If you mean http://www.pewresearch.org/fact-tank/2018/09/06/are-you-in-the-american-middle-class/ , it does not mean that 32% of the population has $400k income. It says that $400k is in the “upper income tier”, which they define as higher than double the median income (“lower income tier” is below two thirds of the median income, while “middle income tier” is between two thirds and twice the median income).
What they are saying is that 32% of San Jose is in the “upper income tier”. The calculator suggests that, for a family of 2 in San Jose, the threshold between “middle income tier” and “upper income tier” is at $140,705 / $140,706.
Wasn’t there a famous article a while ago where a Chicago law professor with about $400,000 income complained that it doesn’t feel enough, with all the mortgage and paying for three kids in private schools?
On the other side of the scale, I remember reading a sympathetic article describing what it means to be poor, which mentioned a father of the family who worked in construction and had to spend tons of money on soda every day to stay hydrated. I was a graduate student at the moment, whose idea of a splurge was lunch from Taco Bell, and I had a hard time understanding why he couldn’t drink tap water.
@HImom Please point out the posts or other claims to which you are referring, because I don’t believe any such comments have been made. Or is it your opinion that wealth is a binary concept, and you’re either rich or poor, with nothing in between?
@HImom It does seem like you are equating “not rich” to “poor” … And because of that duality concept you naturally don’t understand how someone making 300k doesn’t feel “rich”. But They don’t feel poor. They don’t feel squeezed. They feel “comfortable” and maybe that they don’t have to worry about money so long as they spend wisely. If you are poor those feelings make you feel rich but for those living it who are paying 1/3 of their income in taxes ( state, federal and property in many places) and are saving for college and retirement they don’t feel that they can just spend money freely which is what they equate with being rich.
I work in tech. During periods in which I’ve had a 1% income, I wore T-shirts at work, which cost an average of approximately $5. I know quite a few others in tech who also regularly wear T’s. Some regularly wear shorts as well, in warmer months. I found it funny that a woman I know was asking about how to dress for a SV type tech job, and was looking in to buying hoodies and such, like the persons on TV. I’d expect the majority of SV tech employees place little emphasis on clothing, particularly at smaller companies. And the dressing in T-shirts, hoodies, shorts, and sandals is primarily an effort to dress comfortably, rather than a sense of style.
@Happytimes2001 , I fit your description of frugal habits, too. My kids used to tease me until they were budgeting their own earnings after college. They still spend on things that I consider a huge waste (Starbucks for one kid) but I bite my tongue.
Someone, maybe @HImom (I can’t find the post), questioned my comment about dh being teased at work. Yes, he drove a compact Toyota or a Chrysler when his colleagues all drove Audi, BMW, Lexus and Mercedes. I shopped long and hard for deals, but he still didn’t wear clothes that cost half as much as theirs although they looked just as nice. Fortunately, styles in conservative business suits, shirts and ties don’t change a great deal so I’d buy last year’s stuff at 75% or more off. I lucked into a very deep discount on some Allen Edmonds shoes for him one year. A couple of guys were both surprised and impressed that he was finally wearing a brand they knew. He just laughed them off. These guys now “can’t afford” to retire but they continue to spend on luxury brands, eat out three to five times a week and take expensive vacations. Three of them are likely to be out of a job by the end of this year.
@Silpat And no one has mentioned in the clothing discussion those people like me. Yes, I will spend $75-150 on a pair of work pants. Yes, I will have them for 15 years. I also buy very expensive clothing on deep discounts (often 70%). Expensive shoes can last a long time. So can coats and sweaters. An expensive car can often be driven more than 100K miles. I’m not a car person, per se. But I just noticed the other day my car has 110K miles. I won’t think about buying a new one until it has an issue. Same thing with my last car.
These folks who don’t understand why someone who makes 300K$ doesn’t feel rich: Just doesn’t get how people are different. And people get to make choices esp. when they earned the money. Maybe they are not the choices, you would make, but they get to spend their money as they like. So maybe you are in a different income bracket. But before I was a 1%er. I also bought expensive clothing because I cared about my career. I spent money there because I thought it was important and it was. At that time. Again my choices.
My spouse has had the same watch for 30 years. It has paid for itself. Probably costs a lot less long term than a bunch of cheap watches. But hey it’s choices.
Some people have nothing saved for retirement. They earn a lot. Others have a lot saved they earn a little. Again, it’s choices.
If you read these forums enough, you will see the “donut hole” complaints about college financial aid, complaints about taxes, complaints about the cost of living, etc. suggesting that some people are just barely making it on $300,000 incomes (that are much higher than typical even in expensive areas). See the quote from the article in post #0 for a contrived, yet representative, example.
I guess “ comfortable” for this thread is a very expansive term and covers a huge range—$60k to $300k or more. When the categories are so large, are they meaningful at all?
No one wants to be “rich” and the target of the angst of others who are struggling paycheck to paycheck, no matter what they earn. That’s certainly understandable. Maybe that’s one of the reason everyone strives to be “comfortable,” whatever that is.
The Pew Research Center defines middle income as people who earn 2/3 to 2 times the median US household income. In 2016, middle income was defined as $39k - $118k. Families earning $300k are more than 2.5 times the high end of the middle income definition. The PRC defines those with that income as “rich.” Just because you’re on the lower end of the top 2% doesn’t make you part of the bottom 98%.
@ucbalumnus Maybe people who make around $300k thought that that amount would have been enough to have little to no monetary concerns. And when that turned out to untrue (in their valid perception), they began asking questions about why.
I do agree that net worth and debt weigh heavily on all folks, along with concerns about medical expenses and retirement. These are not concerns that are limited to a particular income level, whenever said income is achieved.
@ucbalumnus What you are not factoring in when people complain about the donut hole is… if they send two kids to college, let’s just say private that is roughly $600K AFTER taxes. Many people who are 1% are business owners and have incomes which vary. Ok, some make that every year. Some also fall into the 1% only occasionally ( sale of a business or farm). So for you to judge that they are not donut hole isn’t really correct. You don’t know that they didn’t have a child with special needs, etc. That said, they might have high income and low assets. Or high assets and low income. Or any other combination. Or they might be people who live in high income areas, make a lot of income and have invested in their kids education so the money for long term retirement, and college payments is going to be tough for them. You may not appreciate it but if you lived in San Fran, NY and many other places in the US-you would. Not everyone can move. Some have overspent relative to income but college is expensive and remember, high income=high taxes, high healthcare etc. Hence the complaints. Also, may people run into health issues at an early age so they cannot work until 65.
My own parents had zero saved. So options were limited ( thank goodness for college generosity) but saying that no one is in the donut hole makes no sense. You can have more disposable income on 100K in NE than 300K in San Fran-just saying.
Let’s see, suppose the $300k couple in San Francisco, CA has an after tax income of $210,560, and a $100k couple in Lincoln, NE has an after tax income of $79,375 (after federal income tax, FICA, and state income tax).
Let’s say that the San Francisco couple spends $4,500 per month in rent (average two bedroom rent there), for a total of $54,000 per year, leaving $156,560 left over after taxes and rent. Meanwhile, the Lincoln couple spends $1,000 per month in rent (average two bedroom rent there), for a total of $12,000 per year, leaving $67,375 left over after taxes and rent.
Maybe I am not seeing how, after paying taxes and rent, $156,560 in San Francisco will result in less disposable income than $67,375 in Lincoln.
Folks in the middle and lower income brackets, say $30k to $60k can also have kids with special needs, need to help support elders/loved ones. It is just that those with fewer financial resources CANNOT easily afford to pay for help for these things or offer financial support without literally putting themselves and families in more precarious financial situations.
Many/most folks have tough situations—aging parents, chronic health issues, high medical bills, need to help kids get an education, etc. It remains that having more money — say $300,000/yr makes it easier to tackle some of these issues than if you have $30k or $60k/yr. It would seem to be pretty basic math.
Wow… glad I don’t work where you do. Glad H doesn’t either. Even when he worked for companies prior to starting his own (Civil Engineering) the first day on his job post Navy he was told “Lose the coat and tie. We don’t want them here.” The only time he’s needed a suit has been for weddings, funerals, and the occasional award ceremony at college for one of our lads (the other college was far less formal - even for awards).
In our world/life the only folks who might be judged on their clothing would have to be really, really off - like wearing a clown suit or shorts or something… People being interviewed are assessed more for their people skills in my job (teaching) than what they chose to wear - though if they wore that clown suit they would probably be out. No one would need a $75 piece of clothing.
There are niches for everyone. Ours and yours certainly aren’t similar!