S/O: Affluence

[DawnM]

It was said in the previous post that all homeschoolers are affluent.  Of course that is inaccurate and I would venture to say that over 90% are not, however, no definition of affluent was given.

 

I know some of this has been discussed before, in terms of "what is middle class?"  but I decided to look up some statistics.

 

See where you rank on this little sliding scale:

 

http://money.cnn.com/calculator/pf/income-rank/

 

I am not wanting anyone to publicly state where they fall, but I did want to post for you to see where you are.

 

I am creating a poll, it is private, and certainly you don't have to participate, but I am now curious at the "all homeschoolers are affluent" which, from my personal experience HSing for 10 years, is NOT true.

 

Of course, that depends on how to you define affluent.  Would you said that the top 25% of income is affluent?  I really wouldn't.  I think until you get upwards of $200K, even in a mid cost of living area, you are living well, but not affluent.   I see only the top 1% or so (above $450K) as truly affluent.  But maybe that isn't a definition for others???

 

ANSWER HOWEVER YOU WISH:

 

In other words, if you are retired, or out of work, etc....you can answer based on what you used to make or answer according to however you feel the most comfortable.

 

 

 

 

[SeaConquest]

Are these percentiles for your local area or nationwide? 100K in San Diego doesn't put you in the same percentile nationally.

[Jane in NC]

The other thing to consider is the difference between income and net worth.  Personally I would tend to define affluence via the latter more than the former.

[heartlikealion]

Yeah, what they said.

 

On paper I think we should be better off than we are. In reality we have high insurance costs, student loan debt, etc.

 

I definitely use the term affluent more loosely than 450k a year.

[Bluegoat]

Well, I would set the bar for affluent closer to the @5th percentile than the 1st.  The 1% is not just affluent, they are the people who effectively control the economy.  The word affluent doesn't imply that level of wealth to me.

[bettyandbob]

I'm in the top 30%. However I live in a HCOL suburb. It's not easy to live at this income level where I live. Additionally, because of issues with dh's work, I work too. I have three jobs averaging about 40 hours with partial benefits (I pay a significant amount toward insurance, have no leave it retirement options).I earn about a third of our family income. So it's a hard push to get to that income level.

 

It's really hard to compare Nationwide.

[2ndGenHomeschooler]

I found this calculator interesting as it adjusts for family size and location. It calculates what you would need to make to live a modest but comfortable lifestyle based on your family size and the COL where you live. I feel that we live a fairly comfortable life although we do have to be careful and things do get tight sometimes. We make a decent amount below the amount it gives us. We also spend less in every category so we make it work. If we did make that much I still wouldn't consider us wealthy but we would be able to relax a bit.

 

http://www.epi.org/resources/budget/

 

 

The chart in the OP doesn't quite seem right to me. Our income certainly doesn't put us in the "top" of anything in our HCOL, High tax area.

[Bluegoat]

Not in the US, but for Canadian families of two or more, our income falls in the middle 20%.

[DawnM]

Are these percentiles for your local area or nationwide? 100K in San Diego doesn't put you in the same percentile nationally.

 

 

It is nationwide if you look at the link.

I am well aware that different areas are different, but this is the national scale just based on actual income.

 

Our income will go back up by about 50% when we move back to CA.

[Guest]

Well, I would set the bar for affluent closer to the @5th percentile than the 1st. The 1% is not just affluent, they are the people who effectively control the economy. The word affluent doesn't imply that level of wealth to me.

But that 1% is such a massive range- I'm having trouble thinking CNN is accurate on that. There are percents of this 1% who do have that level of control. But it's not the guy or gal making 450k a year. I don't think the way they lumped these incomes is helpful. Warren Buffet has zero in common with the person bringing home 450 a year. Not in taxes, not in influence. Not in anything.

[bolt.]

I'm Canadian so the calculator isn't relevant, but I do consider our family "affluent" at well below the "1%" level. I see "affluence" as the level of income where basic needs are met without a second thought, any reasonable desire is easily fit into the budget, including a nice house in a good neighbourhood.

 

Affluence is when you ask "budget" questions about setting realistic priorities, about the best investments and their relative tax savings, and about the best charities and whether they can handle substantial investments with wisdom. (Instead of questions about how to pay bills and get out of consumer debt.)

[DawnM]

The other thing to consider is the difference between income and net worth.  Personally I would tend to define affluence via the latter more than the former.

 

Yeah, it certainly isn't an all encompassing percentage by any stretch as it only deals with income.

[DawnM]

But that 1% is such a massive range- I'm having trouble thinking CNN is accurate on that. There are percents of this 1% who do have that level of control. But it's not the guy or gal making 450k a year. I don't think the way they lumped these incomes is helpful. Warren Buffet has zero in common with the person bringing home 450 a year. Not in taxes, not in influence. Not in anything.

 

Very true.  But I am not at any of those levels, so it is all out of reach to me!   :lol:

[Meriwether]

Dh makes considerably more than he did when we started homeschooling 10 years ago. We have been transferred twice in that time. Transfers have automatic pay raises attached. So we would have fallen into various categories over the past ten years. I was committed to homeschooling before I knew what his job would even be, and both of us grew up in poverty level income households (And I always feel I need to clarify this statement by saying that we were country poor. We had food to eat and a stable roof over our heads.) So, I would have been homeschooling anywhere from poverty level to upper class.

Edited April 11, 2017 by Meriwether

[poppy]

It was said in the previous post that all homeschoolers are affluent.  Of course that is inaccurate and I would venture to say that over 90% are not, however, no definition of affluent was given.

 

I know some of this has been discussed before, in terms of "what is middle class?"  but I decided to look up some statistics.

 

See where you rank on this little sliding scale:

 

http://money.cnn.com/calculator/pf/income-rank/

 

I am not wanting anyone to publicly state where they fall, but I did want to post for you to see where you are.

 

I am creating a poll, it is private, and certainly you don't have to participate, but I am now curious at the "all homeschoolers are affluent" which, from my personal experience HSing for 10 years, is NOT true.

 

Of course, that depends on how to you define affluent.  Would you said that the top 25% of income is affluent?  I really wouldn't.  I think until you get upwards of $200K, even in a mid cost of living area, you are living well, but not affluent.   I see only the top 1% or so (above $450K) as truly affluent.  But maybe that isn't a definition for others???

 

ANSWER HOWEVER YOU WISH:

 

In other words, if you are retired, or out of work, etc....you can answer based on what you used to make or answer according to however you feel the most comfortable.

 

You think a family making $400,000 annually is not affluent???  Wow.  

 

 

[maize]

This also doesn't account for family size. What is comfortable for a family of 4 is not so comfortable for a family of 8.

[DawnM]

You think a family making $400,000 annually is not affluent???  Wow.  

 

No, you have to make $450K to be truly affluent to me.

 

Sorry that you are offended.

 

(I do hope you are joking because I am being sarcastic.)

[DawnM]

This also doesn't account for family size. What is comfortable for a family of 4 is not so comfortable for a family of 8.

 

 

True, but incomes aren't based on family size.  A teacher with 10 kids makes the same as a teacher with no kids.

[eternalsummer]

I think whether you are affluent really depends on COL.  Where we used to live, in a nice suburb of Kansas City, $150K or so a year was definitely well into affluence.  You could live very comfortably there, in a 1500 sqft. house with a lawn in a neighborhood with 7+ rated schools (on greatschools, not the best indicator but decent), on $40K/yr.  

 

When we moved to the Front Range, that $150K would go about 2/3 as far.  Same house in same level of neighborhood would cost an extra 50%/month.  $150K on the Front Range is doing very well, but not affluent.  I imagine places like Seattle or DC have an even higher barrier to entry.

[eternalsummer]

But that 1% is such a massive range- I'm having trouble thinking CNN is accurate on that. There are percents of this 1% who do have that level of control. But it's not the guy or gal making 450k a year. I don't think the way they lumped these incomes is helpful. Warren Buffet has zero in common with the person bringing home 450 a year. Not in taxes, not in influence. Not in anything.

 

This is true with other things too - IQ, for instance.  An IQ of 135 is smart, but the difference between that and someone with an IQ of 155 is enormous and life-defining.

[maize]

True, but incomes aren't based on family size. A teacher with 10 kids makes the same as a teacher with no kids.

Incomes are not; standards of living, and whether a family falls in the poverty, middle, or upper class range in economic calculations, are.

[Sneezyone]

Our income puts us on the upper end but there are lots of intangibles associated with being a military family that make our lives a little 'richer' than they might otherwise appear based on income alone...tax free income b/c of overseas duty, fully paid and low-cost travel opportunities, etc. We're certainly not in the top 5% but I would consider us relatively affluent.

[poppy]

No, you have to make $450K to be truly affluent to me.

 

Sorry that you are offended.

 

(I do hope you are joking because I am being sarcastic.)

 

I am not offended at all,  I'm just amazed.   I think it mathematically impossible for "all " homeschooling families or even, as you guessed, 10%, if the minimum starting point to affluent is $450,000 annually. 

[DawnM]

I think whether you are affluent really depends on COL.  Where we used to live, in a nice suburb of Kansas City, $150K or so a year was definitely well into affluence.  You could live very comfortably there, in a 1500 sqft. house with a lawn in a neighborhood with 7+ rated schools (on greatschools, not the best indicator but decent), on $40K/yr.  

 

When we moved to the Front Range, that $150K would go about 2/3 as far.  Same house in same level of neighborhood would cost an extra 50%/month.  $150K on the Front Range is doing very well, but not affluent.  I imagine places like Seattle or DC have an even higher barrier to entry.

 

But if you make $450K or more, you can make it just fine in any of those places.  You may not have the same size house (we are looking at paying twice the price for half the house when we move) but you can make it.

 

There are individual calculators for that, but there doesn't seem to be a general calculator that takes cost of living into account.

 

But even then, I don't really trust those calculators.  They say I only need 25% more to live the same lifestyle in San Francisco.  I highly doubt that.  

[LucyStoner]

Are these percentiles for your local area or nationwide? 100K in San Diego doesn't put you in the same percentile nationally.

Actually it does put you into that percentile nationally, but it doesn't account for the local cost of living. The percentiles are based on federal tax data. But as we all know $100K, relatively speaking, less affluent in some areas and more affluent in others. Income alone isn't the sole component of affluence. Someone could have less income on paper but be affluent in their available assets and cash reserves. Cash in the bank for example generates little income but isn't itself income.

Edited April 11, 2017 by LucyStoner

[Arcadia]

There are individual calculators for that, but there doesn't seem to be a general calculator that takes cost of living into account.

This one takes care of cost of living and number of people in the household but doesn't have every area

http://www.pewresearch.org/fact-tank/2016/05/11/are-you-in-the-american-middle-class/

[maize]

Location definitely matters. A family making $200,000 may still struggle in Silicon Valley (they would be getting by comfortably but not have a lot of extra) while they would absolutely be affluent by the standards of rural Alabama.

 

Not that I can imagine earning $200,000. I can sort of imagine cracking the six figure point; that would be nice.

[DawnM]

This one takes care of cost of living and number of people in the household but doesn't have every area

http://www.pewresearch.org/fact-tank/2016/05/11/are-you-in-the-american-middle-class/

 

That is still not that precise.  I have seen that one before.

 

I am in the "top 20%" of my area whether I put in $160K or $1.6M

 

and then, on the other hand, if I put in Los Angeles, and $100K it says I would be in the top 16%.  

 

 

Edited April 11, 2017 by DawnM

[Carol in Cal.]

Personally, I don't think this calculator has anything to do with actual affluence.

This is because it measure only income and not wealth.

 

The high income are not necessarily wealthy.  The wealthy are not necessarily high income, and they are the ones who are 'the rich'.  While I think anyone who makes $400K is far better off than others, the focus in the US on 'taxing the rich' pokes at them compared with poking at those whose net worth is insanely high, in the hundreds of millions or billions of dollars.  And I don't think that that is realistic.  We should remember that when a politician says 'tax the rich' he really means 'tax the high income', which is NOT THE SAME THING.

 

There are also elements of choice involved.  http://www.moneycrashers.com/wealth-and-income-difference/

[Carol in Cal.]

This one takes care of cost of living and number of people in the household but doesn't have every area

http://www.pewresearch.org/fact-tank/2016/05/11/are-you-in-the-american-middle-class/

Ha, so where we live $150K for a family of 3 is 'middle income'.  That explains so much, LOL.

[SporkUK]

We're bottom of the barrel at the bottom 10% both in the UK and by that website with our income converted. I don't have much idea of what other home educating parents I know make but I don't know any I would describe as "affluent" though to me that's less a particular income and more a  social power and control in life that comes from freedom to not be continuously actively worrying and dodging around financial issues for basic needs. With the big financial changes happening in the UK with the recent change of the tax year and what is suppose to be coming in the upcoming years, it's been a big topic of conversation around here as we're very much in a working class and disabled-retired social group where cuts and ideological poor bashing heard everywhere is a big issue.  We have three adults with incomes, so we can spread out time and costs a bit better than most people we know which at times makes us seem more affluent, but I also know people who take trips all the time and run big cars who seem affluent until you talk to them about their parents or friends paid for the trip or groceries or have been topping up the petrol. I can't wrap my head around the idea that home ed is for the affluent as that doesn't match who I know at all. The well-off people can afford to get out of our education black spot where less than a third finish school with a basic standard of qualifications. 

[alisoncooks]

Nm, tmi

Edited April 11, 2017 by alisoncooks

[TheReader]

I find the various calculators interesting. 

 

Using the one linked in the original post (the simple sliding scale), it shows our income at the top 20% (somewhere between 19% and 17%, but I honestly do not know the exact number as DH just had a raise go into effect and I've not looked at what the new number is...it just took effect this pay period....). 

 

Using the 2nd calculator linked, that lets you put in your zip code & number of people, and calculates what you need to meet your bills, we are paid well over that amount (as in, 66% more than the amount listed in the calculator). Yet, when I do the 3rd one linked, where putting in my zip code, # of people, and income, it says we're in the "middle income range" along with 48% of other adults (and ditto that for people of our demographic in the US). 

 

I find it fascinating that so many people in our metro area (granted, our metro area encompasses a HUGE area, with a lot of variance in income depending on what zip code, and even what part of what zip code...) make such a comfortable living. Although, I would like to see a calculator like the last one, that we could narrow down to zip code level. "Houston Metro Area" encompasses such a huge (huge) variance, and while the zip code chart said we make plenty (we do, for our area), I know we're not in the highest group around here. Go two subdivisions over/10 miles closer to the city, and the incomes are easily double ours (at least, the home costs are double or greater....). On the other hand, because we chose to live in a lower cost subdivision/area, on purpose, our neighbors probably make closer to the "amount you need to live in this area" calculator, vs so much over like we do. Luckily we live in such a way that our neighbors wouldn't suspect or realize that; I don't feel more affluent than them, other than that yes, we have savings accounts, small amounts of debt that we're actively paying down, and while we don't like the ever-increasing property taxes, we can afford them without sacrificing other things from our budget. So...in that sense, yep, we're kind of on the affluent side. Yet we drive the same kinds of cars as our neighbors, shop the sales, budget, etc. 

 

*of course, since taking on a world perspective, I've realized we're definitely on the affluent side of things, but that's a conversation for another post, and I'm not interested in being the one to start it. I do think that affluent, rich, comfortable, middle class.....all have different definitions, some require comparison to your area/COL, some do not. One can be affluent, I think, without being rich, or even comfortable where they live. But  maybe I'm misdefining affluent.....? 

[Arcadia]

Ha, so where we live $150K for a family of 3 is 'middle income'. That explains so much, LOL.

Our tax bracket for California is much lower than for Federal. We are poor by California's income tax standards. Quite a bit of our AGI is vested stocks so we are cash poor unless we sell those stocks.

[luuknam]

I wish you'd had the bottom split out into 10% divisions as well, rather than 25%. I mean, I get that you wanted to separate out the top 5%, but it would've been interesting to know how that bottom 50% was divided up too. 

 

As I pretty much gave away in the other thread, we're in the top 40-49%. 

[Carol in Cal.]

Our tax bracket for California is much lower than for Federal. We are poor by California's income tax standards. Quite a bit of our AGI is vested stocks so we are cash poor unless we sell those stocks.

Just about everyone I know around here is 'house poor' except for the newer to the area techies who are 'stock poor'.  But then there are the 'poor poor', and things are getting worse and worse for them.  This is a very hard place to regain your balance once you lose it.  At least the weather is improving now--the homeless have had a very rough time this winter.  Alas, there is another cold storm coming in.  (Will this rainy season NEVER END???)  

[SKL]

I have never used affluent to describe an actual person.  It is a pretty loaded term IMO.

 

And $1 is worth a lot more in some places than others - even within a single US state.

 

And I know almost nobody, even in the top %, who would descibe themselves as "affluent."  It seems to me that almost everyone in the US considers himself poorer than their actual financial position is.

[maize]

It seems to me that almost everyone in the US considers himself poorer than their actual financial position is.

I think this is true of the top percentiles.

 

I don't think it is true of those in the bottom half. Folks who are actually struggling correctly assess that they are struggling. Folks near the top tend to compare themselves to whoever is above them so they never actually feel well off.

[Arcadia]

At least the weather is improving now--the homeless have had a very rough time this winter. Alas, there is another cold storm coming in. (Will this rainy season NEVER END???)

We pass by a homeless encampment by the lake at the intersection of CA85 and Almaden Expressway (across from Barnes & Noble Blossom Hill) :(

 

The Almaden Community Center multipurpose courts could have been a great temporary overnight homeless shelter if the city opens that up. My city isn't doing a good job either as they could have opened up the youth activity center as a temporary overnight shelter.

[SamanthaCarter]

I voted based on your link and we were one group up from where I thought! This is one income though, so if we made that as a combined income, we could not homeschool. The fact that DH makes as much as he does makes it possible for me to stay home. If you split that 50%/50% me and him, and I gave up the 50% to homeschool, we'd live below the poverty level. So the ability to live on a single income makes a huge difference in a way that household income cannot tell you. We are more "affluent" than a household that makes the same annual income between two wage earners. I feel like there is at least some validity in saying that the majority of homeschoolers are "affluent."

Edited April 11, 2017 by SamanthaCarter

[luuknam]

Looks like the median WTM family makes about $100k/is roughly at the 25th percentile. 

 

ETA: Not that I think WTM is representative of the average homeschooler.

Edited April 11, 2017 by luuknam

[indigomama]

I found this calculator interesting as it adjusts for family size and location. It calculates what you would need to make to live a modest but comfortable lifestyle based on your family size and the COL where you live. I feel that we live a fairly comfortable life although we do have to be careful and things do get tight sometimes. We make a decent amount below the amount it gives us. We also spend less in every category so we make it work. If we did make that much I still wouldn't consider us wealthy but we would be able to relax a bit.

 

http://www.epi.org/resources/budget/

 

 

The chart in the OP doesn't quite seem right to me. Our income certainly doesn't put us in the "top" of anything in our HCOL, High tax area.

 

 

This chart doesn't go past 4 children, we have 5 and their housing estimate was off by about $500/mo from what I see locally. And we still only make 2/3 of what they estimated we'd need. It's very interesting. 

[maize]

Looks like the median WTM family makes about $100k/is roughly at the 25th percentile.

 

ETA: Not that I think WTM is representative of the average homeschooler.

I found it interesting that we have a significant cluster in the top 5 %

[rocassie]

So I looked over the link, and I picked the amount for DH's yearly salary which was at the top 35%.  Of course, that is not his take home due to taxes, health insurance, etc., but  I would say we are living comfortably middle class.  DH does put a high percentage into his 401K and we have only our mortgage as debt so I suppose we are more upper middle class, but living a more middle to lower middle class.  

[Mergath]

I found it interesting that we have a significant cluster in the top 5 %

 

I'm guessing a part of it is that those of us with a more modest, middle-class income are tired of playing "How rich are you?" when these kinds of posts pop up once a month or so. I wouldn't count on this poll to be an accurate representation of incomes here.

 

[LucyStoner]

While low six figures in a HCOL area may not feel like affluence relative to one's surroundings, in all of these HCOL areas there are many families getting by on less. In fact most families are getting by on less in most of these HCOL areas.

 

I think people tend to compare themselves to those who have more and not to those who have less. For example, I know people who make up to about $250k here who consider themselves struggling. Because they are on a budget or don't have the things that people with more than them can easily afford. Struggling for a certain standard of living IS NOT the same as actually struggling to just get by. Struggling to afford food, healthcare and housing is way different than merely not having the housing, transportation or private schools you want. Living in a safe apartment for example is far different than barely being able to afford substandard housing of any sort. As some one who grew up in poverty, I will admit to rolling my eyes when single people earning $80k a year claim "poverty". Words mean something and not being wealthy is not the same thing as struggling to make the ends meet for basic needs or actually living below or just above the poverty line. We are below the median for our area but I don't consider us struggling. As a person who spent time living out of a van as a child, a three bedroom two bath apartment with my own washer and dryer where the utilities don't get shut off in a nice area is a pretty *sweet* situation. Yes, it's relatively less than we had before we dropped to one modest income but it is not, in any way shape or form, struggling. I can't see homeless encampments or families living in their cars and claim poverty or anything even a fraction as dire. I just can't. And I will admit to laughing a bit when people who are pulling in high incomes use words like poverty to describe themselves.

Edited April 11, 2017 by LucyStoner

[madteaparty]

Well, I would set the bar for affluent closer to the @5th percentile than the 1st. The 1% is not just affluent, they are the people who effectively control the economy. The word affluent doesn't imply that level of wealth to me.

People who make 450 in salary income a year, while immensely fortunate beyond what anyone deserves, are not the ones controlling the economy. Edited April 11, 2017 by madteaparty

[luuknam]

I'm guessing a part of it is that those of us with a more modest, middle-class income are tired of playing "How rich are you?" when these kinds of posts pop up once a month or so. I wouldn't count on this poll to be an accurate representation of incomes here.

 

 

The number of people in the 9th-6th percentiles is less than 4/5th of the % of people in the top 5% (less than half, currently), and neither are "more modest, middle-class incomes", so that's not really an explanation. That said, I must have missed some of these threads. 

[LucyStoner]

Not too long ago I had a dear old friend sit in my living room and whine that she can't make it her on an annual income which exceeds ours. And it's true that her income is fairly modest for the area, I accept that. At the time, her housing payment was 35% lower than ours and her parents had paid for her car. We are a family of four and we have expenses for my father and two extra kids as well. We do not qualify for food stamps or get help from any extended family. While I get that it's all relative and her feelings aren't invalid, at a certain point it was pretty grating and a bit callous of her. Please, tell me again how hard it is to feed 1 person on a food budget equivalent to what I have to spend feeding more than 4 people at least part of the time and feeding 4 people all of the time.

[Arcadia]

I found it interesting that we have a significant cluster in the top 5 %

The big cities on both coasts have high COL. I know many dual income families in my area earning >$250k gross and some are homeschooling through mostly outsourced classes. For example one of my kids former science lab class cost $30/hr and some of the mothers make more than that as a consultant so they drop their children off to class, meet their clients and then pick up their children after the three hour lab class. If I had been more industrious, I could have tutored a child or siblings for two hours at the library near the class while one of my kids was at his class and my other kid at a nearby library table reading and that would offset most or all of the cost.

 

ETA:

I pay my kids Chinese tutor $60/hr (discounted) for both kids, it would be $50/hr for one child.

Edited April 11, 2017 by Arcadia