Why a Six-Figure Salary No Longer Means You’re Rich

because money does not make you rich

Because inflation?

It sure as hell does mean you're rich.

Median household income in the US is about $50k/yr. The average global income is about $10k/yr.

As the article mentions at the end, a big part of living within your means is reducing your spending -- and a lot of that has to do with recognizing what things are actually necessities. The chart of price increases mentions things like movie tickets, new cars, and private college tuition, which are certainly not necessities. Even high gas prices can be mitigated if you recognize the hidden costs of driving a fuel-inefficient vehicle long distances to and from work every day -- and that in many cases you're not forced to live so far away.

I recommend the Mr Money Mustache blog as a source of some decent advice about how to think more frugally and focus on early retirement: http://www.mrmoneymustache.com/

As dual-income households have become more the norm, it's really the household income, rather than an individual's income, that's a better measure of (material) richness.

For instance, you might have a family with a sole breadwinner who has a low six-figure salary, but that has to cover all the family's expenses. Meanwhile, even if his neighbors, a dual-income household, both earn less than him, their household income could be considerably more.

By the way, the rising percentage of dual-income households has been suggested as an exacerbating factor in the growing income inequality in the U.S.

If you figure that people tend to marry others of the same educational level (more so now than in generations past), and if educational level is roughly correlated with income, then you can see how the gulf widens.

Whereas 50 years ago, when single-income households were the norm, a lower-educated fellow might bring in SALARY and a higher-educated fellow might bring in SALARY * 2. But now, with dual-income households, a lower-educated couple might bring in (SALARY * 2) and a higher-educated couple might bring in (SALARY * 2) * 2.

So, 50 years ago, there was one SALARY worth of difference between the lower-educated household and the higher-educated household. Nowadays, there is (SALARY * 2) worth of difference.