Do you consider a family that makes >$100,000 wealthy?

[BostonJP]

Yes, this is exactly what I said earlier in the thread about how it seems like people's expectations of a "middle class life" have really become super-sized. Many things that people thing are "normal" are really things that have been considered luxury in the past..

Good call - 15-20 years ago, only rich people had big screen TV's. Now you have to explore the far corner of Best Buy just to find one smaller than 30 inches.

 

[Gumbo4x4]

Good call - 15-20 years ago, only rich people had big screen TV's. Now you have to explore the far corner of Best Buy just to find one smaller than 30 inches.

I don't know if that's a fair comparison. First, my parents (retired teachers) have had big screens for well over 20 years. Relative to income, they're not priced any worse than a 19" TV was in the 60's. Dad paid $1,000 for his first VCR well over 30 years ago.

 

[AlohaNow]

Everything is relative. And as people like to say on this board, "It’s a regional thing."

DH and I met and got married in NY. We both worked for non-profits in NYC so we weren't pulling down much cash. We rented a small place in a cute little town on the commuter rail line and took the train into the city each day for work. But the donors and board of directors we dealt with every day through our organizations were truly wealthy people. Descendants of Rockefellers and Vanderbilts wealthy. The wives flitting about town and serving on numerous boards of high profile organizations and giving away money. The CEOs of major corporations that everyone in the world has heard of. That to me is true wealth. That is why I have my separation between rich and wealthy. Much like Chris Rock’s (very, very funny by the way) (Love him). So when someone asks if $100K as a salary constitutes wealthy, I just have to laugh out loud due to the experiences I have had in life. And even in my own house, raising two kids now, $100K is what we should be making to get by.

We moved to the DC area from NY, and even now we live somewhere entirely different. But when I mention that we used to live in DC people here say, “Wow, I’ve heard that’s expensive.” Again, I just have to laugh and say, “Not when you move there from NY! It was cheap!”

Everything is relative.

 

[bcla]

So, looking at a COL indicator I can see why you would feel that anyone making $100K should be able to save money.

If I make $100,000 in the DC/MD/VA area, I would only need to make $65,000 in Alabama to live comparably.

So, I guess that means that in Alabama, a person making $65,000 per year should be able to put away a substantial part of 65k, or they have spending problems. Maybe that's true? I don't know.

Depends on one's needs. The main factor in COL differences is housing. I know people talk about California being expensive, but it isn't universal. It's the coastal population centers and maybe some upscale non-urban areas like Lake Tahoe. I remember passing through Bakersfield once and tuning to a local radio station where the station was doing a promotional work (not just an ad) for an apartment complex renting 3BR units for $800/month. It would have been double or even triple that where I lived.

Then there are other expenses. Construction costs vary a lot depending on location. Food prices may to some extent; I've noticed one benefit to living in California is low produce prices. Still that's maybe a wash since different prices hit you depending on what's relatively local. Still, a lot of standard stuff doesn't seem to absorb too much in shipping costs. Target ad prices are pretty much valid anywhere in the lower 48. Amazon charges the same price anywhere in the lower 48.

And then there are the big ticket items. You want to buy a car? A Honda Accord or Ford F-150 cost the same in Alabama, DC, California, or Idaho. So the big issue with COL estimates would be that not everything scales the same.

There's also the issue with taxes, when you start going into higher marginal tax rates. I've heard of some two earner families where one spouse (making far less than the other) decides it's not worth it because the marginal income isn't really that much, and might not make up for child care or travel expenses.

 

[BostonJP]

I don't know if that's a fair comparison. First, my parents (retired teachers) have had big screens for well over 20 years. Relative to income, they're not priced any worse than a 19" TV was in the 60's. Dad paid $1,000 for his first VCR well over 30 years ago.

Oh of course, the cost of technology is a big part of this too. Same can be said for cell phones where back in the late 80's only Gordon Gecko and Zach Morris had cell phones whereas now my 11 year old cousin has one. We expect to have the items that were prohibitively expensive years ago.

 

[bcla]

Everything is relative. And as people like to say on this board, "It’s a regional thing."

DH and I met and got married in NY. We both worked for non-profits in NYC so we weren't pulling down much cash. We rented a small place in a cute little town on the commuter rail line and took the train into the city each day for work. But the donors and board of directors we dealt with every day through our organizations were truly wealthy people. Descendants of Rockefellers and Vanderbilts wealthy. The wives flitting about town and serving on numerous boards of high profile organizations and giving away money. The CEOs of major corporations that everyone in the world has heard of. That to me is true wealth. That is why I have my separation between rich and wealthy. Much like Chris Rock’s (very, very funny by the way) (Love him). So when someone asks if $100K as a salary constitutes wealthy, I just have to laugh out loud due to the experiences I have had in life. And even in my own house, raising two kids now, $100K is what we should be making to get by.

We moved to the DC area from NY, and even now we live somewhere entirely different. But when I mention that we used to live in DC people here say, “Wow, I’ve heard that’s expensive.” Again, I just have to laugh and say, “Not when you move there from NY! It was cheap!”

Everything is relative.

I've noted that there's a Mobil motor oil commercial where it's supposed to be a guy working in NYC and living in Schenectady. He talks about how he deals with his 3 hour one way commute (books on tape) and how the rest of the family loves it there. It finishes with an announcer talking about taking good care of your car by giving it Mobil Super motor oil.

I've visited NYC and took the train to PA. I've mentioned this on another board. On the way back we took SEPTA and NJT back because it was cheaper, but it took longer than Amtrak. I remember seeing one Amtrak train after another passing by our train on the inside rail (they go up to 120 while NJT is 80). I overheard the guy in front of me say "That's the rich people train". I remember pricing it, and it was maybe $22, but Amtrak was over $50. So I guess rich is a matter of opinion on what constitutes "rich". Or maybe he was just joking.

 

[barkley]

Yes, this is exactly what I said earlier in the thread about how it seems like people's expectations of a "middle class life" have really become super-sized. Many things that people thing are "normal" are really things that have been considered luxury in the past.

ETA: I did not mean to quote the first post, but my take home is even less than the 67%. Net and gross are very different numbers, that's for sure.

I'm on the same page with this concept. things that we considered UBER luxuries (as in never conceived of having it/doing it) when I was growing up (60's and 70's) morphed into sometime treats for many of my peers in early adulthood, and now are just perceived as being the norm in many households/families.

I think to a great extent people don't even realize it esp. if they aged up w/it being the norm in their supposedly 'middle class' family, but I saw allot of eyes opened when the recession hit and household incomes dramatically decreased. families would be terrified that they were going to lose their homes, be on the street...but then they started peeling off expenses. cable/satellite, regular nail and hair appointments, kid's pay for participation extracurricular activities, everyone in the home's unlimited minutes/data phone plans, eating out (even fast food)/'convenience foods', expensive car leases, vacations (even their 'frugal' ones were frequently nothing the average family I grew up knowing would have ever perceived as anything but a once in a lifetime trip)....it all added up such that when it got peeled away and eliminated it entirely changed their lifestyles for the better financially and (in their opinion as well as mine) lifestyle wise. less go, go , go-gotta get,do,have. more downtime at home, for many the first time in years (other than their vacations) they got to spend extended times at home actually interacting w/their spouses/kids (vs. just being at the same practice, event or venue with them).

 

[bcla]

Oh of course, the cost of technology is a big part of this too. Same can be said for cell phones where back in the late 80's only Gordon Gecko and Zach Morris had cell phones whereas now my 11 year old cousin has one. We expect to have the items that were prohibitively expensive years ago.

I dunno. Way back in the late 80s I remember going on a Disneyland Grad Nite trip. Our tour organizer came along and he had this big honking cell phone with a corded handset and a transceiver base the size of a VCR that was carried with a shoulder strap. That thing must have cost a small fortune to use, but then he didn't have to find a pay phone to change plans or make arrangements if something went wrong.

 

[DawnM]

We had one of those! Top loading VCR that weighed about 50 pounds. I think it was indeed about $1,000.

I don't know if that's a fair comparison. First, my parents (retired teachers) have had big screens for well over 20 years. Relative to income, they're not priced any worse than a 19" TV was in the 60's. Dad paid $1,000 for his first VCR well over 30 years ago.

 

[DawnM]

You can look up and see where your salary ranks compared to the rest of the US.

According to this, if you are Married and filing jointly and make $100,000, you are in the top 67% of the US. If you are single, you are in the 96th percentile.

http://www.whatsmypercent.com

 

[mnrose]

I don't know if that's a fair comparison. First, my parents (retired teachers) have had big screens for well over 20 years. Relative to income, they're not priced any worse than a 19" TV was in the 60's. Dad paid $1,000 for his first VCR well over 30 years ago.

I paid $100 less (in real dollars) for a 1080 "smart" TV in 2014 than I did a MUCH smaller "color" TV without remote control in 1985. True story.

 

[DLgal]

$100k net is very different that $100k gross. If you are funding a 401(k), paying for benefits and FICA, federal and state taxes, your gross is probably more than $150k.

This is a generalization. Our gross is actually about $127k, but that is active duty military pay, of which about $40k is tax free allowances (housing and subsistence). Base salary (gross) is $85k.

10% goes to retirement. Kids 529 plans get monthly contributions.

Health care cost is $1000 per year MAX out of pocket (that is where we save big, I am aware.).

Our net after taxes, retirement contributions, and college funding is $102000.

Our rent and utilities eat up about 50% of our take home and we are STILL living very nicely.

The question is are people who make GREATER than $100k wealthy, not $100k gross.

 

[Gumbo4x4]

I paid $2,000 for a 47" 1080P just 8 years ago. Same set today (only much thinner) is about $600.

 

[Colleen27]

Good call - 15-20 years ago, only rich people had big screen TV's. Now you have to explore the far corner of Best Buy just to find one smaller than 30 inches.

I don't think electronics are a good gauge because the prices have come down so dramatically over the years. Every computer in our home (and we have four - DH & I each have a desktop, and both high schoolers have laptops) don't add up to what my mother spent on the computer she bought when I started college, and our three TVs don't cost what my mom spent replacing our living room TV in the late 80s. Heck, even video games have become more affordable... Granted, we're not early adopters and don't pay top dollar for gaming systems but a quick inflation calculator tells me that the retail price of the Nintendo I had as a kid was higher, after adjusting for inflation, than what we paid for my son's XBox 360.

I think it is other aspects of lifestyle inflation - bigger homes, always keeping new cars, making every event more lavish - along with the rising cost of essentials that are moving the "middle class" bar upwards.

 

[Gumbo4x4]

I don't think electronics are a good gauge because the prices have come down so dramatically over the years. Every computer in our home (and we have four - DH & I each have a desktop, and both high schoolers have laptops) don't add up to what my mother spent on the computer she bought when I started college, and our three TVs don't cost what my mom spent replacing our living room TV in the late 80s. Heck, even video games have become more affordable... Granted, we're not early adopters and don't pay top dollar for gaming systems but a quick inflation calculator tells me that the retail price of the Nintendo I had as a kid was higher, after adjusting for inflation, than what we paid for my son's XBox 360.

I think it is other aspects of lifestyle inflation - bigger homes, always keeping new cars, making every event more lavish - along with the rising cost of essentials that are moving the "middle class" bar upwards.

Let's not forget the cost of health insurance/healthcare. I built my home in 2000. Had I built it twice as big, the increase in my mortgage would not be as big as the increase I've incurred in health insurance/healthcare costs since 2000

 

[Luv Bunnies]

I think of wealth as being "what you have" as opposed to "what you make." My dad was a police officer and my mom was a nurse. They didn't make a ton of money, but they invested what they had very well. I remember them scrimping and saving to buy rental properties in the 70s. Once they had their first duplex, they rented it out and used that income to buy more property. They built up a pretty nice portfolio of properties by the time they retired. Again, never made a lot, but have a lot. All of the properties are paid for, including the house they live in. They make more in rental income than they do in social security or their pensions. It took a lot of saving, doing without luxuries, and good planning to achieve what they did. They sent my sister and I though college and my brother through a trade school. If you looked at their income when they worked, you wouldn't think they'd ever fit the definition of "wealthy."

On the other hand, I know people who have high-paying jobs who never seem to have anything. It's all in the way you spend what you have, not how much you make.

 

[bcla]

I think of wealth as being "what you have" as opposed to "what you make." My dad was a police officer and my mom was a nurse. They didn't make a ton of money, but they invested what they had very well. I remember them scrimping and saving to buy rental properties in the 70s. Once they had their first duplex, they rented it out and used that income to buy more property. They built up a pretty nice portfolio of properties by the time they retired. Again, never made a lot, but have a lot. All of the properties are paid for, including the house they live in. They make more in rental income than they do in social security or their pensions. It took a lot of saving, doing without luxuries, and good planning to achieve what they did. They sent my sister and I though college and my brother through a trade school. If you looked at their income when they worked, you wouldn't think they'd ever fit the definition of "wealthy."

On the other hand, I know people who have high-paying jobs who never seem to have anything. It's all in the way you spend what you have, not how much you make.

I'm hoping to keep my rental property for a long, long time. As much as I love living in the San Francisco Bay Area, maybe one day it'll come time to retired to some other place with lower costs and live off of the astronomical rents that I'd expect by the time I'm ready to retire.

 

[tvguy]

I paid $100 less (in real dollars) for a 1080 "smart" TV in 2014 than I did a MUCH smaller "color" TV without remote control in 1985. True story.

Not sure that is a far comparison. TV's have become like cell phones, a couple of years and into the trash now. That 1985 TV probably still is working if you still have it.

 

[barkley]

Not sure that is a far comparison. TV's have become like cell phones, a couple of years and into the trash now. That 1985 TV probably still is working if you still have it.

isn't that the truth. same thing w/appliances. mom did laundry for a family of 6 w/ the same mid range cost washer/dryer set for over 20 years (and lots of those loads were heavy men's jeans laden with grease and dirt). what's the shelf of a set now-maybe 10 or 11 years? dishwasher-over 30 years, now one lasts maybe 9 or 10. her freaking maytag freezer finally died over 30 years after she got it-I've gone through at least 3 over the past 20 years b/c even if we can find replacement parts it ends up being cheaper to replace than repair. just had a repair guy over this past week, he and I were talking about different brands and their reliability and estimated lifespan-he said that one of the reasons it's so hard to find appliance repair people anymore is b/c the field is dying out due to the appliances no longer being built to be repaired-w/the exception of the realy high end stuff the manufacturers make um so they are next to impossible to repair or so costly for the consumer that they will just decide to opt to put out a few hundred more and get new.

 

[Wishing on a star]

We have been looking at homes, for retirement, both in our area, and also considering moving further south, to FL, near the beach.

These points that people are making about huge McMansion 'starter homes' is very very true.

If one does want a newer home.... FORGET finding a smaller one.
Builders have people clamoring over these 2000-3000 square foot homes.
That is the least they will build.
They are not even building smaller. At all.
Why would they.

It is a crazy world we are living in.

The wedding thread is one example.

And, this is the world our teens are growing up in.
I have a teen son.
We know kids that think they just have to have a brand new iPhone6, a souped up Diesel truck, etc... etc...
Kids!
Things that many of us have worked for many years, and might not have.

But, that is the expectation and entitlement.

I truly do feel that this is now more common, and very sad but true.