Many Wealthy People Become Out of Touch

[matchewed]

This thread has gone full-retard.  I posit that the whole thing is just a litmus test:

Anybody thinking they're rich making $100k/yr actually just has really low standards and strives for mediocrity.

Me, I think rich is like $1MM/yr+....which means I have high standards and strive for excellence.

/thread

In that case I embrace my mediocrity in your eyes. I may never make that much and I'm fine with that. Yet I still strive for excellence in my own life. How can that be given your false dichotomy? Hint the answer is in the adjective.

I'm just not going to embrace a worldview where I view so many other people as just mediocre and having low standards. If you choose to do so that's fine but you're probably going to miss out on 99.9% of the people out there.

[big_slacker]

I'm the one that called $200K in Atlanta a fuck-ton of money.

<----- Note the location in my profile. I live there! I know what I'm talking about!

Ohhh, you live there, so that's why you can speak authoritatively for the entire city!  Wait, I live there, too, but I don't always agree with you, so now what?  Anyway, it just bothers me that on so many different threads you crown yourself king of Atlanta knowledge.

Having a $200K income around here means you could live in a neighborhood with a name like "Tuxedo Park" (which is where people like rap stars, pro football and baseball players, and the governor live). You wouldn't be able to get the nicest mansion on the block (and it wouldn't be a Mustachian choice, obviously), but you could do it.

Uh, the cheapest/crappiest homes in Tuxedo Park still go for close to $1 million, with most homes being in the $2-10 million range.  I wouldn't try to live there on a $200,000 income.  Obviously, that neighborhood is an extreme for our city, and on cost of living, yes, Atlanta is a great place where your dollar can travel quite far.  That's even more true if you're willing to live in the suburbs.  You really don't have to go far out from the city center to get beautiful properties for comparatively little.  My personal opinion is that $200,000 is certainly high-income -- even very high -- but I still wouldn't say a fuck-ton . . . unless you mean $200,000 net income, and then I may be more inclined to agree with you.

Finally for those who keep loosely using $200,000 or top 1% as the marking points (or perhaps that's in the sister thread in the MMM Antimustachian subforum), I hope it's clear that these are NOT equivalent.  Top 1% household income in the US (in 2012) would start at $400,000.  http://money.cnn.com/calculator/pf/income-rank/

$200k is very close to the top 1% individual income.  I think it's was closer to $210k in 2014.  If you earn that much by yourself, you are doing exceptionally well and it's foolish to pretend otherwise.

I also like how everyone is now focusing on the very bottom range suggested above by big slacker.  We are talking about a range of $200k-$500k.  Lets see if we can all agree that $500k income is a fuckton?

Total agreement on that fuckton example, there is a large gulf between $200k and $500k income. If you're pulling a 500k income and aren't FI and true rich really quickly even in a HCOL area then you're doing something wrong. And this threadjack is really about definitions. Given the def of many on this thread I'd be a rich guy living a middle class lifestyle which again makes me involuntarily chuckle every time.

My definition of rich has traditionally been $1M in liquid assets on the low end of that labrel and while I might be there in 10-15 years of my current lifestyle I very much feel like a middle class guy living a frugal lifestyle in a HCOL area, with the goal of not working into my 60's. I'll gladly accept the high income label, but rich I can't swallow.

[LeRainDrop]

Ohhh, you live there, so that's why you can speak authoritatively for the entire city!  Wait, I live there, too, but I don't always agree with you, so now what?  Anyway, it just bothers me that on so many different threads you crown yourself king of Atlanta knowledge.

Shall I abdicate in your favor, then? If you want to be king, have at it!

FILA! FILA! FILA! FILA! FILA! FILA! FILA! FILA! FILA! FILA! FILA! FILA! FILA! FILA!

You can be the king, le rain drop.

#404 #770 #678

Uh, no, the point of my comment here is that it's silly for any random citizen to speak definitively on behalf of their entire city -- "I am from city, therefore I know all truth about this city and will speak for said city."  I think it's pretty ridiculous not to acknowledge that there is a ton of diversity of opinions and experiences within any city.  I would never pretend to know everything about Atlanta, and I sure as hell wouldn't purport to be its definitive representative.  That is how I interpreted Jack when he wrote:

<----- Note the location in my profile. I live there! I know what I'm talking about!

[big_owl]

This thread has gone full-retard.  I posit that the whole thing is just a litmus test:

Anybody thinking they're rich making $100k/yr actually just has really low standards and strives for mediocrity.

Me, I think rich is like $1MM/yr+....which means I have high standards and strive for excellence.

/thread

I think the opposite.

I posit that the whole thing is just a litmus test: Anyone who thinks 100k+ (DOUBLE the HOUSEHOLD income of the richest country ever in the history of the world) ISN'T rich has lost all perspective.

Anybody thinking they aren't rich making 100k/yr actually just lacks gratitude and a larger perspective.

Me, I think pretty much anyone above the poverty line in the U.S. is doing pretty well, and anyone at the average household income level or above is rich, whether or not they realize it.

/thread

;)

Your overconfidence in yourself is your undoing.  ;)

I'll posit and new posit and say a lot of this comes down to internal personal drive, just like in physical fitness.  Some people are content going through life looking like a milktoast doughboy.  I'm cool with that, need average people to make me look even better.  As a bodybuilder, I'm never happy with how I look, even though my body looks better than 99.9% of the population, I don't think about it that way.  When I look in the mirror I do admire what I've achieved...but only for a moment.  Then I start thinking about how this muscle or that muscle could be better and I need to step up my game.  It's a real struggle at times being so out of touch with the common man.  Ah the humble brag....

I wonder how much protein is in a jar of Grey Poupon and serving of caviar?  I'll have to ask my personal chef later....my driver's here and I gotta get to my personal jet and head out to make some deals and call some shots...

[thd7t]

This thread has gone full-retard.  I posit that the whole thing is just a litmus test:

Anybody thinking they're rich making $100k/yr actually just has really low standards and strives for mediocrity.

Me, I think rich is like $1MM/yr+....which means I have high standards and strive for excellence.

/thread

I think the opposite.

I posit that the whole thing is just a litmus test: Anyone who thinks 100k+ (DOUBLE the HOUSEHOLD income of the richest country ever in the history of the world) ISN'T rich has lost all perspective.

Anybody thinking they aren't rich making 100k/yr actually just lacks gratitude and a larger perspective.

Me, I think pretty much anyone above the poverty line in the U.S. is doing pretty well, and anyone at the average household income level or above is rich, whether or not they realize it.

/thread

;)

Your overconfidence in yourself is your undoing.  ;)

I'll posit and new posit and say a lot of this comes down to internal personal drive, just like in physical fitness.  Some people are content going through life looking like a milktoast doughboy.  I'm cool with that, need average people to make me look even better.  As a bodybuilder, I'm never happy with how I look, even though my body looks better than 99.9% of the population, I don't think about it that way.  When I look in the mirror I do admire what I've achieved...but only for a moment.  Then I start thinking about how this muscle or that muscle could be better and I need to step up my game.  It's a real struggle at times being so out of touch with the common man.  Ah the humble brag....

I wonder how much protein is in a jar of Grey Poupon and serving of caviar?  I'll have to ask my personal chef later....my driver's here and I gotta get to my personal jet and head out to make some deals and call some shots...

It sounds like your goal is never to be content.  I think that if you can't have enough, your goal is fine, but I also think that personal improvement is not the same as money.  Most MMM readers aren't trying to FIRE to be better than average people.  They're trying to retire and be happy.  They don't need to compare.  It's about not keeping up with the Joneses.

[elaine amj]

Your overconfidence in yourself is your undoing.  ;)

I'll posit and new posit and say a lot of this comes down to internal personal drive, just like in physical fitness.  Some people are content going through life looking like a milktoast doughboy.  I'm cool with that, need average people to make me look even better.  As a bodybuilder, I'm never happy with how I look, even though my body looks better than 99.9% of the population, I don't think about it that way.  When I look in the mirror I do admire what I've achieved...but only for a moment.  Then I start thinking about how this muscle or that muscle could be better and I need to step up my game.  It's a real struggle at times being so out of touch with the common man.  Ah the humble brag....

I wonder how much protein is in a jar of Grey Poupon and serving of caviar?  I'll have to ask my personal chef later....my driver's here and I gotta get to my personal jet and head out to make some deals and call some shots...

It sounds like your goal is never to be content.  I think that if you can't have enough, your goal is fine, but I also think that personal improvement is not the same as money.  Most MMM readers aren't trying to FIRE to be better than average people.  They're trying to retire and be happy.  They don't need to compare.  It's about not keeping up with the Joneses.

ITA. I think learning to be content is a massive achievement. I thought MMM was a place to learn this. After all, it is a major component of everything MMM says. Like someone else said....what forum is this anyway?

Anyway, we each have our own lives to live :)

[Bertram]

EXACTLY what I was going to say. Seriously...if u have a $100k or a $200k or a $500k and don't realize or appreciate how good you have it...then you are out of touch.

But like arebelspy said: The same goes for someone with 40K who "won the lottery of birth" by being born in a first world country.

Why is it OK to ridicule someone (or call him "out of touch") when he is making 100K who is explaining (not complaining!) the differences to a 500K income.
But somehow everybody who is comparing a 40K income to a 100K income and saying "man that other guy's got it good is" - that's somehow OK.

I feel like I'm taking crazy pills, does nobody see the irony in this?

[matchewed]

But somehow everybody who is cparing a 40K income to a 100K income and saying - man that other guy's got it good is somehow OK.

Nobody said that.

*edit* And personally I am a firm believer that if you make 40k you are in fact also rich.

[soupcxan]

You think the average $200k household owns a million dollar yacht and regularly flies on private jets? And I'm the one who's out of touch with reality?

No re-read what I said. You're either not understanding or misconstruing. They have the capability. That's a rich household right there, not middle class, not upper middle class, that's rich.

They clearly do not have the capability. A $1M yacht is $5k/month just in principle and interest. And then there is fuel, maintenance, docking, crew, etc. conservatively call that another $2k/month assuming you want to actually use the thing. That's $84k/year out the door.

A $200k income household ($160k after tax) is unlikely to qualify for a primary residence mortgage of $1M, let alone be able to afford a $1M yacht. You have this picture in your head of $200k households sitting around on their yacht lighting cigars with $100 bills but it's just not reality. They are comfortable but they are not the 0.1%.

[matchewed]

You think the average $200k household owns a million dollar yacht and regularly flies on private jets? And I'm the one who's out of touch with reality?

No re-read what I said. You're either not understanding or misconstruing. They have the capability. That's a rich household right there, not middle class, not upper middle class, that's rich.

They clearly do not have the capability. A $1M yacht is $5k/month just in principle and interest. And then there is fuel, maintenance, docking, crew, etc. conservatively call that another $2k/month assuming you want to actually use the thing. That's $84k/year out the door.

A $200k income household ($160k after tax) is unlikely to qualify for a primary residence mortgage of $1M, let alone be able to afford a $1M yacht. You have this picture in your head of $200k households sitting around on their yacht lighting cigars with $100 bills but it's just not reality. They are comfortable but they are not the 0.1%.

You assume much about the pictures in my head. I never said that. You're still taking things out of context and misconstruing what I've been saying.

[Jack]

Your overconfidence in yourself is your undoing.  ;)

I'll posit and new posit and say a lot of this comes down to internal personal drive, just like in physical fitness.  Some people are content going through life looking like a milktoast doughboy.  I'm cool with that, need average people to make me look even better.  As a bodybuilder, I'm never happy with how I look, even though my body looks better than 99.9% of the population, I don't think about it that way.  When I look in the mirror I do admire what I've achieved...but only for a moment.  Then I start thinking about how this muscle or that muscle could be better and I need to step up my game.  It's a real struggle at times being so out of touch with the common man.  Ah the humble brag....

I wonder how much protein is in a jar of Grey Poupon and serving of caviar?  I'll have to ask my personal chef later....my driver's here and I gotta get to my personal jet and head out to make some deals and call some shots...

It sounds like your goal is never to be content.  I think that if you can't have enough, your goal is fine, but I also think that personal improvement is not the same as money.  Most MMM readers aren't trying to FIRE to be better than average people.  They're trying to retire and be happy.  They don't need to compare.  It's about not keeping up with the Joneses.

ITA. I think learning to be content is a massive achievement. I thought MMM was a place to learn this. After all, it is a major component of everything MMM says. Like someone else said....what forum is this anyway?

Anyway, we each have our own lives to live :)

Not to mention, that description of bodybuilding and body image sounds like some kind of disorder -- like anorexia, except compensated for by exercise instead of diet.

A $200k income household ($160k after tax) is unlikely to qualify for a primary residence mortgage of $1M, let alone be able to afford a $1M yacht. You have this picture in your head of $200k households sitting around on their yacht lighting cigars with $100 bills but it's just not reality. They are comfortable but they are not the 0.1%.

You assume much about the pictures in my head. I never said that. You're still taking things out of context and misconstruing what I've been saying.

He's also insisting on defining upper class as "the 0.1%" instead of "the top 20%," which is a much more reasonable definition. (Even defining it as "the top 5%" might be okay, but insisting everyone up to the 0.1% is "middle class" is absurd by any reasonable standard.)

[CCCA]

He's also insisting on defining upper class as "the 0.1%" instead of "the top 20%," which is a much more reasonable definition. (Even defining it as "the top 5%" might be okay, but insisting everyone up to the 0.1% is "middle class" is absurd by any reasonable standard.)

I'm not an expert here but looking at this wikipedia page, several experts or academics seem to define the "upper middle class" as a wide range that goes all the way up to the 99th percentile, and the 3rd on the chart goes up to the 94% percentile.  So it is apparently not unreasonable to have this definition of "upper middle class" that goes pretty far up the income scale.


https://en.wikipedia.org/wiki/Household_income_in_the_United_States#Social_class

[cawiau]

You wouldn't because you're Mustachian, but a $1M house on a $200K income is "affordable" according to Zillow's calculator (which is the sort of thing normal people use to make the decision). I agree that anyone actually deciding to do it is an idiot, but lots of people are idiots...

Good luck finding a bank nowadays that will give you 1 Million mortgage with a 200k/year income... Even if you bring 200k down payment to the table it would be a stretch and you would need to have no other monthly obligations / debt... And you enjoy being house rich and cash poor!

600k - 700k mortgage is more like it + down payment.

Sent from my iPhone using Tapatalk

[cawiau]

But somehow everybody who is cparing a 40K income to a 100K income and saying - man that other guy's got it good is somehow OK.

Nobody said that.

*edit* And personally I am a firm believer that if you make 40k you are in fact also rich.

Now you are just straight up LYING just to prove a point!

[MOD EDIT: Attack the argument, not the arguer.  Make your case and be specific about where you think the other poster is incorrect]

Sent from my iPhone using Tapatalk

[matchewed]

But somehow everybody who is cparing a 40K income to a 100K income and saying - man that other guy's got it good is somehow OK.

Nobody said that.

*edit* And personally I am a firm believer that if you make 40k you are in fact also rich.

Now you are just straight up LYING just to prove a point!


Sent from my iPhone using Tapatalk

Not lying dude, and there's no reason to start getting upset. Chill and relook at my posts. I've never did that comparison you're stating. If I did I'd say both are rich because that is what I actually believe. This portion of the thread has been about "is 200k rich?" my answer is yes and I've yet to see a reasonable argument otherwise. All you keep doing is misconstruing rhetoric in an effort to either be nitpicky or you just aren't getting it.

[dragoncar]

to the old school users in this thread:

[JLee]

...
So when someone who makes $200k or $500k a year acts as if they're a regular guy they may not be delusional but just have a different perspective on what income and wealth really means.

Yeah, a delusional perspective

200k for a married couple is not as irregular as you think. It's not even top 5% of household income in most large cities like Atlanta, Dallas, Denver, etc.

First of all, slacker said someone making $200k, not sometwo.  $200k is in or very near the top 1% of individual incomes.

Second, whether or not $200k household income is "regular" in whichever microcosm you choose, in the context of our nation and world, it's a shit load.

Honestly, what forum am I on again?

...
So when someone who makes $200k or $500k a year acts as if they're a regular guy they may not be delusional but just have a different perspective on what income and wealth really means.

Yeah, a delusional perspective

Come visit sometime, you'll laugh too at the thought that almost $200k is rich in this area. Comfortable for sure, maybe upper middle class depending on your definition. Rich is hilarious.

Sure, cause I'm totally pampered by the low cost living in San francisco

The top 1% is a lot higher than one might expect:
http://www.huffingtonpost.com/2015/01/26/1-percent-in-each-state-map_n_6548222.html

[dragoncar]

You wouldn't because you're Mustachian, but a $1M house on a $200K income is "affordable" according to Zillow's calculator (which is the sort of thing normal people use to make the decision). I agree that anyone actually deciding to do it is an idiot, but lots of people are idiots...

Good luck finding a bank nowadays that will give you 1 Million mortgage with a 200k/year income... Even if you bring 200k down payment to the table it would be a stretch and you would need to have no other monthly obligations / debt... And you enjoy being house rich and cash poor!

600k - 700k mortgage is more like it + down payment.

Sent from my iPhone using Tapatalk

You can def qualify for a million dollar mortgage on a $200k salary.  Ask me how I know

[dandarc]

You wouldn't because you're Mustachian, but a $1M house on a $200K income is "affordable" according to Zillow's calculator (which is the sort of thing normal people use to make the decision). I agree that anyone actually deciding to do it is an idiot, but lots of people are idiots...

Good luck finding a bank nowadays that will give you 1 Million mortgage with a 200k/year income... Even if you bring 200k down payment to the table it would be a stretch and you would need to have no other monthly obligations / debt... And you enjoy being house rich and cash poor!

600k - 700k mortgage is more like it + down payment.

Sent from my iPhone using Tapatalk

You can def qualify for a million dollar mortgage on a $200k salary.  Ask me how I know

How do you know?

[dragoncar]

You wouldn't because you're Mustachian, but a $1M house on a $200K income is "affordable" according to Zillow's calculator (which is the sort of thing normal people use to make the decision). I agree that anyone actually deciding to do it is an idiot, but lots of people are idiots...

Good luck finding a bank nowadays that will give you 1 Million mortgage with a 200k/year income... Even if you bring 200k down payment to the table it would be a stretch and you would need to have no other monthly obligations / debt... And you enjoy being house rich and cash poor!

600k - 700k mortgage is more like it + down payment.

Sent from my iPhone using Tapatalk

You can def qualify for a million dollar mortgage on a $200k salary.  Ask me how I know

How do you know?

I used a mortgage affordability calculator

[thd7t]

...
So when someone who makes $200k or $500k a year acts as if they're a regular guy they may not be delusional but just have a different perspective on what income and wealth really means.

Yeah, a delusional perspective

200k for a married couple is not as irregular as you think. It's not even top 5% of household income in most large cities like Atlanta, Dallas, Denver, etc.

First of all, slacker said someone making $200k, not sometwo.  $200k is in or very near the top 1% of individual incomes.

Second, whether or not $200k household income is "regular" in whichever microcosm you choose, in the context of our nation and world, it's a shit load.

Honestly, what forum am I on again?

...
So when someone who makes $200k or $500k a year acts as if they're a regular guy they may not be delusional but just have a different perspective on what income and wealth really means.

Yeah, a delusional perspective

Come visit sometime, you'll laugh too at the thought that almost $200k is rich in this area. Comfortable for sure, maybe upper middle class depending on your definition. Rich is hilarious.

Sure, cause I'm totally pampered by the low cost living in San francisco

The top 1% is a lot higher than one might expect:
http://www.huffingtonpost.com/2015/01/26/1-percent-in-each-state-map_n_6548222.html

That's a pretty interesting map, but it deals with "tax units", which may mean households.  It just makes it hard to judge with individual incomes.

[LeRainDrop]

He's also insisting on defining upper class as "the 0.1%" instead of "the top 20%," which is a much more reasonable definition. (Even defining it as "the top 5%" might be okay, but insisting everyone up to the 0.1% is "middle class" is absurd by any reasonable standard.)

I'm not an expert here but looking at this wikipedia page, several experts or academics seem to define the "upper middle class" as a wide range that goes all the way up to the 99th percentile, and the 3rd on the chart goes up to the 94% percentile.  So it is apparently not unreasonable to have this definition of "upper middle class" that goes pretty far up the income scale.

https://en.wikipedia.org/wiki/Household_income_in_the_United_States#Social_class

Thank you.  I was going to post that, too.  $200k is certainly very high income, but based on the various sources and consensus shown in CCCA's link, it's not unreasonable or delusional to characterize a $200k income as "upper middle class," which is one end of the "middle class" spectrum.

I also think it's interesting to note the sources supporting the idea that "upper class" has a social and generational connotation, even in the United States, as well.  https://en.wikipedia.org/wiki/Upper_class#United_States

[big_owl]

Your overconfidence in yourself is your undoing.  ;)

I'll posit and new posit and say a lot of this comes down to internal personal drive, just like in physical fitness.  Some people are content going through life looking like a milktoast doughboy.  I'm cool with that, need average people to make me look even better.  As a bodybuilder, I'm never happy with how I look, even though my body looks better than 99.9% of the population, I don't think about it that way.  When I look in the mirror I do admire what I've achieved...but only for a moment.  Then I start thinking about how this muscle or that muscle could be better and I need to step up my game.  It's a real struggle at times being so out of touch with the common man.  Ah the humble brag....

I wonder how much protein is in a jar of Grey Poupon and serving of caviar?  I'll have to ask my personal chef later....my driver's here and I gotta get to my personal jet and head out to make some deals and call some shots...

It sounds like your goal is never to be content.  I think that if you can't have enough, your goal is fine, but I also think that personal improvement is not the same as money.  Most MMM readers aren't trying to FIRE to be better than average people.  They're trying to retire and be happy.  They don't need to compare.  It's about not keeping up with the Joneses.

ITA. I think learning to be content is a massive achievement. I thought MMM was a place to learn this. After all, it is a major component of everything MMM says. Like someone else said....what forum is this anyway?

Anyway, we each have our own lives to live :)

Not to mention, that description of bodybuilding and body image sounds like some kind of disorder -- like anorexia, except compensated for by exercise instead of diet.

LOL, how often do you hear a competitive sprinter say "Welp, that's it, I'm not gonna train to run any faster than my last race...that was good enough for me!". 

I think it maybe comes down to some people just being wired differently.  I can't imagine settling and telling myself I don't want to do any better, in much of anything, yet alone bodybuilding.  Different strokes for different folks. 

[arebelspy]

It's not settling to decide you have enough money and are interested in other things, any more than it is settling to decide the 10 miles you run daily and marathons you do is enough because you have no desire to do ultramarathons.

Life has so much more to offer than making money. It's sad to be stuck on that, and see any concept of being happy with your money, and moving on to other things as inadequate "settling."

[thd7t]

It's not settling to decide you have enough money and are interested in other things, any more than it is settling to decide the 10 miles you run daily and marathons you do is enough because you have no desire to do ultramarathons.

Life has so much more to offer than making money. It's sad to be stuck on that, and see any concept of being happy with your money, and moving on to other things as inadequate "settling."

Damn it man!  That's settling talk!  You should get back to working full time to pursue more money at a higher wage!  It should be the goal of everyone on this forum!  Can't you see that money is an end, not a means??

[big_owl]

It's not settling to decide you have enough money and are interested in other things, any more than it is settling to decide the 10 miles you run daily and marathons you do is enough because you have no desire to do ultramarathons.

Life has so much more to offer than making money. It's sad to be stuck on that, and see any concept of being happy with your money, and moving on to other things as inadequate "settling."

Eh, I bet for a lot of rich people the money is just a product of being driven to succeed in whatever it is that's making them rich.  On the other hand I'm sure there are plenty of rich people who really do just always want more money for the sake of having more money.

One could also make an argument that the concept of MMM is really about sacrificing many of life's pleasure's now just for the sake of seeing an investment balance grow, similar to an out of touch rich person.  We like to be self-righteous and claim it's just a means to an end and that we only do it so that we can retire early and volunteer or travel or whatever....but I'm somewhat skeptical as to the percentage of us who will actually pull the trigger at $1MM or $2MM or whatever the magic number is and give it all up.  I have no way to prove it, of course, but I'd be willing to bet that a majority of people on this forum, when they reach the supposed magic number, will enjoy that number getting larger and abandon FIRE and continue to work and watch it grow.

PS - I'm not sure where we got on the topic of making money for making money's sake anyway.  That wasn't the basis of my litmus test.

[arebelspy]

You've had an account for a year and 1/2.  How many people have you seen FIRE in that time when they planned versus decide to OMY past when they planned?

[big_owl]

You've had an account for a year and 1/2.  How many people have you seen FIRE in that time when they planned versus decide to OMY past when they planned?

Dunno, don't care, nor do I plan on doing any research on the subject.  But I'd still take the bet.

[Bertram]

https://en.wikipedia.org/wiki/False-consensus_effect

In psychology, the false-consensus effect or false-consensus bias is a cognitive bias whereby a person tends to overestimate the extent to which their beliefs or opinions are typical of those of others. There is a tendency for people to assume that their own opinions, beliefs, preferences, values, and habits are normal and that others also think the same way that they do.[1] This cognitive bias tends to lead to the perception of a consensus that does not exist, a "false consensus". This false consensus is significant because it increases self-esteem. The need to be normal and fit in with other people is underlined by a desire to conform and be liked by others in a social environment.

Applies in various ways to this thread...

[mm1970]

This thread has gone full-retard.  I posit that the whole thing is just a litmus test:

Anybody thinking they're rich making $100k/yr actually just has really low standards and strives for mediocrity.

Me, I think rich is like $1MM/yr+....which means I have high standards and strive for excellence.

/thread

I think the opposite.

I posit that the whole thing is just a litmus test: Anyone who thinks 100k+ (DOUBLE the HOUSEHOLD income of the richest country ever in the history of the world) ISN'T rich has lost all perspective.

Anybody thinking they aren't rich making 100k/yr actually just lacks gratitude and a larger perspective.

Me, I think pretty much anyone above the poverty line in the U.S. is doing pretty well, and anyone at the average household income level or above is rich, whether or not they realize it.

/thread

;)

Your overconfidence in yourself is your undoing.  ;)

I'll posit and new posit and say a lot of this comes down to internal personal drive, just like in physical fitness.  Some people are content going through life looking like a milktoast doughboy.  I'm cool with that, need average people to make me look even better.  As a bodybuilder, I'm never happy with how I look, even though my body looks better than 99.9% of the population, I don't think about it that way.  When I look in the mirror I do admire what I've achieved...but only for a moment.  Then I start thinking about how this muscle or that muscle could be better and I need to step up my game.  It's a real struggle at times being so out of touch with the common man.  Ah the humble brag....

I wonder how much protein is in a jar of Grey Poupon and serving of caviar?  I'll have to ask my personal chef later....my driver's here and I gotta get to my personal jet and head out to make some deals and call some shots...

Hmm.  This is an interesting point, and I wonder how much of it is personality, or age, or upbringing, or what?

I'm pretty type A.  I'm less type-A than I used to be, but growing up I was #1 in my class, went to a top 10 engineering school (graduated #5), got really high SAT's, played varsity volleyball (even though I'm a shorty), was yearbook editor, etc. etc.  Always striving to be the BEST, you know?

But then stuff happens.  I still work hard and all but...my life is more than work now.  What's the research say, you can do at most 3 things really well, and the rest gets neglected?  Obviously that will vary by the type of person.

So I'm still awesome at my job and I work hard BUT... I hit the glass ceiling at around age 42.  And...I don't see that changing in my current workplace.  Even here in town, the few places I've interviewed at - aren't any better.  It's not every manager here that is an issue, but there are enough of them that...well, what do you do?  Beat yourself up, work EVEN HARDER and get no further?

It's also like fitness.  There's a point of diminishing returns here too.  My niece is really into bodybuilding now.  She's "seen the light" so to speak - going from 235 lbs after she had her baby to a pretty ripped 145# now, and training for her first powerlifting competition.  She spends HOURS at the gym every day.

I spend a lot of time on fitness.  If you add up the hours I spend meal planning, grocery shopping, cooking, and exercising - it's a SIZEABLE amount of time each week.  But you know what?  While I'm not overweight anymore (finally got off the last of the baby weight), nobody is going to put me on a calendar.  With a full time job and two kids, I'm limited to how much time I can work out.  I used to run, but can't do that anymore - my joints aren't cut out for it.  I've struggled with many a knee, ankle, and hip injury.  So I lift weights at home, and do body weight training, and swim, and walk.  Not ever going to look like a supermodel or body builder - I'm 45, I've got cellulite, loose belly skin, wide hips.  But I'm no slacker.  In order to look "better than 99.9% of everyone else", I'd have to at least double the amount of time spent, not to mention start lifting seriously at the gym with people spotting me.  And...I don't have time for that.  It's bad enough for women to worry about this little pooch here, that little sag there.  My god, to look in the mirror and hate myself every day, or think "you look okay BUT you need to work more here..."

That's just a little bit crazy.  And at some point, you have to let it go.  Like I said with being good at 3 things...maybe that's one of your 3 things.  But it's not one of my 3 things.

Sometimes striving for excellence is just going to drive you nuts - eventually, most people hit a bump or a wall that they cannot really get around - illness, injury, discrimination, downsizing, accident, children.  So it's better to adjust and move on.

[arebelspy]

If you're striving for that standard in one or two areas, you must have low standards and accept mediocrity in others.

Trading time for money sounds like a good deal when you're young, and have no money, and lots of time.  But when you're old, and have lots of money but no time left, you may regret that.

Or, as the saying goes: You can always earn more money, but you can't buy more time.

[bzzzt]

Combined, my wife and I will break the $200k/year mark this year due to overtime. We're going to be about 30 years old with absolutely ZERO debt come Dec 31st.

We have 10+ year old cars, a 1000 sq. ft. house, and we aren't wearing designer clothes, but we're pretty much rich. We already own so much stuff that we go through our belongings and donate things we're done with or that we don't use anymore.

Assuming fairly steady employment, in ten to fifteen years we'll pretty much be able to do whatever we want, within reason, for the rest of our lives. Very few people on the planet can say that.

Damn, it feels good to be a gangster.

[arebelspy]

Great attitude bzzzt. That's Mustachian all around--maximizing earnings, maximizing spending, recognising your situation, and being grateful for it. Way to go. :)

[arebelspy]

Cross-posting from the other thread discussing this:

Thought this was appropriate to the discussion:

http://money.cnn.com/2015/12/09/news/economy/middle-class/index.html?iid=hp-stack-dom

Thought this was appropriate to the discussion:

http://money.cnn.com/2015/12/09/news/economy/middle-class/index.html?iid=hp-stack-dom

The median net worth of upper class families doubled between 1983 and 2013, up to $650,100.
But the wealth of the middle class has increased a near negligible 2% over that time to $98,100. At least they fared better than lower-income Americans, who saw their wealth drop 18% to $9,500.
For its wealth calculations, Pew used data from the Federal Reserve Bank's Survey of Consumer Finances, which defines net worth as all of a family's assets minus all their debts.

According to that, basically anyone who's FIRE'd here is classified as upper class, and $72,521/yr (single) puts you in the top 21% / upper class. Interesting.

Thought this was appropriate to the discussion:

http://money.cnn.com/2015/12/09/news/economy/middle-class/index.html?iid=hp-stack-dom

Wow, perfect timing, and that is fascinating!  If you click through to the Pew Research Center report that the CNN Money article is about, you can find lots of interesting information, including this graphic:  http://www.pewsocialtrends.org/2015/12/09/the-american-middle-class-is-losing-ground/st_2015-12-09_middle-class-02/

Some good definitions there. Apparently they quantify middle class as 2/3 to 2x the median income for that household size.

Thanks for directly linking the infographic, Raindrop.

My wife and I were middle class, though I felt like we were rich.

So yes, 200k is well into the upper class, for pretty much any household size.

[sokoloff]

In what world is a household with a family net worth of $650K "upper class"?

That's enough to generate about $20-26K in annual income (out of which you'd have to pay for housing).

Any definition of upper class that requires the family to work for fairly basic sustenance is suspect. (Further, median means that 50% of the "upper class" families have less than $650K in net worth.)

[arebelspy]

That's the net worth of the upper class.  That doesn't mean some middle class people (making, say 50k/yr) haven't built up that net worth, or that upper class people (making and spending 500k/yr) that don't have that much saved are suddenly lower class based on their net worth.

You have to look at both factors, and if they're working, income is the more relevant factor of the two, IMO.

Whatever "class" you put someone in, if they have enough to never work again at their desired lifestyle, they are rich.

[Bertram]

I think 95% of the disagreements and complainging and name-calling would go away, if everybody stopped trying to use overloaded terms like "rich", "upper", "average", and simply created new terms without all the political and social connotations.

If you put like this and say:
- GazorpGazorps are households that earn X and they can do Y comfortably, they can do Z if living hand to mouth and they cannot do P.

then most people would agree. But as soon as you use an overloaded term like "rich" instead of GazorpGazorp, all different kinds of things pop up in different heads, and everybody looses their mind.

[Jack]

I think 95% of the disagreements and complainging and name-calling would go away, if everybody stopped trying to use overloaded terms like "rich", "upper", "average", and simply created new terms without all the political and social connotations.

If anyone can't deal with the fact that the 80th percentile and higher is the "upper" quintile, or that "average" means "arithmetic mean," "median" or "mode" (or, in vernacular usage, at least "close" -- i.e., within a standard deviation -- to one of those things), that's their problem. Words have meanings.

[matchewed]

I think 95% of the disagreements and complainging and name-calling would go away, if everybody stopped trying to use overloaded terms like "rich", "upper", "average", and simply created new terms without all the political and social connotations.

If anyone can't deal with the fact that the 80th percentile and higher is the "upper" quintile, or that "average" means "arithmetic mean," "median" or "mode" (or, in vernacular usage, at least "close" -- i.e., within a standard deviation -- to one of those things), that's their problem. Words have meanings.

Yep, we're all adults here. We can view relatively tame subject matter without overloading. Those terms aren't actually overloaded in my opinion anyway, it's been sold to us as a culture that it is whenever a discussion about income comes up. Odd that our politicians/media are the ones manipulating our own language to induce this overload into our language. Or maybe it isn't odd...

This is a board about being able to discuss personal finance openly, people shouldn't feel ashamed or threatened about their particular location on a spectrum. You do you and I'll do me (kinky I know) and let's just be a bit ok with our situations as we work to improve them in various ways.

[Bertram]

And that's not at all what the disagreement is about, you entirely sidestepping the argument I am making.

Nobody disagrees that there is a big difference in disposable income between 40K and 200K. Nobody disagrees that it affects quality of life or time to FIRE. Nobody disagrees with any of the objective statistics that are being posted. The disgreement is about labels like rich, upper, middle class etc., because of the connotations those labels have. If you leave out the labels for one moment or use abstract labels, most of the disagreements disappear.

The remaining question is only what is the more correct base population to use for the statistics: DC, SF, whole US, whole 1st world, whole earth population? You can make everybody end up on different ends of the spectrum or in the same quintile depending on the base population you pick.

[thd7t]

I think 95% of the disagreements and complainging and name-calling would go away, if everybody stopped trying to use overloaded terms like "rich", "upper", "average", and simply created new terms without all the political and social connotations.

If you put like this and say:
- GazorpGazorps are households that earn X and they can do Y comfortably, they can do Z if living hand to mouth and they cannot do P.

then most people would agree. But as soon as you use an overloaded term like "rich" instead of GazorpGazorp, all different kinds of things pop up in different heads, and everybody looses their mind.

I don't think that this would work the way you think it would. Plenty of people with upper quintile incomes complain about affording basics. They would say that they have similar buying power to people at lower income levels. A big part of the FIRE mentality is using your resources efficiently. This is not typical behavior among any income level.

[matchewed]

So the crux of your argument is if I just use the term cromulent people will all stop being so bugs in the pants about whether their income makes them cromulent or not... ooooooooooohhhhhkaaaay.

If you make 200k you're cromulent.

[Bertram]

I don't think that this would work the way you think it would. Plenty of people with upper quintile incomes complain about affording basics. They would say that they have similar buying power to people at lower income levels. A big part of the FIRE mentality is using your resources efficiently. This is not typical behavior among any income level.

But if it's not typical to any specific income level, how does it support the argument that "rich" people are out of touch. Then the argument would be all non-mustachians are out of touch. Which is an odd proposition to make, given that mustachians are likely a minority in the overall population.

[Bertram]

So the crux of your argument is if I just use the term cromulent people will all stop being so bugs in the pants about whether their income makes them cromulent or not... ooooooooooohhhhhkaaaay.

If you make 200k you're cromulent.

Now you ahve created a fresh label, that is step 1. Next you need to define:
- what a cromulent person can do comfortably  on his income
- what he could do if he saved nothing
- what he cannot do financially.

For a given cost of living, this is pretty easy. And this is exactly what people are doing all the time when they talk about becoming mustachian. It just works when you simply talk about the numbers and don't use the overladed labels.

[matchewed]

Joking aside I don't actually agree with that. I think that people are going to be less grateful and compassionate when they disillusion themselves to their current reality when it comes to the fortune in their lives. In particular we're talking about monetary resource flow with that fortune. We have a word for that, cromulent. It has mostly been people saying I'm definitely not cromulent at my current income because whatever handwavy reason I come up with; I still have to work, or I live in an expensive area, or it's literally semantics...

Part of why I'm so vocal about this is that people aren't realizing their incredible fortune, some people have chipped in to do so and YAAAAAAAAY!!!! for them. :) But the others have pulled the wool over their own eyes and I don't buy that it's because they don't like the word cromulent. I think it's deeper than that.

Replace cromulent with rich.

So the crux of your argument is if I just use the term cromulent people will all stop being so bugs in the pants about whether their income makes them cromulent or not... ooooooooooohhhhhkaaaay.

If you make 200k you're cromulent.

Now you ahve created a fresh label, that is step 1. Next you need to define:
- what a cromulent person can do comfortably  on his income
- what he could do if he saved nothing
- what he cannot do financially.

For a given cost of living, this is pretty easy. And this is exactly what people are doing all the time when they talk about becoming mustachian. It just works when you simply talk about the numbers and don't use the overladed labels.

No I'm not going to start inventing words for every discussion I have that makes people a bit uncomfortable. I'll save that for actually sensitive issues much like I said in my other post that you think "sidestepped" the issue you see.

This strikes me as more red herring than cohesive.

[arebelspy]

So the crux of your argument is if I just use the term cromulent people will all stop being so bugs in the pants about whether their income makes them cromulent or not... ooooooooooohhhhhkaaaay.

If you make 200k you're cromulent.

Now you ahve created a fresh label, that is step 1. Next you need to define:
- what a cromulent person can do comfortably  on his income
- what he could do if he saved nothing
- what he cannot do financially.

For a given cost of living, this is pretty easy. And this is exactly what people are doing all the time when they talk about becoming mustachian. It just works when you simply talk about the numbers and don't use the overladed labels.

Okay, the word I'll use is "rich."

The definition I'll use is the same one the PEW research center used: 2x the median income for that household size.

http://money.cnn.com/2015/12/09/news/economy/middle-class/index.html?iid=hp-stack-dom

What they can do comfortably is afford housing, food, and lots of luxuries like technology, eating out at restaurants, shopping, and vacations which totals to less than their salary.

What they cannot afford is too much of those things which totals to over their salary.

The problem with the labels is that people use different definitions because they aren't clearly defined, and because of people's connotations and associations.

If we use a common definion, like "middle class is 2/3 to 2x the median income for the household size" then we can discuss.  Simple.

[matchewed]

Simple.

Or cromulent.

[justajane]

I don't understand why people have such a problem with being called rich.

Now mind you, I wouldn't tell my children that I thought we were rich, because kids have a tendency to misunderstand such terms and lord it over their friends in unpleasant ways. But hopefully by adulthood we have divested ourselves of rich meaning that you are superior or that it means you have bags of money laying around to buy whatever you want.

Would the term affluent make some of you more comfortable? After all, it's a synonym of rich.

[elaine amj]

Joking aside I don't actually agree with that. I think that people are going to be less grateful and compassionate when they disillusion themselves to their current reality when it comes to the fortune in their lives. In particular we're talking about monetary resource flow with that fortune. We have a word for that, cromulent. It has mostly been people saying I'm definitely not cromulent at my current income because whatever handwavy reason I come up with; I still have to work, or I live in an expensive area, or it's literally semantics...

Part of why I'm so vocal about this is that people aren't realizing their incredible fortune, some people have chipped in to do so and YAAAAAAAAY!!!! for them. :) But the others have pulled the wool over their own eyes and I don't buy that it's because they don't like the word cromulent. I think it's deeper than that.

Replace cromulent with rich.

So the crux of your argument is if I just use the term cromulent people will all stop being so bugs in the pants about whether their income makes them cromulent or not... ooooooooooohhhhhkaaaay.

If you make 200k you're cromulent.

Now you ahve created a fresh label, that is step 1. Next you need to define:
- what a cromulent person can do comfortably  on his income
- what he could do if he saved nothing
- what he cannot do financially.

For a given cost of living, this is pretty easy. And this is exactly what people are doing all the time when they talk about becoming mustachian. It just works when you simply talk about the numbers and don't use the overladed labels.

No I'm not going to start inventing words for every discussion I have that makes people a bit uncomfortable. I'll save that for actually sensitive issues much like I said in my other post that you think "sidestepped" the issue you see.

This strikes me as more red herring than cohesive.

Exactly. I thought the discussion here is that people in the upper percentile (whatever percentile you wish to choose - I don't care) of the income bracket don't feel they are any better off than average Joe (who earns the country's median income). They are "out of touch" because they feel that the resources they pull from (to save or to spend) is not much different than average Joe.

All I'm saying is - you should realize you have more resources than average Joe - be a little grateful/appreciative and stop being coy just because you don't like the "rich" label. And if you don't want to be called "rich" - fine....you're "cromulent" so quit talking about hard-up you are because you are "just getting by". That's insulting. There's is NOTHING wrong with having more resources. In fact, acknowledging all your resources is a key part of Mustachianism - because now you can readjust your use of those resources towards things you value - not just mindless spending because everyone else does it.

And the whole debate about high COL and low COL is just nuts. Fine - let's define "wealth" by purchasing power then. Can we at least acknowledge that Fred with a $200k income in a high COL area has more purchasing power than Thomas with a $50k income in a low COL? And can we acknowledge that this means Fred has more purchasing power than Thomas? And that it is rather worthy of facepunches for Fred to be "just barely getting by" (and we know how easily it happens) and complaining how hard his lot in life is?

[big_slacker]

I lied in another thread when I said I'm abandoning this one.

Don't like the rich term become I feel it's more asset based than income/expense based. Also damn all those cartoons and shows I watched as a kid with the evil fat cat rich guys holding everyone down. I wanna be the Duke boys, not Boss Hogg! :)

There also seems to be an assumption here based on these types of statements:

"I think that people are going to be less grateful and compassionate when they disillusion themselves to their current reality when it comes to the fortune in their lives. In particular we're talking about monetary resource flow with that fortune."

"All I'm saying is - you should realize you have more resources than average Joe - be a little grateful/appreciative and stop being coy just because you don't like the "rich" label."

That the folks here arguing on 'the other side' AREN'T extremely grateful for the resources they have or the opportunities they give for themselves, their families and their communities. It's a constant topic in our household. Charitable giving, volunteering and mentoring are also a very normal part of our lives. If I don't bring it up constantly in internet arguments it's because I feel it's a little bit preachy and humblebraggy. Disagreeing with a definition in no way means that someone isn't unaware of what they do and don't have in life.

If someone doesn't like a label like rich it's exactly because of the assumptions and statements I quote above. It's a loaded term.