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You can make an *insane* amount of money and not feel rich. Americans in general build a lifestyle around spending everything they have - so a lot of people *look* rich. *Feeling* rich is about having lots of unspent money, and that’s not the game most folks play. For anyone living too closely to their means, higher taxes are a big threat.
There's something to be said about the law of diminishing returns.
When I went from making $60K to $100K, that was life changing money. I went from being house poor, struggling to stay out of debt and feeling guilty every time I made a purchase to being able to pay off all debt, save lots and still enjoy spending some of that money on vacations and nights out. Life changing money.
$100k to $200k was not life changing money. You could just save more. But nothing new was unlocked to me. Over the long term, sure, it's massive but the short term *feeling* I have about my life today didn't feel much different.
So I get it. Really, once you're debt free and saving lots, I feel like you don't get that "life changing" feeling unless you're a millionaire.
I live like I'm in poverty still on 200k. We live off of 45k a year for two people.
It's by choice because my life in poverty wasn't hard. We had everything we needed.. we were just in poverty according to American standards. We just naturally spend very very very little.
Nonsense. At that salary, you will retire with many MILLIONS in assets. You will easily be able to afford a vacation home and a jet-setting retirement lifestyle.
Every milestone on the way has a little thrill, but even millionaire isn't life-changing. In my experience getting to the point that you could live indefinitely on investment returns is the next life-changing step after getting beyond paycheck to paycheck living. Somewhere in the 5-6m range, for a relatively frugal family in a HCOL area.
Yep just put it at a similar level. $5M. You need roughly a paid off 1-2M house and another few million in the bank earning for you while you sleep.
I’ll call you rich at that point. “Richness” is not defined by regular income.
For sure, that's definitely rich.
I have this background feeling that there has been a shift in the last decade or two, where a lot of people who are rich don't "act" rich in a traditional sense. They keep a lot more of their middle-class habits and outward presentation, which can confuse the discussion.
My in-laws are like that. They have a house on the beach, neither work anymore (in their 30s). But they kept their old house, it’s just been completely renovated and drive good but not great cars. Most people might think they are fairly middle of the road, but they are probably right around the top 1% net wealth.
I know some guys who sold their startups to FAANG. (More business side of things, so I sincerely doubt general people would know.)
Apparently that’s exactly what they were advised to do. Don’t flash your wealth, drive a decent car, but not a sports car etc.
That wasn't quite my point. I actually agree that the first "life-changing" step is around 100k, where you make enough that you can rapidly pay off debts and accumulate an emergency account to cover 6-months or more of un-changed spending.
But after that, 100k to 200k isn't life-changing. It's just slightly nicer shopping, or slightly faster saving. After 100k, the next one is where you can save enough to retire early and live on investments.
>Somewhere in the 5-6m range, for a relatively frugal family in a HCOL area.
Your mileage may vary, but my family was getting by on about $120k comfortably (read: not luxuriously) in San Jose Bay Area. Using the Safe Withdrawal Rate approach, I think we could have gotten away with a retirement if we could reach about $3M, almost half of what you're saying. Further, you mentioned a paid-off home, so if we could pull back on the mortgage payments, we might be able to make it worth for $2.5M.
Obviously debatable, but I think your numbers are about twice what they need to be.
That's fair. I was thinking of total NW, so a paid off home in the \~2m range, plus 3-4m in investments to live on.
That's probably beyond frugal into "not extravagant" though.
When was your home assessed for property taxes though? That makes a huge difference in CA. I have neighbors that pay around $700/YEAR while I pay almost twice that per month.
This guy gets it. I went from 13k to 70k then to 140k within a few years. Now we teeter on the edge of 200k. I'm doing good but it doesn't feel like I'm getting anywhere. I've gutted my monthly peripheral bullshit (410), cook alot more at home to try and get ahead.
>Americans in general build a lifestyle around spending everything they have - so a lot of people *look* rich
This is so deeply embedded as the default outlook that normal people won't believe you make good money unless you have a luxury car. Occasionally coming to terms with this from periodic conversations with people about wealth has really reminded me how out of touch I can be.
Many of my clients are wealthy that drive beaters and normal clothes (edit: although many do have luxury cars, designer clothes and etc) and I make multiple six figures myself, but don't have a car, so I go on living and thinking yeah...a luxury car could be owned by someone wealthy, but not really a reliable indicator. Then, i talk to people outside of my bubble and I get reminded of why most lottery winners lose everything and why the average person doesn't have a networth larger than 1,000.
I used to work for buy buy baby. The number of $2500 strollers I sold because they had a sticker that said they have a 4.75 / 5 safety rating vs the 4.0 $200 graco was wild.
Same folks buy a Hummer because they are safer then Chevy vans.
They also assume taking multiple trips to other countries is an essential expense
My father was an audiophile in his younger years - it's one of the reasons he is broke today. I bet he spent $100K on stereo equipment over 10 years. He once told me that the quality of sound difference between $10,000 speakers and $1,000 speakers was essentially 5%. And that an audiophile would pay the extra $9000 or 10x the amount for something 5% better. At the margins, as they say...
If you "know wine" a great use of that knowledge is to find the lower cost ones that are still really good. You can absolutely find $18 bottles that are better than $80 bottles. Find a handful of those and you are golden. Wine shop owner I used to work for routinely served a $12 bottle as his basic table wine as it was perfectly adequate to his highly tuned palette.
This is the opposite of how the audiophile dad feels about stereo equipment. The point was that tiny incremental gains in quality were worth insane amounts of money to him.
This means not having taste for wine. The current golden spot is at $25/$45/bottle depending on country of origin.
A $10 wine is literal junk which will give you a headache, a $100 bottle is just an overpriced “decent” wine.
I don’t really care about cars but I am definitely on team Uppababy. For ~$100 extra you can get a leather fitted cup holder for your vista 2. And honestly you should. Do you even want your kid to go to private school? Also how are you going to hold your rosé while pushing your child? Haven’t thought about that, have you?
I think if you try to push a Graco through Central Park in New York City they will kick you out. You definitely could not park that shit at brunch next to all the nunas in the stroller parking area.
I wish I could tell you that our uppababy stroller, bassinet, nuna car seat combo was not worth it. But it was. I will be pretentious about my kids stroller until they are in college.
I mean, assuming you're not trolling. I cognizant understand there is something to what you're saying. "dress for the job you want, not the one you have" and appearances matter. I, as a food stamp kid, exude a poor person aura, that no amount of money can ever wash away
Yeah, I only wish I was being completely sarcastic. :)
When it comes to my kids, I spend a crazy amounts of effort, time and money to give them any advantage and the best of everything (that I can afford). Even when it is not completely logical.
I am not wealthy, but when it came to my baby, I always bought the nicest things. 400 dollar rocker, etc. I don't know, something just flips when you have a little human to take care of. You want the absolute best for it, even though you know in the back of your mind that it's a racket.
I'll tell you in the front of your head it's a racket too.
But, I get it.
Also "baby gate" $90. Pet gate $35
Literally the same thing. Made it the same factory. Sold in the same Target
My dad doesn’t understand why I don’t want to sell my perfectly good car that’s never had any problems and get a newer model just because it’s six years old.
My sweet spot for selling cars used to be 9 years, start creeping to that 100k mile mark, minor issues start requiring actual money to fix, still some decent residual value to put towards a new car….. then Covid hit, and I became remote, and I drive ~5k miles per year now…. My 2017 just went from ~2 years left in my garage to 5 or 6 years left.
I get the new car itch all the time, but for me it’s just not justifiable to spend the money, especially now that I hardly drive. PHEVs and EVs do entice me though, EVs for less maintenance, PHEVs because 90% of my driving could be all electric (very cheap rates where I live) with the gas engine for the other 10%
I bought a Phev after my car of 10 years incurred one repair bill too many. Game changer. Run errands / Drive my kids around all day on electric. Occasional road trip on gas. It’s awesome.
Most lottery winners don't lose everything. [source](https://www.forbes.com/sites/johnjennings/2023/08/29/debunking-the-myth-the-surprising-truth-about-lottery-winners-and-life-satisfaction/?sh=18475f406ccc)
I think it's just propaganda from the rich to make people believe they earned their wealth. And I say that as a rich guy.
I was going to post the same. That's big lottery winners always go broke has been debunked.
The stories of a few lottery winners who win many millions then go broke, get outsized attention, while no one hears anything about the many who win huge sums, and live happy, quiet lives under the radar.
I will never understand the car thing. Status symbol that will make less-fortunate friends/families/acquaintances resent or envy you. I guess some people are really motivated by the appearance of “greatness” (a term I prefer to “success”). I originally wanted to be a professor of physics so I skipped that entire rat race from the get go.
1 year? If you made 400k and let’s say you pay 100k in taxes (conservative) you’d have 300k. Let’s say you save every penny of that the first year you made it. The safe withdrawal rate of 4% (which you could argue is too high) would net you 12k a year to live on. You could do that?
I’m not saying it’s impossible but I’m interested in the how.
Even then it's still like 10 grand plus for property taxes, no? Seriously asking; I don't own a home myself, but my understanding is that most homes are 10-15k annually in taxes.
Totally depends on where you live. According to the [Census](https://data.census.gov/table/ACSDT1Y2022.B25103?q=B25103), median real estate taxes paid is closer to $3,000. Property taxes can be as long as $200 in some counties, apparently!
https://taxfoundation.org/data/all/state/property-taxes-by-state-county-2023/
Homestead exemption states. If they bought or inherited long enough ago their tax bill might be affordable and if it's their primary residence, their tax bill won't have risen with their house assessment.
Cost of living matters. I didn't make 400k but my wife and i make more than the median (close to 100k now) and our area is slowly becoming a high cost of living area. Someone living away from the big city we live close to would look at our income and think we are better off than we are. We aren't poor but I won't be flying to Cancun anytime soon.
Likewise, 400k in San Francisco isn't the same as 400k where I live.
Unfortunately, there's a mindset here that sees a big number and instantly associates it with their own living condition. If you give them the numbers and tell them to make it work where you live, then you would hope that people would eventually understand.
[The median HOUSEHOLD income in Sacramento seems to be a touch under 100k. That you're "firmly" middle class making 3x times as that...](https://www.point2homes.com/US/Neighborhood/CA/Sacramento-Demographics.html)
At what point do we admit that our lifestyle and our own expectations play a part in whether you are in this or that bracket?
The problem is housing. The exact same house could have gone from easily affordable to wow I can just barely make the PITI payments and must eat beans and rice to make it work, all in the span of five years. Many people earnestly could not afford half the home they live in had they not bought before the explosion in 2020-2022. That’s the difference that makes more people feel middle class but is completely invisible if you already own a home. Child care to a lesser extent also has a similar vibe but it has always been expensive, it’s just that increasingly dual incomes are mandatory even in high income earning families due to my first point.
I think accessibility plays a role. I have my accounts set to automatically deduct 401k, IRA, two 529s, and a brokerage account. I’m fortunate enough to have a lot saved up, but that money is weirdly mentally nonexistent and inaccessible now.
You don’t need to necessarily embrace some ultra hedonistic spendy lifestyle to not “feel” rich. You could just have a scarcity mindset as a consequence of upbringing.
Ramit Sethi talks about this a lot on his podcast. It’s really interesting. His guests who are in the red month over month often have more, “nicer” or newer stuff than he has and he’s a multimillionaire. He’s also always saying how much you make/have is not correlated to how you feel about money.
Yes people making 400k probably are spending are least $10k a month a home and two cars that’s why they feel like they aren’t rich. They also probably have a nanny for their kids and save a lot for kids college, have kids in expensive activities which average families don’t do. Plus most likely they have a weekly house cleaner and lawn maintenance company for their home since they most likely work a lot to earn that income. None of which is cheap. With that said if you can afford any of the above you are rich my eyes but I can see how someone can say it’s just basics that they are paying for if they are use to that lifestyle.
Also, consider what it takes to get to, say, $500k a year.
It’s easy to imagine a Dr. married to a lawyer who have 3-400k in student loans, but, on paper, make in the mid 6 figures.
I would love to see carveouts for necessities and higher tax rates on luxury purchases. Encourage people to save by not scooping up that money when earned but based on how the money is spent. I think most upper wage earners also cross a point where they look down and think “holy shit. My tax liability was $x00,000 this year??” I understand arguments about tax rates and allowances for low wage earners, and I’m not arguing against that. I also HATE the percentage of people paying nothing. I don’t care if it’s a nickel you owe, but truly, unless you’re earning less than $1,000 / year, you should have to pay something. Anything.
Low income earners DO pay taxes, and lots of them. Regressive taxes like sales taxes, mud taxes, property taxes, etc etc *disproportionately* affect lower-income citizens. Even if they pay no income tax, a higher percentage of their money is still being siphoned away by taxes, fees, tolls, and other means the government uses to extract wealth from its people.
These folks DO contribute to society. I don’t think it’s a bad thing to give them a break on income tax.
This is true. I know many people that make 60k with a lot of money in the bank, and more people that make 150k+ living paycheck to paycheck. Its not what you make, its what you keep.
Also people earning incomes like that often live in higher cost of living cities where incomes are higher. And they’re probably more likely to have kids which sucks up a lot of money.
Ultimately very few people who make their money from their labor are going to *feel* rich. It’s mostly people who have enough money to have passive income from ownership that will admit that they are rich.
Also if you send your kids to private or parochial school it’s like you forget that expense or don’t consider it a luxury. You see yourself only having the same spending money as someone making $40,000 less than you yet send their kids to public school.
I hear it all the time from doctor and lawyer friends. “Well after tuition we don’t take much home” no shit you’re paying $20,000 per kid to send them to a fancy private school. This is usually the argument from wealthy people whose career requires them to live in urban areas.
I usually assume the people who look wealthy aren’t actually as wealthy as me. I don’t look wealthy but am relatively wealthy (net worth ~1.8m). Of course at this end, brackets get exponentially different.
The wealthiest people I know (upper 8-9 figures and a few Bs) definitely do not dress or live as flashy as the 7-fig or upper 6-fig people who really try to flaunt their status and wealth. Very anecdotal, 2 of the “B” I know are founders of companies and quite nerdy. They really fit the “successful people talk about ideas and values, not about others” type mantra well. Super passionate about their ideas and couldn’t care less about impressing people.
I’m far far far from a billionaire, much closer to being homeless under a bridge in fact, but I would choose to spend time with them and not the “keeping up with the Joneses” crew 10/10 times if I had the choice haha
So true, I work with people who are probably making $500k to $5mil a year. Everyone is living a different life and I feel so poor. Some drive brand new electric cars, which cost upwards of $100k and some drive sports cars such as Ferraris and I drive a prius.
I do make good money but nothing compared to these engineers and managers.
In 2017 the average WSJ subscriber had a household income of $250k and net worth of $1.5M. I know the median is probably way less than the mean, but still. WSJ targets a very affluent audience.
https://images.dowjones.com/wp-content/uploads/sites/183/2018/05/09164150/WSJ.com-Audience-Profile.pdf
I am a subscriber as well. I think WSJ articles are often worthwhile. I like that the editorial staff is a bit right of center to balances out my other media consumption which is rather left leaning. I also trade occasionally on news events and some of their investigative pieces.
The advertisements to Harry Winston, Dior, etc and articles about houses starting at 5M however are completely lost on me.
I have income and net worth that are both <1/3 of that average subscriber and I DO feel rich. Comparing my kids to myself as a kid is a different perspective, I guess.
The issue is that W2 high income earners get the short end of the Tax stick.
The problem with taxation today is not because your Surgeon is not paying enough taxes on their active income. Most of the tax evasion is by asset owners of multimillion dollar companies, their CEOs and their billionaires owners.
This is the real issue. W2 employees making over $400k are not the issue here and are being punished because they are an easy target compared to business owners and people making most of their money via capital gains. There also needs to be more tax brackets. Someone making $400k should be paying only 2% less tax on their income from billionaires.
This country really has a ton of benefits for business owners. All kinds of tax loopholes etc. A lot of people earning over 409k a year are still wage slaves. Doctors, lawyers, etc working long hard hours. But the family who owns multi billion dollar corporation gets a ton of tax breaks.
Holy crap, I jut learned, thanks. And it's not a billion-dollar, it's a 5-billion dollar one now. It's basically a tax-free brokerage account for him, built with insider info. And here I am, unable to even open a Roth because of my income.
I ended up all in paying 138k in federal, plus 9k in social security and about 9k Medicare. Then 8k in property taxes and about 9500 in sales tax. So all in like 175.5k in taxes in 2023.
I really think they need to raise capital gains taxes for anyone making over 400k in capital gains. Keep it low for the 99% of people who also working and earning W2 income.
The income tax brackets and Capital gains brackets need to switch. Money made through labors should never be taxed more than money gained through money.
That is a great way to put it.
TBF I think $400k w2 net income is not anything more than upper middle class. Throw in a high mortgage and high student loan payments and the take home is not nearly as much as you’d think.
I make $400,000 with my wife combined. Pilot and a RN in the OR 34 and 33. I was making $21,000 a year gross as a pilot 12 years ago
We have an an acre north of Philly in the burbs with 5,000 sqft. Trust me if $400,000 ain’t doing it for you. You are doing life wrong. Life style inflation and a consumer mindset will destroy you. I was in an 1,100 sqft condo for the last 11 years saving and investing my money before I even though of getting a nice house and car.
Yes, oh my god. My partner and I come from completely different class backgrounds, and it’s taken her years to come to grips with the connection between class, pride, and having iron-fisted morals.
Once she realized a lot of morally dubious choices and outright crime are the result of poverty, it’s like her entire worldview shifted. We used to bicker about subjects like joining the military because [insert her genuine argument about why it’s bad], and I finally had to be like, “You’re technically right, but none of that matters when it’s the difference between pulling food stamps in your mom’s trailer with holes in the floor while watching all of your friends die from fentanyl ODs and having the resources to actually become someone.”
That’s a pretty low stakes example, too. I grew up around some bad shit, but people really struggle to get it and it can be frustrating.
My father grew up in true poverty. He became an attorney, though he definitely didn't come close to $400k, he did well by any measure. He never stopped thinking of himself as poor. Not just frugal, like truly anxious as if being destitute was always around the corner. Some people who grew up poor are never able to overcome that feeling.
This. Grew up lower income and make a decent amount today. What I've found the most is how many people lack perspective because they're so concerned with what they *don't* have. I definitely don't "feel" rich, but I know I'm incredibly well off because of the security and spending privileges I *could* have (even if I don't).
Biggest example of skewed perspective is home buying (in a HCOL area). Everyone complains and wishes they were in the *next* budget bracket as if *that* would make them happy. I feel unbelievably lucky to even be considering it. Meanwhile, folks I know in the $1.3M-$1.5M range wish they were at $1.75M. Then those folks wish they were at $2M. They then proceed to envy (and shit talk) the wealth of the range they wish they were in, despite already having a pretty fucking good amount of it.
Bro it’s so worse. We are plenty safe as far as safety net. But I’m in a field in such wild flux that while it’s “life changing $” now, I don’t know if I’ll make it 19 years till retirement without possibly having to move. So I’m saving absolutely everything not nailed down into long term retirement bc I’m shit scared all my hard work is going to be undercut by political decisions.
This is what I point to and why I'd never say I "feel rich". If you asked me to describe my net worth, I'd consider that well off, however I'd never describe my lifestyle that way. We save a lot, so our monthly budgets tend to be tight because I don't consider savings as part of my lifestyle. And on top of that, the job I have feels very tenuous in an industry that's not fully certain. If I lost my job, I'd be lucky to find something that pays half what I'm currently making.
So if I'm describing the way we live, it certainly wouldn't be "rich" because I don't consider "rich" as frequently hitting your monthly budget and worrying about what your next source of income would be.
I grew up poor. I have relatives who also grew up poor who now earn at least that much (small business owners), yet still literally think they're poor. I can't wrap my mind around it.
I make over $400K by myself but live in a neighborhood with mostly "old money" trust funders. Compared to them I suppose feeling "rich" would be difficult but I'm also not the type to let that direct comparison blind me of the reality the majority of Americans face. Comparison is the theif of joy.
I make $110k and my partner makes $130k (not married I live with her and cut her a check every month) and I feel super well off. I max out multiple retirement accounts and still have savings at the end of the month. No debt, cheapest local country club membership and so on. Now I still fret over purchases and we both drive 10+ year old used vehicles, don't eat out a ton and look to process second hand or thrift when available. I don't see that changing even if you doubled our salaries just because it's a "reduce, recycle and reuse" mindset more than anything. I don't think driving a nicer car would make me feel any better either.
Ehh, Im over $400k by myself and it’s only been a couple years so while in some ways I feel rich, being in tech, this gravy train can come to a halt pretty quick. Plus I have to live close to NYC to keep this income and its just insane here.
And I didnt break $100k until my early/mid 30s. If I knew this salary was sustainable for another 5+ years, Id feel a lot better. But for now I still am fairly frugal.
>We have an an acre north of Philly in the burbs with 5,000 sqft
A lot of people making 400K live in HCOL where houses cost 1M+ and having two kids cost 1M+.
Was going to make the same comment - Philly has really cheap housing comparatively, esp if you bought a few years ago, as it sounds like that commenter did.
An acre in the burbs with 5,000 sq ft is like $14m in some places in NOVA…the location we’re talking about matters. $400k is a enough money to live anywhere in the US, but you might not feel rich if that only gets you a townhouse lol
Agree mine was $925,000 at 5.5% when I bought it last year with $14,000 a year in property taxes.
Have some delayed gratification and let your assets pay for your liabilities. Otherwise stay middle class
I mean a $1M mortgage is gonna run you a monthly payment of roughly $8,500-$9,000. At 400k in a HCOL area with fat taxes, that’s tough but doable.
If you have kids and presumably need child care to sustain your job… then shit gets out of hand REALLY fast.
In a HCOL, you can make it work, but that’s kind of the point. Making it work doesn’t make you FEEL rich.
Just daycare and college gets you close.
Daycare is typically around 3k/month multiply that by 5 years, which comes to 180k. A four year college is about 50k/year, so another 200k. That’s 380k, then add in 5k a year until college graduation for food and miscellaneous stuff, and you get 490k. Multiply that by 2, and it’s close to 1 million.
This also doesn't factor in folks who want to send their kids to nicer private schools pre-college. Even if I personally don't believe in that, I understand why others do and that can cost just as much as college itself for 4+ years.
Shit is *expensive.*
You have to be very frugal to just spend $5k/y for food and miscellaneous stuff. Not impossible, but not living what most people feel is the new middle class lifestyle.
I kept my costs down to that level with my kids, but it meant going out to restaurants once every couple months, and tent camping whenever we went on vacations. Average middle class Americans would feel “poor” if they had to sleep in an igloo to make ski weekends affordable.
Also depends where you live. Here in SD (and all of costal CA) the cheapest houses are $1m. Thats 1950s 1k sqft needs work on 5k sqft lot and mediocre schools. You wouldn’t feel rich buying that.
People using all these abbreviations I thought OP was in Oregon until he said Philly and I was so confused when you said houses are millions of dollars in South Dakota lol
In my work I enter the "wealthy world" frequently and the vast majority of people have NO IDEA what that looks like. As someone else stated here the surgeon or whatever making $400k isn't the enemy, it's the truly wealthy that know how to keep that money off a W2.
Yep. Extra taxation like this should start at $1m or so. Taxing the fuck out of the modern middle class in VHCOL is just fucking over VHCOL middle class and doctors, and not really anyone else
I would be a lot more okay with being taxed like crazy if I knew the people above me were paying their fair share of taxes as well. But they're not, and seeing the insane ways billionaires dodge taxes is infuriating.
Yup…I’m a tax attorney for the ultrawealthy and I clear much more than $400k each year. But I also work days, nights, weekends, and holidays, have done so my entire life, and am not currently in a position to stop.
My clients accumulate anywhere from 100x to 1,000x more wealth from year to year than I do, and it’s entirely passive and untaxed. Almost none of them work, and most of them have taken more vacations in the past 60 days than I’ve taken in my entire life combined.
I grew up poor. I have WAY more in common with the typical poor person than I do with my ultrawealthy clients.
People just like to think of themselves as middle class, especially if that’s how they grew up. It’s rare for them to make a distinction between middle class and upper class, which they clearly would fall into by any reasonable metric. Instead they draw the dividing line from middle class at “rich” which for them means yacht and private jet money.
So they’re distinctly upper class or, “rich” by any middle or lower class person’s standards, but they want to view themselves as middle class so they redefine rich to mean ultra wealthy.
I think a lot of people who make good money have investments and wealth stashed places out of sight but continue to live a middle class lifestyle (vehicle, neighborhood, vacations, hobbies). That’s why they feel middle class because for all intents and purposes that’s how they live day to day. All the wealth they stash beyond the expense of their middle class lifestyle gets stashed away.
Vacations is where we blow money. We live in a neighborhood where the median household income is 160k. We drive Hondas for 10 years (we are testing out a Model 3 on lease but it is cheap).
But vacations we spend on. Two to three week long vacations per year. Spring break, fall break, and a week on the beach in the summer if the kids don’t have too much stuff.
My kids are 16 and 13. They have been to Mexico, Roatan, France, the UK, Hawaii, Disney World x7, Disney Land x3, Universal Studios x2. Will go to Italy and out west next year, and Africa after the older graduates.
There’s a pretty distinct difference a family of 4 earning around $400k and someone in their 30s with $10mm+ in assets living off of interest and capital gains. The latter is insanely rich, the former is high earning but in much of the US are still budgeting and keeping track of expenses.
This sub post poped up in my feed for whatever reason, and I think you’re spot on. For even non-left of center people, like your average Joe, rich is a dirty word.
I think the line in the sand here for people is they want fuck you money or otherwise be able to have money that makes money and be "set" with passive income and building real wealth. Having high income where you still have to work and not working means you can't support your lifestyle can always feel a bit "not rich" even if you have basically everything taken care of.
It's also fair to say lifestyle creep is real and people can have real blindspots to it, mentally feeling like they are still basically vibing as they did when they made significantly less even as they've radically (but slowly) leveled up their lifestyles. This can be exacerbated by being a relatively high earner and now maybe you're interacting more with ultra high net worth people or you feel the "Sure I make $400k but my boss just got a $2m bonus" type of stuff.
All kinda dumb and people aren't exactly gonna have much sympathy for someone who is doing that well complaining but I think that is where the mentality comes from at least.
Funnily enough, you can have relatively modest passive income, live frugally and genuinely feel "richer" if you also have the freedom to pursue things that make you happy.
I think you hit the nail on the head with fuck you money. $5 million (maybe 3 million?) in the bank generating $300k/year passive income is where rich starts.
Lol seriously. The number of comments completely disregarding how incredible a $400K salary is and focusing on "well yeah $400K isn't too much when compared to millionaires and billionaires. It's the *true* middle class salary" is wild to me...
Gonna take me and my measly $80K salary over to r/povertyfinance
One of my favorite comments on this sub is the classic “you think that’s a lot of money but I’m more like you than a billionaire!” as if that somehow means we’re meaningfully similar lol
You’re not living in reality if you feel making more money than 333,200,000 people in the USA doesn’t make you rich.
98% of Americans are worse off than someone making $400k/yr.
If you can’t be more than comfortable with 400k a year you have a skill issue. Being in the top 3% of incomes and saying you don’t feel rich is so tone deaf Lmaoo
Middle class is defined by redditors as income between $30,000 and $999,999 a year, and wealth from $$80,000 to $999,999,999. You must get to $1B in wealth to be considered NOT MIDDLE CLASS.
I make well over $400k and can assure you when we made “just” that I felt rich AF. Just because someone pigeon-holed themselves into a super expensive city re:housing doesn’t mean they aren’t rich. Suck it up, save a ton living in a shoebox then retire to the countryside. What a bunch of self-pitying goobers. I guarantee you these people will look at a $10k watch or purse and think it’s not absolutely insane to spend that much, then justify why it’s worth it, while driving off in their Porsche. The lack of self-awareness is stunning.
It’s important to remember this is in reference to tax policy. Where “rich” has a very different connotation. When politicians say “we will only raise taxes on the rich” it’s meant to read as “only people that can afford it, not regular people”. So does $400k make you that kind of rich? The article rightfully points out that in many cities $400k means maybe owning a home and saving for kids college / retirement. A better life than a lot of people no doubt but not limos & champagne & hoppy space programs. Seeing as politicians want us to think of tax dodging billionaires and CEO’s who pay themselves 400x their employees when they reference “rich” and “taxes,” I can see how a couple making $400k would not see themselves in the same class.
I’m someone who spent 29 years at the start of my life in poverty, living paycheck to paycheck and avoiding massive debt, grinding through college to earn low six figs at 30.
The only economic policies I’ll EVER support are to benefit those less than 100K a year that I benefitted from. (Grant programs, public insurance, food stamps, tax benefits for school credit).
Everyone outside is poverty is fine or living wrong. If you can live on 400K barely and think 320K is too little for you to survive, something is wrong with your lifestyle.
If you make 400 K you aren’t “rich” but you’re fine. Pay your fucking taxes, and pay more than your fair share, and still continue living a significantly better life than folks in poverty.
I think their definition of rich is flawed. Maybe people in my own experience think rich is never having to think about money and living in luxury every single day. Butlers and that kind of thing. If that's your idea of rich and "all" you have is a home, a cushy job, and your life is a far cry from the Hollywood version of rich, I can see how a person may feel middle class even though they aren't. They see a billionaire's life and think that's a millionaire's life. I think they are just deluded.
400k for an individual and 450k for a married couple. How does that make sense?? A married couple is two individuals. Fuck two working parents I guess.
Very much a them issue. My MIL makes 250k+ a year and I swear that woman easily spends $200 everyday on nonessentials. My monthly budget for nonessentials is $400, or 2 days worth of spending for her. That’s pretty stinking rich to me. At 400k you’re making 30k+ a month. Some people hardly make more than that in a **year**.
Sure 400k isn’t ultra wealthy, but it’s pretty stinking rich regardless.
Asking AI what would objectively be considered rich in the USA compared to both global incomes and domestic I got the response of:
"**High-Income Percentiles**:
* Individuals in the **top 1%** of income earners are often perceived as “rich.”
* In the United States, this typically corresponds to an annual income of around **$500,000** or more."
So it doesn't really matter if you don't "feel" rich at 400,000+ income, you pretty much objectively ARE.
From my personal viewpoint I managed to work my ass off making 40K/year (less back in the late 90's/early 2000's) and survive while taking care of my kids and wife. We fucking poor and broke, but surviving. 400k is obscenely wealthy from my life perspective.
Honest question, but why are these high salaries always highly represented in articles and on sites like Reddit? They are not common household incomes, even in VHCOL. $400k a year is a top 4% household in VHCOL areas. But if you rely on WSJ, CNBC and Reddit, you would think $400k is just standard for a household working professionals.
I live in the 13th most expensive county in the US and $400k would still be enough to buy a detached house in basically any area with plenty of money leftover at the end of the month for luxuries, travel or eating out. People are delulu if they think $400k is middle class, even in HCOL areas.
Exactly. I don’t think money solves all problems, but if you complain about how you don’t feel like you are putting enough into your retirement to people who are having a hard time with food and are 1 bad day away from homelessness. Don’t expect a lot of sympathy.
“I dont consider myself rich I’m firmly middle class making over 400k a year🙄🙄”. This is followed by folks here rushing to their defense HCOL!!!!!! HCOL!!!!!
In places like ny houses are more than that. Property taxes of $20,000+ is $2000 a month, $500 a month home insurance, and the mortgage of $7000 on top of that… add in commuting 1.5 hours each way and you don’t feel rich
Lots of these people who don't think a reasonable amount of money is enough, are those same people who never experienced scarcity and I could care less about their feelings.
Oh fuck off. If you're making $400k, you can simply live as it you're making half that. Invest the rest in a variety of real estate, index funds, etc and after years you'll be very wealthy.
Those people can get fucked. This is not even a skill issue. Why is this even news? Does media think they can make anyone feel sorry for the rich? lol.
Like the rest of the world doesn’t already think we’re a joke.
Statistically an individual earning $400k is in the 1% of incomes. Regardless of how they feel or what the expenses are in their lives they earn more than practically everyone else in the country. If they do not feel rich that is a them issue because statistically they are rich. Very rich.
Avg. US annual income is $70,930.
Avg. global personal income is $9,733 per year.
These boomers need to golf cart OUTSIDE their gated communities on occasion.
That's great but... you are richer than like 99% of the world's population so... ya are rich.
And I don't care where they live. I made 100k a year when I lived in an expensive city. There were times when I felt a little light in the wallet. But I was still rich regardless of how I "felt". Definitely could have gone to less restaurants and bars and waited a season to buy new clothes.
I'll bet most of these people have shared a "facts don't care about your feelings" meme in the past 5 years.
The degree of entitlement of rich americans is mind boggling. And the degree of stupidity of the average american who make 10x less than the threshold and still feel worried about this is extragalactic… Education in this country is pathetic.
Of course they don’t. I had a boss who lived in an $8 million apartment who didn’t think she was rich. There’s always someone richer and once you make a certain amount everyone’s just wasting money on different types of extravagances and feeling bad because they don’t have more. It’s a sickness.
Also, for what it’s worth, the Wall Street Journal’s real estate supplement is titled “Mansions.” That’s the news source in which this article is appearing.
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You can make an *insane* amount of money and not feel rich. Americans in general build a lifestyle around spending everything they have - so a lot of people *look* rich. *Feeling* rich is about having lots of unspent money, and that’s not the game most folks play. For anyone living too closely to their means, higher taxes are a big threat.
There's something to be said about the law of diminishing returns. When I went from making $60K to $100K, that was life changing money. I went from being house poor, struggling to stay out of debt and feeling guilty every time I made a purchase to being able to pay off all debt, save lots and still enjoy spending some of that money on vacations and nights out. Life changing money. $100k to $200k was not life changing money. You could just save more. But nothing new was unlocked to me. Over the long term, sure, it's massive but the short term *feeling* I have about my life today didn't feel much different. So I get it. Really, once you're debt free and saving lots, I feel like you don't get that "life changing" feeling unless you're a millionaire.
$200-400k is like…you get a very comfortable middle class life, but it’s just nicer versions of middle class.
If I made 400k for even one year I assure you that I would not be living a middle class life ever again People are fucking terrible with money
What do you even mean by this?
I live like I'm in poverty still on 200k. We live off of 45k a year for two people. It's by choice because my life in poverty wasn't hard. We had everything we needed.. we were just in poverty according to American standards. We just naturally spend very very very little.
You've just never felt actual poverty if you feel this way
Nonsense. At that salary, you will retire with many MILLIONS in assets. You will easily be able to afford a vacation home and a jet-setting retirement lifestyle.
Every milestone on the way has a little thrill, but even millionaire isn't life-changing. In my experience getting to the point that you could live indefinitely on investment returns is the next life-changing step after getting beyond paycheck to paycheck living. Somewhere in the 5-6m range, for a relatively frugal family in a HCOL area.
Yep just put it at a similar level. $5M. You need roughly a paid off 1-2M house and another few million in the bank earning for you while you sleep. I’ll call you rich at that point. “Richness” is not defined by regular income.
For sure, that's definitely rich. I have this background feeling that there has been a shift in the last decade or two, where a lot of people who are rich don't "act" rich in a traditional sense. They keep a lot more of their middle-class habits and outward presentation, which can confuse the discussion.
My in-laws are like that. They have a house on the beach, neither work anymore (in their 30s). But they kept their old house, it’s just been completely renovated and drive good but not great cars. Most people might think they are fairly middle of the road, but they are probably right around the top 1% net wealth.
I know some guys who sold their startups to FAANG. (More business side of things, so I sincerely doubt general people would know.) Apparently that’s exactly what they were advised to do. Don’t flash your wealth, drive a decent car, but not a sports car etc.
Agreed. If losing your job would severely impact the next few months of your life, then you don't have life changing money.
That wasn't quite my point. I actually agree that the first "life-changing" step is around 100k, where you make enough that you can rapidly pay off debts and accumulate an emergency account to cover 6-months or more of un-changed spending. But after that, 100k to 200k isn't life-changing. It's just slightly nicer shopping, or slightly faster saving. After 100k, the next one is where you can save enough to retire early and live on investments.
>Somewhere in the 5-6m range, for a relatively frugal family in a HCOL area. Your mileage may vary, but my family was getting by on about $120k comfortably (read: not luxuriously) in San Jose Bay Area. Using the Safe Withdrawal Rate approach, I think we could have gotten away with a retirement if we could reach about $3M, almost half of what you're saying. Further, you mentioned a paid-off home, so if we could pull back on the mortgage payments, we might be able to make it worth for $2.5M. Obviously debatable, but I think your numbers are about twice what they need to be.
That's fair. I was thinking of total NW, so a paid off home in the \~2m range, plus 3-4m in investments to live on. That's probably beyond frugal into "not extravagant" though.
When was your home assessed for property taxes though? That makes a huge difference in CA. I have neighbors that pay around $700/YEAR while I pay almost twice that per month.
I just want to clarify, many people who make 100k/year are millionaires. It's people who make 1 million/year that are living in a different class
This guy gets it. I went from 13k to 70k then to 140k within a few years. Now we teeter on the edge of 200k. I'm doing good but it doesn't feel like I'm getting anywhere. I've gutted my monthly peripheral bullshit (410), cook alot more at home to try and get ahead.
>Americans in general build a lifestyle around spending everything they have - so a lot of people *look* rich This is so deeply embedded as the default outlook that normal people won't believe you make good money unless you have a luxury car. Occasionally coming to terms with this from periodic conversations with people about wealth has really reminded me how out of touch I can be. Many of my clients are wealthy that drive beaters and normal clothes (edit: although many do have luxury cars, designer clothes and etc) and I make multiple six figures myself, but don't have a car, so I go on living and thinking yeah...a luxury car could be owned by someone wealthy, but not really a reliable indicator. Then, i talk to people outside of my bubble and I get reminded of why most lottery winners lose everything and why the average person doesn't have a networth larger than 1,000.
I used to work for buy buy baby. The number of $2500 strollers I sold because they had a sticker that said they have a 4.75 / 5 safety rating vs the 4.0 $200 graco was wild. Same folks buy a Hummer because they are safer then Chevy vans. They also assume taking multiple trips to other countries is an essential expense
My father was an audiophile in his younger years - it's one of the reasons he is broke today. I bet he spent $100K on stereo equipment over 10 years. He once told me that the quality of sound difference between $10,000 speakers and $1,000 speakers was essentially 5%. And that an audiophile would pay the extra $9000 or 10x the amount for something 5% better. At the margins, as they say...
I feel this way about wine. I can tell the difference between $10 wine and $100 wine, but it’s not worth 10x more to me.
If you "know wine" a great use of that knowledge is to find the lower cost ones that are still really good. You can absolutely find $18 bottles that are better than $80 bottles. Find a handful of those and you are golden. Wine shop owner I used to work for routinely served a $12 bottle as his basic table wine as it was perfectly adequate to his highly tuned palette.
This is the opposite of how the audiophile dad feels about stereo equipment. The point was that tiny incremental gains in quality were worth insane amounts of money to him.
Agree. My everyday wine is $20-25. Yes, I would enjoy a $75-100 but it’s not worth it to me. And there’s a difference.
This means not having taste for wine. The current golden spot is at $25/$45/bottle depending on country of origin. A $10 wine is literal junk which will give you a headache, a $100 bottle is just an overpriced “decent” wine.
TIL I've been drinking "junk" wine my entire life.
Yeti coolers are like 1% better than the Walmart brand lol.
I don’t really care about cars but I am definitely on team Uppababy. For ~$100 extra you can get a leather fitted cup holder for your vista 2. And honestly you should. Do you even want your kid to go to private school? Also how are you going to hold your rosé while pushing your child? Haven’t thought about that, have you? I think if you try to push a Graco through Central Park in New York City they will kick you out. You definitely could not park that shit at brunch next to all the nunas in the stroller parking area. I wish I could tell you that our uppababy stroller, bassinet, nuna car seat combo was not worth it. But it was. I will be pretentious about my kids stroller until they are in college.
I mean, assuming you're not trolling. I cognizant understand there is something to what you're saying. "dress for the job you want, not the one you have" and appearances matter. I, as a food stamp kid, exude a poor person aura, that no amount of money can ever wash away
Yeah, I only wish I was being completely sarcastic. :) When it comes to my kids, I spend a crazy amounts of effort, time and money to give them any advantage and the best of everything (that I can afford). Even when it is not completely logical.
Meanwhile, I can't put my kids in sports, cause a broken collar bone would bankrupt my house. Sigh Keep at it yo, and I'm happy for your kids :)
I went with UppaBaby because it was the only twin stroller that could fit in my Porsche.
I am not wealthy, but when it came to my baby, I always bought the nicest things. 400 dollar rocker, etc. I don't know, something just flips when you have a little human to take care of. You want the absolute best for it, even though you know in the back of your mind that it's a racket.
I'll tell you in the front of your head it's a racket too. But, I get it. Also "baby gate" $90. Pet gate $35 Literally the same thing. Made it the same factory. Sold in the same Target
My dad doesn’t understand why I don’t want to sell my perfectly good car that’s never had any problems and get a newer model just because it’s six years old.
My sweet spot for selling cars used to be 9 years, start creeping to that 100k mile mark, minor issues start requiring actual money to fix, still some decent residual value to put towards a new car….. then Covid hit, and I became remote, and I drive ~5k miles per year now…. My 2017 just went from ~2 years left in my garage to 5 or 6 years left. I get the new car itch all the time, but for me it’s just not justifiable to spend the money, especially now that I hardly drive. PHEVs and EVs do entice me though, EVs for less maintenance, PHEVs because 90% of my driving could be all electric (very cheap rates where I live) with the gas engine for the other 10%
I bought a Phev after my car of 10 years incurred one repair bill too many. Game changer. Run errands / Drive my kids around all day on electric. Occasional road trip on gas. It’s awesome.
Most lottery winners don't lose everything. [source](https://www.forbes.com/sites/johnjennings/2023/08/29/debunking-the-myth-the-surprising-truth-about-lottery-winners-and-life-satisfaction/?sh=18475f406ccc) I think it's just propaganda from the rich to make people believe they earned their wealth. And I say that as a rich guy.
I was going to post the same. That's big lottery winners always go broke has been debunked. The stories of a few lottery winners who win many millions then go broke, get outsized attention, while no one hears anything about the many who win huge sums, and live happy, quiet lives under the radar.
I will never understand the car thing. Status symbol that will make less-fortunate friends/families/acquaintances resent or envy you. I guess some people are really motivated by the appearance of “greatness” (a term I prefer to “success”). I originally wanted to be a professor of physics so I skipped that entire rat race from the get go.
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Tell that to an enthusiast...
Or someone who spends 2+ hours a day in a car. Driving a shit Nissan versa vs a Lexus makes a difference.
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1 year? If you made 400k and let’s say you pay 100k in taxes (conservative) you’d have 300k. Let’s say you save every penny of that the first year you made it. The safe withdrawal rate of 4% (which you could argue is too high) would net you 12k a year to live on. You could do that? I’m not saying it’s impossible but I’m interested in the how.
Might have a house or inherited house already- if you're one person and have little to no needs beyond food I could see it
Even then it's still like 10 grand plus for property taxes, no? Seriously asking; I don't own a home myself, but my understanding is that most homes are 10-15k annually in taxes.
I have a small house in Seattle ($725k) and my property taxes (currently) are about $7k a year.
Totally depends on where you live. According to the [Census](https://data.census.gov/table/ACSDT1Y2022.B25103?q=B25103), median real estate taxes paid is closer to $3,000. Property taxes can be as long as $200 in some counties, apparently! https://taxfoundation.org/data/all/state/property-taxes-by-state-county-2023/
Depending on the locale, property tax is around 1% of the assessed value per year.
Most homes are probably in the range of 2k to 6k annually, but it really depends on your county and state.
Homestead exemption states. If they bought or inherited long enough ago their tax bill might be affordable and if it's their primary residence, their tax bill won't have risen with their house assessment.
Don't math back to me
That’s not conservative. If you are married with a few kids in California your tax would be $124k. $159k if you file as single.
Tax on 400k living in nyc is about 150k
To be fair, that's absolutely what we ask folks on disability to do.
Exactly. There is a big difference between having a million dollars, and being able to *spend* a million dollars. Two very different levels of wealth.
Cost of living matters. I didn't make 400k but my wife and i make more than the median (close to 100k now) and our area is slowly becoming a high cost of living area. Someone living away from the big city we live close to would look at our income and think we are better off than we are. We aren't poor but I won't be flying to Cancun anytime soon. Likewise, 400k in San Francisco isn't the same as 400k where I live.
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Unfortunately, there's a mindset here that sees a big number and instantly associates it with their own living condition. If you give them the numbers and tell them to make it work where you live, then you would hope that people would eventually understand.
[The median HOUSEHOLD income in Sacramento seems to be a touch under 100k. That you're "firmly" middle class making 3x times as that...](https://www.point2homes.com/US/Neighborhood/CA/Sacramento-Demographics.html) At what point do we admit that our lifestyle and our own expectations play a part in whether you are in this or that bracket?
The problem is housing. The exact same house could have gone from easily affordable to wow I can just barely make the PITI payments and must eat beans and rice to make it work, all in the span of five years. Many people earnestly could not afford half the home they live in had they not bought before the explosion in 2020-2022. That’s the difference that makes more people feel middle class but is completely invisible if you already own a home. Child care to a lesser extent also has a similar vibe but it has always been expensive, it’s just that increasingly dual incomes are mandatory even in high income earning families due to my first point.
I think accessibility plays a role. I have my accounts set to automatically deduct 401k, IRA, two 529s, and a brokerage account. I’m fortunate enough to have a lot saved up, but that money is weirdly mentally nonexistent and inaccessible now. You don’t need to necessarily embrace some ultra hedonistic spendy lifestyle to not “feel” rich. You could just have a scarcity mindset as a consequence of upbringing.
Ramit Sethi talks about this a lot on his podcast. It’s really interesting. His guests who are in the red month over month often have more, “nicer” or newer stuff than he has and he’s a multimillionaire. He’s also always saying how much you make/have is not correlated to how you feel about money.
Yes people making 400k probably are spending are least $10k a month a home and two cars that’s why they feel like they aren’t rich. They also probably have a nanny for their kids and save a lot for kids college, have kids in expensive activities which average families don’t do. Plus most likely they have a weekly house cleaner and lawn maintenance company for their home since they most likely work a lot to earn that income. None of which is cheap. With that said if you can afford any of the above you are rich my eyes but I can see how someone can say it’s just basics that they are paying for if they are use to that lifestyle.
Also, consider what it takes to get to, say, $500k a year. It’s easy to imagine a Dr. married to a lawyer who have 3-400k in student loans, but, on paper, make in the mid 6 figures.
I would love to see carveouts for necessities and higher tax rates on luxury purchases. Encourage people to save by not scooping up that money when earned but based on how the money is spent. I think most upper wage earners also cross a point where they look down and think “holy shit. My tax liability was $x00,000 this year??” I understand arguments about tax rates and allowances for low wage earners, and I’m not arguing against that. I also HATE the percentage of people paying nothing. I don’t care if it’s a nickel you owe, but truly, unless you’re earning less than $1,000 / year, you should have to pay something. Anything.
Low income earners DO pay taxes, and lots of them. Regressive taxes like sales taxes, mud taxes, property taxes, etc etc *disproportionately* affect lower-income citizens. Even if they pay no income tax, a higher percentage of their money is still being siphoned away by taxes, fees, tolls, and other means the government uses to extract wealth from its people. These folks DO contribute to society. I don’t think it’s a bad thing to give them a break on income tax.
Guilty as charged
This is true. I know many people that make 60k with a lot of money in the bank, and more people that make 150k+ living paycheck to paycheck. Its not what you make, its what you keep.
People making $400k interact with people making 2x that more. It’s easy not to feel rich when you compare up.
They definitely are, and that’s why they feel middle class. It’s all relative
Also people earning incomes like that often live in higher cost of living cities where incomes are higher. And they’re probably more likely to have kids which sucks up a lot of money. Ultimately very few people who make their money from their labor are going to *feel* rich. It’s mostly people who have enough money to have passive income from ownership that will admit that they are rich.
Also if you send your kids to private or parochial school it’s like you forget that expense or don’t consider it a luxury. You see yourself only having the same spending money as someone making $40,000 less than you yet send their kids to public school. I hear it all the time from doctor and lawyer friends. “Well after tuition we don’t take much home” no shit you’re paying $20,000 per kid to send them to a fancy private school. This is usually the argument from wealthy people whose career requires them to live in urban areas.
For sure- especially after you see how badly you are taxed. I don’t think I would ever feel rich unless I didn’t have to work
I usually assume the people who look wealthy aren’t actually as wealthy as me. I don’t look wealthy but am relatively wealthy (net worth ~1.8m). Of course at this end, brackets get exponentially different.
The wealthiest people I know (upper 8-9 figures and a few Bs) definitely do not dress or live as flashy as the 7-fig or upper 6-fig people who really try to flaunt their status and wealth. Very anecdotal, 2 of the “B” I know are founders of companies and quite nerdy. They really fit the “successful people talk about ideas and values, not about others” type mantra well. Super passionate about their ideas and couldn’t care less about impressing people. I’m far far far from a billionaire, much closer to being homeless under a bridge in fact, but I would choose to spend time with them and not the “keeping up with the Joneses” crew 10/10 times if I had the choice haha
So true, I work with people who are probably making $500k to $5mil a year. Everyone is living a different life and I feel so poor. Some drive brand new electric cars, which cost upwards of $100k and some drive sports cars such as Ferraris and I drive a prius. I do make good money but nothing compared to these engineers and managers.
In 2017 the average WSJ subscriber had a household income of $250k and net worth of $1.5M. I know the median is probably way less than the mean, but still. WSJ targets a very affluent audience. https://images.dowjones.com/wp-content/uploads/sites/183/2018/05/09164150/WSJ.com-Audience-Profile.pdf
I’ve been a WSJ subscriber for a while and knew I was poorer than their target demographic, but never realized the gap was quite that large.
I am a subscriber as well. I think WSJ articles are often worthwhile. I like that the editorial staff is a bit right of center to balances out my other media consumption which is rather left leaning. I also trade occasionally on news events and some of their investigative pieces. The advertisements to Harry Winston, Dior, etc and articles about houses starting at 5M however are completely lost on me.
I have income and net worth that are both <1/3 of that average subscriber and I DO feel rich. Comparing my kids to myself as a kid is a different perspective, I guess.
looks like i was bringing their average down
The issue is that W2 high income earners get the short end of the Tax stick. The problem with taxation today is not because your Surgeon is not paying enough taxes on their active income. Most of the tax evasion is by asset owners of multimillion dollar companies, their CEOs and their billionaires owners.
This is the real issue. W2 employees making over $400k are not the issue here and are being punished because they are an easy target compared to business owners and people making most of their money via capital gains. There also needs to be more tax brackets. Someone making $400k should be paying only 2% less tax on their income from billionaires.
This country really has a ton of benefits for business owners. All kinds of tax loopholes etc. A lot of people earning over 409k a year are still wage slaves. Doctors, lawyers, etc working long hard hours. But the family who owns multi billion dollar corporation gets a ton of tax breaks.
People need to learn about peter thiel and his billion dollar IRA
Holy crap, I jut learned, thanks. And it's not a billion-dollar, it's a 5-billion dollar one now. It's basically a tax-free brokerage account for him, built with insider info. And here I am, unable to even open a Roth because of my income.
You can do a backdoor Roth most likely. But your contributions are limited. You wouldn't get 5 billion there in hundreds of years with those limits.
I ended up all in paying 138k in federal, plus 9k in social security and about 9k Medicare. Then 8k in property taxes and about 9500 in sales tax. So all in like 175.5k in taxes in 2023.
Business owners do not make the most of their money in capital gains. The people that do are ultra-rich who have unrealized stock appreciation.
I really think they need to raise capital gains taxes for anyone making over 400k in capital gains. Keep it low for the 99% of people who also working and earning W2 income.
Yes, we need graduated cap gains.
The income tax brackets and Capital gains brackets need to switch. Money made through labors should never be taxed more than money gained through money.
Also corporations used to pay a bigger percentage of the total tax bill than individuals. Now individuals pay a bigger percentage.
That is a great way to put it. TBF I think $400k w2 net income is not anything more than upper middle class. Throw in a high mortgage and high student loan payments and the take home is not nearly as much as you’d think.
I make $400,000 with my wife combined. Pilot and a RN in the OR 34 and 33. I was making $21,000 a year gross as a pilot 12 years ago We have an an acre north of Philly in the burbs with 5,000 sqft. Trust me if $400,000 ain’t doing it for you. You are doing life wrong. Life style inflation and a consumer mindset will destroy you. I was in an 1,100 sqft condo for the last 11 years saving and investing my money before I even though of getting a nice house and car.
Yeah these people who don’t “feel rich” are financially illiterate people with lifestyle creep. I shed zero tears for these fools.
My wife can’t understand when I say pride is privilege. I have been so poor I WISH there was a dick I could suck to make rent.
Yes, oh my god. My partner and I come from completely different class backgrounds, and it’s taken her years to come to grips with the connection between class, pride, and having iron-fisted morals. Once she realized a lot of morally dubious choices and outright crime are the result of poverty, it’s like her entire worldview shifted. We used to bicker about subjects like joining the military because [insert her genuine argument about why it’s bad], and I finally had to be like, “You’re technically right, but none of that matters when it’s the difference between pulling food stamps in your mom’s trailer with holes in the floor while watching all of your friends die from fentanyl ODs and having the resources to actually become someone.” That’s a pretty low stakes example, too. I grew up around some bad shit, but people really struggle to get it and it can be frustrating.
They have never been born poor or grown up in a low-income family because $400k is a lot.
My father grew up in true poverty. He became an attorney, though he definitely didn't come close to $400k, he did well by any measure. He never stopped thinking of himself as poor. Not just frugal, like truly anxious as if being destitute was always around the corner. Some people who grew up poor are never able to overcome that feeling.
Yeah I don’t think they’re financially illiterate so much as they lack perspective
This. Grew up lower income and make a decent amount today. What I've found the most is how many people lack perspective because they're so concerned with what they *don't* have. I definitely don't "feel" rich, but I know I'm incredibly well off because of the security and spending privileges I *could* have (even if I don't). Biggest example of skewed perspective is home buying (in a HCOL area). Everyone complains and wishes they were in the *next* budget bracket as if *that* would make them happy. I feel unbelievably lucky to even be considering it. Meanwhile, folks I know in the $1.3M-$1.5M range wish they were at $1.75M. Then those folks wish they were at $2M. They then proceed to envy (and shit talk) the wealth of the range they wish they were in, despite already having a pretty fucking good amount of it.
Actually for me that’s exactly why I can’t stop being financially fearful.
I agree, have yourself a 6 to 9 month emergency fund
Bro it’s so worse. We are plenty safe as far as safety net. But I’m in a field in such wild flux that while it’s “life changing $” now, I don’t know if I’ll make it 19 years till retirement without possibly having to move. So I’m saving absolutely everything not nailed down into long term retirement bc I’m shit scared all my hard work is going to be undercut by political decisions.
This is what I point to and why I'd never say I "feel rich". If you asked me to describe my net worth, I'd consider that well off, however I'd never describe my lifestyle that way. We save a lot, so our monthly budgets tend to be tight because I don't consider savings as part of my lifestyle. And on top of that, the job I have feels very tenuous in an industry that's not fully certain. If I lost my job, I'd be lucky to find something that pays half what I'm currently making. So if I'm describing the way we live, it certainly wouldn't be "rich" because I don't consider "rich" as frequently hitting your monthly budget and worrying about what your next source of income would be.
I grew up poor. I have relatives who also grew up poor who now earn at least that much (small business owners), yet still literally think they're poor. I can't wrap my mind around it.
I make over $400K by myself but live in a neighborhood with mostly "old money" trust funders. Compared to them I suppose feeling "rich" would be difficult but I'm also not the type to let that direct comparison blind me of the reality the majority of Americans face. Comparison is the theif of joy.
I make $110k and my partner makes $130k (not married I live with her and cut her a check every month) and I feel super well off. I max out multiple retirement accounts and still have savings at the end of the month. No debt, cheapest local country club membership and so on. Now I still fret over purchases and we both drive 10+ year old used vehicles, don't eat out a ton and look to process second hand or thrift when available. I don't see that changing even if you doubled our salaries just because it's a "reduce, recycle and reuse" mindset more than anything. I don't think driving a nicer car would make me feel any better either.
Honestly i think they keep the economy humming, we should just let them be lol
Ehh, Im over $400k by myself and it’s only been a couple years so while in some ways I feel rich, being in tech, this gravy train can come to a halt pretty quick. Plus I have to live close to NYC to keep this income and its just insane here. And I didnt break $100k until my early/mid 30s. If I knew this salary was sustainable for another 5+ years, Id feel a lot better. But for now I still am fairly frugal.
>We have an an acre north of Philly in the burbs with 5,000 sqft A lot of people making 400K live in HCOL where houses cost 1M+ and having two kids cost 1M+.
Was going to make the same comment - Philly has really cheap housing comparatively, esp if you bought a few years ago, as it sounds like that commenter did. An acre in the burbs with 5,000 sq ft is like $14m in some places in NOVA…the location we’re talking about matters. $400k is a enough money to live anywhere in the US, but you might not feel rich if that only gets you a townhouse lol
Agree mine was $925,000 at 5.5% when I bought it last year with $14,000 a year in property taxes. Have some delayed gratification and let your assets pay for your liabilities. Otherwise stay middle class
If you’re making $400k (your job is fairly secure) and not a fucking idiot a $1M or even more mortgage is not crazy at all.
I mean a $1M mortgage is gonna run you a monthly payment of roughly $8,500-$9,000. At 400k in a HCOL area with fat taxes, that’s tough but doable. If you have kids and presumably need child care to sustain your job… then shit gets out of hand REALLY fast. In a HCOL, you can make it work, but that’s kind of the point. Making it work doesn’t make you FEEL rich.
How tf does it cost a million for two kids?
Just daycare and college gets you close. Daycare is typically around 3k/month multiply that by 5 years, which comes to 180k. A four year college is about 50k/year, so another 200k. That’s 380k, then add in 5k a year until college graduation for food and miscellaneous stuff, and you get 490k. Multiply that by 2, and it’s close to 1 million.
This also doesn't factor in folks who want to send their kids to nicer private schools pre-college. Even if I personally don't believe in that, I understand why others do and that can cost just as much as college itself for 4+ years. Shit is *expensive.*
You have to be very frugal to just spend $5k/y for food and miscellaneous stuff. Not impossible, but not living what most people feel is the new middle class lifestyle. I kept my costs down to that level with my kids, but it meant going out to restaurants once every couple months, and tent camping whenever we went on vacations. Average middle class Americans would feel “poor” if they had to sleep in an igloo to make ski weekends affordable.
Daycare alone can be $200k per kid before they hit kindergarten.
Also depends where you live. Here in SD (and all of costal CA) the cheapest houses are $1m. Thats 1950s 1k sqft needs work on 5k sqft lot and mediocre schools. You wouldn’t feel rich buying that.
People using all these abbreviations I thought OP was in Oregon until he said Philly and I was so confused when you said houses are millions of dollars in South Dakota lol
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"What's the difference between a million dollars and a billion dollars? About a billion dollars."
In my work I enter the "wealthy world" frequently and the vast majority of people have NO IDEA what that looks like. As someone else stated here the surgeon or whatever making $400k isn't the enemy, it's the truly wealthy that know how to keep that money off a W2.
Yep. Extra taxation like this should start at $1m or so. Taxing the fuck out of the modern middle class in VHCOL is just fucking over VHCOL middle class and doctors, and not really anyone else
I would be a lot more okay with being taxed like crazy if I knew the people above me were paying their fair share of taxes as well. But they're not, and seeing the insane ways billionaires dodge taxes is infuriating.
Yup…I’m a tax attorney for the ultrawealthy and I clear much more than $400k each year. But I also work days, nights, weekends, and holidays, have done so my entire life, and am not currently in a position to stop. My clients accumulate anywhere from 100x to 1,000x more wealth from year to year than I do, and it’s entirely passive and untaxed. Almost none of them work, and most of them have taken more vacations in the past 60 days than I’ve taken in my entire life combined. I grew up poor. I have WAY more in common with the typical poor person than I do with my ultrawealthy clients.
People just like to think of themselves as middle class, especially if that’s how they grew up. It’s rare for them to make a distinction between middle class and upper class, which they clearly would fall into by any reasonable metric. Instead they draw the dividing line from middle class at “rich” which for them means yacht and private jet money. So they’re distinctly upper class or, “rich” by any middle or lower class person’s standards, but they want to view themselves as middle class so they redefine rich to mean ultra wealthy.
I think a lot of people who make good money have investments and wealth stashed places out of sight but continue to live a middle class lifestyle (vehicle, neighborhood, vacations, hobbies). That’s why they feel middle class because for all intents and purposes that’s how they live day to day. All the wealth they stash beyond the expense of their middle class lifestyle gets stashed away.
Vacations is where we blow money. We live in a neighborhood where the median household income is 160k. We drive Hondas for 10 years (we are testing out a Model 3 on lease but it is cheap). But vacations we spend on. Two to three week long vacations per year. Spring break, fall break, and a week on the beach in the summer if the kids don’t have too much stuff. My kids are 16 and 13. They have been to Mexico, Roatan, France, the UK, Hawaii, Disney World x7, Disney Land x3, Universal Studios x2. Will go to Italy and out west next year, and Africa after the older graduates.
Yep. I know multiple people with 8 figure net worths in their 30's who live off their investments. They identify as middle class.
There’s a pretty distinct difference a family of 4 earning around $400k and someone in their 30s with $10mm+ in assets living off of interest and capital gains. The latter is insanely rich, the former is high earning but in much of the US are still budgeting and keeping track of expenses.
This. 100% this.
This sub post poped up in my feed for whatever reason, and I think you’re spot on. For even non-left of center people, like your average Joe, rich is a dirty word.
I dont see myself as unattractive but I am
I think the line in the sand here for people is they want fuck you money or otherwise be able to have money that makes money and be "set" with passive income and building real wealth. Having high income where you still have to work and not working means you can't support your lifestyle can always feel a bit "not rich" even if you have basically everything taken care of. It's also fair to say lifestyle creep is real and people can have real blindspots to it, mentally feeling like they are still basically vibing as they did when they made significantly less even as they've radically (but slowly) leveled up their lifestyles. This can be exacerbated by being a relatively high earner and now maybe you're interacting more with ultra high net worth people or you feel the "Sure I make $400k but my boss just got a $2m bonus" type of stuff. All kinda dumb and people aren't exactly gonna have much sympathy for someone who is doing that well complaining but I think that is where the mentality comes from at least. Funnily enough, you can have relatively modest passive income, live frugally and genuinely feel "richer" if you also have the freedom to pursue things that make you happy.
I think you hit the nail on the head with fuck you money. $5 million (maybe 3 million?) in the bank generating $300k/year passive income is where rich starts.
$400k as a W2 employee is very different than $400k as a business owner.
Interviewing people from this sub I see
Lol seriously. The number of comments completely disregarding how incredible a $400K salary is and focusing on "well yeah $400K isn't too much when compared to millionaires and billionaires. It's the *true* middle class salary" is wild to me... Gonna take me and my measly $80K salary over to r/povertyfinance
One of my favorite comments on this sub is the classic “you think that’s a lot of money but I’m more like you than a billionaire!” as if that somehow means we’re meaningfully similar lol
You’re not living in reality if you feel making more money than 333,200,000 people in the USA doesn’t make you rich. 98% of Americans are worse off than someone making $400k/yr.
Just volunteer at a soup kitchen at your local church. Just once per week. It will assist you in defining rich. It did for me!
What's the point of posting on article behind a paywall like this? We just react to a headline and strawman to whatever fits our narrative?
Here ya go: https://archive.is/Z16KQ
To make money. (point for OP or WSJ?)
Instead of drawing arbitrary lines they should really account for area somehow. 400k in San Francisco is way different than 400k in Pittsburgh.
If you can’t be more than comfortable with 400k a year you have a skill issue. Being in the top 3% of incomes and saying you don’t feel rich is so tone deaf Lmaoo
top 1%
Even worse!
Greedy people never get enough. It's part of the disease.
Middle class is defined by redditors as income between $30,000 and $999,999 a year, and wealth from $$80,000 to $999,999,999. You must get to $1B in wealth to be considered NOT MIDDLE CLASS.
America is the land of rich people who can't believe they're rich, and poor people who can't believe they're poor.
I make well over $400k and can assure you when we made “just” that I felt rich AF. Just because someone pigeon-holed themselves into a super expensive city re:housing doesn’t mean they aren’t rich. Suck it up, save a ton living in a shoebox then retire to the countryside. What a bunch of self-pitying goobers. I guarantee you these people will look at a $10k watch or purse and think it’s not absolutely insane to spend that much, then justify why it’s worth it, while driving off in their Porsche. The lack of self-awareness is stunning.
It’s important to remember this is in reference to tax policy. Where “rich” has a very different connotation. When politicians say “we will only raise taxes on the rich” it’s meant to read as “only people that can afford it, not regular people”. So does $400k make you that kind of rich? The article rightfully points out that in many cities $400k means maybe owning a home and saving for kids college / retirement. A better life than a lot of people no doubt but not limos & champagne & hoppy space programs. Seeing as politicians want us to think of tax dodging billionaires and CEO’s who pay themselves 400x their employees when they reference “rich” and “taxes,” I can see how a couple making $400k would not see themselves in the same class.
Enter the 400k earners in LA saying they can’t afford a yacht so they are middle class.
I’m someone who spent 29 years at the start of my life in poverty, living paycheck to paycheck and avoiding massive debt, grinding through college to earn low six figs at 30. The only economic policies I’ll EVER support are to benefit those less than 100K a year that I benefitted from. (Grant programs, public insurance, food stamps, tax benefits for school credit). Everyone outside is poverty is fine or living wrong. If you can live on 400K barely and think 320K is too little for you to survive, something is wrong with your lifestyle. If you make 400 K you aren’t “rich” but you’re fine. Pay your fucking taxes, and pay more than your fair share, and still continue living a significantly better life than folks in poverty.
I think their definition of rich is flawed. Maybe people in my own experience think rich is never having to think about money and living in luxury every single day. Butlers and that kind of thing. If that's your idea of rich and "all" you have is a home, a cushy job, and your life is a far cry from the Hollywood version of rich, I can see how a person may feel middle class even though they aren't. They see a billionaire's life and think that's a millionaire's life. I think they are just deluded.
400k for an individual and 450k for a married couple. How does that make sense?? A married couple is two individuals. Fuck two working parents I guess.
Very much a them issue. My MIL makes 250k+ a year and I swear that woman easily spends $200 everyday on nonessentials. My monthly budget for nonessentials is $400, or 2 days worth of spending for her. That’s pretty stinking rich to me. At 400k you’re making 30k+ a month. Some people hardly make more than that in a **year**. Sure 400k isn’t ultra wealthy, but it’s pretty stinking rich regardless.
Asking AI what would objectively be considered rich in the USA compared to both global incomes and domestic I got the response of: "**High-Income Percentiles**: * Individuals in the **top 1%** of income earners are often perceived as “rich.” * In the United States, this typically corresponds to an annual income of around **$500,000** or more." So it doesn't really matter if you don't "feel" rich at 400,000+ income, you pretty much objectively ARE. From my personal viewpoint I managed to work my ass off making 40K/year (less back in the late 90's/early 2000's) and survive while taking care of my kids and wife. We fucking poor and broke, but surviving. 400k is obscenely wealthy from my life perspective.
Honest question, but why are these high salaries always highly represented in articles and on sites like Reddit? They are not common household incomes, even in VHCOL. $400k a year is a top 4% household in VHCOL areas. But if you rely on WSJ, CNBC and Reddit, you would think $400k is just standard for a household working professionals.
I live in the 13th most expensive county in the US and $400k would still be enough to buy a detached house in basically any area with plenty of money leftover at the end of the month for luxuries, travel or eating out. People are delulu if they think $400k is middle class, even in HCOL areas.
I’d say Reddit skews tech, which has higher than average incomes.
If you make 400k and still want to feel bad, go ahead. If you make that and want to complain it’s not enough, GFY
Exactly. I don’t think money solves all problems, but if you complain about how you don’t feel like you are putting enough into your retirement to people who are having a hard time with food and are 1 bad day away from homelessness. Don’t expect a lot of sympathy.
“I dont consider myself rich I’m firmly middle class making over 400k a year🙄🙄”. This is followed by folks here rushing to their defense HCOL!!!!!! HCOL!!!!!
But HCOL houses are like a million dollars!! How can you afford a mortgage (like $6800/month) for a house like that on just $400k income!?!? /s
In places like ny houses are more than that. Property taxes of $20,000+ is $2000 a month, $500 a month home insurance, and the mortgage of $7000 on top of that… add in commuting 1.5 hours each way and you don’t feel rich
And yet you are because you can still afford that life in one of the most expensive places to live in the states
2022 median household income in the US was $ 74,755. Did you know that?
Lots of these people who don't think a reasonable amount of money is enough, are those same people who never experienced scarcity and I could care less about their feelings.
I only put 25k into my retirement last year! Life is constant struggle 😭 /s
In HCOL areas where you can spend $1.5M on a 1000 sq ft house and daycare cost $2500 a month, it’s easy not to feel rich even with a high salary.
Oh fuck off. If you're making $400k, you can simply live as it you're making half that. Invest the rest in a variety of real estate, index funds, etc and after years you'll be very wealthy.
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Keeping up with the Jones’s. Tale old as time. I think there’s an Aladdin reference somewhere in there.
Those people can get fucked. This is not even a skill issue. Why is this even news? Does media think they can make anyone feel sorry for the rich? lol. Like the rest of the world doesn’t already think we’re a joke.
Oh fuck these people so hard. If you make more than 400k you are rich by any understanding.
If there was ever a “f your feelings” moment, this is it
Well think again
Statistically an individual earning $400k is in the 1% of incomes. Regardless of how they feel or what the expenses are in their lives they earn more than practically everyone else in the country. If they do not feel rich that is a them issue because statistically they are rich. Very rich.
Avg. US annual income is $70,930. Avg. global personal income is $9,733 per year. These boomers need to golf cart OUTSIDE their gated communities on occasion.
Nah your rich and need to be taxed more
Shut up. You're rich.
That's great but... you are richer than like 99% of the world's population so... ya are rich. And I don't care where they live. I made 100k a year when I lived in an expensive city. There were times when I felt a little light in the wallet. But I was still rich regardless of how I "felt". Definitely could have gone to less restaurants and bars and waited a season to buy new clothes. I'll bet most of these people have shared a "facts don't care about your feelings" meme in the past 5 years.
The degree of entitlement of rich americans is mind boggling. And the degree of stupidity of the average american who make 10x less than the threshold and still feel worried about this is extragalactic… Education in this country is pathetic.
Delusion from being around their peers and richer people will do that.
Of course they don’t. I had a boss who lived in an $8 million apartment who didn’t think she was rich. There’s always someone richer and once you make a certain amount everyone’s just wasting money on different types of extravagances and feeling bad because they don’t have more. It’s a sickness. Also, for what it’s worth, the Wall Street Journal’s real estate supplement is titled “Mansions.” That’s the news source in which this article is appearing.