Meet the ‘semi-rich’: Millions of high-income Americans may not feel wealthy but

[i_have_so_much_to_learn]

https://grow.acorns.com/the-semi-rich-americans-who-may-not-feel-wealthy/

...I feel personally attacked, lol.

Some excerpts:
<quote>
Meet the ‘semi-rich’: Millions of high-income Americans may not feel wealthy but are, says ‘The 9.9 percent’ author
“I think a defining feature of the group culturally is this belief in meritocracy.”

The net worth of that group ranges from about $1.2 million to $20 million per household, Stewarts says. Those assets include cash savings and investments, as well as real estate. Many members of the 9.9% don’t feel enormously wealthy but they are still doing better than the vast majority of the country.

On balance, they tend to be more in the professional and managerial kinds of roles. It’s not that everyone in the 9.9% is that. There are lots of small business owners, but the core of the people have found a niche in a professional hierarchy.

The people who buy into the 9.9% are much more insulated than they tend to imagine. They spend most of their time talking to other people on similar trajectories and are far more isolated than they think they are.

I think a defining feature of the group culturally is this belief in meritocracy, in the sense merit is what makes the economy work. The sum total of our GDP is the sum total of the individuals in it. Everyone earns what their merit is worth. That is coupled with a market myth that says that whatever people do that earns money is essentially good for society.

There is an ethos of approaching life as a kind of optimization problem. That shows up in parenting and other areas as well. Lots of focus on reproducing a merit system in one’s kids.

</quote


I don't think this article does a half-bad job. I think everyone in this forum probably falls into this category, or will be at some point (or damn close to it).

Thoughts?

[ixtap]

I read this the other day and didn't really identify with much in it. For starters, I do feel wealthy even in the lower half of this group.

And while do approach many of our life decisions from the optimization viewpoint, and hard work the best tool the average person has in their favor, I do not believe that merit is what makes our economy work.

[i_have_so_much_to_learn]

I read this the other day and didn't really identify with much in it. For starters, I do feel wealthy even in the lower half of this group.

And while do approach many of our life decisions from the optimization viewpoint, and hard work the best tool the average person has in their favor, I do not believe that merit is what makes our economy work.

I definitely don't feel wealthy. I don't know why. But psychologically, I still feel like i'm living check to check even though i'm obviously not.

[Metalcat]

I read this the other day and didn't really identify with much in it. For starters, I do feel wealthy even in the lower half of this group.

And while do approach many of our life decisions from the optimization viewpoint, and hard work the best tool the average person has in their favor, I do not believe that merit is what makes our economy work.

I definitely don't feel wealthy. I don't know why. But psychologically, I still feel like i'm living check to check even though i'm obviously not.

I know a lot of very wealthy people, and none of them feel wealthy

[StarBright]

I found this bit very intriguing:
“The interesting thing about this class is that it’s held even,” Stewart says. “People who make it in that group tend to hold on to their cash. People above that have seen their fortunes triple and people below that have seen their wealth decline.”

I feel like there might be something to it about the amount it really takes to pay for things in the US - but teasing that out is not my area of expertise.

I read this the other day and didn't really identify with much in it. For starters, I do feel wealthy even in the lower half of this group.

And while do approach many of our life decisions from the optimization viewpoint, and hard work the best tool the average person has in their favor, I do not believe that merit is what makes our economy work.

I definitely don't feel wealthy. I don't know why. But psychologically, I still feel like i'm living check to check even though i'm obviously not.

I get this feeling. Eventually we'll be in the 9.9% net worth-wise, but household income we are probably somewhere in the 70% range. But when you factor in health insurance, required retirement contributions, and childcare costs, it felt like we were still living paycheck to paycheck until very recently. And it takes time to switch from scarcity mindset to knowing that you have enough.

Weirdly enough, the child credit introduced in July has sort of made the difference emotionally for us. I would have thought we made too much to really notice the difference - but I was wrong :) It has given us a perfect amount of wiggle room for things like putting in a back up sump pump within a month or two of thinking about it, vs saving for it.

[Watchmaker]

I read this the other day and didn't really identify with much in it. For starters, I do feel wealthy even in the lower half of this group.

And while do approach many of our life decisions from the optimization viewpoint, and hard work the best tool the average person has in their favor, I do not believe that merit is what makes our economy work.

I definitely don't feel wealthy. I don't know why. But psychologically, I still feel like i'm living check to check even though i'm obviously not.

I know a lot of very wealthy people, and none of them feel wealthy

I know a fair number of wealthy people who do feel wealthy, but they tend to be the 0.1% NW people who have so much money they can't kid themselves.

[boarder42]

i'm in the top 3-4% household NW in america and i feel wealthy as shit.  I dont have to care about my job b/c i'm quitting year end.  I get to work from home, I take fridays off to hang out with my wife and kids.  maybe its all the monte carlo's i've run that let me know how safe our plan is and how much money i'll be able to give away.  But i'm getting my time back and thats worth way more.

[i_have_so_much_to_learn]

i'm in the top 3-4% household NW in america and i feel wealthy as shit.  I dont have to care about my job b/c i'm quitting year end.  I get to work from home, I take fridays off to hang out with my wife and kids.  maybe its all the monte carlo's i've run that let me know how safe our plan is and how much money i'll be able to give away.  But i'm getting my time back and thats worth way more.

How do you measure at what % you're in?

[soulpatchmike]

This statement to end the article rubs me a bit wrong.
"I’d like to see people from this group recognize where some of their advantages come from and make the world a more affordable place."
I perceive there are many people that would like to make the world a more affordable place, but I can't see the link between my advantages growing up and the ability to save with some special ability to make the world any more affordable.

Also, I concur with boarder42 and feel crazy wealthy with lots of flexibility.  I might not have reached my FI target yet but in the scheme of things, it is statistically very unlikely I will ever become homeless or become what the average person might think of as broke.

[ixtap]

i'm in the top 3-4% household NW in america and i feel wealthy as shit.  I dont have to care about my job b/c i'm quitting year end.  I get to work from home, I take fridays off to hang out with my wife and kids.  maybe its all the monte carlo's i've run that let me know how safe our plan is and how much money i'll be able to give away.  But i'm getting my time back and thats worth way more.

How do you measure at what % you're in?

Personally, I use this calculator. I opt to include home equity, even though we don't count our boat value in our portfolio. We move up 1.5 percentage points if we ignore home equity.

https://dqydj.com/net-worth-percentile-calculator-united-states/

[boarder42]

i'm in the top 3-4% household NW in america and i feel wealthy as shit.  I dont have to care about my job b/c i'm quitting year end.  I get to work from home, I take fridays off to hang out with my wife and kids.  maybe its all the monte carlo's i've run that let me know how safe our plan is and how much money i'll be able to give away.  But i'm getting my time back and thats worth way more.

How do you measure at what % you're in?

Personally, I use this calculator. I opt to include home equity, even though we don't count our boat value in our portfolio. We move up 1.5 percentage points if we ignore home equity.

https://dqydj.com/net-worth-percentile-calculator-united-states/

yep

[i_have_so_much_to_learn]

i'm in the top 3-4% household NW in america and i feel wealthy as shit.  I dont have to care about my job b/c i'm quitting year end.  I get to work from home, I take fridays off to hang out with my wife and kids.  maybe its all the monte carlo's i've run that let me know how safe our plan is and how much money i'll be able to give away.  But i'm getting my time back and thats worth way more.

How do you measure at what % you're in?

Personally, I use this calculator. I opt to include home equity, even though we don't count our boat value in our portfolio. We move up 1.5 percentage points if we ignore home equity.

https://dqydj.com/net-worth-percentile-calculator-united-states/

does checking your wealth vs a tool like this serve any purpose other than comparing sizes? seems to be a fuel for jealousy

[boarder42]

i'm in the top 3-4% household NW in america and i feel wealthy as shit.  I dont have to care about my job b/c i'm quitting year end.  I get to work from home, I take fridays off to hang out with my wife and kids.  maybe its all the monte carlo's i've run that let me know how safe our plan is and how much money i'll be able to give away.  But i'm getting my time back and thats worth way more.

How do you measure at what % you're in?

Personally, I use this calculator. I opt to include home equity, even though we don't count our boat value in our portfolio. We move up 1.5 percentage points if we ignore home equity.

https://dqydj.com/net-worth-percentile-calculator-united-states/

does checking your wealth vs a tool like this serve any purpose other than comparing sizes? seems to be a fuel for jealousy

i find things like this interesting to know how you feel about someone else is up to you.

[roomtempmayo]

I suspect people with money don't feel wealthy because the vast, vast majority of people in the developed world are deprived only relative to their neighbors.  By any historical and/or global standards, we're fine.

If all deprivation is relative deprivation, and we've self-sorted by class, we normalize whatever level of consumption we want, at least until the Joneses ratchet it up a notch and send ripples of relative deprivation through the (literal or social) neighborhood.

For people who have adequate food and shelter, the remaining absolute gains are mostly related to health, wellbeing, creativity, and community.  The collective "we" are pretty bad at matching all the wealth we produce with the goods that lead to absolute gains, instead squandering wealth on temporarily addressing feelings of relative deprivation.

[boarder42]

I suspect people with money don't feel wealthy because the vast, vast majority of people in the developed world are deprived only relative to their neighbors.  By any historical and/or global standards, we're fine.

If all deprivation is relative deprivation, and we've self-sorted by class, we normalize whatever level of consumption we want, at least until the Joneses ratchet it up a notch and send ripples of relative deprivation through the (literal or social) neighborhood.

For people who have adequate food and shelter, the remaining absolute gains are mostly related to health, wellbeing, creativity, and community.  The collective "we" are pretty bad at matching all the wealth we produce with the goods that lead to absolute gains, instead squandering wealth on temporarily addressing feelings of relative deprivation.

Social media doesn't help. Maybe you have some reasonably frugal friends. But 1 friend chooses new cars and another chooses trips and another NFL season tickets etc. You get the idea. Now you think all these things are necessary. Bc you can't prioritize your own top wants. 

[roomtempmayo]

Social media doesn't help. Maybe you have some reasonably frugal friends. But 1 friend chooses new cars and another chooses trips and another NFL season tickets etc. You get the idea. Now you think all these things are necessary. Bc you can't prioritize your own top wants.

For sure.  Even back in the early days of Instagram it was clear it would become a toxic cesspool of oneupmanship. 

I remember telling a class circa 2010: Imagine that you follow just 52 people, and each of them takes a vacation and posts pictures of it once a year.  If they take their vacations at random intervals, your feed is going to give you the impression that someone is always taking a vacation, rather than the more accurate reality that your friends are working almost all the time.  From the very start, the toxicity was evident.

If anything, social media ecosystems have, both by users and by designers, only been further optimized to nurture feelings of inferiority over the past decade plus.

Sometimes I think the best possible thing I could do is move to the woods and try to figure out a way to unplug as much as possible.

[MoseyingAlong]

i'm in the top 3-4% household NW in america and i feel wealthy as shit.  I dont have to care about my job b/c i'm quitting year end.  I get to work from home, I take fridays off to hang out with my wife and kids.  maybe its all the monte carlo's i've run that let me know how safe our plan is and how much money i'll be able to give away.  But i'm getting my time back and thats worth way more.

How do you measure at what % you're in?

Personally, I use this calculator. I opt to include home equity, even though we don't count our boat value in our portfolio. We move up 1.5 percentage points if we ignore home equity.

https://dqydj.com/net-worth-percentile-calculator-united-states/

does checking your wealth vs a tool like this serve any purpose other than comparing sizes? seems to be a fuel for jealousy

I think it can serve as a needed reality check.
For example, the multimillionaires who think they are middle-class but are actually in the top few percent. In which case, maybe they are middle-class by choice or lifestyle, not necessity.

[Gronnie]

When pretty much all your money is locked up in home equity and/or retirement accounts it makes it hard to feel wealthy even if your percentile says you are.

[NorCal]

There's absolutely something to this.

When I worked in Silicon Valley, we were making stupid crazy money.  More than I had previously thought possible.  It was mostly due to my wife's work, but I contributed a decent sum too.

Yet our house was a poorly maintained fire hazard with illegal plumbing and illegal wiring.  We rented because we "couldn't afford to buy".  Technically, we could have gotten a mortgage, but prices were so ludicrous that we didn't really consider it an option.  I lived in a nicer place when I was in Tennessee making $45K/year.

So we were technically in the 1% category by a hair.  But our living situation was comparable to college students.  We didn't feel rich at all.  To quote a friend "It doesn't matter how much money you make in Silicon Valley, you'll never be rich". 

The day I finally felt rich?  When we were making about half as much money living in a different state, but we had nice house with a fully paid off mortgage.

[soulpatchmike]

Not sure of the actual publication source of the quote but I have this one marked in my quotes bucket.

We don’t live in a world of reality, we live in a world of perceptions. - Gerald J Simmons

[i_have_so_much_to_learn]

There's absolutely something to this.

The day I finally felt rich?  When we were making about half as much money living in a different state, but we had nice house with a fully paid off mortgage.

^^^ this.

[iris lily]

i'm in the top 3-4% household NW in america and i feel wealthy as shit.  I dont have to care about my job b/c i'm quitting year end.  I get to work from home, I take fridays off to hang out with my wife and kids.  maybe its all the monte carlo's i've run that let me know how safe our plan is and how much money i'll be able to give away.  But i'm getting my time back and thats worth way more.

How do you measure at what % you're in?

Personally, I use this calculator. I opt to include home equity, even though we don't count our boat value in our portfolio. We move up 1.5 percentage points if we ignore home equity.

https://dqydj.com/net-worth-percentile-calculator-united-states/

does checking your wealth vs a tool like this serve any purpose other than comparing sizes? seems to be a fuel for jealousy

It’s just fun.

I haven’t seen this specific calculator, but for decades I calculated our net worth using the various tools out there and we were always in the top 10% and sometimes in the top 5% depending on the tool.

This tool puts us in the top 5% And yeah, I always considered us rich. We never lived paycheck to paycheck back when we were getting paychecks.  Nice house and a pretty garden and the cars we wanted to have. Including fun cars. We live in low cost of living flyover country and seldom broke $100,000 a year in combined salary.

[Metalcat]

Social media doesn't help. Maybe you have some reasonably frugal friends. But 1 friend chooses new cars and another chooses trips and another NFL season tickets etc. You get the idea. Now you think all these things are necessary. Bc you can't prioritize your own top wants.

For sure.  Even back in the early days of Instagram it was clear it would become a toxic cesspool of oneupmanship. 

I remember telling a class circa 2010: Imagine that you follow just 52 people, and each of them takes a vacation and posts pictures of it once a year.  If they take their vacations at random intervals, your feed is going to give you the impression that someone is always taking a vacation, rather than the more accurate reality that your friends are working almost all the time.  From the very start, the toxicity was evident.

If anything, social media ecosystems have, both by users and by designers, only been further optimized to nurture feelings of inferiority over the past decade plus.

Sometimes I think the best possible thing I could do is move to the woods and try to figure out a way to unplug as much as possible.

You don't have to be that extreme.

I live in a dense city, but in a working class neighbourhood. I haven't been on FB for years except to ask questions in specific groups now and then, and I've never had an Instagram account.

These things don't have to be ubiquitous in your life.

Besides, the people I know living in the woods are the ones most connected to social media because they don't have a lot of social options otherwise.

If I want to talk to people, I just leave my house and talk to people.

[cannotWAIT]

My dad was a real estate investor who liked to tell everyone he "retired a millionaire" at 33. That was in 1976. I assume he meant he had an actual million dollars or thereabouts. He had a mini-mansion in Florida, luxury cars, a vacation home, extended travel in Europe, etc. Not dazzling wealth but very, very nice, so in my mind, that's what a million dollars can buy. I would like to know what percentile of net worth he was in then. Because I'm at about the same amount now, and I work full time making $70K, drive a Subaru, and live in a 750 sq ft house--but somehow I am still in the top 13%! And when I look around (not on social media! in real life!) everyone I know seems to have more. Granted everyone I know is some stripe of professional (there's the insularity), but still. My childhood notion of what a millionaire is, plus the appearance of greater wealth all around me, leaves me scratching my head at statistics that say I'm wealthy.

[boarder42]

My dad was a real estate investor who liked to tell everyone he "retired a millionaire" at 33. That was in 1976. I assume he meant he had an actual million dollars or thereabouts. He had a mini-mansion in Florida, luxury cars, a vacation home, extended travel in Europe, etc. Not dazzling wealth but very, very nice, so in my mind, that's what a million dollars can buy. I would like to know what percentile of net worth he was in then. Because I'm at about the same amount now, and I work full time making $70K, drive a Subaru, and live in a 750 sq ft house--but somehow I am still in the top 13%! And when I look around (not on social media! in real life!) everyone I know seems to have more. Granted everyone I know is some stripe of professional (there's the insularity), but still. My childhood notion of what a millionaire is, plus the appearance of greater wealth all around me, leaves me scratching my head at statistics that say I'm wealthy.

Pretty easy take a cpi calculator plug in how much he had or you think he did in 76 and then take the number it spits out and plug that into the calc above.

[cannotWAIT]

But I that won't show where he stood relative to the rest of the population back then. That's what I'm really interested in.

[boarder42]

But I that won't show where he stood relative to the rest of the population back then. That's what I'm really interested in.

It's probably pretty similar.

[Watchmaker]

My dad was a real estate investor who liked to tell everyone he "retired a millionaire" at 33. That was in 1976. I assume he meant he had an actual million dollars or thereabouts. He had a mini-mansion in Florida, luxury cars, a vacation home, extended travel in Europe, etc. Not dazzling wealth but very, very nice, so in my mind, that's what a million dollars can buy. I would like to know what percentile of net worth he was in then. Because I'm at about the same amount now, and I work full time making $70K, drive a Subaru, and live in a 750 sq ft house--but somehow I am still in the top 13%! And when I look around (not on social media! in real life!) everyone I know seems to have more. Granted everyone I know is some stripe of professional (there's the insularity), but still. My childhood notion of what a millionaire is, plus the appearance of greater wealth all around me, leaves me scratching my head at statistics that say I'm wealthy.

According to the article linked below, there were 180,000 millionaires in the US in 1976. The population was ~220,000,000, so that would make a millionaire part of the top 0.1% by NW. Adjusting 1976 $1 million for inflation would give you $4.8 million in 2021 dollars. I read recently somewhere else that the threshold for top 0.1% in the US in 2021 is now $11 million.

https://www.csmonitor.com/1983/0826/082604.html

[Abe]

My family is in the top 5% per that calculator (adjusted for age, otherwise in the 90%). Definitely feel rich because I’ve seen where my parents grew up in India and I grew up in a dirt poor town in a rural area in the US (but was not poor). There’s no way to kid myself that I’m not rich unless I’m willfully blind to others’ suffering.

I agree that the idea of meritocracy gives a false sense of security and tarnishes the mirror we hold up to ourselves.  I know that hard work has taken me far, but also realize I won a ridiculous lottery being born into my family, and know that luck can be fleeting. Thus it makes me paranoid about spending excess on luxuries and fancy vacations, and more concerned about ensuring that luck isn’t the bedrock of our society. Even the mighty can fall, and we wealthy people live in the penthouse of a financial skyscraper of cards even if our personal finances are theoretically secure. The society we have one year may cease to exist in another few years (or not). Most countries have experienced that (some more recently than others). The last two years has weakened my belief we can create an equal society in this country in particular, and I feel there are too many of us who are too smug to see the outcome that awaits us. We foolishly believe the tides of change will not dash us to the rocks, mostly because we gaze upwards and imagine we are the most ultimately wealthy: those whose wealth drives our lawmakers and to whom money has almost no meaning except as a scorecard. They will be spared, but not us 10%. Our arrogance will cost us allies, and our hubris embarrasses the drivers of influence.

[Gronnie]

The last two years has weakened my belief we can create an equal society in this country in particular, and I feel there are too many of us who are too smug to see the outcome that awaits us. We foolishly believe the tides of change will not dash us to the rocks, mostly because we gaze upwards and imagine we are the most ultimately wealthy: those whose wealth drives our lawmakers and to whom money has almost no meaning except as a scorecard. They will be spared, but not us 10%. Our arrogance will cost us allies, and our hubris embarrasses the drivers of influence.

This is just a fancy way of saying that the most ultimately wealthy have done a FANTASTIC job of remaining behind the curtain whilst pitting everyone else against each other.

[maizefolk]

i'm in the top 3-4% household NW in america and i feel wealthy as shit.  I dont have to care about my job b/c i'm quitting year end.  I get to work from home, I take fridays off to hang out with my wife and kids.  maybe its all the monte carlo's i've run that let me know how safe our plan is and how much money i'll be able to give away.  But i'm getting my time back and thats worth way more.

How do you measure at what % you're in?

Personally, I use this calculator. I opt to include home equity, even though we don't count our boat value in our portfolio. We move up 1.5 percentage points if we ignore home equity.

https://dqydj.com/net-worth-percentile-calculator-united-states/

does checking your wealth vs a tool like this serve any purpose other than comparing sizes? seems to be a fuel for jealousy

I think it can serve as a needed reality check.
For example, the multimillionaires who think they are middle-class but are actually in the top few percent. In which case, maybe they are middle-class by choice or lifestyle, not necessity.

I just want to point out that this tool states it uses survey data collected February, 2019 - April, 2020. The people surveyed for this dataset have probably seen their net worth grow a lot (50+%) between they were surveyed and today. The S&P 500 ranged from 2,300-3,400 in the time frame of the survey collection and closed above 4,600 on Friday (but of course the top is in now). Home values have seen similar run ups, and there the effect of changes in value is amplified for the many home owners with mortgages.

In any case, for whatever reason you are consulting a net worth percentile calculator, just keep in mind you're actual net worth percentile is probably non-trivially lower than the results would suggest. Which may feel good if you don't want to consider yourself semi-rich or may feel bad bad if you want to feel like you've won the game.

[iris lily]

i'm in the top 3-4% household NW in america and i feel wealthy as shit.  I dont have to care about my job b/c i'm quitting year end.  I get to work from home, I take fridays off to hang out with my wife and kids.  maybe its all the monte carlo's i've run that let me know how safe our plan is and how much money i'll be able to give away.  But i'm getting my time back and thats worth way more.

How do you measure at what % you're in?

Personally, I use this calculator. I opt to include home equity, even though we don't count our boat value in our portfolio. We move up 1.5 percentage points if we ignore home equity.

https://dqydj.com/net-worth-percentile-calculator-united-states/

does checking your wealth vs a tool like this serve any purpose other than comparing sizes? seems to be a fuel for jealousy

I think it can serve as a needed reality check.
For example, the multimillionaires who think they are middle-class but are actually in the top few percent. In which case, maybe they are middle-class by choice or lifestyle, not necessity.

I just want to point out that this tool states it uses survey data collected February, 2019 - April, 2020. The people surveyed for this dataset have probably seen their net worth grow a lot (50+%) between they were surveyed and today. The S&P 500 ranged from 2,300-3,400 in the time frame of the survey collection and closed above 4,600 on Friday (but of course the top is in now). Home values have seen similar run ups, and there the effect of changes in value is amplified for the many home owners with mortgages.

In any case, for whatever reason you are consulting a net worth percentile calculator, just keep in mind you're actual net worth percentile is probably non-trivially lower than the results would suggest. Which may feel good if you don't want to consider yourself semi-rich or may feel bad bad if you want to feel like you've won the game.

Maize, it is true the 2019 numbers don’t reflect numbers today, but why can’t we assume that everyone’s fortunes pretty much went up at the same time/same amounts? This tool is useful to compare yourself to other Americans.

But that said, this tool that I’ve never used before puts my household in the upper area, 5%, and usually in the past we’ve squeaked into the 5% area sometimes but usually not.

[Villanelle]

I feel fairly rich, though our NW isn't  in the range from the OP.  (To be fair, a significant portion of our FIRE plan is DH's pension, and there isn't a great way to include that in our NW, but failure to do so makes us look less wealthy than we realistically are.)

Our income isn't anything special at all, and surely falls in a lower percentage band than our NW.  Many of my friends and family make (and have made for quite some time) far more than we ever have.  Even if you remove children (which I acknowledge cost a lot, even if childrearing is done frugally), they should have far more money than we do.  Much higher in the earnings, significantly lower in the NW.

While I think merit plays some role in net worth, I certainly don't think it is the only--or even biggest--factor. 

I guess I feel wealthy because I never worry about money.  That's a huge luxury in and of itself and one I don't take for granted. 

[Michael in ABQ]

One of my best friends is a tech executive in Silicon Valley. He's easily worth a few million dollars but because he's surrounded by people worth tens of millions or even billions he doesn't feel like he's wealthy. The reality is he could quit tomorrow and never have to work another day in his life and still live better than 90% of the world.

[dcheesi]

This statement to end the article rubs me a bit wrong.
"I’d like to see people from this group recognize where some of their advantages come from and make the world a more affordable place."
I perceive there are many people that would like to make the world a more affordable place, but I can't see the link between my advantages growing up and the ability to save with some special ability to make the world any more affordable.

Also, I concur with boarder42 and feel crazy wealthy with lots of flexibility.  I might not have reached my FI target yet but in the scheme of things, it is statistically very unlikely I will ever become homeless or become what the average person might think of as broke.

I suspect that that quote is related to this one:

On the housing thing, there are quite a few people whose financial stability and net worth has come about through the luck of the real estate market. Too often they imagine that was from their own genius or their contributions to communities. And then when these same people are asked to make decisions that might make housing more affordable for other people, they slam the door shut.

I see this in my own area fairly frequently. There are endless debates about relaxing the single-family-home zoning rules to allow for denser, and thereby more affordable, housing¹. Invariably, the residents of the community in question fight it tooth and nail, in the name of preserving the "character" of their neighborhood. Basically, they don't want their own home values to be impacted, and/or they're afraid of mixing with members of other social classes.

It's classic "progressive" NIMBY-ism --everyone is all for equity and helping the less privileged, until it's their neighborhood...

¹EDIT: We're not talking about high-rise housing projects here; minor changes like permitting duplexes, or allowing owners to add "mother-in-law" units (ADUs) on their property, are subject to vehement opposition in these debates

[maizefolk]

i'm in the top 3-4% household NW in america and i feel wealthy as shit.  I dont have to care about my job b/c i'm quitting year end.  I get to work from home, I take fridays off to hang out with my wife and kids.  maybe its all the monte carlo's i've run that let me know how safe our plan is and how much money i'll be able to give away.  But i'm getting my time back and thats worth way more.

How do you measure at what % you're in?

Personally, I use this calculator. I opt to include home equity, even though we don't count our boat value in our portfolio. We move up 1.5 percentage points if we ignore home equity.

https://dqydj.com/net-worth-percentile-calculator-united-states/

does checking your wealth vs a tool like this serve any purpose other than comparing sizes? seems to be a fuel for jealousy

I think it can serve as a needed reality check.
For example, the multimillionaires who think they are middle-class but are actually in the top few percent. In which case, maybe they are middle-class by choice or lifestyle, not necessity.

I just want to point out that this tool states it uses survey data collected February, 2019 - April, 2020. The people surveyed for this dataset have probably seen their net worth grow a lot (50+%) between they were surveyed and today. The S&P 500 ranged from 2,300-3,400 in the time frame of the survey collection and closed above 4,600 on Friday (but of course the top is in now). Home values have seen similar run ups, and there the effect of changes in value is amplified for the many home owners with mortgages.

In any case, for whatever reason you are consulting a net worth percentile calculator, just keep in mind you're actual net worth percentile is probably non-trivially lower than the results would suggest. Which may feel good if you don't want to consider yourself semi-rich or may feel bad bad if you want to feel like you've won the game.

Maize, it is true the 2019 numbers don’t reflect numbers today, but why can’t we assume that everyone’s fortunes pretty much went up at the same time/same amounts? This tool is useful to compare yourself to other Americans.

But that said, this tool that I’ve never used before puts my household in the upper area, 5%, and usually in the past we’ve squeaked into the 5% area sometimes but usually not.

For people who are out of the accumulation phase then yeah, putting in their own net worth numbers from late 2019 early 2020 probably gives a reasonably accurate picture of the same percentile they're in today because both their own net worth and the net worth of others folks with significant stock market/real estate investments rose in parallel.

And even if you take the calculator at face value it's probably not THAT wrong for high net worth folks just because it takes a big change in net worth to change your ranking significantly at the high end. In my personal situation my best estimate is that comparing my net worth today to reported net worths from before the pandemic probably over stated my rank in the population by about 5 percentile points.

[moof]

6.5%er here.  I feel very fortunate, not rich.  Very effed up that I say that.  I grew up low income with a stretch of single parentdom on welfare, and money struggles throughout my childhood.  9 year old me would be flabbergasted that as a millionaire I would not feel rich.  Comparing my 9 yo son’s situation to my own is embarassingly oppulant, with dental care, two parents, and a fat college fund.  I almost earned every penny with negligable help from family, so I check the box on believing in meritocracy.  I also realize I’ve won the lottery many times over in the health, intelligence, and pure luck categories.  Start a thousand random kids in identical circumstances to my own and odds are heavily against more than a few making it like I did.

Psychologically I feel precarious, not rich (WTF is wrong with me?!).  A major health event could cripple us.  Funding FIRE means I don’t see vast sums of cash sitting around to buy flashy toys with, which is largely by personal design.  The steps needed to become wealthy involve voluntary deprivation, while our image of the wealthy is of folks who appear spendthrift relative to us but can afford to be so.  My planned retired lifestyle is pretty basic, hard to call someone spending decently under six figures a year “wealthy”, but finanial independence is being wealthy by any sane definition.

[sonofsven]

This statement to end the article rubs me a bit wrong.
"I’d like to see people from this group recognize where some of their advantages come from and make the world a more affordable place."
I perceive there are many people that would like to make the world a more affordable place, but I can't see the link between my advantages growing up and the ability to save with some special ability to make the world any more affordable.

Also, I concur with boarder42 and feel crazy wealthy with lots of flexibility.  I might not have reached my FI target yet but in the scheme of things, it is statistically very unlikely I will ever become homeless or become what the average person might think of as broke.

I suspect that that quote is related to this one:

On the housing thing, there are quite a few people whose financial stability and net worth has come about through the luck of the real estate market. Too often they imagine that was from their own genius or their contributions to communities. And then when these same people are asked to make decisions that might make housing more affordable for other people, they slam the door shut.

I see this in my own area fairly frequently. There are endless debates about relaxing the single-family-home zoning rules to allow for denser, and thereby more affordable, housing¹. Invariably, the residents of the community in question fight it tooth and nail, in the name of preserving the "character" of their neighborhood. Basically, they don't want their own home values to be impacted, and/or they're afraid of mixing with members of other social classes.

It's classic "progressive" NIMBY-ism --everyone is all for equity and helping the less privileged, until it's their neighborhood...

¹EDIT: We're not talking about high-rise housing projects here; minor changes like permitting duplexes, or allowing owners to add "mother-in-law" units (ADUs) on their property, are subject to vehement opposition in these debates

That's what I see too. Zoning regulations that preserve home prices  for current homeowners at the expense of homebuyers, myself included as a longtime homeowner.

[Sandi_k]

I suspect people with money don't feel wealthy because the vast, vast majority of people in the developed world are deprived only relative to their neighbors.  By any historical and/or global standards, we're fine.

If all deprivation is relative deprivation, and we've self-sorted by class, we normalize whatever level of consumption we want, at least until the Joneses ratchet it up a notch and send ripples of relative deprivation through the (literal or social) neighborhood.

For people who have adequate food and shelter, the remaining absolute gains are mostly related to health, wellbeing, creativity, and community.  The collective "we" are pretty bad at matching all the wealth we produce with the goods that lead to absolute gains, instead squandering wealth on temporarily addressing feelings of relative deprivation.

Social media doesn't help. Maybe you have some reasonably frugal friends. But 1 friend chooses new cars and another chooses trips and another NFL season tickets etc. You get the idea. Now you think all these things are necessary. Bc you can't prioritize your own top wants.

Hmm. We're taking an anniversary trip this week. Yesterday, as I got into our rented Jeep outside our private rented 3 Brm/2BA villa, I commented to DH:

"And this is what we choose to spend our money on, instead of spending crazy money every year on Halloween decorations." (His BFF just added animatronic skeletons to their house decor, in addition to the previous decorations, often purchased and "upgraded" each year).

[boarder42]

I suspect people with money don't feel wealthy because the vast, vast majority of people in the developed world are deprived only relative to their neighbors.  By any historical and/or global standards, we're fine.

If all deprivation is relative deprivation, and we've self-sorted by class, we normalize whatever level of consumption we want, at least until the Joneses ratchet it up a notch and send ripples of relative deprivation through the (literal or social) neighborhood.

For people who have adequate food and shelter, the remaining absolute gains are mostly related to health, wellbeing, creativity, and community.  The collective "we" are pretty bad at matching all the wealth we produce with the goods that lead to absolute gains, instead squandering wealth on temporarily addressing feelings of relative deprivation.

Social media doesn't help. Maybe you have some reasonably frugal friends. But 1 friend chooses new cars and another chooses trips and another NFL season tickets etc. You get the idea. Now you think all these things are necessary. Bc you can't prioritize your own top wants.

Hmm. We're taking an anniversary trip this week. Yesterday, as I got into our rented Jeep outside our private rented 3 Brm/2BA villa, I commented to DH:

"And this is what we choose to spend our money on, instead of spending crazy money every year on Halloween decorations." (His BFF just added animatronic skeletons to their house decor, in addition to the previous decorations, often purchased and "upgraded" each year).

Yeah both are consuming. Just different ways. We actually do both of those things. I'm an optimizer. We now make money off my travel habit annually. My boat habit is now also profitable. And our decor is bought right after the season is over for the next year. We definitely aren't what MMM had in mind building this site.

[TempusFugit]

This statement to end the article rubs me a bit wrong.
"I’d like to see people from this group recognize where some of their advantages come from and make the world a more affordable place."
I perceive there are many people that would like to make the world a more affordable place, but I can't see the link between my advantages growing up and the ability to save with some special ability to make the world any more affordable.

Also, I concur with boarder42 and feel crazy wealthy with lots of flexibility.  I might not have reached my FI target yet but in the scheme of things, it is statistically very unlikely I will ever become homeless or become what the average person might think of as broke.

I suspect that that quote is related to this one:

On the housing thing, there are quite a few people whose financial stability and net worth has come about through the luck of the real estate market. Too often they imagine that was from their own genius or their contributions to communities. And then when these same people are asked to make decisions that might make housing more affordable for other people, they slam the door shut.

I see this in my own area fairly frequently. There are endless debates about relaxing the single-family-home zoning rules to allow for denser, and thereby more affordable, housing¹. Invariably, the residents of the community in question fight it tooth and nail, in the name of preserving the "character" of their neighborhood. Basically, they don't want their own home values to be impacted, and/or they're afraid of mixing with members of other social classes.

It's classic "progressive" NIMBY-ism --everyone is all for equity and helping the less privileged, until it's their neighborhood...

¹EDIT: We're not talking about high-rise housing projects here; minor changes like permitting duplexes, or allowing owners to add "mother-in-law" units (ADUs) on their property, are subject to vehement opposition in these debates

That's what I see too. Zoning regulations that preserve home prices  for current homeowners at the expense of homebuyers, myself included as a longtime homeowner.

To be fair, it isn’t just home values that people are concerned about.  This “character of the neighborhood” issue is real and it isn’t as nefarious as some present it.  I don’t think anyone can sincerely argue that having a higher percentage of renters in a neighborhood doesn’t have deleterious effects on the neighborhood.  Nobody paints a rented house, as they say. 

Affordable housing is a real issue and zoning is absolutely part of the problem.  But I understand the instinct people have to protect what they have. 

[dcheesi]

This statement to end the article rubs me a bit wrong.
"I’d like to see people from this group recognize where some of their advantages come from and make the world a more affordable place."
I perceive there are many people that would like to make the world a more affordable place, but I can't see the link between my advantages growing up and the ability to save with some special ability to make the world any more affordable.

Also, I concur with boarder42 and feel crazy wealthy with lots of flexibility.  I might not have reached my FI target yet but in the scheme of things, it is statistically very unlikely I will ever become homeless or become what the average person might think of as broke.

I suspect that that quote is related to this one:

On the housing thing, there are quite a few people whose financial stability and net worth has come about through the luck of the real estate market. Too often they imagine that was from their own genius or their contributions to communities. And then when these same people are asked to make decisions that might make housing more affordable for other people, they slam the door shut.

I see this in my own area fairly frequently. There are endless debates about relaxing the single-family-home zoning rules to allow for denser, and thereby more affordable, housing¹. Invariably, the residents of the community in question fight it tooth and nail, in the name of preserving the "character" of their neighborhood. Basically, they don't want their own home values to be impacted, and/or they're afraid of mixing with members of other social classes.

It's classic "progressive" NIMBY-ism --everyone is all for equity and helping the less privileged, until it's their neighborhood...

¹EDIT: We're not talking about high-rise housing projects here; minor changes like permitting duplexes, or allowing owners to add "mother-in-law" units (ADUs) on their property, are subject to vehement opposition in these debates

That's what I see too. Zoning regulations that preserve home prices  for current homeowners at the expense of homebuyers, myself included as a longtime homeowner.

To be fair, it isn’t just home values that people are concerned about.  This “character of the neighborhood” issue is real and it isn’t as nefarious as some present it.  I don’t think anyone can sincerely argue that having a higher percentage of renters in a neighborhood doesn’t have deleterious effects on the neighborhood.  Nobody paints a rented house, as they say. 

Affordable housing is a real issue and zoning is absolutely part of the problem.  But I understand the instinct people have to protect what they have.

Yes, because lack of fresh paint is the real issue! EDIT: less snarky answer: I understand it, but I'm just saying that that impulse is part of the problem, and a lot of people in this demographic don't even realize they're doing it. Or that the "character" of the neighborhood that they bought into was built on red-lining and other exclusionary practices to begin with.

As an aside: a timely satirical article: https://takomatorch.com/index.php/2021/10/30/east-silver-spring-residents-horrified-by-haunted-townhouses/

[FLBiker]

Interesting article and thread.  I'm in the "feel wealthy" camp.  I don't know that we're technically "high income" Americans (I earn ~$80K and DW earns ~$30 part-time) but we have a net worth (leaving our house aside) of ~$1.3 million.  I don't do any social media, and we live in a pretty modest neighborhood in small town Nova Scotia (moved from Florida last year).  I'm not going to say I never worry about money, but that's more about anxiety than not feeling wealthy.

There's a lot of talk in Canada right now about how to make housing more affordable.  We're very lucky -- because I work from home, we were able to choose to live in an affordable place, but for many folks housing is a huge portion of their NW.  Thus, even though people want to make it affordable, their afraid of the loss of wealth.  We paid ~$200K for our house (USD) so whether the price goes up or down for us is pretty much irrelevant.  And we were in a similar situation in Florida.  I feel like it would be much harder to feel wealthy in a HCOL place (although maybe not if my salary increased accordingly).

[Paper Chaser]

Similar article on the 9.9% that I found a bit deeper, more balanced, and a bit less preachy:

https://www.vox.com/the-goods/22673605/upper-middle-class-meritocracy-matthew-stewart

"There are some defining characteristics of today’s American upper-middle class, per Stewart’s telling. They are hyper-focused on getting their kids into great schools and themselves into great jobs, at which they’re willing to work super-long hours. They want to live in great neighborhoods, even if that means keeping others out, and will pay what it takes to ensure their families’ fitness and health. They believe in meritocracy, that they’ve gained their positions in society by talent and hard work. They believe in markets. They’re rich, but they don’t feel like it — they’re always looking at someone else who’s richer.

They’re also terrified. While this 9.9 percent drives inequality — they want to lock in their positions for themselves and their families — they’re also driven by inequality. They recognize that American society is increasingly one of have-nots, and they’re determined not to be one of them."

The discussion goes into a lot more depth than that synopsis, but the part about being driven by inequality, while simultaneously benefiting from inequality really hit home for me.


Also, if we're going to compare our net worth to others, I think it makes more sense to do it by age than by the population overall. If I'm interested in how I compare to others, I want it to reflect my peers, not somebody that's had 40+ more years on this planet to accumulate their wealth:
https://dqydj.com/net-worth-by-age-calculator-united-states/

[StarBright]

Thanks for sharing that link @Paper Chaser  - it was a good read!

[iris lily]

….


Also, if we're going to compare our net worth to others, I think it makes more sense to do it by age than by the population overall. If I'm interested in how I compare to others, I want it to reflect my peers, not somebody that's had 40+ more years on this planet to accumulate their wealth:
https://dqydj.com/net-worth-by-age-calculator-united-states/

Agreed, I am rich, but I am old. The Benjamins have been working for me for decades.

Still when I take this test of of peer comparison, I’m at the same range as the previous one.

I remember decades ago there was a wealth/peer calculator that defined its top-tier as “prodigious accumulators of wealth. “I still remember that phrase, it was funny.

[boarder42]

….


Also, if we're going to compare our net worth to others, I think it makes more sense to do it by age than by the population overall. If I'm interested in how I compare to others, I want it to reflect my peers, not somebody that's had 40+ more years on this planet to accumulate their wealth:
https://dqydj.com/net-worth-by-age-calculator-united-states/

Agreed, I am rich, but I am old. The Benjamins have been working for me for decades.

Still when I take this test of of peer comparison, I’m at the same range as the previous one.

I remember decades ago there was a wealth/peer calculator that defined its top-tier as “prodigious accumulators of wealth. “I still remember that phrase, it was funny.

well at the high ends of wealth there arent very many differences in age group further at the high ends of age it would make sense that your avg doesnt change as you shift from median for all ages to median for your age group.  all projections i have put us moving up these ranks as we age both all age groups and current age group. 

[TempusFugit]

“They’re rich, but they don’t feel like it — they’re always looking at someone else who’s richer.”

It seems to me that this statement applies almost all the way down the scale, at least in the wealthy West. Even people of “moderate” means live lives of comfort and luxury unheard of in the fairly recent past.  Air conditioning, on demand entertainment, access to the sum total of human knowledge from a device in your pocket, etc.  People pine for good old days that never really existed when they whine and moan about how hard things are today.  Some people certainly do have hard lives, but that category doesn’t start at the 85th percentile of wealth in the United States of America. 

[boarder42]

“They’re rich, but they don’t feel like it — they’re always looking at someone else who’s richer.”

It seems to me that this statement applies almost all the way down the scale, at least in the wealthy West. Even people of “moderate” means live lives of comfort and luxury unheard of in the fairly recent past.  Air conditioning, on demand entertainment, access to the sum total of human knowledge from a device in your pocket, etc.  People pine for good old days that never really existed when they whine and moan about how hard things are today.  Some people certainly do have hard lives, but that category doesn’t start at the 85th percentile of wealth in the United States of America.

This concept can even be seen in a netflix episode of billionaires explained where mark cuban starts to talk about how he's not that rich(think bezos rich) then calls himself a dumbass and laughs about it b/c he's filthy rich.

this episode also tells people how to become rich - dont work hard - invest your capital - hopefully it raised some eyebrows for spendypants in the world and they found all the great PF FIRE advice online.

[Dicey]

Also, if we're going to compare our net worth to others, I think it makes more sense to do it by age than by the population overall. If I'm interested in how I compare to others, I want it to reflect my peers, not somebody that's had 40+ more years on this planet to accumulate their wealth:
https://dqydj.com/net-worth-by-age-calculator-united-states/

I'm old, so I thought I'd try this one. I got 59%. Huh? Then I realized I'd missed a zero. Oops. 93%. I can't be arsed to calculate our actual NW, so even that number is a bit low.

Here's the relevance of my comment on this thread. Having "multiple two-comma money" (inside joke) or rather, a number > 2 in front of the first comma, gives us an incredibly exhuberant feeling of buoyancy. Nothing is a problem when you can just throw a relatively de minimis amount of money at it. We did not expect that and it's pretty fucking amazing.

Neither DH or I have four year degrees. We were never high wage earners. This shit works, man, it really works!