<p>People who have been around these forums a while have probably noticed the common meme of “middle class but will not get financial aid anywhere” (i.e. $200,000+ income, or lesser income with high assets). It is as if people are unwilling to admit being in the top few percent of income and/or wealth.</p>
<p>200k households are indeed upper income, but they still have to work for a living and are conscious that they may be a pink slip away from financial ruin.</p>
<p>In 1980 COA for a private university was 12k. That’s 35k in 2014 dollars, based on CPI. There’d be a helluva less crying if full freight was only 35k, instead of the 65k it is today.</p>
<p>That’s about 85% more in inflation-adjusted terms. However, the high income households have not done badly during that same time period. The 80th-99th percentile income households gained 65% in inflation-adjusted terms from 1979-2010, while the 99th-100th percentile income households gained 201%. (See table 1 in <a href=“http://www.cbpp.org/cms/?fa=view&id=3629”>http://www.cbpp.org/cms/?fa=view&id=3629</a> )</p>
<p>So list price at an expensive private college might be, in real terms, about 12% higher relative to income for the 80th-99th percentile income households – an increase, but not as huge as $35,000 to $65,000 looks. But those households may be thinking that they are “poor” compared to the 99th-100th percentile income households who have gained a lot more (and who find expensive private college to be a 39% discount relative to their income levels compared to 1979).</p>
<p>I think the people you speak of look at being rich in the context of do they have enough money today to retire and then live a lifestyle they want…like the multimillionaires. If the answer is no, then they don’t feel rich. They feel like a worker bee just like everyone else, but with a few more material possessions .</p>
<p>conmama has it correct. I think we’ll be able to send our kids to college and not lose our house. But our lifestyle will change dramatically because of it, if they don’t get enough loans and merit aid.</p>
<p>Yet we are “rich” compared to many, 150K per year gross income.</p>
<p>Really poor people like my MIL (who I wrote about on the CSS Profile that she is on limited income and we are financially responsible for her medical and other cost overruns) bringing in 10K per year in SSI have it different. IMHO, there are more poor people and fewer middle class people due to the COLA increase, and the necessity of things like computers and internet access (and cable) for even those who are poor.</p>
<p>Some of us know and hear about the 1%ers–those who make 7 figures, have private jets, send their kids to international boarding schools, etc. compared to them, who doesn’t feel poor. If you don’t personally know these folks, they’re just a click away on TV–say yes to the dress, lifestyles of the rich & famous, etc., promoting the grass is always greener elsewhere. </p>
<p>I grew up in a family where we could thankfully afford the necessities, but watching the budget was a reality. When I was a kid, our ideas of “rich” were formed by reading Ritchie Rich comics and Scrooge Mc Duck. These characters had giant mansions, staff to help with everything, huge cars, chauffeurs. Batman had his butler, and the whole underground hide out complete with equipment and Batmobile. </p>
<p>Not that I like to watch the Kardashians frequently, but I saw an episode where Kim jumped into the ocean wearing $70K earrings and lost one of them. I can’t imagine buying $70K earrings and if I had them, I would never wear them swimming. </p>
<p>Nowadays, a salary of $200K a year will not buy anything like this. I would say that people with this income can live quite comfortably compared to those with lower salaries, but they are not fantastically “rich”. I think there is a whole tier of wealthy people- stars, top athletes, family wealth- people like Bill Gates, the Kennedy’s, the Kardashians, who have set the bar for “rich”. </p>
<p>People tend to increase their lifestyle expectations with increased income. Feeling “rich” I think is largely about feeling like you have extra money after the rest of life is take care of. If you keep upping the cost of the rest of life to match your increased income then you never get that sense of having a cushion. If you lived like a family with 90k and amongst people in a similar bracket but you took in 250k you would probably feel rich. </p>
<p>We are right on the edge of elementary school boundaries and I remember our son in 3rd grade or so lamenting that he was the only person he knew who hadn’t been to Hawaii (he still hasn’t been). My answer was that if we lived 5 blocks the other way he’s be feeling great that we had 2 cars that run. It’s all relative.</p>
<p>"I think the people you speak of look at being rich in the context of do they have enough money today to retire and then live a lifestyle they want…like the multimillionaires. If the answer is no, then they don’t feel rich. They feel like a worker bee just like everyone else, but with a few more material possessions "</p>
<p>I think that nails it. People aren’t sitting around thinking, “Gee, I’m in this top percentile, I’m so much better off than most people, I must be rich.” And they aren’t thinking they’re not rich because those billionaires are so much better off than them. I believe people aren’t constantly comparing themselves to others, they are looking at their own situation, and if you still have to work, and you feel that you don’t have enough money to live how you’d like, you probably don’t feel rich.</p>
<p>People with higher incomes have higher expenses. The #1 expense generally being taxes. When I see these threads you tend to start, ucbalumus, it makes me think that you are coming from the basis that everyone has the same costs, and if another person makes $100K-$200K more, than they have that much more income, so they’re rich. And likely that person has far higher expenses, with taxes, having to be full pay, probably have costlier housing, more expensive tastes. They may consider certain things as non negotiable, like maxing out their 401Ks and good health insurance, which for others are more of a luxury. People have different expectations and priorities as their income increases. It’s not a matter or right or wrong, it’s not people complaining, but it explains why people don’t feel rich, even though you think they should, because YOU would feel rich.</p>
<p>And it’s not what you make, but what you save. If your expenses are as high as your income, no matter what your income is, you sure don’t feel rich.</p>
<p>$200,000 a year a year in income is not rich in many areas of the country, but in the op…</p>
<p>“It is as if people are unwilling to admit being in the top few percent of income and/or wealth.”</p>
<p>I think the above is true. </p>
<p>You also don’t have to necessarily increase your expenses as your income rises… Especially when an income rises above a certain level. You don’t have to buy a more expensive house, more expensive cars, etc because your income rises. It is interesting that what was a luxury becomes a necessity as income rises. </p>
<p>Also, there are different circumstances for people who have similar incomes. Some people haven’t made that kind of income for a long period of time. Maybe there are health issues. College is not necessarily cheap. What was
once a luxury, going away to college, becomes a necessity. </p>
<p>$200,000 a year is not rich. But some people that make double that complain they aren’t rich either. Like there is a club for $200,000 income earners and $400,000 income earners say they are in it. Hmmmm… That is a little doubtful. :)</p>
<p>I know some people that make $400,000 and they say they aren 't rich. What they really mean is that they aren 't as rich as they would like. That is a little different. </p>
<p>I think it’s all semantics. I consider the word “rich” as having more money than someone who is “wealthy”. And people have far different visions of what they consider to be “rich”, and because they don’t consider themselves to be such, I don’t think they are complaining. In fact, I can’t think of a single person I know who has ever complained they aren’t rich. They would probably say they aren’t rich if asked, but I would never consider that as complaining. </p>
<p>People have different ideas of how much it would take to actually consider themselves rich, and I don’t think it is much based upon income, but on net worth. I don’t know if I’d consider myself rich until I had maybe 20-30 million in assets, no debt, and no large outflow of cash. With good health and good health insurance. And probably when I got to that point, I wouldn’t think I was rich unless I had 50 million. I would never think I was rich just because I was making more than others, that is just plain silly. But I remember when both me and my husband were laid off, with no job in sight and two little kids—thinking jealously if I could get that 50K job my friend had, I’d be rich. Silly.</p>
<p>Busdriver11, we don’t get to make up defintions for everything. Somebody once said, and I am paraphrasing, “Shaq, the basketball player is rich. The owner of the team is wealthy.”</p>
<p>There are two issues. How you think about yourself? How you compare with others? </p>
<p>You can think about yourself anyway you want. You can feel uneasy with a $18 million net worth if you want to do that. </p>
<p>Then there is society. Society makes up definitions too. I am pretty sure $18 million is considered rich in our society. You can buy a pretty nice place all cash… even in Manhattan and still be in good shape.</p>
<p>I appreciate reading about your views on this issue. </p>
<p>Going back to the OP I would say it is because they are in debt. No matter how much you make if you owe more than you own there’s always that uneasy feeling in the bottom of your stomach that something could happen and you wouldn’t be able to make ends meet.</p>
<p>I have no idea about an inheritance, dstark, but I never count other peoples money as my own. My parents probably have a couple million (and would never consider themselves rich, they live as if they are poor), and they spend money on almost nothing but dental work. I wish they would spend it all and enjoy themselves. Odds are, it might end up all going to the native plant society.</p>
<p>I think I might feel wealthy if I could get my current income, but not have to work all night, fly in blizzards in the NE, dodge thunderstorms, and have to study for checkrides. If I could get this income paid out by investments, I’d have an entirely different perspective.</p>
<p>We are a nation of poor people of various degrees. :)</p>
<p>I had a friend with a net worth of $30 million including a house on the top of Tiburon worth about $7 million. The house has views of Downtown SF and the Golden Gate Bridge.</p>
<p>He feels poor. He is poor. He is never going to be anything but poor.</p>
<p>I agree net worth is important and income derived from that net worth can be very important.</p>
<p>If someone who made $200k lived like they made $75k they would feel pretty well off. Most don’t do that. We have a tendency to live in proportion to our income. You don’t feel richer because you have more to lose, safety nets need to be proportionately larger, taxes are higher and obligations are greater. I think the secret is knowing what is enough for you. If you’re satisfied with what you have then it becomes much easier to be financially secure. I think the same can be said for college choices. If you can be satisfied with what you can afford then costs are not so much an issue. </p>