I’ve had a card with this saying on our fridge or wall in every house we’ve lived in:
IMO, once you have “food enough, shelter enough” and can pay your bills with a bit left over, you are rich. The rest is semantics.
Wow, we have not been teased about our ancient 20 or so year old cars, among friends, family or coworkers. No one has ever teased us about clothing choices either. That seems pretty rude to do, imho.
We could buy one or more new cars today with funds readily at hand but honestly have no particular interest in doing so.
We paid full freight for one kiddo at an expensive private U and a significant amount at same U for the other—no regrets and are glad they are able to be debt-free. It was challenging but we were ok with doing it.
We are not in top 1% but still feel very fortunate to earn more than we spend.
I used to live in a bubble where we were at the low end financially of the people we knew. And I frequently felt lacking.
Now I live somewhere where we are at the higher end financially of the people we know. And I feel blessed.
I have a relative who is in that 1% and is always comparing their life to those who have more.
My kids graduated college debt free and my husband and I will retire comfortably. Can’t really ask for more, can I?
I think the original question was about feeling rich. Perception may or may not be based on fact. I felt rich both as an undergrad and graduate student because I was making more than my peers or others included in my frame of reference. As your taxes and expenses grow and the present value of your expected future earnings shrinks (by virtue of you getting older), you may feel like you, similarly to Alice in Wonderland (“Through the Looking Glass”, to be exact) are running very fast just to stay in the same place. Naturally, that creates psychological discomfort, hence the result of not feeling rich. For full disclosure, I am not in the top 1%. Oh, and on a positive note, my neighbors’ kids are out of college - and the neighbors feel like the Rockefellers have nothing on them!
I am doing full pay for my last kid. Once that is done, heck we will probably feel like we are loaded =D> We have three semesters left!
I have always looked at life as a series of raises and demotions based on non-employment factors. Having a baby big demotion (monetarily), moving from formula to real food promotion, getting out of diapers promotion, ending day care promotion, ending club sports/music lessons promotion. Now going to college big demotion. I am looking at one more big promotion/raise when the college tuition ends. I am sure there will be other events after college expenses end but each even brings a feeling of richer or poorer when overall income didn’t change.
It’s been my experience the opposite is often true – a new income often leads to “feeling rich” , more so than an older income. I have owned a small Internet company with highly variable income. In one year, my take home income might triple over the previous year. When my income suddenly had a large increase like this, then I suddenly have far more left over after my usual expenses. I am more likely to feel wealthy when I have far more income coming than I know what to do with like this. However, after being at that income for awhile, then I’m more likely to have increased my spending with increased mortages/rent, day to day expenses on new non-essentials, have new long term plans requiring larger expenses, etc. There is generally a smaller portion left over when the income is not new. Similarly, if the income level suddenly has a large decrease, persons are less likely to feel wealthy, even if the decreased income is still in the top x% of persons in a particular large group.
Part of this relates to “feeling rich” largely being a subjective comparison, rather than an objective being in x percentile… I’d expect people who have incomes in the top few % of persons in their state/country/world rarely compare themselves to persons across their full state/country/world. For subjective feelings, it’s not particularly meaningful what percentile they are in reference to a group that they do not compare themselves to. Instead they are more likely to compare themselves to friends, family, neighbors, colleagues at work, themselves (past income), etc; some of whom are likely more wealthy than they are. Using a different perspective, a person in a less wealthy country might not understand how an Palo Alto resident with an income of $33k per year, which is in the top 1% globally, could not feel wealthy.
As touched on, another issue is income level is not the same as how much a person can spend on luxuries. Persons with high incomes also tend to have high cost of livings and high expenses. These large expenses can include things that are not typically considered luxuries, such as business expenses, insurance, and taxes. Persons with high incomes also tend to live in expensive areas, which often relates to why their compensation is high. If you live in an area where a basic home costs 7 figures and rent scales accordingly, the income doesn’t go as far as if you live in area where a basic home costs $100k.
IMO, once you have “food enough”, shelter enough", can pay your bills on time, and can reasonably foresee all of the above for as long as you live, you are rich.
We had an interesting night out with some 1%ers last night. While the wife was lamenting the costs of an average wedding ($30k), and asking how to cut costs, her husband was showing my husband the Rolex he intends to buy if he wins the golf league championship.
A few years ago, I attended an event hosted by a family that had doneted over 1 million to the organization. She supplied good chamgaign and disposible champaign glasses. She insisted that everyone save the the plastic glasses so she could bring them home, wash them and reuse them. I was impressed.
" She insisted that everyone save the the plastic glasses so she could bring them home, wash them and reuse them. I was impressed."
I’m WAY less than impressed on too many levels. The first being telling guests that a disposable glass will be reused and to save it. That’s just my start.
“It’s been my experience the opposite is often true – a new income often leads to “feeling rich” , more so than an older income.”
I definitely agree with this. The “richest” I’ve ever FELT was when I went from poor college student to my first job that paid a good salary. Such a great feeling! Not a lot of income by today’s standards but I was RICH! My income increased over the years but “feeling rich” was that sudden increase.
I’m not a fan of re-using plastic glasses—too hard to fully sanitize and sterilize. I do reuse and repurpose many things. Using metal utensils that I can wash and sanitize to reuse is much safer than reusing plastic glasses
Still, even in an expensive region, there are choices to be made… does someone with a lot of money buy a house that costs $500k, $1 million, or $2 million?
“Still, even in an expensive region, there are choices to be made… does someone with a lot of money buy a house that costs $500k, $1 million, or $2 million?”
I think $1 million is still ‘starter level’ in my town if not the whole county. A friend of mine got a fixer upper 3 br 2 ba place for $800K a couple of years ago and spent about 2 years getting it habitable.
“Food enough” and “shelter enough” are moving targets. Not dying of hunger or having healthy, organic meals full of fresh veggies? Having to sleep on the floor with several other people in the room and without heating or A/C doesn’t really count as enough shelter for us, but it was good enough for early-medieval rich people.
$500k houses get bid up to $700k plus in my neck of the woods… so while there are $500k listings around here, there are no $500k homes, and someone wishing to by a single family house or even a 2 bedroom condo with a max budget under $500k is simply out of luck.
In our neighborhood, teardowns sell for 7 figures and are scooped up right away. They are then torn down and a new McMansion is built.
The original homes in this area are >60 years old, single-wall construction, small lots, old wiring and plumbing and really nothing to look at. Oh yeah, most are in the flood zone and need extra insurance coverage as well!
Agree food can vary from prepared from scratch basic ingredients at local market to Whole Foods organic or blue apron type subscriptions or dining out or takeout because life is so hectic with VERY long commutes.
Sleeping—how many roommates? Share dwelling with extended family or unrelated others? How long/short a commute, etc. The list goes on.
I know folks whose NORMAL commute is a 4+ hour bus ride—one way—back from work to the bus stop where spouse picks him up to go home.
Anybody complaining about anything near the top 1% US income has never truly suffered. Envy is not the same as pain.
Seven years ago our net income for a family of 5 was $26,000. It was a lean year but we had heat, running water, and enough food.
While we’re in the top 1%, I am very cheap. I will never spend more than I need to, I generally buy things on sale including hotels, flights, anything even, especially expensive things. One of my kiddos had developed a love of Starbucks. This made me really angry. $4.00 for a coffee? I just had to reel it back in. Though I give a lot of money to charity ----mainly schools and things related to our lives. My kids laugh about how cheap I am. My spouse will take them shopping and spend a lot in a small amount of time. I consider every purchase. Usually I take a few things and put them back or make them decide. I don’t believe in wasting money but I do believe in giving good tips and spending money on people who need help. I often give anonymously. I do not want our name on anything ever. I like to give money to people who are helping others.
So, when I saw the post regarding hotel prices, I laughed out loud. Especially since I had just been looking at the best hotel deal for this weekend.