General Question

Rarebear's avatar

How do you define wealthy?

Asked by Rarebear (24663points) September 20th, 2011

According to a recent poll that was publicized by the Cato Institute, the answer is it depends on how much you make. Taxing the wealthy is popular as long as the cut off is more than you make.

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89 Answers

gailcalled's avatar

There is also the consideration of one’s expenses. This is not a simply question. If I were earning $100, 000 after taxes in my present life and with my present life-style, I’d have plenty to spare for charity and additional taxes.

If I were 45, with five children and a spouse who was not working outside the home, i’d be using a budget, insisting that the kids get some kind of job as soon as they were able, and being careful.

In example #1, I am wealthy; in #2, I am not.

JLeslie's avatar

Well, I think wealthy means you have so much money you never have to work again, you can live off of the money your money throws off and never touch your savings. The wealthy talked about in your article, I would say for sure I can go with anyone making over $1 million. As far as taxing, I am fine with increasing taxes on anyone making more than $100k, and I want the wealthy to be taxed at least as much as the guy making $100k as a percentage when all is said and done after loopholes and write-offs.

As a side note you might be interested in this old Q of mine about defining rich

I am in the middle of an argument with someone on facebook on the topic and he flat out said he wants the rich to pay a lower percentage of taxes on their income than the average guy, and I am pretty sure he is an average guy himself.

wundayatta's avatar

I would define wealthy as those in the top ten percent of gross income in the country. I would define poor as those in the bottom 40% of gross incomes. The other 50% would be middle income.

Alternatively, I might say that whatever percent it is that makes fifty percent of all income are wealthy. However many people who make the next forty percent of all income are middle class, and the remainder—those who make the lowest ten percent of all income are the ones who are poor.

I’d look at how those breakdowns come out, and adjust it to taste.

jrpowell's avatar

In our current state I define it as not being worried about replacing your roof when a storm blows it off.

Rarebear's avatar

You’re right @JLeslie It’s a very similar question.

JLeslie's avatar

@Rarebear Yes, but I don’t want it to impact answers here, it is from a long time ago. We have new jellies, and of course old jellies who never answered at the time of my question.

JLeslie's avatar

@wundayatta Why in percentages like that? Isn’t the actual dollar amount more important?

smilingheart1's avatar

Still of sound mind and body, enjoying being able to move around freely in a free society, groceries at the store and funds to purchase some. Family and friends to enjoy and a good sniffer for all the “roses” of life. Oh and peace as much as possible. I am saying the things we take for granted is true wealth, for we would miss them the most.

wundayatta's avatar

@JLeslie You could do it with respect to a certain standard of living. I guess that is the way it is currently done. Except it is not done with a specific dollar level, but with a relationship to the poverty level. This means that more of the population could be in poverty (or wealth) at certain times compared to others. You could track the changing number of poor, middle and rich.

The value of actual dollars changes constantly. Adjusting the dollars to reflect current conditions requires the same debate over and over. The percent of people who pay a certain portion of the taxes will always be an adjustment made easily because it is a constant formula. What matters is where people are in relation to each other, not how much they happen to make in inflation adjusted dollars.

You could do it with respect to a changing index, such as the cost of living index, which defines poverty, but could also define wealth. Cost of living indexes supposedly take into account the different living standards at different points of time (like today you have to have a cell phone, but two decades ago it was not seen as a must have item).

If we use are relative expenditure system, then you might say the poor end at 400% of the poverty level and the wealthy start at 10 times the poverty level

Nullo's avatar

Wealth is tied to the standard/cost of living, don’t forget. A wealthy person in a small town in Missouri would not be as wealthy in New York City.

I would say that you could call yourself wealthy if you could retire today and live at your comfort level until you die.

pezz's avatar

Wealth is not aways about money. Someone can have a wealth of knowledge or a wealth of friends. well that’s me poor then

Coloma's avatar

Aside from obvious gross “wealth” as in upwards of millions, I think “wealth” is all relative.

For me, as a single person who lives simply but well, I could live like a queen on a 100k a year.

My yearly expenses, including all my debt, ( which is less than 5k ) run around 35–40k

Within this margin I include having a housekeeper on occasion, travel on occasion, plenty of good food, decent clothing, pet expenses and indulging in lots of small pleasures as well.

“Wealth” is also a state of mind.

Many would consider my feeling of wealth to be far below their Mercedes menu, but, to me, being almost entirely debt free, only having to work part time, having a decent little nest egg, and choosing simplicity IS wealth!

As far as taxes…I do not think the very wealthy should have to pay for more than their fair share.

They earned it, and they deserve to keep it as much as the rest of us.

There is such a thing as reverse discrimination ya know. :-)

john65pennington's avatar

I define wealthy as being married to the same person for 45 years.

No amount of money can take its place.

CaptainHarley's avatar

Yayyyy @john65pennington !!!

I define financially wealthy as having an annual income of more than $200,000.00

Hibernate's avatar

According to that but wealth can be defines in more ways besides money.

JLeslie's avatar

@wundayatta So, is it a formula you can use any country? Or, maybe every developed nation?

Blackberry's avatar

“Old money” that has been in the family for generations. I might consider “rich” to be a dollar amount in the hundreds of thousands a year.

laureth's avatar

People often confuse wealth with money. Money is a convenient symbol of wealth, but not in every circumstance. Example: Give ten economists a million dollars each (in gold, if you like) and then drop them on a desert island with one coconut. Who is wealthy there?

Wealth is what money can buy, though, to some degree. Wealth is the knowledge and tools and opportunity to use them to sustain yourself and the folks you care about. As another example, I’m looking to buy a minifarm, on which to grow my own food – vegetables, eggs, some meat, even some wool if I can swing it. Living that way, I could conceivably only need money for property taxes and whatever I can’t make myself. Will I have tons of cash? No. Will I be wealthy? Very.

So, is a person wealthy when they sock away hundreds of thousands of dollars in an account? Society says yes, but I don’t think so, not for sure. They have a symbol of wealth, not actual wealth. And when so many folks have neither wealth nor a symbol of it to use to get wealth, I have sympathy for those who think that taxing that dollarific account would help things.

There are two sets of morals clashing here, by the way. There are those who say that someone earned their pile of money, they get to keep it, to buy what they want, or even roll around on stark naked if they think it’s a good idea. And then there’s the system that questions how moral it is to have people rolling around naked on a pile of money, when others across town can’t even buy peanut butter for their kids’ lunch.

Maybe it depends on how much of the world you’ve experienced, which one of these moral viewpoints is more compelling.

wonderingwhy's avatar

Sticking to financial definitions of wealth; personally having enough to be financially independent for the rest of my life while, at all times, maintaining the standard of living I desire. For purposes of taxes and building a better tax code: average per capita income * 2 or greater while factoring in national and local cost of living adjustments.

Qingu's avatar

I don’t agree that a person who makes 100k in New York City is less wealthy than a person who makes 100k in Bumfrack Idaho.

The New Yorker may have a much smaller apartment and pay more for his food, but he also gets the tangible benefits of living in NYC—particularly public transportation, not to mention the value of nearby restaurant and entertainment options.

Rarebear's avatar

Okay, let me rephrase the question a little. For those of you who put a number, are you in that number? Are you willing to pay more in taxes, or is the level above your income level so that it doesn’t affect you?

Obviously don’t feel obligated to answer because that would clue everybody in to your income level.

Qingu's avatar

I’m below my number for wealthy, but I’m willing to pay more in taxes.

Rarebear's avatar

@laureth Fair enough. Let’s say income, then.

JilltheTooth's avatar

I have a fair whack of money, probably would be considered wealthy by some and I pay a f**king boatload of taxes. At least my fair share, by anybody’s concept of percentages. I don’t resent it, but I am a bit appalled every spring.

JLeslie's avatar

@Rarebear I do not consider myself wealthy, and as I stated I do not consider people making over $100k wealthy, but my household income is over $100k, and as I stated above I think they can and should raise taxes on everyone over $100k. So, yes, I will pay more, even vote for the measure that raises my taxes. I don’t want a hige increase of course, but I think raising taxes 2–3%, and then maybe 3–5% on the superduper wealthy. Or, getting rid of some of the write-offs that effectively give the superwealthy a lower percentbpaid in the end. I voted to raise sales tax when I lived in Palm Beavh County, FL, which affected me.

King_Pariah's avatar

By mid next year, my father will probably be raking in $200,000. However, he is paying for 5 mouths to feed, by then 2 kids in college, my medical bills since I’m still under his insurance, the mortgage, his medical bills due to a broken ankle and compartment syndrome, insurance for 3 much needed vehicles do to distances that must be traveled daily, gas and diesel, my grandmother, and by then possibly a funeral or two. By then, I don’t think I’d call him rich.

wonderingwhy's avatar

For those of you who put a number, are you in that number?
yes (even considering the number I gave is a moving target).

Are you willing to pay more in taxes,

or is the level above your income level so that it doesn’t affect you?

Qingu's avatar

@King_Pariah, if your father can afford all of that out of pocket with money left over then he is ipso facto rich. Those expenses, particularly for the 3 vehicles, would bankrupt most Americans.

JLeslie's avatar

@Qingu I don’t consider it rich to afford the things @King_Pariah mentioned. I think that is typical upper middle class.

laureth's avatar

Was anyone here (old enough to be earning money, of course) going totally broke under Clinton (assuming they liked in the U.S.)?

Blackberry's avatar

Is @King_Pariah‘s situation typical? That seems really excessive.

JLeslie's avatar

@Blackberry Three cars insurance let’s say $3,000? College per year $40,000 for two? Medical bills, I have no idea what they are paying of course, let’s guess $5k. Food for 5 $30k including some restaurant. Gas for the cars $12k a year? That’s $90k so far. Of course I am just guessing what their actual numbers are.

Here’s the thing, someone who has made $200k for several years, or close to it, has probably saved up a lot of cash before their kids ever made it into college, so they have money sitting to help pay for college. If he had savings during the prosperous years his savings was throwing off a lot of cash, assuming he had some conservative places he put savings like the bank and CD’s, and didn’t lose a ton of cash investing in bad stocks or funds.

People who have constant surplus of money over their expenses become wealthy. That is where maybe the example is a wealthy lifestyle, to contradict myself, depending on whether he has done some smart saving over the years. But, if he lost his job there is a good chance he would be in some trouble affording everything, a truly wealthy person in my opinion, could still afford it all.

Qingu's avatar

3 cars is pretty richy. So is sending two kids to college with savings for more with no scholarships. College is tremendously expensive. I consider myself privileged, if not spoiled, that my parents paid for mine.

JLeslie's avatar

@Qingu I too don’t feel spoiled my parents paid for college, and I am very grateful they could and did. They saved for my education over years. It was not money that came out of their yearly salaries the years I was in school. And, they were very middle class, when I was little I would say lower middle, but by the time I was a teen middle middle class I would say regarding their salaries. They didn’t have three cars, they had one, then two, and they kept them for ten years.

I think it is pretty common for a suburban middle class household with teen kids to have 3 cars.

Blackberry's avatar

@JLeslie I wouldn’t even assume someone making 200k would not have children, so I would expect a lot of expenses like paying for your kid’s car and stuff, but I didn’t take into account all of these other things that Pariah mentioned. Like you said, it really does depend on how they handle their money and their personal life. 200k probably just seems like a lot to me because I’ve never been in such an environment.

cockswain's avatar

I like to look at my wealth compared to the 7 billion others on the planet. A middle class citizen in the US is doing way better than the vast majority of people in Asia, Africa, and South and Central America. So I feel privileged to be middle class in the US. That would seem insanely wealthy to probably 90% of the people on the planet.

I saw a study that shows happiness doesn’t really increase after one’s income reaches $70K. So if you aren’t happy and make over that, making more won’t make a difference in how satisfied you are with your life. Just thought I’d mention that.

DominicX's avatar

I’d probably have to agree with the people who are saying over $100—$200K a year, as a “wealthy” income. Of course, it can go way up from there, but that would be the starting point for being considered “wealthy”. In the context of the Bay Area, the more “wealthy” towns have median household incomes around $150—$400K a year, just for reference.

Qingu's avatar

@JLeslie, my family is in the same boat as yours basically. I thought we were middle class when we were growing up; we were typically suburban and whatnot. My best friend in college thought she was middle class too, and her family was much, much poorer than mine, so that served as a sort of wake-up call.

Most people tend to think they are “middle class,” and it’s easy to lose sight of relative wealth until you meet someone who is not used to the things you take for granted. I think most Americans couldn’t imagine owning 3 cars.

cockswain's avatar

at least not three good cars. Check out your local trailer park.

wilma's avatar

If you live in a rural area, 3 cars for a family with 3 or more drivers is not unusual.
They might not be good cars and at least one is probably a truck, but that is the only way to get someplace if you live in the country.
I know families who make less than $30,000 a year and they own 3 vehicles, they need them to get everyone to work and school. They might live in a trailer, or dumpy little house, they might get food stamps and free hot lunch at school. They are not rich by any stretch on the imagination.
No car, no job, that is how it works in many rural areas.

Neizvestnaya's avatar

Wealthy to me has only to do with income. Are you asking me to put some number on what I think is wealthy? 100K+ If I think someone is fortunate or rich then that’s to do with all kinds of stuff, not limited to income.

JLeslie's avatar

@Qingu When I was in high school I remember taking a a sociology class and they divided the socioeconomic strata as lower lower class, upper lower, lower middle, middle middle, upper middle, lower upper, and upper upper. The entire middle class I think was $50k-$250k, if memory serves, I definitely rememeber the upper number was $250k, the lower number might have been $35k? Anyway, the middle class was a huge category. It makes sense the upper number, because it coincides with the $250k used by politicians, that number was agreed on back in the late 70’s early 80’s I think, and maybe they looked at numbers sociologists were using. Not sure.

The point is, in my opinion, $75k is middle class, and so is $200k, but those two families live very very differently. This is why the sociologists sometimes break it down into the 7 categories. The guy making $500k a year is upper class, but he is not the old money upper upper, which is hard to break into.

It would be interesting to know how sociologists break it down now. I think I will send the question to a few in the field. Or, maybe create a new question?

tom_g's avatar

$100k/yr goes nowhere here in MA – especially if you have a family to support. Even if you’re a minimalist who lives in a tiny house and never eat out, you will be living paycheck-to-paycheck – unless you have no student loans, you buy a house in a dangerous neighborhood or 50 miles from any work, and you were lucky enough to purchase your first house prior to 2002.

I am not exaggerating.

Coloma's avatar

Lets do a lottery pool. lol ;-)

Qingu's avatar

Was it 250k per household or per individual? I always thought it was per household.

JLeslie's avatar

@Qingu It should always be household.

Qingu's avatar

Aha. My 100k “rich barrier” was per individual. I don’t know how to translate that into households. Actually now that I think of it, is measuring by households even the best way to go about it?

JLeslie's avatar

@Qingu While you were writing I googled social classes and wikipedia has an interesting table just a little way down under the title US Model that discusses $‘s for each category.

I think household is the best way. Although, I don’t know how couples not married, but living together actually count themselves? Now that I think about it. Being married, for sure I think my husband and I should be counted as one unit regarding social class. If one spouse makes $20k and the other makes $150, the couple lives as though they earn $170, if they don’t, and I guess it is possible, it would be very rare that the spouse earning much less is living at a much lower standard somehow? How would that even work?

Berserker's avatar

The only person who could miss with this gun is the sucker with the bread to buy it.

Qingu's avatar

I dunno. The household thing seems to shortchange, for example, roommate situations. I probably lived at a higher standard of living while living with 2 good friends (since the place was nicer than a place I’d pay for on my own, we shared meals and responsibilities, etc), but I don’t think the apartment counted as a “household.” And then there are kids who still live with their parents but work, etc. It just seems like a kind of dated concept, the whole 50’s nuclear family as the economic unit. I could be wrong though.

JLeslie's avatar

@Qingu Roommates would not count as household. Children bringing in money would not count either.

wonderingwhy's avatar

Just a thought that’s been nagging me (it may well have been said already), but wealth is separate from income. In terms of dollars wealth can be considered net worth which has less to do with how much you make and more to do with how you spend it (or don’t). Obviously how much you make greatly impacts opportunities to accumulate wealth but income alone doesn’t equal wealth.

To illustrate, someone who earns 250k a year (a number that looks pretty average in the OP’s linked poll in terms of defining wealthy) from wages and paying off mortgage(s), car(s), tuition(s), etc. is significantly less wealthy than someone who is debt free and earning the same 250k a year in interest and dividends.

In the end wealth is a matter of perspective (if you don’t believe me just read all the varied responses above). Not surprising that so many politicians use such an ill-defined concept when discussing taxes, it helps to polarize the issue and pit one side against the other rather than taking responsibility and acting on what could be seen as vote-risking issues.

Rarebear's avatar

It was a question about tax policy. The President says that he is drawing a line in the sand about reversing the Bush tax cuts, which may or may not be good policy, depending on your political point of view. Cato is making the point that “wealthy” is a matter of perspective. Everybody is okay with taxing the wealthy as long as their income is greater than what they are making.

wonderingwhy's avatar

@Rarebear sad but true; too much “raise taxes? sure, seem like it might be a necessary evil, just not mine.” attitude.

Qingu's avatar

The weirdest thing about the selfish rich people is that they probably had more net wealth when their taxes were higher. Those taxes pay for social safety nets, for government spending, all of which bouys the economy, which bouys investments and the stocks that likely store a lot of their wealth. Were 250k earners better off during the Clinton years or now?

cockswain's avatar

I’m totally fine with my taxes being raised, as long as I know everyone else’s will go up the same percent with no loopholes to be exploited. If it will help knock down the debt at a beneficial rate, let’s do it.

Rarebear's avatar

@Qingu “Selfish rich people”? Don’t you think that’s a bit of a generalization?

Rarebear's avatar

@cockswain That’s the point. Not everybody’s taxes are being raised. Just the “selfish rish people” as Qingu puts it.

Again, to be clear, I’m not stating my own political position on this on purpose.

Qingu's avatar

@Rarebear I am referring to the rich people who do not want to pay more in taxes because “no it’s mine!” Plenty of rich people are fine with paying more taxes and I would not necessarily call them selfish.

cockswain's avatar

@Rarebear Oh. Well if other people are greedy asshole hypocrites, there’s not a lot I can do about that.

Greed is usually at the root of most problems.

Rarebear's avatar

@Qingu Well, the top bracket is 35%. In California, the tax rate is about 10%. That’s a total of 45% of income. That’s a big chunk of income. Let’s say you make $1,000,000 a year. That would mean that you take home $550,000. That’s still a lot to most people, but it’s a lot of money. (Not to mention property taxes and the like. Then it most probably goes well over 50% of income).

Qingu's avatar

@Rarebear, you’re forgetting the higher rate is only for 750k of the 1 mil; the first 250k is taxed at the lower rate.

And who cares? Someone who earns a million dollars only gets to take hom 550,000? Why would anyone give a shit? I don’t think anyone “earns” their money in a vacuum to begin with. The millionaire’s transaction does not take place in some pristine laissez-faire utopia and then the government comes in and steals 400k. That transaction is only possible because of the existence of said government, and the stable and progressive society that government promotes—paid for by taxes.

JLeslie's avatar

@Rarebear The top 400 earners pay 17% federal tax on adjusted gross income.

Simone_De_Beauvoir's avatar

I’d say people who in a household of 1 make above $200K are wealthy, economically speaking. I recognize that that’s quite a high number.

Rarebear's avatar

@Qingu Fair enough. I think you said this, but if Congress wanted to raise your tax rate, say, 5%, you’d be in favor of it?

Blackberry's avatar

@Rarebear I would! I don’t go anywhere, anyway lol.

atch's avatar

Trump said you are wealthy if you have no idea how much money is in your bank account.

JLeslie's avatar

This IRS table says people making $1m to $1.5m paid 27% in 2006 if I read it right. Not sure if it includes what is given to Social Security? I would assume it does since that is all included in our tax return as one number. It is not 35%. And @Qingu is correct you pay the highest tax rate only on the money you make up in that bracket. The first $50k you make is taxed at the rate that applies, then $50—$75 is taxed at that rate, and so one. I don’t realy know what the breakpoints are, but you get the idea.

I would rather pay less tax of course, but what I want more is to pay off the national debt right now. People who owe $20k in credit card debt hate to pay off that bill, especially if it was their spouse who racked it up, but you can’t ignore the money you owe, it’s irresponsible. The person has to suck it up and stop spending on frivolous things, and pay. We are married to our government.

JLeslie's avatar

That table also shows those making over $10m pay less of a percent to income than those making between $500k and $10m.

wilma's avatar

@JLeslie “We are married to our government.”
That just slapped me in the face hard first thing this morning.
I wish that it wasn’t true, but I fear that perhaps you are right.

I think wealthy is very subjective and $250,000 under many circumstances is not as much as it seems.

Qingu's avatar

@Rarebear, I could certainly afford another 5% in taxes. I’d absolutely be in favor of it if it would help pay for more stimulus to help fight unemployment.

@wilma, I think 250k might not seem much… to someone making 250k. To someone making 30k with kids to feed, or someone below the 17k (iirc) poverty line, such a person’s whining about not being actually rich would probably sound obscene if not sociopathic.

wilma's avatar

@Qingu so you know my perspective, I am way closer to the poverty line than 250k.
I know several families with 10–14 kids each. With college and medical bills etc, raising a family that large would take a pretty sizable income. Also Doctors and other folks who have to pay huge amounts for malpractice insurance or people who need to hire help such as body guards and other security measures. I imagine that eats up a lot of money. I don’t consider those things luxuries.
It depends on where you live and what you do weather or not you have a lot of money at the end of the day.

Qingu's avatar

I don’t agree with the way you’re framing this, @wilma. If you have ten kids, the responsibilities of raising those kids require a lot of wealth—or else government support. If you have 10–14 kids and feel poor after paying for all of those expenses, well, to me that doesn’t mean you’re not wealthy, that means you are wealthy and you’ve chosen to invest your wealth in having a shit-ton of kids. You should feel privileged that you can afford to raise those kids without needing handouts.

And medical malpractice insurance? Serioulsy? Doctors are still incredibly wealthy after those expenses. And if you are wealthy enough to both require and be able to afford a bodyguard, well, I don’t really think you’re poor if you can’t eat steak every day after those expenses.

JLeslie's avatar

I think $250k is a lot of money, except for cities like NYC, Boston, LA, and San Francisco. And even with those I agree with @Qingu that you have public transportation and a different lifestyle in the city, so there is a little balance, but the cities are still more exoensive. We don’t make $250k (except for two years that were sort of flukes, one of which was me selling an investment condo for profit if we include that. In some ways I wipe ot out because my current house is for sale and I am going to lose double what I made on the condo) and I feel like I have a lot of money, although I do not feel wealthy. I can pay for everything I need and some wants, sure if I were rich I would get maybe one or two other extravagant things, and we save lots of money each year. If I had kids, I would not be saving as much, maybe I would have one less Porsche in my garage.

If we had been making $250k every year the last 10 years, I probably would have almost $1 million in the bank by now. Well, notnquite that high. That is a ton of money to me. But, unfortunately that is not my reality. See we spend about $80k-$90k a year, the rest is savings, and that is with my husbands car racing. As our household income has gone up, our spending barely has. So making $250, I would easily be saving over $50k a year, even if I started spending a lot more. I think that is a lot to save. Even if I had kids I don’t think they would use up $50k in a normal non-college year. Although, here in the midsouth a lot of parents pay incredibly high private school tuition. An additional cost that should be factored in when looking at cost of living for a family.

Qingu's avatar

@JLeslie, I think you’re pretty squarely “rich.” No offense.

And I don’t think paying a lot for private school tuition negates one’s wealth. I think private school tuition is something wealthy people spend their wealth on.

JLeslie's avatar

I have to agree with @Qingu in his remarks to @wilma. If people want to be wealthy and don’t already have family wealth or a brilliant business idea that will make them millions, choosing to have 10 kids is not going to play well with people. Not many people are going to be empathetic to those parents complaining about making ends meet. My girlfriend’s priest says things like the best gift you can give your children is a sibling, money doesn’t matter. Literally more or less that is what he says. And, she feels a little guilty and odd about only having 2 children, because so many of the other families have 4 and 5. She is up in your neck of the woods @wilma in MI. That mindset of multiple kids in our society means families have a harder time financially, it is a choice.

For most prosperous countries where citizens have a fairly high standard of living it is commonplace for fertility to be controlled by the individual. I don’t think that is a coincidence.

@Qingu Except wealth is not just cash flow, it is money you are sitting on. Rich might be more accurate in my opinion regarding what you are talking about.

cockswain's avatar

Yeah, @JLeslie , you’re rich. If you are spending 80–90K a year, a lot of that must be for really fun vacations and eating at great restaurants and getting to experience things that most people in the world rarely if ever get to do, let alone continuously year after year.

I hope you aren’t offended by being called “rich”, but I think it would be sort of funny if you are.

JLeslie's avatar

@cockswain I am not offended, but I still think that is middle class. Anyway, my only real point was to clarify that even though I think $250k is the very top of middle class, I also think it is a lot of money. If I had that much income I would be extremely happy. Which is why I have little tolerance for households that were making that kind of income and are in debt. Debt! See, they never will be wealthy, to further the point I was making to @Qingu. Those supposedly rich people basically live check to check like the guy making a pittance. Stupid.

Yes, a lot of it is not necessities, maybe $20K is travel and my husband’s cars. Part of the necesities are medical bills unfortunately.

Qingu's avatar

@JLeslie, this reminds me of a story I read about this world-famous violinist.

The story notes that he had to take a cab and public transportation because apparently he couldn’t afford a car of his own. Is he wealthy? Hell yes, because he has chosen to spend his money on a $3.5 million-dollar Stratovarius violin rather than on a car.

I don’t think wealth just means money; it means your ability to spend money and the value of things that you have already spent money on. Joshua Bell the violinist may not be sitting on much cash, but he is sitting on a Stratovarius that he could sell and get a lot of cash.

JLeslie's avatar

@Qingu Valid point.

JLeslie's avatar

@cockswain So, would you say that the rich cut-off the President and other politicans speak of should be lower? Maybe $150k?

cockswain's avatar

I’ve thought the number should be around $500K since he started talking about it in 2008. I wouldn’t be upset at all if it was $80—$100K, but would be if it was over $1M. And we aren’t talking about enormous increases, just a few percent. Everyone can handle that for the good of the nation, but this is venturing into politics now.

JLeslie's avatar

@cockswain Oh, don’t get me wrong, I think we all can pay more also, except for the poor of course. I hate the deal Obama made, I think he should have let all the Bush tax cuts expire, even on the middle class as it is defined now.

But, you say $500k, and at the same time $100k. Haha. Which is basically what I say.

JLeslie's avatar

Correction: It seems we spend more like $70—$80k. I’m one of those wives kind of removed from the paying of the bills. Still, not that much different.

Think about it, I think probably a lot of people in this country have a household income (double income) of $120k say. That is easily about $70k take home.

Skaggfacemutt's avatar

Wealth is relative. If everyone lives in a mud hut with a dirt floor, but you have a mud hut with a cow dung floor, then you are wealthy.

lillycoyote's avatar

I think @Nullo is right but everyone is still arguing about it. It does matter where you live as to how far your $100,000 dollars goes.

I still don’t think you can use net income as a determination of wealth except above a certain level. Bill Gate is fricking rich and he would be rich no matter where he lived but cost of living is a real factor. There is a difference between $100,000 in New York City and somewhere else in the country where the cost of living is not so high and while there are benefits to living there many of them can’t be put in the bank when you are trying to save for retirement or to help put your kids through college. Here are some real numbers adjusting income for the cost of living in selected areas

And there a number of factors that go into determining how far your money will go in any particular place.

But, as the articles states, yes, there are intangibles that aren’t about money:

Baum-Snow also adds that places like New York City and Honolulu have high costs of living in part because people are willing to pay top-dollar to live there for non-economic reasons, like the excitement of the Big Apple or the gorgeous weather.

Also, figuring these numbers is not an exact science. As the article points out:

It is important to note that COLI figures have limitations. The COLI is not a precise arithmetical figure; that is, a city with an index of 120 may not have prices that are exactly 20 percent higher than those in a city with a COLI of 100. Likewise, median household income figures are estimates. Therefore, the resultant adjusted median income figures are also approximations. For example, the adjusted median income of $58,555 in the Raleigh-Cary, N.C., is $14 higher than that in the Omaha, Neb., metro area, but that difference is negligible.

But they are a reasonable approximation and cost of living is a real factor in how far your income goes. I don’t think that can be denied or ignored.

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