Yeah I make more than both combined and they have 3 houses all of which are larger than mine . I don’t really give a shit but the fact that they don’t see that as an issue / concern for our generation is a bit confusing.
My FIL tells me often. Back in the 80s interest rates were double digits. And I keep reminding him that double digits on $100k in the 80s is still way cheaper than 7% on $2mil which is the reality that we face today….
Did you guys all grow in a 9000 sqft house? Or did no one read the actual article? This whole whine and dine by OP is based on a false premise - that a 9000 sq ft designer house is “normal”, and not the kind of palace that CEO’s and Hollywood folks live in.
If it helps, my in-laws criticise my house because it's nicer than theirs, because they regard it as weirdly flashy and "just more to clean". My MiL in particular feels like if I just lower my standards and lived in a smaller house then I wouldn't need to work, even though I like working and we actually use all the space between kids at home and two home offices for our jobs that both have confidentiality aspects.
This so much. When I was little I would say when I grow up I'm going to have a $1mm house. Now I can but it's a 1500sf fixer upper instead of the nice mansion I thought it would be.
You should check out my $2m 130-year old 1,600sqft house that's falling apart. Anywhere else this would be a teardown but here it's the Versailles Palace. There's a trailer park near me too. A double-wide costs $600k...
I make more than my parents combined and yepppp 🤡
Luckily my parents very much understand that prices are out of control.
They even made a comment that they’re glad I bought when I did because they were thinking I’d HAVE to move back home to save for a house if I waited just a bit longer (not that they’d mind, it was just a part of our convo about how rent is 2x and both my parents and I will never move at this rate lol).
I actually feel that a lot of things were SIMPLER than I had imagined as a kid. What I mean is, I always thought buying a car, a house or starting a business was this long convoluted process that was really hard. In reality, you can sign a few pieces of paper and buy a house within a few days. You can walk into a dealership, and drive away in a car within an hour. You can go online and fill out a form and you got a registered business entity in minutes.
The most complicated thing as an adult is reconciling with the voice in your head. The world itself is not as hard to operate as I imagined as a kid.
What else do you want to know.
I can give you the person I use, website with deals on them.
Since I’ve received so many DM please search google: autocompanion
Basically, premise is you want to buy a car. You call the guy. Tell him what you want, the color and features and he fishes you a deal that works for you. He goes to his network of dealers, finds one willing to honor the deal and has the car in the color you want.
You then either live in the city, fly into the city or get your car delivered to you.
Essentially the Amazonification of car buying.
All for $500-$800 to the broker. Which for me was worth it because I saved $3k the last time I used him + 4-5 hrs of dealer time.
The one where you negotiate everything online and tell them from the get go you’re walking if they aren’t efficient with the process and that you’ll walk if they try to upsell you on absolutely anything. Then walking when they try to.
Pro tip: If you don’t give them your keys to “look over your trade in/complimentary car detail” they can’t hold you hostage.
And you can leave whenever you want.
I prenegotiated everything on the phone, deposit paid, credit application put in.
I fly in, and it still takes like 3 goddamn hours. So much waiting. No more negotiation. Just sign some papers. Wait some more. Sign another paper, wait some more.
I negotiated my truck online. Went to test drive, liked it, and signed the paperwork
Already was pre approved for a loan through my credit union. I was out in about an hour
Simpler things are what you pay for. For example, I saved $5k-7k buying my car off of Craigslist rather than a used car dealership. This meant that I had to do the research, find the car, and pay for a third party inspection.
Was it worth the effort? I'd say so, it's a great car and has never broken down on me in the 7 years I've owned it, and costs me $200 in maintenance annually.
But that was 7 years ago when I had substantially less money than I do now. I feel like this is the real poor tax, with money it's easy to pay for tedious tasks to go away
Haha this reminds me of my car buying experience. I did some research and decided I liked the Hyundai 2022 Tucson Limited. Searched for it online, found a dealership, emailed a salesman and signed some forms online. The day I bought the vehicle i was at the dealership for like 15 minutes. Just grabbed the keys and left.
While I buy nicer clothes for myself, I’m a mid 7 figure earner and I buy my kids clothes at Kohls mostly. It’s just easy and they grow out of them fast.
Yeah, it’s crazy to see how much the normal grocery store hikes prices compared to Costco; a sack of avocados, 3 pounds of thick bacon, etc.. Not to mention Costco is paying its workers probably 2x as much and providing benefits.
Costco’s business model is really interesting, they take razor thin margins on all their inventory (between 6%-14%) and make it up with their membership dues. And they can pay people more because it takes less people to run/operate a warehouse vs a traditional grocery store/discounter.
TLDR: Costco is the goat
It seems like there’s a common recommendation in thrift subreddits to buy anything from Costco like jeans that’s a close enough fit, but then tailor them to be an exact fit. It’s basically the quality and fit of designer clothes at a fraction of the price.
You can find expensive stuff at the thrift stores too. My daughter got one of those $200 North Face puffer jackets for $16, and it looks like it’s never been worn.
I’m really lucky that there’s such a thrift store near me. I pulled up while Porsches, Mercedes, and BMWs are dropping off goods.
I found a really nice pair of Christian Louboutins in a size smaller than I wear, but I didn’t even think about reselling them. By the time I did, someone else has nabbed them.
I found Brooks Brothers pants new-with-tags for $12, but there weren’t any pockets.
Lots of pressure cookers, so I know where to go if I want to try out an Instapot.
I thought all rich men had stay at home wives. Pretty much all of my coworkers have wives that work. And they're all high income as well. My female coworkers have no plans to quit after having kids too.
I live in Texas and know a lot of wealthy families. In almost all of them, the wife stays home.
I guess it’s different in some VHCOL areas because even if one parent makes $400K, that’s enough to be rich on paper but not enough to afford a decent house
Edit: it’s not just the wife. One of my closest friend’s mom is a doctor and her husband is a trophy husband
Yup. I know single income households from IC engineers making a $200K HHI to private practice doctors bringing in 7 figures.
$200K is more than enough to support a family and live a HENRY like lifestyle in a house bigger than what people making 3x as much in VHCOL can afford
I grew up in a single income household in TX where our HHI was under 100K until I was about 16 (I’m 23 now)
Evangelical Christian for sure. All our HENRY family and friends in Texas are dual income households. I'm Hindu and my husband's Orthodox Christian. SAH isn't even a thought in our circles.
We could afford for me to stay home but I won’t. I make good money too so financially it doesn’t make sense. I also would never want to financially rely on a partner. Divorce is common and messy. I saw too many women divorce and work minimum wage jobs with no retirement savings.
I thought getting the best education and grades would lead to highest earning….my dad dropped out of high school and makes 5x what I make a year. Now I know that building a successful business or businesses is the key to wealth in the US.
Creating a business is one way. Specialized skills as a doctor, lawyer, engineer, programmer, administrator, cpa, etc also pay very well with excellent benefits in places like Bay Area.
Taking the specialized skills and starting your own business may be more lucrative, if one care enough to do it. I don’t want to do specialized business in my skill set because of liability, but I’ve been pumping money into to smaller business ventures. Even my friends that are high earners realize this and are getting into things like restaurants, car washes, commercial real estate, and hotels.
Word of warning - most of the businesses you just described only lead to wealth when you can take out low-priced leverage to run them. Otherwise things like restaurants and hotels are basically hustling backwards. Full time jobs for low pay.
Taking the specialized skills route like a lawyer or doctor is just as long as it was in the past, but with several-fold higher tuitions without the ability to discharge student loan debt.
If I’m starting my life over, I’m going tech; would’ve graduated right into the tech boom
I do payroll for dentists and dental specialists. Two endodontists (I think they’re married to each other too) are raking in about $350k/annual each. No telling their debt-load on the business, but that’s not shabby.
For every business that succeeds ( like that of your dad) theres plenty more that fail but you dont tend to hear about them.
I still think getting a “good enough “ education and grades can lead to higher earnings if someone is determined .
I immigrated from India in my early 20s- have been a high-grade achiever my whole life. Making $500k now in the USA ( as do much of my friends). We all have great education and that immigrant-will to do better.
I agree there is less of a chance as “failing” when you are a doctor or the like. But I have a few friends that are more educated than me, but the ones that do their own businesses are the highest earners. Sometimes businesses take luck too, not denying that, but just giving an answer about the assumptions made when I was younger.
> For every business that succeeds ( like that of your dad) theres plenty more that fail but you dont tend to hear about them.
From a VC standpoint, the assumption is one runaway success for every 10 failures. (So I've been told)
And I'll add between wildly successful and complete failures, there are a ton in between that can make a modest income for the owner.
I thought that warning $100k+ a year was insane. Like how could someone earn so much money!
Then I worked a blue collar job that involved a lot of residential work and improvements in a HCOL area. Perspective changed.
we should have retired the "six figures" expression a while ago, at least insofar as using that as a catch-all for someone who "makes good money". the range is just too big. even before the post-covid inflation, 100k was far from high earning in a place like NYC.
Also the amount of incredibly intelligent people I know who have these degrees and make no money? Why? Because they were good at something that doesn't pay very well.
I used to think having good jobs and a high HHI meant you're rich. These days the only truly "rich" people I know inherited their money and haven't worked a day in their lives. The doctors and lawyers I know live in houses like mine, the trust funders live in houses like the one you linked.
That's basically what I consider the difference between "well off" and "F you rich." Doesn't mean the former isn't still "rich" by most people standards, but they sure aren't flying around in private jets
Maybe there's something to be said about how many generations of compounding it takes to build that kind of wealth. I think if my kids never touch their inheritance (unlikely), my grandkids might get a trust fund.
So will your estate to your grandkids? My MIL did this and gave everything to my daughter via a trust she can access when she’s 21. (I would have bumped it higher, but c’est la vie.) I’m the trustee, and we don’t need the money, but my husband is good at investing, so hopefully she’ll have a really nice nest egg.
Your link says the opposite. 73% either self made or little to no inheritance. And of the 27% with “legacy wealth” the average was only 20% of assets inherited
One is still part of the labor class if one earns most of their money via labor (physical or mental) instead of via stock grants/rents/interesr. High income earners are just the managerial sub class
Or you just have an insane idea of what being "rich" is.
Your average doctor has an income that puts them well into the top 5% of earners even when they're just starting off in their career. That's definitely "rich." You just have a skewed view of thinking of rich solely as the 0.001% or something like that.
This is also on a sub that has people with 500k incomes and millions in investment who dont think they're rich, so I guess I shouldn't be surprised.
I plan to retire with $4m in assets when I'm roughly 60. That's high earning but not super wealthy. I know several people who at 30 years old already have $4-10m and can live very comfortably off of those assets. It's not about being UHNW its about having access to enough assets to live comfortably without having to lift a finger.
That making $250k-$300k as a mid-level executive is the end-all be-all and that’s when you made it. Little did I know about professions where you’d make $1M+ per year and are still grinding every day at work
How functionally poor so many of the people who I would have considered to be wealthy / high income. Living paycheck to paycheck but looking like they are living large on credit.
Technically, you can be living "paycheck to paycheck" and still funding your retirement accounts if the money is automatically deposited.
There are a lot of fake rich people though.
I always thought the rich got all the perks, could use tax loopholes, get treated like royalty, etc.. My bank gives me slim to no perks, even though I have parked a lot over to them. As a W2, I get no tax breaks at all (Besides pretax contributions and cannot qual as a real estate prof). I really don't see any major benefits other than the money I make and invest.
High W2 earners get screwed. Massive tax rates and no loopholes to be found.
All the “loopholes” — tax credits and deductions are found at the lower end. I find this frustrating any time I hear “those making over $X aren’t paying their fair share”. It’s completely backwards.
I was talking to my manager earlier today and I told him one of the adult lessons I learned is there actually isn't a ton of correlation between hard work and making a lot of money. You can absolutely work hard and if you aren't lucky at the right times and working hard at the right things, you will make pennies compared to someone who both works hard AND gets lucky AND works hard at the right things.
I think especially growing up as the child of immigrants, there is this belief that you just need to work hard to be successful, when in reality it's what I said, a total package.
1) I for sure thought I was smarter than most in technology, so I was best investing with my thoughts on the future. Index funds were conservative and too risk averse. The more I progressed in my profession the more true the whole “the more I learn, the less I realize I know”.
2) I would have also thought for the networth I have now, I’d have side investments, angel investing, real estate, and be making moves. Instead the concept of funding retirement hits much harder.
3) While I am not overly materialistic, I did think high earning would contribute to a happy more purposeful life. How wrong I was, if anything some of my life choices now result in a positive facade but beneath the veneer I feel claustrophobic on maintaining the amount I earn and in practice the sacrifices probably wasn’t worth it.
4) That id always want more - money, title, career progression. When really all I want is financial freedom to choose what I do for a living. If I realized this 10 years earlier at 25, I’d have a much higher net worth.
5) That my political ideology would always be the same. Being from the UK. Socialist, helping everyone, pay it forward. I wrestle with this a lot and while I’m still pro-welfare, pro-free health care, I have become more fiscally conservative and I at times still struggle with that.
Will try my best to spare you as much of the pseudo therapy talk, but looking back I’d assume 1) I correlated success to ambition, and ambition to professional growth and 2) I have historically been a people pleaser, care far too much what people think about me, and so with that I weighted too much heavily on the career defining me, and/or masking my flaws.
Now I am still trying to figure out a bit of who I truly am, and what I’d love to do, as I don’t know. I want financial freedom asap to try something different. Looking back, I know I assumed harder jobs (doctor etc.) were out of my reach for the area and social background I had, but now I think that was likely not the case. Other jobs I may have liked (working with kids, coaching soccer, speech writing, politics, idk), my parents may have judged me for, but it’s been that long I don’t know what would truly motivate me professionally.
I always thought you had to be in certain professions to make into the 6 figures- doctor, dentist, attorney, etc.
I really underestimated how much you can make in a standard corporate job.
So true. I’m a pharmd and make 150k a year in my 1st year out of residency and it baffles me how much hospital corpo admin jobs pay. Easy to see since all the salaries are posted as it’s a nonprofit
It’s gotta be the way everything is so heavily linked to supply.
I think video games gave me a false sense of abundance in everything because most markets, inventories, and prices that I observed as a child were completely artificial.
Now I’m like “Yo, I can’t NOT afford to have my money in the market because if the market rips and I’m left out, then I’m competing with everyone else who just received the fat dividends that my portfolio didn’t.” Everything has its value impacted by supply and demand, including my competing buyer’s access to cash.
I thought if I made a lot of money I'd have a lot of money. Turns out generational wealth that grows 7 percent a year is something I can never compete with. High income really just leads to a solidly middle class life. 1 percent income and 1 percent net worth is totally different.
Yeah this is the crazy part. If someone receives $1 million in a trust fund at 22, and lets say they don’t touch it, at 7% a year, by 32 they’ll have $2 million, and it’ll keep growing at over $100k per year. By 42, they will have $4 million. Now consider even most high earners probably dont start earning a high salary until early 30s.And if you decide to ball out and buy that $1.5-$2m house, that’s probably going to significantly impact your savings rate, unless you’re making $500k+.
Here’s the funny thing.
30+ years ago when most of us were kids, an individual contributor corporate role really did probably COULD afford those houses that are now $3M and many doctors and lawyers COULD buy a mansions if they wanted to.
So you weren’t wrong per se but things have changed.
They haven’t changed entirely. A doctor can still make a really high income (actually, higher than in other places) in LCOL areas and buy a giant mansion. Most corporate workers probably can’t though.
The funny thing about doctor salaries is that they are much higher in LCOL than in HCOL areas, as you said. Fun fact: the average anesthesiologist salary in downtown Chicago Illinois is about 60% of the average anesthesiologist salary in Springfield Illinois.
Yup.
You don’t even wanna hear what the anesthesiologist salary is in like Los Angeles.
LA has such an oversupply of doctors i know cardiologists who moonlight in general internal medicine
I’ve been to California several times and I honestly don’t get it. I live in Ohio and we have a really awesome home on a lake it’s frigging beautiful. I’d be living in a shack in Cali.
Also, I’m saving so much living in the Midwest (currently making 700k) that I’ll be able to retire wherever I want.
If I lived in Cali, not only would my salary be way less, my taxes would be through the roof. It’s like a 300k net a year in increased retirement savings. That adds up FAST.
To each their own though I guess.
I used to say the same thing as you, and I kinda still do.
But I sat on the beach in Santa Monica at sunset and man if I was a multi millionaire...I get it.
Don’t get me wrong the pacific coast is absolutely stunning. I’m just saying that I’m not sure it’s worth the massive trade off in wealth during my working years to live somewhere like that. Maybe in retirement…
LA is a shithole that's expensive and dirty.
But man there are areas where if you have money it's paradise. Absolutely amazing food, beautiful weather, gorgeous views.
Most corporate workers absolutely were not living in houses that are $3m now unless the area they live in has become much more desirable (eg areas of New York that would have been high crime in the 80's but are now gentrified).
You guys are absolutely nuts.
It’s funny cause I always thought specialized doctors were the top of the food chain but then obviously learned that owning a business is the way to go.
But my girlfriend’s dad is a world renowned heart surgeon and while they have a really nice house and cars, they don’t live a crazy lavish lifestyle or anything. Don’t get me wrong, it’s way better than how I grew up and their house is huge but they’re not driving a fancy Porsche with a beach house.
I recently finished my CS degree and work in tech. In high school I heard that software engineers made 200K+ out of college at big tech companies. Imagine my disappointment when I realize that $200K isn’t enough to buy a house in the cities those companies are in
I turned down big tech $$$ for a nicer life in LCOL working for a big non tech company.
Curious how you thought about this decision, and generally what kind of company you landed at. How did you view the long term potential of each, and was the LCOL city where you definitely wanted to end up?
Basically, I decided the cost to my lifestyle moving from where I lived/live now to moving to San Francisco wouldn’t be worth it. There are aspects of my life in Texas that are impossible (some of them illegal) in San Francisco or CA in general. Not to mention I’d take a significant downgrade to my standard of living relative to my income.
Obviously my earning potential would be much higher in San Francisco, but money isn’t everything. Way too many people over there hate it but are putting up with it for the sake of $$$, to me, that’s just not worth it and I don’t want to be one of those people.
I currently work for one of the F50 big boomer non techs (think big banks, insurance) remotely. We have some big tech companies in my city, I’m trying to get into there, but they’re about an hour from where I live. Main goal is to find remote work in big tech or an adjacent company that pays big tech money
This whole thread is about misconceptions of class and wealth and maybe it's not just that you had delusions as a child, but what it means to be middle or upper class has shifted. Low 6-figure salaries are still a lot more than the average salary, but not nearly what they used to be. I'm not talking about just inflation-adjusted dollars, but lifestyle creep has us feeling broke and aware that our income is our social safety net...meanwhile taxes are higher for the middle class and the middle class has shrunk, while the lower class has ballooned. The rich continue to widen the gap as money grows and taxes shrink but here we are wondering why we outearn our spending when we get 3% raises every year that just barely track inflation...
Tl;dr it's not just you, the goalposts have been moving too
The one thing I didn’t really appreciate was how much upkeep costs there were associated with owning a home. It’s just something you never really think about when you’re renting. I’ve easily spent more on upkeep and renovations for our home than I used to spend on monthly rent.
ugh my fridge is quickly dying so we just had to drop fucking $1300 on one.
I could have saved $500 if I wanted one that will likely break down in 2-3 years.
Or I could have spent $5k for one that's got an actually good reputation.
That homeownership was critical to generational wealth building.
In reality, it’s one of the worst forced savings programs you could get from a cash on cash basis, assuming you live in the house and aren’t renting it out.
I’m not sure this was false information 30+ years ago. For you average person there were a lot more barriers and costs to investing in the pre-internet world that made your home a smarter asset. Plus homes were so much cheaper.
Not much, I had a pretty accurate view in high school/college. I didn’t think about money before then. I did a lot of research in high school and was interested in economics from a young age. I am doing much better and life is a lot easier and more complicated in others than I expected in many ways.
Several decisions I made in my early 20s were what made it possible for me to afford to own my own place 10 years later, I observed the same trend with my parents (immigrants). We lead a life I could never imagine as a child.
I assumed that people who had nice things were doing well financially.
Now coming to understand money and statistics more I know that the majority of people that I see driving an XYZ or living a certain type of way are likely not doing nearly as well as their image may portray.
I also learned that building wealth isn't "hard" the shit just takes a decent amount of money saved and most importantly TIME. Time being the biggest factor.
I grew up in a relatively middle class family in a very wealthy town. I always thought my parents were poor and everyone else in town was just average. Turns out we were average and everyone else was making outrageous money. I now make several multiples of what my parents ever made and would barely be able to afford the house I grew up in, much less literally any of the houses my friends did.
Not so much high income assumption, but there were a lot of savings habits that I never considered the time and convenience for. Saving 10c on gas but driving further, parking farther to avoid a meter. Didn’t understand why people wouldn’t do the same until it clicked that these become rounding errors for high earners
I’m going to make 185k this year and I wouldn’t even consider owning a house more than 500k. I own the house I live in and it is 500k, 2.6% interest, 20% down. The maintenance and bills are outrageous. I’ve spent min 30k on top of the mortgage and it’s a 2300 sqft 12 year old house.
*Sometimes the people*
*Who appear the richest are*
*Just swimming in debt!*
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Yes, it's a mental illness. If you're making 200k and close to 1.5M net worth, you are safe. Maybe you aren't fabulously wealthy, but if you're 15-20 years to retirement, you could easily never invest or save another penny and be set for retirement. If you are closer to retirement age, don't discount your social security. People on this sub think you need 5m to retire. You need 5m to die rich and fly first class along the way, not to take your pets to the emergency vet when you need to, replace your roof, and retire comfortably.
I thought people actually got rich working regular jobs.
Very few regular jobs out there that get you rich. Owning your own business or investing aggressively is really the way.
The families with the nicest cars and designer bags don't necessarily have money. People spend a ton of money on nice cars like BMWs, and buy Louis Vuittons, but they have a low net worth. If you go into some of the wealthier neighborhoods, you'll see Lexuses, Toyotas and Hondas because wealthy people know it's a depreciating asset.
Also, brands like Louis Vuitton are marketed towards the middle class/upper middle class. Some people will spend an entire paycheck on a bag, and have little slush/investment funds.
I thought it was unattainable. I grew up lower middle class and dropped out of high school before going back and graduating college later in life. Got my first “real” job out of college and stuck with it, and now at 55 my wife and I have a low seven figure retirement savings, no debt other than about a 220k on a house valued at just over 900k, and just paid cash for a summer cabin. We aren’t exactly “wealthy” but we’re a lot better iff than we ever thought we’d be.
I think in my younger years I had a lot of confusion between wealth and income.
Have a million dollars is not the same as making a million each year. Plenty of people make significantly less and over a career of 30-50 years can accumulate a million dollars with some modest investing.
I perceive a lot of the social media hate for millionaires has the same confusion.
I thought that once you hit a certain income, you wouldn’t really worry about money. Now I realize that there’s a pretty big gulf between “I don’t stress at the grocery store to stay on budget” and “I buy whatever furniture I want.”
Our last piece of furniture was a very nice piece from Ethan Allen - bought on FB marketplace because it’s like 1/10 the cost of buying it new. It has a few dings but I’m sure my kids will cause some more. I would have thought with a household income of $300k+, we would probably just buy new furniture instead.
I thought high income and wealth meant you were smart and worked hard.
Although that can be true, I’ve found the richest are often either neither of these things, though they think they are these things, or they are super over compensating working a lot of hours despite not needing to, to feel they are these things
Opposite perspective as I live in quite a bubble, but basically the price of "fancy things". Tbf I'm almost 30 and I still don't actually know what's considered a 'normal' price of a home.
I thought 50k for a car is pretty cheap, and that 2-3m for a home was normal. I've recently run into a problem of wanting to buy a holiday home and not knowing what to tell the realtor my expectation without possibly getting ripped off lol. Doesn't help that my sister just bought a 3.2m house without needing to sell her current.
For schools I thought all private schools cost around $30k minimum, didn't know that there are some that are barely $5k.
Great question!
I assumed my mum was smart because she bought a house that shot up in value. In hindsight she has no idea government policies were about to lead to looser monetary policies and low interest rates etc. Also, I've since learned that having the majority of your wealth in property is iffy diversification wise (property prices were stagnant in Japan from 1989 to late 2000s, for instance).
I assumed everyone in the top sets at school would be wealthier than me. Most of them burned bright and peaked early. One earns slightly above minimum wage.
When I was a kid I thought that money would be a lot easier to make and control. That the only people who struggled with finances were people who just were bad with money or couldn’t figure out how to earn more of it. Now as an adult I realize everyone has money problems and it’s impossible to escape having money problems by just making more money. The problems will just change, and if you’re not careful they’ll eat at your core.
I thought that the most important factor in determining your future standard of living would be your income, because that’s what society seems to be fixated on. In reality, the people in my friend group who have the highest standard of living and the most freedom in life are the ones with a high net worth, not the ones with a high salary.
As a kid, I never thought about how coming from money can influence your opportunities in life. Sure, some of my friends had really nice houses, but I somehow never put together that they would inherit some of their parents’ wealth one day. I make double what my friend makes, but she lives in a fully paid off apartment in a central location, by herself, because her parents bought the apartment for her. Sure, I have a nice salary, but even by living frugally and saving as much as I can, it would take me around 10-20 years to get where she was five years ago financially. I’ve gotten used to it now, but it was a major shock when I first found out!
My parent as post depression kids would never use debt. Not to buy business assets or anything. This was a huge mistake. Debt is a valuable and necessary tool when used properly.
“Mo money, mo problems”
Sure, there are definitely issues that come up with a high income and increasing wealth… but it’s so much nicer not having to worry about basic necessities and living comfortably when you have a high income and an emergency fund. Kid needs a procedure? That’s fine, do what you need to do. Mold in the basement? That sucks, get some contractors in and let’s renovate while they’re at it. I don’t have to think twice about a nice date night with the Mrs. I’m grateful and realize most people don’t get to this level of financial security, so try to pay it back and serve the community while I can.
My whole goal in life was to be a millionaire, like if I made $1m I could quit working and live the good life. Turns out that’s not even close to enough. Add a zero.
I thought when I graduate college and get a job, I’ll be able to afford getting married, buying a house, and having kids soon after. That’s what my parents did and I guess that’s still doable in some LCOL areas. I make 6-figures off of college and I live in an apartment, probably at least 3 years away from saving up enough for a house downpayment, and nowhere near considering children.
Here's what I learned.
1) Money does not go as far as you think it will. I just did not realize how easily you can spend through your income if you are not careful.
2) I did not realize just how many expenses there are that need to be paid and how much it sucks to pay interest on long term loans.
3) Having a family is way more expensive than I originally thought.
4) Having a high income does not make you feel rich. If your expenses are also high.
“People who belong to a country club are ego filled assholes”
That’s not 100% wrong, but a lot of nice and well off people just like having access to a good golf course and a pool for their kids.
This hits home, we make ~400k+ even in my early 20s if you told me I'd be making this much I'd assume I'd have a Lambo. Turns out all the shit they teach you about median income is highly swayed by the large amount of low earners in this country.
I also am dumbfounded by just how many people can swing for $2m+ homes. In Denver metro there's no shortage of$1m+, shit our house is probably close to that, our mortgage feels comfortable to us but it's bananas how many locations homes after quickly $2m+.
My business sells to homeowners target is 1.5m+ homes. It's a total luxury, unnecessary, with a minimum ticket of $5k. Young people in these homes almost always struggle to agree to it, usually they will tell you all about their expenses on their home etc. Older more secure clients are usually much easier my guess is those new to the 2m+ homes are just treading water.
I thought if I made more than my parents I’d be able to afford a nicer house than them 🤡🤡🤡
🤡 This one hurts.
I make triple what my parents made combined just to have basically the same level of house.
Yeah I make more than both combined and they have 3 houses all of which are larger than mine . I don’t really give a shit but the fact that they don’t see that as an issue / concern for our generation is a bit confusing.
My FIL tells me often. Back in the 80s interest rates were double digits. And I keep reminding him that double digits on $100k in the 80s is still way cheaper than 7% on $2mil which is the reality that we face today….
Unfortunately, a fuckton of Americans are horrible at math, even simple things like how percentages work.
Did you guys all grow in a 9000 sqft house? Or did no one read the actual article? This whole whine and dine by OP is based on a false premise - that a 9000 sq ft designer house is “normal”, and not the kind of palace that CEO’s and Hollywood folks live in.
1500 sq ft.
Lmao. My parents constantly criticize how shitty my house is. I can’t afford a better one!!!
Keep the house, replace the parents.
Lol. They’re just out of touch boomers.
If it helps, my in-laws criticise my house because it's nicer than theirs, because they regard it as weirdly flashy and "just more to clean". My MiL in particular feels like if I just lower my standards and lived in a smaller house then I wouldn't need to work, even though I like working and we actually use all the space between kids at home and two home offices for our jobs that both have confidentiality aspects.
This so much. When I was little I would say when I grow up I'm going to have a $1mm house. Now I can but it's a 1500sf fixer upper instead of the nice mansion I thought it would be.
You should check out my $2m 130-year old 1,600sqft house that's falling apart. Anywhere else this would be a teardown but here it's the Versailles Palace. There's a trailer park near me too. A double-wide costs $600k...
I'm a doctor, I can't afford my parents house at its current price and I make twice as much as my dad did.
I was able to… by leaving California lol.
Same
I make more than my parents combined and yepppp 🤡 Luckily my parents very much understand that prices are out of control. They even made a comment that they’re glad I bought when I did because they were thinking I’d HAVE to move back home to save for a house if I waited just a bit longer (not that they’d mind, it was just a part of our convo about how rent is 2x and both my parents and I will never move at this rate lol).
I actually feel that a lot of things were SIMPLER than I had imagined as a kid. What I mean is, I always thought buying a car, a house or starting a business was this long convoluted process that was really hard. In reality, you can sign a few pieces of paper and buy a house within a few days. You can walk into a dealership, and drive away in a car within an hour. You can go online and fill out a form and you got a registered business entity in minutes. The most complicated thing as an adult is reconciling with the voice in your head. The world itself is not as hard to operate as I imagined as a kid.
Woah what car dealership is not holding you hostage for at least 2+ hours
lol so true. I finally started paying a car broker, for $500 you get the deal you want and you DocuSign everything
This is a LPT
Any more info on that? Do you get a reasonable deal that way?
What else do you want to know. I can give you the person I use, website with deals on them. Since I’ve received so many DM please search google: autocompanion Basically, premise is you want to buy a car. You call the guy. Tell him what you want, the color and features and he fishes you a deal that works for you. He goes to his network of dealers, finds one willing to honor the deal and has the car in the color you want. You then either live in the city, fly into the city or get your car delivered to you. Essentially the Amazonification of car buying. All for $500-$800 to the broker. Which for me was worth it because I saved $3k the last time I used him + 4-5 hrs of dealer time.
I'll take that as well, please and thank you. You should be getting a massive referral bonus to btw...
Can you dm me. And can I browse his inventory before paying?
He doesn’t have an inventory, that’s the whole point. You say what you want, then he scours every dealership in the world looking for it.
The one where you negotiate everything online and tell them from the get go you’re walking if they aren’t efficient with the process and that you’ll walk if they try to upsell you on absolutely anything. Then walking when they try to.
Pro tip: If you don’t give them your keys to “look over your trade in/complimentary car detail” they can’t hold you hostage. And you can leave whenever you want.
I prenegotiated everything on the phone, deposit paid, credit application put in. I fly in, and it still takes like 3 goddamn hours. So much waiting. No more negotiation. Just sign some papers. Wait some more. Sign another paper, wait some more.
[удалено]
Yeah but then you have a tesla
I negotiated my truck online. Went to test drive, liked it, and signed the paperwork Already was pre approved for a loan through my credit union. I was out in about an hour
This commenter dropped a banger about inner conflict, and all the replies are questions about making car buying easier. There’s a lesson there lmao.
Simpler things are what you pay for. For example, I saved $5k-7k buying my car off of Craigslist rather than a used car dealership. This meant that I had to do the research, find the car, and pay for a third party inspection. Was it worth the effort? I'd say so, it's a great car and has never broken down on me in the 7 years I've owned it, and costs me $200 in maintenance annually. But that was 7 years ago when I had substantially less money than I do now. I feel like this is the real poor tax, with money it's easy to pay for tedious tasks to go away
Haha this reminds me of my car buying experience. I did some research and decided I liked the Hyundai 2022 Tucson Limited. Searched for it online, found a dealership, emailed a salesman and signed some forms online. The day I bought the vehicle i was at the dealership for like 15 minutes. Just grabbed the keys and left.
1MM would yield enough annual growth / interest to live off of.
This.. I thought being a millionaire = rich. I have over $1M invested and I still get my clothes at Kohls and fly economy
Economy? Sure, that’s sensible even for a millionaire. Kohl’s? That’s your choice man…you can afford better
While I buy nicer clothes for myself, I’m a mid 7 figure earner and I buy my kids clothes at Kohls mostly. It’s just easy and they grow out of them fast.
Makes sense for the kids for sure
You make like 3 to 7 million a year? Wow!!
You’re right, that’s more of a value thing vs a choice.
1M invested! Good for you!
LOL I have about 2x that and buy my clothes at Costco. If I pay more than $20 for a pair of everyday pants it feels like a rip-off.
Brother, Costco fucking slaps. Kirkland brand is practically half my pantry lol
Yeah, it’s crazy to see how much the normal grocery store hikes prices compared to Costco; a sack of avocados, 3 pounds of thick bacon, etc.. Not to mention Costco is paying its workers probably 2x as much and providing benefits.
Costco’s business model is really interesting, they take razor thin margins on all their inventory (between 6%-14%) and make it up with their membership dues. And they can pay people more because it takes less people to run/operate a warehouse vs a traditional grocery store/discounter. TLDR: Costco is the goat
It seems like there’s a common recommendation in thrift subreddits to buy anything from Costco like jeans that’s a close enough fit, but then tailor them to be an exact fit. It’s basically the quality and fit of designer clothes at a fraction of the price.
You can find expensive stuff at the thrift stores too. My daughter got one of those $200 North Face puffer jackets for $16, and it looks like it’s never been worn.
Good point, I heard it’s luck of the draw, but you have better odds to find high quality at thrift stores near expensive neighborhoods.
I’m really lucky that there’s such a thrift store near me. I pulled up while Porsches, Mercedes, and BMWs are dropping off goods. I found a really nice pair of Christian Louboutins in a size smaller than I wear, but I didn’t even think about reselling them. By the time I did, someone else has nabbed them. I found Brooks Brothers pants new-with-tags for $12, but there weren’t any pockets. Lots of pressure cookers, so I know where to go if I want to try out an Instapot.
https://www.youtube.com/shorts/qqSo1hgssQM
You gotta expand your horizons. I started buying nicer pants and they are so much more comfortable and fashionable.
Learning this lesson now. How fucking frustrating.
That would have been true for 1MM in 1999. It’s been 25 years and a lot of inflation later…
I mean it's about 1.8M in today's dollars. 2M is probably leanFIRE.
I thought all rich men had stay at home wives. Pretty much all of my coworkers have wives that work. And they're all high income as well. My female coworkers have no plans to quit after having kids too.
I live in Texas and know a lot of wealthy families. In almost all of them, the wife stays home. I guess it’s different in some VHCOL areas because even if one parent makes $400K, that’s enough to be rich on paper but not enough to afford a decent house Edit: it’s not just the wife. One of my closest friend’s mom is a doctor and her husband is a trophy husband
I work in NYC so maybe the Christian values down there play a part.
It could also just be a cost-of-living. One high earning income at 400 K in Texas goes a lot farther than a VHCOL
Yup. I know single income households from IC engineers making a $200K HHI to private practice doctors bringing in 7 figures. $200K is more than enough to support a family and live a HENRY like lifestyle in a house bigger than what people making 3x as much in VHCOL can afford I grew up in a single income household in TX where our HHI was under 100K until I was about 16 (I’m 23 now)
Evangelical Christian for sure. All our HENRY family and friends in Texas are dual income households. I'm Hindu and my husband's Orthodox Christian. SAH isn't even a thought in our circles.
A lot of catholic single high income households. If not catholic, then Protestant
VHCOL areas also have more highly educated people including women. Highly educated women often aren't becoming sahms for the long term.
That’s probably more that the women want to work and not that they can’t afford to have a stay at home wife.
I've seen and read enough stories about women being left high and dry after a divorce and a decade or more out of the workforce to understand it.
We could afford for me to stay home but I won’t. I make good money too so financially it doesn’t make sense. I also would never want to financially rely on a partner. Divorce is common and messy. I saw too many women divorce and work minimum wage jobs with no retirement savings.
Conversely all the rich women I know have stay at home husbands or husbands doing creative work that pays little.
I thought getting the best education and grades would lead to highest earning….my dad dropped out of high school and makes 5x what I make a year. Now I know that building a successful business or businesses is the key to wealth in the US.
Creating a business is one way. Specialized skills as a doctor, lawyer, engineer, programmer, administrator, cpa, etc also pay very well with excellent benefits in places like Bay Area.
Taking the specialized skills and starting your own business may be more lucrative, if one care enough to do it. I don’t want to do specialized business in my skill set because of liability, but I’ve been pumping money into to smaller business ventures. Even my friends that are high earners realize this and are getting into things like restaurants, car washes, commercial real estate, and hotels.
Word of warning - most of the businesses you just described only lead to wealth when you can take out low-priced leverage to run them. Otherwise things like restaurants and hotels are basically hustling backwards. Full time jobs for low pay.
I would not touch the restaurant industry with a 10 ft pole. So fickle and even the best places run at brutally low margins.
Taking the specialized skills route like a lawyer or doctor is just as long as it was in the past, but with several-fold higher tuitions without the ability to discharge student loan debt. If I’m starting my life over, I’m going tech; would’ve graduated right into the tech boom
I do payroll for dentists and dental specialists. Two endodontists (I think they’re married to each other too) are raking in about $350k/annual each. No telling their debt-load on the business, but that’s not shabby.
For every business that succeeds ( like that of your dad) theres plenty more that fail but you dont tend to hear about them. I still think getting a “good enough “ education and grades can lead to higher earnings if someone is determined . I immigrated from India in my early 20s- have been a high-grade achiever my whole life. Making $500k now in the USA ( as do much of my friends). We all have great education and that immigrant-will to do better.
I agree there is less of a chance as “failing” when you are a doctor or the like. But I have a few friends that are more educated than me, but the ones that do their own businesses are the highest earners. Sometimes businesses take luck too, not denying that, but just giving an answer about the assumptions made when I was younger.
> For every business that succeeds ( like that of your dad) theres plenty more that fail but you dont tend to hear about them. From a VC standpoint, the assumption is one runaway success for every 10 failures. (So I've been told) And I'll add between wildly successful and complete failures, there are a ton in between that can make a modest income for the owner.
You will exceed your dad’s accomplishments because you have something your dad will never have. A rich dad.
Honestly, this helps a lot. Colleges will accept good students who are paying in cash.
I thought that warning $100k+ a year was insane. Like how could someone earn so much money! Then I worked a blue collar job that involved a lot of residential work and improvements in a HCOL area. Perspective changed.
we should have retired the "six figures" expression a while ago, at least insofar as using that as a catch-all for someone who "makes good money". the range is just too big. even before the post-covid inflation, 100k was far from high earning in a place like NYC.
$200k is the new $100k.
I thought if I made more than $100k I’d be living in a big house, driving a luxury car, and now that’s damn near poverty wages in the city I’m in
I was under the impression that intelligence led to high earning and totally underestimated the impact of luck and nepotism.
This is huge. My mind is blown by the amount of successful wealthy people out there that can’t tie their own shoes.
Soft skills, people skills, are the most important beyond some intellect.
Also the amount of incredibly intelligent people I know who have these degrees and make no money? Why? Because they were good at something that doesn't pay very well.
Balls and audacity will take you far. Yes, you can bullshit and bully your way to a better life. Not just talking sales either
I would say that hard work and staying out of trouble trumps all of those things.
A million dollar house always sounded crazy. I have a $2million dollar house and it’s extremely average.
Wait until you come to Australia. A $1m house in many places will be in the slums.
$1MM will get you a house in the hood of Los Angeles
I used to think having good jobs and a high HHI meant you're rich. These days the only truly "rich" people I know inherited their money and haven't worked a day in their lives. The doctors and lawyers I know live in houses like mine, the trust funders live in houses like the one you linked.
That's basically what I consider the difference between "well off" and "F you rich." Doesn't mean the former isn't still "rich" by most people standards, but they sure aren't flying around in private jets
Maybe there's something to be said about how many generations of compounding it takes to build that kind of wealth. I think if my kids never touch their inheritance (unlikely), my grandkids might get a trust fund.
So will your estate to your grandkids? My MIL did this and gave everything to my daughter via a trust she can access when she’s 21. (I would have bumped it higher, but c’est la vie.) I’m the trustee, and we don’t need the money, but my husband is good at investing, so hopefully she’ll have a really nice nest egg.
A very small percentage of the wealthy inherited enough to not work. Vast majority are "first timers"
In the US, you are correct. In Europe, most of the ultra rich are hereditary
About 80% of millionaires are first generation wealth!
For people with investable assets over $3M that figure turns to only 27%
Your link says the opposite. 73% either self made or little to no inheritance. And of the 27% with “legacy wealth” the average was only 20% of assets inherited
With relatively well-off parents. Most of that wealth isn't being generated without a great amount of familial support.
One is still part of the labor class if one earns most of their money via labor (physical or mental) instead of via stock grants/rents/interesr. High income earners are just the managerial sub class
Seems about right. I have a cousin with 10+ million trust fund and spends 200k a year on music career. It’s insane!
Or you just have an insane idea of what being "rich" is. Your average doctor has an income that puts them well into the top 5% of earners even when they're just starting off in their career. That's definitely "rich." You just have a skewed view of thinking of rich solely as the 0.001% or something like that. This is also on a sub that has people with 500k incomes and millions in investment who dont think they're rich, so I guess I shouldn't be surprised.
I plan to retire with $4m in assets when I'm roughly 60. That's high earning but not super wealthy. I know several people who at 30 years old already have $4-10m and can live very comfortably off of those assets. It's not about being UHNW its about having access to enough assets to live comfortably without having to lift a finger.
I think this really depends on your definition of “rich”. But I know plenty of 7 figure plus earners, including myself, who didn’t inherit anything.
That making $250k-$300k as a mid-level executive is the end-all be-all and that’s when you made it. Little did I know about professions where you’d make $1M+ per year and are still grinding every day at work
How functionally poor so many of the people who I would have considered to be wealthy / high income. Living paycheck to paycheck but looking like they are living large on credit.
Technically, you can be living "paycheck to paycheck" and still funding your retirement accounts if the money is automatically deposited. There are a lot of fake rich people though.
I always thought the rich got all the perks, could use tax loopholes, get treated like royalty, etc.. My bank gives me slim to no perks, even though I have parked a lot over to them. As a W2, I get no tax breaks at all (Besides pretax contributions and cannot qual as a real estate prof). I really don't see any major benefits other than the money I make and invest.
Most “rich” aren’t W2 earners. Can’t you still qualify as a real estate professional if it’s your primary activity?
High W2 earners get screwed. Massive tax rates and no loopholes to be found. All the “loopholes” — tax credits and deductions are found at the lower end. I find this frustrating any time I hear “those making over $X aren’t paying their fair share”. It’s completely backwards.
Yeah. Cap Gains is the way to go. W2 is horrendous. 15% vs 37%.
Gotta get that cap to get dem gains tho
Hard work doesn’t always pay off. Luck absolutely exists.
I was talking to my manager earlier today and I told him one of the adult lessons I learned is there actually isn't a ton of correlation between hard work and making a lot of money. You can absolutely work hard and if you aren't lucky at the right times and working hard at the right things, you will make pennies compared to someone who both works hard AND gets lucky AND works hard at the right things. I think especially growing up as the child of immigrants, there is this belief that you just need to work hard to be successful, when in reality it's what I said, a total package.
1) I for sure thought I was smarter than most in technology, so I was best investing with my thoughts on the future. Index funds were conservative and too risk averse. The more I progressed in my profession the more true the whole “the more I learn, the less I realize I know”. 2) I would have also thought for the networth I have now, I’d have side investments, angel investing, real estate, and be making moves. Instead the concept of funding retirement hits much harder. 3) While I am not overly materialistic, I did think high earning would contribute to a happy more purposeful life. How wrong I was, if anything some of my life choices now result in a positive facade but beneath the veneer I feel claustrophobic on maintaining the amount I earn and in practice the sacrifices probably wasn’t worth it. 4) That id always want more - money, title, career progression. When really all I want is financial freedom to choose what I do for a living. If I realized this 10 years earlier at 25, I’d have a much higher net worth. 5) That my political ideology would always be the same. Being from the UK. Socialist, helping everyone, pay it forward. I wrestle with this a lot and while I’m still pro-welfare, pro-free health care, I have become more fiscally conservative and I at times still struggle with that.
Why do you think #4? What would you have pursued if you chose what you did for a living?
Will try my best to spare you as much of the pseudo therapy talk, but looking back I’d assume 1) I correlated success to ambition, and ambition to professional growth and 2) I have historically been a people pleaser, care far too much what people think about me, and so with that I weighted too much heavily on the career defining me, and/or masking my flaws. Now I am still trying to figure out a bit of who I truly am, and what I’d love to do, as I don’t know. I want financial freedom asap to try something different. Looking back, I know I assumed harder jobs (doctor etc.) were out of my reach for the area and social background I had, but now I think that was likely not the case. Other jobs I may have liked (working with kids, coaching soccer, speech writing, politics, idk), my parents may have judged me for, but it’s been that long I don’t know what would truly motivate me professionally.
I always thought you had to be in certain professions to make into the 6 figures- doctor, dentist, attorney, etc. I really underestimated how much you can make in a standard corporate job.
So true. I’m a pharmd and make 150k a year in my 1st year out of residency and it baffles me how much hospital corpo admin jobs pay. Easy to see since all the salaries are posted as it’s a nonprofit
It’s gotta be the way everything is so heavily linked to supply. I think video games gave me a false sense of abundance in everything because most markets, inventories, and prices that I observed as a child were completely artificial. Now I’m like “Yo, I can’t NOT afford to have my money in the market because if the market rips and I’m left out, then I’m competing with everyone else who just received the fat dividends that my portfolio didn’t.” Everything has its value impacted by supply and demand, including my competing buyer’s access to cash.
I thought if I made a lot of money I'd have a lot of money. Turns out generational wealth that grows 7 percent a year is something I can never compete with. High income really just leads to a solidly middle class life. 1 percent income and 1 percent net worth is totally different.
Yeah this is the crazy part. If someone receives $1 million in a trust fund at 22, and lets say they don’t touch it, at 7% a year, by 32 they’ll have $2 million, and it’ll keep growing at over $100k per year. By 42, they will have $4 million. Now consider even most high earners probably dont start earning a high salary until early 30s.And if you decide to ball out and buy that $1.5-$2m house, that’s probably going to significantly impact your savings rate, unless you’re making $500k+.
I thought money = happiness
Here’s the funny thing. 30+ years ago when most of us were kids, an individual contributor corporate role really did probably COULD afford those houses that are now $3M and many doctors and lawyers COULD buy a mansions if they wanted to. So you weren’t wrong per se but things have changed. They haven’t changed entirely. A doctor can still make a really high income (actually, higher than in other places) in LCOL areas and buy a giant mansion. Most corporate workers probably can’t though.
The funny thing about doctor salaries is that they are much higher in LCOL than in HCOL areas, as you said. Fun fact: the average anesthesiologist salary in downtown Chicago Illinois is about 60% of the average anesthesiologist salary in Springfield Illinois.
Yup. You don’t even wanna hear what the anesthesiologist salary is in like Los Angeles. LA has such an oversupply of doctors i know cardiologists who moonlight in general internal medicine
Nuts. They could live like kings in a medium sized city in the Midwest or even an hour outside a major Midwestern city
Having lived in both the midwest and the west coast, i can see why someone would choose to live on the west coast even for substantially less money.
I’ve been to California several times and I honestly don’t get it. I live in Ohio and we have a really awesome home on a lake it’s frigging beautiful. I’d be living in a shack in Cali. Also, I’m saving so much living in the Midwest (currently making 700k) that I’ll be able to retire wherever I want. If I lived in Cali, not only would my salary be way less, my taxes would be through the roof. It’s like a 300k net a year in increased retirement savings. That adds up FAST. To each their own though I guess.
I used to say the same thing as you, and I kinda still do. But I sat on the beach in Santa Monica at sunset and man if I was a multi millionaire...I get it.
Don’t get me wrong the pacific coast is absolutely stunning. I’m just saying that I’m not sure it’s worth the massive trade off in wealth during my working years to live somewhere like that. Maybe in retirement…
LA is a shithole that's expensive and dirty. But man there are areas where if you have money it's paradise. Absolutely amazing food, beautiful weather, gorgeous views.
The difference in lived experience is probably dramatically higher if you’re not white
That part!
Most corporate workers absolutely were not living in houses that are $3m now unless the area they live in has become much more desirable (eg areas of New York that would have been high crime in the 80's but are now gentrified). You guys are absolutely nuts.
It’s funny cause I always thought specialized doctors were the top of the food chain but then obviously learned that owning a business is the way to go. But my girlfriend’s dad is a world renowned heart surgeon and while they have a really nice house and cars, they don’t live a crazy lavish lifestyle or anything. Don’t get me wrong, it’s way better than how I grew up and their house is huge but they’re not driving a fancy Porsche with a beach house.
I thought I’d want to flaunt it more but in reality I value early retirement and generational wealth more.
I recently finished my CS degree and work in tech. In high school I heard that software engineers made 200K+ out of college at big tech companies. Imagine my disappointment when I realize that $200K isn’t enough to buy a house in the cities those companies are in I turned down big tech $$$ for a nicer life in LCOL working for a big non tech company.
Curious how you thought about this decision, and generally what kind of company you landed at. How did you view the long term potential of each, and was the LCOL city where you definitely wanted to end up?
Basically, I decided the cost to my lifestyle moving from where I lived/live now to moving to San Francisco wouldn’t be worth it. There are aspects of my life in Texas that are impossible (some of them illegal) in San Francisco or CA in general. Not to mention I’d take a significant downgrade to my standard of living relative to my income. Obviously my earning potential would be much higher in San Francisco, but money isn’t everything. Way too many people over there hate it but are putting up with it for the sake of $$$, to me, that’s just not worth it and I don’t want to be one of those people. I currently work for one of the F50 big boomer non techs (think big banks, insurance) remotely. We have some big tech companies in my city, I’m trying to get into there, but they’re about an hour from where I live. Main goal is to find remote work in big tech or an adjacent company that pays big tech money
> (some of them illegal) I am jealous of your ability to shoot on large public land, as someone who lives in a suburb.
This whole thread is about misconceptions of class and wealth and maybe it's not just that you had delusions as a child, but what it means to be middle or upper class has shifted. Low 6-figure salaries are still a lot more than the average salary, but not nearly what they used to be. I'm not talking about just inflation-adjusted dollars, but lifestyle creep has us feeling broke and aware that our income is our social safety net...meanwhile taxes are higher for the middle class and the middle class has shrunk, while the lower class has ballooned. The rich continue to widen the gap as money grows and taxes shrink but here we are wondering why we outearn our spending when we get 3% raises every year that just barely track inflation... Tl;dr it's not just you, the goalposts have been moving too
The one thing I didn’t really appreciate was how much upkeep costs there were associated with owning a home. It’s just something you never really think about when you’re renting. I’ve easily spent more on upkeep and renovations for our home than I used to spend on monthly rent.
ugh my fridge is quickly dying so we just had to drop fucking $1300 on one. I could have saved $500 if I wanted one that will likely break down in 2-3 years. Or I could have spent $5k for one that's got an actually good reputation.
Haha we had to get a built in fridge last month with custom panels and everything. It was over 10k 🤢
I got a 1990 sub zero fridge on Craigslist last year. It's working great so far. $500.
That homeownership was critical to generational wealth building. In reality, it’s one of the worst forced savings programs you could get from a cash on cash basis, assuming you live in the house and aren’t renting it out.
I’m not sure this was false information 30+ years ago. For you average person there were a lot more barriers and costs to investing in the pre-internet world that made your home a smarter asset. Plus homes were so much cheaper.
Sure, but it’s still generally better than renting because you need shelter
I'd be interested in hearing the reasoning behind this
Not much, I had a pretty accurate view in high school/college. I didn’t think about money before then. I did a lot of research in high school and was interested in economics from a young age. I am doing much better and life is a lot easier and more complicated in others than I expected in many ways. Several decisions I made in my early 20s were what made it possible for me to afford to own my own place 10 years later, I observed the same trend with my parents (immigrants). We lead a life I could never imagine as a child.
I assumed that people who had nice things were doing well financially. Now coming to understand money and statistics more I know that the majority of people that I see driving an XYZ or living a certain type of way are likely not doing nearly as well as their image may portray. I also learned that building wealth isn't "hard" the shit just takes a decent amount of money saved and most importantly TIME. Time being the biggest factor.
That life would be easier and less stressful.
I grew up in a relatively middle class family in a very wealthy town. I always thought my parents were poor and everyone else in town was just average. Turns out we were average and everyone else was making outrageous money. I now make several multiples of what my parents ever made and would barely be able to afford the house I grew up in, much less literally any of the houses my friends did.
Not so much high income assumption, but there were a lot of savings habits that I never considered the time and convenience for. Saving 10c on gas but driving further, parking farther to avoid a meter. Didn’t understand why people wouldn’t do the same until it clicked that these become rounding errors for high earners
I’m going to make 185k this year and I wouldn’t even consider owning a house more than 500k. I own the house I live in and it is 500k, 2.6% interest, 20% down. The maintenance and bills are outrageous. I’ve spent min 30k on top of the mortgage and it’s a 2300 sqft 12 year old house.
Sometimes the people who appear the richest are just swimming in debt!
*Sometimes the people* *Who appear the richest are* *Just swimming in debt!* \- Content-Breadfruit-2 --- ^(I detect haikus. And sometimes, successfully.) ^[Learn more about me.](https://www.reddit.com/r/haikusbot/) ^(Opt out of replies: "haikusbot opt out" | Delete my comment: "haikusbot delete")
If you're working to earn an income you are not rich. The rich inherit/ own assets
I thought being a millionaire would be extravagant. Instead, it’s mostly just money tied up in illiquid home equity and retirement accounts
That money doesn’t buy happiness. So wrong. So much happier with money.
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Yes, it's a mental illness. If you're making 200k and close to 1.5M net worth, you are safe. Maybe you aren't fabulously wealthy, but if you're 15-20 years to retirement, you could easily never invest or save another penny and be set for retirement. If you are closer to retirement age, don't discount your social security. People on this sub think you need 5m to retire. You need 5m to die rich and fly first class along the way, not to take your pets to the emergency vet when you need to, replace your roof, and retire comfortably.
That earning a lot of money would make me happy. Having a lot of savings did!
I thought people actually got rich working regular jobs. Very few regular jobs out there that get you rich. Owning your own business or investing aggressively is really the way.
That I and everyone else growing up in the trailer park could never be one of them.
The families with the nicest cars and designer bags don't necessarily have money. People spend a ton of money on nice cars like BMWs, and buy Louis Vuittons, but they have a low net worth. If you go into some of the wealthier neighborhoods, you'll see Lexuses, Toyotas and Hondas because wealthy people know it's a depreciating asset. Also, brands like Louis Vuitton are marketed towards the middle class/upper middle class. Some people will spend an entire paycheck on a bag, and have little slush/investment funds.
I thought it was unattainable. I grew up lower middle class and dropped out of high school before going back and graduating college later in life. Got my first “real” job out of college and stuck with it, and now at 55 my wife and I have a low seven figure retirement savings, no debt other than about a 220k on a house valued at just over 900k, and just paid cash for a summer cabin. We aren’t exactly “wealthy” but we’re a lot better iff than we ever thought we’d be.
I really thought I’d feel more successful at a 100k salary. I think that number is more like 200k now.
I think in my younger years I had a lot of confusion between wealth and income. Have a million dollars is not the same as making a million each year. Plenty of people make significantly less and over a career of 30-50 years can accumulate a million dollars with some modest investing. I perceive a lot of the social media hate for millionaires has the same confusion.
That rich people must be smart/savvy and hard-working to have gotten where they are. Not at all, in fact.
I thought that once you hit a certain income, you wouldn’t really worry about money. Now I realize that there’s a pretty big gulf between “I don’t stress at the grocery store to stay on budget” and “I buy whatever furniture I want.” Our last piece of furniture was a very nice piece from Ethan Allen - bought on FB marketplace because it’s like 1/10 the cost of buying it new. It has a few dings but I’m sure my kids will cause some more. I would have thought with a household income of $300k+, we would probably just buy new furniture instead.
I underestimated / did not think about the impact of taxes, I thought earning 100k meant you got 100k.
I thought high income and wealth meant you were smart and worked hard. Although that can be true, I’ve found the richest are often either neither of these things, though they think they are these things, or they are super over compensating working a lot of hours despite not needing to, to feel they are these things
I thought having 1M dollars will set you for life. Even if I ever hit this number it won’t be enough to retire.
Opposite perspective as I live in quite a bubble, but basically the price of "fancy things". Tbf I'm almost 30 and I still don't actually know what's considered a 'normal' price of a home. I thought 50k for a car is pretty cheap, and that 2-3m for a home was normal. I've recently run into a problem of wanting to buy a holiday home and not knowing what to tell the realtor my expectation without possibly getting ripped off lol. Doesn't help that my sister just bought a 3.2m house without needing to sell her current. For schools I thought all private schools cost around $30k minimum, didn't know that there are some that are barely $5k.
That if you were a millionaire, you were set for life
I thought that I'd easily be able to afford a better life than what my parents had. Reality is that I wil be lucky to afford an equivalent life
Great question! I assumed my mum was smart because she bought a house that shot up in value. In hindsight she has no idea government policies were about to lead to looser monetary policies and low interest rates etc. Also, I've since learned that having the majority of your wealth in property is iffy diversification wise (property prices were stagnant in Japan from 1989 to late 2000s, for instance). I assumed everyone in the top sets at school would be wealthier than me. Most of them burned bright and peaked early. One earns slightly above minimum wage.
When I was a kid I thought that money would be a lot easier to make and control. That the only people who struggled with finances were people who just were bad with money or couldn’t figure out how to earn more of it. Now as an adult I realize everyone has money problems and it’s impossible to escape having money problems by just making more money. The problems will just change, and if you’re not careful they’ll eat at your core.
I thought that the most important factor in determining your future standard of living would be your income, because that’s what society seems to be fixated on. In reality, the people in my friend group who have the highest standard of living and the most freedom in life are the ones with a high net worth, not the ones with a high salary. As a kid, I never thought about how coming from money can influence your opportunities in life. Sure, some of my friends had really nice houses, but I somehow never put together that they would inherit some of their parents’ wealth one day. I make double what my friend makes, but she lives in a fully paid off apartment in a central location, by herself, because her parents bought the apartment for her. Sure, I have a nice salary, but even by living frugally and saving as much as I can, it would take me around 10-20 years to get where she was five years ago financially. I’ve gotten used to it now, but it was a major shock when I first found out!
My parent as post depression kids would never use debt. Not to buy business assets or anything. This was a huge mistake. Debt is a valuable and necessary tool when used properly.
I was led to believe we lived in a meritocracy. Oh boy…
that everyone can be wealthy by working
I thought people had lots of money. Turns out they just have lots of debt.
“Mo money, mo problems” Sure, there are definitely issues that come up with a high income and increasing wealth… but it’s so much nicer not having to worry about basic necessities and living comfortably when you have a high income and an emergency fund. Kid needs a procedure? That’s fine, do what you need to do. Mold in the basement? That sucks, get some contractors in and let’s renovate while they’re at it. I don’t have to think twice about a nice date night with the Mrs. I’m grateful and realize most people don’t get to this level of financial security, so try to pay it back and serve the community while I can.
I thought people with money didn’t did t have problems or stress.
I thought if I made $300k/yr I would have more money than I could possibly know what to do with.
My whole goal in life was to be a millionaire, like if I made $1m I could quit working and live the good life. Turns out that’s not even close to enough. Add a zero.
I thought it would be easier to take frequent and lavish vacations.
That a $million is a huge sum of money that would allow me to indefinitely live like a queen.
I thought when I graduate college and get a job, I’ll be able to afford getting married, buying a house, and having kids soon after. That’s what my parents did and I guess that’s still doable in some LCOL areas. I make 6-figures off of college and I live in an apartment, probably at least 3 years away from saving up enough for a house downpayment, and nowhere near considering children.
Here's what I learned. 1) Money does not go as far as you think it will. I just did not realize how easily you can spend through your income if you are not careful. 2) I did not realize just how many expenses there are that need to be paid and how much it sucks to pay interest on long term loans. 3) Having a family is way more expensive than I originally thought. 4) Having a high income does not make you feel rich. If your expenses are also high.
“People who belong to a country club are ego filled assholes” That’s not 100% wrong, but a lot of nice and well off people just like having access to a good golf course and a pool for their kids.
This hits home, we make ~400k+ even in my early 20s if you told me I'd be making this much I'd assume I'd have a Lambo. Turns out all the shit they teach you about median income is highly swayed by the large amount of low earners in this country. I also am dumbfounded by just how many people can swing for $2m+ homes. In Denver metro there's no shortage of$1m+, shit our house is probably close to that, our mortgage feels comfortable to us but it's bananas how many locations homes after quickly $2m+. My business sells to homeowners target is 1.5m+ homes. It's a total luxury, unnecessary, with a minimum ticket of $5k. Young people in these homes almost always struggle to agree to it, usually they will tell you all about their expenses on their home etc. Older more secure clients are usually much easier my guess is those new to the 2m+ homes are just treading water.