"Why Don't the 1 Percent Feel Rich?"

@roethlisburger - Not my place to judge.

Was it new or used? I am selling my 13 yr old lexus crossover to a friend for her son as his first car. Its costing her less than many newer cars (I am asking a very fair price), she knows I have taken good care of the car (I have) and I know I can take a check from her, no worries. Win, win. But just because he’ll be driving a lexus doesn’t mean conspicuous consumption, IMO. Its not an old, couple hundred dollar beater car, but she wants him to be safe. Nothing wrong with that.

There were times my kids rode their ponies home from the bus stop in elementary school. H had taken them up to the bus stop rather than our car.

I think many of the other kids were jealous.

Once in high school, my youngest rode in our car along with me. He actually couldn’t drive for a good part of his senior year due to developing a form of epilepsy, but he didn’t drive much after that was controlled either because we didn’t buy our lads vehicles. They used ours when needed. He just bought his first vehicle himself this past summer after graduating from college - a 2011 Subaru Forester that he paid cash for.

In our area cars don’t really mean much except for the “He Man” trucks many lads feel like showing off with. They don’t realize it doesn’t show off much of value outside their own social group.

Don’t assume that someone is rich by the car they drive. Many people in my area drive very expensive cars that they lease or afford with a car payment. Many people here have high salaries with equally high overhead - living the good life for now, but not accumulating any wealth. When I see a stable full of expensive cars, I assume that those folks are probably living beyond their means, and most of the time, it ends up that I’m right.

We gifted the same car jym is selling to our “adopted” immigrant Olympians. They desperately needed a second car because they train teams on the opposite ends of the city. Does not make them rich. We hope that it will help them professionally and some day they will be well off to be able to pay it forward. :slight_smile:


[QUOTE=""]
I don't think the HS parking lot relates to anything...S drove my Volvo XC90 to HS because he attended a magnet >> school 20+ miles away and the drive involved the DC beltway.

[/QUOTE]

I’m not talking about mommy’s Volvo. I’m talking about these things:

Subaru WRX STI ( 300+ HP) - The thing with the large spoiler on back.

Volks GTI - XXX (0-60 in under 6 seconds - cant remember the exact model) I know someone who crashed at 150MPH and survived - his passengers did not

BMW 3 (If they have a 5 or god forbid a 7, they are just borrowing daddy’s car)

16-18 year olds are gifted these things. I can judge anyone I want when you give a kid a $30+K toy that is almost as fast as my motorcycle which I ride like an old lady, except on track day.

As for the Mercedes thing, one 16 year old kid from our HS missed the turn into the HS on a weekend (at high speed) and flipped the car into a creek. He was in a coma for a week and was damn lucky someone saw it and pulled him out of the water. He was face down in the water when they dragged him out.

If you want to see the real parade of sports cars, go to any HS in Westchester/Rockland or many rich Long Island towns. If I was rich and was going to buy my kid a new car, I would get them a Camry/Corolla or a Regular Cab truck with manual transmission. Boring and safe for the car and a regular cab truck with a stick cant be stuffed with too many bodies.

‘If a high school kid has a Mercedes, the family is most definitely rich and their conspicuous consumption is available for all to see”

My brothers best friend had a Mercedes in high school. My parents were appalled until my brother told them the kid worked in the family business and working weekends and summers the year before had outsold every other salesman at the place. His dad always bought the number one salesman a Mercedes. He felt it was only fair to reward his son. The kid ended up taking over the business as an adult and growing the business 10 fold.

@Gourmetmom

[/quote]
Don’t assume that someone is rich by the car they drive. Many people in my area drive very expensive cars that they lease or afford with a car payment. Many people here have high salaries with equally high overhead - living the good life for now, but not accumulating any wealth. When I see a stable full of expensive cars, I assume that those folks are probably living beyond their means, and most of the time, it ends up that I’m right.

[/quote]

This is true. If you looked at our cars, you’d assume we were poor. I make my kids take the bus to school, because 1) I believe it’s safer for them, 2) I think it’s important that they take whatever shared transportation they possibly can to reduce the traffic on the road and not add to the pollution problem, and 3) they have to walk .75 miles each way to the bus stop and I believe it’s good for them to get that brisk walk in before and after sitting all day.

Most of the 1%ers drive luxury cars, not all luxury car drivers belong to the 1%.

Of course you are free to judge anyone you want. But others are free to wonder why it bothers you so much that some HS kids drive nice cars :slight_smile:

I’d want to see stats before believing this is true. The two multimillionaires I know personally - both accumulated wealth - do not. It could be regional, but those I know fit the profile of The Millionaire Next Door rather than Lifestyles of the Rich and Famous.

It makes me wonder what the overall stats are.

I have read all the posts in this long thread and thought a lot about how we measure up. We are certainly in the top 5% and likely higher. Top 1%? Maybe. Do we feel rich. No. Don’t quite know why. Fortunate, comfortable, secure - yes, but not even close to rich.

My DH and I both work. We both have been at our jobs for over 25 years. We both have graduate degrees, mine earned at night while working full time and Dh leaving the work force to get his. For a long time we made similar salaries, just recently my Dh has started making more than me as I have maxed out for my career and he is benefiting from his MBA. We do not make enough to benefit from the drop off of social security deductions so we are both fully taxed. Unlike friends, neighbors, even coworkers who have had a parent stay at home, we have never had that. We have gone from college loans for ourselves, to daycare for 3, mortgage, and then college savings along with retirement savings. We are in our forever home in a moderate neighborhood but it needs updating and work (30+ years old). We do not have any outsourced help (lawn, housekeeping, grocery delivery). We don’t complain or bemoan others but the college funding/financing is frustrating when everyone assumes we could/should have enough to send our kids to top LAC or private Universities. We seem typical to so many here on CC and in our area.

Now, why don’t I feel rich? I guess because we both work hard and can not afford for either to stop if we hope to send our younger 2 to college or to retire someday. I have 11-12 years left to work minimum to be eligible for my pension (lucky I know but trade off for lifetime of less pay). We have aging parents and 3 children who all bring uncertainty to the financial outlook. I had a medical scare last year and am not sure how long I will be able to work or if I will make it to my pension year. My Dh’s father and grandfather, both seemingly healthy died suddenly and early in their 50’s. We don’t feel we can afford the luxuries that most around us take (see above about extra help, regular vacations, expensive hobbies, home repairs and upgrades). Once our kids are launched I am sure I will feel rich.

I can’t help but think about the average income numbers being thrown around in this thread. Just as their are different geographic considerations, there are different age range considerations. I think about how our first 10 years of income would be pulling down those averages for our area but our expenses were much less (namely no children). Do those averages take into account retirees who no longer have dependents at home or mortgages? Seniors who are living off of their SS and savings supporting just 1 and possibly receiving help from grown children. Do the averages take into account families where one adult is not contributing but could (stay at home by choice)?. Do the averages take into account those launching singles who have financial help from parents/grandparents as they get their footing (first jobs, part time)? So a young single making $25K but getting help from family or co-living arrangement is so different from a family. I wonder what the “average” income is for families of high school and college age children where people have 20+ years in the workforce. I wonder what the average income is for 2 income families where both have been in the workforce continuously. I wonder about the average income of college graduates and those with graduate degrees (the cost of lost years of income as well as the cost of obtaining those degrees are a factor).

Back in the 80’s I had a client with a $60 million dollar net worth who drove a Toyota Camry. I’ve also known many people with decent incomes and all the accoutrements of wealth but zero or negative net worth, which a friend of mine calls “renting the lifestyle”.

This is why people are uncomfortable saying they are rich. What is wrong with consumption? What is wrong with spending your own money to buy the things you want for yourself and your family. If someone can afford to buy a nice car for their son, how does that take anything away from me? As long as those same people aren’t complaining about aid going to others, how they spend their money is not a reason for condemnation.

“We are certainly in the top 5% and likely higher. Top 1%? Maybe. Do we feel rich. No. Don’t quite know why. Fortunate, comfortable, secure - yes, but not even close to rich…

Do you mean to say that you have between 5-10 million in assets and couldn’t afford to pay for college even leading what seems like a frugal life unless you keep working ? Or did you mean top percentage by income not assets?

@maya54 I was going by the numbers being thrown around earlier in the thread for income indicating that we were not upper middle class like we thought but rich in the top percentage of wage earners. I was originally thinking your numbers were what all were referring to as rich and thinking “how can anyone not think of that as rich”, but as I read more, many people mentioned people making over $180,000 -$200,000 as rich. Posters weighed in that income at that level no longer put people as upper middle class and that no matter where you live this still put you multiples of the “average”. It made me question the idea of average income that is being used as the benchmark in this thread to tell people that are 2.5 times above that average they are rich.

Our gross income is now at that upper range. From what I read on other sites it would be near the top 5% of income but others in the thread seemed to have calculators that indicated it could be higher (3%? 2%?). We have modest and possible above average for our age retirement savings (forced deductions to pension help this). Paying a mortgage on an aging suburban home that needs updating/repairs. Not millions in assets. We don’t feel rich. We don’t think we are rich. Many posters here have disagreed according to similar scenerios presented.

I felt rich yesterday when I went onto StubHub and bought three super expensive field level/home plate tickets to the Red Sox-Yankees playoff game for my H and two sons. Totally spontaneous and last minute, but I didn’t have to think twice about the cost. They had a fantastic time and I felt very lucky to help create a great memory for them.

“If a high school kid has a Mercedes, the family is most definitely rich and their conspicuous consumption is available for all to see.”

“This is why people are uncomfortable saying they are rich. What is wrong with consumption? What is wrong with spending your own money to buy the things you want for yourself and your family. If someone can afford to buy a nice car for their son, how does that take anything away from me? As long as those same people aren’t complaining about aid going to others, how they spend their money is not a reason for condemnation.”

Nothing wrong with spending your money however you want, but in my own life experiences, the high schooler who drives a car that is heads and tails above the average car in the high school parking lot is making a statement that may be different from what the parents think they are making.

Note: if the average car in the lot is a Mercedes, you are blending in. If your kid is driving the only Mercedes you (and your child) are using it as a signal. And to claim otherwise is disingenuous.

The car conversation is funny. Just passed the 100K mark on my Volvo, I mentioned it was approaching and my spouse said why don’t you stop at the Volvo dealership and just get another ( new vehicle). It made me laugh a little. What a waste of money. I would get zero satisfaction from a new vehicle. Also, I didn’t want to spend the time picking out a moving piece of metal. To me, if it works great. This week I passed the 103K mark. I was happy when my spouse said well it’s probably good to save the $500 a month. The fancy cars ( usually Rovers) pull up behind me at school. I don’t think there is ANY correlation between income and car ownership. In fact, many wealthy people drive their cars longer and own them versus leasing a more expensive vehicle. I am absolutely not buying my kiddo an expensive car. That’s something you have to earn. Kids learn a lot by paying for things they want. Even if you buy them a safe vehicle, they should still pay for gas. Makes them invent ways to earn money which is awesome

We drive our cars into the ground. Our general policy is to have cars six model years apart so we don’t have two payments and we have a few years without before replacing the car. That is, unless some jerk hits me and totals the car! Has happened twice, both tomues within a year of paying off the loan and @ 95k miles.