We haven’t made new peer friends as our wealth has increased. No one told us we were supposed to and we had no interest in doing so.
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I’m not in that social zoo either but I have a friend who is–bigger city, networking, social expectations. Certain locales (the doc was Texas oil/ cattle) do have social circles based on wealth. Not everyone gets drawn into it–these people did because it was directly related to their business and necessary for networking.
Side note: “The Millionaire Next Door” (1996) is a great book. Still relevant today. The clerk at the shop that Kelly Clarkson visited should’ve read it.
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Yes, one or more of my sibs have been drawn into higher levels of social strata with their friends as they all get richer. It makes them all happy but we don’t relate to it. They are friends from traveling internationally together.
Our net worth and that our most of our longtime friends and relatives has increased but most of us haven’t changed our friend group.
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But you understand it would actually be quite easy to live on much less. I know tons of people who raised their kids in NY on some tiny fraction of $500k. Their kids went to public school (there are many good ones) starting in pre-k. Before that parents juggled work schedules to have less time to be covered including sometimes one parent working part-time or parents trying to have different work hours. Family or local babysitters, including home daycare, covered the rest - much cheaper than a full time nanny. If they didn’t get a pre-k 3 spot they looked for pre-k programs at local churches, etc., which tend to be less expensive. They lived in Brooklyn or queens not Manhattan. They lived in a 2-bedroom and their kids shared a room. In several cases I can think of where it was a single parent the parent temporarily shared a bedroom with the kid (in one case even when married they lived in a one bedroom and the baby/toddler was in the same room). Vacations were mostly visiting family, if at all. None of this is deprivation, these kids are mostly grown up and did just fine, including attending top colleges. The only difference to someone just starting out is that some of these families were able to buy apartments/houses in the 1990s for far far less than would be possible now. Otherwise though it is very possible to live and raise children in NY on far less than 500k!
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We know a couple who are millionaire-many-times-over rich. They are quite diligent about making sure that they operate in the proper social circles, with “networking” being extremely important to them. He once told us that they won’t become more than nodding acquaintances based on the fact that we are not fit for their social circles (not those exact words, but no mistaking the meaning). I had never encountered anyone like that. I used to work closely with a billionaire, and while we weren’t going to be friends outside of work due to the very different activities we engaged in, I cannot fathom her ever saying anything like that. Both are self-made, but one apparently feels superior as a result of being wealthy … and the other doesn’t seem to feel that way at all. I’d bet the billionaire is still friends with the friends she had before she got rich.
And I’m sure that neither the couple nor the woman live paycheck to paycheck!
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I could easily see how someone making over 500K/yr can feel strapped. It’s really not how much you make, it’s what you have left. Take away all the deductions people have (federal, state, local taxes, SS, Medicare, 401K deductions), there is unexpectedly little left. Though of course people don’t have to make 401K contributions, many feel they need to.
High cost of living areas, property taxes, medical expenses, insurance, private schools or college, child care, life can be crazy expensive.
Of course, these are all choices, but I think many high income people expect that they should be able to pay for all this with a high income and are surprised when it falls short.
My parents didn’t have high incomes at all, yet they paid very little for those items I listed.
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The children of the public servants I know who work in NYC do not wander the streets unsupervised, barefoot, scrounging for crumbs in dumpsters.
Really.
Their salaries are publicly available. They are assistant district attorneys, supervisors in city agencies which monitor infectious disease patterns, nurses in public hospitals, FBI agents. All of them have advanced degrees- I don’t know what their loan payments look like, but they are young enough to still be paying off those pesky Master’s degrees which made their careers possible.
Yes, public employees make more in NYC than in Omaha. But a librarian married to a nurse is making a fraction of that 500K and somehow- miraculously- their children seem to be doing just fine.
Owning a car- huge financial mistake if you are on a budget in NYC. Parking, insurance, parking tickets. Living in an apartment with luxury amenities if what you need is a safe and clean neighborhood. Paying close attention to the calendar- so you are first in line to sign up for the low cost summer camps and programs, low-cost vacation day options for legal holidays, etc. Reading the benefit book at work- and rereading it frequently. Take advantage of Transitchek or other subsidized mass transit options when your work offers it; take advantage of subsidized or free meals when you work overtime or a double shift. Learn to share with your neighbors- they own the nice drill, you purchase the nice stud-finder and your neighbor has a full complement of pliers and hammers. Never pay for someone to install a shelf or connect a faucet if you or your neighbor will do it for nothing. And the library- some branches lend out sewing machines, bread machines, other things you need occasionally but not every day.
It’s not rocket science. These are highly educated people living in an expensive city doing good things for society and somehow they’ve figured it out. I cringe every time someone claims it’s “tight” living in NYC on half a million dollars. It’s only “tight” when you’re living like someone making a million- it’s not “tight” when you compare your life to that of a medical examiner or other public employee.
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This is a massive pet peeve of me when it comes to this form of journalism.
If I ask a bunch of my friends in big tech this question i’m pretty sure they will say “of course we are living paycheck to paycheck”
…that’s true after they pay for
- max out pre-tax
- pay similar amount into after tax
- pay million plus mortgage
- pay mortgage on vacation home
- pay for 3 vacations a year
- private school for 2 kids
- pay for their 529
- pay for kids roth ira
- contribute to after tax brokerage etc
No one in their sane mind will leave a bunch of surplus in their checking account. Are they living paycheck to paycheck? technically.
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It depends on what kind of job you have. D1 travels and entertains clients during the week. When she is in town, she is out of the door by 7 and home by 6. Her H also travels sometimes. Neither one could afford to be home when kids are sick or school is closed.
D2 is a lawyer and doesnt do as well as her sister financially. They plan on to have one child because that’s what they could afford.
A lot of people do move out of nyc when they have kids because of the costs.
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Best bud and wife, both writers. Always traveled on the subway. And the two kids (fortunately, the same sex) shared a room all through college. You’re right. It’s not rocket science.
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The paycheck to paycheck scenario isn’t necessarily from lack of funds but from the inability to easily transfer funds around. For example, at some point if your wealth is in real estate (and paying mortgages) you aren’t paying for the private school education or investing elsewhere.
I’m not crying over it–but it’s a common scenario. Trap of liquid vs illiquid assets.
This is an off-shoot, but I was with a friend who teaches 7th grade math. She was talking about how the lack of access now to actual tangible money is a real block for students in learning about things like ratios, percents, and other elements of consumer math.
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$500k of wage/salary in California ends up with $335k or so after federal and state income taxes, including Social Security and Medicare. Even with maximum optional 401k contributions that still leaves a lot of after tax money.
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I enjoy this series which runs in the New York Times. It highlights how people live on modest incomes in NYC. Here’s an example:
https://www.nytimes.com/interactive/2026/10/12/nyregion/nyc-budgeting-affordability-crist.html?unlocked_article_code=1.KFE.NyL1.VUil0CbFsJAE&smid=url-share
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Okay, subtract $49K for 401K contributions, that makes $286K. I’ll take some of the expenses that we have paid in a year as an example.
50K/yr for medical insurance and medical/dental expenses.
100K/yr for two kids in college (I’m sure it’s significantly higher now)
40K/yr for property taxes.
That leaves 96K. Still a lot of money, but if someone is paying for a mortgage in a high cost of living area and insurance, there may not be much left.
Of course all of these things are choices, however, I can see how someone who expects that they should be able to provide these things for their family based upon their income could feel stretched. And if someone also is paying back hundreds of thousands of dollars of medical/law degree expenses? It adds up fast.
I have advised people who are getting large income jumps to keep living the way they are now, if they’re used to it and comfortable anyways, and slowly ramp up. Once you take on these expensive obligations, it is very hard to change your lifestyle. I know we could go back to an extremely inexpensive and starvation lifestyle if we had to, but it would be a challenge at first.
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This.
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These are people smart enough to amass the funds to invest in real estate-- but can’t do a simple cash flow analysis??? Yikes.
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It all boils down to choices. My S has lived in many of the most expensive US cities—Honolulu, LA, DC and now NYC. He’s generally very frugal but lives where and how he wants. His former condo he rented in DC was very lovely and his new one rented in Long Island City is also gorgeous (he and DIL are 1st occupants). They’re very happy — could they save more by renting more frugal lodgings—of course. Are they content with current condo, yes!
His single cousin is paying a tiny fraction—about $1k for rent of a place he rents with several friends. He admits it’s not as nice a neighborhood but loves his savings.
Is this another where everyone thinks they are middle class despite a substantially higher income than the average.
I mean when we had 2 in college, I definitely felt like we lived paycheck to paycheck. We had 2 college tuitions to account for, one household to run. Things like wrecking a car or an unexpected expense felt HARD!
The reality was even though our disposable income at that moment felt like we didn’t have much, we still didn’t stop saving for retirement. We had spent to our limit, after putting away that money.
Not everyone can save for retirement, live, eat, have car payments and mortgage. And also be able to travel and have designer clothing and and and. Some do, but most people have to make choices.
That’s life. Doesn’t mean they aren’t saving for the future with a higher than average income.
Also some are bad with money and think they need all the ands.
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Yes, when we had 2 kids and private school and then private U, we felt things were challenging but didn’t gripe.
I was able to get some grants so I could get a salary and help pay bills so we could manage. Once the kids graduated both HS & college & we paid off mortgage, we felt we got a huge raise!
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