Conversations with the Wealthy but Working neighbors

[Undecided]

This is top 5% of the world type stuff. I honestly can hardly put into words how nice it is to do all of the above--and have money not even remotely be of any concern to me. Hell, the lack of stress (via living a frugal lifestyle) probably puts me in the top one percent. 

It's on you if you think not having yachts means I'm not rich.

No, you're mischaracterizing everything I wrote. I just think you are conflating lifestyle (which may be paid for with current earned income) and wealth. I said, absolutely, that you've described affluence, and are right to recognize your good fortune. But (with all the qualifiers I already delivered), that's just not what "rich" or "wealthy" means to me---it has absolutely nothing to do with lifestyle or income and everything to do with assets. I am in in no way saying that's not great, or that you need to have yacht money to be rich, just that "rich" is about assets, not income. When I Google 'rich,' I see "having a great deal of money or assets; wealthy." When I Google "wealthy," I see "having a great deal of money, resources, or assets; rich." Neither refers to income, or spending.

I also have some sympathy for inline five's reaction to DS. While we can indeed talk about being "rich" in myriad ways (friendships, love, joy), to talk about being "rich" without any modifier means to talk about money and assets, and pretending otherwise is either disingenuous or reflects a use of the term that requires some explanation.

We're two ships passing in the dark here, so it's not like we're going to resolve our disagreement. But to summarize as briefly as possible, if you don't think I have a "great deal of money, resources, or assets" as compared with the general (and world) population, I think you lack a bit of perspective.

As I said above, "Context is everything, of course, and when the term "rich" is used within a first-world society, I think it is generally used as a relative demarcation within that type of society...."

You've said that my characterization of your situation reflects a lack of perspective, but I already acknowledged that the world context "is a very valid perspective and an important reminder." It's just not the same context in which the term is used for what I perceive to be its typical purposes in, e.g., the US or Canada (that is, when it's used in a wealthy society, without any modifier).

If you want to conclude that we're passing in the dark, that's fine, but I'm not sure how you can tell with your head in the sand.

[nereo]

It's ridulous to compare oneself to the worlds poplulation. What does $1m in Costa Rica get you? A lot more than the US.

Same thing goes for different areas of the US. While it may seem like $100k is a lot of income, if you live in San Francisco or San Jose it's hardly middle class. There a one bedroom apartment is ~$4k/month.

In Little Rock it's on the upper end of middle and allows the purchase of many income producing assets.

Everything must be taken in context and be relative.

Yes there are differences in the COL, but lets not resort to absurd hyperbole here. 
One can get a 1br apartment in SF for much less than $4k/month.  I know because I lived there.  Plus, there's currently 152 listed on craigslist for <$2k/mo in case you'd like to check.

Also, if you make $100k in SF you are solidly middle class, defined as falling between the 30th and 80th income percentiles.
(if you're wondering, the range there for SF is $42,897 - 108,994; earning $100k puts you almost within the top 20% of households in SF. $200k puts you solidly within the top quintile.
 Source.

All of this just points to a complete misunderstanding of what middle class really is (which, by definition, is in the "middle" of the finanical spectrum, whether we are talking about income/spending/assets/etc.)

[inline five]

Inline five, I too will double down on you posting a case study and let the others have a wack at your budget.  You would be surprised how much you can learn just by putting everything in writing. A few years ago I was going to post a question non bogleheads and ready to lay out all of our finances.  I stayed up probably later than I should one night and put everything together.  By the end of the process I learned so much about myself, our spending, our future projections that I didn't even end up posting anything.  My family is so much better off because of it. Give it a try.

We spend $3500/month on average as I stated up thread which includes our $1000/mortgage. Honestly I'm not interested what so ever in cutting back on our $2500/month monthly spending amount. I really don't care about saving an extra even couple hundred a month. I'm at the point in my life where I refuse to be uncomfortable or eat ramen to save $.

When/if we lose our jobs then we can cut back but I really don't think spending $3500/month to live is outrageous. I would say it's solidly middle class if not below.

[solon]

Inline five, I too will double down on you posting a case study and let the others have a wack at your budget.  You would be surprised how much you can learn just by putting everything in writing. A few years ago I was going to post a question non bogleheads and ready to lay out all of our finances.  I stayed up probably later than I should one night and put everything together.  By the end of the process I learned so much about myself, our spending, our future projections that I didn't even end up posting anything.  My family is so much better off because of it. Give it a try.

We spend $3500/month on average as I stated up thread which includes our $1000/mortgage. Honestly I'm not interested what so ever in cutting back on our $2500/month monthly spending amount. I really don't care about saving an extra even couple hundred a month. I'm at the point in my life where I refuse to be uncomfortable or eat ramen to save $.

When/if we lose our jobs then we can cut back but I really don't think spending $3500/month to live is outrageous. I would say it's solidly middle class if not below.

Wuss. A real man would post a case study.

[scantee]

Same thing goes for different areas of the US. While it may seem like $100k is a lot of income, if you live in San Francisco or San Jose it's hardly middle class. There a one bedroom apartment is ~$4k/month.

In Little Rock it's on the upper end of middle and allows the purchase of many income producing assets.

I see this reasoning a lot and it drives me crazy. The reason $100k in the Bay Area isn't comparable to the same amount of money in Little Rock isn't cost of living, the difference is you get to live in the Bay Area, one of the most sought after locations in the entire world. By living there you are choosing to work longer because it is worth it to you to "buy" an unnecessary luxury good (housing) just as some people work longer to fund fancy cars and private school for their kids.

[JayhawkRacer]

This is top 5% of the world type stuff. I honestly can hardly put into words how nice it is to do all of the above--and have money not even remotely be of any concern to me. Hell, the lack of stress (via living a frugal lifestyle) probably puts me in the top one percent. 

It's on you if you think not having yachts means I'm not rich.

No, you're mischaracterizing everything I wrote. I just think you are conflating lifestyle (which may be paid for with current earned income) and wealth. I said, absolutely, that you've described affluence, and are right to recognize your good fortune. But (with all the qualifiers I already delivered), that's just not what "rich" or "wealthy" means to me---it has absolutely nothing to do with lifestyle or income and everything to do with assets. I am in in no way saying that's not great, or that you need to have yacht money to be rich, just that "rich" is about assets, not income. When I Google 'rich,' I see "having a great deal of money or assets; wealthy." When I Google "wealthy," I see "having a great deal of money, resources, or assets; rich." Neither refers to income, or spending.

I also have some sympathy for inline five's reaction to DS. While we can indeed talk about being "rich" in myriad ways (friendships, love, joy), to talk about being "rich" without any modifier means to talk about money and assets, and pretending otherwise is either disingenuous or reflects a use of the term that requires some explanation.

We're two ships passing in the dark here, so it's not like we're going to resolve our disagreement. But to summarize as briefly as possible, if you don't think I have a "great deal of money, resources, or assets" as compared with the general (and world) population, I think you lack a bit of perspective.

It's ridulous to compare oneself to the worlds poplulation. What does $1m in Costa Rica get you? A lot more than the US.

Same thing goes for different areas of the US. While it may seem like $100k is a lot of income, if you live in San Francisco or San Jose it's hardly middle class. There a one bedroom apartment is ~$4k/month.

In Little Rock it's on the upper end of middle and allows the purchase of many income producing assets.

Everything must be taken in context and be relative.

Isn't that the idea behind "Keeping up with the Joneses," though?

[ReadySetMillionaire]

It's ridulous to compare oneself to the worlds poplulation. What does $1m in Costa Rica get you? A lot more than the US.

Same thing goes for different areas of the US. While it may seem like $100k is a lot of income, if you live in San Francisco or San Jose it's hardly middle class. There a one bedroom apartment is ~$4k/month.

In Little Rock it's on the upper end of middle and allows the purchase of many income producing assets.

Everything must be taken in context and be relative.

As I said above, "Context is everything, of course, and when the term "rich" is used within a first-world society, I think it is generally used as a relative demarcation within that type of society...."

You've said that my characterization of your situation reflects a lack of perspective, but I already acknowledged that the world context "is a very valid perspective and an important reminder." It's just not the same context in which the term is used for what I perceive to be its typical purposes in, e.g., the US or Canada (that is, when it's used in a wealthy society, without any modifier).

If you want to conclude that we're passing in the dark, that's fine, but I'm not sure how you can tell with your head in the sand.

Both of you are using your subjective interpretation of what is rich and labeling it as "context." You've essentially just changed the vernacular, created your own definitional goalposts, and then are upset at me for not agreeing with how you've created the rules.

You're both effectively comparing my wife and I to your definition of the Joneses when I don't give a shit about the Joneses at all.

[inline five]

I see this reasoning a lot and it drives me crazy. The reason $100k in the Bay Area isn't comparable to the same amount of money in Little Rock isn't cost of living, the difference is you get to live in the Bay Area, one of the most sought after locations in the entire world. By living there you are choosing to work longer because it is worth it to you to "buy" an unnecessary luxury good (housing) just as some people work longer to fund fancy cars and private school for their kids.

Absolutely I agree with this. Although I dislike San Fran and much prefer SoCal.

[A Definite Beta Guy]

If "rich" means two-earner professional households, we need a new term for people like Taylor Swift, Warren Buffet, Michael Jordan, etc.

Michael Jordan has his own private indoor basketball court. That's a totally different level of wealth from anyone on this board.

[nereo]

We spend $3500/month on average as I stated up thread which includes our $1000/mortgage. Honestly I'm not interested what so ever in cutting back on our $2500/month monthly spending amount. I really don't care about saving an extra even couple hundred a month. I'm at the point in my life where I refuse to be uncomfortable or eat ramen to save $.

When/if we lose our jobs then we can cut back but I really don't think spending $3500/month to live is outrageous. I would say it's solidly middle class if not below.

you seem to have this deep-seated belief that any reduction in your spending would correspond with increasing discomfort.
I hope you can take a moment to reassess this belief and consider that might not be the case.


Also - ramen noodles, when prepared correctly (not that crap which comes freeze-dried in a packet) are flavorful, healthy and divine.

[inline five]

Wuss. A real man would post a case study.

Think of all the money I can save if I live in a van!

People always focus on the small line items and never the big stuff. "Hey! You're spending $60 on two cell phone plans! You could save $20 if you used Republic Wireless but have no signal and no data to use rendering it practically worthless! But you'll save $20!!!" But ignore the thousands spent on a home.

Here is something interesting. We pay more in state income tax than our mortgage. So we are moving to a no income tax state. That alone will save around $850/month after factoring in increased property taxes on the new place.

[inline five]

you seem to have this deep-seated belief that any reduction in your spending would correspond with increasing discomfort.
I hope you can take a moment to reassess this belief and consider that might not be the case.


Also - ramen noodles, when prepared correctly (not that crap which comes freeze-dried in a packet) are flavorful, healthy and divine.

You consider a serving of ramen with 14g of fat and 1,800 mg of sodium healthy? Seriously?

As for that recipe, do you know how much sodium is in soy sauce? It's probably the worst "sauce" once could ever concoct to consume.

[Slee_stack]

It's ridulous to compare oneself to the worlds poplulation. What does $1m in Costa Rica get you? A lot more than the US.

Actually, not that much more...its pretty expensive there now.

J/k, I get the point you are trying to make.

however...

Where is the line drawn?  USA?  State?  City?  Your neighborhood?


If your whole complaint is that you are 'poor' with respect to the people on your street.....OK.   So what?

You can move to another street in another state and possibly be the 'richest'...OK.  So what?

You can also move just about anywhere else in the world if you really wanted to.

Perhaps its your comparing yourself to others that is the root cause of your dis-satisfaction?

Give up chasing the Jones.  You'll be much happier.

Besides, the Jones may or may not be as 'rich' as you think they are.

[Undecided]

Both of you are using your subjective interpretation of what is rich and labeling it as "context." You've essentially just changed the vernacular, created your own definitional goalposts, and then are upset at me for not agreeing with how you've created the rules.

You're both effectively comparing my wife and I to your definition of the Joneses when I don't give a shit about the Joneses at all.

I quoted definitions of “rich” and “wealthy”—the first that came up in a Google search. If you want to assert that I’m the one using a subjective interpretation on that point, while you’ve completely redefined the terms, you’re not being honest with me or yourself.

Similarly, if you think “we should increase taxes on the rich” or “oh, him? He’s rich” means somebody who makes $34k/year (the global 1%), then you’ve been misunderstanding what people mean.

[inline five]

Actually, not that much more...its pretty expensive there now.

J/k, I get the point you are trying to make.

however...

Where is the line drawn?  USA?  State?  City?  Your neighborhood?


If your whole complaint is that you are 'poor' with respect to the people on your street.....OK.   So what?

You can move to another street in another state and possibly be the 'richest'...OK.  So what?

You can also move just about anywhere else in the world if you really wanted to.

Perhaps its your comparing yourself to others that is the root cause of your dis-satisfaction?

Give up chasing the Jones.  You'll be much happier.

Besides, the Jones may or may not be as 'rich' as you think they are.

Have I said I was poor?
Have I said I compare myself to others?
How am I chasing the Jones's driving a 22 year old car which incidentally happens to be the first car I ever drove (I'm 36)? I plan to keep it until it won't run, I love it.

[Slee_stack]

Actually, not that much more...its pretty expensive there now.

J/k, I get the point you are trying to make.

however...

Where is the line drawn?  USA?  State?  City?  Your neighborhood?


If your whole complaint is that you are 'poor' with respect to the people on your street.....OK.   So what?

You can move to another street in another state and possibly be the 'richest'...OK.  So what?

You can also move just about anywhere else in the world if you really wanted to.

Perhaps its your comparing yourself to others that is the root cause of your dis-satisfaction?

Give up chasing the Jones.  You'll be much happier.

Besides, the Jones may or may not be as 'rich' as you think they are.

Have I said I was poor?
Have I said I compare myself to others?
How am I chasing the Jones's driving a 22 year old car which incidentally happens to be the first car I ever drove (I'm 36)? I plan to keep it until it won't run, I love it.

What are you so mad about then?

[NoraLenderbee]

We spend $3500/month on average as I stated up thread which includes our $1000/mortgage. Honestly I'm not interested what so ever in cutting back on our $2500/month monthly spending amount. I really don't care about saving an extra even couple hundred a month. I'm at the point in my life where I refuse to be uncomfortable or eat ramen to save $.

When/if we lose our jobs then we can cut back but I really don't think spending $3500/month to live is outrageous.

I don't think it's outrageous either. But it leaves you about $50K left over to save, spend, or invest. That's a TON of extra money. How can you claim that your gross of $230K isn't that much when you have $50K more than you know what to do with?

I would say it's solidly middle class if not below.

According to the Pew Charitable trusts (a fairly reputable organization), the mean expenditure for a US household in 2014 was 36,500. You're about 15% higher. That still isn't lavish and I'm not telling you to cut back.  My point is that your attitude is really distorted. You feel like you're almost below middle class and don't have much, but you're spending a bit more than the (mythical) middle class and you have scads of extra money.

http://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2016/03/household-expenditures-and-income

[Jrr85]

See that's a BS question because $230k isn't anywhere near that amount.

After federal, state, local, and 401k you're down to roughly $120-$130k. Minus insurance, ESOP etc. and you lose even more.

Our insurance/medical costs are under $2k/yr for the two of us and housing net is around $6k (of which about $12k is mortgage minus $6k pay down so net of $6k). My wife does an ESOP with the 10% deduction post tax.

Are we rich? Absolutely no way, the rich can live their comfortable lives without working again and receive their income via passive income. Are we better off than we were a couple years ago? Sure.

This is a new one.  I've heard the "I'm not rich because look, after I spend all my money (generally on house, cars, private school, etc), I don't have any left." 

I've never heard anyone argue that they're not rich because "look how little money I have left to spend after I save a shit ton of it". 

[nereo]

you seem to have this deep-seated belief that any reduction in your spending would correspond with increasing discomfort.
I hope you can take a moment to reassess this belief and consider that might not be the case.


Also - ramen noodles, when prepared correctly (not that crap which comes freeze-dried in a packet) are flavorful, healthy and divine.

You consider a serving of ramen with 14g of fat and 1,800 mg of sodium healthy? Seriously?

As for that recipe, do you know how much sodium is in soy sauce? It's probably the worst "sauce" once could ever concoct to consume.

This is what you got out of my post?  Seriously?  The ramen comment was just an aside.
...but if you're going down this road, you're basically slandering a staple in the cuisine of about a quarter of the world's population. Wow.

[ReadySetMillionaire]

I quoted definitions of “rich” and “wealthy”—the first that came up in a Google search. If you want to assert that I’m the one using a subjective interpretation on that point, while you’ve completely redefined the terms, you’re not being honest with me or yourself.

Similarly, if you think “we should increase taxes on the rich” or “oh, him? He’s rich” means somebody who makes $34k/year (the global 1%), then you’ve been misunderstanding what people mean.

Right, and I'm saying I'm rich by those definitions:

...if you don't think I have a "great deal of money, resources, or assets" as compared with the general (and world) population, I think you lack a bit of perspective.

My household earns 200% of the median household income in the United States, the richest country in the world. That's a shitload of money that generally allows me to, among other things, save $45k per year for retirement, which almost exceeds (a) the median household income and (b) the median amount saved by current retirees. We also have hardly any debt, no credit card debt, and enough saved up to live on for a long, long time if an emergency happened. That's a great deal of money and assets no matter how you slice it.

So my point in all this is that if you've above comparing your situation to averages and median U.S. households, and instead are comparing it to your definition of "great deal of money or assets," as defined by you, then that's your issue.

[matchewed]

Funny haven't we had this discussion?
https://forum.mrmoneymustache.com/welcome-to-the-forum/how-to-know-if-you're-rich/

[oldtoyota]

I live in a pretty nice neighborhood, where average houses go for well over $1M, and typically both the husband and wife are working, usually one (often both) of them is a doctor or attorney or a DC lobbyist.  I retired from the Navy about a month ago at 44, and am in no rush to find a civilian job.

I was at a meeting in a DC neighborhood like yours during a weekday. I noticed lawncare workers in many yards and contractors building and refurbishing in others. It struck me as an expensive choice in a million-dollar neighborhood.

In another meeting in a similar neighborhood, someone told me he would never be able to retire. I noticed the Lexus, the day staff, the yard tended by others. All I can say is, it's a choice.

[Undecided]

I quoted definitions of “rich” and “wealthy”—the first that came up in a Google search. If you want to assert that I’m the one using a subjective interpretation on that point, while you’ve completely redefined the terms, you’re not being honest with me or yourself.

Similarly, if you think “we should increase taxes on the rich” or “oh, him? He’s rich” means somebody who makes $34k/year (the global 1%), then you’ve been misunderstanding what people mean.

Right, and I'm saying I'm rich by those definitions:

...if you don't think I have a "great deal of money, resources, or assets" as compared with the general (and world) population, I think you lack a bit of perspective.

My household earns 200% of the median household income in the United States, the richest country in the world. That's a shitload of money that generally allows me to, among other things, save $45k per year for retirement, which almost exceeds (a) the median household income and (b) the median amount saved by current retirees. We also have hardly any debt, no credit card debt, and enough saved up to live on for a long, long time if an emergency happened. That's a great deal of money and assets no matter how you slice it.

So my point in all this is that if you've above comparing your situation to averages and median U.S. households, and instead are comparing it to your definition of "great deal of money or assets," as defined by you, then that's your issue.

And you may be. I'm not saying you're not. But now you've shifted to talking about assets, when initially you'd been talking about income, which was the sole point of my disagreement.

Count me as another poster who is fascinated by people on this forum with 2x or 3x my family's income and not feeling rich. My wife and I make about $110k jointly and we feel unbelievably wealthy.

Just this year, that income allowed us to....

[Dr. Pepper]

Sometimes I hire stuff out, because it helps me be more productive with my time. Recently we hired out some lawn work, that would have taken me and my wife 10-12hrs to do. The company came out and did it in 6, with a team. In the meantime we were able to pick up extra work, and make 4X what we spent on the work. There are some things though that the cost to time is beneficial for me to do, for example replacing the brakes on our cars or oil changes. Does anyone else look at it this way?

[inline five]

This is what you got out of my post?  Seriously?  The ramen comment was just an aside.
...but if you're going down this road, you're basically slandering a staple in the cuisine of about a quarter of the world's population. Wow.

I'd say that's pretty generous. Judging by most folks grocery carts I'm probably slandering about 90% of the US population at least...

I lost around 50 lbs going from 195 to 145. I hope to never go back to what I ate before. Good quality fresh food costs a lot more than eating carbs daily, which I ate a lot when I was actually poor (poor as in qualified for food stamps poor).

[inline five]

Actually, not that much more...its pretty expensive there now.

J/k, I get the point you are trying to make.

however...

Where is the line drawn?  USA?  State?  City?  Your neighborhood?


If your whole complaint is that you are 'poor' with respect to the people on your street.....OK.   So what?

You can move to another street in another state and possibly be the 'richest'...OK.  So what?

You can also move just about anywhere else in the world if you really wanted to.

Perhaps its your comparing yourself to others that is the root cause of your dis-satisfaction?

Give up chasing the Jones.  You'll be much happier.

Besides, the Jones may or may not be as 'rich' as you think they are.

Have I said I was poor?
Have I said I compare myself to others?
How am I chasing the Jones's driving a 22 year old car which incidentally happens to be the first car I ever drove (I'm 36)? I plan to keep it until it won't run, I love it.

What are you so mad about then?

The only thing I'm mad about is this stupid quote function on this web site. Why would I be mad? I've honestly told my wife there is pretty much no way our lives could get much better, "these are the good old days".

[inline five]

We spend $3500/month on average as I stated up thread which includes our $1000/mortgage. Honestly I'm not interested what so ever in cutting back on our $2500/month monthly spending amount. I really don't care about saving an extra even couple hundred a month. I'm at the point in my life where I refuse to be uncomfortable or eat ramen to save $.

When/if we lose our jobs then we can cut back but I really don't think spending $3500/month to live is outrageous.

I don't think it's outrageous either. But it leaves you about $50K left over to save, spend, or invest. That's a TON of extra money. How can you claim that your gross of $230K isn't that much when you have $50K more than you know what to do with?

I would say it's solidly middle class if not below.

According to the Pew Charitable trusts (a fairly reputable organization), the mean expenditure for a US household in 2014 was 36,500. You're about 15% higher. That still isn't lavish and I'm not telling you to cut back.  My point is that your attitude is really distorted. You feel like you're almost below middle class and don't have much, but you're spending a bit more than the (mythical) middle class and you have scads of extra money.

http://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2016/03/household-expenditures-and-income

Good god I never said it wasn't that much.

I SAID WE WEREN'T RICH.

And that's when everyone started flipping out. The two are very different things.

[inline five]

Sometimes I hire stuff out, because it helps me be more productive with my time. Recently we hired out some lawn work, that would have taken me and my wife 10-12hrs to do. The company came out and did it in 6, with a team. In the meantime we were able to pick up extra work, and make 4X what we spent on the work. There are some things though that the cost to time is beneficial for me to do, for example replacing the brakes on our cars or oil changes. Does anyone else look at it this way?

Nope. At my job I do the minimum amount of time on duty. This leaves me with roughly 20-22 days a month, sometimes more, to myself. Personally I look at it as I GET to do the lawn, because there was a time when we didn't have a house with a lawn and couldn't afford one.

Same thing with changing the oil. I like doing it. I even swapped the transmission out in my car myself over a weekend. It was fun and I learned something new. It's more of a PITA to drive to the car place than it is to pop it up on some ramps and drain it on my own time. Plus I can look under and make sure everything is OK.

I do all sorts of stuff because I learn new things. Sometimes I step over a dollar. I just call it tuition...

[nereo]

Good god I never said it wasn't that much.

I SAID WE WEREN'T RICH.

And that's when everyone started flipping out. The two are very different things.

You really don't see it?  I think people are 'flipping out' because of all the things you are saying here, and the manner in which are you saying them.

For starters you've said "BS" to at least two posters here when they were sharing some reasonable points. Your snarky response to DS about living in a van seemed like a low blow, to me, and completely misconstrued the point being made.  Then you've pushed false narratives about how a $100k income in SF isn't 'middle-class' (by my research it's the 76th percentile for that area, which pushes it into upper-middle class territory) and how rent costs $4k there (it doesn't).  You've repeatedly referenced your spending as middle class 'or below,' talked about how people at work are buying second homes and aeroplanes but then repeatedly claimed NOT to be comparing yourselves to others ...and yet you gleefully and openly slander the cuisine of, well, mostly everybody.  You are deliberately ignoring points made by other posters and instead deflecting off trivial matters.   Finally, you're on a forum which focuses on financial optimization but proclaim that you aren't interested in saving a few hundred$ each month.

Worst of all, you are doing this to people who were legitimately trying to help you.

[inline five]

Good god I never said it wasn't that much.

I SAID WE WEREN'T RICH.

And that's when everyone started flipping out. The two are very different things.

You really don't see it?  I think people are 'flipping out' because of all the things you are saying here, and the manner in which are you saying them.

For starters you've said "BS" to at least two posters here when they were sharing some reasonable points. Your snarky response to DS about living in a van seemed like a low blow, to me, and completely misconstrued the point being made.  Then you've pushed false narratives about how a $100k income in SF isn't 'middle-class' (by my research it's the 76th percentile for that area, which pushes it into upper-middle class territory) and how rent costs $4k there (it doesn't).  You've repeatedly referenced your spending as middle class 'or below,' talked about how people at work are buying second homes and aeroplanes but then repeatedly claimed NOT to be comparing yourselves to others ...and yet you gleefully and openly slander the cuisine of, well, mostly everybody.  You are deliberately ignoring points made by other posters and instead deflecting off trivial matters.   Finally, you're on a forum which focuses on financial optimization but proclaim that you aren't interested in saving a few hundred$ each month.

Worst of all, you are doing this to people who were legitimately trying to help you.

For starters I never asked for help on the subject.

I know how to live on a shoestring budget because I've had to do so. It sucks. Most higher earners, heck most college graduates, hit the ground running and don't have to think about trying to make their half of the rent or DIYing their brakes so they can get to work the next day. Living like that is not something to strive for, trust me.

I was also referring to San Jose on my rent comment but can see how it could be misunderstood. Either way you understood what I meant so no biggie.

If you polled 100 people on what their idea of retirement was I doubt even one would say living in a van. I can't believe it was even suggested.

There is a huge difference in choosing to do something and being forced to do it. Most would call the former 'eccentric'..

I do like the idea of freedom. Don't get me wrong! That is the attraction to my industry, even though the pay generally isn't very high. I would like a small paid for house as home base. Lots of neat things you can do with what my profession offers (free travel and lots of time off). I can see the attraction to living in a van or RV part time and traveling. But that requires money.

But the discussion wasn't about that. It was, are you rich? Ok, I don't think the inference was spiritual richness...it was money...so let's move on from that. Just because people earn more than others doesn't mean they are rich. Just because someone doesn't earn much money doesn't mean they are poor.

[nereo]

For starters I never asked for help on the subject.

I know how to live on a shoestring budget because I've had to do so. It sucks. Most higher earners, heck most college graduates, hit the ground running and don't have to think about trying to make their half of the rent or DIYing their brakes so they can get to work the next day. Living like that is not something to strive for, trust me.

I was also referring to San Jose on my rent comment but can see how it could be misunderstood. Either way you understood what I meant so no biggie.

If you polled 100 people on what their idea of retirement was I doubt even one would say living in a van. I can't believe it was even suggested.

There is a huge difference in choosing to do something and being forced to do it. Most would call the former 'eccentric'..

I'm so stunned by this response it's almost left me speechless.  Almost.
You do realize that people can actually go back through the tread and re-read responses, right?

You can't believe living in a van was really suggested?  You were the one who suggested it. (here)

You weren't referring to San Francisco when you said: While it may seem like $100k is a lot of income, if you live in San Francisco or San Jose it's hardly middle class. There a one bedroom apartment is ~$4k/month.? (again, here)
(Editors note:  Rental apartments in San Jose are less than in SF.  320 listed <$2k and counting as of right now). 

As for not wanting any help, you've now made that clear and so I will stop offering you any well-intentioned suggestions.  Hopefully you can understand how posting comments about feeling 'below middle class' with a ~$100k income on a forum dedicated to financial optimization invites commentary.  I meant it when I said MMMs blog is specifically targeting people just like you, yet you seem to ignore most of what Pete has been saying. The reason I (and many others, I'd guess) made postings specifically to you is because many of us have watched others go through case studies from exactly where you seem to be now - high income (regardless of what you say $100k is well above average, even in the Bay area) but still 'feeling' like the struggling lower-middle-class, watching your co-workers purchase second homes and aeroplanes.

I'll give you that a person can earn a lot of money, fritter it away and be less well off financially than someone who makes a lower income but invests it wisely (or as you aptly put it: Just because people earn more than others doesn't mean they are rich. Just because someone doesn't earn much money doesn't mean they are poor.) Here again is why I and others interjected - you don't feel rich, even though you earn more than most. Ironically you seem to be socking away money - enough where most of us would be fully FI in under a decade, and you are - i believe just 36.  Do you see how this leads to a whole heck of a lot of confusion? It only gets more confusing to me the closer I look at the numbers you provided: $8,600 monthly income after taxes and deductions with a $200k house, no kids and no debt?  Those kinds of numbers are like catnip to this crowd.

While I will refrain from offering you more advice, I'm not about to stand by as you make snarky comments to others or post demonstrably false statements like what rent is like in SF and SJ.  I've lived there, and on far less income - and I still considered myself very well off.

[Milizard]

Well, I have assets, but my family's current gross income < what some of you are saving each year in retirement accounts, so I find the claim that income has nothing to do with being rich pretty obnoxious, to tell you the truth.  Just because you choose to put it into certain cookie jars doesn't mean you don't have it available to you.

[NaturallyHappier]

Rich is being Financially Independent.   We formerly had a combined household income on just under 500K, 350K after tax, and now we are RE and live lavishly on 1/4 of that amount.  Spending my time doing what I want to makes me rich.  Rich isn't about money.  Rich is about living life without worrying about the money. 

[nereo]

Funny haven't we had this discussion?
https://forum.mrmoneymustache.com/welcome-to-the-forum/how-to-know-if-you're-rich/

Yup.  Nothing is new.  Thanks for the re-link.

[A Definite Beta Guy]

Actually, not that much more...its pretty expensive there now.

J/k, I get the point you are trying to make.

however...

Where is the line drawn?  USA?  State?  City?  Your neighborhood?


If your whole complaint is that you are 'poor' with respect to the people on your street.....OK.   So what?

You can move to another street in another state and possibly be the 'richest'...OK.  So what?

You can also move just about anywhere else in the world if you really wanted to.

Perhaps its your comparing yourself to others that is the root cause of your dis-satisfaction?

Give up chasing the Jones.  You'll be much happier.

Besides, the Jones may or may not be as 'rich' as you think they are.

Have I said I was poor?
Have I said I compare myself to others?
How am I chasing the Jones's driving a 22 year old car which incidentally happens to be the first car I ever drove (I'm 36)? I plan to keep it until it won't run, I love it.

What are you so mad about then?

I get mad when people call me rich to throw me in a bucket that includes some obscenely wealthy people. It's also frustrating when there are various think-pieces about how I am alternately ruining America or preventing other people from realizing the American dream or whatever and therefore need to be taxed more as punishment.

7 years ago both my wife and I would be considered impoverished. We happen to be a bit below the 95th percentile now. But these comparisons should really come with some caveats. The median US household is not a married 2-income household. Married filing jointly households have an average income of $117k: our income is still quite a bit higher than that, but it's substantially LESS impressive when you compare us against other married households as opposed to American households as a whole.

It's also not fair to put us in the same category as our retired 90-year old neighbors, who stopped working 25 years ago. It's also not fair to compare us to my parents or her parents, who both have positive wealth, while we are still in Debt Emergency. Or even my sister, just a few years older, who makes less than us, but has no student debt that needs to be serviced, and has a stay-at-home father to raise kids.

Also, wealth is the relevant factor here. It's like confusing acceleration with velocity when talking about income figures.

Now, we are quite wealthy, and I won't deny that. But I get a bit miffed when I see someone like Noah Smith throw us in the same category as a Goldman Sachs executive, and propose a series of policies that would necessitate major life changes because "hey they are rich, who cares about them"?

I ate black beans and rice for lunch today, I had oatmeal for breakfast, and my dinner was chili (more beans, some green pepper, and even some ground beef!) We're not on a mission to keep up with the Joneses. We live in the same neighborhood as my VP who makes like 3 times more than me. We're not interested in keeping up with them and couldn't even if we tried.



Nereo, $100,000 for a family of four in San Francisco is considered low income, defined as 80% of the area's median income by HUD. That'd put it as lower middle class in common parlance, not rich.

[inline five]

Well, I have assets, but my family's current gross income < what some of you are saving each year in retirement accounts, so I find the claim that income has nothing to do with being rich pretty obnoxious, to tell you the truth.  Just because you choose to put it into certain cookie jars doesn't mean you don't have it available to you.

Look at it this way. If you had $100m in investment accounts and lived on $50k/yr are you rich? Yeah. Are you living a middle class lifestyle? Sure.

Ones wage doesn't make one "rich" or not. It may determine one's lifestyle. The higher the income the faster one can become "rich" and in some cases such a low income may preclude it.

There is zero shame in wanting to become "rich". Being rich gives you options. The entire idea of MMM is to become "rich".

[Milizard]

Well, I have assets, but my family's current gross income < what some of you are saving each year in retirement accounts, so I find the claim that income has nothing to do with being rich pretty obnoxious, to tell you the truth.  Just because you choose to put it into certain cookie jars doesn't mean you don't have it available to you.

Look at it this way. If you had $100m in investment accounts and lived on $50k/yr are you rich? Yeah. Are you living a middle class lifestyle? Sure.

Ones wage doesn't make one "rich" or not. It may determine one's lifestyle. The higher the income the faster one can become "rich" and in some cases such a low income may preclude it.

There is zero shame in wanting to become "rich". Being rich gives you options. The entire idea of MMM is to become "rich".

You can look at it this way:  if you make $5M a year and live a lifestyle of spending  $5M a year, you're rich. You may not be independently wealthy, since it's not sustainable indefinitely,  but you're still rich.   Rich  has to do with having lots of options for discretionary spending (or saving), while indepently wealthy has to do with not needing to work ever again.

[Vegasgirl]

So back to OP - We live in a really nice neighborhood, golf course community HCOL area and our neighbors just crack me up.  DH and I consider ourselves the "white trash" of the neighborhood.  After 15 years of living here none of our neighbors even barely speak to us.  We never had kids and obviously that is the prerequisite in our neighborhood.   We are in our forties, next store neighbors in their early seventies, both still working.  They have three cars between the two of them (2 Mercedes and a Jag convertible) they also have a second home on the eastern shore.

Man I just can't wait to FIRE next year. 

Also - We are rich, consider ourselves fortunate, but guaranteed we have way less debt then most of the folks in the neighborhood.  If we were going by only appearances, we'd seem middle of the road compared to everyone around us.  The big difference is all of our shit is paid for and we have a good size stash going on top of that.   Oh and obviously will be the early retirees in the neighborhood once we FIRE.

[nereo]

So back to OP - We live in a really nice neighborhood, golf course community HCOL area and our neighbors just crack me up.  DH and I consider ourselves the "white trash" of the neighborhood.  After 15 years of living here none of our neighbors even barely speak to us.  We never had kids and obviously that is the prerequisite in our neighborhood.   We are in our forties, next store neighbors in their early seventies, both still working.  They have three cars between the two of them (2 Mercedes and a Jag convertible) they also have a second home on the eastern shore.

Man I just can't wait to FIRE next year. 

Also - We are rich, consider ourselves fortunate, but guaranteed we have way less debt then most of the folks in the neighborhood.  If we were going by only appearances, we'd seem middle of the road compared to everyone around us.  The big difference is all of our shit is paid for and we have a good size stash going on top of that.   Oh and obviously will be the early retirees in the neighborhood once we FIRE.

Man, I've never understood households that have more cars than people - particularly very nice, expensive cars.  I'm guessing their explanation would be that "the convertible is our summer car" - but man that's an expensive, space-consuming, resource using, depreciating toy to have. ...but then there's the second home.  Assuming they don't rent it out, thats an even larger, more expensive, and ongoing expense. I love to calculate the 'cost-per-use' of such things - it's often eye wateringly absurd.

[Vegasgirl]

It's funny because they have a two car garage and for a couple years kept the Jag in storage over the winter but I noticed last winter the Jag was home but in the garage while one of the Mercedes got to sleep outside !! LOL Storage expenses must have caught up with them !! ?? Who knows ??  Yeah the other house is not rented out - I can tell you that.

Neighbors on the other side are late forties and have two teenage boys - one high school and one just in college.  Don't talk to them but I could see that as each turned 16 (and I guess got their drivers license) they each got a car too !! I think it's comical myself.  Two teenage boys and for years when we would get snow guess who is still out shoveling driveway - mom or dad. 

[HawkeyeNFO]

So back to OP - We live in a really nice neighborhood, golf course community HCOL area and our neighbors just crack me up.  DH and I consider ourselves the "white trash" of the neighborhood.

Yep, sounds like my area.  We are the "poor" family.  Usually, my next door neighbors don't even take their trash cans out to the street or put them back because their cleaning ladies do that.  About once a week, the dog grooming truck drives up and their dog gets a bath inside it. 

I don't begrudge any of the neighbors having nice stuff, I just see the reasons why they need to work until they are old, and find it ironic.  The typical American attitude of "Easy come, easy go" when it comes to money.

[nereo]

"Dog grooming trucks" are a thing?!
When I was young our dog spent half its life outside, had its baths from a hose and seemed happy as could be. "Grooming" was limited to baths and tick treatment, and once a year a new collar.  I miss that dog.

[HawkeyeNFO]

I almost never see their dog outside.  Hell, I almost never see the people outside!

[Dancin'Dog]

So back to OP - We live in a really nice neighborhood, golf course community HCOL area and our neighbors just crack me up.  DH and I consider ourselves the "white trash" of the neighborhood.  After 15 years of living here none of our neighbors even barely speak to us.  We never had kids and obviously that is the prerequisite in our neighborhood.   We are in our forties, next store neighbors in their early seventies, both still working.  They have three cars between the two of them (2 Mercedes and a Jag convertible) they also have a second home on the eastern shore.

Man I just can't wait to FIRE next year. 

Also - We are rich, consider ourselves fortunate, but guaranteed we have way less debt then most of the folks in the neighborhood.  If we were going by only appearances, we'd seem middle of the road compared to everyone around us.  The big difference is all of our shit is paid for and we have a good size stash going on top of that.   Oh and obviously will be the early retirees in the neighborhood once we FIRE.

I live in a similar situation.  I've found that having a dog to walk is a great way to see & be seen by the neighbors.  People are friendlier when they see us regularly.  I think they appreciate that we "look" poorer, because it makes them feel special, I guess.  None of them really know our business, but considering the neighborhood it's obvious we have "something" going on.  I suspect many of them, realize that they have a consumption addiction and envy our self control.  (that's what I tell myself anyway)

[Dancin'Dog]

"Dog grooming trucks" are a thing?!
When I was young our dog spent half its life outside, had its baths from a hose and seemed happy as could be. "Grooming" was limited to baths and tick treatment, and once a year a new collar.  I miss that dog.

There's even "dog poop trucks" that come to clean up their back yards! 

[Vegasgirl]

We have a dog and cat for that matter, but I just don't see a whole lot of people out in the evenings when I get home from work.  On my random days off I do see the dog grooming van, dog vet van and dog walkers out but I guess by the time I get home in the evening everyone is dogged out  for the day !! Can't say that I've seen a poop mobile though.

[clutchy]

My wife and I have a household income of around $230k. After taxes, deductions etc we only see at best $8600/month.

While that sounds like a lot of money it really isn't anywhere near being "wealthy" or "rich". We are most solidly middle class and our home is valued around $200k, my car is 22 years old hers is 7. No kids no debt etc.

Hey income pal!!  We're generally in the same ballpark.


So by any reasonable measure we are "rich" to the general populace.  I assume your take home is net of 401k's HSA's and all that other sugary goodness. 

I dont' feel rich either but being able to dump $55k into 401k's, HSA's and 529's is a pretty decent deal and one that most middle income people can't do. 


I will say location makes a pretty huge difference though.  Perhaps you're in a high tax state or ridiculous R/E market?  Those have costs but benefits down the line as well. 


I'm not coming after you but perspective is certainly called for in this case. :)

[dude]

My wife and I have a household income of around $230k. After taxes, deductions etc we only see at best $8600/month.

While that sounds like a lot of money it really isn't anywhere near being "wealthy" or "rich". We are most solidly middle class and our home is valued around $200k, my car is 22 years old hers is 7. No kids no debt etc.

When you say "deductions," I suspect you are including maxed out 401k contributions and other saving/investment?
 
We made $237k last year. Our net income after state and fed taxes, OASDI and Medicare was $182,481. That's $15,207/month. Cannot fathom how your number is so vastly different from ours. And yes, we are rich by ANY measure.

[starguru]

My wife and I have a household income of around $230k. After taxes, deductions etc we only see at best $8600/month.

While that sounds like a lot of money it really isn't anywhere near being "wealthy" or "rich". We are most solidly middle class and our home is valued around $200k, my car is 22 years old hers is 7. No kids no debt etc.

When you say "deductions," I suspect you are including maxed out 401k contributions and other saving/investment?
 
We made $237k last year. Our net income after state and fed taxes, OASDI and Medicare was $182,481. That's $15,207/month. Cannot fathom how your number is so vastly different from ours. And yes, we are rich by ANY measure.

I’m curious what would happen if you couldn’t work anymore?


Sent from my iPhone using Tapatalk

[biggrey]

What a great thread, with many excellent perspectives.  I'll only add a brief thought. 

If I read right, I earn as much or more than anyone I've seen posted here so far and we have hit 8 figures in net worth. 

Do I feel rich?  Yes.  But is it a struggle to do so?  Yes!

This is about psychology for me, issues that are deep-seated and obscure the facts.  When you grow up very poor, with nothing, and have money hanging over you, it is hard to escape the feeling of scarcity, fear and risk that the possibility of "not having" brings on.  It is a very real if irrational fear. You can't control it any more than other fears.

When you are talking about earnings, income, wealth and net worth, I agree with many comments that say you must have context and it's relative.  The fear exacerbates this need to have more for security, even when the facts indicate otherwise.

You have to work on it so you stay normal and don't obsess.  It is a mission.  I've come most of the way there but even I still have setbacks and doubts and I have no objective reason to.  We live WAY below our means and have for the years we've been making great money, enabling our earnings to covert to well-managed savings that we have protected. 

It has taken this long everything to come together and allow myself to see myself as "rich" without the constant fear of thinking I could be "poor" any time.  It is definitely true that the more you have the more there is to lose, amplified by the fear of going back to what you once were.