Do you think $250,000/year is wealthy?

[Marie in Oh]

I don't know many. Most good old fashioned doctors and lawyers don't. I know that for a fact.

 

We used to know a few people who made that kind of money. Many of them were dual income people. Some where just the dad worked were lobbyists at or lawyers for special interest groups, etc. The community we lived in was high cost of living-- average house 560K before the bubble burst. These families were not struggling-- except for maybe what to spend their money on. They took their kids on vacations-- to Europe, Africa, and South America. Their kids wore designer clothes all the time. They went to camps, participated in activities that cost hundreds of dollars a month.

 

250K is a lot of money, no matter where you live. It is a lot to spend. It isn't wealth. True wealth is money earned with no work attached.

 

It is what a person does with that kind of money, or any money, to become wealthy. Net worth determines wealth. I don't think these people were wealthy. They had money to spend.

 

Wealthy isn't income. It is making your money work for you so you then don't have to work yourself. We know a few wealthy people-- they don't hold real jobs. They golf and look in on their investments. This is wealth in my mind.

[Pamela H in Texas]

I definitely consider it wealthy....of course some people could live really poorly on that much while others can do quite a bit better on a quarter of that. A lot depends. But really, $250,000/year is almost beyond my comprehension.

[Unicorn.]

I think it is MORE than wealthy, as in stinkin rich! I got news for you, my dh has the same amount of student loans that a person who makes $250,000 has, and he only makes 1/5 of that amount, and we can't afford health insurance. So yes, someone making that amount, imho, is extremely wealthy!

 

I also understand that the cost of living is determined by where you live, but even in Jersey or NYC, I would consider that amount wealthy!

[TraceyS/FL]

Absolutely!

 

A family health insurance plan is somewhere around $1200/year.

 

 

$1200 a year?????????? i'm moving to NH!

 

My DH's last job it was $1385 a month - and we had to pay the whole thing, and i wont' be shy here, it was 3/4 of our take home pay. He doesnt' work there any longer....

 

We are not eligible for individual insurance due to skin cancer, prior injuries, and 2 kids with life long medical issues. They laugh at us when we apply.

[mommaduck]

It's stinkin' rich! Add the fact that a person can pay health insurance on it, heavens yes it's rich!

 

We don't earn even a 1/5 of that either and only my husband is covered by insurance through work. We pay all other medical out of pocket.

[lynn]

depends where you live.

[Mom0012]

Yes, I consider it weathly. We live in Northern Virginia, which is an expensive area and my husband makes less than 1/3 of that. We do fine on my husband's salary, but don't have much extra. If we had $250,000/year, we'd be able to do anything we wanted.

 

Lisa

[Erica in PA]

I was talking to a friend today and she made a comment about $250,000/year being wealthy. I disagreed. Not when you take into account the student loans someone making that much probably has and health insurance costs. My friend only pays $40/month for health care so she agreed that she has no idea what it is like for the average American who has to pay for their own hc.

 

What do you think? Is $250,000 for a family wealthy or firmly middle-class?

 

Considering that that amount is almost 10x more than our family makes a year, I consider that wealthy. :tongue_smilie:

[RebeccaC]

It is what a person does with that kind of money, or any money, to become wealthy. Net worth determines wealth. I don't think these people were wealthy. They had money to spend.

 

Wealthy isn't income. It is making your money work for you so you then don't have to work yourself. We know a few wealthy people-- they don't hold real jobs. They golf and look in on their investments. This is wealth in my mind.

 

 

Good post :iagree:

[CAMom]

For those that consider it wealthy, are you just taking into account day to day living expenses or are you factoring in being able to save for retirement (15% of your income), pay for your kids' education, give to charity, put away 6 months worth of living expenses, etc.?

[PariSarah]

I would consider it wealthy, but I tend to define wealth from more of a global perspective.

 

It's not "wealthy" if you compare yourself to Brangelina. But if you compare yourself to the entire US, it is. It's enough to put you in the top 5% of households in the US. Probably top 1% globally, although I don't know for sure.

 

If being in the top 5% of households in the US isn't wealthy, I just don't understand the meaning of the word anymore.

[Plucky]

I agree that most $250,000 households are two-income families.

[HRAAB]

For those that consider it wealthy, are you just taking into account day to day living expenses or are you factoring in being able to save for retirement (15% of your income), pay for your kids' education, give to charity, put away 6 months worth of living expenses, etc.?

 

We've done the above - excepting that we homeschool - on $50,000. or less.

 

Janet

[dangermom]

I'd consider that comfortable and well-off, but not wealthy. I live in California, but a more rural area.

[mommaduck]

For those that consider it wealthy, are you just taking into account day to day living expenses or are you factoring in being able to save for retirement (15% of your income), pay for your kids' education, give to charity, put away 6 months worth of living expenses, etc.?

 

As far as I'm concerned, if you are able to put away/pay for all of that, then you are pretty darn well off. Most of society can't even dream of retirement, their children will have to earn their way through college, and are lucky to make each months bills plus any surprises that come up.

[Zelda]

I looked up San Francisco, and only 7% of the population makes more than $200K, about the same as those earning $20-30K.

 

Most households were in the $100-150K range, so that would be middle class.

 

So, even in San Francisco it would put you at the top of the heap.

 

It might put you at the very bottom of the top heap if you are a single earner. At the top of the middle heap for a couple but not the tippy top. Most of the working couples I know here (near SF) make over $250k/year. Remember that there is a large lower class in the Bay Area that skews these numbers and doesn't tell the whole story.

[Zelda]

So many variables. In some situations it would be wealthy. In some it wouldn't. In almost all it would be at the very least, quite comfortable. I could find a way to "get by" on that. :001_smile:

 

Of course, I think that even if you make $250 kajillion/day the government shouldn't confiscate it.

[Renee in NC]

For those that consider it wealthy, are you just taking into account day to day living expenses or are you factoring in being able to save for retirement (15% of your income), pay for your kids' education, give to charity, put away 6 months worth of living expenses, etc.?

 

Going back to my calculation:

 

15% for retirement - $37,500 (assumes 6 months of expenses was already saved or saved first)

 

10% for charity - $25,000

 

I plugged these extra numbers into the tax calculator (and the state tax as well - forgot that before) and got a reduction in taxes of $20,000.

 

Net (from the $109K figure) is $66,500. And this hypothetical family has retirement savings and health insurance. Even subtracting out the payment on a $500K mortgage, you are left with $25,500 per year.

 

About where we fall.:D So, yeah, still wealthy.

[CAMom]

As far as I'm concerned, if you are able to put away/pay for all of that, then you are pretty darn well off. Most of society can't even dream of retirement, their children will have to earn their way through college, and are lucky to make each months bills plus any surprises that come up.

 

So, then, "wealthy" is being able to live comfortably now and prepare for your future?

 

My family doesn't make $250 but we do make an amount that has already been considered "wealthy" here. We live in a high cost of living area, save 15% for retirement, save for our kids' college (they will have to work for some of it), give away 10% and save for emergencies.

 

We live comfortably but not extravagently for our area. I don't consider us "wealthy."

[Renee in NC]

It might put you at the very bottom of the top heap if you are a single earner. At the top of the middle heap for a couple but not the tippy top. Most of the working couples I know here (near SF) make over $250k/year. Remember that there is a large lower class in the Bay Area that skews these numbers and doesn't tell the whole story.

 

According to the figures I found, the 7% is HOUSEHOLD income, not individuals. I was looking at a distribution of incomes, not median income. Distribution would not be skewed by a high number of low wage households. Actually, the US Dept of Commerce figures showed the opposite - that more households fall at the upper end than the lower.

[CAMom]

Going back to my calculation:

 

15% for retirement - $37,500 (assumes 6 months of expenses was already saved or saved first)

 

10% for charity - $25,000

 

I plugged these extra numbers into the tax calculator (and the state tax as well - forgot that before) and got a reduction in taxes of $20,000.

 

Net (from the $109K figure) is $66,500. And this hypothetical family has retirement savings and health insurance. Even subtracting out the payment on a $500K mortgage, you are left with $25,500 per year.

 

About where we fall.:D So, yeah, still wealthy.

 

OK, but if you live in an area where property taxes are 10K or more per year, gas is more expensive, health ins. is more expensive (over 1K per month), utilities are more expensive, food is more expensive, etc....then?

[Colleen]

Regardless of where one lives in the US, most people making $250k will own a home (even if it's not their dream home), eat 3 square meals a day, own one or several cars, have decent clothes to wear, have access to medical care, own at least one computer, have cell phones and cable tv, etc. Even if they are broke by the end of every month, they will have all their basic needs met and most likely a little extra (or a lot extra, depending on where they live).

 

:iagree::iagree::iagree:

 

(And furthermore...

 

:iagree:)

[Renee in NC]

So, then, "wealthy" is being able to live comfortably now and prepare for your future?

 

 

Yes. It's all so relative, though. What does "comfortably" mean? I imagine my standards and someone's standards in that income bracket (no matter where) are going to be markedly different.

[Zelda]

According to the figures I found, the 7% is HOUSEHOLD income, not individuals. I was looking at a distribution of incomes, not median income. Distribution would not be skewed by a high number of low wage households. Actually, the US Dept of Commerce figures showed the opposite - that more households fall at the upper end than the lower.

 

I'll take your word for it. I certainly don't trust my head for statistics. Its not what I see here but my anecdotal information is limited in scope.

 

ETA: Is your information for all of the Bay Area or just San Francisco? That would make a considerable difference. I'm seeing a page with similar results but it includes the Bay Area beyond San Francisco.

[mommaduck]

So, then, "wealthy" is being able to live comfortably now and prepare for your future?

 

My family doesn't make $250 but we do make an amount that has already been considered "wealthy" here. We live in a high cost of living area, save 15% for retirement, save for our kids' college (they will have to work for some of it), give away 10% and save for emergencies.

 

We live comfortably but not extravagently for our area. I don't consider us "wealthy."

 

Actually, yes I do. Most of the world cannot do this. Most people in the US cannot do this. Retirement is a relatively new invention for those that aren't of the upper classes. You may have your share of bills to pay, but you are "wealthy". Count yourself blessed. One doesn't have to be Daddy Warbucks to be wealthy/well off.

Edited October 15, 2008 by mommaduck

[Pamela H in Texas]

For those that consider it wealthy, are you just taking into account day to day living expenses or are you factoring in being able to save for retirement (15% of your income), pay for your kids' education, give to charity, put away 6 months worth of living expenses, etc.?

 

Not sure I can make this make sense, but....why would they get more consideration than any of the rest of us? It wouldn't be any harder for them than it is for us. In fact, I still think it'd be considerably easier. Also, they don't HAVE to have considerably more bills than us. THAT is a choice. They COULD live as if they made $50-100K instead.

[Just a Jen in Mississippi]

In Mississippi where I live, that would be considered wealthy! If we made that and didn't get into a bigger mortgage, I'd feel like I had money running out of my ears!

[Renee in NC]

OK, but if you live in an area where property taxes are 10K or more per year, gas is more expensive, health ins. is more expensive (over 1K per month), utilities are more expensive, food is more expensive, etc....then?

 

I figured health insurance at $2500 per month - way more than what you are saying.

 

When you are talking to a person whose family lives on $25K, none of that matters. As it keeps getting pointed out on the board, people make choices. Even people at the $250K level have to live within their means. Can people feel stretched at $250K? Of course!

 

A person who has $250K per year has a LOT more options, choices, and creature comforts than someone at the $25K level. And for me, $250K would be EXTREMELY wealthy, as it would for most other people.

[Stacy in NJ]

In NJ it is not wealthy.

 

:iagree:

 

In NJ $250,000 is middle class.

[Renee in NC]

I'll take your word for it. I certainly don't trust my head for statistics. Its not what I see here but my anecdotal information is limited in scope.

 

ETA: Is your information for all of the Bay Area or just San Francisco? That would make a considerable difference. I'm seeing a page with similar results but it includes the Bay Area beyond San Francisco.

 

I included the whole Bay Area as that is the metropolitan area (and how this sort of thing is tabulated.)

[TraceyS/FL]

OK, but if you live in an area where property taxes are 10K or more per year, gas is more expensive, health ins. is more expensive (over 1K per month), utilities are more expensive, food is more expensive, etc....then?

 

Homeowners insurnace... don't forget that!

 

What i've learned is that most people can't relate to the cost of living in an area such as CA.

 

My electric bill is almost the same here - and there i didn't have AC for example. My water bill is 1/4 of what my grandma pays. She is one, we are 5.

 

So i'm probably swayed in my feelings because i have lived (for 35 years) in a spot that expensive. We always said, if we could take our income and plop it somewhere else - we'd live like kings!

[Jenny in Atl]

For those that consider it wealthy, are you just taking into account day to day living expenses or are you factoring in being able to save for retirement (15% of your income), pay for your kids' education, give to charity, put away 6 months worth of living expenses, etc.?

 

To me retirement, kids education, charity, etc are all luxuries. I would love to be about to have the extra $ to do those. Heck, even a cheap vacation once every ten years would be nice.

[Zelda]

I included the whole Bay Area as that is the metropolitan area (and how this sort of thing is tabulated.)

 

Okay, well, I will say that, like many big cities, what goes on in the areas surrounding the city proper do not reflect what happens in the city. There is a lot of wealth in SF and it drops off considerably outside of the city, picking up again in pockets here and there.

[Renee in NC]

:iagree:

 

In NJ $250,000 is middle class.

 

In New Jersey it would still put you in the top 7-8%.

 

Middle class would be the 25-75 percentile.

[mommaduck]

To me retirement, kids education, charity, etc are all luxuries. I would love to be about to have the extra $ to do those. Heck, even a cheap vacation once every ten years would be nice.

 

No kidding! What is a vacation? We've only had one in our marriage and it wasn't even with the kids :(

[Pamela H in Texas]

I don't consider us "wealthy."

 

I don't guess that many outside the "stinking filthy rich" group consider themselves wealthy (monetarily). It doesn't mean it's not so in the grand scheme of things.

 

For example, it's said to be the top 7% of whatever CA city was mentioned earlier in this thread. It's an even smaller percentage of the whole country. And it's the very tip top percentages in the whole world. Yeah, $250K is A LOT of money to the GREAT majority of people.

 

I'd guess my family is on the lower side of middle class and we STRUGGLE. I find $250k/year to be just about unimaginable. I so could make it anywhere VERY comfortably on that. Without going haywire, I probably couldn't even figure out how to spend that much the first year or two! LOL I'm sure I'd adjust though...LOL

[bkpan]

I know people in many regions (including mine) believe otherwise, but as far as I'm concerned, $250,000 a year is wealthy. It depresses me that anyone wants to classify this kind of income as middle-class. Hogwash.

 

:iagree::iagree::iagree:

 

It also speaks to me of just how "wealthy" our society really is and how the money blinds us and shelters us from the world around us. I too find it really depressing that we can actually consider those kinds of numbers as middle class. Goodness, we take SO much for granted!!!

:rant:

 

Kim

 

ETA: We are a family of 8 living on less than 1/2 that amount and WE are wealthy! A year ago we lived on that amount in Las Vegas NV (much higher cost of living), and we were STILL wealthy!

Edited October 15, 2008 by bkpan
still needed to rant! I need a nap.

[Pamela H in Texas]

What i've learned is that most people can't relate to the cost of living in an area such as CA.

 

Well, I won't pretend to totally "get it." However, if the cost of living is 3 times what I'm used to and the income is over 5 times what I'm used to..... I still am in for a pretty sweet surprise.

[homeschoolmom]

:lol::lol::lol::lol:

 

No, no. You have to have MULTIPLE families in various parts of the country try it.

 

I volunteer for NC!

 

OOOOh, I'll rep NJ! :D

[Rhonda in TX]

I have a friend whose DH probably makes about this much. They live in a reasonably priced area. They do not have much in the way of debt and are savers. They pay cash for just about everything and are able to buy pretty much what they want (which may be less than what others buy). They live in a big house that they have remodelled over the last few years. They take a nice family vacation every year (just got back from a Disney cruise). Both of their girls are in private school and they have a college age girl as well. All of those bills are paid in cash. They just bought a vacation condo, but they got a good deal and I'm pretty sure that was financed. They don't worry about money.

 

I guess I would call them "wealthy", but a lot of that is because of good decisions they've made over the years. (as in, when they were barely scraping by, they did not get in debt to buy stuff)

[Renee in NC]

Homeowners insurnace... don't forget that!

 

What i've learned is that most people can't relate to the cost of living in an area such as CA.

 

My electric bill is almost the same here - and there i didn't have AC for example. My water bill is 1/4 of what my grandma pays. She is one, we are 5.

 

So i'm probably swayed in my feelings because i have lived (for 35 years) in a spot that expensive. We always said, if we could take our income and plop it somewhere else - we'd live like kings!

 

My point was that while it does cost more to live in some areas, it isn't THAT much more. According to a cost of living calculator, if I made $250K in San Francisco and moved here to the Raleigh, NC area, an equivalent income would be $146,797 to maintain the same standard of living.

 

That would be wealthy. Again, depends on what you consider wealthy. I could have health insurance, music lessons and therapies for my children, high quality food, a house in a decent neighborhood (not high-end mind you, but decent), money for charitable giving, clothes for everyone, and retirement. No problem.

 

That, to me, is wealthy.

[Stacy in NJ]

In New Jersey it would still put you in the top 7-8%.

 

Middle class would be the 25-75 percentile.

 

Where are you getting your data from?

[sleepy]

To me retirement, kids education, charity, etc are all luxuries. I would love to be about to have the extra $ to do those. Heck, even a cheap vacation once every ten years would be nice.

 

:iagree:

[bettyandbob]

If not wealthy, extremely well-off. I live in No VA. It is expensive here. Our household income is considerably less than that. We struggle. We don't regularly contribute to retirement. We used to so there is a little money sitting there for the time when we are still needing to work, but can't work as much.

 

One poster mentioned people growing into their income. I definitely think people do this. Then, they don't have savings because they were busy living up to the standards of their income. People with more money can begin to define necessities differently and loose awareness for budgeting. I see this all the time around me. I have a friend who shops for her family entirely at the mall. I shop sales at Target and gladly scrounge through hand me down bags. My friend is purchasing clothes her family needs and I'm doing the same thing. My children do not wear rags. Some people feel the costs of activities like club soccer (and all the insane travel) are necessities. Dh and I just got speech therapy back in our budget for our little one--I kinda think speech is more important than soccer, but you can argue with me on that. My dd does ballet. She would like to do field hockey, swimming, tennis, violin and theater too. All at the same time. She has a friend who does manage to be signed up for that number of activities. When I sign up I consider whether will miss any sessions--each session is a dollar amount to me. My dd's friend regularly misses things she's signed up for because she's signed up for so much. Her mother thinks it's important for her to try anything she wants.

 

Years ago dh and I were on a different financial trajectory. Job changes and health issues changed that. If we'd stayed on the previous path, I could see us having a different idea of "necessity". Now, if we started having an income more than twice what we have now I think I'd still be careful with spend, but it would be nice to have the breathing room, the retirement, all the therapies we'd like for ds and maybe a nice vacation too. I wouldn't spend the money on a bigger house, like so many people think is a necessity around here.

[rafiki]

It does matter where you live when an 1100sf house cost over $300,000 (and i'm talking one of the last cheap areas on the Central Coast of CA) And often, a person can't just up and move.

 

It very MUCH does relate to where one lives.

 

:iagree:

 

Pay scales vary by location.QUOTE]

 

But, it is possible to up and move. We have done just that interstate 4 times now. Because of that we have experienced many different areas in the country. You also have a choice to move further out where housing often costs less. Where you live IS your choice.

 

Our property taxes are $1,000 a month here, not including our mortgage or homeowners insurance, just property taxes. Yet, we make now where near that and are able to live comfortably. It goes back to an individual's priorities and living with in their means.

 

Not to this poster in particular, but I do wonder if those who do not see 250K as wealthy have ever experienced low income living themselves? That certainly changes one's perspective.

[sunshine]

Wealthy means very affluent, rich. Maybe in the land where houses are under well under $300,000, health insurance isn't $14,000 a year and property taxes aren't $10,000 a year it's rich.

 

I watch the House Hunters show, my favorite. But it also shows me what you can get for a certain amount in different cities and countries.

 

If you can live comfortably on 250,000 in an area where housing is over 300,000 for a 1600 to 1800+ sq ft home, buy groceries, make A car payment, pay your health insurance, utilities etc and pay cash for everything else on one income, then I consider you well off. If you vacation and buy new clothes when you see something you like, don't really agonize over whether to buy groceries or gas for your car, and splurge on things that you love then Well to do. If you have a savings account after all that and retirement then I consider you wealthy. Because the majority of the nation cannot do all those things.

 

:lurk5:

[Crissy]

Yes. I would say 250K is wealthy.

It matters not whether a person or a family is willing to spend every last cent on material items and living expenses, or save and invest the bulk of it.

That a person has the ability to earn that amount in the first place is what qualifies him or her as wealthy, in my opinion.

[Renee in NC]

Where are you getting your data from?

 

For San Francisco it was the Department of Commerce. For NJ, it was an article about income disparity.

 

http://money.cnn.com/2006/01/25/news/economy/income_gap/index.htm

 

I will concede that this is 2006 data and it was less scientific.:D

[TraceyS/FL]

Not to this poster in particular, but I do wonder if those who do not see 250K as wealthy have ever experienced low income living themselves? That certainly changes one's perspective.

 

Yes i have. I'm living it.

 

But i don't see it was "wealthy" either. Comfortable and not having to think about certain things? Yes. Well off? Yes.

 

But my DH and/or I would still have to go work everyday. That isn't enough to bank a ton and quit working. And if we were still in CA we'd both have to work, and public schools in our area were NOT an option, and private was about out of reach.

 

SOmeone else said it in this thread - wealthy is the people that don't have to work for that $250,000 a year. I'm guessing that the people making it work long hours - case in point, my parents did... they worked 7 days a week, 10-13 hours a day (own business). Ruined my Dad's health and he really isn't in a position to enjoy any of hte fruits of all that labor now.

 

SO i'm not denying it's not "well off" on the high end, but it's not as much as "you" think in some areas of the country.

[st_claire]

Haven't read the other responses, but I consider it very wealthy. And they shouldn't have student loans, I think they are very avoidable for any income level.