Chedva
August 19, 2019, 4:26pm
88
EconPop:
Chedva:
EconPop:
I’m not criticizing anyone for spending as much of their income in any manner they see fit. I’m just saying that to earn $200K as a family and cry poverty because one is living paycheck to paycheck is disingenuous.
$X/year depends on cost of living in the area you’re in (which is why it was included in the quiz). There are many areas of the country in which $100K is indeed rich. But in Manhattan? Won’t even get you a 1 BR apartment to rent, never mind owning one. In LA? Don’t even think about buying a house.
Cost of living is an factor, but not as large a factor as is often presented. The largest factor in calculating CoL is housing. Even workers in Manhattan get to choose how they spend their money on housing. Hundreds of thousands of people who work in Manhattan choose to live not in Manhattan … to save the expense. Just because someone chooses to live in Manhattan instead of commuting 20-40 minutes doesn’t mean we get to ignore their $110K salary.
Choose to live in a 2BR apt in Queens for $230K, or choose to live in midtown Manhattan for $550K-$900K. That is a choice. The income is sufficient – the chosen residence may or may not be affordable with that income. This type of dilemma is not isolated to NYC and SF. People make such choices all over the country: Work in DC, live in Silver Spring; work in Dallas, live in Ft Worth. I once commuted 55 minutes each way, and the housing cost difference was not even close to the difference between Manhattan and commuting 1 hour away from Manhattan. We can all make choices.
Also, let’s not ignore the inherent value of living in a place like Manhattan or SF. People choose to do so because the locale puts them in close proximity to many things that enrich their lives – the arts, sporting events, career opportunities, nightlife, singles mingling, education, etc. It can be argued that being able to afford such a lifestyle is as much a sign of being “rich” as much as having a six-figure savings account. Make the choice to have a more “enriched” lifestyle, or choose to have more savings. Neither choice forces us to ignore the actual income.
Making the wrong spending choice does not necessarily negate the income. Having the opportunity to make the choice in the first place is a sign of being “rich” or of “wealth”. A Manhattan worker earning $40K does not get the opportunity to make the choice to live in midtown Manhattan and have less money, or commute from a less expensive location and save/invest money. That worker is forced to commute from afar AND is unable to save/invest the difference in housing costs. The lack of choice is a sign of having a lack of “riches”.
A richer income allows the opportunity to make choices. Making one spending choice or a different spending choice should not factor much into whether the income is “rich” or not.
IMO, if you have to worry about the spending choices you’ve posited (apartment vs. hour commute, Manhattan vs. Queens, etc.) means that you are not “rich” as most of us understand the term. Yes, they are choices. But the truly rich don’t have to make them.