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Around the Internet => Antimustachian Wall of Shame and Comedy => Topic started by: caleb on September 12, 2019, 10:22:09 AM

Title: $350k = "Middle class." The endless ratcheting of expectations.
Post by: caleb on September 12, 2019, 10:22:09 AM
https://www.marketwatch.com/story/this-budget-shows-how-a-350000-salary-barely-qualifies-as-middle-class-2019-09-11

$350,000 of personal income,
Quote
while relatively huge, is barely enough, according to Dogen, for a family to lead a comfortable life in coastal counties — where almost half of the nation’s population calls home.

“You can certainly live a middle-class lifestyle earning less, but it won’t be easy if your goal is to raise a family, save for your children’s education, save for your own home and save for retirement (so you can actually retire by a reasonable age),” he wrote in a post published on CNBC on Wednesday.

(https://ei.marketwatch.com/Multimedia/2019/09/11/Photos/NS/MW-HR115_downlo_20190911132701_NS.png?uuid=5dc27b86-d4b9-11e9-adfb-9c8e992d421e)

To state the stunningly obvious, the budget they lay out - that includes a $1.8m home - isn't middle class in any city, anywhere.  It's not middle class in the Five Boroughs, and it's not middle class in the Bay Area.  The only way it's "middle class" is to restrict your unit of measure so tightly (i.e. put your blinders on so tight to the world around you) that you're really just measuring against a neighborhood.  Talking about being "middle class" on the Upper West Side or Nob Hill is just a stupid mashup of language that tries to use language for normal conditions to describe abnormal conditions.

There's some vague reference at the end of the article to how hard it is to FIRE when you spend $222k after taxes.  You don't say.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: solon on September 12, 2019, 10:30:04 AM
There is also something a little fishy about claiming the standard deduction. The budget shows $1900 a month in mortgage interest, which is $22,800 a year. Surely they are itemizing.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: bacchi on September 12, 2019, 10:47:36 AM
This article, and the FS blog article on which it's based, have been around for possibly years. Marketwatch must recycle articles when they run short.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Dollar Slice on September 12, 2019, 10:52:34 AM
Yeah, all the middle class people I know are definitely saving $50,000 a year in tax-advantaged accounts with money left over. And I can't imagine how far they must stretch every dollar to feed two toddlers on that $70/day food budget.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Tuskalusa on September 12, 2019, 10:54:32 AM
“If the goal is to amass wealth and hit the FIRE goal (financial independence, retire early), the couple needs to consider moving to a more affordable area, go to public school, limit vacations, eat at home more often and track it all so they get to understand their situation and their goals.”

Well, yeah.  If the goal is to reach FIRE, this isn’t the plan, for sure.

 In order to reach FIRE, a couple earning this much cash should be thoughtful and make a less wasteful plan. Sure, this may actually be typical of a high earning Silicon Valley couple. It’s also wasteful, lacks creativity, and is indicative of striving to keep up vs. being a true steward of one’s precious family resources.

I hate articles like this. They expose a line of privilege that makes all high earners look like jerks.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: dandarc on September 12, 2019, 10:55:55 AM
This article, and the FS blog article on which it's based, have been around for possibly years. Marketwatch must recycle articles when they run short.
Don't have to read too much of the FS blog to conclude that if it is written by Financial Samurai, it is probably a deeply flawed analysis.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Padonak on September 12, 2019, 10:57:59 AM
This f'ing big baller troll should marry Suzie Orman. They'll make a good couple spewing their bullshit together.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Kazyan on September 12, 2019, 11:36:43 AM
If your idea of a normal middle class lifestyle includes $6,190 per month on housing, start over.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: YoungGranny on September 12, 2019, 11:40:46 AM
Could you imagine if somebody posted that as a case study here?
-4,200 for baby items
-7,800 for three weeks of vacations a year
-6,000 for entertainment
-4,8000 on clothing
-25,500 on food

Daaaamn those 5 line items are ~48k which is around my total average annual spend. I must clearly be living in poverty if that's middle class spending.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: BECABECA on September 12, 2019, 11:55:32 AM
There is also something a little fishy about claiming the standard deduction. The budget shows $1900 a month in mortgage interest, which is $22,800 a year. Surely they are itemizing.

That changed recently. As of tax year 2018, you can only deduct mortgage interest on up to $750,000 borrowed for primary residence. The previous limit was $1,000,000 (although you might be able to still deduct mortgage interest on loans up to 1 million if you secured the mortgage before the tax change). Not sure how much their mortgage is for, but likely only half of the mortgage interest is tax deductible due to the limits, so taking the standard deduction is actually the best they can do.  Another reason it sucks to live in a HCOL area.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: CCCA on September 12, 2019, 11:56:29 AM
Living in the Bay Area, you definitely see this sort of lifestyle creep / raising of expectations when people around you spend money on all sorts of non-essential things or inflated amounts of money on normal things. 


The childcare + preschool expense is $53k, way high for what looks like 2 kids.  And food is pretty crazy too.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Davnasty on September 12, 2019, 01:06:26 PM
Their "middle class" monthly spend on food is surprisingly close to APowers annual spend, also with 2 kids. $2,129/month vs $2,613/year

https://forum.mrmoneymustache.com/share-your-badassity/have-a-sub-$200month-grocery-budget/msg1795356/#msg1795356 (https://forum.mrmoneymustache.com/share-your-badassity/have-a-sub-$200month-grocery-budget/msg1795356/#msg1795356)
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: RFAAOATB on September 12, 2019, 02:01:02 PM
How do you draw the line between middle class and upper class when you can easily spend a half million dollars on not that much more value?

Should private schools be a rich family only deal?  For a million dollar house you’d think you would live in a good school district.

What about a house in the 2,000 square feet range?  That’s only a small step up from the starter home a working class family can aspire to.

Is it purely an income issue with little wiggle room for local cost of living? After all their income is about 3-4 times the median along with house prices and taxes, but other expenses shouldn’t rise as proportionally.

How much debt to income does a middle class high earning family have on a million dollar home compared to some rich person has on their baller mansion?  How much does a rich person have to spend to escape the credit and debt enabled reach of the middle class?

My opinion on what makes these people middle class is their dependence on high income jobs.  Until their investment returns cover their expenses they will always have that cloud of fear above them that they could lose everything.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: fattest_foot on September 12, 2019, 02:12:30 PM
I don't think you can call someone living in a $1.8M house "middle class" with a straight face.

If San Francisco is really that expensive, maybe it's not worth living in San Francisco no matter how great people tell you the jobs are?
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: ysette9 on September 12, 2019, 02:56:06 PM
Living in the Bay Area, you definitely see this sort of lifestyle creep / raising of expectations when people around you spend money on all sorts of non-essential things or inflated amounts of money on normal things. 


The childcare + preschool expense is $53k, way high for what looks like 2 kids.  And food is pretty crazy too.
Another chiming in from the Bay Area perspective. $1.8M is certainly not average/middle class, but there are many areas here where that will buy you a house that looks middle class. 4 bed, 2 bath with a yard and white picket fence yadda yadda. The thing is that living here with an amazing job market almost perfect weather and outdoor activities and cultural diversity means you have to sacrifice in other areas, and housing is the first item on the chopping block. So normal people here live in houses everyone else would think are too small. Or condos. Or townhomes. You just can’t move from Nowheresville and expect to duplicate that lifestyle here because normal people, even tech workers, just can’t buy 2000-3000ft^2 houses.

Childcare costs are temporary but seem pricey to me, and that is from my HCOL perpective. Food is out of control. I don’t understand $500/month 529 contributions, but maybe they are front loading for the max tax benefits?
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: ysette9 on September 12, 2019, 02:58:29 PM

Should private schools be a rich family only deal? For a million dollar house you’d think you would live in a good school district.

You would think that. There are pockets where that is not the case and we happen to live in one. I’m not complaining though because this place has a lot to offer, not least along them the salaries we can get here which make the housing attainable.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: FireHiker on September 12, 2019, 03:15:05 PM
Wow, even at our peak spendy-ness, we never came CLOSE to these numbers...I cannot even fathom. But, we are sitting just over 300k gross and I have had the conversation with my husband that, NO, we are not middle class. He seemed to think we were...and he's a pretty rational person most of the time. I think it's easy to live in a bubble and consider yourself "average" when compared against your immediate community. He also started the game on third base with a nice, upper middle childhood with stability and good schools,etc. I grew up in poverty and was homeless as a child; we have very different perspectives I think.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: APowers on September 12, 2019, 03:38:32 PM
Uh.....Hey, I have an idea! Why don't they just turn their paycheck over to me, and I will take care of everything. I will find a babysitter and preschool, run the household budget, give them $150 a month disposable income, and keep whatever scraps are left for myself. Ok? Great! I'll just make myself at home in the butler's wing of the mansion.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: PDXTabs on September 12, 2019, 04:43:22 PM
...we are sitting just over 300k gross and I have had the conversation with my husband that, NO, we are not middle class.

I'm not sure I actually agree. The middle class grew out of feudal Europe where originally there was a noble class and everyone else (peasants). Eventually, a merchant class arose. Some of the merchant class were very wealthy and some had much more modest means but they were all separated from the noble class in that they worked for a living, where as the noble class lived off of tribute. At this point you had three classes: nobility, merchants, and everybody else (peasants).

I could make an analogous argument that today we have something similar: capitalists class, middle class, and working class.

If you still have to work for a living, you might well be middle class IMHO.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Kyle Schuant on September 12, 2019, 06:59:55 PM
https://dqydj.com/income-percentile-calculator/ (https://dqydj.com/income-percentile-calculator/)

In the US, an income of $300k puts you in the 99th percentile, that is to say, the top 1% of the country. Half that (assuming 2 people getting half of that each, which would have different tax results in most areas) is $150k which is 95th percentile, or top 5%.

I am not sure how "top 1-5%" becomes "middle." It's like calling a Lieutenant General a "middle-ranking" officer. As the article linked above says,

"Middle class is household income from $34,061 to $136,244 by the most common definition. This definition of middle class is half of median household income up to twice median household income."
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Travis on September 12, 2019, 07:19:22 PM
This article, and the FS blog article on which it's based, have been around for possibly years. Marketwatch must recycle articles when they run short.

Pretty sure this chart has been discussed on this thread within the last year.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: PDXTabs on September 12, 2019, 08:55:33 PM
I am not sure how "top 1-5%" becomes "middle." It's like calling a Lieutenant General a "middle-ranking" officer. As the article linked above says,

It's the middle class, not the median class. If it were the median class you would have to have more than a high school diploma and less than an associates degree.

From Wikipedia (https://en.wikipedia.org/wiki/Upper_middle_class):

The American upper middle class is defined similarly using income, education and occupation as the predominant indicators.[1] In the United States, the upper middle class is defined as consisting mostly of white-collar professionals who not only have above-average personal incomes and advanced educational degrees[1] but also a higher degree of autonomy in their work.
...
The American middle class (and its subdivisions) is not a strictly defined concept across disciplines, as economists and sociologists do not agree on defining the term.[4] In academic models, the term "upper middle class" applies to highly-educated, salaried professionals whose work is largely self-directed. Many have postgraduate degrees, with educational attainment serving as the main distinguishing feature of this class. Household incomes commonly exceed $100,000. [5] Typical professions for this class include lawyers, physicians, military officers, psychologists, certified public accountants, pharmacists, optometrists, financial planners, dentists, engineers, professors, architects, school principals, urban planners, civil service executives, and civilian contractors.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Dollar Slice on September 12, 2019, 09:21:36 PM
If you still have to work for a living, you might well be middle class IMHO.

I don't think this is a good way to measure. If I'm making $30m a year and spending all of it, I still have to work - but I'm sure as hell not middle class as I fly in my luxury jet to my private island for the Beyonce concert I arranged for my kid's sweet 16. It would be absurd to the vast majority of people to call that person "middle class" and someone living in a van on a ramen diet "rich" because they're FIRE/ERE. It's great if you have different values and ideas about work than most people (we all do around here) but changing the definition of commonly understood words isn't really helpful if you want to communicate with others.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Paul der Krake on September 12, 2019, 09:37:20 PM
If you still have to work for a living, you might well be middle class IMHO.

I don't think this is a good way to measure. If I'm making $30m a year and spending all of it, I still have to work - but I'm sure as hell not middle class as I fly in my luxury jet to my private island for the Beyonce concert I arranged for my kid's sweet 16. It would be absurd to the vast majority of people to call that person "middle class" and someone living in a van on a ramen diet "rich" because they're FIRE/ERE. It's great if you have different values and ideas about work than most people (we all do around here) but changing the definition of commonly understood words isn't really helpful if you want to communicate with others.
What kind of shit parent are you if your child has to wait 16 years to have Beyonce at their own concert?
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: PDXTabs on September 12, 2019, 09:43:34 PM
If you still have to work for a living, you might well be middle class IMHO.

I don't think this is a good way to measure. If I'm making $30m a year and spending all of it...

might - used to say that something is possible - Merriam-Webster

If you're making 30m a year and you aren't very quickly indoctrinated into the capitalist class you are a moron.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Dollar Slice on September 12, 2019, 09:59:11 PM
If you still have to work for a living, you might well be middle class IMHO.

I don't think this is a good way to measure. If I'm making $30m a year and spending all of it...

might - used to say that something is possible - Merriam-Webster

So all you're trying to say is that people who work may or may not be middle class?
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Michael in ABQ on September 12, 2019, 10:01:52 PM
Living in the Bay Area, you definitely see this sort of lifestyle creep / raising of expectations when people around you spend money on all sorts of non-essential things or inflated amounts of money on normal things. 


The childcare + preschool expense is $53k, way high for what looks like 2 kids.  And food is pretty crazy too.

I have a friend living in the Bay Area and he's about to get married. They decided to do it in L.A. because it was "so much cheaper". They still planning on spending something like $30-40k for an event with maybe 40-50 people.

When my wife and I got married we spent about $500. $40,000 is about 9 months of living expenses for us and they're planning to spend that on part of a day. It blows my mind. But combined they make probably $250k+. Then again their one-bedroom apartment rent is three times what my five-bedroom house rent is.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: norajean on September 12, 2019, 10:16:03 PM
There is no class structure in the US. There are homeless jobless millionaires, billionaires who work 15 hours per day, Walmart greeters with British titles, and everything in between. If you use food stamps you are possibly lower class.if you golf with Trump you may be upper class. Anything else may be middle.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: PDXTabs on September 12, 2019, 10:38:15 PM
So all you're trying to say is that people who work may or may not be middle class?

I wrote a lot more than that, maybe go back and read it carefully. Also maybe pick up some history books and read until you realize that historically society has had two classes, an upper class and some much worse off class (even Investopedia has an article on it (https://www.investopedia.com/articles/investing/102914/main-characteristics-capitalist-economies.asp)). The middle class isn't the middle because you have a median income. It's the middle because it goes between what Marx would call the Bourgeois and the Working Class. But in order to be Bourgeois you need to own the means of production, so it is hard to say that you are Bourgeois if you don't have capital.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Dollar Slice on September 12, 2019, 11:05:32 PM
I understood your point, I just disagree with you about what "middle class" and "rich" mean in 2019 America. Disagreeing with you doesn't mean I'm uneducated or didn't read your post, but if it makes you feel better to be condescending to strangers on the internet, knock yourself out.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: jeff191 on September 13, 2019, 07:11:39 AM
Also could be impacted by the SALT cap. I itemized every year until this last filing where the increased standard deduction was better. With the $10K limit, I lost about $15K in deductions and that pushed us under the $24K standard deduction. My mortgage interest is ~$11K and not $22.8K though. With interest that high, even with SALT cap and lower deductibility limits, seems like they should still be able to get over $24K and itemize.



There is also something a little fishy about claiming the standard deduction. The budget shows $1900 a month in mortgage interest, which is $22,800 a year. Surely they are itemizing.

That changed recently. As of tax year 2018, you can only deduct mortgage interest on up to $750,000 borrowed for primary residence. The previous limit was $1,000,000 (although you might be able to still deduct mortgage interest on loans up to 1 million if you secured the mortgage before the tax change). Not sure how much their mortgage is for, but likely only half of the mortgage interest is tax deductible due to the limits, so taking the standard deduction is actually the best they can do.  Another reason it sucks to live in a HCOL area.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: PDXTabs on September 13, 2019, 08:21:51 AM
I understood your point, I just disagree with you about what "middle class" and "rich" mean in 2019 America. Disagreeing with you doesn't mean I'm uneducated or didn't read your post, but if it makes you feel better to be condescending to strangers on the internet, knock yourself out.

Then I welcome you to articulate your disagreement with my ideas instead of repeatedly quoting one sentence I wrote out of context.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Kazyan on September 13, 2019, 08:58:50 AM
Since this thread is still stuck in my head: it's weird how that lifestyle is described as "barely" middle class. If they had even more money...what would they do with it? As far as I can tell, that example doesn't have to make any choices about their standard of living; they do everything. The budget has every amenity a middle-class family could want, including some whining that you have a silly $30k clown car instead of a ridiculous $90k clown car. The example is "barely" middle class because if they had any more income, they'd be upper class.

EDIT: Regarding the discussion of American social classes, "income" and "relationship to capital" are both required to get a clear picture of America's class system. I don't understand it well enough to definitively categorize it, though, aside from the basics.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: BlueHouse on September 13, 2019, 09:57:11 AM

Should private schools be a rich family only deal? For a million dollar house you’d think you would live in a good school district.

You would think that. There are pockets where that is not the case and we happen to live in one. I’m not complaining though because this place has a lot to offer, not least along them the salaries we can get here which make the housing attainable.

I've been thinking about this quite a bit lately.  Should good school districts be available only to rich or upper middle class areas?  After many decades of ingrained capitalism, I'm really starting to wonder why some children don't get as good schooling as others.  Shouldn't all children be treated equally regardless of where they live?
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Just Joe on September 13, 2019, 11:01:19 AM
Wow, even at our peak spendy-ness, we never came CLOSE to these numbers...I cannot even fathom. But, we are sitting just over 300k gross and I have had the conversation with my husband that, NO, we are not middle class. He seemed to think we were...and he's a pretty rational person most of the time. I think it's easy to live in a bubble and consider yourself "average" when compared against your immediate community. He also started the game on third base with a nice, upper middle childhood with stability and good schools,etc. I grew up in poverty and was homeless as a child; we have very different perspectives I think.

Here in flyover country those numbers are laughable. I'm pretty sure an income like that would make a person among the richest dozen in our county. We have a few properties here in that price range. Mostly purchased by people fleeing HCOL areas on the coasts for retirement. Not easy to unload later when they realize they don't want to manage a huge house in their 70s and 80s.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: FireHiker on September 13, 2019, 11:45:09 AM
I've been thinking about this quite a bit lately.  Should good school districts be available only to rich or upper middle class areas?  After many decades of ingrained capitalism, I'm really starting to wonder why some children don't get as good schooling as others.  Shouldn't all children be treated equally regardless of where they live?

I personally think all children should have similar school available to them, but since we can afford to live in a "top" school district, we do...it doesn't hurt that it's a one mile commute. I honestly have mixed feelings and worry our kids will grow up in too affluent of a bubble though. A few years ago there was low-income (section 8) housing built directly across from our very highly ranked high school, which I thought was fantastic. OMFG the outcry from all the rich "nimby"s in the community was appalling. I have never been more disgusted by my "peers".
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: RFAAOATB on September 13, 2019, 11:55:03 AM

Should private schools be a rich family only deal? For a million dollar house you’d think you would live in a good school district.

You would think that. There are pockets where that is not the case and we happen to live in one. I’m not complaining though because this place has a lot to offer, not least along them the salaries we can get here which make the housing attainable.

I've been thinking about this quite a bit lately.  Should good school districts be available only to rich or upper middle class areas?  After many decades of ingrained capitalism, I'm really starting to wonder why some children don't get as good schooling as others.  Shouldn't all children be treated equally regardless of where they live?

Yeah but that’s not going to happen.  As long as schools are funded by property taxes and neighborhoods are economically segregated, it’s a zero sum game that has little attraction for choosing to go to a school less economically and academically matching your lifestyle.

This is something I am considering for my next move.  Do I save a ton of money buying a small affordable house in a less than ideal district or spend way more than I should buying my way into a million dollar neighborhood good school district?

While studies say parental influence is a better indicator of academic success than school ratings, they don’t measure social success.  Kids can get good grades anywhere, but do you want your kids surrounded by people where living frugal isn’t a choice and there are way to many peers with adverse childhood experiences?
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: mm1970 on September 13, 2019, 01:23:07 PM

Should private schools be a rich family only deal? For a million dollar house you’d think you would live in a good school district.

You would think that. There are pockets where that is not the case and we happen to live in one. I’m not complaining though because this place has a lot to offer, not least along them the salaries we can get here which make the housing attainable.

I've been thinking about this quite a bit lately.  Should good school districts be available only to rich or upper middle class areas?  After many decades of ingrained capitalism, I'm really starting to wonder why some children don't get as good schooling as others.  Shouldn't all children be treated equally regardless of where they live?

Yeah but that’s not going to happen.  As long as schools are funded by property taxes and neighborhoods are economically segregated, it’s a zero sum game that has little attraction for choosing to go to a school less economically and academically matching your lifestyle.

This is something I am considering for my next move.  Do I save a ton of money buying a small affordable house in a less than ideal district or spend way more than I should buying my way into a million dollar neighborhood good school district?

While studies say parental influence is a better indicator of academic success than school ratings, they don’t measure social success.  Kids can get good grades anywhere, but do you want your kids surrounded by people where living frugal isn’t a choice and there are way to many peers with adverse childhood experiences?
I mean, it depends.  It depends on how many.  My kids are at schools like that.  Where there are multiple families to a house, where the kids do not have furniture, where the mother was murdered by her boyfriend, where parents were arrested for dealing meth.

So far, it appears to have taught my kids (we help, of course) compassion.  And appreciation for what they have.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: bostonjim on September 14, 2019, 06:48:07 PM
"MIddlle income" is a statistic.  "Middle Class" is a certain way of life.  They overlap in some places, depending on the COL in the area (In other words, in some places a middle income is enough to afford the things that go along with being "middle class").  But in some places (particularly on the Coasts), there are only a small fraction, considerably above the median or the average, that can legitimately be considered "middle class".  Where I live the Boston area, a household income of $100,000 is just barely enough to get you there (and then only in the less-fashionable towns - think "M" towns, not "W", for those in the know about Boston).

This is not new - I forget who it was, but there was a College professor in the early 20th century who wrote an artlicle about how academics were being squeezed out of the middle class because  on his salary he could barely afford 2 live in servants...
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Kyle Schuant on September 14, 2019, 06:56:07 PM
"MIddlle income" is a statistic.  "Middle Class" is a certain way of life. 
Top 5%.

The only people who make such a distinction are those in the top 5%. To everyone else, that's upper class. They might be upper class and managing their money badly, but even billionaires can do that - they're still upper class.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: TomTX on September 14, 2019, 07:15:08 PM
https://dqydj.com/income-percentile-calculator/ (https://dqydj.com/income-percentile-calculator/)

In the US, an income of $300k puts you in the 99th percentile, that is to say, the top 1% of the country. Half that (assuming 2 people getting half of that each, which would have different tax results in most areas) is $150k which is 95th percentile, or top 5%.

Note that your link was to the individual income calculator. The household income calculator is here:

https://dqydj.com/household-income-percentile-calculator/

$300k would be at 97% instead of 99% - it doesn't really change the point. Top 5%. They ain't middle class.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: PDXTabs on September 14, 2019, 10:48:45 PM
"MIddlle income" is a statistic.  "Middle Class" is a certain way of life.

It's the class between the people that have almost all of the power and the people that have almost none of the power. It's the class in the middle of the working class and the capitalist class. It is also anomalous historically. Humans don't typically have a middle class, which is why Peter Temin (Professor of Economics Emeritus at MIT) can write The Vanishing Middle Class (https://mitpress.mit.edu/books/vanishing-middle-class). If the middle class were the people with a middle/median income they could never vanish.

It's a good book BTW, I highly recommend it.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: The_Big_H on September 16, 2019, 06:23:56 AM
I want to know what they are eating on $70 a DAY for 2.5 people (2 adults and two 1/4 adults)?
I bet each spend $6 a day on coffee and $15 each on lunch yet everyday “it’s our one treat”

With that gas bill they must be driving 24,000 miles a year total. Wowzers 

Oh and $400 a MONTH on baby stuff?  Well I can see that I’ve been through “bye bye money” (buy buy baby)
$1200 strollers that fold themselves
$2000 baby room furniture “collections”
$500 monitors
Ripping off newborn parents is a sport it seems
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: mm1970 on September 16, 2019, 11:43:27 AM
I want to know what they are eating on $70 a DAY for 2.5 people (2 adults and two 1/4 adults)?
I bet each spend $6 a day on coffee and $15 each on lunch yet everyday “it’s our one treat”

With that gas bill they must be driving 24,000 miles a year total. Wowzers 

Oh and $400 a MONTH on baby stuff?  Well I can see that I’ve been through “bye bye money” (buy buy baby)
$1200 strollers that fold themselves
$2000 baby room furniture “collections”
$500 monitors
Ripping off newborn parents is a sport it seems
In a HCOL if you are buying organic, grass fed, etc., that total for a family of 4 is a no-brainer.

My source: friends.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Nick_Miller on September 16, 2019, 11:57:45 AM
-25,500 on food

get in mah belly!!!

Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: cloudsail on September 16, 2019, 03:30:54 PM
I want to know what they are eating on $70 a DAY for 2.5 people (2 adults and two 1/4 adults)?
I bet each spend $6 a day on coffee and $15 each on lunch yet everyday “it’s our one treat”

With that gas bill they must be driving 24,000 miles a year total. Wowzers 

Oh and $400 a MONTH on baby stuff?  Well I can see that I’ve been through “bye bye money” (buy buy baby)
$1200 strollers that fold themselves
$2000 baby room furniture “collections”
$500 monitors
Ripping off newborn parents is a sport it seems

Yeah, I was super curious about what they were eating and buying too. I consider ourselves to be pretty spendy people, but even at our spendiest we didn't spend nearly that much.

Maybe lots of Michelin stars for their date nights??
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: TheGrimSqueaker on September 16, 2019, 05:02:51 PM
I want to know what they are eating on $70 a DAY for 2.5 people (2 adults and two 1/4 adults)?
I bet each spend $6 a day on coffee and $15 each on lunch yet everyday “it’s our one treat”

With that gas bill they must be driving 24,000 miles a year total. Wowzers 

Oh and $400 a MONTH on baby stuff?  Well I can see that I’ve been through “bye bye money” (buy buy baby)
$1200 strollers that fold themselves
$2000 baby room furniture “collections”
$500 monitors
Ripping off newborn parents is a sport it seems

Yeah, I was super curious about what they were eating and buying too. I consider ourselves to be pretty spendy people, but even at our spendiest we didn't spend nearly that much.

Maybe lots of Michelin stars for their date nights??

Either that, or consistent use of take-out because they're both "too tired" to cook after a long day of work. It's consistent with the habit of using restaurants for breakfast and lunch because they don't have the skill or the inclination to plan meals, cook on the weekends, prepare a bagged lunch, or even prepare a bagel or something to eat on the way to work.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Bloop Bloop on September 16, 2019, 10:20:27 PM
Without trying to defend the majority of their spending (I spend $45k a year and can't imagine spending 6 figures a year), I know plenty of professional couples, including my partner and me, who rarely cook on weeknights, because we are tired and we like the simplicity of a ready-made meal. If you're both making a professional wage it's hardly extravagant, especially if there is a mechanism (like in my case where I'm self-employed, or in the circumstance of someone who's paid overtime) where you can earn a lot more staying back half an hour than it would cost to buy a few meals.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: The_Big_H on September 16, 2019, 11:05:32 PM
Without trying to defend the majority of their spending (I spend $45k a year and can't imagine spending 6 figures a year), I know plenty of professional couples, including my partner and me, who rarely cook on weeknights, because we are tired and we like the simplicity of a ready-made meal. If you're both making a professional wage it's hardly extravagant, especially if there is a mechanism (like in my case where I'm self-employed, or in the circumstance of someone who's paid overtime) where you can earn a lot more staying back half an hour than it would cost to buy a few meals.

For me, its just as much a health thing than it is a money vs time thing.  I'm slowly crawling my way back to regular obese (was morbidly obese) and hopefully to just "overweight" in the future.  Part of that has been largely ceasing going out all the time and avoiding pre-packaged meals.

Might I recommend a crock pot?  By far my favorite way to cook, wife makes breakfast while I make dinner pre-kid awakening.  Usually takes 15 minutes to throw everything in.  Set on low for 8-10 hours (use a timer one if you need it to cook less and go to "warm" till you get home).  Come home and voila meat and veggies are all done and the house smells of deliciousness (ive done vegan meals too in crockpot).

Aside from that, use of a broiler is extremely easy to cook a couple pieces of fish or steak or chicken or pork loins.  Two minutes to lay non-stick AL foil down and season two pieces of meat, while broiling for 15-20 minutes on low (turn once), toss some rice, water and large portion of vegetables into a rice+steam cooker.  Next to no cleanup (toss the AL foil).

One can also whip up a rather nice salad by just throwing 3-5 ingredients and a dressing into a giant bowl and stir away.  Total time = 5 minutes, take out some work aggression on that stirring action :)

Desert = fruits, the original convenience food of our cave-man ancestors.

I think this is why our dear leader has pointed out many times how commuting long distances is really terrible.  I can see why now because a 45 minute commute = 90 minutes total.  MORE than enough time to cook, clean, unwind, all eaten up in a car.  I wonder how much of people being tired from work is the fact that it takes 10-11 hours out of your day (rat race commutes plus hour lunches) versus the 8 hours actually worked.  Our goal is door-to-door 8.75 hours, 15 minutes commute and 15 minute lunch (usually sandwich or salad or leftover).
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Bloop Bloop on September 16, 2019, 11:12:00 PM
Thanks for those suggestions, Big H! As you say, the decision to try to eat in more often is driven more by health concerns than cost/benefit analysis about spending. Processed/take-away food is rarely healthy, and the alternative of buying salads and other vaguely healthy stuff from the supermarket is a bit of a chore, so it's better in the long run for us to try to figure out an uncomplicated way of cooking. I will check out the crock pot suggestion!
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Bloop Bloop on September 17, 2019, 02:10:01 AM
So all you're trying to say is that people who work may or may not be middle class?

I wrote a lot more than that, maybe go back and read it carefully. Also maybe pick up some history books and read until you realize that historically society has had two classes, an upper class and some much worse off class (even Investopedia has an article on it (https://www.investopedia.com/articles/investing/102914/main-characteristics-capitalist-economies.asp)). The middle class isn't the middle because you have a median income. It's the middle because it goes between what Marx would call the Bourgeois and the Working Class. But in order to be Bourgeois you need to own the means of production, so it is hard to say that you are Bourgeois if you don't have capital.

It's silly to say there are only two classes. There's a petit bourgeoisie - the tradies, shop owners, doctors, law firm partners etc who start off as employees but end up with a tiny slice of capital, and who control their own work and run their own businesses.

Everyone owns his or her body and brain, and that's the means of production that's most important today.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: PDXTabs on September 17, 2019, 06:43:07 AM
It's silly to say there are only two classes. There's a petit bourgeoisie - the tradies, shop owners, doctors, law firm partners etc who start off as employees but end up with a tiny slice of capital, and who control their own work and run their own businesses.

I completely agree, that basically mirrors the upper middle class wikipedia article that I linked to above. But it is also true that my grandfather was able to accumulate capital with an eight grade education at a blue collar job with a good pension and that part of the middle class is almost gone and arguably never going to come back.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: cloudsail on September 17, 2019, 10:14:14 AM
The thing is, there was a period last year and early this year where we ate out or got takeout waaaay more than we should. Like multiple times on the weekdays and three or four times on the weekends. Yeah not proud of it, and we've since gotten our act together. But even then our food spending wasn't as much as this couple's. Which is why I find it hard to imagine what it is they could possibly be eating.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: cats on September 17, 2019, 10:28:21 AM

The childcare + preschool expense is $53k, way high for what looks like 2 kids.  And food is pretty crazy too.

Also living in the Bay Area, for two working parents the childcare+preschool expense for two kids is maybe on the higher end, but doesn't look that out of line to me. We currently have a 3.5-year-old.  His preschool is about $1800/month.  For a child under 2, it would be more like $2200/month.  So if we had a second child and were both working, we'd be paying $48k/yr.  We did look around at different options when we were setting up childcare.  We found that 1) there's not a lot of choice in terms of just who has spots open 2) many cheaper places have hours that don't really work well for two parents working FT (which I think is the case for most families grossing this kind of income...).  We looked at another place near our house that was a little cheaper, but was open only 8-5:30, vs 7-6.  I know families who have their kids in places with the shorter hours and guess what, they often will have a nanny picking the kids up a few days a week, making childcare overall more expensive.

I'm not going to say that my husband and I are "middle class", I know our income means we are doing pretty well, even for our area.  But within the Bay Area, housing is in relatively short supply and the result is that buying a home is a pretty daunting proposition even WITH a large salary.  A small 2-bedroom house down the street from us went for $1.3 million two years ago and we do not live in Nob Hill.  I can see how people with large salaries feel they are only "middle class" when that's the home their mammoth salary will buy.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: mm1970 on September 17, 2019, 10:42:01 AM

The childcare + preschool expense is $53k, way high for what looks like 2 kids.  And food is pretty crazy too.

Also living in the Bay Area, for two working parents the childcare+preschool expense for two kids is maybe on the higher end, but doesn't look that out of line to me. We currently have a 3.5-year-old.  His preschool is about $1800/month.  For a child under 2, it would be more like $2200/month.  So if we had a second child and were both working, we'd be paying $48k/yr.  We did look around at different options when we were setting up childcare. We found that 1) there's not a lot of choice in terms of just who has spots open 2) many cheaper places have hours that don't really work well for two parents working FT (which I think is the case for most families grossing this kind of income...).  We looked at another place near our house that was a little cheaper, but was open only 8-5:30, vs 7-6.  I know families who have their kids in places with the shorter hours and guess what, they often will have a nanny picking the kids up a few days a week, making childcare overall more expensive.

I'm not going to say that my husband and I are "middle class", I know our income means we are doing pretty well, even for our area.  But within the Bay Area, housing is in relatively short supply and the result is that buying a home is a pretty daunting proposition even WITH a large salary.  A small 2-bedroom house down the street from us went for $1.3 million two years ago and we do not live in Nob Hill.  I can see how people with large salaries feel they are only "middle class" when that's the home their mammoth salary will buy.
This is something that fascinates me, and makes me glad we never made the move to Bay Area, like many of our friends.

Yes, we could be making a lot more money.  Prob $200k more, if I were hazard a guess.

But, we were visiting friends a couple of years ago, and they were on the nanny hunt, as theirs just up and quit. Their jobs were being nice and flexible with work at home and leaving early in the meantime.  (School aged children, lots of after school activities.)

So, our friends asked how we survive without a nanny?  I said "well, we just shift our schedules".  Meaning, one of us works 7:30 - 4:30 and the other works 9-6, or thereabouts.  So the later start person does kid drop off and the early start person does kid pick up.  Of course there's the occasional in service day, sick day, dr appts, etc., where we may work from home more than that.  And when my spouse travels, my hours are 9 to 4:45, because I have to do both.  (Our kids have after school programs at their school.)

And, they really couldn't conceive of this idea - of work/life balance, or of the work place being understanding of those schedules.  Now, I don't know exactly what hours they work (it was a weekend).  That brought back memories of my days in DC with the more type-A cutthroat, crazy work hours schedule that is expected.  I want nothing of that.  I guess it can be never ending if everyone does it.  At least where I am (coastal So/ central Cal), I was able to push back on that.  It wasn't easy (I was the only mom).
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: mm1970 on September 17, 2019, 10:52:49 AM
The thing is, there was a period last year and early this year where we ate out or got takeout waaaay more than we should. Like multiple times on the weekdays and three or four times on the weekends. Yeah not proud of it, and we've since gotten our act together. But even then our food spending wasn't as much as this couple's. Which is why I find it hard to imagine what it is they could possibly be eating.
It's really not that hard to get there with a combination of a few things:
1.  Organic/ grass fed.  If you are eating grass fed, local, organic, meats and wild fish...I have friends who do this, and buy local.  For a family of 4 or 5, you are easily eating 2 lbs a day, probably more.  And at $10 / lb MINIMUM (that's what ground beef costs, you really have to assume an average of $15/ lb) = $11,000 a year in meat alone.

2. Organic fruits and veg can easily be $3000/ year.  That's about what we spend (though for us, that's 35% of our total budget).

3.  Meals out.  If you eat out once a week for the whole family, you can easily hit $100.  Heck, my kids get a hankering for a particular sandwich place and it's $65 for 4 sandwiches.  That's another $5000.

There you are at almost $20,000, and you haven't even bought milk or rice or beans or pasta or cheese.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: cloudsail on September 17, 2019, 10:55:16 AM
Can't you get a nanny or au pair for much less than 50k per year? When we were in the Bay Area and I was still working, we had a live-in nanny. She also picked up my son from preschool and did basic chores, and didn't cost nearly that much.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: cats on September 17, 2019, 11:30:56 AM
Can't you get a nanny or au pair for much less than 50k per year? When we were in the Bay Area and I was still working, we had a live-in nanny. She also picked up my son from preschool and did basic chores, and didn't cost nearly that much.

We briefly did a nannyshare.  Splitting the nanny cost between 3 kids was about the same as daycare, splitting between 2 kids was quite a bit more than daycare (we did do it legally w/ payroll taxes and all that, which definitely drives the cost up a bit).  An au pair or live in might be cheaper, but requires a larger (and more expensive) home as they will need their own bedroom.  We didn't look into a live-in option much as we definitely did NOT have space.

I know with our daycare, the cost has gone up pretty regularly each year, by $50-150/mo each year.  Not sure when you were living here but if it was a while ago that may be why the cost seems high.

We have definitely been looking around to move, just having a hard time settling on the next place.  Unfortunately a lot of the good/interesting jobs are in areas that are still quite expensive.  We also really want to live somewhere that doesn't require daily driving, which seems to be tricky in many areas.  For the moment we realize this is the price we pay for living here (and aside from housing and childcare, our costs are VERY low...much lower than a lot of what I see posted on these forums!).  And while we moan about the cost of buying a house or childcare, we're still socking away plenty of money and I would *never* say that we are "barely getting by".  We're very comfortable from a financial standpoint.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: cats on September 17, 2019, 11:53:20 AM
To add onto the childcare cost aspect, Elizabeth Warren has proposed a universal childcare program which caps the cost of childcare at 7% of a family's salary.  I haven't seen any specifics on whether that is 7% per child or per family, but if it is per child, well....7% of $350k is $24k/yr.

Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: cats on September 17, 2019, 12:41:37 PM
And to triple post :)  As someone who does live in the Bay Area, I do find *most* of the numbers on this budget to be...high.  Some stuff we manage to do that this fictional and "vetted by thousands of Financial Samurai readers" family does not:

Food: First, we don't do a weekly date night.  Since we're already paying $$ for daytime childcare, we take advantage of that and meet for brown bag lunch dates.  We also cook most of our food from scratch and shop specials, don't eat much meat, etc.  I looked back through our past few years of spending and even when I was pregnant (when we were definitely eating more convenience foods and I was buying random single serving this or that hoping it might help with morning sickness) we were spending about $18/day on food.  Other years have been less.  Okay, we are only 3 people, but I don't see a second kid suddenly hoovering up $50/day in food.  If you are two people earning $350k per year presumably at least some of your food needs are subsidized by your employer (i.e. company cafeteria, lots of office snacks, or just basic out of town travel requiring you to expense meals to your employer...my company is not particularly lavish in this regard and I still probably average one meal per week on the company dime, and I know there are other positions within my company that involve a lot more business lunches).  Also, if you're paying as much as we do for childcare, the place should be supplying at LEAST your kids weekday snacks, some places also do lunch.  My point here is that no family of four bringing in $350k/yr is actually paying for 12 meals per day out of their grocery budget, so this number is even more silly than it initially seems.  I'm sure it's *possible* to spend $70/day (many of my colleagues eat lunch out daily, for example), but it's not at all necessary.

529: While this is commendable, I'm not sure I would really class it as a necessary expense...

Home stuff: can't really comment in detail as we still rent, but our monthly rent is less than that mortgage payment by quite a bit!  Though an online mortgage calculator tells me the monthly payment on a $1.8mil home is $6,800/mo, not the $4k cited in the article.  ???

Utilities: Ours are a lot lower! Last year we averaged $83/mo.  Water is included in our rent, some googling suggests we might pay ~$100/month if paying it as a separate line item, so let's say our utilities *could* be up to $200/month. Still at lot less than the $500 month of this example family!  We are pretty good about turning lights off when not in use, etc. but don't do anything too out there to keep our costs/use down.

Life insurance: umm...we decided we have enough $$$ that we can forgo it.  Hopefully won't regret that decision!
Umbrella policy: what?  I find so many abandoned umbrellas out when it rains...is this some kind of replacement program for the people who keep losing them?
Health care: You earn $350k/yr and this is the best your employer can come up with? We pay <$200/month for employer subsidized care.  Even when my husband was working at not-so-family-friendly startups I think they did better than this example...
Baby items: Just, WTF. We spend <$1k
Vacation: We do one "destination" vacation/yr and then local stuff like camping trips. Our last "destination" vacation cost about $2500, so I guess if we took two of them...but we don't.
Entertainment: Our library has an awesome streaming service!  For social stuff we meet up with friends at parks.
Car payment: We have an older Honda Fit.  We do have a payment b/c the interest rate is so low.  Payment is about $115 mo
Other car expenses: We spent about $900 on these things last year
Mobile phone: I think we all know this expense can be lower than $150/mo!
Clothes: typically <$1k/yr for the family.  We just don't buy a lot.  When we do, thrift stores, ebay, or just sales at mainstream stores seem to get the job done. Kiddo gets a lot of hand-me-downs, so far he is young enough not to be too fashion conscious.
Personal care products: Having a hard time pulling this number out of our expenses but it's definitely <$100/month.  What is this?  I'm thinking shampoo, soap, deodorant, razors, sunscreen, chapstick....
Charity: Not going to quibble with this one, we actually donate a tad more each year but to each his own.
Student loans: Finally a number I agree with!

Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Gremlin on September 17, 2019, 06:10:47 PM
Thanks for those suggestions, Big H! As you say, the decision to try to eat in more often is driven more by health concerns than cost/benefit analysis about spending. Processed/take-away food is rarely healthy, and the alternative of buying salads and other vaguely healthy stuff from the supermarket is a bit of a chore, so it's better in the long run for us to try to figure out an uncomplicated way of cooking. I will check out the crock pot suggestion!
One of the other advantages of a slow cooker/crock pot option is that it's just as much effort to prep multiple meals as it is to prep one.  So right now I have a beef curry on the go in the kitchen.  20 minutes of prep this morning will probably yield three to four meals for a family of four (including two teenage food demolition machines).  One for tonight and the rest in the freezer for when life becomes busy.  Just add rice and we're good to go.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Ynari on September 17, 2019, 09:40:18 PM
The thing is, there was a period last year and early this year where we ate out or got takeout waaaay more than we should. Like multiple times on the weekdays and three or four times on the weekends. Yeah not proud of it, and we've since gotten our act together. But even then our food spending wasn't as much as this couple's. Which is why I find it hard to imagine what it is they could possibly be eating.
It's really not that hard to get there with a combination of a few things:
1.  Organic/ grass fed.  If you are eating grass fed, local, organic, meats and wild fish...I have friends who do this, and buy local.  For a family of 4 or 5, you are easily eating 2 lbs a day, probably more.  And at $10 / lb MINIMUM (that's what ground beef costs, you really have to assume an average of $15/ lb) = $11,000 a year in meat alone.

2. Organic fruits and veg can easily be $3000/ year.  That's about what we spend (though for us, that's 35% of our total budget).

3.  Meals out.  If you eat out once a week for the whole family, you can easily hit $100.  Heck, my kids get a hankering for a particular sandwich place and it's $65 for 4 sandwiches.  That's another $5000.

There you are at almost $20,000, and you haven't even bought milk or rice or beans or pasta or cheese.

The USDA sets the "liberal food plan (https://fns-prod.azureedge.net/sites/default/files/media/file/CostofFoodJul2019.pdf)" (Liberal is benchmarked to the upper quartile of food spending) for a household of 4 at $1292.70 per month, or $15,512.40 per year for groceries. Now, 36.7% of every "food dollar" is spent on dining out, so if we run the math we get $8,993.52 spent on dining out every year (proportionally), bringing us to $24,505.53. Granted, the wealthy tend to spend more than average, proportionally, on dining out, so a wealthy family following a "liberal" but managed dining plan could easily make $25,000 per annum, true.

But it is also something that is more the illusion of middle class rather than the reality. High quality steak and organic potatoes looks a lot like discount steak and the cheapest russets you can find, but it can cost more than twice as much. Dining out three or four times a week instead of once or twice, again, doesn't feel different if you're going to the same places, but it can be twice as expensive. Being able to choose what you want regardless of price is not a middle class luxury.

Personally, I eat the way you say, in a HCOL area. Produce and dining out come out similarly for me. But my meat spending is about half. I don't eat grassfed steak pretty much ever - I buy sausage and chicken. I buy in bulk. I usually have a meatless night once per week. I still feel like the fanciest fancy pants because I can afford pasture raised meat at all! We spend $661/month for two people, inclusive of all food/dining out/alcohol. I know mustachianism is about recognizing the luxury of modern life, but I felt this way before MMM. I remember how special it was to find grassfed ground beef for $7/lbs in the freezer section of the commissary when I was a teenager. I remember my dad telling me that I could buy any produce I want, because "produce is cheap!" Even then I'd scout the pricing, setting limits like $2/pound of bulk produce because I knew out-of-season produce could be unreasonable (hello, avocados). Now that I am *rich*, my limit is over twice that at $5/lbs!

Growing up in a military family, I had a generally stable life that really felt middle class. My partner and I now make nearly double what my dad makes - and we're at the beginning of our careers while he is finishing his. Yes, location makes a difference, but I'd be disrespecting my upbringing to think that my personal choices for fancy grassfed meats and organic produce are anything but an upper class luxury.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: cats on September 17, 2019, 10:45:44 PM
The thing is, there was a period last year and early this year where we ate out or got takeout waaaay more than we should. Like multiple times on the weekdays and three or four times on the weekends. Yeah not proud of it, and we've since gotten our act together. But even then our food spending wasn't as much as this couple's. Which is why I find it hard to imagine what it is they could possibly be eating.
It's really not that hard to get there with a combination of a few things:
1.  Organic/ grass fed.  If you are eating grass fed, local, organic, meats and wild fish...I have friends who do this, and buy local.  For a family of 4 or 5, you are easily eating 2 lbs a day, probably more.  And at $10 / lb MINIMUM (that's what ground beef costs, you really have to assume an average of $15/ lb) = $11,000 a year in meat alone.

2. Organic fruits and veg can easily be $3000/ year.  That's about what we spend (though for us, that's 35% of our total budget).

3.  Meals out.  If you eat out once a week for the whole family, you can easily hit $100.  Heck, my kids get a hankering for a particular sandwich place and it's $65 for 4 sandwiches.  That's another $5000.

There you are at almost $20,000, and you haven't even bought milk or rice or beans or pasta or cheese.

I would not be surprised to discover some of my colleagues DO spend this much money on food. Buying lunch daily ($10-$20) is common. Buying coffee ($3-5) daily is common. Breakfast/brunch out on weekends with the kids, common. Buying whatever looks good at the grocery store, common. One woman I know has a smoothie delivery subscription, $8/smoothie and she has one every morning...

It’s totally possible. But it’s not middle class.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: caleb on September 18, 2019, 08:44:30 AM
@mm1970 Wait, two adults with two very small children average two pounds of beef a day?

That's like both adults eating a third pound burger for both lunch and dinner every single day of the week, with the kids splitting another third pounder twice a day, every day of the week.

Heart attack incoming!
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: caleb on September 18, 2019, 09:08:58 AM
-25,500 on food

get in mah belly!!!

That's $491/week.  There is simply no realistic world in which more than half of that is going for groceries.  Sometimes I get really lazy and just order whatever we want or whatever looks good from Whole Foods with zero thought to price.  Even with a tip, and usually ordering four pounds of coffee at a time, I've never managed to break $150, and that order will easily last us a week.  If we go to the farmer's market and buy cut flowers and some artisanal bread or whatever, maybe we could manage to spend another $50 by giving the remainder to the community garden.  That's still $200/week just buying whatever the heck catches our fancy in the laziest, most indulgent manner possible.

The only possible way I see to pad this food budget out another $300+/week is to go to some really expensive restaurants, eat a ton of takeout and delivery, and wash it down drinking expensive booze running through a firehose.

I'd love to see an itemized breakdown of how someone manages to spend $500/week on food, and what their colon and waistline look like after a few years of it.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Davnasty on September 18, 2019, 09:12:17 AM
@mm1970 Wait, two adults with two very small children average two pounds of beef a day?

That's like both adults eating a third pound burger for both lunch and dinner every single day of the week, with the kids splitting another third pounder twice a day, every day of the week.

Heart attack incoming!

The justification included meat like fish which could be even more expensive and pull the average up to $15/lb. Still though, that's a lot of meat. I think it's more likely that someone spending over $20,000/year on food is eating out multiple times per week and buying very expensive prepared food. The last time I was in a Whole Foods (prior to Amazon buying them) I saw a container of potato salad for $8, it wasn't even close to enough for a 1 person meal.

ETA: Another good point in the last post, they may have included alcohol in the "Food" category. That changes everything for someone who likes pricey wine.

Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: mm1970 on September 18, 2019, 12:20:55 PM
@mm1970 Wait, two adults with two very small children average two pounds of beef a day?

That's like both adults eating a third pound burger for both lunch and dinner every single day of the week, with the kids splitting another third pounder twice a day, every day of the week.

Heart attack incoming!
I'm thinking more of friends who are a family of 5, but yeah.  They tend to eat lower carb.  They eat meat for lunch and dinner every day.  So, that's a pound of meat for lunch and a pound of meat for dinner, so 4 oz per person per meal (if you are talking 4 people).  Grassfed beef and lamb ($15-20 a pound), wild salmon (same).  Free range chickens at $20 each will at least last two days.   If you like steak, and eat it once a week, it's not going to be cheap.  Wild salmon is not cheap either, and if I wanted to eat it weekly?  I mean, I do want to eat it weekly but that's 1 pound for each meal (4 people).  Actually the recommendation is to eat fish 3x a week.

I'd hazard a guess that most people who come close to this spending number do it more by eating out more often, at least a few times a week.   Still, I know a family or two who spend that on groceries, and that's how they do it - buying all the meat and fish at the farmer's market.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: jps on September 18, 2019, 12:50:11 PM
One woman I know has a smoothie delivery subscription, $8/smoothie and she has one every morning...

Smoothie Delivery Subscription is something I never would have imagined reading. WOW!
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: caleb on September 18, 2019, 01:04:49 PM
One woman I know has a smoothie delivery subscription, $8/smoothie and she has one every morning...

Smoothie Delivery Subscription is something I never would have imagined reading. WOW!

Sounds like a euphemism for my dog squatting in the yard.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: cats on September 18, 2019, 01:08:50 PM
One woman I know has a smoothie delivery subscription, $8/smoothie and she has one every morning...

Smoothie Delivery Subscription is something I never would have imagined reading. WOW!

Sounds like a euphemism for my dog squatting in the yard.

www.dailyharvest.com

The ingredients are nice, but not $8/serving nice, IMHO

We also have a local brand of crackers that is $9 for a 5oz package. If you have the money, there are definitely opportunities to blow it in the Bay Area!
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: cloudsail on September 18, 2019, 02:11:21 PM
One woman I know has a smoothie delivery subscription, $8/smoothie and she has one every morning...

Smoothie Delivery Subscription is something I never would have imagined reading. WOW!

Sounds like a euphemism for my dog squatting in the yard.

www.dailyharvest.com

The ingredients are nice, but not $8/serving nice, IMHO

We also have a local brand of crackers that is $9 for a 5oz package. If you have the money, there are definitely opportunities to blow it in the Bay Area!

Wow, I've seen their ads but had no idea that's how much they cost. For $8, can't I just go out and get a smoothie made for me? Why would I bother making it myself at home?
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: StarBright on September 18, 2019, 02:50:52 PM
One woman I know has a smoothie delivery subscription, $8/smoothie and she has one every morning...

Smoothie Delivery Subscription is something I never would have imagined reading. WOW!


www.dailyharvest.com

The ingredients are nice, but not $8/serving nice, IMHO

We also have a local brand of crackers that is $9 for a 5oz package. If you have the money, there are definitely opportunities to blow it in the Bay Area!

Wow, I've seen their ads but had no idea that's how much they cost. For $8, can't I just go out and get a smoothie made for me? Why would I bother making it myself at home?

I actually get a daily harvest delivery once in a while (though we use it for vegan bowls more than for smoothies). FWIW - I have tried to recreate their recipes and it ain't cheap! We also live in a place where it is really hard to find certain organic and vegan stuff without driving an hour so having the variety, healthy ingredients and ease are definitely worth it to us when we are stretched too thin (certainly beats unhealthy takeout for us).  Also - a "monthly" sized delivery is 7 bucks an item - so comparable to eating chipotle but WAY healthier.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: dandarc on September 18, 2019, 04:03:25 PM
One woman I know has a smoothie delivery subscription, $8/smoothie and she has one every morning...

Smoothie Delivery Subscription is something I never would have imagined reading. WOW!


www.dailyharvest.com

The ingredients are nice, but not $8/serving nice, IMHO

We also have a local brand of crackers that is $9 for a 5oz package. If you have the money, there are definitely opportunities to blow it in the Bay Area!

Wow, I've seen their ads but had no idea that's how much they cost. For $8, can't I just go out and get a smoothie made for me? Why would I bother making it myself at home?

I actually get a daily harvest delivery once in a while (though we use it for vegan bowls more than for smoothies). FWIW - I have tried to recreate their recipes and it ain't cheap! We also live in a place where it is really hard to find certain organic and vegan stuff without driving an hour so having the variety, healthy ingredients and ease are definitely worth it to us when we are stretched too thin (certainly beats unhealthy takeout for us).  Also - a "monthly" sized delivery is 7 bucks an item - so comparable to eating chipotle but WAY healthier.
Plus no need to stock up on chipotl-away. Saving money coming and going.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: cats on September 19, 2019, 09:55:58 AM


I actually get a daily harvest delivery once in a while (though we use it for vegan bowls more than for smoothies). FWIW - I have tried to recreate their recipes and it ain't cheap! We also live in a place where it is really hard to find certain organic and vegan stuff without driving an hour so having the variety, healthy ingredients and ease are definitely worth it to us when we are stretched too thin (certainly beats unhealthy takeout for us).  Also - a "monthly" sized delivery is 7 bucks an item - so comparable to eating chipotle but WAY healthier.

See, I can (kind of) see this as a reason for getting something like the smoothie delivery if you live in an area where the individual ingredients are hard to source.  But...the Bay Area (where the guy who wrote this article and budget lives) is definitely NOT that area.  I clicked through the Daily Harvest smoothies and all the exotic ingredients they list (goji berries, acai, raw caco, ashwaganhda) are available at a grocery store within a mile of my home (which I think is actually closer than any smoothie shops, though I would have to look into that a bit more...), which I visit weekly for produce anyway.  And fresh fruit/veg is one thing you can get VERY cheaply out here (if you go to the right stores), because you are so much closer to where everything is grown.  I'm not sure what the exact proportions of things are in the DH smoothies but unless they are using a LOT of the expensive specialty ingredients, I'm pretty sure I can recreate all of them at home for under $4, and some of them I think I could probably manage for under $1.  I took a quick look at the vegan bowls and I would say the same for them.  So in this area, you are entirely paying a premium price for the convenience of not having to chop/prep the stuff yourself.  The raw ingredients are not difficult to find.

I think also a lot of people justify this (and other convenience food related expenses) the way you just have--they view the alternative as "unhealthy takeout" rather than the option most of us here would consider desirable: cooking food themselves.  So yes, if your "only" option is to eat out, paying for a healthy vs. an unhealthy option seems more reasonable.  But these folks view this as their "only" option on an almost daily basis, sometimes multiple times per day.  I get that maybe sometimes life gets busy and you find yourself eating convenience foods.  But I think (hope?) most of us on this board would view that as a temporary/occasional thing, and if we found ourselves eating like that every day...we'd look for ways to make life less crazy and allow time for cooking.

Someone else commented on the impact of frequent eating out on your health/weight.  Well....many of the people I know who eat out frequently are also attempting to maintain a healthy weight, with the result that they pay even more of a premium to get healthy convenience food.  For example, near my office, you can go to a sandwich place and get a sandwich/chips/drink combo for $7.  OR, you can go to a salad place and have a fancy salad prepared for you for $12-$15.  Guess which spot has a line out the door at lunchtime?
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: coffeefueled on September 23, 2019, 01:58:41 PM
I don't understand the food budget either or some of the earlier comments on groceries. DH and I eat a lot of grass fed beef. We buy a quarter cow in bulk - $5.75/lb including steaks, roasts, and ground beef. It would be cheaper if we bought ma whole cow or went with a farm that didn't price out in advance. I can't imagine that there aren't similar farm options available in California since it seems like they also have a thriving beef industry. If this family isn't eating out all the time it seems like they're shopping at the all organic fancy market instead of choosing a better option or doing any research on pricing. We also buy grassfed organic milk, but we get it at the regular grocery store and not the fancy organic market where the same brand is $1-2 more.

Since when does middle class mean these types of vacation and entertainment expenses? Does a massive part of the US really think everyone should be able to live like this? It doesn't make any sense to me how this is anything but very luxurious despite the HCOL area differences on daycare etc. It seems pretty out of touch.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: StarBright on September 23, 2019, 02:37:05 PM
...
Since when does middle class mean these types of vacation and entertainment expenses? Does a massive part of the US really think everyone should be able to live like this? It doesn't make any sense to me how this is anything but very luxurious despite the HCOL area differences on daycare etc. It seems pretty out of touch.

I actually think these articles show up every now and then because when you hit a certain income point you think life will be easier than middle class - but it isn't. And then it is shocking that you still have to carefully budget on 350k (if you live in a HCOL area). And not for nothin' but the types of jobs that give those salaries often require way more than 40 hours a week which means you must outsource life stuff (especially with kids, and even more so if you don't have a support network in the area).

It sucks to feel like you are doing everything right when it comes to savings for retirement and kids and then you don't have what you thought you'd have left over (when it comes to either money or energy).

That isn't to say the family in the original article can't make cuts, because we, here, know they can. But at some point, in America at least, we got it into our national psyche that if we work hard enough and do everything "right" then life will be sort of easy and golden. I think these "350k and middle class" articles stem from the dawning realization that nothing is easy and golden.

Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: mm1970 on September 23, 2019, 03:22:52 PM
I don't understand the food budget either or some of the earlier comments on groceries. DH and I eat a lot of grass fed beef. We buy a quarter cow in bulk - $5.75/lb including steaks, roasts, and ground beef. It would be cheaper if we bought ma whole cow or went with a farm that didn't price out in advance. I can't imagine that there aren't similar farm options available in California since it seems like they also have a thriving beef industry. If this family isn't eating out all the time it seems like they're shopping at the all organic fancy market instead of choosing a better option or doing any research on pricing. We also buy grassfed organic milk, but we get it at the regular grocery store and not the fancy organic market where the same brand is $1-2 more.

Since when does middle class mean these types of vacation and entertainment expenses? Does a massive part of the US really think everyone should be able to live like this? It doesn't make any sense to me how this is anything but very luxurious despite the HCOL area differences on daycare etc. It seems pretty out of touch.

A brief foray into local-ish California beef costs - half cow, $9.49/lb for grass fed beef.
There are places in Idaho and elsewhere that will ship, but comes out to being the same price, approx.

California's not cheap.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: TheGrimSqueaker on September 24, 2019, 12:11:01 AM
I don't understand the food budget either or some of the earlier comments on groceries. DH and I eat a lot of grass fed beef. We buy a quarter cow in bulk - $5.75/lb including steaks, roasts, and ground beef. It would be cheaper if we bought ma whole cow or went with a farm that didn't price out in advance. I can't imagine that there aren't similar farm options available in California since it seems like they also have a thriving beef industry. If this family isn't eating out all the time it seems like they're shopping at the all organic fancy market instead of choosing a better option or doing any research on pricing. We also buy grassfed organic milk, but we get it at the regular grocery store and not the fancy organic market where the same brand is $1-2 more.

Since when does middle class mean these types of vacation and entertainment expenses? Does a massive part of the US really think everyone should be able to live like this? It doesn't make any sense to me how this is anything but very luxurious despite the HCOL area differences on daycare etc. It seems pretty out of touch.

A brief foray into local-ish California beef costs - half cow, $9.49/lb for grass fed beef.
There are places in Idaho and elsewhere that will ship, but comes out to being the same price, approx.

California's not cheap.

Would anyone consider a late season road trip into New Mexico? I have a line on some great grass fed beef. It is frozen solid and will last a 48 hour road trip back to CA. PM me and I will provide the link. I've been using them personally for years and can vouch for the excellent grass fed beef, although 2 years ago they gave me a Longhorn instead of a Corriente and I'm still eating the damn thing.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: mm1970 on September 24, 2019, 02:34:51 PM
I don't understand the food budget either or some of the earlier comments on groceries. DH and I eat a lot of grass fed beef. We buy a quarter cow in bulk - $5.75/lb including steaks, roasts, and ground beef. It would be cheaper if we bought ma whole cow or went with a farm that didn't price out in advance. I can't imagine that there aren't similar farm options available in California since it seems like they also have a thriving beef industry. If this family isn't eating out all the time it seems like they're shopping at the all organic fancy market instead of choosing a better option or doing any research on pricing. We also buy grassfed organic milk, but we get it at the regular grocery store and not the fancy organic market where the same brand is $1-2 more.

Since when does middle class mean these types of vacation and entertainment expenses? Does a massive part of the US really think everyone should be able to live like this? It doesn't make any sense to me how this is anything but very luxurious despite the HCOL area differences on daycare etc. It seems pretty out of touch.

A brief foray into local-ish California beef costs - half cow, $9.49/lb for grass fed beef.
There are places in Idaho and elsewhere that will ship, but comes out to being the same price, approx.

California's not cheap.

Would anyone consider a late season road trip into New Mexico? I have a line on some great grass fed beef. It is frozen solid and will last a 48 hour road trip back to CA. PM me and I will provide the link. I've been using them personally for years and can vouch for the excellent grass fed beef, although 2 years ago they gave me a Longhorn instead of a Corriente and I'm still eating the damn thing.
That's funny.  Maybe!

Some of my best friends from long ago (were in our wedding) live in NM, and I've been dying to head back to Santa Fe to visit - when our schedules can align (they like travel, we have kids).  Also, my "aunt" and her wife just built a house outside Albuquerque.  Now I have extra people to visit!  I am hoping to get it to align sometime in the next year.  If I do, I'll let you know.  But I'll have to arrange the proper pickup time, as my aunt's wife and our good old friends are all vegetarian.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: obstinate on October 04, 2019, 11:15:57 AM
If you're retired, why would you have your kids in five day a week child-care? That's about 1/5th of the budget that could be cut by 90%.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: bacchi on October 04, 2019, 11:50:49 AM
If you're retired, why would you have your kids in five day a week child-care? That's about 1/5th of the budget that could be cut by 90%.

The rich have other things to do than take care of their own kids, like play tennis and have afternoon cocktails.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Linea_Norway on October 04, 2019, 12:18:38 PM
Does no one find it weird that a person with such a high income (top 3%) need a car loan?
Apart from the food budget, which is 5 times as high as it needs to be, I found that car payment very weird.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: RFAAOATB on October 04, 2019, 12:24:25 PM
If you're retired, why would you have your kids in five day a week child-care? That's about 1/5th of the budget that could be cut by 90%.

The rich have other things to do than take care of their own kids, like play tennis and have afternoon cocktails.

Is a live in nanny a better rich family move?  I mean do you want your kids going to childcare and spending too much time with middle class kids?
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: The_Big_H on October 06, 2019, 09:08:36 PM
If you're retired, why would you have your kids in five day a week child-care? That's about 1/5th of the budget that could be cut by 90%.

The rich have other things to do than take care of their own kids, like play tennis and have afternoon cocktails.

Is a live in nanny a better rich family move?  I mean do you want your kids going to childcare and spending too much time with middle class kids?

Why not, teach them how to flex on the poors early.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: jinga nation on October 07, 2019, 07:08:50 AM
If you're retired, why would you have your kids in five day a week child-care? That's about 1/5th of the budget that could be cut by 90%.

The rich have other things to do than take care of their own kids, like play tennis and have afternoon cocktails.
Psshhh. Afternoon cocktails are for the normies.
Breakfast mimosas with fresh OJ and canapes.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: ThriftyTechie on October 07, 2019, 11:28:43 PM
I don't think you can call someone living in a $1.8M house "middle class" with a straight face.

If San Francisco is really that expensive, maybe it's not worth living in San Francisco no matter how great people tell you the jobs are?

San Francisco Bay Area really is that expensive. Here's a 3 bdrm selling for $1.7 million https://www.redfin.com/CA/San-Francisco/3589-21st-St-94114/home/993891, it probably has termite issues too. Here's a 2 bdrm in Palo Alto priced to sell at $1.9 mil https://www.redfin.com/CA/Palo-Alto/961-Channing-Ave-94301/home/1715123
It's very difficult to buy a SFH here if you're making less than $300k and paying for childcare. Mortgage and taxes are 6 figures each. Daycare costs $25k-$30k, full-time nanny costs $60k.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: obstinate on October 08, 2019, 07:07:20 AM
San Francisco Bay Area really is that expensive. Here's a 3 bdrm selling for $1.7 million https://www.redfin.com/CA/San-Francisco/3589-21st-St-94114/home/993891, it probably has termite issues too. Here's a 2 bdrm in Palo Alto priced to sell at $1.9 mil https://www.redfin.com/CA/Palo-Alto/961-Channing-Ave-94301/home/1715123
It's very difficult to buy a SFH here if you're making less than $300k and paying for childcare. Mortgage and taxes are 6 figures each. Daycare costs $25k-$30k, full-time nanny costs $60k.
These two houses are in two very desirable parts of the city. One is just outside the Mission. The other is in Palo Alto, which is second only to maybe Los Altos Hills and Atherton in price. Yes, SFBA is expensive, but no need to cherry-pick from the most expensive parts. :)
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Goldielocks on November 06, 2019, 05:57:58 PM
When I lived in the Bay area (outskirts), I had a preschooler in full day care, rented a SFH, and had a family of 4. 
Very middle class -- older car, no vacations other than camping, but we did have orthodontics, ski weekends at Tahoe, retirement savings at 12% income, etc.

In today's dollars, we earned $150k/yr.  No itemized deductions (renting).
ANYWAY...  we had a middle class lifestyle in a detached home for the equivalent of $150k/yr in salary.    Even if rental prices would now add another $500/mo to get the same home... no where near $350k is needed for middle class.

Here is the amazing part --
Although natrually frugal, and I did not have a Starbucks lifestyle, because EVERYTHING seemed more expensive in California, that $4.50/day starbucks habit some people had seemed like no big deal.  It seemed like it was $1.50 Dunk'n Donuts black coffee  in Iowa level of spending.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: spartana on November 08, 2019, 10:39:53 AM
If you're retired, why would you have your kids in five day a week child-care? That's about 1/5th of the budget that could be cut by 90%.

The rich have other things to do than take care of their own kids, like play tennis and have afternoon cocktails.
Psshhh. Afternoon cocktails are for the normies.
Breakfast mimosas with fresh OJ and canapes.
Hey TGIM morning mimosas at the beach in SoCal with the FIRE crowd (or slacker volleyball/surf bum crowd) is a thing. Although our OJ and canapes come from ALDI. Perhaps the Financial Samari needs to take a lesson from us "poors" and learn how to live the good life on a WHOLE LOT less.

Or yeah, and you can bring your kids too. It's like free childcare.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Daisyedwards800 on December 06, 2019, 01:29:05 PM
Why is he using a flat 24% fed tax rate?
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Kyle Schuant on December 06, 2019, 03:54:13 PM
no where near $350k is needed for middle class.
97% of US households earn $305k or less, 98% $359k or less, and 99% $475k or less. It takes some mental and arithmetical gymnastics for anyone to define the top 2% as the "middle".

The 40-60% quintile is $50-$79k, by the way. Statistically that's the middle class.

https://dqydj.com/average-median-top-household-income-percentiles/#Household_Income_Percentiles_for_the_United_States_in_2019

Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Mr. Green on December 07, 2019, 03:21:47 PM
Based on his spending habits, Financial Sumo seems like a more appropriate name for Mr. Dogan's site. I'm sure headlines like that get a lot of clicks though.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Fomerly known as something on December 07, 2019, 06:48:49 PM
It does make one wonder why do people not like to admit that they are "upper middle class."  I see myself in this category.  I'm not glittering rich and my life can appear somewhat "middle class" but I'm not.  I make/have too much money for that in my MCOL area.  I knew I was not "middle class" in 2004 when I was living on what could have been a middle class salary in NYC because I saw the projection that my career/life was going in. 
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: MrUpwardlyMobile on December 07, 2019, 08:22:16 PM
I don't think you can call someone living in a $1.8M house "middle class" with a straight face.

If San Francisco is really that expensive, maybe it's not worth living in San Francisco no matter how great people tell you the jobs are?

Lol 1.8mill could be a modest apartment in nyc. 
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Bloop Bloop on December 07, 2019, 08:40:20 PM
It does make one wonder why do people not like to admit that they are "upper middle class."  I see myself in this category.  I'm not glittering rich and my life can appear somewhat "middle class" but I'm not.  I make/have too much money for that in my MCOL area.  I knew I was not "middle class" in 2004 when I was living on what could have been a middle class salary in NYC because I saw the projection that my career/life was going in.

I think a lot of people prefer to see themselves as average and not above average or below average. Recognising that you are above-average then requires introspection as to whether you've earned it, whether it was given, whether it is fair, etc etc etc

I freely admit I am upper-middle class, but then I also see myself as only "average" within the people that I socialise with, which seems to me to be an easy way out. When you consider the cohort of well-educated intelligent well-read dual-income professionals, I am only average and therefore I don't have to worry about the real implications of privilege, etc.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: TheGrimSqueaker on December 07, 2019, 11:19:33 PM
It does make one wonder why do people not like to admit that they are "upper middle class."
Even new money can read an account of the French Revolution, and learn from it.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Dollar Slice on December 07, 2019, 11:51:56 PM
I don't think you can call someone living in a $1.8M house "middle class" with a straight face.

If San Francisco is really that expensive, maybe it's not worth living in San Francisco no matter how great people tell you the jobs are?

Lol 1.8mill could be a modest apartment in nyc.

If by "modest" you mean a gorgeous 3000-square foot townhouse in Brooklyn (https://streeteasy.com/sale/1397186), then yeah. Totes middle class.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Bloop Bloop on December 08, 2019, 12:34:34 AM
It does make one wonder why do people not like to admit that they are "upper middle class."
Even new money can read an account of the French Revolution, and learn from it.

By all accounts they have.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Malcat on December 08, 2019, 07:49:50 AM
I think a big part of the problem is that no one really seems to know what "rich" looks like.

People have an image of what ultra rich looks like from TV and movies, but actual "rich" really looks A LOT like middle class life, it just costs a lot.

Two people can live essentially materially identical lives:
-nice detached home
-two cars
-kids in good schools and activities
-yearly vacations
-maybe even own a cottage

And that life can range from costing mid 5 figures to several hundreds of thousands depending on location, what finishes are in the house, what kind of cars, what the public vs private school situation is, what activities the kids are into, etc, etc.

Until someone gets to the level where they have a house with maid's quarters and multiple live in domestic staff, and a private jet, then the lifestyle of the rich really isn't really any different from what everyone pictures as a normal, middle class life, at least not in the broad strokes.

A different way to put it is the "normal middle class life" can be really, really god damn expensive. Pete has written about how a low 5 figure life can be virtually identical to a high 5 figure life depending on how wasteful someone is with their spending. Well, that logic extends well into the hundreds of thousands life as well.

DH and I have a low 5 figure base spend and most of our friends spend at least a hundred to a few hundred thousand per year, and our lives really aren't so appreciably different.

Like sure, a colleague and I just both bought new homes (mine under 150K, her's 1.4M) and both kitchens were dated and had bad layouts. She dumped 45K into hers, and I spent about $500 on Ikea modular cabinets, bars to hang pots on my wall, and a plug in chandelier so I wouldn't have to hire an electrician.

Her kitchen is like something out of a magazine, mine is a franken-kitchen with half of the cabinets nearly 50 years old and original to the house and the other half from Ikea, and no, they don't match at all.

I'm a former chef who knew exactly what she wanted and mine is actually my dream kitchen now, and the mix of elements is actually so eclectic that it looks kind of cool. It's perfect for me. Her kitchen looks like something you probably shouldn't touch, and the layout the designer put together is, well, okay, but not overly efficient for actual cooking.

In the end, she spent 90 times what I did, and the real life difference between the two is that they have a different esthetic style and slightly different efficiency in layout.

Both kitchens are solidly, middle class lifestyle. Neither are overly huge or overly small. Both are customized for women who will stand over hot stoves cooking for their families (her's a several thousand dollar Bosch gas range, mine an 'apartment size' cheap thing that came with the place.)

I'll spend about $200 per month on food, she'll spend over $2000 because her two sons and friends like a lot of brand name stuff and they eat pounds of it, and her husband insists on a lot of steak nights, plus none of them will eat leftovers, so their food wastage is massive.

We both love a good restaurant meal. I just went to a local Ethiopian place and shared an amazing meal with my dad for $20 including tax and tip. She just took me out for a meal at her favourite restaurant, where a mediocre glass of wine costs more than my Ethiopian meal. The food was pretty good, both were nice experiences.

I drive a used Corolla, she drives a leased Range Rover. We both have remote car starters, but I have heated indoor parking at my building, so I don't have to clear off snow all winter.

I have a $30 Aeropress and a $100 Breville milk frother. She is known on sight by every Starbucks employee at the locations near her house, work, and gym.

I just booked a trip to Europe, which will be a self-guided road trip through small towns, off season, for $2600 for two, including breakfasts. She is taking her brood to Italy over Christmas, and the business class flights alone will be at least $16K.

I colour my own hair and maintain a low maintenance hair style, she gets her hair cut and coloured every 4 weeks for $600.

Both couples are active. I have a gym and pool in my building, public baseball diamond, tennis and basketball courts across the street, and DH bikes and runs all winter. She and her DH have $800/mo gym memberships each, she has a trainer, he also has a golf membership, and the whole family loves to ski ($$$$$).

Her household spending is enormous, but really, our lives aren't appreciably different in functional terms.

The thing is that as you go up in luxury in life, the cost rises astronomically, but the outcome changes only marginally.
A stone countertop is only so much nicer than a laminate, an expensive restaurant has food and service that can really only be so good, an extremely expensive car in morning traffic is still just a car in traffic, a several thousand dollar chandelier doesn't light much better than a $100 plug-in chandelier from Ikea, a several thousand dollar watch and a drug store watch both tell time, and the latest iPhone vs an older phone both work pretty comparably.

The incremental increases in quality and experience start getting proportionally so much more expensive that it can cost nearly 10X to live a life just superficially better than someone else's.

My colleague and I have the same job, and per hour, I actually bill more than she does. I said that our lives are pretty similar despite our wildly different spending, but that isn't strictly true. She works 6 days a week, and I work 1.
So in truth, our lives are RADICALLY different because of our spending differences, just not in the way people might think.

So yeah, it's very difficult to define "rich" because you need to be rich to afford a lot of seemingly middle class lifestyles. 
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: norajean on December 08, 2019, 07:54:17 AM
The middle class is extremely wide the US.  If you are working for a living and paying bills every month from your earnings you are very likely middle class.  If you don't have a job and can't afford basics you are probably lower class.  If you fly in private jet aircraft and spend your time at country clubs, you may be upper class.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: dandarc on December 08, 2019, 10:44:33 AM
@Malkynn continuing to run away with the "best poster of all time on the MMM forums" award.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: fredbear on December 08, 2019, 11:31:23 AM
It does make one wonder why do people not like to admit that they are "upper middle class."  ...

There is a neighbor up the hill - perhaps you know him, he's the one who makes it clear he loves the earth far more than you do, to the extent that he sneaks over and unscrews the light you left on to help your wife drive into the garage, as her night vision is poor.  He posted on the neighborhood group that he wanted some one of us to take care of his dog while he went on a trip.  Now in my experience Malamutes are a sweet and affectionate breed, but they do not suffer the alphaic pretensions of other dogs.  Not at all.  To control this I use strict leash discipline when walking a Malamute, to the extent of getting off the trail and making the dog sit when we encounter another dog.  But the neighbor believes that dogs should be free; his cost him about $9000 by attacking other dogs while running free, savaging another neighbor's dog and pretty much Schwartzeneggering one of the little freepy dogs it met on the bike path.  He also decided he could integrate it into functioning as the Watch-Malamute for the flock: his "baby ducklings."  None survived.

So there is some reason for the general neighborhood perspective that this is a vicious bitch (VB).  None of us agreed to take care of her, particularly as, for the love of Gaia, he made it clear that when doing this favor we were not to drive up the road to his house, but to walk up 200 vertical feet, to take care of VB.  I suggested he use a local kennel where we had had good experience.  He thought this a pretty outrageous suggestion, expensive and un-neighborly.  It was only going to be a 5 or 6-day absence.  He was going to the far Midwest, over near the Mississippi, to hire an instructor who would come back with him, while he learned to fly his airplane back to Colorado.  But he cleared up my misconception: it was NOT AN AIRPLANE, it was a motor-glider. 

This episode exposed my prejudice.  If you can hire an instructor for 5 days to teach you to fly your airplane motor-glider across half the US, you have entered the Upper Class.  Not Upper Middle, Upper. 
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: MrUpwardlyMobile on December 08, 2019, 12:52:03 PM
I don't think you can call someone living in a $1.8M house "middle class" with a straight face.

If San Francisco is really that expensive, maybe it's not worth living in San Francisco no matter how great people tell you the jobs are?

Lol 1.8mill could be a modest apartment in nyc.

If by "modest" you mean a gorgeous 3000-square foot townhouse in Brooklyn (https://streeteasy.com/sale/1397186), then yeah. Totes middle class.
that particular place appears to be controversial on real estate forums. While lacking modern amenities like central air can be forgiven if it’s to maintain certain architectural elements, there is speculation that it was remodeled before the permits were issued.  It’s not bad, but you’d have to be willing to live in Brooklyn, which sounds kind of like a prison sentence.

Similar price fetches 1100 square feet in manhattan. https://streeteasy.com/building/the-colonnade/15a



Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: MrUpwardlyMobile on December 08, 2019, 01:01:16 PM
The thing everyone keeps talking about for middle class is income. Median income is not necessarily middle class.  Class is defined by overall wealth. income is at best one of the factors for determining class.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Dollar Slice on December 08, 2019, 01:41:37 PM
It’s not bad, but you’d have to be willing to live in Brooklyn, which sounds kind of like a prison sentence.

LOL. I'm sorry, but I can't take you seriously after reading that. You're either completely out of touch or you've never been to NYC or both.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: MrUpwardlyMobile on December 08, 2019, 02:42:37 PM
It’s not bad, but you’d have to be willing to live in Brooklyn, which sounds kind of like a prison sentence.

LOL. I'm sorry, but I can't take you seriously after reading that. You're either completely out of touch or you've never been to NYC or both.

From New York. Moved away this year.  Fabulous semi rural Pennsylvania. Breathing room.

I’m also not a fan of manhattan. Brooklyn is awful with the exception of a few food festivals over the summer.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: fredbear on December 08, 2019, 04:29:25 PM

LOL. I'm sorry, but I can't take you seriously after reading that. You're either completely out of touch or you've never been to NYC or both.

ANCOBTS - also not capable of being taken seriously.  I had a fling with a woman from NYC, and among other things, she provided the country mouse experience.  Taxis, subways, darling little cranny-restaurants, elegant dinners with literati (actually I arranged that), shows, mvsevms, parks, etc.  On my own while she worked I enjoyed the air in the air; coming down from about 6000 feet to 15 I could run 16 miles just to explore, so over days and days I ran roughly the bottom half of the island.

My conclusion: you can't live a human life in NYC. 
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Dollar Slice on December 08, 2019, 05:11:08 PM
It’s not bad, but you’d have to be willing to live in Brooklyn, which sounds kind of like a prison sentence.

LOL. I'm sorry, but I can't take you seriously after reading that. You're either completely out of touch or you've never been to NYC or both.

From New York. Moved away this year.  Fabulous semi rural Pennsylvania. Breathing room.

I’m also not a fan of manhattan. Brooklyn is awful with the exception of a few food festivals over the summer.

My apologies, I thought your comment was on topic and about the possibility of living in NYC in a middle class lifestyle (specifically with a $1.8m home as you mentioned). I didn't realize you were simply taking the discussion completely off topic and talking about how you don't like an urban lifestyle. That's your prerogative. I don't know why you would bring it up in this thread, but whatever. :-)
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: spartana on December 08, 2019, 11:30:24 PM
The middle class is extremely wide the US.  If you are working for a living and paying bills every month from your earnings you are very likely middle class.  If you don't have a job and can't afford basics you are probably lower class.  If you fly in private jet aircraft and spend your time at country clubs, you may be upper class.
I don't agree with this definition. Lots of low income working class people, and even people in poverty, are working for a living and paying bills every month from their earnings. They just aren't living the same lifestyle as someone with a higher middle class income.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: APowers on December 08, 2019, 11:41:05 PM
I think a big part of the problem is that no one really seems to know what "rich" looks like.

*snip*

I get a lot of flak for maintaining that middle-class/"normal"="rich". ¯\_(ツ)_/¯
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Malcat on December 09, 2019, 04:00:35 AM
I think a big part of the problem is that no one really seems to know what "rich" looks like.

*snip*

I get a lot of flak for maintaining that middle-class/"normal"="rich". ¯\_(ツ)_/¯

Then maybe don't hang out with people who give you flak :P
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: zolotiyeruki on December 09, 2019, 04:53:39 AM
And that life can range from costing mid 5 figures to several hundreds of thousands depending on location, what finishes are in the house, what kind of cars, what the public vs private school situation is, what activities the kids are into, etc, etc.
This is so true!  Our neighborhood is master planned, with different sections being built by different builders.  One section has homes similar in size to ours, but 30% more expensive.  Same number of bedrooms, same square footage, same number of rooms total, but just higher-end finishes and more expensive layouts (like bay windows).  Same schools, same access to roads/shopping/etc.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Arbitrage on December 09, 2019, 09:05:53 AM
And that life can range from costing mid 5 figures to several hundreds of thousands depending on location, what finishes are in the house, what kind of cars, what the public vs private school situation is, what activities the kids are into, etc, etc.
This is so true!  Our neighborhood is master planned, with different sections being built by different builders.  One section has homes similar in size to ours, but 30% more expensive.  Same number of bedrooms, same square footage, same number of rooms total, but just higher-end finishes and more expensive layouts (like bay windows).  Same schools, same access to roads/shopping/etc.

Indeed.  We live near two families that we are very close friends with (HCOLA).  All of similar age/education, 2 kids each.  We all purchased houses that cost a similar amount of money several years ago, and for the most part, you wouldn't think we live lives that are very different.

Compared to couple 1, who have similar income to us, you'd take our expenses and add (gross estimates of monthly cost):
Frequent, expensive home renovations (+1500/month)
Maid service (+200/month)
Cable TV (+150/month)
Premium cell phone service with frequently purchased new devices (+200/month)
Groceries without an attempt to economize (+400/month)
Eating in restaurants a 'normal' amount (+400/month)
Moderately expensive wine (+200/month)
Newer cars - not luxury, driven until old, but nice enough (+600/month)
Driving everywhere, no bicycling (+200/month)
More frequent vacations involving flying the whole family, and general spending while on vacation (+700/month)
Several different classes/lessons for kids (+400/month)
Visits to the salon for hair coloring and such (+100/month)
Expensive gifts for each other (+400/month)

All told, the lifestyle that doesn't outwardly look that different from ours is costing $5500/month more, which is more than our entire non-mortgage spending.

Comparing to the third couple, who used to earn a similar amount but now earns 10 times what the other two couples earn, you'd add:
Financial advisor
Frequent travel, often first-class, often international
Full-time nanny (not live-in)
Luxury vehicles
...I'm sure other things I'm not aware of or don't pay much attention to

If you squint, even the third couple could be middle-class in behavior (though they will admit they are rich at this point).  None of us are dealing with private school bills, private jets, butlers, or whatever.  Which of us is middle class?  Some would even say that we are not middle class, on the basis of income.  Some might say that we all live upper middle-class lives.  Nonetheless, there's at least a factor of 3-4 separating us in non-mortgage spending.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: DadJokes on December 09, 2019, 09:38:32 AM
It's certainly going to vary widely by location. Per this source (https://statisticalatlas.com/place/California/San-Francisco/Household-Income), the median household income in San Francisco is $87.7k. Let's pretend that the population is divided into 3 equally sized income classes.

The top third earn $125k and up.
The middle class earn $50k-$125k.
The bottom third earns $50k and below.

That doesn't seem too crazy, but the distribution is nuts. Nearly 20% earn $200k+. The large number earning those exorbitant incomes drive up the cost of living, which makes life for the bottom third (and even middle third) a lot more difficult than it would be in most other parts of the country.

In my area, the distribution looks like this:
Upper: $90k+
Middle: $45k-$90k
Lower: $45k and below

The lower tertile is pretty similar to SF, but because the income distribution is much more even (<5% earn $200k+), the upper tertile is much more reasonable, with the result being that the cost of living is much lower.

It's odd knowing that we are in the top third of family incomes as government employees. I assume that the data is skewed by unmarried people and single-income households, but maybe our incomes really are exceptionally high. Either of us individually would fall in bottom of the middle class or top of the lower class.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: GreenIvy66 on December 12, 2019, 02:23:34 PM
It does make one wonder why do people not like to admit that they are "upper middle class."


In addition to what others have mentioned, I think part of this phenomenon can be explained by how people (US residents, specifically), react to talking about class. No one typically likes stating that they are poor to others, and people typically don't like saying that they are financially "comfortable" to others, even if it is the truth. We have been socialized, in a way, to never outright discuss such matters. The idea of "class" has come to be viewed as information we are supposed to infer and guard for ourselves, through interacting with others.

The problem with that is people tend to associate around others who have similar circumstances as their own. Being surrounded by people like you makes it easy to think that you are "average", even if one's financial situation is not.

I know and can admit that I am part of the "upper middle class" because I've taken the time to look at the income data for my region, and know that my household is in the 85th+ percentile for income. Many people don't know, care to know, or search out that data. I care because I am a numbers nerd and the topic fascinates me.

Even if everyone knew that information, there would still be a social taboo associated with having free and open discussions with others about it.
Title: Re: $350k = "Middle class." The endless ratcheting of expectations.
Post by: Kyle Schuant on December 12, 2019, 04:05:14 PM
We have been socialized, in a way, to never outright discuss such matters.
Which is how we know it's important. Nobody demands you be silent about trivialities.