Why So Many Rich People Don’t Feel Very Rich

Parent Cafe
801

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<p>No, it can’t. How can you even think this?? No one can “live” on the potential future benefit of a Harvard degree. All you can reasonably add to the current living situation for a poor family with a kid away at college “for free” is the savings on room and board during the months school is in session.</p>

<p>You are making some faulty connections between the cash value of a Harvard education to those who can pay for it and the “gift” to a poor family who would not be sending their kid if they had to pay for it. It’s not like the poor family is “saving” the $60K a year it would cost a full-pay family and now has the cash to spend on other things. I don’t know why this is so difficult to understand.</p>

802

<p>“The value of the scholarship can be added to the 50K a year of the poor family”</p>

<p>This is where you are still missing the point, completely.</p>

<p>Let’s say you’re a family, dual professional income but not Richie Rich - making $200 - 300K (and have steadily been progressing through your career, so it’s not as though you made $50K for 18 years and then suddenly jumped to $200 - 300). </p>

<p>Look, to send your kid to an elite school at that level involves sacrifice. (I send 2 kids to elite schools full-pay. You think that money dropped from the sky? H and I worked out tails off and lived below our means for years to make that happen, because that was something of personal importance to <em>us</em> and our value system. (We’re also fortunate. Both “hard working” and “fortunate” can be true at the same time.) It’s not starvation, but there IS sacrifice involved - no doubt about it.</p>

<p>But either that is important enough to you and your value system to afford an elite college that you’ll do that to the best of your ability – or it isn’t, and that’s fine too – either is an “acceptable” decision to make.</p>

<p>But the value of being full-pay at an elite school that doesn’t offer you at your level any financial aid is INDEPENDENT of whether other people are paying or not paying, or free-riding or not free-riding. </p>

<p>I (me me me) find the value of that $60K education worth it - regardless of whether my kids’ schools were to offer zero financial aid to anybody, whether they offer modest financial aid, or whether they take every kid of a certain income and give them a complete free ride with a pony to boot. The value TO ME is independent of what other people pay.</p>

<p>Which means that I don’t need to sit there and look at the “poorer” kids who attend my kids’ schools and mentally “add back in” whatever financial aid they get - whether it’s the family getting $30K off the $60K sticker price, or the family getting the full $60K. It’s IRRELEVANT. </p>

<p>I think it says a lot about someone’s character, and things that aren’t very flattering, that you would feel the need to “add back on” the $60K on top of the poor family’s $30K income. I don’t <em>need</em> to score other people’s income. And I think it is quite ugly to think along the lines of … here comes Polly Poor whose family makes $30K, but boy, she got a $60K free ride from the school, so <em>really</em> the Poor Family has the equivalent of $90K. It’s just utterly classless behavior, and it doesn’t impact what (if anything) YOU are doing to carve $60K out of your $200 - 300K. So why do it? </p>

<p>It’s all this counting-other-people’s-money and being-in-other-people’s-business that causes half the trouble on CC to begin with - nosy people fretting about why junior down the block got in, or needing to “keep up with the Joneses” and fretting because Short Hills is poor compared to the Hamptons. </p>

<p>And look - if you resent a college for giving full rides or whatever financial aid to the Poors, then there’s a simple solution – don’t apply there. It’s like no good deed goes unpunished - elite schools try to do the right thing by helping out those on the bottom rungs, and people resent that. Well, then, go elsewhere if the idea of helping those on the bottom rungs is so distasteful to you. No one <em>needs</em> Harvard. </p>

803

<p>If I decide I want to pay $5,000 for a business class ticket overseas, either it’s worth $5,000 to me or it’s not. The fact that the guy next to me may be flying for free because he’s an airline employee doesn’t change that equation. </p>

<p>It almost seems like some of you resent the $ for an elite college MORE because other people get it for free. Maybe you’d feel better if Harvard et al stopped offering financial aid. It’s clear that you view “the other guy not getting more” as more important than calculating the actual value of the education to you and deciding what you’re willing to pay for it. </p>

804

<p>Harvard has not come up in conversation for years in my circle. </p>

<p>The colleges the kids went to doesn’t seem to matter much around here. </p>

<p>Are the kids self sufficient seems to matter more. Once that is established, parents tend to move on to other things like what are we doing with our free time.</p>

805

<p>Looks like we have gotten back to the the upper income but not super rich people resenting the existence of college financial aid for the lower and middle income, while the top 0.01% can buy their kids’ admissions into many otherwise-super-selective colleges by donating enough to build buildings at those colleges, even though those amounts may be pocket change for them.</p>

806

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<p>But if you multiply the 1984 numbers by 2.29 (the CPI inflation adjustment from <a href=“http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1&year1=1984&year2=2014”>http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1&year1=1984&year2=2014&lt;/a&gt; , the numbers are not that different.</p>

<p>However, that chart does claim that at least half of households are “lower class”, since the minimum household income to be (lower) “middle class” is $50,000, which is about what the median household income in the US is. But that is also somewhat inconsistent with the definition of “middle class” based on homeownership, since about 65% of households in the US own their own home.</p>

807

<p>“Looks like we have gotten back to the the upper income but not super rich people resenting the existence of college financial aid for the lower and middle income, while the top 0.01% can buy their kids’ admissions into many otherwise-super-selective colleges by donating enough to build buildings at those colleges, even though those amounts may be pocket change for them.”</p>

<p>You know? I have a sorority sister who came from a nice upper middle class background, and it was just revealed that she and her husband (also an alum) donated $40MM to our alma mater. I think that buys her a “chit” to get her own kid in when the time comes, and I’m totally serious. The amount of good that her donation does is worth it. </p>

<p>I also know someone who is a major fundraiser for a similar elite u on the east coast and I think she’s entitled to chits too. </p>

<p>And AGAIN, if these schools are soooooo full of stupid Richie Riches who can’t add 1+1 but got in because daddy donated money, then you certainly wouldn’t want precious to have to sit in calculus class with them, they’d slow her genius down. </p>

808

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<p>Agreed, although as I stated above there is no “current value” to the family other than having to spend less on the “away” kid for groceries and maybe some small contribution to utilities. </p>

809

<p>“Looks like we have gotten back to the the upper income but not super rich people resenting the existence of college financial aid for the lower and middle income, while the top 0.01% can buy their kids’ admissions into many otherwise-super-selective colleges by donating enough to build buildings at those colleges, even though those amounts may be pocket change for them.”</p>

<p>Right. It’s one thing to say – hey, this ain’t fun! We’ve had to vacation at grandma’s condo in Florida instead of at Disneyworld, and we have to turn the heat down in winter, and we have to buy Toyotas instead of Lexuses to be able to send kid to an elite school - grrr!</p>

<p>It’s another thing to actively resent poorer people for their financial aid. Ugly, ugly, ugly. </p>

810

<p>I see a couple of themes in this discussion. What I’ve been arguing is that middle-class Americans are “rich” in a global context, and that they should realize this. I think perhaps some of the push-back against this is that it’s somehow arrogant to think of yourself as “rich.” Instead, some more neutral term like “well-off” or “secure” is used. Perhaps “rich” is a loaded term for some people.</p>

<p>I was thinking about a possible analogy. Do you think of yourself as “healthy” or “in good health?” This is also pretty subjective–for example, I generally think of myself as “healthy,” although there are a number of things wrong with me. There are other people who are clearly much more healthy than me–do they think of themselves as healthy? I don’t know, but I’d be curious to know. I think we could all agree that there are people who are healthy, but don’t feel healthy, because they are hypochondriacs.</p>

811

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<p>I was surprised by how “cheap” it was to buy a seat at super-selective colleges. A few years ago, a coupe of people I know at a distance paid $2M to get their kids in at Ivies, one to a top Ivy. It’s possible they promised more later.</p>

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<p>I was looking at “rich” class. It used to take 500K+. Now it’s 1.5M+. I assume they could be the complaining rich.</p>

812

<p>Fireandrain–Have you read “The Millionaire Next Door”? You’d enjoy it I think. It’s about how you don’t really know who has money and who doesn’t by appearances and toys only. A lot of rich folks are happy with what they have and don’t crave toys which are associated with being rich by media standards. Money is a means to an end–food, shelter, education for their kids. They are normal folks who blend in with a lot of social classes. Most of them were raised by parents who worked hard and they continue to do the same. The value of relationships over money is always the theme for real happiness.
So, money enough to not worry about it and relationships to connect to the world are enough to make me “feel rich”.
And the older I get, I’m adding health.
But (especially to pizzagirl), I wouldn’t have the same friends if I hadn’t made them a million years ago when we were all on the same economic playing level. Not because they aren’t fab people, selfish in any way or are conceited --but because I probably wouldn’t be in their current high economic circle to even meet them.</p>

<p>Many of the “you make so much money so quit complaining” comments discount taxes to come to actual take-home pay. If you make 400K (Wow! you have NO problems!) --you are in the 40 percent tax bracket. You now make 240K to spend. I know that’s a lot.( I’m not stupid but this thread is about “feeling rich”)
Wow! We should be SO lucky! But not what you thought you had. Send a kid to college at that 60K (since you qualify for nada) and you are at 180K–yeah, still a lot but not nearly what you hoped you would have after 400K salary–hardly" feeling rich" by this time. And then add the property tax, state tax, whatever else… And then comes the cable bill…</p>

<p>So I think more people feel “fortunate” than “rich”.</p>

813

<p>“Many of the “you make so much money so quit complaining” comments discount taxes to come to actual take-home pay. If you make 400K (Wow! you have NO problems!) --you are in the 40 percent tax bracket. You now make 240K to spend. I know that’s a lot.( I’m not stupid but this thread is about “feeling rich”)
Wow! We should be SO lucky! But not what you thought you had. Send a kid to college at that 60K (since you qualify for nada) and you are at 180K–yeah, still a lot but not nearly what you hoped you would have after 400K salary–hardly” feeling rich" by this time. And then add the property tax, state tax, whatever else… And then comes the cable bill…"</p>

<p>I don’t really wish to reveal my personal finances, other than that I pay six-figure tax bills and I GET IT. I don’t enjoy high tax bills any more than anyone else and I do whatever possible within the letter of the law to minimize that. However, I’d STILL rather be in this position than “poor with a free ride to Harvard,” and I find it
A) obnoxious to be resentful of people who make less because a mere handful of them overcome overwhelming odds for that freebie; and
B) not very indicative of good values to be “resentful” that I don’t have the money of the high-flying investment bankers or hedge fund managers. Good for them - if they earned it honestly, I hope they enjoy their private jets and penthouse Manhattan apartments. I have more than enough.</p>

<p>And, of course, if you were making $400K, you didn’t just make $400K overnight, so presumably the whole $60K isn’t coming out of that particular year and you had put some money away. </p>

814

<p>Health is an interesting issue. Some of us have serious chronic, progressive conditions that are currently stable. Is our health excellent except for that or do we average that in do our health is good instead? </p>

<p>Anyway, is it just a semantics game as to whether folks are rich or secure or comfortable? Who decides? Why should anyone be counting anyone else’s money?</p>

815

<p>@HImom,</p>

<p>When deciding who is what, here’s my personal taxonomy:</p>

<p>Wealthy have at least one jet
Very Rich have a Netjets card and use it liberally, seldom flying commercial
Rich will fly private if they are going in a group, but still need to rationalize it
Very Comfortable flies Business Class, occasionally First Class, never Coach
Comfortable flies Coach, but often upgrades for longer flights </p>

<p>For the record, my wife and I are Comfortable. </p>

<p>The Harvard free ride for the poor situation is reminiscent of the luxury handbag makers who claim losses of $10 million because they discover 5,000 fakes of a bag that sells for $2,000, as though the buyers of the $40 knockoff were really going to buy the real bag but decided to get the knockoff instead.</p>

816

<p>As I’ve pointed out in other threads, FRL students who qualify for admission to Harvard et al, are more deserving of aid than the students whose families don’t qualify for any financial assistance, because the low income students reached the same academic bar as those students who had many advantages.
Just think what they can achieve with the resources of Harvard!</p>

817

<p>Being in the 40 percent tax bracket doesn’t mean that taxes will be 40 percent of your entire income. </p>

818

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I guess you’re more or less kidding about this, but it pretty much demonstrates the American attitude about wealth. Being able to fly on a jet at all, much less upgrade for longer flights, requires a level of wealth that’s pretty substantial in global–or even US–context. I guess people who get around on Greyhound are uncomfortable.</p>

819

<p>“Being in the 40 percent tax bracket doesn’t mean that taxes will be 40 percent of your entire income”</p>

<p>No, but you add in FICA, medicare tax, AMT, state taxes, property taxes, sales tax…and you’d be surprised at how much tax you’re paying, with many different names.</p>

820

<p>@Hunt, I was half kidding, but the not kidding part is that Comfortable probably describes the top 1-3% of families in one of the wealthier countries in the world. </p>

<p>I aspired to Comfortable, and having attained it, don’t yearn for the higher categories. </p>