My dad used to say, “It’s not about how much you make, it’s about how much you spend”. I’ve lived my finances by those words. Don’t get me wrong, I still enjoy the fruits of my labor from time to time. But as I’ve made more money, I keep my lifestyle the same.
No matter how much money I make I will care what the restaurant bill is. And the price of groceries are and ... Watching expenditures small and large ensures you don't get a big unwanted surprise when you look at your bank statement or CC bill at the end of the month.
Grew up lower middle class, got engineering degree, secured 6 figure job, saved 160k in 2 years. I don’t feel rich however I do see the very clearly lit up path to wealth. I just have to stay humble for another 10-20 years and early retirement is a very real possibility. Feeling rich to me is just being able to do whatever I want to do within reason and not stress in the slightest over the cost.
Serious question…why do you have $160k saved? You could invest most of that and benefit far better. I understand growing up lower middle class but still.
It seems to me that a lot depends on where you live. If you live in California, Sand Francisco (for example) it take more money to live there due to the cost of living. I
I think the top ten percentile of savers have like 120k or more by 30 so by all means you are well enough off. It’s only a matter of deciding what you value and you should be able to get there with time. Congratulations!
Another possibility is those making 175k are focusing on saving a large portion for retirement. Last year we made 155k and this year will be on track to make 175k.... but we live off 60k a year and that's been consistent for multiple years now with no increased lifestyle. We save around 50-65% of our gross wages a year (usually because our salary is ~100k and a large majority of the rest is through quarterly bonuses so we don't budget for them and just save most of it)
If they are saving and investing large portions of their salary for retirement, they wouldn't be complaining that they feel poor. I don't think that's the group of folks this video is about.
@@PaulProsperInvestments It is called forced scarcity.... forcing yourself to live on less which will cause you to feel like you don't have as much. Case and point... After we have 30+% auto deducted from our salary for retirement we have additional auto transferred out of checking to save for house maintenance, car maintenance, replacement car, house projects, etc.... after a large chunk of the money is gone you live on the leftover which isn't a ton- so now your checking has a smaller balance... and now you feel like you dont have much. Meanwhile you just put money away for retirement and to prepay for future expenses so you can avoid HELOC, car loans, credit card debt, etc
@@PaulProsperInvestments Also sometimes feeling poor and being poor are two different things. I'm not poor... but I force my checking account to stay low which makes me feel/live poor (not literally- we just live a simple life)
@@PaulProsperInvestments Living on 60k a year feels poor to me. A lot of financial surveys also show a difference in mindset between income ranges and I'm not sure they actually define the questions clearly enough for us to know the truth. A common one is x% of people making y income live paycheck to paycheck. I bet a lot of people making six figures saying they live paycheck to paycheck are actually putting money into their 401k and have deductions for benefits. If someone puts 15% into retirement, has medical, vision, and dental insurance, and $0 left over each month a large amount of them are going to say "I live paycheck to paycheck." This is clearly VERY DIFFERENT from someone putting 0% into retirement and has no benefits and $0 left over each month.
They're almost certainly in high COLAs. Income != wealth. And 175k in LA doesn't go nearly as far as 175k in rural Iowa. Income over time can be turned into it.
Objectively I’m better off than I was five years ago, but I definitely feel less comfortable than I used to be. I can pin point exactly why - expenses have gone up (part inflation and part addition of a family member that is also building a business) and the “fun” line in the budget just simply doesn’t stretch as far as it did a few years ago.
George, the main reason for this is called a 'mortgage' post-2020.I actually make 175k on the dot, and still feel poor for this reason. We cannot buy a house back in the area that we work (which is a typical large-metro suburb). For reference, I made 140k+ pre-covid and if we had bought a house then would have had zero issues finding a great place to live. I'd gladly swap salaries and go back in time if I could... in a heartbeat. We have 1 child, zero debt, live essentially in the woods right now in a low income area (no keeping up with the joneses here).... and we don't spend our money on much of anything fancy. I am also currently looking into a side-hustle as a 2nd job for the sole purpose to try and make extra money to put towards a mortgage. (never would've thought in a millions years I'd be doing this). Personally I am pretty convinced that the government has created this issue, and we are now waiting-out one of the biggest money-printing/shutdown blunders ever, that will one day be in text books.
both my parents were low incomw but worked hard to buy a home and keep food on the table and clothes on my back. they taught me to work hard and get a good education. fast fwd 30yrs, retired USAF and collect pension work for the govt making 175k/yr and zero debt! feeling much love!
I think we should have a conversation on lifestyle creep. It’s not an evil thing. It needs to be proportional to how your income increases. We used to live off of $20K a year. Our lifestyle has increased that number 2.5x however we make $400K/yr now. My lifestyle of $75K as a family was a big jumb, but our margin/spread is still extremely healthy.
Managing money is different from accumulating wealth, and the lack of investment education in schools may explain why people struggle to maintain their financial gains. The examples you provided are relevant, and I personally benefited from the market crisis, as I embrace challenging times while others tend to avoid them. Well, at least my advisor does too, jokingly.
Investors should exercise caution with their exposure and exercise caution when considering new investments, particularly during periods of inflation. It is advisable to seek guidance from a professional or trusted advisor in order to navigate this recession and achieve potential high yields.
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.
this is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? i'm in dire need of proper portfolio allocation
Finding financial advisors like Melissa Terri Swayne who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
I'm a single person making well over (multiples of) $175K and a millionaire. While I don't feel broke, and I could technically go and buy a new car or a house with cash, I do comparison shop for the best price on blueberries. Even though my family was solidly upper middle class growing up, my parents grew up during the war and had a famine mentality that is ingrained in my psyche to this day. My parents have a net worth of close to 8 figures, yet, they refuse to upgrade their cracked iPhone 7. I live in a modest studio apartment in NYC and drive an 8-year-old BMW. As far as I'm concerned, this is the good life. So much of this is about psychology and not about literal numbers on a bank statement.
Hopefully you get married and have children so you can benefit from your family's generational wealth. There's really no joy in having an 8 figure net worth and no legacy to show for it.
I definitely have money dysmorphia and I'm always comparing my wealth to people around me. Who are much wealthier than me. I grew up lower middle-class to middle-class range. Now, I'd say I'm upper middle-class and still feel poor-ish / comfortable.
We allowed some lifestyle creep, but honestly it was regular expenses that we couldn’t allow before the income increase. Stuff like YMCA membership and traveling to see grandparents… Thankfully we haven’t creeped all the extra up!
When I was 22 I met a guy who had been an engineer at Boeing. He said that his boss took him out to a nice neighborhood and told him that he should buy the house that's for sale there. If he had, he would have still worked at Boeing when I met him instead of starting his own business, driving a paid for BMW that he bought used because he could afford it, and it was only two years old.
1. They probably live in a high cost of living area such as LA or NYC 2. Perhaps they have medical expenses such as cancer treatment 3. Being comfortable is hardly the "this is fine" meme. That is all George projecting. 4. I'm sure some are just bad with their money, every income bracket has this
A big chunk of this is regional. $175k in San Antonio is middle upper-class, while $175k in Los Angeles is middle middle-class. I feel wealthy and I make within 10% of that living in an affordable area. My brother-in-law makes about the same in Ventura County, and I have far more disposable income.
@@user-tb7rn1il3q The Pew Research calculator for determining class is based solely upon income, not wealth. Quick google search indicates that it's based up many factors, including both income and wealth.
$175,000 minus $40,000 in state and federal taxes, minus fully funding retirement accounts and savings to a level that will sustain your planned retirement lifestyle + living below your means to avoid lifestyle creep = living very average. Having a secure future and being able to address emergencies leads to contentment.
I have figured out a way to live quite comfortably on my income of ~$40k, so I find it incredibly silly that people making $175k claim they "feel" poor lol
@@VBoo459You have some audacity to say making $175 brings problems. People who make $40k have actual problems. Try buying groceries and saving for retirement.and a house. You have entitlement problems. Just because you make $175k does not entitle you to live above your means.
I’m in a somewhat well off friend/family circle and I know people making great money, but they are comparing themselves to the highest earners in the group/family.
Our household income is one third of the median income in my state and we feel ok. We can pay our bills and have an emergency fund. We have changed the food we by since the price has gone up so much.
I made 105k last year. If i almost doubled my income, I'd honestly feel like i have too much cash. The people who make 175k and feel poor must absolutely be dealing with lifestyle creep
@str8nashtygaming466 Well, just for fun, let's say you live in Manhattan NY Because you want to ball like no tomorrow and live in the most EXPENSIVE city in the US and #4 in the world. At @175k income, your net monthly income is 9,940. You get an nice apartment literally next door to central park, that will run you 3,500 a month. You also invest 1,000 into a 401k, 550 in groceries, no car because bruh you live in Manhattan. Insurance st around 200, all utilities 450$, phone 60, fun money 900, let's also say you have some pets 130/month and some transportation costs, subway, taxi etc 400. That all totals 7,190 a month which means you should still have roughly 2,750 a month. Woah so much cash left over!
@@crashtestdummy1972lol dude are you seriously arguing for that? 😂😂 most people don't even have a couple hundred.dollars to save. Dude that's good money, just spend it correctly.
When I first making a salary close to this number I felt rich, but I had just bought a doublewide for 80k and payment was $560 a month. Fast forward a few years and my new house was 575k, with that payment i don't feel rich anymore.
Comparison is the thief of joy. Truer words were never spoken. However, I will say that a lot of these high income jobs are located in high expense areas so the cost of housing, etc is taking up a disproportionate amount of income.
Because medical bills and cash lifestyle on 175k with a family, while well off and not worried about living paycheck to paycheck, isn't were you'd thought you be at 175k. I remember when I was a kid and my dad would say "ah hes got a brand new truck and a nice house, he must make 65k a year!" So when 175k isn't buying you the lifestyle youd imagine it would, especially since your in that wild tax bracket were they take 40k+ of it, it can feel crappy real quick.
No matter how much you earn, you can outspend it. My sister’s husband makes 400K and they’re in debt with impulse shopping and vacations . It’s hard to make our spending behave.
Thank you for speaking on this. A Kardi could buy a 20,000 dollar handbag. That amount could provide a student with a full year of tuition. That amount could provide me with a kitchen renovation. What's frivolous to one person is an investment to another person is a cosmetic upgrade to another person. Context makes a difference, and it's unpleasant when the 300,000/combined incomes a year write articles for msn about how they can't afford their lifestyles. It's disenfranchising for some of us managing and thriving on a fraction of the "high earner" incomes.
I make about 100k, and i saved about 100k cash to put towards a home so far. I can comfortably make a 300k condo work, but a house of 500k is really stretching it. Money would be very tight monthly. Another salary would definitely help, but i want to plan based on only one. I have coworkers who have similar salaries buying 500k+ homes on a single salary and im scratching my head wondering how they'll keep up with it. Im relatively frugal compared to my peers and still live with my family. If i feel that cash would be tight, idk if their financial situation is sustainable. Sure, they'll get by, but with barely any savings outside of their house equity and employer match. Context i live in NY/NJ. Decent homes start at 500k in my target area.
You base your life on your earnings, your mortgage and other payments will be based on your wages. They will be affected by inflation exactly the same as people on a lower wage. They may do activities that cost a lot of money to maintain, part of this may be paying club memberships. People have different views on what is classed as poor, wealthy, rich etc.
I earn 180k, don't necessarily feel poor but definitely not rich lol. Childcare, healthcare for special needs child, and legal fees to keep full custody are more than my mortgage and bills. Still managing to save 20% though.
@ivictus2004 That's because you're not rich. You collect a lot of dollar bills but those dollar bills are worth about 84% less than what they were worth 50 years ago. Every time the Fed pumps fiat money into the system the value of your dollars decreases and they have been doing it ever since the government made the horrible decision to end the gold standard.
I feel like I make good money but then I also see that I cant afford any houses in my area. Though there are a ton of people who have houses and don't make much but they are comfortable because they don't have crazy living costs except for food.
Yes, but the U.K. varies heavily. In London in particular, the average salary is around 70-90k. So it’s very different. And the 1% earn 175k yes true but also the 1% earn 300k too and the wealth gap within that 1% is drastic. So for many of us high earners in London, 175k even as a household income isn’t that much, because many of us know someone earning 300k anyway.
Being "Comfortable" is not bad. You just don't want to brag in front of your friends. When we made that, no one in our neighborhood knew what we earned in those years. But it did not change my house budget or anything else that would show off. Oh yes, I did trade in my 11 year old car for a 2013 VW Passat, TDI SEL. But then again it looked similar to a Chevy Impala, so just another larger car. Since that was 12 years ago, maybe it is time to change the car again.
@chaselesser3191 lol same. I drive a older Honda. Newer cars seem so comfortable and useful with the features but i couldn't see my self getting rid of the red beast lol.
I dunno. That's in the area of what we're making for total household income and I wouldn't say I feel rich or poor. The word "comfortable" does fit. We've lived below our means for decades, have no debt, and live in an area where the cost of living is below average. So it's really no trouble if we want to splurge on something special once in awhile but we couldn't afford to live a "rich" lifestyle - we'd be broke in no time. I know plenty of richer folk and poorer folk. I've never really bothered comparing ourselves to anyone.
If you earn $175,000 and live a $175,00 lifestyle you will feel poor. If you have that same income and live an $85,000 lifestyle you will feel like you are rolling in dough. And don't hang out with big spenders :-)
$175K is not close at all to being "rich" in an expensive county in CA. Our income is in the $200K and that is still not amazing where we live and is absolutely not rich. Upper middle class is still part of middle class... No matter how good I want to feel about what we have (very, very grateful though). I am currently a stay at home mom and will be looking for a job when our youngest goes to school full time to help my husband.
How? Do you have two expensive cars? Expensive schooling? Dont cool at home? I know about living costs in CA, bur 200k and needing a second income I dont get.
@@suzanne2650 We have one car, $520 a month (that's not an issue). Our eldest goes to public school. We eat at home but sometimes do take outs. We have 2 homes so 2 expensive property taxes (more than $15K a year). Then add all the expensive insurances. Then add other fees. If we go over the monthly budget we cover it with our savings and unexpected things do come up (gifts for relatives, teachers, someone's anniversary so you gift money, etc.). My income would cover if we go over, if we want to go on a nicer vacation with the kids. Maybe other things. Extra money for investing and retirement would be good too.
@@IrisP989 2 homes? Wow! Yeah i understand extra income is always nice! To most this sounds like a lucurious life though. I think we sometimes forget what most of the world’s population or even americans live like…
@@suzanne2650 We were lucky, saved and had luck with the timing and interest rates. I am grateful for that. Some people have to rent and can't purchase a house. I don't view it as a luxurious life when you go over your budget, even if you cover it with savings. To me, luxurious is what I see around me - people going to Hawaii, for example, and stay at 4 or 5 star hotels, dine in expensive restaurants, buy brands, etc. I was raised in the middle east in a middle class family (I think so since I've never had to go without). I only found out about the American Dream, the white picket fence, etc. after I immigrated to the states.
@@LegDayLas Upper middle class on paper.. I don't feel that. That's not what I thought it will be in reality but that's also because we live in an expensive area in an expensive state..
We are considered "wealthy" by this video's standards. The issue we have is that every time we plan a strategy with our financial advisor, it is a fact that all the plans are affected by state / government / local tax laws and regulations penalizing our income and net worth. We are sick of it and actually planning an exit strategy from the US upon our retirement. What we pay in taxes each year would shock most people. And I'm being 100% serious and honest.
170k in ca. after taxes, i take home ~9k a month. Mortgage/hoa/insurance/tax is 4k. Rest of my bills are about $2k. Left with rest to try and save/invest and entertain myself. I can only imagine how much more challenging this would be if I had kids. But regardless inflation and increased COL will continue to squeeze me
When I see people wearing expensive clothes, jewelry or driving fancy cars, I assume they're in debt up to their neck and I in no way feel like I'm making less. I feel like I am doing way better, because I can buy anything I want, whenever I want but don't have a liking for things that don't have a practical use.
Or they could be driving those nice cars because they own a business that pays for them. That is why a contractor rolls up to your house in a $100K pickup truck.; Real estate agent has a nice Mercedes, ...
Since 2020 my personal income increased by ~$40k and skimming over some numbers $30k of it is eaten up by increases in homeowner's/auto insurance, taxes, retirement contributions (been saving 15% before and after the promotions), and an increase in recurring medical costs. When do I get to start life style creeping :(.
The US dollar has lost around 84% of it purchasing power in the last 50 years. People need to stop acting like it 1950. 175k is not even middle class in some places.
The more you earn, the more you pay in taxes. Progressive taxes go up in percentage faster than increases in wages. Further, higher income have to save more for retirement because the Social Security replacement rate is lower. No tears for high income earners, but those people can’t increase spending in line with wage increases, so they feel poorer.
My wife and I don't feel rich. We live in a high income area. We live in an $800,000+ 1963 era built 4 bedroom 2 and a half bath home with a 2 car garage that we owe less than $260,000 on. We have friends that own beach homes or newer homes than we have. My wife drives a 2011 Honda Accord. I drive a 2018 Ford F-150. Many of our friends drive high end cars and buy cars more often than we do. Many of our friends have boats at the harbor and some even own airplanes. Most of them have toys, ATV's, Motorcycles, Jet Skis. My wife and I prefer to rent those things on the few times that we use them during the year. We save in a retirement account over 15% of our pretax income. We save 10% of our after tax income. So while I don't feel rich on paper I don't look so bad.
Unless you're in Southern California, NYC or Hawaii you should not feel poor on 175k per year. You should be rocking it. For real. You're making an insane amount compared to your average American.
180k combined income. No consumer or mortgage debt. Retirement funds will keep us at our current lifestyle (which is well below our means), but I don't feel "rich." Comfortable, definitely. I still shop grocery ads and sales, though. I'm a budgeting N*zi, and have sinking funds for every conceivable expense coming down the pipe.
this is me. we make 300k and i felt richer and happier at 13k a year. It started when I let my husband bully me into buying a house with a 5k mortgage and he wouldn't take no for an answer.
$175K is an income thats around the middle management level - someone who actually works but you’re not a C-Suite level, you’re not a business owner, you’re still struggling to ascend and buy that $2-5M house, which in CA, is just the average option. Sure you can afford the 20% downpayment but if you were rich, you could have purchased the house in Cash. Alas, you have to support your family and kids and save save save.
I would put myself in the comfortable crowd, largely because I was only making 25k about 5 years ago, so i wasn't able to buy a house before they shot up, and my income is so high, my kid doesn't qualify for much financial aid. In-state tuition, room and board still costs $37k per year before aid where I am. Add in maxing out 401k, and you just don't feel like you can spend freely, but definitely no worries either. I also wouldn't consider 10% of people to be rich, and George says that's top 10% income.
For us, the comparison game is the big one. We feel comfortable because no debts, and we are able to save and invest and still travel and experience amazing things. At the same time, our friends who earn £350k get a tad more than us
What a person spends their money on is their lifestyle. No matter how much a person makes, if a person is living paycheck to paycheck or deep in debt, they are living a lifestyle they cannot afford.
@@starventure # 1 rule In retirement is have money. #2 rule is retirement is boring so have A lot of it. I am shooting for $2.5 million 401k, $360,000 bridge fund in a HYA and paid off house. And then….. I’ll be middle class in retirement with a 4% withdrawal. $3 MM in 401k even better
Is "living in SF" such a crazy outlier? I would imagine most people making $175k live in one of the HCOL areas. Wouldn't feel rich on a $175k salary either. Rich to me means that I could quit my job today without any impact on my standard of living if I wanted to. No doubt it would be very comfortable, though, and you get to that definition of rich a lot more quickly
Because of inflation. Not even being a millionaire is enough to buy a hose nowadays. Even if it is possible with right mind set and hard work. You know how difficult it is to get there, and what age people are when reaching it.
I don't see our family as rich, just comfortable (we have a lot of kids to support with this income). However, as a poor kid growing up, I would have seen a family living like ours as rich.
LOL, if you earn 175000 and you're struggling because the area is so expensive... it is time to move! I just don't get why people stay in these unaffordable places. Go to Spain and you can live off of 10000 a year.
@@thejoshman1234 Well actually things are on average 20% higher. You're arguing against facts. There's a lot more to the world than homes and cars. Also, what about all of us who already owned homes and cars, which is the vast majority of the population.
If you make more money, you should be able to spend more to enjoy your hard work. I think the key is to increase your lifestyle by 50% and increase your saving/investing by the other 50% of your raise. You can enjoy your success and still better your financial status at the same time
Honestly big time Ramsey fan but they are having a hard time understanding inflation. They need to stop trusting the nonsense inflation numbers and understand what the true inflation is currently. 175k a year is like 80k 6 years ago......
Yes, look at things you actually need to survive. Housing, transportation, food and energy. Plus it's not exactly 120% because 175k is taxed more then 80k. But everything you actually need to survive is up 100% plus.
My dad used to say, “It’s not about how much you make, it’s about how much you spend”. I’ve lived my finances by those words. Don’t get me wrong, I still enjoy the fruits of my labor from time to time. But as I’ve made more money, I keep my lifestyle the same.
Small business owner here. A guy once said "you are rich when you don't care what the restaurant bill is". I'm finally there after years of toil.
congrats on your success! what kind of business?
I can now too do the same thing
But when I do it I am talking to a clown as I put in the order
The trick is to avoid lifestyle creep, there will always be a restaurant you can’t afford.
No matter how much money I make I will care what the restaurant bill is. And the price of groceries are and ... Watching expenditures small and large ensures you don't get a big unwanted surprise when you look at your bank statement or CC bill at the end of the month.
Grew up lower middle class, got engineering degree, secured 6 figure job, saved 160k in 2 years. I don’t feel rich however I do see the very clearly lit up path to wealth. I just have to stay humble for another 10-20 years and early retirement is a very real possibility. Feeling rich to me is just being able to do whatever I want to do within reason and not stress in the slightest over the cost.
that's rich lol. wealthy is another level but u r rich
💯
Serious question…why do you have $160k saved? You could invest most of that and benefit far better. I understand growing up lower middle class but still.
It seems to me that a lot depends on where you live. If you live in California, Sand Francisco (for example) it take more money to live there due to the cost of living. I
I think the top ten percentile of savers have like 120k or more by 30 so by all means you are well enough off. It’s only a matter of deciding what you value and you should be able to get there with time. Congratulations!
Another possibility is those making 175k are focusing on saving a large portion for retirement. Last year we made 155k and this year will be on track to make 175k.... but we live off 60k a year and that's been consistent for multiple years now with no increased lifestyle. We save around 50-65% of our gross wages a year (usually because our salary is ~100k and a large majority of the rest is through quarterly bonuses so we don't budget for them and just save most of it)
If they are saving and investing large portions of their salary for retirement, they wouldn't be complaining that they feel poor. I don't think that's the group of folks this video is about.
@@PaulProsperInvestments It is called forced scarcity.... forcing yourself to live on less which will cause you to feel like you don't have as much. Case and point... After we have 30+% auto deducted from our salary for retirement we have additional auto transferred out of checking to save for house maintenance, car maintenance, replacement car, house projects, etc.... after a large chunk of the money is gone you live on the leftover which isn't a ton- so now your checking has a smaller balance... and now you feel like you dont have much. Meanwhile you just put money away for retirement and to prepay for future expenses so you can avoid HELOC, car loans, credit card debt, etc
@@PaulProsperInvestments Also sometimes feeling poor and being poor are two different things. I'm not poor... but I force my checking account to stay low which makes me feel/live poor (not literally- we just live a simple life)
@@PaulProsperInvestments Living on 60k a year feels poor to me. A lot of financial surveys also show a difference in mindset between income ranges and I'm not sure they actually define the questions clearly enough for us to know the truth. A common one is x% of people making y income live paycheck to paycheck. I bet a lot of people making six figures saying they live paycheck to paycheck are actually putting money into their 401k and have deductions for benefits.
If someone puts 15% into retirement, has medical, vision, and dental insurance, and $0 left over each month a large amount of them are going to say "I live paycheck to paycheck." This is clearly VERY DIFFERENT from someone putting 0% into retirement and has no benefits and $0 left over each month.
1 in 4 people that earn 175k Dollars probably are surrounded by friends and family earning 300k
lol, source of that stat?
@@leisure057blank3 because that's generally how life works. Freaking "SOURCE??" guy strikes again.
@@adamcape8451 source guy? Is that someone asking for sources all the time?
They're almost certainly in high COLAs. Income != wealth. And 175k in LA doesn't go nearly as far as 175k in rural Iowa.
Income over time can be turned into it.
Or live in NYC/San Francisco, where it gets you a 1-bed apartment lifestyle.
Objectively I’m better off than I was five years ago, but I definitely feel less comfortable than I used to be. I can pin point exactly why - expenses have gone up (part inflation and part addition of a family member that is also building a business) and the “fun” line in the budget just simply doesn’t stretch as far as it did a few years ago.
George, the main reason for this is called a 'mortgage' post-2020.I actually make 175k on the dot, and still feel poor for this reason. We cannot buy a house back in the area that we work (which is a typical large-metro suburb). For reference, I made 140k+ pre-covid and if we had bought a house then would have had zero issues finding a great place to live. I'd gladly swap salaries and go back in time if I could... in a heartbeat. We have 1 child, zero debt, live essentially in the woods right now in a low income area (no keeping up with the joneses here).... and we don't spend our money on much of anything fancy. I am also currently looking into a side-hustle as a 2nd job for the sole purpose to try and make extra money to put towards a mortgage. (never would've thought in a millions years I'd be doing this). Personally I am pretty convinced that the government has created this issue, and we are now waiting-out one of the biggest money-printing/shutdown blunders ever, that will one day be in text books.
both my parents were low incomw but worked hard to buy a home and keep food on the table and clothes on my back. they taught me to work hard and get a good education. fast fwd 30yrs, retired USAF and collect pension work for the govt making 175k/yr and zero debt! feeling much love!
Great job!!! Is that all pension from retirement?
I think we should have a conversation on lifestyle creep. It’s not an evil thing. It needs to be proportional to how your income increases.
We used to live off of $20K a year. Our lifestyle has increased that number 2.5x however we make $400K/yr now. My lifestyle of $75K as a family was a big jumb, but our margin/spread is still extremely healthy.
There’s one thing that some people don’t understand about people who earn more money; they pay more taxes.
"He that loveth silver shall not be satisfied with silver, nor he that loveth abundance with increase: this is also vanity" - Ecclesiastes 5 : 10
Earning $175k in my rural community is the equivalent of earning just over $500k in SF. Geography matters
Managing money is different from accumulating wealth, and the lack of investment education in schools may explain why people struggle to maintain their financial gains. The examples you provided are relevant, and I personally benefited from the market crisis, as I embrace challenging times while others tend to avoid them. Well, at least my advisor does too, jokingly.
Investors should exercise caution with their exposure and exercise caution when considering new investments, particularly during periods of inflation. It is advisable to seek guidance from a professional or trusted advisor in order to navigate this recession and achieve potential high yields.
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to around $750k.
this is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? i'm in dire need of proper portfolio allocation
Finding financial advisors like Melissa Terri Swayne who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Thanks, I just googled her I'm really impressed with his credentials. I reached out to her since I need all the assistance I can get.
I'm a single person making well over (multiples of) $175K and a millionaire. While I don't feel broke, and I could technically go and buy a new car or a house with cash, I do comparison shop for the best price on blueberries. Even though my family was solidly upper middle class growing up, my parents grew up during the war and had a famine mentality that is ingrained in my psyche to this day. My parents have a net worth of close to 8 figures, yet, they refuse to upgrade their cracked iPhone 7. I live in a modest studio apartment in NYC and drive an 8-year-old BMW. As far as I'm concerned, this is the good life. So much of this is about psychology and not about literal numbers on a bank statement.
Hopefully you get married and have children so you can benefit from your family's generational wealth. There's really no joy in having an 8 figure net worth and no legacy to show for it.
I definitely have money dysmorphia and I'm always comparing my wealth to people around me. Who are much wealthier than me.
I grew up lower middle-class to middle-class range. Now, I'd say I'm upper middle-class and still feel poor-ish / comfortable.
We allowed some lifestyle creep, but honestly it was regular expenses that we couldn’t allow before the income increase. Stuff like YMCA membership and traveling to see grandparents… Thankfully we haven’t creeped all the extra up!
When I was 22 I met a guy who had been an engineer at Boeing. He said that his boss took him out to a nice neighborhood and told him that he should buy the house that's for sale there. If he had, he would have still worked at Boeing when I met him instead of starting his own business, driving a paid for BMW that he bought used because he could afford it, and it was only two years old.
1. They probably live in a high cost of living area such as LA or NYC
2. Perhaps they have medical expenses such as cancer treatment
3. Being comfortable is hardly the "this is fine" meme. That is all George projecting.
4. I'm sure some are just bad with their money, every income bracket has this
To add to 3, while making 10 Euro an hour and some financial support from my partner, we were able to pay for my (straightforward) cancer treatment🙂
A big chunk of this is regional. $175k in San Antonio is middle upper-class, while $175k in Los Angeles is middle middle-class. I feel wealthy and I make within 10% of that living in an affordable area. My brother-in-law makes about the same in Ventura County, and I have far more disposable income.
Your class is based strictly on net worth not income. Many people making $175k per year feel poor because they actually are poor.
@@user-tb7rn1il3q The Pew Research calculator for determining class is based solely upon income, not wealth. Quick google search indicates that it's based up many factors, including both income and wealth.
At 7:42 I immediately recognized this song…”Never or Right Now” by ELFL!! Such a good tune. @GeorgeKamel was that your choice?
$175,000 minus $40,000 in state and federal taxes, minus fully funding retirement accounts and savings to a level that will sustain your planned retirement lifestyle + living below your means to avoid lifestyle creep = living very average. Having a secure future and being able to address emergencies leads to contentment.
I have figured out a way to live quite comfortably on my income of ~$40k, so I find it incredibly silly that people making $175k claim they "feel" poor lol
But you’re earning 40k so ofc it’s silly to you because you haven’t got 175k problems.
If by problems you mean insane lifestyle creep? Correct, that's on purpose
It is. Fisrt world stupidity at its worst
I could not imagine trying to live off of that again. Glad I've continually made more.
@@VBoo459You have some audacity to say making $175 brings problems. People who make $40k have actual problems. Try buying groceries and saving for retirement.and a house. You have entitlement problems. Just because you make $175k does not entitle you to live above your means.
I’m in a somewhat well off friend/family circle and I know people making great money, but they are comparing themselves to the highest earners in the group/family.
My favorite thing about the comment section is that the video is still playing and informing people above it
Our household income is one third of the median income in my state and we feel ok. We can pay our bills and have an emergency fund. We have changed the food we by since the price has gone up so much.
I make $180k and only feel poor because we're putting every extra cent to paying our house off.
I made 105k last year. If i almost doubled my income, I'd honestly feel like i have too much cash. The people who make 175k and feel poor must absolutely be dealing with lifestyle creep
Or they are living in an area with a really high cost of living.
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@str8nashtygaming466 Well, just for fun, let's say you live in Manhattan NY Because you want to ball like no tomorrow and live in the most EXPENSIVE city in the US and #4 in the world. At @175k income, your net monthly income is 9,940. You get an nice apartment literally next door to central park, that will run you 3,500 a month. You also invest 1,000 into a 401k, 550 in groceries, no car because bruh you live in Manhattan. Insurance st around 200, all utilities 450$, phone 60, fun money 900, let's also say you have some pets 130/month and some transportation costs, subway, taxi etc 400. That all totals 7,190 a month which means you should still have roughly 2,750 a month. Woah so much cash left over!
@@crashtestdummy1972lol dude are you seriously arguing for that? 😂😂 most people don't even have a couple hundred.dollars to save. Dude that's good money, just spend it correctly.
@@xletzyy Arguing what?
When I first making a salary close to this number I felt rich, but I had just bought a doublewide for 80k and payment was $560 a month. Fast forward a few years and my new house was 575k, with that payment i don't feel rich anymore.
What was wrong with the doublewide?
Comparison is the thief of joy. Truer words were never spoken. However, I will say that a lot of these high income jobs are located in high expense areas so the cost of housing, etc is taking up a disproportionate amount of income.
Because medical bills and cash lifestyle on 175k with a family, while well off and not worried about living paycheck to paycheck, isn't were you'd thought you be at 175k. I remember when I was a kid and my dad would say "ah hes got a brand new truck and a nice house, he must make 65k a year!" So when 175k isn't buying you the lifestyle youd imagine it would, especially since your in that wild tax bracket were they take 40k+ of it, it can feel crappy real quick.
"Things are costing more now"
Yeah.... Those of us who don't make 175,000 a year also have to pay more
No matter how much you earn, you can outspend it. My sister’s husband makes 400K and they’re in debt with impulse shopping and vacations . It’s hard to make our spending behave.
This is individual income of $175k. Different from household income
If you have food clothing and shelter you have enough everything else is a bonus
Thank you for speaking on this. A Kardi could buy a 20,000 dollar handbag. That amount could provide a student with a full year of tuition. That amount could provide me with a kitchen renovation. What's frivolous to one person is an investment to another person is a cosmetic upgrade to another person. Context makes a difference, and it's unpleasant when the 300,000/combined incomes a year write articles for msn about how they can't afford their lifestyles. It's disenfranchising for some of us managing and thriving on a fraction of the "high earner" incomes.
I make about 100k, and i saved about 100k cash to put towards a home so far.
I can comfortably make a 300k condo work, but a house of 500k is really stretching it. Money would be very tight monthly. Another salary would definitely help, but i want to plan based on only one.
I have coworkers who have similar salaries buying 500k+ homes on a single salary and im scratching my head wondering how they'll keep up with it.
Im relatively frugal compared to my peers and still live with my family. If i feel that cash would be tight, idk if their financial situation is sustainable. Sure, they'll get by, but with barely any savings outside of their house equity and employer match.
Context i live in NY/NJ. Decent homes start at 500k in my target area.
You base your life on your earnings, your mortgage and other payments will be based on your wages. They will be affected by inflation exactly the same as people on a lower wage.
They may do activities that cost a lot of money to maintain, part of this may be paying club memberships.
People have different views on what is classed as poor, wealthy, rich etc.
Feeling rich is being happy and content with what you have, being debt free, being healthy. I am extremely rich and I live off of social security.
💜 Agreed!
I earn 180k, don't necessarily feel poor but definitely not rich lol. Childcare, healthcare for special needs child, and legal fees to keep full custody are more than my mortgage and bills. Still managing to save 20% though.
@ivictus2004
That's because you're not rich. You collect a lot of dollar bills but those dollar bills are worth about 84% less than what they were worth 50 years ago.
Every time the Fed pumps fiat money into the system the value of your dollars decreases and they have been doing it ever since the government made the horrible decision to end the gold standard.
Budgeting every month is a game changer everybody
I feel like I make good money but then I also see that I cant afford any houses in my area. Though there are a ton of people who have houses and don't make much but they are comfortable because they don't have crazy living costs except for food.
$175k won't buy you a house in the SF Bay Area; not even close. Won't even buy a condo. It barely covers rent. Just saying...ll
In the UK that's the 1% the average salary £34000
Yes, but the U.K. varies heavily. In London in particular, the average salary is around 70-90k. So it’s very different. And the 1% earn 175k yes true but also the 1% earn 300k too and the wealth gap within that 1% is drastic. So for many of us high earners in London, 175k even as a household income isn’t that much, because many of us know someone earning 300k anyway.
Paying £2000 a month for day care, housing costs and 45% tax not counting national insurance makes living in London no joke
Oncloud joke 😂 I got a pair for $5 at a garage sale and so many were asking about them and I didn't even know what they were lol 😅
Being "Comfortable" is not bad. You just don't want to brag in front of your friends. When we made that, no one in our neighborhood knew what we earned in those years. But it did not change my house budget or anything else that would show off. Oh yes, I did trade in my 11 year old car for a 2013 VW Passat, TDI SEL. But then again it looked similar to a Chevy Impala, so just another larger car. Since that was 12 years ago, maybe it is time to change the car again.
Not gonna lie newer cars have some nice amenities. But I still have an 02 Chevy. I could buy a newer truck. But it just doesn’t make sense.
@chaselesser3191 lol same. I drive a older Honda. Newer cars seem so comfortable and useful with the features but i couldn't see my self getting rid of the red beast lol.
I had clients that would pay almost a million dollars for a vacant riverfront lot tell me they "weren't rich."
I dunno. That's in the area of what we're making for total household income and I wouldn't say I feel rich or poor. The word "comfortable" does fit. We've lived below our means for decades, have no debt, and live in an area where the cost of living is below average. So it's really no trouble if we want to splurge on something special once in awhile but we couldn't afford to live a "rich" lifestyle - we'd be broke in no time. I know plenty of richer folk and poorer folk. I've never really bothered comparing ourselves to anyone.
If you earn $175,000 and live a $175,00 lifestyle you will feel poor. If you have that same income and live an $85,000 lifestyle you will feel like you are rolling in dough. And don't hang out with big spenders :-)
That’s easy; to get actual people who are actually poor to not berate them without end for their excuse of “being poor.”
Lifestyle creep is the majority of it.
Your video production is top notch! Well done and I enjoy your sense of humor.
$175K is not close at all to being "rich" in an expensive county in CA. Our income is in the $200K and that is still not amazing where we live and is absolutely not rich. Upper middle class is still part of middle class... No matter how good I want to feel about what we have (very, very grateful though). I am currently a stay at home mom and will be looking for a job when our youngest goes to school full time to help my husband.
How? Do you have two expensive cars? Expensive schooling? Dont cool at home? I know about living costs in CA, bur 200k and needing a second income I dont get.
@@suzanne2650 We have one car, $520 a month (that's not an issue). Our eldest goes to public school. We eat at home but sometimes do take outs. We have 2 homes so 2 expensive property taxes (more than $15K a year). Then add all the expensive insurances. Then add other fees. If we go over the monthly budget we cover it with our savings and unexpected things do come up (gifts for relatives, teachers, someone's anniversary so you gift money, etc.). My income would cover if we go over, if we want to go on a nicer vacation with the kids. Maybe other things. Extra money for investing and retirement would be good too.
@@IrisP989 2 homes? Wow! Yeah i understand extra income is always nice! To most this sounds like a lucurious life though. I think we sometimes forget what most of the world’s population or even americans live like…
@@suzanne2650 We were lucky, saved and had luck with the timing and interest rates. I am grateful for that. Some people have to rent and can't purchase a house. I don't view it as a luxurious life when you go over your budget, even if you cover it with savings. To me, luxurious is what I see around me - people going to Hawaii, for example, and stay at 4 or 5 star hotels, dine in expensive restaurants, buy brands, etc. I was raised in the middle east in a middle class family (I think so since I've never had to go without). I only found out about the American Dream, the white picket fence, etc. after I immigrated to the states.
@@LegDayLas Upper middle class on paper.. I don't feel that. That's not what I thought it will be in reality but that's also because we live in an expensive area in an expensive state..
$175K is definitely not "rich". It's very comfortable if you live somewhat modestly. You aren't going to be driving a McLaren and living on the beach.
We are considered "wealthy" by this video's standards. The issue we have is that every time we plan a strategy with our financial advisor, it is a fact that all the plans are affected by state / government / local tax laws and regulations penalizing our income and net worth. We are sick of it and actually planning an exit strategy from the US upon our retirement. What we pay in taxes each year would shock most people. And I'm being 100% serious and honest.
170k in ca. after taxes, i take home ~9k a month. Mortgage/hoa/insurance/tax is 4k. Rest of my bills are about $2k. Left with rest to try and save/invest and entertain myself. I can only imagine how much more challenging this would be if I had kids. But regardless inflation and increased COL will continue to squeeze me
In my experience those with money say, "We are comfortable."
When I see people wearing expensive clothes, jewelry or driving fancy cars, I assume they're in debt up to their neck and I in no way feel like I'm making less. I feel like I am doing way better, because I can buy anything I want, whenever I want but don't have a liking for things that don't have a practical use.
Or they could be driving those nice cars because they own a business that pays for them. That is why a contractor rolls up to your house in a $100K pickup truck.; Real estate agent has a nice Mercedes, ...
Since 2020 my personal income increased by ~$40k and skimming over some numbers $30k of it is eaten up by increases in homeowner's/auto insurance, taxes, retirement contributions (been saving 15% before and after the promotions), and an increase in recurring medical costs.
When do I get to start life style creeping :(.
Big missed opportunity to say “honey, dew better” during that honeydew joke 😂
Be grateful for what you have. :)
The US dollar has lost around 84% of it purchasing power in the last 50 years. People need to stop acting like it 1950. 175k is not even middle class in some places.
Name 1 place 175K is not middle class?
@@FooFan-b3k Maybe I should have said upper middle class but give it a few more years.
The more you earn, the more you pay in taxes. Progressive taxes go up in percentage faster than increases in wages. Further, higher income have to save more for retirement because the Social Security replacement rate is lower. No tears for high income earners, but those people can’t increase spending in line with wage increases, so they feel poorer.
@@LegDayLasYou keep less of every incremental dollar you earn, so you don’t get the full benefit of wage increases.
Thank you for your research. I find your videos are well done. When Flokong hits it hits hard
My wife and I don't feel rich. We live in a high income area. We live in an $800,000+ 1963 era built 4 bedroom 2 and a half bath home with a 2 car garage that we owe less than $260,000 on. We have friends that own beach homes or newer homes than we have. My wife drives a 2011 Honda Accord. I drive a 2018 Ford F-150. Many of our friends drive high end cars and buy cars more often than we do. Many of our friends have boats at the harbor and some even own airplanes. Most of them have toys, ATV's, Motorcycles, Jet Skis. My wife and I prefer to rent those things on the few times that we use them during the year. We save in a retirement account over 15% of our pretax income. We save 10% of our after tax income. So while I don't feel rich on paper I don't look so bad.
Paying for 3 college tuitions in cash definately lowers the available cash left over for fun stuff
Unless you're in Southern California, NYC or Hawaii you should not feel poor on 175k per year. You should be rocking it. For real. You're making an insane amount compared to your average American.
180k combined income. No consumer or mortgage debt. Retirement funds will keep us at our current lifestyle (which is well below our means), but I don't feel "rich." Comfortable, definitely. I still shop grocery ads and sales, though. I'm a budgeting N*zi, and have sinking funds for every conceivable expense coming down the pipe.
They simply spend too much. We have high income friends that are broke! It’s crazy but they are broke.
Bob Marley has the best answer when asked if he felt rich
this is me. we make 300k and i felt richer and happier at 13k a year. It started when I let my husband bully me into buying a house with a 5k mortgage and he wouldn't take no for an answer.
$240k and I feel broke… but no debt except house but still feel like I got nada…smh
Is that $175k before or after taxes? It could be important depending on the situation the earner is in.
$175K is an income thats around the middle management level - someone who actually works but you’re not a C-Suite level, you’re not a business owner, you’re still struggling to ascend and buy that $2-5M house, which in CA, is just the average option. Sure you can afford the 20% downpayment but if you were rich, you could have purchased the house in Cash. Alas, you have to support your family and kids and save save save.
I would put myself in the comfortable crowd, largely because I was only making 25k about 5 years ago, so i wasn't able to buy a house before they shot up, and my income is so high, my kid doesn't qualify for much financial aid. In-state tuition, room and board still costs $37k per year before aid where I am. Add in maxing out 401k, and you just don't feel like you can spend freely, but definitely no worries either. I also wouldn't consider 10% of people to be rich, and George says that's top 10% income.
For us, the comparison game is the big one. We feel comfortable because no debts, and we are able to save and invest and still travel and experience amazing things. At the same time, our friends who earn £350k get a tad more than us
No debt but the mortgage. The reason I feel poor is having two kids in daycare!
What a person spends their money on is their lifestyle. No matter how much a person makes, if a person is living paycheck to paycheck or deep in debt, they are living a lifestyle they cannot afford.
Honey Dew Melon is Deliciousssss!!!! 😂😂😂🍈🍈🍈🍈🍈🤣🤣🤣🤣🤣
For me wealth is about fortune, not about income
@@LegDayLas
So i never have been rich but every month wealthier
$2.2 million and no debt. I don’t feel rich at all.
You will need $3 million minimum to retire in a 401k.
@@starventure exactly!
@@starventure # 1 rule In retirement is have money. #2 rule is retirement is boring so have A lot of it. I am shooting for $2.5 million 401k, $360,000 bridge fund in a HYA and paid off house. And then….. I’ll be middle class in retirement with a 4% withdrawal. $3 MM in 401k even better
@@LegDayLas What about inflation, COLA, etc?
Is "living in SF" such a crazy outlier? I would imagine most people making $175k live in one of the HCOL areas.
Wouldn't feel rich on a $175k salary either. Rich to me means that I could quit my job today without any impact on my standard of living if I wanted to. No doubt it would be very comfortable, though, and you get to that definition of rich a lot more quickly
Because of inflation. Not even being a millionaire is enough to buy a hose nowadays. Even if it is possible with right mind set and hard work. You know how difficult it is to get there, and what age people are when reaching it.
This pretty laughable when I make considerably less and I feel comfortable.
I don't see our family as rich, just comfortable (we have a lot of kids to support with this income). However, as a poor kid growing up, I would have seen a family living like ours as rich.
Well, $175,000 isn’t rich. It’s how much money you actually have.
Loved you on the new strangers movie!
$175k isn't rich. Dave Ramsey, OTOH... Dave Ramsey is rich ($200 million).
Living in large metro cities is sooo expensive, but $175 is doable
LOL, if you earn 175000 and you're struggling because the area is so expensive... it is time to move! I just don't get why people stay in these unaffordable places. Go to Spain and you can live off of 10000 a year.
@@LegDayLas with a remote job you won't have that problem.
I come to find out most people that think their poor but have money have never actually been poor.
Most likely you live in a huge city and it doesn't matter how much you make you will live a basic life.
That was a cantaloupe, not a honeydew.
I make only about 25 to 26k per year and I live with my elderly parents but I pay all my bills in the house 🏠 except rent and utilities.
175k isn’t rich. That’s like making 100k 4 years ago
4?
Actually 100K 4 years ago is like 120K today, but nice try.
@@FooFan-b3kno way you can buy with 120k what 100k could buy 4 years ago. Homes and cars are astronomically higher. So is pretty much everything else
@@thejoshman1234 Well actually things are on average 20% higher. You're arguing against facts. There's a lot more to the world than homes and cars. Also, what about all of us who already owned homes and cars, which is the vast majority of the population.
Perhaps it's greed.
If you make more money, you should be able to spend more to enjoy your hard work. I think the key is to increase your lifestyle by 50% and increase your saving/investing by the other 50% of your raise. You can enjoy your success and still better your financial status at the same time
💯
Flokong is the new and fresh Floki! Awesome
Honestly big time Ramsey fan but they are having a hard time understanding inflation. They need to stop trusting the nonsense inflation numbers and understand what the true inflation is currently. 175k a year is like 80k 6 years ago......
120% inflation over 6 years?
Yes, look at things you actually need to survive. Housing, transportation, food and energy. Plus it's not exactly 120% because 175k is taxed more then 80k. But everything you actually need to survive is up 100% plus.
@@crushedtogloryrebuilds5375 that’s 100% false. There is no stats that show 120% over 6 years
@@LegDayLas that makes no sense. I guess then I’ll make up my own stats to and not be incorrect and say inflation has only risen 2% over that time.
@@LegDayLas inflations not real got it
I'm impress how you are becoming my favorite youtuber....good job jorge, nice information and really funny jokes!
Please explain wealthy vs rich