Why rich people don't feel rich

[Anonymous]

Anonymous wrote:

Anonymous wrote:In this day and age, I think people count as 'rich' if they are able to have an emergency fund and save for college and retirement. Most people are one paycheck away from catastrophe and if you're not in that boat, you're in good shape.

The reason 'rich' is so hard to define these days is because so many people are spending everything they have (and more), so their quality of life and material possessions are in many cases much higher than people who are being more responsible with their money.

We ought to just abolish credit cards and see who's 'rich' then.

I don't know. I think eventually, so many people will have a catastrophe that it will bring down our entire economy again. And/or they will age and become disabled an unable to work and all us folks who are being responsible will end up, yet again, having our hard earned saving sucked away b/c of the irresponsibility and poor choices of others. I don't know, but I can lots of folks looking at those choices and saying its not worth it.

Do you truly think those who don't have retirement funds or emergency funds are just irresponsible and making poor choices? Wow, that is rich (pun intended).

Yes, many people are in peril, one paycheck or illness away from disaster. That should be a wake up call to our nation, but I truly think it is wrongheaded to blame those in that situation. Do some of them make poor choices? Sure. But most of them are hardworking people who just can't get ahead. The working poor and middle class are squeezed from all directions anymore, and the safety nets that used to be available are becoming a thing of the past.

We consider ourselves very lucky to have health insurance, retirement funds and a little bit of money in savings. But we only have been able to do that because we make enough money to cover our basics and more. Many people struggle for t those things, even when they work hard day in day out.

[Anonymous]

"Yes, many people are in peril, one paycheck or illness away from disaster. That should be a wake up call to our nation."

Maybe our nation needs to stop taking so much of our money so that we can save more and take care of ourselves instead of being on the edge of poverty b/c we pay so much to support others.

[Anonymous]

Anonymous wrote:"Yes, many people are in peril, one paycheck or illness away from disaster. That should be a wake up call to our nation."

Maybe our nation needs to stop taking so much of our money so that we can save more and take care of ourselves instead of being on the edge of poverty b/c we pay so much to support others.

yes, because clearly the people I am referring to are getting killed in taxes. But if you'd like to discuss 2 wars at once where mostly working and middle class families are the ones losing loved one, sure, let's go there.

[Anonymous]

Anonymous wrote:

Anonymous wrote:"Yes, many people are in peril, one paycheck or illness away from disaster. That should be a wake up call to our nation."

Maybe our nation needs to stop taking so much of our money so that we can save more and take care of ourselves instead of being on the edge of poverty b/c we pay so much to support others.

yes, because clearly the people I am referring to are getting killed in taxes. But if you'd like to discuss 2 wars at once where mostly working and middle class families are the ones losing loved one, sure, let's go there.

you're so ignorant, its scary

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:"Yes, many people are in peril, one paycheck or illness away from disaster. That should be a wake up call to our nation."

Maybe our nation needs to stop taking so much of our money so that we can save more and take care of ourselves instead of being on the edge of poverty b/c we pay so much to support others.

yes, because clearly the people I am referring to are getting killed in taxes. But if you'd like to discuss 2 wars at once where mostly working and middle class families are the ones losing loved one, sure, let's go there.

you're so ignorant, its scary

I was going to say the same about you...

[Anonymous]

I have not read all the posts, but My husband makes $75k a year and I make $12K a year. We are very frugal and I only work 1 day a week. My MIL does childcare. We have never been on a real vacation, and our cars are five+ years old. We get most of our taxes back in April. But this was our decision, we had kids right away and we never went to college. I have no problem with people earning a lot of money. I think our tax system is horrible. I know because of our income and the amount of kids we have, we probably make more take home then a lot of people who put have four year degrees. How fair is that?

[Anonymous]

Anonymous wrote:I have not read all the posts, but My husband makes $75k a year and I make $12K a year. We are very frugal and I only work 1 day a week. My MIL does childcare. We have never been on a real vacation, and our cars are five+ years old. We get most of our taxes back in April. But this was our decision, we had kids right away and we never went to college. I have no problem with people earning a lot of money. I think our tax system is horrible. I know because of our income and the amount of kids we have, we probably make more take home then a lot of people who put have four year degrees. How fair is that?

That's my point. If you know that your efforts at financial advancement will likely only mean that you can pay your own way vs. have more spendable cash AND qualify for subsidies and loans and grants; that your 4-6 years of college and post baccalaureate work will only result in 20 years of debt repayment and perhaps the ability to pay for your child care, health care, kid's college and retirement without gov't help, and it will likely NOT improve the actual day to day quality of your life, some (not all) might say...hmm...I'd rather have no debt, more spending money and qualify for more help. Its not entirely implausible that people will choose the immediate gratification of consumerism vs. the delayed gratification of self sufficiency. This is not exactly an astute insight into the American consciousness but fairly self-evident, I think.

[Anonymous]

Anonymous wrote:I have not read all the posts, but My husband makes $75k a year and I make $12K a year. We are very frugal and I only work 1 day a week. My MIL does childcare. We have never been on a real vacation, and our cars are five+ years old. We get most of our taxes back in April. But this was our decision, we had kids right away and we never went to college. I have no problem with people earning a lot of money. I think our tax system is horrible. I know because of our income and the amount of kids we have, we probably make more take home then a lot of people who put have four year degrees. How fair is that?

This simply isn't the case. Does anyone here ACTUALLY know how the tax system works? It is a GRADUATED tax system. That doesn't JUST mean the rich pay more.

Here is a very oversimplified explanation.

Let's say there are three tax brackets...
0 - 35K pays 10%
35K - 100K pays 20%
100K+ pays 30%

Now, if you make 35K, you pay 3,500 in taxes and take home 31500.

If you make 200K, you DO NOT pay 60K in taxes.

You pay 10% on your first 35K, 20% on the next 65, and 30% only on the last 100%. You'd pay 3500 + 13000 + 30000 for a total of 46500. That is a long way from 60K. You are not paying 30%... you are paying an actual tax rate of 23.25%. So, the likelihood that someone earning less gross pay is taking home more net pay is unlikely, unless there are massive differences in deductions and such.

That is why all the hemming and hawing over the 250K limit was more bluster than anything else. If you were earning 251K, then you only saw the slightest difference in that last 1K and still had an overall lower tax bill because of the tax breaks on the first 250K.

Our financial illiteracy is astounding.

[Anonymous]

Our financial illiteracy is astounding.

But are you really surprised. Financial literacy is hardly taught, if at all, anywhere in our educational system. I think a mandatory financial literacy class would go a long way toward improving the economic health of our nation. In fact, it would be more worthwhile than a year learning trigonomety, for most.

[Anonymous]

Anonymous wrote:

Our financial illiteracy is astounding.

But are you really surprised. Financial literacy is hardly taught, if at all, anywhere in our educational system. I think a mandatory financial literacy class would go a long way toward improving the economic health of our nation. In fact, it would be more worthwhile than a year learning trigonomety, for most.

This is a good comment. We so often like to blame people for their ignorance without examining why the ignorance exists.

[Anonymous]

Anonymous wrote:

Our financial illiteracy is astounding.

But are you really surprised. Financial literacy is hardly taught, if at all, anywhere in our educational system. I think a mandatory financial literacy class would go a long way toward improving the economic health of our nation. In fact, it would be more worthwhile than a year learning trigonomety, for most.

Great point. But can't we at least expect our political leaders... ya know, the ones making decisions on all this shit... to have at least this basic understanding? I'm not saying they should memorize the tax code... but they should realize that tax cuts for salary under 250K and tax raises for salary over 250K is still beneficial for people close to 250K?

Odds are they DID know this but it was more politically expedient to peddle ignorance.

[Anonymous]

Anonymous wrote:Odds are they DID know this but it was more politically expedient to peddle ignorance.

BINGO

[Anonymous]

OP, of all the worries in the world, yours must be the smallest

[Anonymous]

Anonymous wrote:"Yes, many people are in peril, one paycheck or illness away from disaster. That should be a wake up call to our nation."

Maybe our nation needs to stop taking so much of our money so that we can save more and take care of ourselves instead of being on the edge of poverty b/c we pay so much to support others.

Until then, people need to stop upgrading their technology every year or two and start investing the big bucks. We have one 6 year old computer. No iPad, iPhone, etc. and we just now got a flat screen tv when our old one broke. Two old cars that we fix rather than trade in. This lifestyle is sadly very out of fashion. On the other hand, we had our first million by age 40, so we'll have the last laugh. Uncool but rich.

[Anonymous]

Anonymous wrote:

You have a point, but not a good one. Just because you decide to spend all of your high income doesn't mean you're not rich. You could do the same things people that live on far less do, but you choose not to. If everyone could make the same amount of money in Iowa, as they do here, then more people would do that. But the reality is most of the time, lower paying jobs come with those lower cost of living areas. My husband and I lived in DC comfortably on 60K combined. Now we make closer to 130K and feel very fortunate.

Thank you! This point can't be made often enough. Unless your debt is the result of catastrophic health issues, it was a choice. Maybe a good choice (the educational debt that allows you to hold that high paying job) or a bad choice (the McMansion in Loudoun that plummeted in value), but still a choice. We're not talking about non-english speakers who were duped into taking out loans they could never afford - these are people who earn enough income to be in the top 5% or so of earners in the county. If your income can't support your lifestyle or debt service, that's unfortunate - but it's on you. Earn more, or alter your circumstances so you have to pay less. Either way, stop freakin' whining about it, and take some ownership. Sheesh.

Short version - just because you don't feel rich doesn't mean you aren't rich.

but everyone makes choices -- some families decide to have one income and may be "poor" as a result. why dont they have to stop whining about it?