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Your savings is impressive — you must have made some great choices — giving your salary and retirement fund, you must have done more that throw it in a K in a target mutual fund — Kudos to you! Rchinpg — Rich is definitely a question of net worth not discretionary income.
Rich is being able to cover all of your expenses with passive income. F you money. Your article makes me want to move to America. Salaries in Canada are generally lower than American and tax is much higher.
So harder to save and accumulate wealth. All I can say is wow. Good job. Wish I was that good at write offs. It still is to be a legitimate business expense. After the accountant is done, I only paid taxes on k of the overall amount of k income. So if you get audited, will they find you overlap expenses? You make much more than us and we pay taxes on double that.
Living in those places gives you instant access to all the best culture that the world has to offer. Everyone else has to pay thousands to travel to those places to get that. Not manhatten or sf high, but high. In my job as a high school teacher in Manchester I see what most people experience every day. Have you seen this post Fred? Sure, the example family in the article are not rich, but you really had to hunt for a very narrow demographic to try to make your point.
Some might even say they were rich. According to the wsj, the Manchester-Nashua metro area where I live is the 10th wealthiest metro area in the country. People in this country need to start caring about the crazy high poverty levels here much higher than any other developed country.
Your website is contributing to the idea that too much is never enough. Of course,you think society i. Get a grip, your Socialist mindset does not work unless you are on the public dole. This website and others are all advising others to create enough value by providing goods and services for which one can then draw wealth out to whatever degree satisfies them.
All courtesy of the taxpayer. Man- I get tired of pompous Union public servants, especially those who are busy brainwashing children with Democrat Socialist myth. Expensive is in the mind of the purchaser. High cost of living cities are rich in amenities and opportunities.
I have a friend who is rather anti-social. He is quite happy presumably living in a more remote area. His income is slightly lower but his cost of living is a lot lower and his house is bigger. Fred — You are not factoring in the cost of kids into your equation.
Other bills will eat up most if not all of your after tax income. Also, the idea that you are so lucky to live in Manhattan that you never need to go on vacation is ridiculous.
Tiny apartments, horrible weather, insane prices for everything. What a nightmare. However, I still think your expense estimate is a bit too high. Yeah, those were interesting posts to read. I even heard of a Ph. But some of them still drive a Toyota and live in a rent-controlled apartment.
Also, for many of us in Silicon Valley, the fact we make so much money is almost a side effect. So in short of throwing my money away or spending on useless things, I just save them to prepare for a layoff or an early retirement. I live in the wrong place. You can pretty much do whatever you want when you want, including not working any longer if you so choose.
Somebody wants you to do something, f— y—. Boss pisses you off, f— y—! Invaluable article! If 50 grand a year is lower middle class then that means being average is no longer middle class.
Middle class is suppose to be the average therefore 50 grand a year. If solidly middle class is grand you need to make double what the average person makes to be middle class. Hi , guys! Firstly , wanted to thank finsamurai dude I really like the article , learned a lot! But I also need to think how I should pay my loans after I graduate.
Basically , I need to choose a major in business field , so after I am done with paying those loans , it could help me in my own business and it has to be specific major , because , I think , nobody needs a person with business , or economics degree. Tell me if I am wrong , I am flexible and I trust you. Also can I start to earn a lot of money now , not like an average student.
And by the way , I am in the 11th grade. Appreciate any advice! Very few people become rich being wage earners the typical lawyer, doctor, tradesman, path. And the ones that do, are the ones that have their own firm or business. Your time is a finite 24 hours per day, but once your money works for you, that time becomes infinite. Owning a business allows you to make your money work for you, instead of you working for your money. HOWEVER, If you are completely set on getting a typical degree law, medical, etc at least make sure your end goal is to own your own firm or practice.
Or invest the money you earn from your into creating a business. Invest in people that know more than you and pay them to run the business. This is why you see a lot of people recommend real estate as a way to get rich I personally am not a fan because you are limited on how good your credit is. Once that concept sinks in, your revenue cap basically becomes pretty limitless. This is coming from someone that works a few hours a week, and owns a multifigure per year business.
If you are not conventionally or academically smart you may have a better chance of getting rich through business and entrepreneurship. I banking, private equity, finance recruit top students from top universities. Getting into med school is no chip shot, and getting into neurosurgery or plastic surgery residency is another level of selection. Same with being a google engineer.
Each apartment he broker can bring him close to k. He also invest in real estate. Another older nurse is worth about million. No way she could have gotten into an Ivy or med school. Maybe if she tried really hard, but only top doctors make over 1 millions.
You said making over a year is considerd rich. I strongly disagree with that!! It is all relative to life style,If your making more then a year, your expected to live a certain lifestyle. I live in brooklyn ny between my house and house bills , that leavs me with I am not talking reactive to other people it might be called financhel stable but not rich,.
Not wealthy, because of your expenses, but rich. Thanks, love the content! I used to be poor. I used to think like you guys until I started my sm business and when it took off and I reached this level of income. Well it did in a way. After my taxes were done and I was told how much I felt kicked in the stomach. If I had spent the money I would have been in serious trouble. It was a real lesson. After that I saw income very differently and learned that just because someone has a high income does not mean they are rich.
I still feel kicked around each quarter, but I now save and invest to build my wealth. I no longer have the drive or want to take on more responsibility to grow my company or increase my income and instead my drive is to increase my wealth to create passive income. Erayp, not having to work at all is a great goal. I could never start a business. My point is that it takes a certain type of person to start a business. We should all strive for more, but free time with good health and a stable living situation is probably more important than tax bracket for most people.
As several others have said, your numbers are way too high. The majority of people now live within an hour of a high cost of living area. NYC has more people than most states. Weird area! Louis Richards is absolutely correct.
I have the utmost respect for the people that earn their success and more times than not it IS earned. I can safely say that I will have a fair amount of success as I continue my career and will certainly make over k a year.
One of the most important things that I hope to remember is what a blessing it really is. I would have to assume that you are extremely wealthy. We live in a moderately priced market in California 3 bed 2 ba SF home. Have two incomes, two kids in day care, and after maxing out our Ks and maintaining the 6 months cash reserves balance, we have very little left over.
Not a heck of a lot. That does not make you middle class, although in your area, it would put you in the middle of the demographic. We max our retirement account, send two kids to pre-k, share 1 leased mazda and live in a 1, sq ft apartment. We live on bananas, eggs, and rice and beans. Shop at costco and discount stores.
Virtually nothing left at the end of each month. I am sorry, but you are way off. I totally disagree. I am not sure what circles of friends you hang around with. Nor do I know what your personal income level is as well as any of your friends. Comments like that normally come from Rich people… Because that much money is nothing to them and they can only equate it to terms of middle class they are so rich.
I am 54, and I am a working-class man. I am self-employed and do quite well in life. I have friends that range from crack addicts to CEOs. They are waiters and waitresses, cooks, electricians and plumbers, carpenters and real estate agents, auto mechanics and landscape people.
Is Middle class? And once again, annual income level is a joke anyway. Not income anyway, but savings account balances and how much free money they have yearly is the ultimate clue of wealth.
I would gather to say, without being too sarcastic, you my friend are a millionaire. Because only rich people could possibly think that income level is middle-class. Talk to anybody who truly is middle-class, and they would kill to earn that much money.
Take any area in the country, and divide the median home price by , and I would say that is pretty middle class e. Are you actually trying to equate income levels with median price home sales??? Listing as an example no yet, two of the most expensive markets in America?
No wonder it is askew. You want to say for people who live in San Francisco, that is the middle class range, fine, whatever, conversation over. But using an income level that adheres to a vary narrow and specific market, than using it as a blanket calculation over all of citizenship in America, is not only inaccurate math, but frankly, a very bizarre math.
Have you factored in places like Kansas, Wyoming, Tennessee, Kentucky, areas where there are many other median home prices, or just the two most expensive in the nation? Of course. Income and home sales are tied. Ratios helps readers who visit from all over America with different cost of living standards. So, let me put it this way. I own a year-old, updated home in a fantastic, suburban area.
We bought the house in It took us about 3 years to pay the mortgage off entirely. We also own outright a Maxima and a Honda Fit. Our home is fully decorated, our fridge, freezer, and pantry always well-stocked, and my wife has an impressive collection of shoes and clothing.
My wife also just began studying to be a pharmacy tech, which will earn us an additional 30K annually. That is absolutely irrelevant. I love the city I live in, and I have a very comfortable life.
I would absolutely consider myself upper-middle class. Sorry, I feel I should clarify — my point is that rich is relative, and ill defined, but that this article also does a pretty miserable job of adequately defining it. I am certain that by the definitions of many, I would qualify as rich. I pay about as much in income tax as my wife is expecting to earn when she starts working her job making well over minimum wage.
Even my own definition is arbitrary at best. But to stick to the facts of the article, if you do not believe in the governments definition of rich, the IRS definition of rich, my definition of rich that is fine.
But at least try to add some value and define what you think is rich instead of renting against this article. Come on, step up and provide some value and academic rigor behind the definition of rich. What I define as rich is largely irrelevant. I believe this perception is common among people in that income category that is, the majority of Americans.
They would almost certainly say yes. The fact that I still feel that it is debatable is the entire point. A decade ago, I would have agreed with them.
I actually just asked my brother about this, in response to this conversation, and I mentioned the houses we were looking at. His feedback was that the fact that the controversial issue keeping us from simply buying one of these houses which he straight up considers to be mansions right now is that, if we waited a couple years, we could pay cash, means that we are rich. Only rich people do. My bar for that has moved, though, like I said. Now I would say that anyone who is truly financially independent would be considered rich.
If I could retire right now and continue my current lifestyle for the rest of my life, then I would consider that rich. I have a sqft home in Richland, WA. If I lived in San Francisco, I would have to live much, much more simply. I think that most people in America would agree that what Obama defines as rich is, in fact, rich, especially for people not living in the most experience areas in the country. We can throw numbers around all we want, but nothing we can throw around is going to be true for all people.
What one person considers abundant is spare to another. That will never change. What has your income earning range been and number of years worked? Have you been chronicling your personal finance journey for the past 7 years?
Another great definition of rich is not having to work for money because your passive income or multiple passive income streams cover your costs completely. The reason is the majority of the people in that income bracket are living in incredibly expense metro areas. The problem is childcare, housing, and inflated costs of basic services. Rich implies an absolute abundance of everything you need without having to budget. My household is living in a world of scarcity in every way imaginable just like the stereotypical middle class family.
Wealth is determined by net worth, not income. Many high income earners often do not save or invest. Live below your means, no matter your income. Wealth is having choices. Learn to cook and make choices about what is worth a splurge.
Pick a good spouse and invest in your marriage if you get married. Divorce is expensive. Do not be follower. Take care of your health. Do not equate your value as a human to your wealth.
Also, never take advice from people who have not achieved what they advise about. I have trouble believing some of the figures that you mention regarding tax and all of that stuff.
So how is that someone making k pays close k in taxes? Sorry for the confusion. From what location did you determine these numbers? I only ask because you made reference to a Californian city to equate spending power of a certain salary. I am from Alabama, a generally rural state with one of the lowest cost of livings. Southern living is fairly affordable. In live in SF bay area and a 3 bed 2 bathroom house in a nice but not amazing suburban area cost at least 1 million.
A 3 bedroom 2 bathroom house in sf city in a nice area would cost at least 2 million. You talked about those with capital and very little income and about how it could be quite good. You also talked about how there are many different ways of being in that position. Then you went on to define wealth by income alone. Something is missing. Put three kids through college and find out that they are going to graduate school and you could see that plummet. It turns out you are a pauper.
You might not want to sell your securities that are appreciating the most on the grounds that they represent the best companies and are best in the long run. Yet it does show that income can be whatever you want it to be, has little to do with net worth, and if you decide you want to be rich in a given year so you can buy something big, you can do it. I only have…. So you are paying for that, and you enjoying the luxury of having money. Lets not even go into private school….
It is kind of frightening though how much real estate prices have moved beyond the normal income levels in SF and NYC though. I get it….
I made very little when I was young. I lived at home thru most of college and have always worked very hard. I was given some opportunities but created most of them. Over the years I obtained three degrees. Let me tell you how this really works. Some do it in a bit more style. Some are very disciplined and they save a good part of it savings also know as delayed consumption.
Then when they are in the last years of life and they are lucky enough to have savings, health care costs will take up a great portion of the estate and in many cases drive the people into near bankruptcy. I had a parent in assisted living and it can run k a year depending on the level of care.
That will wipe out most estates quickly. Unless you are crazy rich then money gets divided between the government and heirs pretty quickly and will disappear relatively quickly.
In most situations the best you can hope for is to lead a conservative life and teach your kids good values and morals as well as give them the skills to fend for themselves. Because unless you are in the. So to the angry people who looks at the rich in disgust. Most worked their ass off to give their families a decent go of it. Do you realize how many people are being neglected from the US shit social services? How many people are dying from lack of healthcare families who are struggling to make it on our criminal minimum wage.
That being said we could easily provide free healthcare education and housing if we didnt spend half of our budget on imperialistic wars for oil. IMO if you can comfortably afford food healthcare and a place to live you are rich since only a small minority of people can say they have this. As long as wealth is concentrated at the top poverty will remain.
Even middle class people in america depend on the exploitation of billions of people to extract cheap resources and manufacture cheap clothing and food. We live on a planet with finite resources which we must all share to survive. However a small amount of people control those resources which is why more than half of all people on earth make less than a dollar a day.
This wont change from having a better outlook or mindset thats bullshit the rich make up to make stupid people think they can work themselves into wealth.
Above this income I think income taxes are much more of a concern. We have a high State tax rate. Part luck, part work, part being appreciative. I think class is more than just wealth.
Free time with good health and a stable living situation is the ultimate wealth to me. Eventually a mansion is just like any other house and a bentley is just like any other car once you get used to it.
The problem is most very high earners sacrifice their time for money, and never even get to enjoy the fruits of their labor. Saved time, reduced stress, no commute, no depressing cubicle, no workplace politics etc as a result from working remotely is the ultimate freedom.
You could be working from the beach in the south of France if you wanted to and no one would be able to tell. In fact I would be more depressed from the stress. One thing that I have realized is that in US majority of people are obsessed with wealth…. I have experienced a civil war in my own country and have actually seen true value of materialism… basically it is 0… I realized that when I had liitle I was happiest then so now All I do is travel at any opportunity I get.
I make half of my cousin but I have twice as much time to spend with loved ones. Enjoy every moment that you can grasp because you will never get it back. Many people never even reach retirement age. Plenty of ignorance here.
Wealth and income are two different things. Wealth is about net worth. You can have a high net worth with ZERO income, or a low net worth with a high income. I have a question. My big worry was when I was planning on savings, debts, lifestyle, etc.
So, my question is, how can people with less, justifiably ask for those with more to pay more, when I myself would be making more than the national average but not making enough to be what I consider rich?
Also, what ways can I save money from federal taxes? Note: I plan to move to Washington state where there is no state income tax. Note: I live in Texas at the moment, so even if I had to work for a year here before moving, I would still not have to pay state income tax. Note: I plan on being single as long as possible. This is such a load of BS!!! Do not listen to this pile of crap and do not be discouraged.
TheOpinionator — You are heavily discounting the cost of having a family. Both of these expenses are after-tax. Your article is accurate considering you specifically stated that your only referring to high COL areas when you are talking about income levels. For example:. Based on the economic definition of upper middle class, that certainly qualifies as upper middle class income. Your still upper middle class in terms of income but probably towards the top of the range when considering individual income.
I think your levels are actually a bit conservative. I know a lot of people that make between k per year and not one considers themeselves rich. The very interesting twist is that they had always considered that level of income rich BEFORE they were actually earning it. I am in the same boat. I actually grew up very very poor. I just turned 33, and had my first 7 figure year last year…. Once I hit that level it was very underwhelming once I realized how much I had to give back to the government, as well as how expensive it is to live well in this country.
The point: those without actual first hand experience earning a specific amount of income have no solid ground to base their opinions on about that income level. First hand experience trumps second hand opinions. I have a unique perspective on living both extremes on the wealth spectrum and can honestly say that anyone that thinks k is rich is either extremely frugal or they have simply never hit that income level.
But rich? No way. They live a rich lifestyle. If you live in SF, k is barely middle class. First hand experience. In fact, earning k a year means you make more money than Source: Wikipedia. The median wage in USA is about 32k a year. Consider yourself educated.
He is only talking about high cost living areas. My friend just got a lower management job at k salary in SF, and is married with 3 kids. Not long ago he commented on how he felt more wealthy as a poor single college student, living off small student loans, than he feels now. No house, drives an older civic, and not much debt. Life is expensive and little things add up!! His rent alone is ridiculous for how small his apartment is. Especially not in SF or NY. When it comes to pays cal it all depends on location.
It seems that we are using an economic model, whose language is outdated; to describe wealth and the lack of any financial resources. At the center of this vast hoarding of wealth are billionaires. So much ignorance here. Income and net worth are two different things. The are people with low incomes who are multi-millionaires, and there are people who make K and are broke.
I made k last year on logistics, I own no debt, my housed is paid nice 35k rathole , still single engage and owned my first car still Saab. I at my age, 27, I consider myself very lucky and successful, at least compare to the rest of my family.
It was more luck than investment, and or prudent planning to be honest, but you know what they say: Better to be lucky than good. I like this article. I was curious about the various income levels and what people would consider rich or well off. Out of all of the sites I read it seems everyone has their own perception of what rich is. I guess that the term rich is subjective.
It seems to depend upon a persons point of reference. A person with lower income would probably feel being rich begins at a lower threshold than someone who has a high level income. Very interesting. The best definition I have seen for middle class is times the level of poverty.
Hmm, never heard of a multiple based off poverty. Is this not somewhat of a defeatist attitude? Saying you have 5x more income than poverty just sounds weird. I like how you break it down very well. But there seems to be more to it than just the numbers alone to me. I happen to save more money than they do when all said and done. This all depends on how much you spend and what your expenses are.
To me if you can make k but you can live a lifestyle of about 50k your doing great! But if you make k but your lifestyle is maxed out that your spending k of it. Who is in a better situation in the long run? This is quite a clique — when most of the country is living with median incomes just shy of 50k, here we are complaining about how really not rich we are.
What a bubble. That taxation is an incentive for everyone to do so. We got a good deal, and frankly squandered the two tax cuts that W put on credit card, which just went to a big red debt mound. Reversing that will compel people to put their capital to better work and yields. It has singularly put a number of states including Calif back in surplus for the first time in decades as capitalist sell off their gains now to avoid higher gains taxes later.
We do not have a lot left infact far from being wealthy. A few people are the doers and a whole lot of people are takers. With the economy what it is today I suppose I understand people's desire to want to make the playing field more level, but the fact of the matter is taxing higher earners doesn't level the field. Those who work hard to achieve good incomes want to provide jobs to other people so they can make good incomes. Adding additional taxes however is not incentive to start or grow a business.
In fact why don't I just list all of the ways I am taxed. There is a disincentive for people to earn more money and create more jobs. Quite frankly the money can't go to more taxes, and new jobs, because there isn't that much to go around. I guess we could raise prices to cover it all, but oh wait if we do that we won't be competitive anymore, and we will go out of business, and then no one has a job. Anyone not getting it by now is just too damn dumb. People stop letting your emotions drive your philosophy, and apply a little logic.
The answer truly lies in logic. That is a fact. Are we rich? I sure don't think so. I'm unemployed with the student loan debt from a Master's degree. I clip coupons and even jump into recycle bins to pull out extras, mystery shop to get a little extra cash, and take online surveys just to help pay bills.
We shop at TJ Maxx, drive non-luxury vehicles that are both over 6 yrs. We don't worry about money, but I scrimp and save on everything from the electric bills to groceries so that we can pay our bills, save for retirement, and donate to charity. We don't eat out, buy extravagant things, or even anything full price. It may be rich in comparison to the world as a whole, but if you think someone making this never thinks about money, you're way off.
We recently reached this amount, but with the cost of everything else we have to pay for just to have a normal house in a normal community it really doesn't seem like that much any more for a couple. And we don't live in an expensive area like New York City or California. I can't imagine what you would need to feel rich there. By using this site, you agree to our Privacy Policy and our Terms of Use.
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