morrisr2d2
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Post by morrisr2d2 on Mar 26, 2011 20:08:17 GMT -5
As a 36 YO who went from making $80K 8 years ago (age 28) in Ohio, and then moved to NYC and worked my way up to making $220K last year, I am not rich. I, like most people, moved to NYC to fastrack my career. In the midwest opportunities are limited and are waiting for someone to retire.
Now yes, I choose to live in the NYC metro area, and am definitely upper middle class, with a net worth of $400K. But can I tell my employer to shove it and sail to a tropical island and live worry free? Absolutely not. Am I on my way there one day? Hopefully.
having said that, I am very happy with my position and don't bitch, since I know I am richer than 99.9% of people to ever live. But I work my butt off to get it. And that was one reason I was pissed to not get the 8K tax credit last year when I bought my 3 bed. 2 bath house at 500K. Really, I work my butt off to get here, just getting going, yet the government says I don't need to benefit from the tax credit.
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trimatty471
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Post by trimatty471 on Mar 27, 2011 20:24:54 GMT -5
I cannot speak for anyone else but at $250,000/yr I would consider myself rich.
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Waffle
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Post by Waffle on Mar 28, 2011 9:07:47 GMT -5
Some person or persons mentioned the difference between $250,000 in NYC versus $250,000 elsewhere in the country. So out of curiousity, I went to one of those salary comparison websites.
Supposedly I would have to make $205,000 in NYC (Manhattan) to replace the $89,000 I make out here in the sticks (I used Cincinnati as the closest city). Maybe that's why $250,000 seems rich to many of us that don't live in the NYC area.
According to the calculator, if I made $250,000 a year here, it would be the same as $576,759 in NYC. Does that seem rich to the NYC area people and others who think that $250,000 a year isn't rich?
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Post by Savoir Faire-Demogague in NJ on Mar 28, 2011 9:13:10 GMT -5
I cannot speak for anyone else but at $250,000/yr I would consider myself rich.
Depends on what your expenses are. You are confusing wealth with annual income.
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Post by Savoir Faire-Demogague in NJ on Mar 28, 2011 9:16:22 GMT -5
According to the calculator, if I made $250,000 a year here, it would be the same as $576,759 in NYC. Does that seem rich to the NYC area people and others who think that $250,000 a year isn't rich?
Depends on how one chooses to live and if they are residing in Manhattan or one of the outter boroughs(Bronx, Queens, Brooklyn, Staten Island), or ever New Jersey. Real estate is very expensive, but you can find inexpensive apartments to rent outside of NYC.
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Deleted
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Post by Deleted on Mar 28, 2011 9:21:30 GMT -5
$250,000 per year is rich.
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Deleted
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Post by Deleted on Mar 28, 2011 9:25:38 GMT -5
According to the calculator, if I made $250,000 a year here, it would be the same as $576,759 in NYC. Does that seem rich to the NYC area people and others who think that $250,000 a year isn't rich? Depends on how one chooses to live and if they are residing in Manhattan or one of the outter boroughs(Bronx, Queens, Brooklyn, Staten Island), or ever New Jersey. Real estate is very expensive, but you can find inexpensive apartments to rent outside of NYC. It is definitely not poor but like Savoir faire said it depends on where you want to live. My wife cousin choose to live in Long Island because for that price she could get a nice home in 4 bedroom home in the suburbs with basement, backyard, etc. If her husband and her decided to stay in NYC to be closer to their jobs they would barely be able to afford a 1 bedroom condo / co-op for that same price and with 3 boys they would be really cramped. So she does the 2+ hours commute to work instead. But 500K is definitely rich if they decide to save a nice chunk of it and built wealth.
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cael
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Post by cael on Mar 28, 2011 9:27:46 GMT -5
late to the party on this one but I think it depends on what you do with the $250k/year. If I made that much, maybe I'd be rich after say 5 or 10 years of that salary because I'd use the salary to build wealth. Someone else might spend most of it yearly & never accumulate anything, but still have the salary - I wouldn't consider them "rich".
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Deleted
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Post by Deleted on Mar 28, 2011 9:32:40 GMT -5
Some person or persons mentioned the difference between $250,000 in NYC versus $250,000 elsewhere in the country. So out of curiousity, I went to one of those salary comparison websites. Supposedly I would have to make $205,000 in NYC (Manhattan) to replace the $89,000 I make out here in the sticks (I used Cincinnati as the closest city). Maybe that's why $250,000 seems rich to many of us that don't live in the NYC area. According to the calculator, if I made $250,000 a year here, it would be the same as $576,759 in NYC. Does that seem rich to the NYC area people and others who think that $250,000 a year isn't rich? I read an article over a year ago about a couple with a small child who lived in NYC. The father was a dentist and the mother was some sort of business person (I really don't remember). They made around $400k/year. They lived in or close to Manhattan in a cramped 1 bedroom apartment. They started to look for 2 bedroom apartments to purchase, but most of them were either way out of their price range or (in their opinion) too far from the center of the city. While some may think that the ability to afford to live in Manhattan is a luxury and makes one "rich", to me the idea of busting my butt to live in an overpriced shoebox is not how I want to spend my best years. FWIW, I live about an hour's train ride from NYC.
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Deleted
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Post by Deleted on Mar 28, 2011 9:37:36 GMT -5
Some person or persons mentioned the difference between $250,000 in NYC versus $250,000 elsewhere in the country. So out of curiousity, I went to one of those salary comparison websites. Supposedly I would have to make $205,000 in NYC (Manhattan) to replace the $89,000 I make out here in the sticks (I used Cincinnati as the closest city). Maybe that's why $250,000 seems rich to many of us that don't live in the NYC area. According to the calculator, if I made $250,000 a year here, it would be the same as $576,759 in NYC. Does that seem rich to the NYC area people and others who think that $250,000 a year isn't rich? I read an article over a year ago about a couple with a small child who lived in NYC. The father was a dentist and the mother was some sort of business person (I really don't remember). They made around $400k/year. They lived in or close to Manhattan in a cramped 1 bedroom apartment. They started to look for 2 bedroom apartments to purchase, but most of them were either way out of their price range or (in their opinion) too far from the center of the city. While some may think that the ability to afford to live in Manhattan is a luxury and makes one "rich", but to me the idea of busting my butt to live in an overpriced shoebox is not how I want to spend my best years. FWIW, I live about an hour's train ride from NYC. Read the same article and brings me back to my wife cousin. For 500K she was able to purchase a nice home in Long Island and in your example, she would be able to get 1 bedroom condo in NYC. She choose the 2hr commute every day in exchange for a bigger home. Like she said she was past the cramped up appartments, that was for her early 20's not late 30's with a husband and 3 kids.
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sil
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Post by sil on Mar 28, 2011 12:18:31 GMT -5
We have another thread, "wealth flight" which discusses the impact of higher state income tax on the increasing exodus from blue states.
It seems to me that the loss of federal tax exemptions/credits and the higher federal tax brackets gives even larger incentive for high-earning individuals to relocate away from HCOLAs, once they've accumulated some wealth.
Corporations will need to offer larger wages in big cities in order to keep talent in HCOLAs, but the working poor will not enjoy the same level of wage inflation. As "rich" incomes go up expenses will rise for everyone, not just the $250k wage earners. Thus the people most punished will be the urban (HCOLA urban) poor.
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workpublic
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Post by workpublic on Mar 28, 2011 12:40:17 GMT -5
Is $250,000 a year rich? for most people.
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Gardening Grandma
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Post by Gardening Grandma on Mar 28, 2011 17:52:48 GMT -5
I don't care how expensive a Manhattan apartment is, or a housekeeper or gardener or nanny. When your income puts you in the top 2-3%, you are rich. And 250,000/yr puts you in the top 2-3%.
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hoops902
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Post by hoops902 on Mar 28, 2011 18:23:23 GMT -5
I don't care how expensive a Manhattan apartment is, or a housekeeper or gardener or nanny. When your income puts you in the top 2-3%, you are rich. And 250,000/yr puts you in the top 2-3%. So if you make $250K, spend $275K, and have a negative net worth, you are rich?
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Phoenix84
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Post by Phoenix84 on Mar 28, 2011 23:22:24 GMT -5
"So if you make $250K, spend $275K, and have a negative net worth, you are rich?"
But in the case you describe, do you propose we call them poor? Should we compare them to someone from a thrid world country who doesn't have a place to live, food to eat, or clean clothes to wear? Even though the person from the third world country may have a better "net worth" than the person with negative net worth, presumably the person making 250k is living better.
It all goes back to how you define "rich." Is it simply by income, net worth, or lifestyle. If you go by income, 250k/year is rich because it puts you in the top 1-2% in the U.S, which itself is a high earning country. If you go by lifestyle, it depends on where you live. In some more expensive areas, it might simply make you middle of the road upper middle class. Also, if you're using lifestyle as a rubric to guage rich, do you compare someone who is in debt up to their eyeballs but living well rich? If you go by net worth, it can make you "poorer" than someone from a third world African country.
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Deleted
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Post by Deleted on Mar 28, 2011 23:37:08 GMT -5
"So if you make $250K, spend $275K, and have a negative net worth, you are rich?" But in the case you describe, do you propose we call them poor? Should we compare them to someone from a thrid world country who doesn't have a place to live, food to eat, or clean clothes to wear? Even though the person from the third world country may have a better "net worth" than the person with negative net worth, presumably the person making 250k is living better. It all goes back to how you define "rich." Is it simply by income, net worth, or lifestyle. If you go by income, 250k/year is rich because it puts you in the top 1-2% in the U.S, which itself is a high earning country. If you go by lifestyle, it depends on where you live. In some more expensive areas, it might simply make you middle of the road upper middle class. Also, if you're using lifestyle as a rubric to guage rich, do you compare someone who is in debt up to their eyeballs but living well rich? If you go by net worth, it can make you "poorer" than someone from a third world African country. I think that is where everyone will never agree. Is 250K a nice income? Definitely Is it rich? Yes and no depending on who you ask. Some people before answering that will consider student loans (my cousin is in medical school and will have close to 200K in student loans), other debt, where they live, assets, etc before answering. I always believed that unless you can afford to not work another day in your life (life off money you have already, inheritance, business income, dividends) you are not rich. Upper class, well to do, financial stable, yes. But if you still need your JOB to substain your lifestyle, you are not rich in my book. The CEO and COO of my company are rich (company has been in the family for close to a century and makes over 1billion in revenue, employs over 130K employees). My friend is rich sine he can afford to not work another day in his life thanks to a combination of large sum of money he received when his grandparents passed away and company stocks in his family business. But my wife cousin making 200K is not rich.
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Elizabeth
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Post by Elizabeth on Mar 28, 2011 23:37:08 GMT -5
We make over $200k per year, but we have a mortgage on an upside down house in AZ that we can't sell, as well as paying rent in San Diego. Add a few more obligations on there, and yes, I DO get worried about money sometimes. You never know what other people have going on in their financial situations, so people could be struggling even at $250k. Maybe they have a mass of medical bills or are paying for kids or relatives to go to college or live in a nursing home. You never know. What irks me is when people assume I should be able to buy something or pick up the tab because they think I make a lot.
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Phoenix84
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Post by Phoenix84 on Mar 28, 2011 23:47:21 GMT -5
"I always believed that unless you can afford to not work another day in your life (life off money you have already, inheritance, business income, dividends) you are not rich."
I understand what you're saying, but what about someone who lives off a $900 a month SS check and doesn't work. They obviously don't "have" to work to live and can live in subsidized senior housing. They don't "need" a job to sustain their lifestyle, so are they "rich."
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Deleted
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Post by Deleted on Mar 29, 2011 0:04:34 GMT -5
"I always believed that unless you can afford to not work another day in your life (life off money you have already, inheritance, business income, dividends) you are not rich." I understand what you're saying, but what about someone who lives off a $900 a month SS check and doesn't work. They obviously don't "have" to work to live and can live in subsidized senior housing. They don't "need" a job to sustain their lifestyle, so are they "rich." If they have a positive net worth, can afford all their wants/needs than they are rich. I want at least 5 Millions by the time I retire, my mom thinks it is nuts because my mom is the type of person that will be happy with 50K for retirement. She does not care for the latest fashion, technology gadgets (basic cell phone), doesn't wear jewelry, etc. She is a simple gal that does not need/want much, as long as she gets to be with her family and go to church she is a happy woman. I mean my mom is the simplest person I have ever met of in my life and it drives me nuts at times because you would love to get her the latest things but I know she will not care for it and a few months later I will find it in a corner collecting dust.
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Post by straydog on Mar 29, 2011 3:50:10 GMT -5
MJ82: exactly. It also depends on where you live. In NYC, you could maybe afford to purchase a studio or a 1 bedroom outside Manhattan and still struggle. But I don't feel bad for those people - they're willing to pay the price of living close to the city. Move to Jersey and you can at least get a decent house on that salary.
SD: When I was looking for a house to buy a few years back, I was considering returning to my home state of N.Y.. On the internet, I spotted a co-op studio in Hempstead L.I.. I think I remember it being listed for around $59.000.
I had the 20% downpayment+the closing costs covered, a high credit score, and five years at my job, so being approved was no problem. All I needed to find out was what the monthly maintenance fee was.
I called the realtor and asked and when he told me what it was I nearly dropped the phone on the floor. $750.00 per month! And on top of that you still had your mortgage to pay. Even though I was guaranteed a job at my chain if I moved there, much of my income depended on tips, so when I heard that I quickly decided that Long Island was not the best place for me to be buying in.
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Post by straydog on Mar 29, 2011 4:26:56 GMT -5
DH: Not to mention all the people living in NYC that make 50k a year. If 250k is hum drum middle class, how are the people making 50k even able to eat?
SD: IMHO, 250k is not hum drum middle class. If someone makes that (whether a single or combined income), and they know how to save, and if they don't think that they are entitled to have the best of everything, then it should be considered comfortable middle class.
The people making 50k certainly aren't starving, but if they live in NYC or L.I., then I think that it will be much harder for them to save a decent amount of money, unless they are renting a room in a private house and driving an older, paid for car.
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skubikky
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Post by skubikky on Mar 29, 2011 6:46:30 GMT -5
Re: Living in NYC.
There are so many factors to consider when discussing whether an individual/family with income of $250k would be considered "rich" which is a divisive and subjective term.
Case 1: You could be a 55 year old couple that has owns a 3 bdrm co-op on West End Avenue and bought it for $400k 25 years ago. You've saved/invested, put a few kids through college and maybe have a NW of a few million. Remember also that it probably took many years to reach that salary level. In reality, both of these people could be NYC school teachers who've been in the system for 30 years and are making $125k each...it isn't unrealistic. Are they "rich"....depends on who you compare them to?
Case 2: 36 yo surgeon, working on staff and in practice at NYU/NYHospital/et al. You make a$250k/yr, but you have about $250k in student loans. You're renting an apartment for maybe $3000/month for a 1 bedroom. You pay NYC/NY State/ and Federal income taxes. You're NW is negative....are you "rich". Hell no, there are janitors and doormen who have greater NW than this guy on their $65k/yr jobs....
It depends on what you've invested, not necessarily what you're currently earning. And of course, the cost of living.
DD lives in E. Rutherford, NJ. Shares a large Victorian half a house with 5 other kids. Her rent is $450 month plus utilities. She can park her car right in front of the house and can get a bus to Port Authority a block and half away. It's a nice neighborhood, parts might even be considered affluent. She'd pay twice that in Brooklyn for less space and less security.
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Deleted
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Post by Deleted on Mar 29, 2011 8:42:09 GMT -5
this discussion is really hitting home with me especially after DH and I considered him applying for an IT management position in Iowa. The position started at $65,000 which at first didn't seem like a whole lot (we were both born and raised in the Northeast, so $65k is good but not good enough to support us in the way we're used to here). But then I started looking at rent rates and home prices - WOW! I mean you could pay a whole lot for a fantastic house, but you really didn't need that much to buy a decent home. Lots of decent homes with an okay amount of property were listed for around $100k. You can MAYBE buy a 1 bed condo here for that price. If he ended up taking that job, adjusting for the COL, it would have more than covered for the fact that I wasn't working and I wouldn't even have to work if I didn't want to. That whole experience opened up our eyes to the fact that if we want to have a personal life and not hate what we do for a living, we'll most likely have to move out of this region.
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mmhmm
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Post by mmhmm on Mar 29, 2011 8:45:15 GMT -5
I don't care how expensive a Manhattan apartment is, or a housekeeper or gardener or nanny. When your income puts you in the top 2-3%, you are rich. And 250,000/yr puts you in the top 2-3%. So if you make $250K, spend $275K, and have a negative net worth, you are rich? No, you're not rich. However, you could have been. If your decisions place you in a position of spending more than you make, you've decided NOT to be rich. Whose responsibility is that?
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Deleted
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Post by Deleted on Mar 29, 2011 8:50:03 GMT -5
I like skubikky's example. When I think of whether or not 250k is enough I think about a young couple in their 30's in a HCOL area. 250k a year doesn't feel like a lot when you are facing 3-5k PITI payments, student loan debt, childcare expenses of over 1k for a single kid, putting away for retirement, and the high taxes associated with major cities. When you purchased a home makes a big difference. Using waffle's col calculator I'd be pretty happy with 500k per year.
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