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

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Again, if you make $500K, it seems very easy to judge that person, without knowing a single detail about that person. What about a parent whom earns $500K, but, spends like $200K a year on a very sick child? Is that person materialistic???? Because, according to one poster, that is what you are. INSANE!!!! That same person could be living paycheck to paycheck. Do you think that person 'feels rich'???

If you are spending $200k on a very sick child, I am sorry to hear that. But you still have $300k a year for other expenses.

The median income in the US is around 60k. The median income in this area in 2017 was around 82k. Your leftover income would still be more than 3x that. You are rich. You are uber rich. If your friends make $1m a year, guess what, you are still rich.

I will repeat it: if you make $500K, you start off by giving a lot of it to the gov't in the form of taxes. About $175K. And, if you have medical expenses of $200K, you have about $125K left to house yourself, eat, insure yourself, save, etc etc. That is NOT rich. Very far from it.

What medical insurance has an out-of-pocket annual limit anywhere near 200k (and at least since Obamacare is in place even preexisting conditions are insurable)? This is not a reasonable example on which to talk about a more general issue. And if you had 200k in medical expenses that would be deductible and you wouldn't owe 175k in taxes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Again, if you make $500K, it seems very easy to judge that person, without knowing a single detail about that person. What about a parent whom earns $500K, but, spends like $200K a year on a very sick child? Is that person materialistic???? Because, according to one poster, that is what you are. INSANE!!!! That same person could be living paycheck to paycheck. Do you think that person 'feels rich'???

If you are spending $200k on a very sick child, I am sorry to hear that. But you still have $300k a year for other expenses.

The median income in the US is around 60k. The median income in this area in 2017 was around 82k. Your leftover income would still be more than 3x that. You are rich. You are uber rich. If your friends make $1m a year, guess what, you are still rich.

I will repeat it: if you make $500K, you start off by giving a lot of it to the gov't in the form of taxes. About $175K. And, if you have medical expenses of $200K, you have about $125K left to house yourself, eat, insure yourself, save, etc etc. That is NOT rich. Very far from it.

If you have a child that needs $200k in medical care annually, your child would qualify for Medicaid through Katie Beckett or similar. I bet most people making $500k have decent insurance that would cover a large portion of the expenses.

And you can deduct medical expenses that exceed 10% of your income, so this whole outlier example created by the "actually the rich have it much harder than any poor person, you are judgmental"??!?!?!!!??!?!? poster falls further and further apart the more closely its examined.

[Anonymous]

When you have to work for any income you are not rich. When you stop working it goes away. Rich is when you have enough passive income you don't have to go into the office and worry about your job.

[Anonymous]

Anonymous wrote:So, in my example, that lucky parent is exempt from the label offered up by you and the OP?

My HHI of $250K is even lower than the $300K than this theoretic parent would then have to live on. So yeah, still rich.

[Anonymous]

These threads just reflect the same fundamental difference of opinion over and over. Do you define "rich" as "high income" or do you define it as "independently wealthy". Many posters argue that being "rich" means you have enough wealth that you don't have to work. So you could say that someone who has had a trust fund paying out $75K a year is rich, even if they work at a non-profit for 20K a year, and never make six figures in their life. On the flip side, the BigLaw associate making 200K who can be fired at any moment is high income, but may not be at all rich, depending on their debts, savings rate etc. However, obviously many people on this thread only consider HHI, or simply think that anyone with either assets of X, or income over Y, is rich. So if you earn 200K you are rich, if you get fired tomorrow and now earn $0, you are poor, etc.
I tend to think lumping wealthy and high income together is fairly misleading. For example, the working class kid who accumulates 300K in college/law school debt, and then starts earning 200K at a law firm, is to my mind not rich yet, and certainly not in the same category as a trust fund baby who has no debt, and never has to work a day if they don't want to. The distinction matters, because from a policy/tax code perspective, it seems like treating those two people the same would be somewhat unfair, and make it tougher for working class/middle class to become rich. If a presidential candidate says "we should tax the rich more" I might agree about trust fund baby, and not agree about indebted working class striver.

[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 they spend $321 on a haircut.

[Anonymous]

Anonymous wrote:It’s all about your lifestyle and spending habits. If you surround yourself with well-to-do people and feel the need to keep up with the neighbors in order to feel good about yourself, then you’ll never feel “rich” because you’re chasing the latest and greatest thing.

On the other hand, if you are a high income family in a lower-SES area, it’s easier to feel rich.

I live in an area that many of you would sneer at, but I’m very happy with my choices.

I do, too! Perhaps we're neighbors.

[Anonymous]

15:14, I am one of the posters....the only aggravated one seems to be you. I don't feel rich, but, I also don't obsess over other's peoples incomes like you do. So, in that sense, you are very poor.

[Anonymous]

I won't feel rich until we have 4 or 5 million dollars in the bank. Excluding the kids' college funds which we plan to use.

[Anonymous]

I think the one poster nailed it: Rich means, not having to work.

[Anonymous]

Anonymous wrote:

One big reason I don’t think I’ve seen mentioned is student loans. Often a couple making $500k has several hundred thousand dollars in student loan debt. That’s often what it takes to get those jobs and that is an albatross around your neck.

So in one year, pay off all your student debt and live off rice and beans. You won't be rich that year, but you can be rich the next year and all the rest of your life. Congratulations!

[Anonymous]

Definition of rich: having abundant possessions and especially material wealth.

Therefore, unless you had some pretty rare, extreme circumstances, if you make $500k or more a year, you are rich. I haven't seen one example here of someone having extreme enough circumstances that you couldn't call someone who makes that much rich.

If you make that much money and you don't "feel" rich, well, you live in a different reality from the rest of us.

[Anonymous]

Anonymous wrote:I think the one poster nailed it: Rich means, not having to work.

Only to the very wealthy!

[Anonymous]

Anonymous wrote:15:14, I am one of the posters....the only aggravated one seems to be you. I don't feel rich, but, I also don't obsess over other's peoples incomes like you do. So, in that sense, you are very poor.

I offered one post explaining some student loan context. Not obsessed over anyone else’s money and didn’t cheekily tell people multiple times they were stupid and/or poor decision makers.

And on repaying student loans - that $500k income couple probably has $400-500k in loans. So after taxes, living expenses (living modestly), it will still take a few years. Not just one. For example, I graduated law school with $200k in debt and a $160k starting salary several years back.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Again, if you make $500K, it seems very easy to judge that person, without knowing a single detail about that person. What about a parent whom earns $500K, but, spends like $200K a year on a very sick child? Is that person materialistic???? Because, according to one poster, that is what you are. INSANE!!!! That same person could be living paycheck to paycheck. Do you think that person 'feels rich'???

If you are spending $200k on a very sick child, I am sorry to hear that. But you still have $300k a year for other expenses.

The median income in the US is around 60k. The median income in this area in 2017 was around 82k. Your leftover income would still be more than 3x that. You are rich. You are uber rich. If your friends make $1m a year, guess what, you are still rich.

I will repeat it: if you make $500K, you start off by giving a lot of it to the gov't in the form of taxes. About $175K. And, if you have medical expenses of $200K, you have about $125K left to house yourself, eat, insure yourself, save, etc etc. That is NOT rich. Very far from it.

If you have a child that needs $200k in medical care annually, your child would qualify for Medicaid through Katie Beckett or similar. I bet most people making $500k have decent insurance that would cover a large portion of the expenses.

And you can deduct medical expenses that exceed 10% of your income, so this whole outlier example created by the "actually the rich have it much harder than any poor person, you are judgmental"??!?!?!!!??!?!? poster falls further and further apart the more closely its examined.

I don’t think that deduction works if you are self employed.