Inability to imagine life being much different (same in a way as for some poor).
Risk aversion (more than for the truly poor, as arguably they don’t have much to lose).
Lack of an entrepreneurial gene (another form of risk aversion).
For lots of second or third generation only-recently-made-it-to-the-middle-class people: feeling that you’ve got it made, complacence, fear of losing the recent gains. I certainly see this in my family – everyone has placed an emphasis on finding, and keeping, “a good job.” As you know, the old aphorism is that no one ever got truly wealthy working for a salary, which can at best go up a few percent a year. In my family almost everyone would look very askance on anyone who quit a good job (emphasis on steady, hard to lose, decent pay, which corellates with not very imaginative paper-pushing jobs that will never lead to vast wealth) to start a new business, or even to take another job that paid less or had worse benefits but had an entrepreneurial upside.
For some of the ethnic or socioeconomic classes that just made middle class recently, they often did so in ways that were great at getting you to the middle class, not great at all for getting you beyond it. A friend (Irish, Catholic, third generation) told me it was almost literally a rite of passage in his family to either take the civil service exam, police exam, a bartending job, or do all of the above, at 18.
I think in many ways, this is the big one, assuming you’re not incompetent, uneducated or somehow unable to cut it in the working world.
I’ve known several people (senior consultants, executives, etc…) who more than likely make at least a million a year, if not more from their managing director cut of the profits. One of them’s like 31 years old.
I wouldn’t trade with them for the world; those guys were there at 7, and left after 9 every night. Literally all they really do is work- it’s 14 hour days at the office, and then a blackberry and laptop at home, and they usually put in time on the weekends too.
Fuck that. I don’t want to reach old age and wonder where the hell my life went, and think of all the things I might have done had I not spent every spare second working. It’s better, IMO to make 70,000 and work 8 hr days and enjoy life, than 700,000 and work 14 hour days.
Well, using the criteria in this post, I should definitely consider myself wealthy. Lucky me. But in truth, I still consider myself middle class for one simple reason: I still have to go to work; I don’t have enough saved to retire right now.
Maybe it’s because this thread is based on the premise that being middle class is bad, and that those of us who are middle class are being “kept” here by our own poor choices. Otherwise we’d be wealthy…like you. I don’t think I’m twisting anything here, this is what your OP quite plainly says. Do you really have no idea why this sort of thing would rub people the wrong way?
On another note, like others have said, not everyone wants to be rich for several reasons.
In my earlier post I talked about how my coworker makes about 2.5x more than I do. But it isn’t uncommon for her to work 60 hours in a week. Plus her commute is 2 hours a day, so that is a 70+ hour workweek. I don’t want a 70 hour workweek. I like going to the gym, having joints that don’t hurt, having low stress, getting adequate sleep, having time for hobbies and people I know, leisure activities, etc.
Plus, really, what is the point? Here is an example.
Another coworker at my job is about 52, and he is a saver. In a lot of ways he is like me (and like the OP). He lives below his means, abhors debt and saves everything he can. Whenever he gets a raise or bonus he has it automatically put into IRA and 401k investments.
At 52 he has $500,000 in investments. At this rate he should be over a million by age 65.
But really, so what? His social security and work pension combined should be about $3,000 a month in retirement, assuming he collects full SS at 66.
If you invest retirement money at 6%, with inflation at 3%, you can pull about 0.5% out a month and have your money last 25 years. So if you have 100k in savings growing at 6%, you can pull $500 out a month for 25 years.
So if he has a million, that means he can pull $5000 a month out. But what is he going to do with it? In between that, his pension & SS he will have $8000 a month in income. He lives on far, far less than that.
Comically, him having so much money in retirement will raise his taxes. He is a diehard republican, so that is amusing to me.
But he has no kids, and no one to leave his money to. He is going to retire a rich man with more money than he needs. He is not going to spend $8000 a month for 25-30 years.
I figure I can probably retire with $200,000-300,000 in retirement accounts, full SS and a paid off house/condo/mobile home to live in. I don’t really need more than that to retire comfortably based on how I think I will live.
I’d like to be rich enough to retire comfortable, and to be able to switch careers and living situations. If I want to move to Belize or Cambodia for 2 years, I want enough of a cushion to do that. However I have no need to have $7000 a month in retirement income.
Well I don’t know how to do that quote thing that separates each of your questions, so bear with me here okay!
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Heh! Don’t worry about it, I don’t know either. The post just automatically does it when you use the quote function.
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Do I consider myself rich? I do from a personal viewpoint in that I have a very loving wife and daughter, good friends and enjoy life. From a strictly financial viewpoint, yes I would consider myself rich by the standards outlined in the quote I had from ‘The millionaire next door’. As to when a person crosses from middle class to wealthy–I honestly don’t know. I know that the word middle class is pretty elusive it seems. I know several people who make much more money then me and they consider themselves middle class. So I think it has to be a personal definition. Well, I was really asking in reference to your OP subject heading. But I think that’s been pretty well covered. I was pretty much johnny come lately here.
Well in my case, it’s more curiosity and to clarify exactly what you were asking. But I’m a little confused, if you grew up poor, at what point did you segue into, as you say in your OP, (paraphrased) VERY well off? At one point you stated that people should have 6-12 months ahead on their bills. Were you always there? Or did you have to work up to that? FTR, my questions weren’t in that I was dissing you, but in seeing how YOU did it so as to get hints.
OH interesting! I’d like to transfer there.
Well, I think it was your “tone” and your choice of words that have led people to seem as if they are irritated or impatient with your OP. You’re equating middle class with being poor in a way. Using terms like “stuck” “in a spot” “keeping them there” and so on.
If you lived in a place like Alaska where public transportation is poor and travel is crucial for work you may not consider a car loan “bad debt”. Besides, to misquote (was it Yogi Bera?) “no one ever says on their death bed, ‘gee, I wish I’d have had a perfect credit score’”.
Well, we’re kind of talking apples and oranges here. You mention the word comfortable above. If a person can afford it, and it fits into their budget, their goal may not be worrying about being “stuck” as a middle class person. It may simply be in “hey, I’ve arrived where I want to be, now I’ll stay there”.
Now, if a person is truly living way above their means, or too close to them to make it, then that’s another matter, they might in fact be headed for “poor” and that IS something they need to readdress and correct.
Merely being middle class isn’t something that needs to be “fixed”. As many posters have said, it’s a comfortable destination for most people, very much UNLIKE being poor.
Boy, don’t we all! So, a lot of what you were saying was more like “learn from my mistakes” type of thing?
Naaah, I can’t speak for others, but I think most people were more interested in getting clarity than in doing a “gotcha” on you.
And now you understand why msmith’s thread was so offensive.
I know HM didn’t intend to be offensive, but I’m quite glad that making the target US instead of THEM has made the point that I wanted to make in the other thread.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. - Charles Dickens, in David Copperfield.
Twenty pounds was not much of an annual income when Dickens wrote David Copperfield. You would still be poor.
According to earlier posts in this thread, I am either comfortable or wealthy. But like many I view myself as middle class. My “wealth” is because of behavior along the lines of The Millionaire Next Door - I live well within my means and have always saved and invested.
But to the OP, why am I not rich? The people I know who are no-question-about-it-rich don’t really do it for the money or they could have stopped some time ago. Money is the way of keeping score - not in a status manner, but in terms of their success as business people. The folks enjoy running a business and that is their focus in life. The money then just follows naturally as a consequence of success. These people have taken more risks in the past to create their own businesses and have become successful.
In contrast, I have always been salaried - paid by the risk-takers. I have been good enough to be paid well, but rather than go out and do my own thing, I have regarded the money as a means to an end - and end of daily work and being able to enjoy myself. And my enjoyment does not come from building businesses and making more money - it comes from enjoying what I can do with or because of the money I have. I am now able, in my early fifties, to be self-employed just taking on projects that interest me (and often do not pay well) and working just a couple of days a week.
No, I understood why msmith537’s thread was offensive the moment I saw the thread title. I have not even posted in that thread, so I’m not sure why you think I need to learn some kind of lesson about it.
As I have said already, if THIS thread were intended to make middle class posters feel more sympathy for the poor then it’s a failure. If I am to believe the poor feel the same way about their situation as I feel about mine, then they must enjoy being poor. More than that, they feel that their poverty means they have succeeded in life. They must have rejected opportunities to enter higher-paying fields because they find their low-paying jobs fulfilling. They have no serious problems that could easily be fixed if they had more money. There’s no reason tax dollars should go to help them, or for charitable organizations to provide them with assistance. They already have everything they could reasonably want. Because that’s what being poor means, right?
I know people who are poor that fit that criteria. They are musicians and artists. Happy with what they do. They live within their means, their means has meant, at times, living out of the back of their van while they do the Ren Faire circuit. They are “poor” because they choose to be.
And I know middle class people who continue to make poor choices which keep them from being upwardly mobile - they’ve lost tens of thousands on their house on because they bought a lot of house with a balloon. They make themselves a pain in the back end at work so when layoffs come - its “lets get rid of HIM.” They don’t save for retirement.
(The middle class is so large that it doesn’t do much good to wonder why the middle class stays the middle class - its one hell of an economic band to jump in a single lifetime unless you manage to found Google or something. However, it is possibly worth wondering why people don’t climb the economic ladder by smaller steps over the course of their life - which isn’t a judgmental statement - it may be well thought out choice, or circumstances, or poor decisions. )
My Wife and I are middle class (DINKS) and live where we want to and we would not double our paychecks if it meant moving to a place we don’t like. Our home and where we live is our life. Not our money.
You (the OP) might be defining ‘Rich’ differently than other folks do.
I see you put “poor” in quotes, suggesting that these people aren’t actually poor. I’d say that anyone with enough money to live comfortably (according to their own standard of comfort) within their means is by definition not poor. But for the sake of argument, let’s say these people are poor. They’re poor and happy. Good for them. But, for what must be at least the fourth time, suggesting that the poor are happy the way they are is a pretty lousy way of encouraging sympathy for them. I really don’t know how I can express this idea more clearly, or why it is apparently so difficult for others to grasp, but I’ll try again. If I believed that the poor felt the same way about being poor that I feel about being middle class then I would not feel any particular concern for the poor at all. I would be opposed to the poor receiving any kind of special help from the government or even private charities.
Now, I don’t believe this was the OP’s intent. I think he was hoping for a reaction more like “Gosh, I shouldn’t judge the poor so harshly when I’ve made the same kinds of bad decisions. That’s why I’m stuck in the middle class rather than being wealthy!” But this rests on two faulty assumptions: that middle class people do not want to be middle class, and that middle class people make bad financial decisions. In my experience the former is rarely true, and while the latter is more common it’s far from universal. The so-called middle class mindset described in the OP doesn’t sound like me and bears little resemblance to anyone I know.
Quoted for truth, with italics mine. And the smaller the difference between your income and expenses, the more time we’re talking about. It takes a hell of a lot of time to get to the point of being able to retire 10 years early. Which isn’t exactly “drop the balloons, cue the band playing We’re in the Money” money, iyswim. Well-off, certainly, but quite frankly not “wealthy” as most Americans understand it. The OP does, after all, have to get up and go to work just like the rest of us until age 55 or else it all goes off the rails.
It’s going to take us a long time to get to the point the OP is in, probably almost as long as it took him, even with a higher income than he has. We max out our retirement accounts, sure, but we pretty well kissed the first few years of contributions goodbye when the market collapsed. And I don’t know when, or if, things will recover to the point that our accounts will bear the sort of yield the OP’s have. It would take a hell of a lot longer if we’d had to pay off his educational loans instead of him working him off–we’re about a hundred grand up on the people he graduated with just from that. (Well, a hundred grand minus the income tax we had to pay on the forgiven loans, which wasn’t a negligible amount.)
Making more than 30k a year is hardly “elite” programmer pay. Making six figures or close to it is “elite” programmer pay.
I made more than 30k straight out of college in salary alone 14 years ago, and I wasn’t one of the higher-paid people in my class. I did make a 15k bonus that first year though.
A lot of that depends on where you live too… my mother was a special ed/prekindergarten teacher in suburban Houston for 25 years and she made more than your brother did when she retired. And there aren’t pay increases for teaching special ed in her district.
Dad made more than that working for the City as a civil servant in Houston.
Jobs that pay between 45 and 100k aren’t that uncommon at all, if you’re educated and in a white collar job in a big city. It’s the jobs above 100k that are the harder (but neither uncommon or impossible) ones to get- you generally have to be in sales and be good at it, or be in some sort of management/executive position to make that kind of cash.
A very few technical sorts make that much by virtue of being extremely good at something esoteric and hard to learn, but there are probably 20 guys making 65k out there for every one making over 100k in the technology world.
That’s why legal degrees are so popular; unless you work in the public sector, many lawyers start out at the 75k mark and go up from there. If you’re really good, you can start as a corporate attorney upwards of 150. However, if you end up an assistant DA, you may only make 45k or less, which makes it hard to pay off law school loans.
By the standard I’m reading here my wife and I are considered poor as we jointly make less than 40k a year. I certainly don’t feel that way. We have two nice, paid off cars, a motorcycle, a nice 2/2 home that we rent for a reasonable amount. We’ll be saving up to buy in a year or so. We already have all the furnishings and those are paid up as well. We carry little debt. We eat well, and do fun things together. What more do you need? We don’t plan on having children, and since we are young, (I’m 30, she’s 27) we will have lots of time to save for retirement when I find a more lucrative job. Like many people in this thread I don’t like to work too hard and value my time with my friends and family above ridiculous luxury items. I don’t like living poorly just to save a few more bucks for my decrepitude, and would rather live an interesting life full of experiences and travel than a boring, meager existence to gamble on having enough for a comfortable retirement. I don’t want to go see the mountains, I want to go climb the buggers! I don’t want to go on a glass bottom boat, I want to dive with the sharks! If that means that we have a cozy, comfortable retirement rather than a plush one, then so be it. I consider myself solidly middle class and I’m proud of it.
Money isn’t everything. Getting more money isn’t that big a deal to some people. If we changed our lifestyle, we’d be completely out of debt with a big chunk of change in savings or investments. But neither of us is interested in learning how to invest, and we like the way we live. We’ve got money in the bank, enough coming in to beat down our debts while still taking vacations or dining out or buying new toys if we want. The day I measure my worth by a balance sheet will be a pretty sad day, to my way of thinking.
I meet all of the OP’s criteria for frugalness, and I’ll probably still always be middle-class. Why? Because I’m not seeking out a job based on how much it pays. Theoretical scientists don’t earn all that much, unless you’re really good at pulling in grants. I could have gone into, say, engineering instead of physics, and made considerably more, but that’s not what I want to do, and the extra pay would not be worth it for me.
If enduring sanctimony is an integral step on the way to riches, I’m comfortable where I am.
And that’s pretty much it. To me, making money is either connected to honest work or dishonest speculation. I’ll work honestly up to the point where I’m comfortable - no needs, only wants I can ignore and after that, the rest of my time is better spent doing things I enjoy.
