<p>This doesn’t surprise me at all. It is the exact same psychology involved regardless of your income level or lot in life. Everything is relative and it is amazing and interesting how most people acclimate to whatever income (or life situation) they have found themselves in. And it is easily as hard for us to wrap our heads around those in way higher or lower economic contexts. </p>
<p>As but one example, those living in the third or developing world would be astounded (and maybe confused about) how the middle class in North America worries and complains about their economic struggles (which are very much real and valid to complain about, but to the majority of people in the world, these middle class Americans are very wealthy!). Can’t afford a second or new vehicle? No one in our family has ever owned a car! Can’t afford tuition? Our kids never went past 6th grade because they had to drop out of school to support our family…etc.</p>
<p>Many municipalities rely on the rich, particularly in New York where it is the union members who are truly wealthy because beyond a certain point, their pensions and salaries aren’t subject to the vagaries of the economy.
My husband is a garbageman. He is getting older. If those demons on Wall Street pay less taxes to the city, garbagemen will be laid off and my husband will have to lift more than his currently required 11 tons of garbage a day. Some cities are totally dependent on the wealthy. New York is one of those cities because there are so many taking so much from that tax base.</p>
<p>Demons on Wall Street? Wow…but find your final sentence ironic as those so-called demons are supporting the tax base that allows ‘so many to take so much’ ;)</p>
<p>You pull them out of school and send them to public school. What’s the big deal?</p>
<p>One of my sisters lost her job last year. Her husband has been unemployed for 15 years. They have two kids in private school and one will be attending one of the pricey Boston schools this fall.</p>
<p>No problems. They have S A V I N G S !</p>
<p>Some people that do have money PLAN! They save for a rainy day. Life is uncertain; live that way.</p>
<p>Every couple of years I wind up as a 1%-er. Best year was about $800K. Always lived on the $100K+ income though. My wife grew up in a third-world country so she’s seen the other side and described living in it to me. I grew up in a single-parent minority household myself so I’ve seen living in the US from the poor perspective which is a lot different from third-world poor.</p>
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<p>When I met my wife, I had five times her earnings but she had five times my savings.</p>
<p>I learned a little bit about living within a budget and saving from her.</p>
<p>My salary income is a fraction of what the guy makes in the article but I seldom get stressed out about money. Peace of mind in your budget and savings can provide subtle, background enjoyment.</p>
<p>I can’t understand any one anywhere, regardless of income, not saving for that day when times get tough. Sure, that’s my peasant background talking, but it mystifies me.</p>
<p>Life is not that uncertain. At best you have maybe 60 good years, 10 so-so ones and 10 often not so good. Worrying too much about the last 10 is not maximizing utility. I am pretty sure I will be happy to spend the last 10-15 in the relatively low cost endeavor of sitting on my porch chatting with the walkers going by. On good days I will join them.
See Davy Jones.</p>
<p>This topic was thoroughly explored in “Bonfire of the Vanities.” Remember Wall Street bond salesman and aspiring Master of the Universe Sherman McCoy? He could barely get by on $600k. It can be tough to live up to your own expectations of yourself, but you will get no sympathy from me for trying.</p>
<p>I think spending and savings habits are highly correlated to how you were raised and what financial pressures you experienced as a child. My dad’s business went under in the 70s recession and our car was repossessed from our driveway one night. I now understand we almost lost our house but for a close friend who somehow arranged a 2nd mortgage. We lived on homemade soups and cheap cuts of meat, as that’s all my parents could afford. My school lunch was typically a sandwich with the ends of meat (ham, bologna, etc) from the deli they cut off and sold in the discount case. </p>
<p>Because of this background, my mantra has been Scarlett O’Hara’s famous quote: ‘as God is my witness I will never be hungry again’. With the exception of buying a beach house (for cash) and the requirements of 2 kids, we have the same lifestyle and spending habits as we did 20 years ago. We rarely eat out and don’t take fancy vacation (beach house has replaced much of that). That said, we plan to retire in a few years and enjoy our hard work & savings (and my million-plus FF miles).</p>
<p>I just feel it is a matter of old-money/new-money. My family’s been in the banking industry since 1300s, and since then, we’ve amassed quite a bit of liquid assets. So I think that growing up with money, and the culture associated with it allows families like mine to use our wealth in a favorable manner.</p>
<p>By that I mean, look at a lot of dot-com millionaires and hedge-fund managers. A lot of these people are throwing their money out the window trying to “live the life.” what they need to understand is that “living the life” does not mean living luxuriously and extravagantly.</p>
<p>I’ve gone to Eton College for 5-6th grades in England. While it was a great experience the only reason I did it is because I had to learn English before moving to the States. Other than that, I’ve attended public schools all my life. I don’t get people who spend tons of cash on sending their kids to private schools. I mean, it’s all fine and dandy if you make 750k+ but anything less than that you are seriously playing with fire… Especially if your company goes bankrupt and all, and suddenly you’ve got no income.</p>
<p>And I also personally believe that giving to charities > sending your kids to private school.</p>
<p>But then again, I’m only a trust fund baby… No one takes me seriously…</p>
<p>We know a number of folks who either live in NYC (or similarly priced areas) or have lived there in the past. Remarkably all seem to be able to make ends meet…and yes, some have incomes in the range of the “poor” folks in this article. </p>
<p>I’m sorry but I can’t seem to muster up any sympathy for these folks.</p>
<p>I guess it depends on how well one saves and how many kids they have, aahs. I wish my DH or I were trust fund babies, but sadly we are not. We also don’t have and never will have incomes in the 750K range. But we have managed to save well and put our kids through private school. And college. And survived his being laid off for almost 9 mos a few years ago, right in the middle of a very expensive house remodel. Still did fine with our savings and living on one income. We are frugal and careful with money management. I absolutely cannot understand those for whom money seems to burn a hole in their pocket.</p>