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

[Anonymous]

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.

[Anonymous]

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.

[Anonymous]

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.

[Anonymous]

Because they build their lives so that they never come in contact with anyone who makes less than them (other than the help, who are obviously not actually people).

[Anonymous]

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.

It was your choice to have kids and a (presumably large) mortgage though.

You could live in a modest house and pay cash for it. Forgo kids. Voila. Rich.

[Anonymous]

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.

[Anonymous]

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.

I don't think you have to go all the way to .01%, but yes, this is true.

No one making $500k/year should be complaining, but living off wages and living off dividends are two very different lifestyles.

[Anonymous]

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.

[Anonymous]

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.

Well said.

Signed - A 500K household.

[Anonymous]

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."

[Anonymous]

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.

[Anonymous]

It’s simple - If you make 50,000 a year and only spend 45,000, you are going to feel like you are doing well. If you make $500,000 a year and spend $498,000, you are going to feel like you are struggling. It’s not about how much you make. It’s not about how much you spend.

[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.

We make 250K combined and don't feel deprived.

It's basically the equivalent of buying a $3M home and then complaining that your mortgage is high.

[Anonymous]

Not sure. I feel rich. Maybe because I grew up not rich and I clearly understand the differences between then and now? I remember when I first felt rich: I was having a party and I just bought what I wanted for food and drinks without regard to money. I still feel that way.

[Anonymous]

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

Because as long as there is one person in the world who has more, they can not sleep.