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Why So Many Rich People Don’t Feel Very Rich

economix.blogs.nytimes.com

131–140 of 190 posts

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

#131

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…

Purely anecdotal, but many such risk-takers that I have known were able to mitigate their risk because of familial support mechanisms. Which is to say that while a certain amount of hard work and courage is crucial, it doesn't hurt to have rich parents.

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

#132

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…

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).

Sorry, this theory is wrong.

Looking at http://eh.net/encyclopedia/article/haupert.mlb the average price of baseball tickets has, after adjustment for inflation, not changed very much.

What has changed is the value of the income from TV. Even so, the revenue for players has risen faster than the income from TV.

Another factor, not shown, is the size of the audience.

However even if you add all that together, I believe that salaries have still gone up by more than revenue. And I attribute that to the rise of free agents.

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

#133
post #49

Earlier quoted context omitted.

> "someone making 300,000 probably doesn't have much more disposable income than someone making 80,000" I don't think that's borne out by the stats. As I recall fixed costs essentially flat-line as a percentage of income somewhere south of 200k, up until you reach the "don't look at prices anymore" brackets. Also, I note that it really doesn't take much more disposable income to add flashy consumption. Five thousand…

"So I'm wondering if we aren't having a disagreement on definitions." I think it mostly depends on whether or not you have kids. Kids can basically eat up an unlimited amount of money.

Absolutely.

When I made a third of my current salary range, I felt well off. Now I have kids and feel poor.

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

#134

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…

"I think that was $342K/year for 99.5th percentile of single filers - you need to take on some risk"

I don't think this is true - all the traditional "low risk" professions have this ability: doctors, dentists, lawyers, investment bankers and fund managers. $300k+ is not unusual for a mid-level person in these industries. Senior people in these industries will hit $1m+ pretty easily without having taken on any significant personal risk. A lawyer 3-4 years out from law school in a large firm is going to be sitting on $200k+ already.

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

#135
The thing is, if you're of this "I don't have enough" sort of type (or one of its numerous manifestations) it doesn't matter how much you have. You, thus, by your own words, never have enough of anything and your life is much worse off because of that.

If you're poor, you have worries most people can understand but your worries are real to you. If you're rich, you have worries that seem outrageous to most people and your worries are (still) real to you. Hence, you're not any better off in reality, even if you don't have to starve.

Of course you're not any better off because you still think you don't have enough.

And the funny thing is that it you don't have to become rich to have enough. When you're happy with first what you have, then everything is restored to back to 'okay'. And you can still try to get more but you don't have to try to get more.

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

#136

Earlier quoted context omitted.

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…

Purely anecdotal, but many such risk-takers that I have known were able to mitigate their risk because of familial support mechanisms. Which is to say that while a certain amount of hard work and courage is crucial, it doesn't hurt to have rich parents.

>> mitigate their risk because of familial support mechanisms

Or society support mechanisms - many ppl in say Scandinavia use the two or more years of high unemployment benefits to start a business risk-free. Actually in Norway, to stimulate entrepreneurship, they would pay those benefits for the 1st six month of new company operation (to the owner).

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

#137

Earlier quoted context omitted.

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…

"I think that was $342K/year for 99.5th percentile of single filers - you need to take on some risk" I don't think this is true - all the traditional "low risk" professions have this ability: doctors, dentists, lawyers, investment bankers and fund managers. $300k+ is not unusual for a mid-level person in these industries. Senior people in these industries will hit $1m+ pretty easily without having taken on any signif…

Do you think mid-level doctors, lawyers, bankers don't take risks on their job?

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

#138

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

or: make $100k, spend $85k = happiness make $100k, spend $101k = misery

Anyone who lives within their means suffers from a lack of imagination. -Oscar Wilde

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

#139
post #29

Earlier quoted context omitted.

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

I definitely get this viewpoint- but I would like to add that per gp comment, you should be satisfied with your lot. Which for some people may mean spending money on some things. I've noticed on HN and other sites a fascination with acquiring wealth. I understand why, but in the end you acquire wealth for the utility you can gain from using it. Obviously, this doesn't need to mean spending 5k on the biggest TV, and d…

It's also nice for your kids not to need to take out college loans.

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

#140
post #14
post #2

Because they don't know what it means to be poor?

I disagree with this. While I'm not saying I was ever "poor" (as I never felt poor), I started out working for $5.15/hour, and sleeping on a friend's couch while I tried to find an apartment I could afford. Then I moved into a boston apartment that was $1000/month for three of us. It was falling over, and I ate homemade burritos every single day because beans and tortillas were cheap. Now I own a big house, drive nic…

Lifestyle inflation is very sneaky. I grew up fairly poor (and felt it), like trailer trash in a back-woods area known for potsmoking hicks poor, and now that I'm a "starving college student" with a decent PT job I feel pretty rich most of the time. I don't have the nicest apartment and I've parked my car for the year because the bus is cheaper and (usually) good enough. But even though I'm still not even middle class, I've noticed lifestyle inflation so I'm actively working to combat it. (Especially since I predict my income probably going up as I graduate and go FT year-round, I want the good habits now.)

Firstly I try to be frugal. Some people think this means cutting coupons for everything and not spending any money on fun things, but really it just means not spending money on things you don't care about, so that you can spend money on things you do care about instead. The exact categories there are different for everyone and will change over time and as your situation/environment changes. For me, I chose to give up the car so I could have more wiggle room wrt general spending money (eating out, coffee), and could afford a new laptop and glasses. Other people will bring their own lunches and coffee so they can afford a vacation, or cut down on buying electronics so they can live in a nicer place. Sometimes I fail at frugality -- recently I've spent a lot of money on videogames that I don't really enjoy and won't play much, when I already have unplayed ones and games with lots of leftover replay value. So for the next month, I'm not spending any money on videogames, and after that I'll try to think more carefully about whether I'll enjoy a game and whether I actually have a small enough pile of games to get around to it soon, rather than whether I can afford the game. Because for any individual game, the answer to that question is always YES, so it's not a helpful question to ask myself. You mentioned you drive nice carS -- does this mean you own/lease more than one at once? You can only drive one at a time, so unless you have a family with seriously incompatible schedules or are a hardcore car aficionado, that might be something you could "afford" rather than something you truly need/want.

Secondly I try not to own too much stuff, especially stuff I don't use. Owning stuff costs time and money, but we don't always see that because the costs are hidden and sprinkled around all over the place. If you're using your big house mostly to store a big bunch of stuff you've accumulated, you are paying your hard-earned money to heat your own personal junkyard. When you move house, you pay to move the junk. When the junk breaks you pay to fix it or to replace it -- because by keeping it you've already convinced yourself you "need" it, even if it's something you never/rarely use or whose function could easily be replaced by some other tool you have. So I try to purge the things I own regularly, keeping only the things I use and want. I did a big purge last summer and I'll probably do another one this spring. It can be hard, especially if you've been raised to believe that owning stuff is a good thing, or that "you'll never know when you need it", but it feels really good when you're done. This doesn't mean I live in a minimalist apartment with no stuff, of course. It just means I have a somewhat-smaller, carefully-curated collection of stuff -- stuff I'm consciously willing to actually heat and move and repair and replace.

Sorry if getting money advice from a poor college student seems insulting/silly. It probably is at least a bit silly, but it seems like you and I (and lots of others) have the same problem on different scales, so the things that help me might help you, if you want.

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