$350k a year now considered "middle-class".....WHAT?

Home ownership is having the title to your house!

If you have a car loan or a home loan, the bank owns the title!

baffled here wrote:

[quote]mysalarytake wrote:

Does she work full time? Why if it's contributing less than 10% to your total income? I'm around your income (single), but if my partner (or I) was making significantly less than the other I would hope one of us would either find a higher-paying job, stop working and enjoy life, or go found a potentially-lucrative startup or lifestyle business or something with all that time. If she's doing something she's passionate about like to give back then I get it, but I have an acquaintance who's a partner at a consulting firm (>$1m) and his wife works for well under $100k for something she doesn't really enjoy and we don't get why.

She likes to keep up her skills and works 2-4 days a month.

For many people (my wife included I suspect), working is part of an identity. Choosing that career path, going through all the hoops to make it there, establishing and maintaining professional relationships, after enough time it becomes a part of our identity. This is why retiring kills people. Also, many people in relationships feel the need to contribute, even if it is a fraction of what their partner makes. It is part of maintaining independence in a relationship, which is healthy for the individual and the couple. If my wife made 10x more than me, I'd still be in my job (although I'd work slightly, but not much, less).

I suppose if I was in finance, managing hedge funds, IBanking, some other toxic industry which values profits/money above all else I might feel differently, but we both quite enjoy what we do and the money differential isn't really a factor for us.

mysalarytake wrote:

I suppose if I was in finance, managing hedge funds, IBanking, some other toxic industry which values profits/money above all else

Get over yourself. There's no industry more toxic than healthcare. Would you do your job for $50k/yr? Would your wife stick with you?

$350k is pretty decent if you’re starting out.

Gordon Gekko wrote:

But you probably bought your home 10 - 20 - 30 years ago.

Try to buy your home today. Would you be able to buy it with your current salary?

Bought it three years ago, bro.

DudeBroMan wrote:

Gordon Gekko wrote:

But you probably bought your home 10 - 20 - 30 years ago.

Try to buy your home today. Would you be able to buy it with your current salary?

Bought it three years ago, bro.

But how much was your house and how much cash you put down for it?

US "home ownership" is a pretty loose term when you can "own" a home with just 3% down.

Basically you own nothing.

Gordon Gekko wrote:

But how much was your house and how much cash you put down for it?

US "home ownership" is a pretty loose term when you can "own" a home with just 3% down.

Basically you own nothing.

I understand how home ownership works, bro.

In the US it is also understood that when someone asks you the question, "Do you own your own home?" they are not asking "Is your home completely paid off?" They are asking if you have a mortgage rather than renting.

I didn't invent the language, broseph. So no need to give some pedantic lecture about the intricacies of the home buying process.

highhoppingworm wrote:

Yup. Live in Boston. 350k is definitely middle to upper middle class. People will call me disconnected but that’s the reality in a place where:

1) daycare costs 3500 a month

2) livable single family homes in good school districts start at 1 million

That alone runs 100k a year month in fixed expenses. Want to save money for retirement, go on one vacation a year or save for your kids college let’s call it 150-175k. 250k pre tax basically gets you to that and then you need to actually do things like eat etc.

Bring on the hate!

Yeah, I hear you. I live in the Boston suburbs and my spouse and I make probably just over $300k combined. But I think of us as more like upper- or upper-upper middle class. Two kids in public school, an objectively modest house, one car (Subaru) -- all these seem middle classish. But our public school is great, our house is probably worth just under $1M and we have significant annual savings (401ks, backdoor Roth, 529s, and taxable), a vacation condo, and we usually take 3-4 weeks of family vacation per year. We basically live relatively modestly day-to-day (cook all meals at home, etc.) and then spend a lot on travel/experiences (e.g., season ski passes). By any measure, I think we're doing a lot better than "middle class", but I guess I don't really think you're rich until you can walk away and still maintain your lifestyle. No way we could do that yet, but maybe in 15 years or so. I think this illustrates one key point the author of the original article seems to miss badly -- expenses change over time. It sucked when we paying about $50k/yr for day care/preschool, but we're not anymore. After school care isn't cheap, but it's more like $10k/year and that's only for a few more years (summer camps are still insane though). And in 15 years, my kids will (hopefully) be out of college or nearly there, so no more 529s -- another $20k/yr freed up. Our mortgage will be paid or nearly paid. So that's another $25k/year. Once we're ready to walk away from our jobs, we obviously won't need to save for retirement, so there is another 50k/year. And just like that our annual expenses are down by ~$100k (and hopefully our incomes are still going up!). So not everyone is going to need $5-7M to retire and maintain their (upper-) middle-class lifestyle, as the author asserts. I'm thinking we'll need about $3-3.5M to call it, which is a lot of money for sure, but should be achievable by most households making >$300k I would think.

Cities are over rated. Better to make slightly less and live in a small town where things are cheap than to get sucked into the city lifestyle where everyone is working non-stop and spending their lives fighting pollution and traffic while trying to get enough to pay for their overpriced homes (that are the first to crash when the housing market turns). You might be middle class at this point in your career, but not down the road. You need to appreciate how unique your income is earning $350k working 10 days per month (2.3 doctors per 1000 people). It pays to take on the med school debt (my wife is a doctor) and live in a less expensive part of the country as after 10 years all your debt will be gone, you will have a nice nest egg, and you will be able to enjoy time with your kids, which is ultimately far more rewarding than the extra money you might make working harder in the city. Good for you.

These are all very fair points. The kids will graduate into the public school system, mortgages do get paid down etc.

Let me rephrase... 350kish is about what I think it takes to live a financially responsible middle to upper middle class lifestyle in a HCOL area. Responsible is defined as:

1) No accumulation of consumer debt. Mortgages are ok.

2) Maxing out all tax advantaged accounts and any non advantaged accounts to the extent you need to in order to hit a reasonable retirement goal

3) Be able to manage short term income fluctuations if you or your partner are out of work for a period without having it blow up your life.

4) Give your kids a head start if that is something that is important to you.

I suspect lots of people in Boston, NYC, San Fran etc. make less than 350k but live a nice house and appear middle class but I also suspect the that they aren’t able to do the above things which, IMHO, are the keys to low stress financial well-being.

Really, 1 million people in Manhattan make that much? All those apartments in Washington heights, Stuyvesant town, Penn South. Not to mention Harlem, the Lower East Side are owned by millionaires?

highhoppingworm wrote:

Let me rephrase... 350kish is about what I think it takes to live a financially responsible middle to upper middle class lifestyle in a HCOL area

$350k per year is more than 97% of household income in the United States. How can the top 3% be considered anywhere near the middle class? It seems like you’re defining “middle class” based on a lifestyle as opposed to what the 40-60% of household income is ($50k-$80k per year).

Why can’t the people in the middle of the income brackets live a middle class lifestyle?

Not all but I think you underestimate the salaries relevant to tech and finance. It may not feel good to hear this kind of stuff but a HH income of 500k+ is pretty typical in VHCOL areas with two educated working adults. It isn't EVERYONE as Roy indicates but it is an increasingly sizeable portion of property owners.

I am in Boston, in tech, and the average total compensation packages for my direct reports is around 400k. They are mid to senior level managers (not executives) at a large but non-FAANG company. The people below them probably average 250k-300k most of whom are college educated individual contributors. They are not abnormal here and many many companies poach them on a frequent basis offering higher salaries. Many of them may not be the primary breadwinners of their household.

Just my perspective.

Location is everything. I am being very specific to the top 3-5 most expensive cities to live in, and even more specifically speaking to the metropolitan areas. And yes.. I am defining it based on lifestyle.

I'm tired of people inflating what it means to be "middle class". Let's hit the big ones first.

Middle class means your kids don't go to private school. Middle class means you don't max out your 401k. Middle class means you don't put $12k per year into a 529. Middle class doesn't mean you take two, week-long vacations to Hawaii every year.

Now the smaller stuff. $70 a day for food? My household gets by on less than half of that. $350 a month on "baby items"? Diapers are maybe $100 a month. You only have to buy one crib, stroller, and car seat ever, per kid, at a total cost of maybe $1500. How the hell are you spending $4200 on baby crap every year? $500 a month on entertainment? $400 a month on clothes? You could get by on less than half of all that crap.

Interesting thread. As another data point...

Our household income (pre-tax) is about $160k, and I'd say that puts us very solidly into the middle class, if not even upper-middle class for Portland, OR. Own our house (and yes, "owning" means having a mortgage to every sane human being ever), share one new car (leased, don't even start...), vacation domestically/internationally, eat out plenty often, etc. Probably the most interesting way to define it: I don't worry about the cost of things that I'm buying (like I don't bother shopping around on dates for cheapest plane ticket, the moment I need new shoes I get 'em, I order scallops when on the menu), but also relish being thrifty and not wasting money (ride bike for most trips, cook at home, perform home repairs when capable).

If I had to guess at the $ line that divides lower/middle and middle/upper class lifestyles in Portland (or most over medium sized cities), I'd probably say $70k and $200k.

Just remember, "middle class" phukkos who are, in fact, not in any meaningful way middle class at all:

It is easier for a camel to fit through the eye of a needle than for a rich man to get into heaven.

Translated, that means that rich people are known throughout history to be phukking arsseholes.

That means YOU if you are nonchalantly arguing that 350K is somehow a middle-class salary.

WhyRegisterHere? wrote:

It is easier for a camel to fit through the eye of a needle than for a rich man to get into heaven.

Translated, that means that rich people are known throughout history to be phukking arsseholes.

I'm going to go out on a limb and guess that you're not a biblical scholar, bro.

Step 1: attempt the impossible task of fitting every income level from abject poverty to billionaire neatly into the lower, upper, and middle class buckets

Step 2: argue over which bucket a given income level should be placed in

Step 3: refuse to acknoledge that the disagreement is probably mostly an artifact of using an insufficiently nuanced classification system rather than any actual difference in values or opinions

Step 4: repeat steps 1-3 over and over and over