What is your perception of wealth?

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MrCrowesGarden
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Re: What is your perception of wealth?

Post by MrCrowesGarden »

Is savings in reference to a 401k, savings account, or both? I ask because I'd say I'm doing well in the former but am lucky to put away 50 bucks from each paycheck into a savings account (and just had one closed because it hit zero since I used it for earnest money to buy a house.)

I think TV show comps might be better for me

Poor: I'm having a hard time thinking of one that doesn't involve true homelessness.
Lower Middle Class: The Middle or Roseanne
Middle Class: The Office or Parks and Recreation
Upper Middle Class: Claire and Phil on Modern Family
Rich: Jay and Gloria on Modern Family (and anything above it)

Arthur Dent
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Re: What is your perception of wealth?

Post by Arthur Dent »

AWvsCBsteeeerike3 wrote:Also, it should be noted that families that are in the top 4% tend to surround themselves with, well, similar people and it's not just because they choose to but because of how socio-economics work. For example, let's say a family makes $200k per year. They send their kids to a public school but they, like other families in the top 4%, can afford to purchase a house/property in a desirable school district. Those kids go to school and their families meet. Or, they go to a private school where they meet other families with the means to send their kids to a private school. Or, they make friends through work which tends to mean they're on similar financial footings. Etc

And,finances can be a big divider amongst friends if a group is constantly going to restaurants/venues that are too expensive for some of the group. Or if one person is mooching. Or if a person feels alienated because their resources aren't as vast. Again, etc.

In the end, if a fam is in the top 4%, they'll end up being surrounded through no fault of their own with families in similar scenarios. Do a lot of those families take extravagant vacations and own boats and drive fancy cars and do 'rich' things? Probably, but they're still only 4% of the population. They just seem to be more than that because it's the herd the fam is now surrounded by. If that same fam moved to a different school district with worse ratings and lower median incomes, meeting people that take those extravagant vacations, own boats, etc would all decrease.
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Freed Roger
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Re: What is your perception of wealth?

Post by Freed Roger »

Arthur Dent wrote:
AWvsCBsteeeerike3 wrote:Also, it should be noted that families that are in the top 4% tend to surround themselves with, well, similar people and it's not just because they choose to but because of how socio-economics work. For example, let's say a family makes $200k per year. They send their kids to a public school but they, like other families in the top 4%, can afford to purchase a house/property in a desirable school district. Those kids go to school and their families meet. Or, they go to a private school where they meet other families with the means to send their kids to a private school. Or, they make friends through work which tends to mean they're on similar financial footings. Etc

And,finances can be a big divider amongst friends if a group is constantly going to restaurants/venues that are too expensive for some of the group. Or if one person is mooching. Or if a person feels alienated because their resources aren't as vast. Again, etc.

In the end, if a fam is in the top 4%, they'll end up being surrounded through no fault of their own with families in similar scenarios. Do a lot of those families take extravagant vacations and own boats and drive fancy cars and do 'rich' things? Probably, but they're still only 4% of the population. They just seem to be more than that because it's the herd the fam is now surrounded by. If that same fam moved to a different school district with worse ratings and lower median incomes, meeting people that take those extravagant vacations, own boats, etc would all decrease.
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Yeah. Our community is an older burb with widely varying housing styles. As a result it is more economically diverse than most places. Which I've kind of liked for living in, public schools, raising kids. More intereresting this way.

We briefly researched SF area for a potential job transfer, and I sensed it was fairly homogeneous economically.

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Tim
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Re: What is your perception of wealth?

Post by Tim »

Man I dunno
Psychiatrists make about the least amount of money as any specialty in medicine. But we almost got my med school and her pharmacy loans paid off. I'm blessed beyond I could ask or imagine. I feel pretty rich. My folks didn't go to college and are pretty blue collar. I didn't feel poor growing up. I suspect we were lower middle class.

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Re: What is your perception of wealth?

Post by Arthur Dent »

Michael wrote:Let's say you have a top 4% income, but live like you're in the top 33%, which group do you identify with? Which group should you identify with?
Re: this, it's the difference between the observable (consumption) and the unobservable (income and finances). To me, the more objective measure is income as it is a binding constraint whereas consumption choices are more flexible, but people make consumption choices in large part by reference to the observable consumption habits of the people around them.

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Re: What is your perception of wealth?

Post by Michael »

Arthur Dent wrote:
Michael wrote:Let's say you have a top 4% income, but live like you're in the top 33%, which group do you identify with? Which group should you identify with?
Re: this, it's the difference between the observable (consumption) and the unobservable (income and finances). To me, the more objective measure is income as it is a binding constraint whereas consumption choices are more flexible, but people make consumption choices in large part by reference to the observable consumption habits of the people around them.
Without getting in to my personal specifics before I discussed this topic on other forums and after looking at hard data (income, savings, debt) I associated with an income group lower than I believe I should have. I live below my means and I surround myself with higher earning professionals. That for sure colored my perception.

Looking at some of the middle class earning ranges posted vs the data popeye posted I think my previous perspective is fairly common.

By the way, I'm not making judgments of anyone. A lot of this is semantics.
Last edited by Michael on May 22 18, 4:13 pm, edited 1 time in total.

AWvsCBsteeeerike3
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Re: What is your perception of wealth?

Post by AWvsCBsteeeerike3 »

Arthur Dent wrote:
Michael wrote:I suspect you live below your means. I'm willing to bet you can "afford" a lot more than you realize. You just need to live pay check to pay check and run up some debt just like a lot of other folks in your income range.

Let's say you have a top 4% income, but live like you're in the top 33%, which group do you identify with? Which group should you identify with?
Yes. I'm curious, is there any research on financial habits by income range? I know plenty of people with high incomes that still live paycheck to paycheck and take on lots of consumer debt, but I'm curious what fraction and how it compares along the income distribution, what else predicts these choices in terms of family background, industry, region/neighborhood, etc.
Arthur Dent wrote:
Michael wrote:Let's say you have a top 4% income, but live like you're in the top 33%, which group do you identify with? Which group should you identify with?
Re: this, it's the difference between the observable (consumption) and the unobservable (income and finances). To me, the more objective measure is income as it is a binding constraint whereas consumption choices are more flexible, but people make consumption choices in large part by reference to the observable consumption habits of the people around them.

I too would love to see data if it's available on what % of poor, lower, middle, upper, and rich people live paycheck to paycheck or above/below their means.

This is just my opinion but because, largely, of AD's second post my guess would be that lower/middle/upper and a big chunk of the lower rich are fairly homogenous across the board with regards to how much they consume vs earn. There is an inherent need to keep up with the joneses in our society which is inevitably going to lead to consuming (possibly) more than is necessary.

Oh, the neighbor went to Cancun. Ugh, sad face. We should go to Acapulco!!! Yay, happy face!!!

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Re: What is your perception of wealth?

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Freed Roger wrote:A major wealth factor is familial net worth. A young person (or any age really) starting out may not have a pot to pee in but they have someone to help them out if in a pinch.

A truly poor person lives on the edge without anybody to help them. If they have a job, and their mode of transportation is broke or late -they get fired for missing work. In comparison to my kid who may make same income - we lend a car/ride and help with the car repair.
We’re lower middle class, inching closer to middle middle class with four kids the money doesn’t stretch far. We do however have some very generous extended family and neighbors that allow us to do some things others in our income bracket can. Our babysitter is a distant cousin who’s an empty nester now, she’s spoils our kids rotten. I’m pretty sure she spends half her check on diapers, clothes and other needs and wants of our kids. We’ve got an extended family member that paid for our hotel and food for three days in Nashville last December because they wanted us to met them for a Garth brooks concert. We’re extremely lucky to have those people in our lives. Hopefully when we’re in a better place we can help someone else out someday.

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Re: What is your perception of wealth?

Post by Diddy »

I should also add that the cash flow of farming is helpful even though I’m not netting much right now. I was able to buy our current home on an auction for a low price. My ability to work on it allowed us to completely gut it and remodel it for probably half what it’s worth. It is only 1000sq foot so we’ve outgrown it already but hopefully we’ll get a good return on our sweat equity in the next few years. I also bought a 10k truck for $800 at auction last year because it didn’t run. It was a fleet truck so no one could tell me anything but I figured I’d buy it cheep enough I could afford to fix some stuff. After I bought it all It needed was a new battery so I upgraded from an 88 Silverado to a 08 for a grand.i

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GeddyWrox
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Re: What is your perception of wealth?

Post by GeddyWrox »

Diddy wrote:I should also add that the cash flow of farming is helpful even though I’m not netting much right now. I was able to buy our current home on an auction for a low price. My ability to work on it allowed us to completely gut it and remodel it for probably half what it’s worth. It is only 1000sq foot so we’ve outgrown it already but hopefully we’ll get a good return on our sweat equity in the next few years. I also bought a 10k truck for $800 at auction last year because it didn’t run. It was a fleet truck so no one could tell me anything but I figured I’d buy it cheep enough I could afford to fix some stuff. After I bought it all It needed was a new battery so I upgraded from an 88 Silverado to a 08 for a grand.i
Nice! I don't know why, but I love hearing stories like this. Awesome job!

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