Conversations with the Wealthy but Working neighbors

[DumpTruck]

In the end, today is a good day for your ego to die. All your wealth can instantly evaporate. It's unlikely, but it's not too far out of the realm of possibility.

I used to want enough money to live without fear, but now I just choose to live without fear.

I know everything will be fine if I have 1 million dollars, and I know everything will be fine if i lose my house, car, GF and dog, and only have 1 dollar.

[AnnaGrowsAMustache]

In the end, today is a good day for your ego to die. All your wealth can instantly evaporate. It's unlikely, but it's not too far out of the realm of possibility.

I used to want enough money to live without fear, but now I just choose to live without fear.

I know everything will be fine if I have 1 million dollars, and I know everything will be fine if i lose my house, car, GF and dog, and only have 1 dollar.

Where did you get that kind of confidence? And where do I get it?

[Blindsquirrel]

   DumpTruck! You are wise to quote Low Dog!  I forget.  way. too. often.  Hoka Hey

[inline five]

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

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

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

Well I don't how how you hit that.

$230k with zero deductions besides federal tax is around $170k MFJ. Subtract local tax and we only get $158k. According to pay check city.com.

Minus 401k, ESOP, medical and union dues we see $8600/month which is just over $100k after deductions/taxes.

[Fomerly known as something]

I realized I was rich sometime while living in NYC until I was 30.  I had been making over somewhere between $100,000-$120,000 for a couple of years.  I never had to worry about covering any need and could afford most of my wants just not all at the same time.  Most of all even though this was before MMM, I was maxing out my 401k and IRA.  I could see though normal person math that is was only a matter of time before I became a member of the two comma club.  Again this was while living in a HCOL area. 

It may help that I have had two Millionaire next doors in my life growing up.  I thought they were normal people until each family built what could only be a true mansion sometime when the couples were in their mid-40s. 

I also happened to spend a couple of years down the street from a guy who is glittering rich, as in he is on a Forbes list for the family business.  He sure didn't look it when they lived here, he looked normal I know he never would have said that "I'm not rich because I live on a street with teachers, police officers and firefighters."

[Metta]

I also happened to spend a couple of years down the street from a guy who is glittering rich, as in he is on a Forbes list for the family business.  He sure didn't look it when they lived here, he looked normal I know he never would have said that "I'm not rich because I live on a street with teachers, police officers and firefighters."

When I was a teenager my best friend's father was one of those very wealthy and influential people but I was only vaguely aware of this because they lived an ordinary life in a somewhat ordinary suburb (though in Boulder, CO which is an expensive place and they had two horses). He also seemed ordinary to me. I remember one day when my best friend and I were messing around and not doing the chores he'd assigned, he pulled us aside to lecture us. Finally he pulled himself very straight, looked his daughter in the eye and said, "I am a millionaire publisher. I could do anything I want. And when I shovel horse shit, I do a good job without putting it off. Now go clean out the barn and don't come back until you've done a good job. And Metta, you too."

It turns out that I was much more motivated by his speech against privilege than my best friend was. Strangely enough, she ended up quite poor and I ended up rich. The space to pass between being rich and becoming poor for an individual is often shorter than we realize or want to know.

[Jenny1974]

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

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

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

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

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

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

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

This!  Well said . . .  exactly how I feel.

[DS]

In the end, today is a good day for your ego to die. All your wealth can instantly evaporate. It's unlikely, but it's not too far out of the realm of possibility.

I used to want enough money to live without fear, but now I just choose to live without fear.

I know everything will be fine if I have 1 million dollars, and I know everything will be fine if i lose my house, car, GF and dog, and only have 1 dollar.

Boom! This is what I was getting at with "rich relationship with the self." True independence regardless of 25X expenses in the bank or not.

If you have to argue online on forums to justify whether you are rich, middle class, going to be fine or not be fine, nothing will change when you hit 25X expenses. May as well work on resolving that along the way.

[talltexan]

My wife has had a really de-moralizing week at work (she works for a large corporation that is having a well-documented down period lately.

I'm not worried about what will happen to our household if she resigns from her job. We have enough set aside that I think we could convert to living on only my income with minimal disruption to consumption, although savings rate would go wayyy down. That must be some low grade of rich, right? Please reassure me :-)

[DumpTruck]

In the end, today is a good day for your ego to die. All your wealth can instantly evaporate. It's unlikely, but it's not too far out of the realm of possibility.

I used to want enough money to live without fear, but now I just choose to live without fear.

I know everything will be fine if I have 1 million dollars, and I know everything will be fine if i lose my house, car, GF and dog, and only have 1 dollar.

Where did you get that kind of confidence? And where do I get it?

I was born in consumer capital of see and be seen Dallas TX. I decided to move but I didn't know exactly why, I just knew it was time for something different after 30 years.

for me it came by randomly coming across some books about meditation in a house I was renting. Seemed interesting, but also kind of boring. Why would you just sit there doing nothing?
 
In that house the owners had a huge library of books.

There was the book "The Happiness Hypothesis" which I read and thought, wow that's amazing

A year later, GF leaves a book out called "The Power of Now" out and I grab it heading out to the airport for a business trip.

Read the book "The Power of Now" on the plane and just am crying my eyes out. Wow, incredible.

Overnight everything changed for me.

[DumpTruck]

   DumpTruck! You are wise to quote Low Dog!  I forget.  way. too. often.  Hoka Hey

Aloha, Hoka Hey


https://www.youtube.com/watch?v=E-QGkYNc0Ls

https://www.youtube.com/watch?v=YGVg_OFcLcc

[matchewed]

https://lifehacker.com/the-more-you-want-the-poorer-youll-feel-1820480898

[frugalnacho]

I've made about $70k/yr for the last several years (should be making more soon!).  My wife doesn't work.

I'm able to max my 401k and both our IRA's.  We were also able to save up about $40k to pay for IVF.  Now we are about half way to FIRE.  I could lose my job tomorrow and we wouldn't have to touch our 401k/IRA money for 3-4 years.  We have a wonderful life that provides just about everything we need and want.  If we want just about anything we can get it, with no fear of not being able to make ends meet.  Our biggest financial worries are which CC bonuses we are going to be able to get next.  We are absurdly rich.

I didn't realize everyone got to have their own definition of rich and middle class though.  It seems most people's definition of rich is someone making many multiples more than them, and middle class is whatever salary they make, with no context for the rest of the country/world.   

[ysette9]

I agree with you that people think they are middle class almost no matter what and that rich is much more than you have, whatever it is you have. I think the poster who got so bent out of shape by the word “rich” actually tapped into why: somehow we have attached value judgements to these labels. “Rich” isn’t just having a high income or wealth, it means being demonized. “Middle class” somehow means you are just an average person, likeable, hard-working. All of that is nonsense, of course, but somehow we can’t let go of these ideas. So we end up in an argument where one person calls another rich to point out how fortunate he/she is, and the other takes offense because he/she thinks that he/she was just called an asshole.

[SC93]

In response to above, you never know who is a millionaire and who is not by the house they live in. I'm trying to think of a millionaire friend that lives in a mansion. My rich friends include the founder of a major sporting goods chain, a former newspaper guy, owner of a very large printing company, owner of a large vending company, 2 owners of plumbing businesses, A man/wife that owns 36 Burger Kings, a man/wife that buy and sell land, 4 guys that worked 'regular' jobs for many years and saved..... they all live in average houses. A man/woman that own a garbage service (they live in an old trailer). One of the plumber guys lives in a trailer house that is no where near new. Several more.

The 1 guy that I can think of that lives in a mansion owned and then sold a large wrecking yard.

[libertarian4321]

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

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

"Only" $8,600 a month.

Not having a go at you specifically but so is it we only define wealthy or rich by pointing to someone with a helicopter? If you are in the top 5-10% in your country in terms of income and/or wealth I'd say you are comparatively rich.

Yup.

He's being ridiculous. 

$230k puts them easily in the top 5%.

50% of Americans make between $30k and $105k (25th to 75th percentile).  That is a pretty good definition of "middle class."  At $105k a household is well into upper middle class.

At 230k, he's making well over double what would qualify as upper middle class.

That ain't "middle class."

[talltexan]

In Thomas Piketty's CAPITAL IN THE TWENTY-FIRST CENTURY, he uses a line of 15X median income as the threshold where true opulence begins. By which he implies the lifestyle of the sort of wealthy person you'd find in a Jane Austen novel. (I suppose Christian Grey would be a modern equivalent)

I have often wondered what steps I might need to take to increase my household income to $750,000, but I think i'd need to get really serious about some type of business.

Or I could just inherit $18 million.

[starguru]

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

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

"Only" $8,600 a month.

Not having a go at you specifically but so is it we only define wealthy or rich by pointing to someone with a helicopter? If you are in the top 5-10% in your country in terms of income and/or wealth I'd say you are comparatively rich.

Yup.

He's being ridiculous. 

$230k puts them easily in the top 5%.

50% of Americans make between $30k and $105k (25th to 75th percentile).  That is a pretty good definition of "middle class."  At $105k a household is well into upper middle class.

At 230k, he's making well over double what would qualify as upper middle class.

That ain't "middle class."

Are you comparing apples to apples here?  You give the 25th and 75th percentiles for “Americans” and then compare that to a household, which is two earners....


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[nereo]

Are you comparing apples to apples here?  You give the 25th and 75th percentiles for “Americans” and then compare that to a household, which is two earners....

Should be "US Household income".  25th percentile sits at $29k, 75th percentile sits at $105k.


"Household" does not mean two earners.  Households can have 1, 2 or more than 2 earners.

[stachestache]

For all of you (and me too?) who have enough time to debate who is rich or not throughout this thread: you are rich. And so am I, so there! Jesus christ, this is a ridiculous thread. I did enjoy where it started.

[starguru]

For all of you (and me too?) who have enough time to debate who is rich or not throughout this thread: you are rich. And so am I, so there! Jesus christ, this is a ridiculous thread. I did enjoy where it started.

yeah, they should retool the "lifestyles of the rich and famous" type TV shows to show two hard working wage earners living in modest homes, clipping coupons, living below their means.  Rich.

I guess the definition of rich is find the poorest people, both in wages or net worth, because, you know, that doesn't matter, and then take anyone who makes more than those people, and rich.  You got it. 

[dude]

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

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

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

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


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You mean like 18 months from now when I retire?

[dude]

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

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

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

Well I don't how how you hit that.

$230k with zero deductions besides federal tax is around $170k MFJ. Subtract local tax and we only get $158k. According to pay check city.com.

Minus 401k, ESOP, medical and union dues we see $8600/month which is just over $100k after deductions/taxes.

Mortgage interest deduction, property tax deduction, 401k contributions, charitable contributions.

[dude]

In the end, today is a good day for your ego to die. All your wealth can instantly evaporate. It's unlikely, but it's not too far out of the realm of possibility.

I used to want enough money to live without fear, but now I just choose to live without fear.

I know everything will be fine if I have 1 million dollars, and I know everything will be fine if i lose my house, car, GF and dog, and only have 1 dollar.

Where did you get that kind of confidence? And where do I get it?

There was the book "The Happiness Hypothesis" which I read and thought, wow that's amazing

A friend of mine who is a self-made multi-millionaire (his business did $80M in revenue last year) sent me that book after a discussion we'd had.  Pretty good read, though I thought he gave too much credit to religion in the book.

[inline five]

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

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

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

Well I don't how how you hit that.

$230k with zero deductions besides federal tax is around $170k MFJ. Subtract local tax and we only get $158k. According to pay check city.com.

Minus 401k, ESOP, medical and union dues we see $8600/month which is just over $100k after deductions/taxes.

Mortgage interest deduction, property tax deduction, 401k contributions, charitable contributions.

Federal tax alone is more than that. You aren't being forthcoming about something.

Federal tax alone on $237k is around $55k. Which gets you down to ~$180k ish and doesn't even touch FICA, state/local, and deductions.

[nereo]

I guess the definition of rich is find the poorest people, both in wages or net worth, because, you know, that doesn't matter, and then take anyone who makes more than those people, and rich.  You got it.

Sarcasm?  I'd say a much better and more honest metric would be to see whether people have enough to provide for all the necessities - food, clothing, shelter, medicine etc. and then look at how much they have afterwards to spend willy-nilly on random wants - vacations, lattes, candy-crush aps, jewelry, a shiny car, housekeeping, cocktails, art, pets, tv, a larger house, restaurants etc.
If a good chunk of your expenses falls in the latter category, what does this say about your wealth?

[ixtap]

I guess the definition of rich is find the poorest people, both in wages or net worth, because, you know, that doesn't matter, and then take anyone who makes more than those people, and rich.  You got it.

Sarcasm?  I'd say a much better and more honest metric would be to see whether people have enough to provide for all the necessities - food, clothing, shelter, medicine etc. and then look at how much they have afterwards to spend willy-nilly on random wants - vacations, lattes, candy-crush aps, jewelry, a shiny car, housekeeping, cocktails, art, pets, tv, a larger house, restaurants etc.
If a good chunk of your expenses falls in the latter category, what does this say about your wealth?

I think you are going to have to add savings into that mix. Otherwise, few MMMs will ever be considered wealthy.

[starguru]

I guess the definition of rich is find the poorest people, both in wages or net worth, because, you know, that doesn't matter, and then take anyone who makes more than those people, and rich.  You got it.

Sarcasm?  I'd say a much better and more honest metric would be to see whether people have enough to provide for all the necessities - food, clothing, shelter, medicine etc. and then look at how much they have afterwards to spend willy-nilly on random wants - vacations, lattes, candy-crush aps, jewelry, a shiny car, housekeeping, cocktails, art, pets, tv, a larger house, restaurants etc.
If a good chunk of your expenses falls in the latter category, what does this say about your wealth?

Of course sarcasm.  It seems that this thread has basically decided that once one has a certain level of income, they're rich.  That's it.  The switch flips and one becomes rich, as if by magic, once the arbitrary income line is crossed.  Not consideration of anything else. 

And to answer your question "If a good chunk of your expenses falls in the latter category, what does this say about your wealth?", it says nothing.  Wealth is net worth.  High income doesn't necessary indicate high NW. 

[AlanStache]

So its friday and I really dont want to be doing what I should be doing, so I made a graphic of what 'rich' is.  In my graphic the green area shows 'rich'.



I think I should have made the right end flatten out more at lower net worth's; but you get the basic idea.  In version 2.0 will have to paste in some pics of Beyonce and Mr Burns in the top right corner.  I think the curve shifts around some based on local cost of living etc. but there are no numbers on the axes anyway.

For some reason my art skills are underutilized by my employer; they tell me to stick with math and software for some reason :-)

[talltexan]

I like the idea of the graph, but you left out some points with negative income and high net worth that are also rich.

Example: Suppose I started a tech company that did really well. Today, it has a market cap of $8 billion, and I own 25% of the company.

I have a fairly modest (by world standards) lifestyle of about $20,000/month, which I fund using a line of credit that is backed by my ownership stake in the company. Am I rich?

[AlanStache]

I like the idea of the graph, but you left out some points with negative income and high net worth that are also rich.

Example: Suppose I started a tech company that did really well. Today, it has a market cap of $8 billion, and I own 25% of the company.

I have a fairly modest (by world standards) lifestyle of about $20,000/month, which I fund using a line of credit that is backed by my ownership stake in the company. Am I rich?

Your case is handled as there are no numbers shown; the most negative end of the income (or net worth) scale could be negative.  The crossing point of the horizontal and vertical axes does not have to be at zero-income/zero-net worth.

[nereo]

Your case is handled as there are no numbers shown; the most negative end of the income (or net worth) scale could be negative.  The crossing point of the horizontal and vertical axes does not have to be at zero-income/zero-net worth.

You could extend the graph further along the x-axis in both directions.  I'd argue that one could be considered 'rich' even if they had zero net worth (or possibly even negative net worth) but a very high income.  Others will disagree.  For example, the rock star or pro athlete that makes and spends $5MM/year but racks up liabilities at the same speed as assets (i.e. a true NW of zero).
Likewise your net income could be negative (e.g. a retired person with a mortgage and everything in cash) but you'd still be rich if your NW was high enough.

I don't understand why your superiors fail to value your artistic skills.

[dude]

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

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

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

Well I don't how how you hit that.

$230k with zero deductions besides federal tax is around $170k MFJ. Subtract local tax and we only get $158k. According to pay check city.com.

Minus 401k, ESOP, medical and union dues we see $8600/month which is just over $100k after deductions/taxes.

Mortgage interest deduction, property tax deduction, 401k contributions, charitable contributions.

Federal tax alone is more than that. You aren't being forthcoming about something.

Federal tax alone on $237k is around $55k. Which gets you down to ~$180k ish and doesn't even touch FICA, state/local, and deductions.

Not being forthcoming? What reason would I have for that?  Income was $237,879. We paid $29,547 in fed taxes and $9,306 in state (income) taxes. Add another $11,000 for property taxes, and that puts us at $188,026. Subtract $16,532 for Medicare and OASDI and we're at $171,494, or $14,291/month. 

But we might be comparing apples and oranges here -- I wasn't subtracting 401k, "medical" (by that I assume you mean health insurance?), ESOP (no idea what that is), or union dues (I don't pay any).

When I do that for 401k ($42,000) and health insurance ($6,154), we're left with $123,340, or $10,278. So therein lies the rub, I guess -- I wasn't including these two (arguably, the former is discretionary, no?).

[Slee_stack]

Am I rich?


Am I tall?


Am I old?


Am I small?

(channeling Dr. Seuss...:P)


How does one answer any of these?  By relative comparison.  Pick poor comparisons, get poor results?

If your comparison is 'buys aeroplanes', chances are you will decide you are 'poor'..

If your benchmark is 'can afford most of what truly makes me happy', you might consider yourself rich.


Maybe folks really need an 'aeroplane' to be truly happy.   I guess those peeps will probably need to save a little longer then to get there.

[Captain FIRE]

Seems some of the debate here centers around folks that are arguing that they do not FEEL rich while others pointing out that those folks ARE rich.

Newsflash: You can be rich and not feel it.  :)

In fact, there are certain situations which makes it easier to have that happen:
- You live in a HCOL area.
- You associate with people that are generally richer than you - or appear that way with conspicuous consumption.
- You save a lot of money and mentally ballpark that money as "off limits".
- You have high expenses (e.g. daycare, college costs).

My husband doesn't agree with me that we are rich because he does not feel we are rich.  It's hard to argue with a feeling.  And it's true - we live in a HCOL area, we have family, friends, and neighbors that are richer than others and spend more, he "forgets about" the amount we put towards savings (e.g. 401k, IRA, extra payments to student loans), and we currently have a lot of expenses (e.g. daycare, replacement of two heating systems & insulation, 30+ yr old broken fridge).  While this does not diminish how much we take home each month, it does make it "feel" more like we don't have a lot of excess disposable cash.

[nereo]

[snip]
- You save a lot of money and mentally ballpark that money as "off limits".
...
My husband doesn't agree with me that we are rich because he does not feel we are rich.  It's hard to argue with a feeling.  And it's true - we live in a HCOL area, we have family, friends, and neighbors that are richer than others and spend more, he "forgets about" the amount we put towards savings (e.g. 401k, IRA, extra payments to student loans), ...

This is what has fascinated me the most about this discussion - the idea that some people don't "feel" rich because they are saving so much money, and they "forget" about that money or mentally sandbox it as "off limits". It's a hard concept for me to wrap my head around, effectively 'I'm not rich because most of my income is unspent each month and funneled into savings.

[dude]

[snip]
- You save a lot of money and mentally ballpark that money as "off limits".
...
My husband doesn't agree with me that we are rich because he does not feel we are rich.  It's hard to argue with a feeling.  And it's true - we live in a HCOL area, we have family, friends, and neighbors that are richer than others and spend more, he "forgets about" the amount we put towards savings (e.g. 401k, IRA, extra payments to student loans), ...

This is what has fascinated me the most about this discussion - the idea that some people don't "feel" rich because they are saving so much money, and they "forget" about that money or mentally sandbox it as "off limits". It's a hard concept for me to wrap my head around, effectively 'I'm not rich because most of my income is unspent each month and funneled into savings.

My thoughts exactly. I'm rich as a motherfucker compared to the vast majority of people in this country! Certainly not rich in the sense that I'll ever have any influence on policymakers, as the 0.1% have, but rich nonetheless.

[DS]

[snip]
- You save a lot of money and mentally ballpark that money as "off limits".
...
My husband doesn't agree with me that we are rich because he does not feel we are rich.  It's hard to argue with a feeling.  And it's true - we live in a HCOL area, we have family, friends, and neighbors that are richer than others and spend more, he "forgets about" the amount we put towards savings (e.g. 401k, IRA, extra payments to student loans), ...

This is what has fascinated me the most about this discussion - the idea that some people don't "feel" rich because they are saving so much money, and they "forget" about that money or mentally sandbox it as "off limits". It's a hard concept for me to wrap my head around, effectively 'I'm not rich because most of my income is unspent each month and funneled into savings.

One time I was talking with a manager about how I lived paycheck to paycheck in college, and he said he still does (he earns at least $125k), but that included saving and buying a house. Guess he thought I meant I was "alive" from paycheck to paycheck.

[nereo]

One time I was talking with a manager about how I lived paycheck to paycheck in college, and he said he still does (he earns at least $125k), but that included saving and buying a house. Guess he thought I meant I was "alive" from paycheck to paycheck.

... ok, but by that logic, doesn't  everyone who earns a paycheck 'live paycheck to paycheck'?
I certainly have no money left over each money after I pay for all expenses and put the rest into savings.  ---but how could it be any other way?  ;-)

[GettingClose]

When your day-to-day life is indistinguishable from a household making 1/5 of your income, it is easy to not feel "rich", even if net worth is healthy and FIRE is on the horizon.

[matchewed]

When your day-to-day life is indistinguishable from a household making 1/5 of your income, it is easy to not feel "rich", even if net worth is healthy and FIRE is on the horizon.

[ixtap]

When your day-to-day life is indistinguishable from a household making 1/5 of your income, it is easy to not feel "rich", even if net worth is healthy and FIRE is on the horizon.

???

That is almost exactly our ratio, but I do indeed consider myself wealthy, because I do not consider wealth and ostentatiousness as synonyms. When I actually was earning 1/5 of our current income, I was faced with very different options for my future.

[Captain FIRE]

[snip]
- You save a lot of money and mentally ballpark that money as "off limits".
...
My husband doesn't agree with me that we are rich because he does not feel we are rich.  It's hard to argue with a feeling.  And it's true - we live in a HCOL area, we have family, friends, and neighbors that are richer than others and spend more, he "forgets about" the amount we put towards savings (e.g. 401k, IRA, extra payments to student loans), ...

This is what has fascinated me the most about this discussion - the idea that some people don't "feel" rich because they are saving so much money, and they "forget" about that money or mentally sandbox it as "off limits". It's a hard concept for me to wrap my head around, effectively 'I'm not rich because most of my income is unspent each month and funneled into savings.

Trust me, it's hard enough for me to understand it, and I've had many conversations with him about it!  A few things I've learned:
- money that comes out of my paycheck and goes into my 401k, he never sees.  So that literally never exists for him, even if I show him paperwork for it.  Similar to my IRA account or my student loans.  To combat that I've created spreadsheets, but that doesn't get him to really internalize and accept it.
- when he sees the money scattered, it somehow doesn't add up the same for him.  1.5+2.5+4+2 doesn't seem like 10 to him.  So I've encouraged him to consolidate accounts.  This helped a bit.

I forgot to mention, the other issue for him is that he has a pessimistic doomsday approach (boglehead style, dare I say, considering the thread I read the other day comparing the two sites?) to retirement rather than the optimistic one we have here.  He feels life is getting worse, not better so you have to plan for multiple life catastrophes to hit from health care problems to college costs to tax advantaged vehicles disappearing, etc.  (The tax plans being talked about don't help this perspective, as without the SALT deduction we'll pay a great deal more in taxes going forward - one of his doomsday scenarios.)  So the idea of how much he feels we need to save to "be rich and retire" is a ridiculous figure.

 

[nereo]

Trust me, it's hard enough for me to understand it, and I've had many conversations with him about it!  A few things I've learned:
- money that comes out of my paycheck and goes into my 401k, he never sees.  So that literally never exists for him, even if I show him paperwork for it.  Similar to my IRA account or my student loans.  To combat that I've created spreadsheets, but that doesn't get him to really internalize and accept it.

What's worked for us is graphing out our savings.  Somehow the visual is more powerful than that monthly contribution number... steadily marching upwards (of course the market conditions of the last 8 years have certainly helped).

AS for the doomsday mindset, that's a tougher nut to crack, because its driven by fear of the unknown.  That fear gets exploited by politicians and marketing every day.  A lower-information diet helps, as does considerable flexibility with any plan.  If you read bogleheads and prepper websites all day you'll convince yourself the global economy will inevitably crash and starving bandits will eat you alive if can't bunker down with ammo and canned goods.

[Dancin'Dog]

One of the neighbors is building a new home that's 24,000 sq ft.  I haven't met him yet, but sort'a doubt we'll have much in common.  You never know though, maybe he's on the MMM forum right now.  ;)   

I wonder how much his big house will raise my property taxes.... 

[nereo]

One of the neighbors is building a new home that's 24,000 sq ft.  ...

Is that a typo??!!

[honeybbq]

When your day-to-day life is indistinguishable from a household making 1/5 of your income, it is easy to not feel "rich", even if net worth is healthy and FIRE is on the horizon.

I get it. I run the numbers and I'm definitely in the 1%. While I live a more lavish lifestyle than many on MMM, I definitely just 'fit in' with the average joe. I think of myself as Millionaire next door in my 10+ year old Honda although I'm sure some would beg to differ. I personally think of the 0.1% as "rich". But I've been to countries where the average monthly salary is $50 USD. I know how rich I really am. It's about perspective. Even when I was a "poor" graduate student making 13k a year, I was still "rich" compared to many. Not having to worry about food or a place to live, that puts you better off than half the world's population.

[honeybbq]

One of the neighbors is building a new home that's 24,000 sq ft.  I haven't met him yet, but sort'a doubt we'll have much in common.  You never know though, maybe he's on the MMM forum right now.  ;)   

I wonder how much his big house will raise my property taxes....

Wait. ... what???

[LadyDividend]

In the end, today is a good day for your ego to die. All your wealth can instantly evaporate. It's unlikely, but it's not too far out of the realm of possibility.

I used to want enough money to live without fear, but now I just choose to live without fear.

I know everything will be fine if I have 1 million dollars, and I know everything will be fine if i lose my house, car, GF and dog, and only have 1 dollar.

Pretty much! Best to do your best day to day and not get too attached to anything.

[Dancin'Dog]

One of the neighbors is building a new home that's 24,000 sq ft.  ...

Is that a typo??!!

No typo.  The foundation crew spent all summer with a pile driver, pounding over 300 poles in the ground to support the huge building.  I can't imagine how much was spent before they even began to pour the concrete. 

There's a Nascar driver across the cove that just completed a 35,000 sq ft home! 

I just put in laminate floors & a new roof on my double-wide last year, but nobody seemed to notice.  LOL