<p>"Right, but then again, the person earning that income can easily buy a house in other parts of the country and be “middle-class.”</p>
<p>Except they’d have to have a job. My step-niece (without an M.A.) makes $135k teaching math on the North Shore of Long Island. If she lived in Topeka, maybe she’d make $35k?</p>
<p>I do think Hayden’s point that the $40k earner & the $200k earner have more in common with each other than with the $1m earner has merit. Even though I would consider $200k a lot of money, I do realize that rising prices hits even those earners hard. The $1m earners don’t feel it in the same way. This is my problem with the folks in power … they do NOT understand the impact of today’s economy on MOST people. They have no problem shipping jobs overseas and drastically cutting wages for their employees. $34 an hour cut to $17 an hour? No biggie … at least you have a job, says the CEO. But if his $4 million a year was cut to $2 million, he wouldn’t hurt NEARLY as much as his employees. That’s the difference. But I still think $200k is upper middle class in many areas (mine included). And with that salary comes a lot of perks the $40k earner isn’t able to enjoy (such as saving for retirement). So yes, there are big differences between the $40k earner and the $200k earner’s lifestyles.</p>
<p>Or you do as we do–make big city money and buy houses in the best parts of smaller low-cost cities for retirement and/or second homes at a fraction of the big city price. It’s usually much cheaper cash flow wise to rent than to buy in expensive cities.</p>
<p>I live in NJ and everyone I know making 175k and above live a very nice lifestyle.</p>
<p>Let’s use 180K, b/c it is easily divisible by 12. That means 15K per month, in NJ a large majority work in NYC, thus they pay NYC taxes, NY taxes, NJ taxes and FEDERAL. Out of the 15K they will pay @ 40% in withholdings, now they are at 9K per month…commuting will run them at least 1k, that leaves thm at 8000. In a mtg world they would be guaranteed a mtg of 3600/pm, which translates into a@400K mtg. Now you have less than 4000 that must cover utilities, car pmts, car insurance, credit card debt and college loans…oops I forgot food and gas for the car, now add in school supplies, dance lessons/tae kwon do, etc I am not sure there is enough money left to get your hair done. </p>
<p>175K in NJ goes real quick… even today in a downturn real estate market, a 400K mtg puts you in a 500K area, in the commuting areas with good schools you are not getting a dream home!</p>
<p>175 K in NJ does not equate to a nice lifestyle unless the folks have bought you the car and paid for college…Been there done that and got the patch to prove it</p>
<p>bulletandpima, excellent, and accurate post. Oh, and those commuting costs into NYC, well I think the tolls are now up to $7.00! Also, lets not forget the parking costs once in NYC. 1k might not cover those commuting expenses. I guess there is always the bus, train, or ferry (another huge bill, btw). Those are only possible modes of transportation if you do not need to take your car to work. Not everyone can take public transit.</p>
<p>Well if it costs 7 to get in(typically no toll to leave) add in 2 gallons of gas (30 in 30 out) @8, plus on a good day 30 for parking = $225 per week and 1100 per month…anyone from that area will tell you 50 per day is a steal, thus we are really looking at $1500 in transportation for a good day since we didn’t add in NJTPKE (most likely another $50 at least per month)…so my numbers were off and now you have $3500 left to pay your car pmts., ins., college loans, credit cards, tae kwon do/dance lessons (which run @150 pm) and your food and clothing.</p>
<p>I always would say to my Mom you don’t know what or how they are doing it, but 175k in NJ will put you in a horrible commute, or a smaller home, you will not be living in the dream home unless you decide to become house poor!</p>
<p>Now take that same commuter from New Jersey (or from Queens) who commutes into NYC and earns $54.4k (the median family income).</p>
<p>The family of 3 or 4 with an income of 54.4k is not living in our area whether they commute anywhere or not. They cannot find a place to live on that income, unless they live in someone’s illegal basement apartment, or they live rent free with their mommy and daddy. I cannot speak for Queens.</p>
<p>But mini, and please excuse my ignorance, doen’t the median in New York include lot of people who make very little and are not working? And more than it’s share of millionaires? Isn’t there a huge difference between the top and the bottom? Wouldn’t that matter for the purposes of this discussion? Maybe the “mode” is better.</p>
<p>P.S. I grew up in Queens and when my parents filled out my financial aid forms in '76, they made about 30K (HS RN/teacher and Psychologist for corrections facility) if I remember correctly…or maybe that was the value of or home…</p>
<p>$54.4 is two full-time minimum wage jobs plus some overtime, or a second job. That’s the median income. That’s how many, many families make ends meet (if you call that “meeting”). And they are indeed living in NYC, and in New Jersey. Now, mind you, that $54.4 is the median; many are making less.</p>
<p>Living in the tri-state area, yes, they are. Living in my immediate neighborhood, no, I can’t see that. I don’t know of a single home with a pricetag under 450,000 (that would be a cape cod fixer upper). There are not many rental units around.</p>
<p>Okay, yeah…I just found this…</p>
<p>“The median is the middle of a distribution: half the scores are above the median and half are below the median. The median is less sensitive to extreme scores than the mean and this makes it a better measure than the mean for highly skewed distributions. The median income is usually more informative than the mean income, for example.”</p>
<p>Take that same NJ family you’re talking about, earning 175K with two kids in college. With their income, financial aid won’t be in the cards. So assume full in-state NJ college costs. In addition to all the costs b&p laid out, this family with 2 kids in college will have to pay $40K per year (i.e., 20K annually per child) to their State U. That’s $80K anual pre-tax income paid out for 4 years. So all of a sudden, the difference has narrowed. The person making 54K per annum won’t be paying anywhere near the same for college, since they will qualify for financial aid. I’m not saying that the family earning 200K is the same as the family earning 54K. I’m just saying that the differences in their day-to-day concerns are not that far apart.</p>
<p>And I am strongly disagreeing. ;)</p>
<p>But the point is - they are commuting into NYC just as folks in your neighborhood are. But the folks in your neighborhood, for the most part, have a tax-deductible housing asset (that usually grows in value), pensions, health care, maybe a little stock, perhaps some vacation time, and a car or two that usually runs. In other words, far more in common with the family earning $1m (but working), than with the median family, which often has none of the above. Oh, and maybe a decent public school to attend. Three-quarters of the children of the median family won’t be attending college at all (some will be contributing income to their families)(and about a quarter or so won’t have graduated from high school); many of the rest will be at the community college part-time or in the evenings.</p>
<p>Oh, and savings toward college over the past 20 years (like the $1m family)? Forget it. More likely paying off uninsured medical expenses over the past 20 years.</p>
<p>that person earning 175K was supposed to be saving all along (let’s assume they didn’t get a 100K raise last years). Nobody expects them to pay 40K out of current income. The person earning 54K would never have been able to save as much as someone earning 175K, no matter what neighborhood they live in. </p>
<p>lets say someone with 175K income has efc of 45K and the one with 54K income has efc of 13K, it’s about the same percentage. </p>
<p>But you know what, both families pay the same for that gallon of milk and loaf of bread and gallon of gas.</p>
<p>Isn’t that American’s idea of middle class - a small house (with white picket fence), 2 of everything (cars, bathrooms, kids, tvs), a cabin (without electricity or indoor plumbing) by a lake? To get all that in NJ, you need at least 200,000. To make 54,000, you would be living in an illegal multi family home in my town.</p>
<p>Mini, yes, the public schools are decent, depending upon the community. Tax deductions for yes, hefty property taxes, yes that too. Pensions, no, health care, no-we fund both ourselves. We take vacation, and we lose pay because of self employment. We live in a community with those who make millions, not just a million annually, as well as alongside the teacher earning less than your niece (100k perhaps+ bennies). I feel that I have more in common with the teacher (single wage earning family), than someone earning over a million per year.</p>
<p>Absolutely, correct, oldfort.</p>
<p>Yes, same cost for bread, but not the same cost for health insurance, home owner insurance, and auto insurance in NJ vs. some other areas in the US. Certainly not the same cost for commuting costs if they have them, and property taxes. That needs to be discussed as well as the cost of a loaf of bread.</p>
<p>This thread reminds me of this song from Into the Wild
</p>