True; and that’s why after someone admits that they are “financially blessed,” they often seem to feel compelled to follow it with comments like these:
But I have a very small and rather worn house (but paid for!), decorated with stuff I find sitting out on curbs;
I buy all my clothes at the thrift shop;
We eat at home most days, but occasionally go out for a nice hot dog;
I buy used cars only and drive them until they have 400K miles on them or until parts start falling off onto the street;
I do all my house cleaning and yard work myself, in addition to growing all my own produce;
Why pay for cable when DH is an expert with the rabbit ears antenna he rigged on our 20 year old TV?
Now, I know I’m being facetious, but I see this in pretty much every thread like this. In reading some of my own posts, I’ve seen a bit of it. Partly it may be because when you’ve grown up always struggling to make it from paycheck to paycheck, eventually having wealth doesn’t change that mindset (maybe like some people who lose weight after a lifetime of being heavy but never can see themselves as thin). Or some may feel guilty (or undeserving) for being fortunate while so many people are not. Or, as @doschicos points out, there is a clear antipathy in society towards people who have money, as though having it automatically makes someone spoiled, clueless to the suffering of others, unfairly rewarded by virtue of some assumed privilege, snobby, unduly materialistic, lacking in dedication to quality family time, or perhaps living above their means or not saving putting money in savings, helping others, etc.
So in addition to not “feeling” wealthy, there is a big aversion to admitting it even when they know they are, because that’s just not considered seemly. So in order not to be seen as “one of THEM,” they insist to others, and maybe also to themselves, that they are not “rich.”
Adding the whole raising kids thing into the money mix is a balancing act too. I think our girls thought that their dad made a good salary and thus we could take trips. Living in Hooterville there are no high end stores and a mall is about an hour away - shopping was never recreational; If she needed a new pair of running shoes we drove 35 minutes and then headed home. We didn’t buy them cars because they could walk or bike everywhere. Frankly I lied and said that our family prefers to travel rather than have a kids car.
Somehow they both ended up with a good work ethic and are careful with money. I do not have to worry that they will be slackers. When they were in their early 20s we finally told them they will inherit. Neither of them will get rich in their chosen fields. They know now their retirement is safe. We are playing a long game here!
Wealthy people don’t seem to agree that they have it made. I don’t doubt that there are comments on CC that point out that people with high incomes have it better than those who don’t. Whether or not they’re phrased unkindly, I don’t know. But I can imagine that, after awhile, it’s frustrating for lower income families to see posts by upper income people suggesting that those who earn 1/3 of what they do are similar, if not better off, because of where they live, or tax rates, or the price of gas. Gross income is a valid comparison. Comparing your net to someone else’s gross isn’t.
It’s not uncommon on CC for upper income people to complain about being in a “donut hole” and say the rich and poor have it made for college. Even on this thread the challenge pointed out is the difficulty of being full pay at Harvard vs the relative ease of paying $10k there as a lower income family. But most lower income families aren’t getting financial aid packages that leave them with a net cost of only $10k, and the number of them getting acceptances to Harvard is negligible. Just because one low income family in a million may have a better college situation than a family in the upper 2%, it doesn’t mean you can extrapolate that to the lower income group as a whole and say that they’re better off. If we’re going to compare college costs it would be more helpful to pick a realistic situation, not one using one of the most generous universities in the country.
There’s a disconnect here, I think. I don’t really believe that low income people think their problems would all be gone if they earned more; I think they’re more than aware of rising health costs and other retirement worries. But I’m getting the impression that there are upper income families who don’t really understand that lower income people also pay for taxes, insurance, and living expenses. To say that a $300k income after taxes doesn’t leave a lot of disposable income and puts those families on a level similar to those grossing ~$175k in the Midwest ignores that the people in the Midwest aren’t netting $175k. They also pay taxes, living expenses, insurance, and health care costs. Their parents become old and sick too. If you’re going to compare your net income to families with lower incomes, you have to use their net incomes to make the comparison valid.
It seems that no matter what people say, there are those in the top 2% who are going to say yes, we earn a lot, but… In my opinion, there is no but. Our gross income increased by over 33% when I returned to work a couple years ago. People can apply all the fancy metrics to it that they want, but at the end of the day it’s simple math. We earn far more than we did just a short time ago and it would be insulting of me to compare our finances in any way to those in our former income range. It doesn’t matter to me how long I’ve had it or how much I’ve been able to build up my net worth with it. The simple fact is I have it and access to the opportunities and buying power it represents.
I make my living off of the top 1% and their spending habits and as a result have always known how the 1% lives. While I probably fall into the top 2% to 3% I don’t consider myself rich (maybe intentionally) and I know my children have never thought we were rich. Our community is definitely affluent and we are in the “poorer” section and as a result my children have always had friends with more, especially more visible wealth, and my oldest son always struggled with being the “poor kid” throughout high school.
My son’s perception has changed since he went to college. He is seeing both ends of the spectrum and now has a much better perception on where we (and those high school friends) fall on the wealth spectrum. Seeing roommates struggling over an electric bill increase of $10 each during the summer (running the A/C) vs. us anticipating an increase, has shown him we are not as “destitute” as others and are actually somewhat secure.
On the other hand he has met people that are truly in the 1%, that put the wealth of those high school “rich kids” to shame. He had no idea what real wealth looked like until invited to a friends house this summer and saw how a 1% kid lived and the fact that they were able to host a presidential fund raising event in their home a couple of years ago opened his eyes. He also told me about a new friend he had made in his major. I had been waiting for him to meet this individual as her father is a client of mine so I knew they were at school together, in the same major, and that her family was in the 0.1%. He never would have guessed her wealth. Her father is a self made business owner and among many other things has a yacht valued well into 9 figures. The thing that surprised him the most is this new friend and her siblings all attend state flagship universities.
To say my son has a new appreciation for where we sit on the financial spectrum is an understatement but it has also opened his eyes as to what he would like to strive for and the hard work necessary to get there. Probably worth every bit of tuition we are paying.
@austinmshauri Yes to everything in your post. Especially the paragraph explaining how insane it is for “donut” hole families to assume that low ses families have it made when it comes to college tuition. Try sending a kid to a state school in NJ or PA on 60k or less a year and tell me how easy that is. The poor kids who get into Harvard are irrelevant becuase there are so few of them compared with the vast majority of kids. Its funny how few high income people are willing to impoverish themselves in order to take advantage of all the help available to the poor.
Well, in California at least, having an income of $140K puts you in the “donut hole” that everyone describes–meaning too much income to qualify for financial aid. An income of $140K also puts you squarely in the middle class according to the PEW calculator. So I just don’t experience the same definition of “donut hole” that you do. Maybe this is a regional anomaly.
There is no upper income family who doesn’t understand that. I get that some rich people don’t see themselves as rich because they have defined “rich” as “has a yacht” type of rich. But they absolutely understand that everyone has expenses and taxes and insurance.
That said, I’m not on the college forums that much anymore (usually stick to the Cafe), but I have read some pretty outrageous posts throughout the years from people who admit to either big salaries or extensive assets who are yet complaining about someone they know who got lots of financial aid to go to a private school that their own kid was accepted to yet cannot afford due to EFC and their particular financial “obligations”. As though it’s a good thing to be so poor that you qualify for all demonstrated need! Or that your decision to take out a huge mortgage on a huge house (or merely nice house in an expensive market) somehow puts you on the same level of need as someone with a fraction of the salary or assets! I remember one student complaining that it’s not her family’s fault that they live in a city where you can’t buy a “decent” house for less than 2 million and that the colleges should take into account that her parents have to buy houses for extended family, and it’s not fair that she is being “penalized.” I’ve seen similar outrageous sentiments written by adults who should know better.
My question is: is this kind of thing ACTUALLY verbalized as frequently as being insinuated? Are that many people really saying that the “poor have it made for college”? Are these statements actually being made by true 1%ers, or are they really more lower end 5%ers for whom at least some of this “donut hole” talk can at least be somewhat understandable? For example, someone like that described below:
I honestly don’t know, which is why I’m asking if there is hyperbole going on here about 1%ers.
I don’t hear people actually stating that the “poor have it made.” But it can be inferred when they complain that they can’t afford full pay (or can’t afford it without making some sacrifices) and how unfair it is that others get so much aid.
I hear it often - from across what I think are many income levels - not just the top 10%. My usual comeback if I can get it in is to tell the folks they are welcome to quit/change their jobs and lower their income too. The aid that is available (food, housing, heat, college) is open to all at that income level. There’s no discrimination. If that’s what they’re envious of, do it.
Of course with college, the PELL Grant hardly goes far… and as a pp mentioned, not everyone can make it into the 100% meets needs schools. Details, details.
No one yet has taken me up on that idea, but I’m pretty sure it has helped some think it through.
Few who are truly poor want to be that way. For most it’s lack of ability or opportunity. For some it’s addictions. Their kids are there due to the birth lottery. Helping them overcome their birth lottery “draw” when/if they’ve shown the ability and drive to do so is well worth it for them, their families, and society, but it sure isn’t easy many times. It’s hardly in the “have it made” category.
With intergenerational economic mobility apparently declining, perhaps there is now a stronger realization that much wealth and privilege is inherited. While it is true that there are still many who earn and save their way to wealth, the opportunity to do so, especially if one starts out poor, appears to be declining, and many of the “upper middle class” do not want to be seen as the detached aristocratic class, even though they may engage in opportunity-hoarding behavior with respect to trying to get their own children the maximum advantage in their chance to earn merit or nominally-merit achievements (e.g. if they graduated from a university that prefers legacies, would they advocate that the university move more toward earned merit by dropping legacy preference?).
Personally, I hate legacy. My kids are legacies at two top universities and I would welcome them abolishing that preferance. On the other hand, I certainly engage in behavior designed to provide opportunities for my own kids. For example, I hired a tutor to help with test prep. I didn’t go out and hire tutors for other kids whose parent’s might not be able to afford it. I think we all focus on the needs of our own kids first to a degree.
@Nrdsb4 's post #260 resonates with me and with some that followed.
Our kids didn’t realize until after college that all of their friends had student loans. They attended state schools and earned some academic scholarships. Any of the money we’d saved for college that we didn’t spend was invested and later went toward their home purchases after dh received a few promotions and increases. Now they understand their privilege, but when they were much younger they sometimes thought we were “poor” because we made them make choices instead of getting everything they wanted, unlike some of their friends.
I do find myself minimizing, downplaying or deflecting in real life conversations. I was brought up to not talk about money; it was considered impolite and even tacky to do so. A few times a person working on home repairs or remodeling has asked how we could afford our house. I generally change the subject. Dh’s standard answer has been, “Hard work for X years plus lots of luck.” He deeply believes in the role of luck in our good fortune.
Add a kid for a family of three, the “middle income” tier ranges from $57,443 to $172,328. So $140,000 is still much closer to the top of the “middle income” tier than it is to the bottom.
Other places in California may have the cutoffs at different points.
This is a pretty strong cultural tendency in the US, but could this be part of the reason that people buy status symbol goods? Obviously, status symbols are not a completely reliable signal of wealth, since they may have been purchased with debt rather than actual wealth, but if someone cannot brag about his/her wealth without being tacky, showing status symbols may be a way to do that in a more socially acceptable way.
Meanwhile, in the “Need a new quiet compact car” thread, most of the discussion seems to be focused on more expensive cars like Audi, BMW, Lexus, Mercedes.
“This is a pretty strong cultural tendency in the US, but could this be part of the reason that people buy status symbol goods? Obviously, status symbols are not a completely reliable signal of wealth, since they may have been purchased with debt rather than actual wealth”
Maybe it is a reflection of where I was raised and currently live but most wealthy people I know (NNE) don’t buy a lot of status symbol stuff to show off. That’s more those aspiring to be considered part of that set. Some of it is old money vs. new money as well. Some, I think, is regional as I’ve lived in different parts of the country as well where conspicuous consumption is more of a thing, but again, a lot of it was people purchasing on debt or with lesser means. In one city I lived in, I liked to joke that I had never met so many $50K millionaires in my life - younger people driving fancy leased cars and living in somewhat crappy apartments.
I think a large part of the discussion rests of the fact that it is getting harder and harder to “jump” from one economic step on the ladder to another. There are many reasons why this is the case. It used to be that going to college, particularly a great college could jump you a couple of rungs. Today, it’s harder. There is more competition. Jobs don’t offer pensions so if you hit a couple of road bumps, you are on your on. Yes, some people win the lottery in the form of some windfall, but many have just earned it like the person who makes less earns it.
Frankly, I don’t care what anyone else has. I am thrilled to have more than enough. I don’t take it for granted. We are generous and have taught our kids to be the same. There is absolutely zero correlation between having money and being snobby or any other characteristic you see portrayed in the movies. Though the food is healthier in finer restaurants
In my life I have seen great people at both ends of the spectrum. There are happy people at both ends. But it is easier not to worry about paying for things you need. Maybe someone who is really struggling just doesn’t want to hear someone who is just grousing about something. Makes sense.
Really the argument could just as easily be, Why don’t all Americans think they are rich ( since we all won the 1Million dollar lottery according to a study which said that was the relative value of being born in America?).
For those of you in the top 10%, how does it play out in your own family? Do family members respect your standard of living or is there friction and jealousy or any other factors in the money equation.
In terms of status symbols, a quick trip to the rich parts of Los Angeles or Orange Counties should give you plenty of status symbols (e.g. Rolls Royce, Bentley, and similarly expensive cars, as opposed to Lexus, BMW, Mercedes, and Tesla cars that rich people in other places drive) to look at that you may not find in a year of living somewhere else (including San Francisco or San Jose).
