I guess the issue comes down to—rich compared to what? Globally? Where the person currently lives? Works? Nationally? Statistically?
Rich means having a high income. Your comments about pensions sound as if they are from a different era. The private sector started eliminating or reducing their pensions in the 80s. The family earning $75k with no pension is also susceptible to a stock market downturn.
@roethlisburger it’s all relative, 300k in California means something entirely different than the same amount in Iowa. Unless you know someone’s circumstances you don’t know if that person is rich or not.
Of course you can be rich and frugal. However, it’s a choice, as opposed to necessity.
@jym626, here’s the article I read. The top 1% should have a net worth of $10M and the .1% cut off is $43M.
https://dqydj.com/net-worth-brackets-wealth-brackets-one-percent/
Nice link, @cbreeze – worth noting that ~$1.1 million net worth puts a household in the top 10%, so anybody claiming that a million dollars doesn’t mean you’re rich has a distorted view of US household wealth.
As someone with assets that puts me in the top approximate 1.5 percent should I feel rich? Of course. Do I ? No. Or at least not most of the time. I can’t even put my finger on why. Our lifestyle is certainly not an exalted one. We don’t have a fancy house or cars. We stay at home most of the time because I’m a homebody. I buy nice clothes that are moderately expensive but not crazy expensive ( pants and tops in the $75-150 range) for nights out and work but most of the time I’m in my target leggings and tops. What does make me feel rich is knowing I don’t have to worry about money.
A linear scale on a “net worth brackets” graph is less than useless (just like on a long term stock chart). The difference between zero and two million dollars is far greater than the difference between 10 and 12 million dollars.
Well, @droppedit , it is useful for showing us about where we stand based on our net worth, so we can compare our various feelings about how not rich we are with the facts.
$300k income is still (income) rich, even in California. But some (income) rich people are financially insecure, due to high spending habits, medical bills, poor financial planning, or overconcentration of their income and wealth in one risky industry or company (one of the examples of what not to do is put all of your savings and 401k plan into the stock of the company you work at, since if that company does poorly, both your job and your savings get hit hard).
Perhaps whether one feels financially secure has a lot to do with whether one feels “rich”, whether or not one actually is rich (in either income or wealth/assets). Actual financial security depends more on wealth/assets; higher income can help get one there, but that depends on what is left over after spending.
I think the Pew calculator on wealth and social status is very interesting. http://www.pewresearch.org/fact-tank/2018/09/06/are-you-in-the-american-middle-class/
I’d love to know what the economists and data people out there think of it.
That’s an interesting tool, @ccprofandmomof2 --thanks for sharing.
The American economy highly dependent on consumer spending and the debt that comes with it. While many Americans are trapped in a paycheck to paycheck existence, many could save their way off of the treadmill and into a positive net worth and eventually a stable retirement but, unfortunately, fall victim to the cycle of consumption and consumer debt.
Many of us posting here prioritize saving over consumption. Just because we’re doing better than the typical American consumer doesn’t make us rich.
This is largely because of massive military spending and perennially eroding social service spending. There’s a graph floating around somewhere that shows that as of 1980, the US and Western Europe had similar national income shares: around 22% for the bottom 50% of the population and around 10% for the top 1% of the population. The US graph, though, is like an X, with the 1% outpacing the bottom 50% in 1996 (and as of 2016, the top 1% had ~20% of national income and the bottom 50% had 13%) but the Europe graph is basically the same (12% to 22% respectively).
Note that this is income, so it’s irrespective of spending. Simply put, most Americans live paycheck-to-paycheck and because the US has the most expensive and worst healthcare in the developed world, a health emergency could ruin them. In addition, despite its vast wealth, the US spends a huge amount on the military and military contractors, leaving a relatively meager share for public works, infrastructure, and social services.
I think you’re right that many people could save a lot more and that people spend unwisely, but in a country as wealthy as the US, it’s a shame that people have to scrimp and save just to live a little better than paycheck-to-paycheck. That’s not the case in other developed countries, even though they’re a lot less wealthy than is the US. I’ve also learned over the years that people aren’t really that different everywhere, so when there are large scale differences, it’s more useful to consider the structural factors that contribute to them.
@ccprofandmomof2 Great link! Thanks for sharing it. I put our stats in and we’re not surprisingly in the middle class for the US and our area (or any area if I pretend to be elsewhere - even HCOL areas).
I still look around me and feel rich because we’re quite content… but yes, I’m comparing to a huge population of the US and world, not CC posters. It’s definitely interesting to read from those who are rich, but feel they aren’t. I can’t help but wonder how they think the majority of the world manages to survive on much less than what they have - health issues, retirement, and all.
We could change our lives and make more money - spending less time with family, etc. We could save more by traveling less or eating cheaper food. (We scrimp elsewhere, so not much savings there.) Why should we? We’re content. We love our lives as they are. We’re not among those who couldn’t come up with a 2K emergency need and my calculations show we should be ok in the future with what we have in savings (not all that close to a million…). We have a good health share. We have family. If the worst happens (as it does to just as many in the lower income range as it does in the higher income), then we’ll just deal with that as much of our society does. We don’t live in fear of the future - esp not at the expense of enjoying life as we live it.
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Nice link, @cbreeze – worth noting that ~$1.1 million net worth puts a household in the top 10%, so anybody claiming that a million dollars doesn’t mean you’re rich has a distorted view of US household wealth.[\quote]
Like that article in the atlantic magazine said we only see 10%ers. The remaing 90% remain invisible. Among 10%, $1 million net worth puts one at lower end and doesn’t make one feel rich. We are in the 10% bubble. We evolved to become a nation of 10%. They are most vocal and most visible. They are the new majority. Middle class is not at 50%. It is at 5%, middle of 10%. At $1 million you feel poor, you feel average at $5 million. It would take at least $10 million to feel decent.
Thank you, @cbreeze !
Would like to point out that just because money can’t buy happiness doesn’t mean that one can’t have money and be happy. Some of these posts on these types of threads make it sound like you have to choose between the two or that if you make a lot of money or accumulate wealth, it means you are not spending time with your family or doing things you enjoy. Not necessarily so.
We aren’t spendthrifts, but we do have a very nice house (paid off) and travel well when we travel. I don’t look at prices when I buy things, but if I’m honest, I rarely like to make the effort to go shopping. We eat at nice places when we go out (maybe once a week) and I don’t buy cheap wine. We are in line to have a very comfortable retirement. We are generally very happy and feel extremely fortunate.
Everyone should live within their means, and saving for retirement is very, very important. It’s nice to leave an inheritance for the kids. It doesn’t make sense to over pay on something here if you can get the exact same thing for less over there. But I don’t see the point of being cheap either. You can’t take it with you. You work hard for your money and should be able to enjoy the fruits of your labors while you are alive.
A family with a $300k income has choices that median and lower income families don’t. Worrying that they won’t have enough to get through retirement doesn’t mean they aren’t wealthy. The fact that they take it for granted that they can retire puts them in a different economic class than many Americans.
The median US income is ~$60k. A family who makes $300k will have earned that much by about the end of the first week of March. In our state we have a couple dozen counties where the median income is ~$40k. The $300k families have out earned those families by the middle of February. It will take 5 years for the median income family to earn what the $300k family earns in one. By that time the $300k family has taken in $1.5 million. If they find it such a struggle to get by on that kind of money they may want to think about how the $40-60k families are getting by. If that doesn’t make them feel wealthy, nothing will.
And this thread overall explains a lot about what priorities people have when they vote. If you’re insecure with a 300k income and the assets to match, you are more likely to vote for policies that help YOU feel more secure, and less likely to look downward at those with much lower incomes ( you got your own insecure feelings to assuage, and never mind the objective difference.)
I’m not saying this is true for any one individual, but it does say a lot about our country as a whole.