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$500k a Year yet Struggling? Let's Do a Double Take

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Re: $500k a Year yet Struggling? Let's Do a Double Take

#181

Post by jedberg »

deadc0de wrote: post #162
jedberg wrote: post #146

Earlier quoted context omitted.

Don't kid yourself. Even here in the Bay Area, $400K a year is still upper middle class. You'd be in the top 3% of earners across the nine bay area counties.

Prop 13 distorts that a lot. If you bought a house 25 years ago and now are earning 400k, yeah, you're an upper middle class.

Again, you're kidding yourself. Even if you bought a new house today with no existing equity, you could easily afford $11K a month in mortgage. That's a house that's over $2M. And still have $10K a month left for other expenses.

Re: $500k a Year yet Struggling? Let's Do a Double Take

#182

Post by war1025 »

sys_64738 wrote: post #170
Swizec wrote: post #168

Earlier quoted context omitted.

Imho middle class means you work for a living, upper class means you can live on wealth. You might also be surprised to learn that a $166,000/year household income puts you in the top 5% of US households. Definitely upper middle class but still pretty easy to burn your whole paycheck every month. https://en.wikipedia.org/wiki/Upper_middle_class

> Imho middle class means you work for a living I thought that's what working class meant.

I always viewed the working class a subset of the middle class, defined by the fact that they did some sort of physical labor for pay. I.e. as opposed to office work.

Re: $500k a Year yet Struggling? Let's Do a Double Take

#183

Post by amazingman »

war1025 wrote: post #53
JohnJamesRambo wrote: post #34

I'll share something I learned myself in another Hacker News comment. https://en.wikipedia.org/wiki/The_Millionaire_Next_Door "Their findings, that millionaires are disproportionately clustered in middle-class and blue collar neighborhoods and not in more affluent or white-collar communities, came as a surprise to the authors who anticipated the contrary." It really opened my eyes to the fact that most people I think…

Most people's idea of "Rich" is that you have a very high burn rate. Sort of fits with the "Work hard / Play hard" ethos of success in America. Financial freedom comes from minimizing your burn rate. Far less flashy, but you can stretch money amazingly far when you aren't trying to keep up with what you think people expect of you.

There are people for whom the difference between $10 and $10k is effectively immaterial. These are the people I bin as “rich”, and I think that’s how we should all see it.

While someone making $500k/yr is definitely prosperous, the “rich” are an entirely different category of individual. It only serves the more selfish interests of the truly rich to conflate the two.

Re: $500k a Year yet Struggling? Let's Do a Double Take

#184

Post by war1025 »

amazingman wrote: post #183
war1025 wrote: post #53

Earlier quoted context omitted.

Most people's idea of "Rich" is that you have a very high burn rate. Sort of fits with the "Work hard / Play hard" ethos of success in America. Financial freedom comes from minimizing your burn rate. Far less flashy, but you can stretch money amazingly far when you aren't trying to keep up with what you think people expect of you.

There are people for whom the difference between $10 and $10k is effectively immaterial. These are the people I bin as “rich”, and I think that’s how we should all see it. While someone making $500k/yr is definitely prosperous , the “rich” are an entirely different category of individual. It only serves the more selfish interests of the truly rich to conflate the two.

I think the tricky thing about it is that income / wealth distributions are exponential, so no matter where you are on the curve, it basically looks the same. The people that have more than you have massively more, and the people who have less don't really seem to have that much less.

Re: $500k a Year yet Struggling? Let's Do a Double Take

#185

Post by GuiA »

SolaceQuantum wrote: post #40
astura wrote: post #15

103,500/year on unexplained "other expenses??" Over $8,500/month?!! Which is almost double their mortgage payments Um.... What the hell? Their biggest line item is completely unexplained yet they are trying to explain where their money goes? I live a fairly indulgent life and I spend less than that on everything in a year. I can't imagine spending six figures on "misc" unless there's a lot of hookers and blow involve…

Eating all organic, fresh-from-farm food, eating at luxury restaurants, attending internationally acclaimed shows in the best seating, and maybe even investing in a little bit of modern art? Oh, and purchasing all the best in skincare, makup, spas, saunas, cryotherapy, light therapy, etc? Personal trainers, coaches, cleaners, cooks? I could imagine a combination of all of those could be 8,500$ a month. (EDIT: And I b…

Fresh from farm food is actually a great way to save money and eat healthier! Search for a local CSA and support it!

Re: $500k a Year yet Struggling? Let's Do a Double Take

#186

Post by kgwgk »

amazingman wrote: post #183
war1025 wrote: post #53

Earlier quoted context omitted.

Most people's idea of "Rich" is that you have a very high burn rate. Sort of fits with the "Work hard / Play hard" ethos of success in America. Financial freedom comes from minimizing your burn rate. Far less flashy, but you can stretch money amazingly far when you aren't trying to keep up with what you think people expect of you.

There are people for whom the difference between $10 and $10k is effectively immaterial. These are the people I bin as “rich”, and I think that’s how we should all see it. While someone making $500k/yr is definitely prosperous , the “rich” are an entirely different category of individual. It only serves the more selfish interests of the truly rich to conflate the two.

“I mean, it's one banana, Michael. What could it cost, ten thousand dollars?”

Re: $500k a Year yet Struggling? Let's Do a Double Take

#187

Post by kgwgk »

Swizec wrote: post #84
JohnJamesRambo wrote: post #34

I'll share something I learned myself in another Hacker News comment. https://en.wikipedia.org/wiki/The_Millionaire_Next_Door "Their findings, that millionaires are disproportionately clustered in middle-class and blue collar neighborhoods and not in more affluent or white-collar communities, came as a surprise to the authors who anticipated the contrary." It really opened my eyes to the fact that most people I think…

Rich is when you have a high income. Wealthy is when you have a high net worth. I find people often confuse the two and it took me a long time to clear up in my mind. You can be rich, but live paycheck to paycheck. Even be superbly in debt. Lots of upper middle class lives this way. You can also be wealthy but poor. These are folks with cashflow problems and a lot of illiquid wealth (like a house you can’t sell) Shor…

> Rich is when you have a high income.

If you make up your own definitions, you should not be surprised to find people is “confused”.

Re: $500k a Year yet Struggling? Let's Do a Double Take

#188

Post by IanCal »

michaelmrose wrote: post #153
toasterlovin wrote: post #126

Earlier quoted context omitted.

Uh, pretty sure the OP is not envisioning enslaving someone. And the compensation for the au pair includes a place to live and (not sure about this) food.

He said you ought to import a person like you would import an orange and specifically said it would be ok to pay them a substandard wage as it would still be a good deal to them so they could send money home for their family. One doesn't acquire the services of mexican's to pick your fruit merely because they work hard. You do so because they will work hard for less. Literally the only reason to bring in someone from…

It's not "leverage" it's about different expectations. You're not hiring professional childminders, the goal is to have someone come and live with you and be more like part of the family. You give them a room, I would expect food, and also pay them. Since in the US you need to go through an agency I don't think it would be a great deal of work.

> ignoring your fellow Americans looking for work because they expect things like benefits and fair pay which cost money.

Almost a quarter are from Germany. Most European countries do not consider America to be somewhere with many employee benefits.

Is $24,000 after room and board an unfair wage? What's the cost of a room in NYC?

Re: $500k a Year yet Struggling? Let's Do a Double Take

#189

Post by IanCal »

resters wrote: post #176
wavefunction wrote: post #62

Earlier quoted context omitted.

I mean, this very linked article lays out the finances of some people who are doing just that and it appears to be the result of some very expensive personal choices rather than a fact of life.

My point is that this is not the case. When you take out high Federal and State taxes, high rents, tuition, etc., it's about equivalent to $80K/year income without kids. Seriously.

Can you break that down? That's 420,000 pre tax and if taxes are 50% (I'd guess lower but I don't know the US system) that's more than 200k left over.

Smartasset puts the take-home at 333k, 270k more than a household bringing in 80k. https://smartasset.com/taxes/new-york-tax-calculator#gO77UAY...

How are kids adding a quarter of a million dollars per year in costs?

Re: $500k a Year yet Struggling? Let's Do a Double Take

#190

Post by IanCal »

sys_64738 wrote: post #171
gwbas1c wrote: post #120

Earlier quoted context omitted.

It all depends on the interest rates. If I can invest with a 10% return, and can borrow at 0%, I'm better off borrowing as much as I can to invest. But if I have to borrow at 10% and can only invest at 0%, paying off debt is better than saving.

Paying off debt is always better than investing the money. Nothing beats being debt free.

There is not a simple answer to this, because it depends on your attitude to risk.

> Nothing beats being debt free.

Depending on your risk appetite, being debt free can come more quickly by investing than by paying off debt.

Your suggestion would mean nobody saves for retirement while they have a mortgage, for example. Fine if you are happy with very little risk, but for many that would be a bad option (waiting until you are 50 to start paying into a pension).

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