Not really–it’s about the disjuncture between feelings and reality. The article is about rich people who don’t feel rich–notice that they are rich. So while feelings are part of this discussion, it’s important to remember that there are objective and quantifiable measures of wealth, and no matter how you feel, if you make and/or have a lot of money, you’re rich.
“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.”
True, but the couple in Lincoln might still find it easier to pay $10K per year for Harvard (assuming cost is capped at 10% of income) than the SF couple would find it to pay $70K per year.
Of course you can argue the couple in SF should have saved up, but it’s pretty clear why you hear those complaints (and the kids go to Berkeley/UCLA instead).
To me, all of the folks in the top 10-20% of income are “rich,” statistically, whether we “feel” it or not.
It’s troubling that so few folks are comfortable with that concept.
I’m the one who wrote about how much I like our weekly $50 prime rib dinner and drinks, which is enjoyable for me on two levels, 1) the great food and service, and 2) the fact that it’s a bargain.
Today I attended a volunteer training session for a local environmental stewardship organization and got into a conversation with one of the paid staff, a woman in her 20’s, married, whose husband also works for a nonprofit. She told me their combined income is about $65,000 and they’re now moving in with relatives so they can aggressively pay down student loans and start saving for a down payment on a house.
At one point the discussion turned to dining out and, as it happens, she mentioned that they go out for dinner about once a week and try to keep it to no more than $50.
I respect her prioritization. Working for nonprofits, paying down student loans, and saving to buy a home are laudable goals, and a $50 splurge every week seems about right to me.
Of course I gave her my advice on where to find a nice $50 dinner.
However, the San Francisco couple has $89,185 more per year than the Lincoln couple (after taxes and rent), so they still end up ahead even if they pay $60,000 more per year for a private college during a kid’s college years.
Here’s another article about more folks earning 6 figures who don’t feel “rich.”
And another article:
http://theweek.com/articles/596339/why-dont-rich-people-realize-theyre-rich
And, if they want, they can pull up stakes and move to Lincoln–the Lincoln couple can’t do the same to SF.
Ah, but for many/most folks, the job requires the worker to live within commuting distance, so can’t easily relocate to LCOL AND keep job.
@marvin100 While you are correct that there are objective and quantifiable measures of wealth, those metrics need to be more complicated than the simple quantities of income and assets. If nothing else, any reasonable person should be able to see the differences in otherwise identical income and assets to a 25 year old and a 60 year old.
Where you are wrong is in making the leap toward suggesting that being rich is similarly objective and quantifiable. In fact you chose to associate it with making a lot of money, an equally ambiguous expression. Anyone really interested in understanding this from a scientific perspective might want to do a little reading on utility theory. Maybe this weekend I’ll start a separate thread on the topic.
@ucbalumnus writes “However, the San Francisco couple has $89,185 more per year than the Lincoln couple (after taxes and rent), so they still end up ahead even if they pay $60,000 more per year for a private college during a kid’s college years.”
But you’re not accounting for the COL differences, outside of the rent. San Fran has a 94% higher COL than Lincoln, NE, according to Bankrate’s calculator. I think if I were simply looking at finances, it would make more sense to choose the Lincoln, NE life. Also, in San Fran, you inevitably have massive wealth shoved in your face daily, which makes you feel worse off. I’ve never been to Lincoln (apologies to all you if I’m wrong here) but I’ve lived in lots of mid-sized cities, and I’ve typically felt less of that conspicuous consumption. (It’s funny to me, for instance, that anyone thinks $75 is a lot for a shirt, when I see kids wearing $200 shirts and carrying $300 purses on a routine basis!)
You’re also not counting retirement savings. To sustain a San Fran lifestyle into retirement, you are going to have to max out all 401ks and then some. Whereas to sustain a Lincoln lifestyle, you can just max out the 401K and you’ll probably be fine. So there’s a big tax benefit to being in the $100K place, over the $300K place, as all of your savings are pre-tax, rather than just some of them.
Again, I’m not arguing with your basic premise that people overspend and grouse too much–just trying to make a more complete picture of the emotional math that many people go through as they evaluate where they stand in life. I also think that the “American dream,” which I still believe in, tends to mean owning a home, not renting, which makes the Lincoln life at $100K even more desirable than the San Fran life.
Again, the SF couple can always pull up stakes and retire with $ to spare in most parts of the US, whereas the Lincoln couple can’t do the same in SF, @ccprofandmomof2 .
The more interesting question that all of this suggests is why is it that people are so invested in convincing themselves and others that they’re not rich? What’s in it for them? Why do they cling so tightly to the illusion that they’re “middle class”? Hmmm…
I wonder the same thing. When we had a higher income, we were dang privileged to have it, and I knew it. No whining about taxes, higher cost area, and the like.
And now that we don’t, but I’m still above the state median, I still feel dang privileged.
I just don’t get the rush to insecurity, by people more secure than almost everyone else.
I think part of it may be how the rich are portrayed in comedies and dramas. The rich girl is always snooty, the rich man is always corrupt or the murderer, the rich boy is an entitled jerk. What person sees all that growing up and says, “yes! those are my people”?
In the part of the country I am in, being humble and not sticking out is valued. Out here in Hooterville there aren’t enough rich people to develop a subculture of a social group.
But hey, life is good here in flyover land at a fraction of the cost. There are smart people too, just like anywhere.
In your opinion is upper middle class a subset of middle class? If so, are you suggesting that not only am I rich, but also part of the upper class?
@marvin100 writes: Again, the SF couple can always pull up stakes and retire with $ to spare in most parts of the US, whereas the Lincoln couple can’t do the same in SF, @ccprofandmomof2 .
Yes, this is pretty much the constant discourse of everyone I know in the upper class in urban areas in CA. But that means leaving behind all family and friends, which makes a lot of people sad…hence adding to their sense of loss.
As to your other point about the middle class, I think that happens from the lower and the upper classes. It’s part of the fabric of American discourse to claim you are middle class. Very few people proudly call themselves working class anymore, either. And certainly few people will openly call themselves poor, outside of perhaps their small circle of friends. I happen to teach in a place where we have the full gamut from homeless students to extremely wealthy people who didn’t get good grades in high school. They all say they’re middle class. I do think they all believe it.
“Again, the SF couple can always pull up stakes and retire with $ to spare in most parts of the US, whereas the Lincoln couple can’t do the same in SF.”
And many people in SF know that unless they hit a home run with a startup they will have to leave (and cash in their home equity) to be able to afford to retire. That doesn’t help to make people feel rich, it makes many of them feel insecure (and worried about a house price crash).
Except being able to do that means they are rich, unlike the many, many SF residents who don’t even earn or have enough to do that and just keep being pushed further and further out of the city, into longer and longer commutes. SF has waiters, baristas, housekeepers, retail clerks, and office temps too, after all. The people who don’t “feel rich” if they don’t “hit a home run with a startup” want to feel middle class by comparing upwards, but why? And why do they pretend like the majority of people around them (who serve them food, make coffee, sell groceries, and answer their phones) don’t exist?
I think the reason some wealthy people can’t acknowledge that they’re rich is because they’re comparing themselves to the people who earn more than they do instead of to the 98-99% who earn less. People don’t have to study economic theories to understand that having $300,000 at your disposal every year is far better than having only $40,000.
We relocated to Hooterville because we knew it would be hard to get ahead in the east coast city we were living in.
My family visited and thought Hooterville was great and most of them have moved here too. Rather than thinking of it as exile, think of it as an opportunity and maybe others will too. No, I don’t have 20 different ethnic foods with delivery but my kids can walk home from school, walk to the library, and are friends with farm and factory families as well as professionals. One really has to try hard to stay in an insular bubble.