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Why So Many Rich People Don’t Feel Very Rich

economix.blogs.nytimes.com

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Re: Why So Many Rich People Don’t Feel Very Rich

#51

Post by [deleted] »

bradly wrote: post #29
edw519 wrote: post #8

Every time I read an article like this, I think of all the people I know who are well off, yet appear to be miserable. Then I want to share with them this old wisdom from "The Ethics of the Fathers": "Who is wise? One who learns from every man." "Who is strong? One who overpowers his inclinations." "Who is honorable? One who honors his fellows." "Who is rich? One who is satisfied with his lot."

This reminds me of an HN comment from a few months ago. It was something like... "Need more money can usually be replaced with need less stuff" Edit: I found the comment: 'I bet that 9 times out of 10, "I need more money" should really be rephrased as "I need less stuff"'. http://news.ycombinator.com/item?id=2025234

[deleted]

Re: Why So Many Rich People Don’t Feel Very Rich

#52

Post by bgentry »

narrator wrote: post #28

The reality of this phenomenon is that people who have done everything "perfectly" in their life and academic career feel a bit cheated when their income tops out in between 100k and 200k. They might be senior engineers or doctors or lawyers but they've hit this brick wall as far as income, sometimes in their 30s and yet there are all these people out there that make more than 10x or even 100x their annual income. No…

5. Become a high-level executive of a large or extremely profitable company.

Obviously there's a small number of people for whom this will happen but I'm pretty sure most corporate execs make >$200k

Re: Why So Many Rich People Don’t Feel Very Rich

#53

Post by ugh »

roc wrote: post #42
ugh wrote: post #17

This is just a tangent, but I wonder whether Robert Gibbs really quit at least partly because his salary was too low. (That’s what Obama’s remark about his departure seems to suggest.) I don’t think you become Press Secretary of the White House because of the salary, you become Press Secretary because you are passionate about it. (For all you cynics out there: replace “passionate about it” with “power hungry”.) You c…

As you point out: while it wouldn't be prudent to go into politics for the direct money, the modern reality is that politics is a route to a staggering amount of future money. Not unlike paying vast sums to go to an Ivy League school; not because the education is so much better, but because future opportunities will be. In that light, I don't see a huge line between his decision to 'cash-out' at this particular point…

I like that angle. Four years as communications director of one of the most spectacular presidential campaigns of all times, two years as White House Press Secretary, that certainly opens a lot of doors (and should definitely land him a book deal).

It’s certainly understandable that when you then feel burnt out after six years of stress the thought of leaving must be very attractive. It’s still a bit strange that Obama makes a reference to his modest compensation.

Re: Why So Many Rich People Don’t Feel Very Rich

#54

Post by bane »

boredguy8 wrote: post #27

My adult life began with several years at a non-profit making $18k/yr. I've worked to avoid dramatic changes to my standard of living since then and it's helped me put money in the bank regardless of where I fell on the income scale. I also find that I need to "reset" my spending every 6 months or so, because it's trivially easy to start spending more than you realize, for no practical gain. Sometimes I get jealous o…

My wife lost her job several months ago (bad economy and all) and for a while we were scrambling to figure out what to do with a near 50% loss in income.

Turns out with her staying at home, working on a startup, and us eating a home-cooked dinner everyday...entertaining ourselves with trips to free museums we never went to before (mostly because we were too busy spending money on expensive bits of entertainment before) not only has made up for her salary, but we're actually saving more too.

Crazy.

Re: Why So Many Rich People Don’t Feel Very Rich

#55

Post by barrkel »

msluyter wrote: post #31
jellicle wrote: post #10

It's simple. Make $100K, live near people making $90K = rich. Make $100K, live near people making $110K = poor.

I believe there have been psych studies to this effect. Asked whether you'd rather make 110k when everyone else is making 80k, vs. 140k when everyone else is making 200k -- assuming prices remain constant, which is economically dubious, of course, but hey, it's a thought experiment -- and most people choose the former. Here's another study to that effect: http://www.telegraph.co.uk/science/science-news/3315638/Rela..…

I think it's important to point out that this kind of behaviour is rational under some perspectives, particularly evolutionary ones (dodgy though their explanatory power may be). It's more important, genetically speaking, to be somewhere near the apex of your social group and thereby get more valuable reproduction opportunities, than it is to be materially comfortable on some notional absolute scale.

Re: Why So Many Rich People Don’t Feel Very Rich

#57

Post by colanderman »

AlexC04 wrote: post #4

Perhaps it's because the definition of "rich" that they would need to feel is one where they'd never have to work again if they didn't want to. The article points out an annual income of $172,000 as being rich, but by implication, these people still have to work for their money. Therefore probably don't feel "rich" If they could maintain that income or even half that income in perpetuity without working. If they coul…

If I had one year of $172,000 income, I could bank it and live off the interest for the rest of my life. People who make that much and don't feel "rich" feel so because somehow they incur $172,000 in expenses every year. I'm a tutor and often work with kids of rich families, and it astounds me what their parents spend money on (think private jets and race cars).

Actually, I work with kids of poor families as well, and I could say the same, although the indulgences are more mundane (expensive cell phone plans and TV packages).

Re: Why So Many Rich People Don’t Feel Very Rich

#58

Post by blahedo »

bradly wrote: post #29
edw519 wrote: post #8

Every time I read an article like this, I think of all the people I know who are well off, yet appear to be miserable. Then I want to share with them this old wisdom from "The Ethics of the Fathers": "Who is wise? One who learns from every man." "Who is strong? One who overpowers his inclinations." "Who is honorable? One who honors his fellows." "Who is rich? One who is satisfied with his lot."

This reminds me of an HN comment from a few months ago. It was something like... "Need more money can usually be replaced with need less stuff" Edit: I found the comment: 'I bet that 9 times out of 10, "I need more money" should really be rephrased as "I need less stuff"'. http://news.ycombinator.com/item?id=2025234

Or rather, "I need to need less stuff".

Re: Why So Many Rich People Don’t Feel Very Rich

#59

Post by schammy »

jeremymims wrote: post #38

This article wonders why the rich are getting richer and the answer is compound interest. Having $1 million in the bank will reliably generate between $25k and $50k per year. Having $2 million in the bank will reliably generate between $50k and $100k per year. Having $3 million in the bank will reliably generate between $100k and $150k per year. So someone with $3 million in savings and still working their 200k job w…

I know of no such bank offering interest rates even close to that. You're talking 2.5% - 5%. That's unheard of these days. At my current bank, $1M in a money market account would generate about $2,500/year, which is nothing short of insulting. Who are these fabled banks offering 10x the interest rate?

Re: Why So Many Rich People Don’t Feel Very Rich

#60

Post by barrkel »

bgentry wrote: post #52
narrator wrote: post #28

The reality of this phenomenon is that people who have done everything "perfectly" in their life and academic career feel a bit cheated when their income tops out in between 100k and 200k. They might be senior engineers or doctors or lawyers but they've hit this brick wall as far as income, sometimes in their 30s and yet there are all these people out there that make more than 10x or even 100x their annual income. No…

5. Become a high-level executive of a large or extremely profitable company. Obviously there's a small number of people for whom this will happen but I'm pretty sure most corporate execs make >$200k

As far as I can see, the best ways to become this is are: (a) be an early employee of a company that grows large enough; (b) get your own company acquired (a subset of case 1); (c) meet the right people early on, especially at a young age; and (d) act entrepreneurially within an existing organization's management, which, depending on the health of the organization, may entail more political talent than productive talent.
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