Yes, CA property taxes are based on 1% of sold price, with various increases per year and extras added. If the Uber driver sold his decades old home and bought another one in a less expensive section of CA, his property taxes would likely shoot up, even if the new home had far less market value than the old one. There are various additional costs associated with owning a home besides property taxes, but if the house is in good condition, those could likely be done on a part time Uber salary. I expect he’s gained more in net worth over the past decades by staying in Palo Alto than he would if he had instead sold the home and used the profits from the sale to invest in the stock market.
Are other costs in Palo Alto not high as well? I would assume one would pay at least a little more for goods and services but perhaps not.
One can qualify for housing assistance in our suburban DC county with an income of $90k (family of four).
Actually, it is relevant. One of the reasons given for wealthy people not feeling rich is the cost of living in those high COL areas. But it seems that people are surviving there on far less. So it’s not that people can’t live on less, they just seem to be choosing not to. Making choices that eats through a lot of their income doesn’t mean they aren’t wealthy.
“Making choices that eats through a lot of their income doesn’t mean they aren’t wealthy.”
But those choices might make some FEEL like they are not ‘rich’, which is the stated topic of the thread.
I’m in the Millionaire Next Door group, am arguably rich, but don’t consider myself to be. DW and I shop at Walmart, Costco, and Target. While most of my clothes come from Costco, most of DW’s come from Goodwill.
The most expensive (retail price) item of clothing owned by anyone in our family is my daughter’s pair of Christian Louboutin shoes that were purchased in like new condition at Goodwill for $9, or approximately 1% of retail.
If people are so quick to do it, show me. Nobody’s told the rich to move in here–I pointed out, though, that the freedom to do so is evidence of their wealth, and as for the “poor” (nice scare quotes, btw–do you not believe they exist?), well, moving is expensive.
We’re in the 1% (maybe closer to the .5%?) DH came from a very meager upbringing and my family was solidly middle class. But both families valued education and we met at the local state flagship.
So what changed in the past 40 years? DH was already used to being financially prudent when we married. I started my own business that year which made me more fiscally conservative because I could see how my clients could leave at any moment. We clipped coupons, shopped sales and maximized savings.
Now as much as I’d like to pat myself on the back, I’ll give DH the credit for taking us to the 1%. He’s done extremely well in his industry (not an especially high paying one, but he’s maneuvered his way to the top) and, more importantly, thought long term with investments. Retirement accounts were always financed to the max. 529s were set in place when kids were in diapers. And we kept clipping coupons and shopping sales.
Which leads me to say that we’re rich. How have things changed? We drive better cars and take amazing vacations. We are generous with the (grown & flown) kids. I’ve mostly retired and work with nonprofits. We give a lot of money to charities.
But we still shop sales and clip coupons. And dang you Candy Crush, I will NOT pay for extra boosters 
@marvin100 Huh? There are multiple replies on this thread (and many other threads) that point out if the cost of living is too high, you can move to the Midwest, different city, etc.
I’m not sure what you mean by scare quotes. If there is any takeaway from this thread it’s that people have different definitions of wealth vs middle class vs low income no matter how many articles are linked.
@houndmom - saying you can do something isn’t the same as telling you to do it. I’m one of the people who said it–a few times–and I assure you I wasn’t giving any instructions but rather providing an illustration of wealth that some people were neglecting.
As for scare quotes, well, you can google the term if you don’t know what it means.
So for anyone, of any income, who doesn’t consider themself rich, what would it take? That isn’t necessarily a number although it might be. But what would have to happen before you say, “yes I am rich.”
NYC area resident here. Very frustrating when I hear about how someone makes x, how can they not be rich ?
We pay among the highest state income, local property and sales taxes in the country. My train pass to get to work is as expensive as a car lease, and I need both to get to work. Employers have to pay more in high cost of living areas or they would not have employees. I don’t have a nanny for kids, buy modest cars, etc, but if I listed my salary you would not feel sorry for me unless you saw how much I spend and how little is luxurious. Employers are leaving big cities, NYC, Boston etc, for this reason. High paid in high cost area is not rich.
Kids in college interviewing for STEM jobs. They often love to talk about high salaries offered in Silicon Valley. I tell them to note that the smallest house in that area costs 7 figures. Not a mansion, a tiny middle class home. But yes there are kids getting six figure offers out of school to work there, then leasing a lousy apt for $3000/month.
Don’t judge people and label them. We tend to look at outliers and make unwarranted generalizations.
I have not met more than a handful of people with nannies and limo drivers. But I know lots of people with six figure salaries.
I’m not sure what everyone has against Nannies. I know lots of families with two parents working and a Nanny is the best, sometimes the most economical, method of childcare. Some of these families are both teachers. They are certainly not being paid Wall Street or Silicon Valley salaries. With a few young kids, the Nanny can cost less than daycare. These are not families who have Nannies becaues they are rich. They have them because they can’t lose one parent’s salaries.
Why does anyone CARE if someone does or doesn’t ‘feel’ rich. Why is it important to re-condition a certain portion of the population to ‘feel the appropriate feelings’?
Aren’t we in an era where we get to feel our feelings without judgment? I get to ‘feel’ that which I feel…to tell me my feelings are ‘wrong’ is rather judgmental and inappropriate. What is the potential gain…to make those with the inappropriate feelings feel bad about themselves?
I get to feel rich - or not
I get to feel like a victim - or not
I get to feel disenfranchised -or not
I get to feel attacked - or not
I get to feel the world is against me - or not
Let the free feelings flow…
So true. And as I think about it I realize I need to look at the concept of “privilege” more broadly than I have up til now. My grandparents were poor but my parents were middle and eventually upper middle class. I inherited only minimal wealth, but I “inherited” a lot of privilege; in addition to being white and male, I was raised in a two parent home that valued education and imbued us with a “Protestant work ethic” and an innate frugality based on my parents’ depression era upbringing.
I’m married to a child of immigrants who has neither white or male privilege but, like mine, her family valued education and hard work and appreciated the importance of saving and investing. So she too inherited privilege, and our kids have inherited that privilege in turn.
Another thing they’ve inherited (primarily from DW’s side of the family) is intelligence, the value of which shouldn’t be discounted. And don’t ask me to explain how it’s done, but both managed to live privileged childhoods while remaining humble and developing a strong work ethic.
Surely neither of our kids would consider themselves rich but they are; begrudgingly, I’ll acknowledge that objectively we are too, but with apologies in advance to @marvin100, we don’t “feel rich”.
Atherton has long been a place where rich people live in large expensive houses, so that is not a surprise. Of course, it is near some much less expensive areas, like North Fair Oaks.
When our children were in need of daycare, we lived in a rented 3BR townhouse. We had no place to put a nanny, and the $20k/year we paid for two kids in the DC area 23 years ago would not have covered the expense of one.
We had to pay off student loans, finish daycare, and save a down payment (no parental assistance on any of these things) before we could buy a modest house. Since then, we have been saving our acorns aggressively and watching them grow.
Our sons got the college of their choice; that was a priority we chose long before they were born, and a choice they understood would include Stafford loans if they didn’t choose the flagship route. It was a sacrifice and a pleasure to do this. It was more important to us than other things we could have spent the money on.
DH and I are a bootstrap story, but we had privileges (race, access to good public schools, ability to learn the ropes to get to college and be able to afford it despite family financial difficulties) that made that road easier than it has been for others.
DH is a govt EE, so definitely not close to 1% territory. We should be reasonably comfortable in retirement given the way we (don’t) spend, but the uncertainty we feel revolves around my future medical expenses. We know that without DH’s excellent medical coverage, we’d be in a very different situation. The Millionaire Next Door resonates with me as a good way to approach financial health.
OTOH, I know we are incredibly fortunate. Two of my sibs have lived/currently live in a trailer and/or Section 8 housing. One is on disability with terminal cancer (and until Medicare kicked in, had no health insurance). From that perspective, the 60th%, 85th% or 99th%tile just doesn’t matter.
“Why does anyone CARE if someone does or doesn’t ‘feel’ rich.”
Understanding those people’s political choices. Predicting how we are likely to feel if we work our way into a comparable financial position. Learning something about human nature.
Pulled up The Millionaire Next Door on Amazon, and the description says:
That seems to directly contradict previous posts that say a large percentage of America’s wealthy have inherited their wealth or got it by virtue of being in a pretty strong position of privilege.
So which is it?
Do they define in terms of top 10% or x% or do they have a net asset figure in mind?