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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

#151

Post by dhyasama »

webwright wrote: post #96
jasonkester wrote: post #34

Earlier quoted context omitted.

The cool thing about this approach is how nicely it works with compound interest. Live like a college kid for the 5 years after you leave college, and I defy you not to put $10k per year into the market. Fresh out of school with my $32k salary, I'd regularly find month-old paychecks lying around undeposited because I simply didn't need the money to support my cheap apartment, used car, and 10lb sack of potatoes. With…

5% per year doesn't stack up very fast when you consider inflation (2.56% over the last decade was the average).

and capital gains

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

#152

Post by colanderman »

orangecat wrote: post #72
colanderman wrote: post #57

Earlier quoted context omitted.

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, an…

If I had one year of $172,000 income, I could bank it and live off the interest for the rest of my life. Er, how? Assuming a very optimistic 4% return after inflation and taxes, that's only $7k/year.

Right now I live off of about $12k/year, and I'm paying about $4800/year in loans (which will be paid off soon enough). That works out to about $7k/year.

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

#153

Post by colanderman »

d2viant wrote: post #69
colanderman wrote: post #57

Earlier quoted context omitted.

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, an…

Maybe, but probably not comfortably. After taxes, that 172K will be about 120K. Even if you were to somehow make 8% interest on your money for the rest of your life, that's still only $800 a month.

That's about what I make now, and I'm living pretty damn comfortably without racking up debt (Internet-enabled phone, car, eat organic food, have plenty of free time for recreation).

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

#154

Post by kin »

I once had an hour long conversation with a stranger at a bar about this. Coincidentally, we were in the same field, hacker. And he told me that coming out of college it's a little bit too easy to just work for the man. Being young and fresh out of college, you really can afford to take risks and be in that small percentile of people that are so much richer. Of course, it's a risk, and you have to take it and put your heart into it.

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

#155

Post by kin »

bane wrote: post #50

There's definitely a middle ground though. Being poor sucks...bad. Not because you can't the things you want, but because you can't get the things you desperately need (and I mean things in the physical sense). I remember reading various studies a few years ago (sorry, can't find them now) showing folks who make 40-50k/yr in the U.S. tend to be the most satisfied with life. With inflation that's probably more like 60…

Agree especially to the last line. Being the only person in my group of friends in the 60-70K category while they're in the sub 40K category keeps me on a college budget. Cheap dates, happy hour, home cooking, take-out, etc.

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

#156

Post by [deleted] »

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…

[deleted]

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

#157

Post by zyfo »

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."

"The secret of happiness, you see, is not found in seeking more, but in developing the capacity to enjoy less." - Socrates

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

#158

Post by kin »

colanderman wrote: post #152
orangecat wrote: post #72

Earlier quoted context omitted.

If I had one year of $172,000 income, I could bank it and live off the interest for the rest of my life. Er, how? Assuming a very optimistic 4% return after inflation and taxes, that's only $7k/year.

Right now I live off of about $12k/year, and I'm paying about $4800/year in loans (which will be paid off soon enough). That works out to about $7k/year.

$7k a year would be impossible for me and most other people. My rent alone is $12k/year. But, say to be frugal, and this isn't my current situation be what I imagine would be the bare minimum: $400/mo rent, $100/mo car insurance, $30/week in groceries. I have other necessities but for bare minimum that's already well over $7k/year.

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

#159

Post by Stop_Lurker »

loumf wrote: post #65
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…

Major league athlete, regular on a TV show or star in movies, former press secretary/lobbyist, best-selling author, multi-hit-album singer/band, music mogul/producer, real-estate agent in an expensive area. I bet there are 100s of jobs where the top salaries are over two million. There are very few who can get them, though.

The problem with a high earning career as a professional athlete, is that you have to average their salary over their lifetime, and their earnings drop really fast after they hit their mid thirties.

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

#160

Post by colanderman »

kin wrote: post #158
colanderman wrote: post #152

Earlier quoted context omitted.

Right now I live off of about $12k/year, and I'm paying about $4800/year in loans (which will be paid off soon enough). That works out to about $7k/year.

$7k a year would be impossible for me and most other people. My rent alone is $12k/year. But, say to be frugal, and this isn't my current situation be what I imagine would be the bare minimum: $400/mo rent, $100/mo car insurance, $30/week in groceries. I have other necessities but for bare minimum that's already well over $7k/year.

Rent is spot on. My car insurance is about $800/yr (although it seems MA is a particularly cheap state for insurance). I do not have an exact figure but I believe my weekly grocery bill to be less than that by about 1/3 (not eating meat helps). That brings the total to $6640/yr.

Not counting gas (which I mostly use for my hour-long commute), I further spend $20/mo on internet, and $60/mo on 3G service (which I consider a luxury). That brings the total to $7600/yr. So, I exaggerated slightly. I would need closer to a year and a month's worth of $172k income to meet this requirement.

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