@randyerika I certainly don’t mean to disregard or diminish your feelings or experience. I think the fact that we could talk forever about what is expensive and what isn’t, is the heart of this issue. There may be no true objective measure of what counts as expensive. My point is that what one considers expensive is indicative of their level of wealth. I know people who consider any meal outside the home as expensive, because it is for them.
I keep wondering why people with high incomes don’t want to be labelled as rich. There is some negative connotation connected to the term. Maybe it feels like bragging? Maybe its impossible to actually feel rich when there are still any concerns about money. I understand this. If you worry about your retirement or how you are going to send your kids to college, it doesn’t seem like being rich. Maybe everyone has internalized a hollywood conception of rich. My youngest daughter thinks rich is Scrooge McDuck.
On the other hand, that doesn’t mean that people with high incomes don’t feel grateful and understand that many have less. I think the word rich is just a very charged term.
Yes, silicon valley has it’s own dress code for sure. Not sure re: men vs. women and if women are judged by appearance and/or clothing more than men. Probably yes, but IMO men get judged often as well. Another example, in a meeting room full of wall street men, the men all took their shoes off to compare brands. Even the young guns, probably making $100-$150K, had the tippy top brand shoes, $1K/pair easy. Even then, some of the brands were openly degraded by the higher ranking men. And this is more than just posturing, things like this can and do impact which assignments people get, promotions, etc.
I’m just amazed that it’s viewed as an indulgence to spend $50 on a meal or $75 on a pair of pants, but for many on CC (and in real life) it’s somehow virtuous to spend $300K on sending your kids to a LAC/private school. Sorry, but that’s luxury consumption too.
And even if they are “rich” in absolute terms, a lot of people feel they’re not well off when they can’t afford to consume the same luxury goods as others in their social millieu (hence the donut hole complaints). That feeling is especially acute when the price of those luxury goods (e.g. colleges, homes) has gone up dramatically, so it would have been possible to consume (attend, buy) them in previous generations. In comparison you don’t think about the things that have come down dramatically in price (e.g. TVs, flights) and would have been luxuries 30 years ago.
I don’t see this as an issue of virtue at all. I have never suggested that spending money on a luxery item is in any way less than virtuous. To your point about the $300k LAC, there is no doubt that it is a huge luxury item. That doesn’t mean its wrong for parents to spend that money, but everyone should understand that it isn’t a necessity.
But as I said in several posts upthread, it doesn’t “feel” like being rich in the way most people think about it when you have to tell your child that she can’t attend a school she has gotten into because the family can’t afford it. Many others may consider you rich looking at income alone, but this thread is about the way people feel.
Interesting but without including net worth, I find it somewhat limiting. I intentionally limit my income these days therefore it shows me as below middle class. Based on assets, I am not.
“I’m just amazed that it’s viewed as an indulgence to spend $50 on a meal or $75 on a pair of pants, but for many on CC (and in real life) it’s somehow virtuous to spend $300K on sending your kids to a LAC/private school. Sorry, but that’s luxury consumption too.”
Everyone has different priorities. Education was our top priority - seen as an investment in our children vs. consumables like clothing and restaurant meals. However, my guess is that most who can’t afford a $50 dinner aren’t coughing up $300K for a private college education, either. Of course it is a luxury.
It’s all relative to current price level. Why a pair of $100 jeans which you may wear for years feels too expensive, but the same amount for just one night in a hotel feels about right? This doesn’t make a lot of sense but this is how the current economy works.
Maybe I missed it … but when discussing an ‘income’ of 300K is it a pre or post tax amount?
In our house we have a term ‘Starbucks dollars’. Those are $$ with which you can actually purchase a cup of coffee. If you ‘make’ 300K pre-tax and then need to pay almost 30K for health insurance (not actually health care, just the insurance, add another 6K pp if you actually use the policy), if you live in a high tax State and now also lose a good portion of your SALT deductions, if your gallon of gas costs $1.00 more than the national average…how many truly discretionary Starbucks dollars are left with which to feel ‘rich’?
@dietz199 Good point. I have been wondering this as well. How much of a 300k salary is actually available after taxes and health insurance (which is a true necessity and not readily exchanged for something less expensive).
As a self employed person, I can tell you that insurnace is obscenely expensive and that is with a deductible of 6k per person.
Still way more than families who are earning the median $60k income. I live in Downstate NY. The median income families also pay for health insurance. Our taxes aren’t cheap, and I don’t think we get a discount on our gas either.
As someone who is “comfortable”, all of my problems are really non problems.
I have never had to decided if I can afford the co pay and the time off to take my kid to the doctor for a possible ear infection. I am not out of luck if the car needs brakes. My dogs practically have a dedicated waiting room at the vet.
I have seen people go into the vet and purchase one heart worm pill because they cannot purchase a multipack.
This entire conversation has been really enlightening. On the one hand, I had no idea that the 1% had that much in salary. On the other, it has prompted me to think about my own situation more deeply. I do think that a $100 shirt is very expensive, however, I never worry that my children or I could be homeless. I never worry about having enough to eat. I am able to provide extras in the form of enrichment activities and occasional vacations. I don’t feel comfortable shopping in the most expensive stores, but I never worry about whether I can provide decent clothes for my kids when they grow out of the ones they have. I can take the dog to the vet when needed and afford his monthly meds. I don’t get anxious each month when the bills come in. I can afford to send the kids to college without debt – although not necessasrily full pay at a private. I guess I’m rich!
After all the topic here is about feelings not actuality. My work clothing I do feel is moderately expensive in the $75-150 range. There is just a level of dress that is expected in my profession ( corporate litigation attorney) that requires clothing that looks nice. Is this the bottom of the barrel of what one could spend? No. But it’s in the mid range as to what is acceptable to wear to work. Thus “moderately “ expensive.
https://smartasset.com/taxes/income-taxes suggests that a married couple in California with $300,000 income will pay $54,819 federal income tax, $12,761 FICA payroll tax, and $21,861 state income tax, for a total of $89,440, leaving $210,560 left over. Even if the couple spends $36,000 in medical insurance and out-of-pocket costs, that still leaves $174,560 left over. The extra gasoline costs are small in comparison (even if you drive a 10mpg gas guzzler 50,000 miles, $1 extra per gallon is $5,000 extra – but if you drive that much, you may want a more fuel efficient vehicle).
$174,560 after income and payroll taxes and high medical costs is still a lot, even in California, where the median household income is $67,739 pre-tax, which gives $56,255 after-tax in the same estimator (but not accounting for any medical costs). I.e. more than three times the median. That can buy many cups of expensive coffee.
@maya54 Thats a good point. There are two ways of looking at it: You could say, given the range of options that will fulfill my need, in this case for appropriate work attire, these items fall in the middle of the range, and so are only moderately expensive. Or you could say, I work in a profession where I am forced to buy clothes that are really expensive. Both would be correct. Just because something is a necessity doesn’t make it inexpensive. However, when you know you have to buy something to fullfil the need, it can actually feel like a bargain to find something relatively less expensive.
To those of us who will never make $300,000 in a year, before or after taxes, it is very tough to understand how folks making such amounts and more feel “poor.” It really is.
@HImom To be fair, I don’t think people making 300k are caliming to be poor, just that they don’t necessarily feel rich. My guess is that most would describe themselves as “comfortable.”
Just for the heck of it, I made entries in the Pew Research link posted. For a hypothetical $400K in yearly income for a family of 2 in Silicon Valley (Santa Clara-San Jose), I found that 32% of the population there have that level of income. That’s why some people in certain area feel they are in the upper “middle”.
