Miguelito wrote: ↑
Thu Sep 12, 2019 9:43 am
That life is decidedly not middle class. Also, I don't see that budget being Bay Area-specific. It would apply to many places, particularly in the northeast.
The point should be that $350k (or $500k) does not lead to a life of unrestrained luxury, which is what many in America believe. I see/hear that a lot. Households who try to make it work with ~$100k incomes in HCOL areas hear of $400k and think it is 4 times as much and they would be living the life. Sure, they would be MUCH better off, but whereas they probably pay little in taxes now, they would have to kiss 100k of that good-bye for taxes. Bigger houses come with bigger expenses besides the mortgage, services/vacations/cars get very expensive quickly, etc. Few typical people think of more money and think of saving it. They think of what they could do or buy with it. Unless they are utterly irresponsible, with high incomes should come higher savings and that leads to less disposable income than they would think.
No one should feel bad, it's just that reality is not the visions of wealth people making $50k envision when they think of $400k. I recall the days back when Obama wanted to institute higher taxes on those making over $250k, every article lead with a photo of a couple walking on a tarmac from a Rolls Royce onto a private jet or a in a huge yacht. That's not $250k or the 1%. That's the 0.01% and possibly not even then. But that helps reinforce that incorrect notion that a few hundred thousand makes you super rich.
Finally, and perhaps more importantly, it's not about making $400k one year. That won't make you rich. It's making $400k for many years and saving a good chunk of it. That can lead to great wealth.
I will add one more point to this. Just like there is a false sense at the lower end of the income ladder that the high income people (ie. making $350K+ .. top 2% by income for the US) fly by private jet, and have super cars and such. There is a false sense among the high income folks of what a middle class house and lifestyle looks like. The expectation of a decent middle class lifestyle is a largish, well maintained and manicured house, good newish cars, eating out frequently, taking vacations, etc. Basically quite close to what is described in that article.
I put some of the blame for this "lifestyle expectation inflation" on the entertainment media and now social media too. If you look at the vast majority of tv shows , movies or ads portraying middle class folks... what does the "background" set look like? It looks like what I described above... largish, well maintained and manicured house, good newish cars, eating out frequently, dont ask how much things cost, take vacations without much planning, etc. If they want to portray the rich, the background set portrays the super high end lifestyle with butlers, chauffeurs and private jets.
If they are going to show a small apartment, or an older ill maintained home, or cheaper/older compact cars or show the people asking how much something costs before buying it.. or discussing their credit card bill this month... they are usually portraying the lower middle class or poor. Someone working hard but down on their luck. In California with its aging homes, super high house prices, high taxes and cost of living.. the middle class looks like what is usually portrayed on TV as the lower middle class or the poor.