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

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[quote=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. [b]So yeah dude, you're rich. You just still have to make tough financial choices like everybody else. [/b] 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. [/quote]

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