I also don’t know how her family makes $250,000 per year and lives in a $2 million dollar home. My family makes around the same amount and my house cost less that $200,000 and my parents are still paying their mortgage with on time payments.
And what is that $2 million paying for anyway? I don’t see how three bedrooms and two bathrooms with no pool or unique amenities (my house is 3 bedrooms and 1 and 1/2 bathrooms with a garage and pool) could be for $2,000,000. That was a very poor investment unless she just has acres of land…
CaliCash, $2 million is what small homes cost in that area. The family has probably owned the home for a long time and bought the house for a lower price.
When somebody pays $2 million for a smallish house, they are paying for the area.
Oh my goodness I saw this on the Michigan forum the other day and thought it was a joke/prank/satire article in the Daily about all the wealthy out-of-staters. I re-read it and I’m still not sure what the author is thinking other than she clearly doesn’t “get” that she’s in a class of very privileged people in the country who can afford to travel and pay alot of money to attend an out of state public university. This alone should make her aware that she is not “middle class.”
This reminds me of when my mom calls from Florida to me here in Michigan where it’s sub-zero, and tells me it’s so cold there when it’s 60 degrees outside. Yep, I’m so sad for you.
My kids will never go to U of M even with instate tuition, it’s still to much of a stretch financially. If we lived in CA we would be looking at in-state schools I’m sure.
However, I will say that I have lived in California and it’s freaking expensive. That’s why we moved to Michigan.
I think her point was that her family’s income in Palo Alto is not the same as a kid with that income elsewhere. But clearly had no idea how ridiculous she (or is it a he, Jesse can go either way) sounds in this article. It is sad that her family did not instill in her some appreciation for how lucky she is to have grown up with that level of income and privilege. Based on the comments, she hopefully has learned something.
According to citydata 55% of families in PA with kids under 18 earned $200K or more. So she may have felt “average” there. But by 18, she certainly should have understood that she was living in a bubble of privilege and most kids are not that lucky.
At least the opinion is not all about “our family makes too much to get any financial aid anywhere, but we cannot even afford the cheapest in-state public university”.
My daughter has a best friend who knows this girl. She will only hang with certain people in certain settings. Spoiled rotten elitist mentality here, nothing more.
Even an annual income of $250,000 wouldn’t cover the average price of a home in Palo Alto, by that standard. If the $2 M home has a $1,500,000 mortgage, monthly mortgage payments are $7,000. That doesn’t include any real estate taxes. Given the progressive nature of income taxes–and I don’t have the patience to figure it out for someone living in Palo Alto, California, even if her family has $500,000 of equity in the home, they’re spending more than half their take home income on the mortgage.
I read the article and it really doesn’t come off that spoiled. Somewhat entitled, yes. Somewhat naive, yes. And vauge about what “middle class” means, sure. But most Americans think they are “middle class”.
The gestalt of the essay seemed to be this young lady pointing out that she is not materialistic and did not grow up in luxury. As a midwesterner transplanted to the east coast, I do think there are wildly different expectations of what kind of house a family that makes a certain income would live in, what kind of cars they would drive, and how much disposable income they would have. The message I got from the article is that Ms. Klein is trying to explain to the local Michiganders that just b/c she can pay OOS tuition, they shouldn’t assume she is a spoiled princess.
She considers herself middle class but attends out of state school that costs in the range of $55,000 with room and board. If they were so middle class she would not be attending an OOS school.
Not going to comment specifically on the article but I just want to say some homes in tonier parts of DC run $2 million without yards, pools or anything else but location, location, location.
$2 million in a couple of wealthy Boston area suburbs I know of will barely get you a tiny house with postage stamp front yard. And that’s assuming you can even buy into those towns at such prices unless you want a serious fixupper project.
@movemetoo, that would depend on fin aid and merit money (unless you think your kids have no shot at merit scholaships from UMich for some reason). UMich doesn’t provide fin aid to all, but do to some and I believe try to take care of in-state kids first.
@barrons, not sure why you think a B-average couldn’t get someone in to UMich from OOS in the '90’s.
Grades have really inflated since then (on the college level but probably even more so on HS level) and UMich has always been huge. Yet back then, there weren’t nearly as many applicants as now. Virtually no internationals applying for undergrad. The elite privates weren’t nearly as difficult to enter as now, so if you had good grades and had to pay the same amount, why would you pick UMich over an elite private? A kid with a B-average from a good HS who had the money to pay getting in to UMich would not surprise me in the least.
Can you name the towns? That doesn’t fit the wealthy Boston area suburbs I know.
DStark, we don’t know when her family moved to Palo Alto. According to Realtor.com, 39% of the city’s inhabitants have lived there for longer than 5 years. There’s an 18% turnover rate.
If the house cost $500,000 25 years ago, then its value under prop 13 for tax purposes would be around $800,000. So property tax would run about $8,000 per year, 1% of the base value. Yet 25 years ago, her parents would have been just starting their careers. Their salaries would have been lower. They still couldn’t have afforded a $500,000 house on their salary then.
If they sell the house, they could reap the increase in the home’s value, but they’d owe capital gains tax, and they’d only gain the amount left over after they paid off the mortgage. Then they’d have to live somewhere, which means they would pay much higher taxes for any new house, as the purchase price would set the base price for future calculations if they stay in California.
The family does own an asset which they could mortgage. The chances are high that they don’t have extra income.
It doesn’t mean that they’re less materialistic. They’ve just chosen to put their money in property in an expensive town, rather than clothing and cars.