying all the $5 million dollar apartments? who's sending kids to $50k a year private school? who do all those $100k luxury cars on the upper east & west sides in belong to? who do all the boutiques sell to?


Why do people making $500k+ a year say they can't afford the city?

This should be good

Not pp, but you realized that there's a difference between assets and income, and that rich people have an incentive (taxes!) to minimize "income?" Charts that show income have very little to do with wealth. This is why trying to correlate average income to real estate prices doesn't work in high end neighborhoods.

Where do you think the money to get the assets come from

I find it a much better than relying on census figures as you do

I doubt many people are committing such tax fraud on a massive scale

[Anonymous]

Anonymous wrote:

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Anonymous wrote:Honestly this is why I love DC and find it different from a lot of cities I've lived in across America (LA, Chicago, NYC) - sure, there's a ton of new money, you'll find that everywhere, but for the most part you find more millionaires driving 15 year old cars here than anywhere else.

It's cool to be financially smart...and less conspicuous with your money. DC values education over that low class vegas flash.

I don't know that DC is exceptional in that sense. I grew up in Westchester County, NY and saw plenty of old money people driving beat-up Chevys. You'd never know they had trust funds.

This is patently false. All the rich people in my neighborhood drive nice cars


- scarsdale resident

PP here. That's cool. I grew up in Chappaqua and had a different experience. You know what? People can have different experiences!

In all fairness, Chappaqua isn't as rich as Scarsdale.

Oh yeah, we were dirt poor:

Chappaqua median household income, 2016: $155,232
Scarsdale median household income, 2016: over $200,000

Yes, Scarsdale has a higher median HHI, but Chappaqua isn't exactly a slum.

Scarsdale people like to keep up with the Joneses.

No dear

We are the joneses

[Anonymous]

Anonymous wrote:

Anonymous wrote:Our HHI is $1.3M. Our 15-year mortgage is under $5K (PITI) for an unremarkable 4 bedroom, 3-bath house in upper NW DC. We own our two cars (one hybrid, one electric). We send our two kids to private schools. I earn $100K, DH brings home $1.2M. I don't intend to quit my career, which has excellent benefits and for which I have earned a bit of seniority and therefore have a lot of flexibility and autonomy. We max out retirement and college savings, and put a lot into CDs and money market accounts.

Once you reach a certain income level to cover basics, it all comes down to budgeting and saving. Obviously, if you have a higher income, there's a lot more wiggle room, but there are many people with very high incomes who manage to spend all their money very quickly.

Our major indulgence is the private school tuition. We have nice, safe Japanese cars (not luxury cars); a perfectly nice home in a perfectly nice neighborhood; and we buy virtually all our groceries from places like Whole Foods. Clothes are purchased on sale from stores like JCrew and Hanna Andersson--so nice, but not designer. While we could afford more expensive things, we have decided to be content with what is objectively more than good enough. We make the exception for private school because we feel that the experience of the superb education is affordable for us, but we would be happy to send our kids to our neighborhood public schools if finances were tighter. I would characterize our lifestyle as comfortable--neither frugal nor extravagant given our income.

I think I probably know you. Or rather I know a bunch of families that fit this general description. It’s very common in NW DC.

+1. A lot of friends with one spouse in a not-for-profit, and another a law firm/consulting firm partner, two kids, private school, living in AU Park or CCDC, driving practical cars, and dressing up in a lot of un-branded clothing with organic food in their pantries.

[Anonymous]

Anonymous wrote:Where are all the high income folks? why is every comment on here 5k a month is too expensive for a mortgage, we would never lease a car, this is middle class no that is upper class etc etc


This is money & finances, shouldn't there be, you know, people with money?

So the only people who want to discuss financial matters are people who have a lot of money?

Is that what you think?

[Anonymous]

We make 750k + (sometimes get equity grants).

Still live in the "starter" house we bought for 550k in 2005!

It's paid off now and I love knowing we own it free and clear.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Where are all the high income folks? why is every comment on here 5k a month is too expensive for a mortgage, we would never lease a car, this is middle class no that is upper class etc etc


This is money & finances, shouldn't there be, you know, people with money?

There are an abundance of people on this forum who don’t understand how to use low interest debt to their advanatage. That doesn’t necessarily correlate to their income.

Perhaps there are also an abundance of people who realize that it is physically impossible for the world economy to grow indefinitely?

I only know there IS an abundance of anything, as abundance is a singular noun. Hopefully your big money jobs aren't grammar based.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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Anonymous wrote:You can make a ton of money and still think certain things are a lot of money.

My parents have an HHI of $1M or so and a net worth of several million. They own property in Manhattan. My mom still won't usually pay for Acela tickets to go from NYC to BWI because she thinks they're too expensive.

Sorry to break it to you, $1M isn't much in Manhattan anymore

They're doing just fine. They have a beautiful apartment in a completely renovated pre-war building and just bought a Steinway baby grand.

Also, these graphs would suggest that $1M is still quite good: https://statisticalatlas.com/county-subdivision/New-York/New-York-County/Manhattan/Household-Income

I'm wondering just how you got that idea, seeing how the graph tops out at $250k

The graph shows that $250k is in the top 5% of household income in Manhattan. So it stands to reason that $1M, which is higher than that, is "still quite good," as PP said. How is this confusing?

I can't believe a graph that says the lower level top 5% of Manhattan incomes is $250k or that the median is $800k.


Who's buying all the $5 million dollar apartments? who's sending kids to $50k a year private school? who do all those $100k luxury cars on the upper east & west sides in belong to? who do all the boutiques sell to?


Why do people making $500k+ a year say they can't afford the city?

This should be good

Not pp, but you realized that there's a difference between assets and income, and that rich people have an incentive (taxes!) to minimize "income?" Charts that show income have very little to do with wealth. This is why trying to correlate average income to real estate prices doesn't work in high end neighborhoods.

Where do you think the money to get the assets come from

I find it a much better than relying on census figures as you do

I doubt many people are committing such tax fraud on a massive scale

Are you seriously that naive? The 0.1% hasn't built their assets from "income" in decades/ centuries. These are the families that built America - they were investors in the Erie Canal, they sold shovels to the 49ers, and for the "newer" ones, they're tech entrepreniurs who patented software early in the dot com era, etc (all three examples of real families I know).

Income is for the schmucks who haven't/ cannot escaped the system. Compounding for decades is where the real wealth is, and typically, the taxes at this level are closer to 5-10% depending on the quality of your accountant team.

[Anonymous]

*entrepreneurs (on my phone)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You can make a ton of money and still think certain things are a lot of money.

My parents have an HHI of $1M or so and a net worth of several million. They own property in Manhattan. My mom still won't usually pay for Acela tickets to go from NYC to BWI because she thinks they're too expensive.

Sorry to break it to you, $1M isn't much in Manhattan anymore

They're doing just fine. They have a beautiful apartment in a completely renovated pre-war building and just bought a Steinway baby grand.

Also, these graphs would suggest that $1M is still quite good: https://statisticalatlas.com/county-subdivision/New-York/New-York-County/Manhattan/Household-Income

I'm wondering just how you got that idea, seeing how the graph tops out at $250k

The graph shows that $250k is in the top 5% of household income in Manhattan. So it stands to reason that $1M, which is higher than that, is "still quite good," as PP said. How is this confusing?

I can't believe a graph that says the lower level top 5% of Manhattan incomes is $250k or that the median is $800k.


Who's buying all the $5 million dollar apartments? who's sending kids to $50k a year private school? who do all those $100k luxury cars on the upper east & west sides in belong to? who do all the boutiques sell to?


Why do people making $500k+ a year say they can't afford the city?

This should be good

Not pp, but you realized that there's a difference between assets and income, and that rich people have an incentive (taxes!) to minimize "income?" Charts that show income have very little to do with wealth. This is why trying to correlate average income to real estate prices doesn't work in high end neighborhoods.

Where do you think the money to get the assets come from

I find it a much better than relying on census figures as you do

I doubt many people are committing such tax fraud on a massive scale

Are you seriously that naive? The 0.1% hasn't built their assets from "income" in decades/ centuries. These are the families that built America - they were investors in the Erie Canal, they sold shovels to the 49ers, and for the "newer" ones, they're tech entrepreniurs who patented software early in the dot com era, etc (all three examples of real families I know).

Income is for the schmucks who haven't/ cannot escaped the system. Compounding for decades is where the real wealth is, and typically, the taxes at this level are closer to 5-10% depending on the quality of your accountant team.

This is completely true.

I can't count the number of times I've heard my dad (longtime NYC lawyer) say the following: "Gotta call my guy at Morgan Stanley to figure out how we're going to handle this new tax legislation." He's never did anything illegal, but his Morgan Stanley guy has always helped him lower his taxes as much as the law would allow.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You can make a ton of money and still think certain things are a lot of money.

My parents have an HHI of $1M or so and a net worth of several million. They own property in Manhattan. My mom still won't usually pay for Acela tickets to go from NYC to BWI because she thinks they're too expensive.

Sorry to break it to you, $1M isn't much in Manhattan anymore

They're doing just fine. They have a beautiful apartment in a completely renovated pre-war building and just bought a Steinway baby grand.

Also, these graphs would suggest that $1M is still quite good: https://statisticalatlas.com/county-subdivision/New-York/New-York-County/Manhattan/Household-Income

I'm wondering just how you got that idea, seeing how the graph tops out at $250k

The graph shows that $250k is in the top 5% of household income in Manhattan. So it stands to reason that $1M, which is higher than that, is "still quite good," as PP said. How is this confusing?

I can't believe a graph that says the lower level top 5% of Manhattan incomes is $250k or that the median is $800k.


Who's buying all the $5 million dollar apartments? who's sending kids to $50k a year private school? who do all those $100k luxury cars on the upper east & west sides in belong to? who do all the boutiques sell to?


Why do people making $500k+ a year say they can't afford the city?

This should be good

Not pp, but you realized that there's a difference between assets and income, and that rich people have an incentive (taxes!) to minimize "income?" Charts that show income have very little to do with wealth. This is why trying to correlate average income to real estate prices doesn't work in high end neighborhoods.

Where do you think the money to get the assets come from

I find it a much better than relying on census figures as you do

I doubt many people are committing such tax fraud on a massive scale

Are you seriously that naive? The 0.1% hasn't built their assets from "income" in decades/ centuries. These are the families that built America - they were investors in the Erie Canal, they sold shovels to the 49ers, and for the "newer" ones, they're tech entrepreniurs who patented software early in the dot com era, etc (all three examples of real families I know).

Income is for the schmucks who haven't/ cannot escaped the system. Compounding for decades is where the real wealth is, and typically, the taxes at this level are closer to 5-10% depending on the quality of your accountant team.

This is completely true.

I can't count the number of times I've heard my dad (longtime NYC lawyer) say the following: "Gotta call my guy at Morgan Stanley to figure out how we're going to handle this new tax legislation." He's never did anything illegal, but his Morgan Stanley guy has always helped him lower his taxes as much as the law would allow.

This is completely wrong. High income and high assets go hand in hand. Sorry to burst your bubble

- HHI of 3.8M. Assets of 38M

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You can make a ton of money and still think certain things are a lot of money.

My parents have an HHI of $1M or so and a net worth of several million. They own property in Manhattan. My mom still won't usually pay for Acela tickets to go from NYC to BWI because she thinks they're too expensive.

Sorry to break it to you, $1M isn't much in Manhattan anymore

They're doing just fine. They have a beautiful apartment in a completely renovated pre-war building and just bought a Steinway baby grand.

Also, these graphs would suggest that $1M is still quite good: https://statisticalatlas.com/county-subdivision/New-York/New-York-County/Manhattan/Household-Income

I'm wondering just how you got that idea, seeing how the graph tops out at $250k

The graph shows that $250k is in the top 5% of household income in Manhattan. So it stands to reason that $1M, which is higher than that, is "still quite good," as PP said. How is this confusing?

I can't believe a graph that says the lower level top 5% of Manhattan incomes is $250k or that the median is $800k.


Who's buying all the $5 million dollar apartments? who's sending kids to $50k a year private school? who do all those $100k luxury cars on the upper east & west sides in belong to? who do all the boutiques sell to?


Why do people making $500k+ a year say they can't afford the city?

This should be good

Not pp, but you realized that there's a difference between assets and income, and that rich people have an incentive (taxes!) to minimize "income?" Charts that show income have very little to do with wealth. This is why trying to correlate average income to real estate prices doesn't work in high end neighborhoods.

Where do you think the money to get the assets come from

I find it a much better than relying on census figures as you do

I doubt many people are committing such tax fraud on a massive scale

Are you seriously that naive? The 0.1% hasn't built their assets from "income" in decades/ centuries. These are the families that built America - they were investors in the Erie Canal, they sold shovels to the 49ers, and for the "newer" ones, they're tech entrepreniurs who patented software early in the dot com era, etc (all three examples of real families I know).

Income is for the schmucks who haven't/ cannot escaped the system. Compounding for decades is where the real wealth is, and typically, the taxes at this level are closer to 5-10% depending on the quality of your accountant team.

This is completely true.

I can't count the number of times I've heard my dad (longtime NYC lawyer) say the following: "Gotta call my guy at Morgan Stanley to figure out how we're going to handle this new tax legislation." He's never did anything illegal, but his Morgan Stanley guy has always helped him lower his taxes as much as the law would allow.

This is completely wrong. High income and high assets go hand in hand. Sorry to burst your bubble

- HHI of 3.8M. Assets of 38M

Yes but how much of your HHI is earned income? My guess is you must have had a good amount of one of the following: partnership income, capital gains, rents & royalties income, investment income to get to $38m. Either that or you must be in your 50s or 60s and had a very high earned income for many years. Even at $3.8m in earned income, after tax is $1.9m and let's say you spend $500k annually which would be modest on that level of income if you have children then you save $1.4m. Would take 27 years if no investment gains so call it 20 years to save $38m.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You can make a ton of money and still think certain things are a lot of money.

My parents have an HHI of $1M or so and a net worth of several million. They own property in Manhattan. My mom still won't usually pay for Acela tickets to go from NYC to BWI because she thinks they're too expensive.

Sorry to break it to you, $1M isn't much in Manhattan anymore

They're doing just fine. They have a beautiful apartment in a completely renovated pre-war building and just bought a Steinway baby grand.

Also, these graphs would suggest that $1M is still quite good: https://statisticalatlas.com/county-subdivision/New-York/New-York-County/Manhattan/Household-Income

I'm wondering just how you got that idea, seeing how the graph tops out at $250k

The graph shows that $250k is in the top 5% of household income in Manhattan. So it stands to reason that $1M, which is higher than that, is "still quite good," as PP said. How is this confusing?

I can't believe a graph that says the lower level top 5% of Manhattan incomes is $250k or that the median is $800k.


Who's buying all the $5 million dollar apartments? who's sending kids to $50k a year private school? who do all those $100k luxury cars on the upper east & west sides in belong to? who do all the boutiques sell to?


Why do people making $500k+ a year say they can't afford the city?

This should be good

Not pp, but you realized that there's a difference between assets and income, and that rich people have an incentive (taxes!) to minimize "income?" Charts that show income have very little to do with wealth. This is why trying to correlate average income to real estate prices doesn't work in high end neighborhoods.

Where do you think the money to get the assets come from

I find it a much better than relying on census figures as you do

I doubt many people are committing such tax fraud on a massive scale

Are you seriously that naive? The 0.1% hasn't built their assets from "income" in decades/ centuries. These are the families that built America - they were investors in the Erie Canal, they sold shovels to the 49ers, and for the "newer" ones, they're tech entrepreniurs who patented software early in the dot com era, etc (all three examples of real families I know).

Income is for the schmucks who haven't/ cannot escaped the system. Compounding for decades is where the real wealth is, and typically, the taxes at this level are closer to 5-10% depending on the quality of your accountant team.

This is completely true.

I can't count the number of times I've heard my dad (longtime NYC lawyer) say the following: "Gotta call my guy at Morgan Stanley to figure out how we're going to handle this new tax legislation." He's never did anything illegal, but his Morgan Stanley guy has always helped him lower his taxes as much as the law would allow.

This is completely wrong. High income and high assets go hand in hand. Sorry to burst your bubble

- HHI of 3.8M. Assets of 38M

Yes but how much of your HHI is earned income? My guess is you must have had a good amount of one of the following: partnership income, capital gains, rents & royalties income, investment income to get to $38m. Either that or you must be in your 50s or 60s and had a very high earned income for many years. Even at $3.8m in earned income, after tax is $1.9m and let's say you spend $500k annually which would be modest on that level of income if you have children then you save $1.4m. Would take 27 years if no investment gains so call it 20 years to save $38m.

2.2m earned income, 38m assets, 15m debt.


After tax: 2.5m


You know how I got so many assets? I took my income, and invested in them (not pulled out of my ass as you seem to believe).


There is no secret here. High income - buy assets - invest returns - repeat.

[Anonymous]

So what's your effective tax rate, PP?

You are clearly an exception re:income - according to a quick search, there are less than 20k Americans who have an AGI of over $2mm annually. And relatively speaking, you still haven't accumulated *that* much wealth based on your net assets (that's a lot of debt).

I worked in PWM with global 1%-ers, family offices, the whole shabang, and most of the time we were talking $100m+ in net assets. Though clearly you've done incredibly well for yourself and that's nothing to sneeze at...

You're still wrong, though. High income (if we're talking millions) can go along with high wealth, sure, but more often than not, if the wealth is very substantial then you're talking low income taxes based on low earned income. That's why people are talking about introducing a wealth tax instead of income tax.

Piketty explains this concept well: https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Century