Here is the difference - $125K/year when you are 50 with your student loans paid off, cars paid off, house paid off, and kids out of the house - you will have a very good lifestyle.

Meanwhile, if you are 30 with all of those bills still in front of you, $250K will cover expenses but you will not feel rich.

And the people that I know that got wiped out at that $250K income level have 1 of 2 main issues (not medical debt):

1.) Autistic kid
2.) Divorce

So, I think it is not a surprise upper earners are not rushing to get married and have kids.

"#8 | Posted by LampLighter"

$500K or more. If you are making $250K at 30 and married, you need to grind for another 15 years+ to stack a $1.0M+ in assets. At $250K in Wisconsin (say Milwaukee), your after tax net is ~$170K or $14K/month.

Average home price: ~$700K in the suburbs, monthly payment including PTI: $5,500
Home maintenance (1%/year) = $7000/year = $600/month
Cellphone and cable/internet = $200/month
Assume student loan payment of $500/month X 2 people = $1,000
Assume care payment at $1000/month X 2 people = $2,000
Gas for cars: $150/month X 2 people = $300
Assume heat/gas at $300/month
Average cost for meals: $300/month X 2 = $600

So, after these typical bills, you are at $3,500/month or ~$42,000 per year before any other spending on vacation, buying household items, clothing, or kids, etc. That is not living rich AT 30. But, once they are 45 and your income goes from $250K to $389K in 15 years (3% yearly increase), and the house payment is now only 17% of gross income rather than 26%. Also, their savings start to compound. Assuming they could save 50% of their $42,000/year (assume loans paid off after 5 years with yearly increases), that should be worth $1.025M at 10% savings rate. Also, their house should be worth (3% yearly increase) $1.1M and the remaining mortgage will be ~$480K meaning they will have $620K in home equity. So, savings + home equity = $1.65M AT 45 so they can start to feel a little more rich. However, any job insecurities, overspending, or kids will put a big dent in this. I should note, that $1.65M in net worth would be ~$1.1M in today's money assuming 2.5% annual inflation.

I will also note - having $1M in net worth (with 50% investments and 50% in home equity) IS NOT LIVING RICH today. You have a nice nest egg to build upon - but, YOU ARE NOT RICH. 20 years ago when $1M meant something? - sure. But today? Nope. Especially when it comes to home equity. It is only net worth if you are willing to sell and downsize or retire in a cheaper state.

"Scott, I am very similar to your #10 situation and I definitely do not feel rich. I would certainly agree that pulling in 500k a year is def where one would feel "rich."

Like I said, I think it depends on your individual circumstances (married vs. single, kids, loans, location) but a family pulling in $250K at the age of 30 should not be out buying a GT3 RS. They should be trying to get that investment account up so you can start to have meaningful investment gains. However, if you are at the $500K income level - yeah, you should finally start to feel rich.

"I've concluded I'm going to need 5MM in assets by the time I retire to live comfortably.
#11 | Posted by Bluewaffles"

How old are you if I may ask? The big unknown is what happens with inflation and the housing market. If we get Biden level inflation again, that $5M may not be enough if you are talking retirement in 30 years time. The power of compounding interest makes your investments look great - but, it also applies to inflation.

So people can understand this: $5M in 30 years time is worth today:

@2.5% inflation = $2,383,713
@3.5% inflation = $1,781,392
@5.0% inflation = $1,156,887

5% inflation is not unheard of and with our ballooning government debt and spending, we may get this. So, $5M may sound like a lot - but, I don't think anyone with $1.1M in total retirement savings today is living the high life. You are watching your spending so you don't outlive your savings.

"Why does Pres Trump's tax bill seem to give even more tax credits to those "rich" at the expense of reducing healthcare for those who may not be "rich?"
#12 | Posted by LampLighter"

I am fine giving tax breaks to households making under $100,000/year. In fact, I am fine with ELIMINATING ALL TAXES on households under $100,000/year. In total, this would reduce Fed Income tax collections by 12-15% or ~$300B in total. It really wouldn't even be a big increase to the deficit at this point.

You know who will not agree with that? - DEMOCRATS. We see this with them voting against no tax on tips, no tax on overtime, and no tax on social security.

They do this because they know their unwashed mass of voters will continue to fall for their 'paying their fair share' --------.

If taxes were completely removed on under $100,000 - only the dumbest of the dumb would still continue with the 'fair share' nonsense when they are paying $0. And that is why this will never happen - Democrats.

But, I would gladly cut their taxes to $0 just so I never have to listen to a braindead liberal whiner ever ------- mention 'pay their fair share' again. Same reason why we won't get means testing for Social Security - Democrats.

"I'm talking about people trying to live day-to-day,
#13 | Posted by LampLighter"

Work harder - simply solution. Bluewaffles is not taking money out of your pocket to amass his savings so why are you so jealous and angry?

"Scott, I am in my mid to late 30's. I work in financial markets and previously dealt with financial planning so I am 100% tracking on everything you are trying to explain to people.
#18 | Posted by Bluewaffles"

Well, it is good at least someone on here has some common sense. I really do try to help these people understand these topics because it will have a very large impact on their life.

For me, I am almost 50 - I have had good paying jobs my whole professional career so I am getting ready for retirement. I was a millionaire by the time I was 30 (totally self-made) mainly due to really good investments in rental properties and I have been stacking cash the last 20 years on top of that. I think I will call it quits in another year or so. Both of my parents died in their 70's so I am hoping that I get 20 years to enjoy myself and then die of a massive heart attack in my 70's - so, no nursing home taking my money and no bad quality of life up to that point.

I have saved and invested well so I think I have little chance of outliving my funds. I did all my world traveling when I was younger so I do not plan to drop a lot on that. I think my biggest expense will be buying quality hardwoods for woodworking.

"If a household makes 250k and they struggle at any time, THEY are the problem.
#24 | Posted by humtake"

That is not the argument being made here - the argument is that they don't feel 'rich' - and I would agree that is true as I detailed above. That is a whole lot different from struggling. If you struggle at $250K, you probably have a coke problem.

"You could barely do it on 2 x $100K incomes. And it would be a 2br 1ba without central air.
#27 | Posted by snoofy"

When you are starting out, you buy a condo or a starter home and build equity. You can still get a starter home for ~$650K in San Diego. Granted, it is not beachside in La Jolla and it will be a small 1,200ft 3+2. But, if you do a 10% downpayment, you can swing that on $200K without much struggle.

"With a 30 year mortgage?"

Yes - because normal people don't pay the minimum payment when they have extra cash. For your 30 year mortgage, after 20 years your mortgage payment will be much lower as your salary should have increased by a lot while your payment stays fixed. I paid off my mortgage within 15 years by always paying extra. When I bought my first house, I was 28 and paid ~$500K. At the time, I was making ~$125K-$150 a year.

"Most people, who can, are buying their houses in their 30s."

Yes - thus, your incomes should be higher and you should have a nice downpayment saved up. The only real problem right now is the high interest rates.

"If you can have your house paid off by the time you're 70, you're doing better than most Americans.
#31 | Posted by ClownShack"

Being above average in American is not that difficult. By having a college degree, I was better than most Americans. By having an advance degree from a T-20 school, I was MUCH better than most Americans. By not having a substance abuse problem and criminal record, I was much better than most Americans. Most of this comes does to personal choices and responsibility. Also, I never dropped huge money on cars when I was young. Even my daily driver Mercedes I have now, I bought a 2 year old model.

"You've never had a ------- job, you slack-jawed idiot.
#29 | Posted by LegallyYourDead"

Your jealousy is not a good look for you -------. No one that has read my posts has any doubts about my history regardless of how much you wish it was not so.

"#34 | Posted by Alexandrite"

Jealous much?

Danforth has yet to win an argument against me and I have exposed him as a cosplaying as a 'tax preparer' ignorant of even the most basic tax items. As a reminder, I exposed him lying about what % of the Trump tax cuts the top .1% received and then destroyed him on his ridiculous claim that most of the Trump tax cuts for individuals had already expired - thus proving he never prepared a tax return. For the top .1% claim - it is extra funny as Danforth's problem was a basic inability to read a chart.

Again, I know it pains you - but I have demonstrated by background on this site repeatedly. No one has doubts.

"#36 | Posted by Scotty"

Literally everything that I say is bang on - which is why none of your -------- will ever challenge my numbers.

"Your numbers exist in a vacuum, outside of reality.
#39 | Posted by ClownShack"

And which number is wrong? -------- like you like to fling your --- like a zoo monkey because that is all you are capable of doing.

"He's 100% against you.
#40 | Posted by Alexandrite"

You really want to link to his post where he demonstrates that he does not know how to read a simple chart? probably one of the reasons why he made his ridiculous "the .1% got a majority of the Trump tax cut" nonsense to begin with.

"I'm saying they're not realistic for the majority of people.
#44 | Posted by ClownShack"

So, we should limit discussion to dirt poor rubes like yourself - like how to save on your water bill by using a 'family flush'? The point of this article is talking about people making $250K. If that discussion offends you because it reminds you of your personal economic failings, maybe you should have not clicked on the thread.

"#50 | Posted by Danforth"

Just shut your mouth and slink away again. I already linked to your greatest failures in my #43. Have you learned to read a chart since then?

"#55 | Posted by oneironaut"

I think for this point on the 30s buyers, the statement is meant about 1st time homebuyers. This is true today, but it has been in the 30s since the mid 80s so this is not a recent thing.

"#61 | Posted by Danforth"

Well if it ain't the old cosplaying 'tax preparer' making a return visit. You learn to read a chart yet -------?

"So, all your current trolling alias seems to have is unsubstantiated accusations?
#63 | Posted by LampLighter"

Which claim is unsubstantiated?

That he is cosplaying as a tax preparer? No, that was proven beyond a shadow of a doubt when he claimed that the majority of the provisions of the Trump tax cuts for individuals have already expired. Now, he did this during the last tax season. In fact NONE OF THE PROVISIONS had expired. Not knowing this would be an egregious lack of competence in his field to the point it would be impossible.

Or, that he cannot read a chart? Well, that was clearly documented per by #43.