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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

#121

Post by Retric »

modoc wrote: post #104
Retric wrote: post #102

Earlier quoted context omitted.

if I'm doing new counter tops I should probably This is the mindset that makes high income people feel poor. You can get a vary nice gas stove installed wihtout looking out of place for ~10k or you can spend ~100k and get the same thing but shiny.

10k is a lot of spending money. I'm trying to build up some savings/retirement money, so finding a "spare" 10k+ isn't easy.

I don't know much about your income, expenses, etc. However, I am suggesting that dealing with the I hate my _ list does not need to be that expensive. Relative to "I own a big house, drive nice cars* etc.

Home Equity Line of Credit + reasonable expectations means you could get a gas stove that does not look ugly for around 120$ a month. And in the increased value of your home and the real cost could be less than 80$ a month. (AKA 40$ a month becomes another form of savings.)

Now for you personally it's hard to (edit: quickly) cut 120$ a month from your nice cars and big house. But, I am willing to bet you would get more enjoyment from that 120$ than getting the "nicer" versions of other things in your life.

PS: It was vary freeing when I realized I was not spending my money to optimize my happiness. Rather I was buying things based on the amount of spare money I had when I was buying it. (Edit: Not that you have this problem, but it seems common.)

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

#122

Post by nostrademons »

rapind wrote: post #112
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."

Agreed. It's all relative. Happiness = Success / Expectations

Success - Expectations, usually. Success / Expectations would imply that if you have negative expectations and positive success, you'd still have negative happiness, which doesn't seem true.

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

#123

Post by nostrademons »

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…

I was going to make a related point. To get into the $100K-200K range, all you need is hard work. Study in school, do well on your standardized tests, get into a good college, pay attention to salaries when choosing your major, show up for on-campus interviews, and do your job well when you're hired. It's not hard to be making six figures a few years after graduation on this plan.

But to break the 99th percentile - I think that was $342K/year for 99.5th percentile of single filers - you need to take on some risk. Like forgoing your income for a few years to found a company. Or taking on a lower salary and the risk that you'll be laid off in a year and getting a job at a startup. Or putting up your own money to invest in one. Or taking on high-visibility, high-impact projects that may fail - often at the cost of your regular duties - within your day job.

For people whose whole life has been a steady upwards progression, risk is scary. It often looks impossible. And so they're stuck at a point in life where they know people who have vastly more money than them, but they don't understand how or are unwilling to achieve that.

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

#124

Post by nostrademons »

kscaldef wrote: post #83
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…

> and yet there are all these people out there that make more than 10x or even 100x their annual income Where by "all these people" we mean an extremely small fraction of the population. If I think about things honestly, I'm paid more than almost everyone I interact with regularly. Many of these people aren't lazy or stupid or dropout or what-have-you. They also went to good schools and got good grades and are excell…

And a good fraction - maybe 20-25% - of the people I interact with have more money than I can contemplate. I work with a fairly large number of pre-IPO Googlers, plus here in Silicon Valley, you're always running into people that sold their company for $20M and are starting a new one.

I think that was the point of the article. If you actually get close to the brick wall in your profession, you'll meet people who've gotten past it. And suddenly, what seems like an enormous amount of money is just the tip of the iceberg, and you're left wondering what these people have that you don't.

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

#125

Post by flacon »

loewenskind wrote: post #71
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…

200k isn't that hard. Just go into management. You don't even need to be that high in a big company (even located in a low income region) to pass 200k.

I live in Madison WI. 200K is C-suite territory around here for a mid-sized company. An exec at one of the huge insurance companies or biotech companies make more but that not typical. We have an Amazon affiliate here and mid-level managers make around $80-100K I think. I highly doubt their Chief Architects make more than 200K. 200K for mid-level management in the Midwest (outside Chicago) is unrealistic for sure.

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

#127

Post by CWuestefeld »

pointillistic wrote: post #33

I posted the article here and I find that many comments are missing the point. Catherine Rampell writes that the exponential growth of the global wealth for the super-rich oligarchy, especially in the last decades made the comparison with them so much more difficult. This all at the backdrop of the devastating recession that thrown many productive people into the object poverty. I might add that the media and the int…

That makes a nice, pandering story, but it's really a very very complex.

There's some truth in the idea that the rich get richer, faster than the rest of us. But today, in a practical sense, what does it mean for someone to have much more money than I do?

And what causes it? It's certainly not that some plutocracy is holding our heads below water, as much some people like to paint that picture.

I'd encourage you to read this article, which has a pretty insightful analysis of where this inequality originates, and why: http://www.the-american-interest.com/article-bd.cfm?piece=90...

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

#128

Post by krschultz »

_delirium wrote: post #19
jellicle wrote: post #10

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

I definitely noticed this in grad school. For a few years, I had a $30k fellowship, when the normal stipend, which all my friends made (and which I made the other years) was around $20k. I felt like I had more money than I could reasonably spend, saved about $5k of the excess, and splurged about $5k on what seemed to me to be luxury items, like fancy beer and trips. From my perspective I was, if not wealthy, at least…

Well at $30k, were you:

A) Paying for your own healthcare B) Saving for retirement C) Saving for buying a house, a car, retirement, a wedding, future children, or other large purchases? D) Paying off your loans for undergrad?

Because my girlfriend and I are 22, make over $100k, have less than $30k a year in expenses combined, and still feel a little "tight" on the budget. But we're both maxing our 401ks to the company match, paying for our healthcare, and paying down our student loans (over $60k) in 3 years. Plus saving for a house, and maybe even a little wedding and a vacation. $100k goes quick.

Note that we both drive 6 year old cars and have no plan to replace them, rent a relatively small apartment and keep our expenses below $2.5k a month combined which is pretty good. I don't feel poor by any stretch of the imagination, nor am I complaining, and the situation is improving steadily as we pay down debt and have more cash, but the saving really puts a crimp on how much "fun money" I have.

We are currently (again with 2 people) putting over $3k a month into savings and paying down debt which are prudent decision but don't feel all that fun and don't really make us feel any "richer".

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

#129

Post by kbutler »

Tichy wrote: post #12

What surprises me is that there seems to be no upper limit for lifestyle expenses. To me it seems certain lifestyle choices are more of a liability than a bonus. A bigger house needs more cleaning, a cleaning lady, probably also a gardener. More cars require more maintenance, parking space, taxes. Yachts, OK, I don't know - they require personnel, but maybe they are nice to have. Then again, probably it is possible t…

> I think from a certain comparatively low threshold, my worry would be how to use my money to make the world a better place, not how to get a even more luxurious lifestyle.

I expect many people feel this way, at all income levels. The point is that the "comparatively low threshold" varies depending on your current income - the more income you have, the higher your threshold becomes.

"If I had a little more, I'd give."

"I have a little, so I give." (widow's mite)

kb

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

#130

Post by decadentcactus »

loewenskind wrote: post #76
yummyfajitas wrote: post #61

Earlier quoted context omitted.

5. Become a top developer at a big software company. (A variation on 3. You probably won't earn $100 million, but you could definitely earn $1 million. ) 6. Become a top performer in entertainment (music, sports, movies). A fun fact ignored by most people: it isn't just CEO pay that has skyrocketed over the years. Alex Rodrieguez gets $33 million/year, at his peak Babe Ruth got (inflation adjusted) $1.1 million.

>A fun fact ignored by most people People aren't ignoring it. The two things aren't related to each other. Alex Rodrieguez makes so much money because tickets to see him play cost so much (especially compared to what it cost to see Babe Ruth). For the situation to be the same Rodrieguez would need to be making the same as Ruth (inflation adjusted) but the managers to be making 100+ times more money. What's actually h…

Not only have prices gone up, but exposure and merchandise etc (for the team) have increased in modern times, leading to more money as a whole for the team, and therefore star players.
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