It has been said if your household income is less than $150,000 a year-- you are considered Middle Class.
So over $150K, you're rich! So why people making $150K cannot afford a million dollar home? Because that category is for a new class- Super Rich
Middle class........ live in McMansions, drive around in S.U.V.’s, and are likely to think of themselves as “affluent” rather than rich.
The middle class have lots of disposable income after paying for the essentials, and they don’t lose sleep over expenses, like insurance co-pays. [nytimes]
But to me all of that can be skewed if you're in debt or spending at the same rate that you're earning.
There are middle class people that are doing extremely well and there are high income people that are barely making ends meet.
Let's take a typical Investment Banker on Wall Street making $190K a year. No kids, single. However, he wears a $160 Hermes ties, Ferragamo shoes, Brooks Brothers pants ($150 a pop), Burberry scarfs and shirts from Charles Tyrwhitt. On weekends, he spends about $200 on drinks with his friends. And the apartment that he shares with roommates costs him $3000 a month in Manhattan. He also have house in the Hamptons that he rents in the summer.
Considering his expenses and lifestyle, he maybe just slightly living above paycheck to paycheck.
On the flip side, you may have a two parent household with two kiddos, making $75K a year and have a $950 mortgage in the south. But yet, after necessaries and expenses, they have more disposable income than the single Investment Banker.
So, I have to go by a person's lifestyle and money management skills rather than their income. Income doesn't make you middle class or rich, it's truly what you do with that income.
We all know it's easier to spend money than to manage it. I know once I start making $150K a year I will definitely upgrade my lifestyle/wardrobe, but not to the point where I living paycheck to paycheck.
Watch your spending regardless of how much you're making!....unless you can afford a $6 million dollar house with a bathroom like that above, which is for the Super Rich!
pic credits
marketplace.publicradio.org, firstmutualit.com, sotheby's
Wednesday, September 3
Now That's Rich
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4 cool comments:
Since the super rich class came about it squeezed the poor and middle class slightly down. Taxes Medical insurance and daycare takes up most of the middle class paycheck.
It's best to strive for rich; invest in the stock market or buy some rental properties and avoid using your credit card for everything.
It may not guarantee Super Rich, but it's worth a start.
Long gone are the go to college and get a good job with benefits. You have to do something more
Back in the 80s and 90s, 6 million dollar homes was unheard of. Now it's popping up everywhere.
People always want bigger and better. Making the rest of us feel small. A McMansion now is the new guest suite for the super rich
MM,
I completely agree with your advice - one can never hear too often the importance on spending less than you earn!
This is the real basis of achieving financial freedom.
I spent many years in school then finally got a real job in my mid-thirties. We very quickly ramped up our lifestyle to match my markedly increased income without even realizing it.
Now we cannot even imagine how we lived on my earlier income. Fortunately, we have recognized early how we misaligned our day-to-day life with our core values and are taking steps to achieve all of our goals.
From a financial perspective, save as much as possible and take pleasure in planting as many seeds as possible which will provide future wealth. Some seeds will fail but many will flourish. Derive pleasure from nurturing these seeds as they grow.
" The strong oaks of today were the nuts that held their ground"
Yes, if you plant your seeds early and nurture and water it. You will be amazed of how it will take care of you later on
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