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Random Friday Question: How Rich Is Rich?

Certain magazines exist mainly to make their readers feel just insecure enough about their own status that they keep coming back for more stories about how we aren't quite there yet. The New York Times Magazine, for instance, is forever offering readers glimpses into the fabulous (and not so hot) lives of the ultrarich, rocking back and forth between enticements to dream of reaching that altitude someday and warnings about how we mere mortals just don't want to get there, ever.

The other week, the Times Magazine riffed once more about the purportedly amazing lives of the city's superrich, the folks who employ--I kid you not--baby-room decorators, kids-party planners, personal nutritionists, and their own art conservators. But mere gawking is not enough: The Magazine must make the rest of us see just how far we are from being of the superior class. So they commissioned a poll, which found that the people most likely to feel poor when in the presence of "people with money" are, surprise, not the actual poor, not the striving middle class, but rather those who make north of $200,000 a year.

Which raises an age-old question we've toyed with before here at Random Friday Question headquarters: How rich is rich?

The Times poll found that in the rarefied air of Manhattan, more than 40 percent of those surveyed said one simply must have an income of more than $500,000 to be rich, whereas in the rest of New York City, a mere $200,000 would qualify.

When I was getting out of college a quarter century ago, the notion of a six-figure income was so wildly out there, so inconceivable, as to be the sort of thing my friends and I assumed only the blue-bloods would ever reach. Now, of course, $100,000 is the median income in Fairfax and Loudoun counties--two of the wealthiest jurisdictions in the country.

But outside of Manhattan, $200,000 still qualifies as rich, doesn't it?

Presidential candidate John Edwards, who should know, draws the line at $200,000 and regularly uses that number to designate the folks he would tax much more heavily. Maryland Gov. Martin O'Malley chose the same figure to mark the pivot point separating those who would get tax relief from those who would face higher levies in his plan to save the state's finances.

Nationwide, about three percent of families reach the $200,000 income level. But in the Washington area, that percentage at least doubles. Still, that leaves well more than 90 percent of people under that level of affluence.

(Soaring income inequality may be diminishing the American propensity to avoid bashing the rich. The Gallup Poll says that on the whole, Americans are more favorably inclined to tax the heck out of the superrich now than we've been in a very long time, more even than we were back in 1939.)

Seems to me, if you're raking in more than nine in ten of your fellow citizens, that's rich, even if you do struggle to pay your baby-room decorator and personal nutritionist. Disagree? Let's hear why....

By Marc Fisher |  October 26, 2007; 7:11 AM ET
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Comments

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Kind of depends where you live Marc. In Lexington, Ky where my collie pups breeder resides I can get a nice farm on 17 acres w/ a 3 bedroom ranch for about a $190k. In Fairfax/Loudon and PW counties the same place would cost me a million plus. In Fauqier County about $750k or so. And we arent talking Mcmansion. A 2000 sq ft rambler. As a Fed I would take a about $12k pay cut to move there if I could find a job! So I would be making about $82K. Collies need the land for sheep.

Those making $75k and above pay approx 90% of all Federal income taxes if I remember correctly.

Depends on where you live. You cant be too rich!

Posted by: Anonymous | October 26, 2007 7:37 AM

Depends not only on where you live but how stable your income is. Rich is when you don't care what the stock, real estate or bond markets do, you can still afford the lifestyle you want. Note, the lifestyle you want, not the lifestyle you can afford.

Posted by: Sticks | October 26, 2007 7:52 AM

First, to rebutt to 07:37's post, the top 20% in income pay for 90% of the federal budget.

Second, a few years ago, my neighbor made 163 million in the first three days of his fiscal year. He took the next 362 days off and the next day bought a gulf-stream and a bell jet-ranger helicopter. A friend of mine commented that it "is a whole other level of rich when you start dealing in aircraft."

Posted by: Wish to Rish | October 26, 2007 8:04 AM

I once heard that you are not rich until your money works you, not you work for you money. That definition makes sense to me.

Posted by: WFY | October 26, 2007 8:21 AM

i don't know, i read about that stuff & i don't think rich; i tend to think pathetic. perhaps i will never have "that kind of money" because i have no desire to live that kind of life. rich to me is living the life you want on the terms you want. i'm not there yet but i soon will be. i won't have a jet or any of that sort of stuff but i'll be living on my terms.

Posted by: quark | October 26, 2007 8:35 AM

Quick question - is the $100K median income for Faifax a household median or individual median?

Posted by: Anonymous | October 26, 2007 8:58 AM

My husband and I have, combined, a 200K income. We have no credit card debt, and in fact no debt at all besides our mortgage. We live in a nice four bedroom house, though it's no McMansion and none of the rooms are all that big.

Our cars are not fancy, are 7+ years old, and were bought used. I shop at TJ Maxx and consignment shops. We buy groceries from Safeway or Giant depending on the sales. When we take a vacation every other year, we fly coach or drive and stay with family. For fun we go to the Smithsonian or a national park. And our most extravagant cost is a weekly dinner date to someplace with cloth napkins but no tablecloths.

My point is that we're not rich. The problem is taxes. We're in that category essentially bearing the burden for everyone - we make so much that we're in a top bracket but not enough to duck the taxes with shelters and writeoffs. But according to most people we're rolling in dough.

I'm here to tell you that if we seem better off than most, it's because we work very hard, we pay cash instead of borrowing, and we do without stupid frippery. We "decorated" by putting up pictures of our families, and our "personal trainers" are two active dogs that need long walks.

Maybe we'd be rich in some state that isn't NoVa... but then we'd have to live someplace that just didn't offer a life worth living. ;)

Posted by: Sonia | October 26, 2007 9:01 AM

Back in the 80's there was a baseball player who was paid the then exhorbitant salary of $900,000 per year. He gave $700,000 to charity. When asked how he could give such a large percentage of his income, he reminded his listeners that this left $200,000 for him to live on and opined that this was a lot of money. Well, it is not as much money today, but the principle is still the same. It's all in who you compare yourself to. If I aspire to be wealthier and move to a neighborhood of wealthier people, I will think that I NEED to have that [insert your favorite toy here], which I see other people using. If I compare myself to most of the rest of the world, I feel pretty rich. After all, I don't live on $1 a day, as some people do. I don't want for water (even in a period of relative drought in our area). I never go hungry.

Posted by: rich in other things | October 26, 2007 9:03 AM

Quick Answer: Household

Posted by: Anonymous | October 26, 2007 9:03 AM

Sonia- Amen! What a warped place we live in. We have just accidently developed our tax shelter, my husband's business that operates at a loss. I'm very excited about what that will mean for next year's taxes.

Posted by: atb | October 26, 2007 9:05 AM

Umm..who cares? Defining rich is just an excuse by the class divisive folks, whether it be for snobbery purposes or increased taxes.

I work hard for the money I make, I went into debt to get an advanced degree, and spend far more time working than 9-6. I don't spend money on stupid brand name goods that are overpriced and inferior quality. What I make should be my own business, not the jerks who want to take my money or decide which party I can or cannot attend.

Amazing how the 'privacy rights' folks drop all concerns about my privacy when it comes to taking my money for their taxes.

Posted by: Andrew | October 26, 2007 9:07 AM

If a business operates at a loss sooner or later it goes under. Even if kept alive by subsidies why would anyone invest in something with a negative return. Incurring losses to shelter income is a ticket to the poor house or the big house but not to a rich house.

Posted by: Stick | October 26, 2007 9:12 AM

Amazing how the 'privacy rights' folks drop all concerns about my privacy when it comes to taking my money for their taxes.
---
Either accept that you are supporting the country you love or move to a foreign country, because your attitude borders on unAmerican.

Posted by: Anonymous | October 26, 2007 9:13 AM

If you have clean water running in your house, if you have a working toilet, if you have a house, if you have access to clean food, if you have a steady income to support that household and a few other objects--a motor bike, a television, a radio, some school books--, if you have clothing without holes in it, then in absolute terms on this planet, you are rich.

Posted by: Patric 2 | October 26, 2007 9:25 AM

This is going to sound simplistic, but please bear in mind that I'm 23 with no kids, grad school student loans, no real estate and two jobs.

My idea of rich is spending money on groceries and other necessities without cringing inside.

For example, I'd like to be able to go to Target and drop $150 on goods without thinking about the hit my checking account is going to take.

Posted by: YourStrawberry23 | October 26, 2007 9:40 AM

I will try and explain why making 100k is not rich in this area

Taxes take a little more than 1/3 of that so you are down to 66k = about 5500 a month

Mortgage 2000 a month (trying to live within our means here)

3500

Transportation
500 a month (possible payments, gas/metro, maintanence, insurance)

Retirement
500 a month (most likely off your paycheck automatically)

down to 2500

Food
250 a month (once again trying to be frugal)

Home Maintanence
250 a month

Utilities
250 a month

Charity/Religious Contributions
250 a month

down to 1500

Clothing
100 a month

Saving for a Vacation
100 a month

Congratulations you have 1300 a month and thats before having to deal with any curveballs that life throwns at you

This is also assuming you are single good luck with a wife and kids

Posted by: budgetdude | October 26, 2007 9:44 AM

Rich in other things, I completely agree. I was shocked at Sonia's post that $200,000 means they need to live so frugally. I suspect they either have huge savings, investments, or are not telling the whole story about how they live (such as they live in a million dollar house or some such thing). Because I look at it the way you do - its not about how much you pay in taxes, but how much you're still left with at the end. And I did some crude calculations to get an idea of what Sonia's taxes would be, and according to that, she and her husband would be left with after taxes at least twice what my husband and I make even before taxes! (and so you know, I have an MA and my husband is working and in school right now, so we're not minimum wage people). But we've always thought we were doing fine because we can usually spend about $1,000 less than we make each month (unless the car breaks etc.) I think people's perspectives change the more they make. People always say that raises don't matter in terms of money, because somehow you always find some way to spend it that you never thought of before. Its perfectly fine for people to spend their money on whatever they want, I just can't understand people acting like they are scraping by on $200,000. People have a hard time believing they are rich because in our world today, it seems like they coul always have more or bigger.

Posted by: Anonymous | October 26, 2007 9:49 AM

A family with a household income of $200K is not "rich".

Posted by: Anonymous | October 26, 2007 9:50 AM

It's funny to me when we start defining who's rich and who's not, you immediately start hearing a bunch of whining about "class warfare." But how come welfare reform, lack of health care, and other issues that affect the poor aren't labled "class warfare"?

Posted by: KJ | October 26, 2007 9:55 AM

It's a lot more than annual income that determines whether or not you are rich. One must also consider total assets. When you get to where your house is paid for and you have enough investments that you can retire, then you are "rich". You don't have to earn tons of money to get there if you spend frugally and don't buy new cars, a house that is way too large, etc. My car is 29 years old, by house is tiny (but paid for), and most wouldn't consider me rich, but I'm getting there. It's not just how much you earn, but how much you spend.

Posted by: Anonymous | October 26, 2007 10:01 AM

Why not ask if being rich equates to being happy? How many of you rich yuppies making $100,000+ are worthwhile human beings? Sonia: I can't imagine making $200 thou and you're living frugally. Jeez, if I told you how poor we were when growing up you'd laugh.

I work with professionals making nearly $1 million a year. They are the most miserable, despicable creatures on the earth. Lousy marriages, screwed up kids, Mercedes and BMW in the garage, tuition for Harvard and Yale being paid for, live-in nannies. Ah, the good life. Yeah, right.

Posted by: Anonymous | October 26, 2007 10:01 AM

Going back to the NY Times articles . . . they've always struck me not as extolling the rich, but rather as mocking them. Or at least the rich people described in the article. They're hardly fawning over the baby-room decorators, more incredulous.

They had an article about compulsive fixer-uppers, who would buy $5m apartments that then "needed" $5m in renovations. One woman quit her job to run the renovation project. The Times, apparently trying to provide balance, made sure to quote the various people in the article as taking care to point out that they also give lots of money to charity and their community. The quotes all seemed like add-ons, consciously so, to the articles put in by the reporter to be glaringly self-serving statements requested by the article's subjects.

Posted by: ah | October 26, 2007 10:06 AM

When I think of "rich" I think in terms of wealth/assets, not just income. Did anyone read "The Millionaire Next Door?" I can't remember the formula, but I believe it took into account wealth building correlated to age and income. The "overaccumulators of wealth," as the authors described them, were not the type to hire baby room decorators, to say the least.

It's been years since I read the book, but despite my relatively lofty income, more than 9 in 10 of my fellow citizens, I don't now and probably never will qualify as an "overaccumulator of wealth."

Nonetheless, I don't mind paying my fair share of the tax burden, which is, rightly so, based on income. I do wish the politicians would refrain from pitting one part of the citizenry against another, but that is perhaps too much to ask.

Posted by: Anonymous | October 26, 2007 10:10 AM

I'm cracking up that you think DC is filled with massive homes. I know my 1300 sq ft home certainly doesn't feel much like the 4000 sq ft mcmansions I've been in in Dallas.

$100,000 doesn't give you a nanny and a BMW, that's for sure.

I'm living Sonia's life, though at $150K. Mortgage, daycare, groceries, gas/metro, insurance, utilities, 5% retirement, baby stuff, and a car payment for my 2001 used Honda comes to $6500. That doesn't include clothes, vacations, eating out, movies, internet, netflix, pets etc. If you're paying for all of that in DC for less than $100K, please, tell us how, especially if you've bought your home in the last 5 years.

Posted by: atb | October 26, 2007 10:12 AM

If you're making 6 figures, you're rich. Maybe not filthy rich, but you're rich. You don't have to worry about being able to buy groceries in a given month or is the power is going to be cut off. You worry if you're going to be abel to afford UPenn or Yale for your kids, not Salisbury or York College.

Everyone makes their own descions about where they are going to live and what kind of house they want and how much they think they can afford to pay for it. Voluntary expenses that you control don't control weather or you're rich.

Posted by: EricS | October 26, 2007 10:13 AM

Here's a thought. There is NOTHING wrong with AMT. There is NOTHING wrong with capital gains taxes. The problem is that the threshold remains static while all other numbers creep up due to inflation year after year. The Social Security threshold rises year to year, government retiree benefits and worker salaries rise year to year but AMT does not. What if we took the AMT level when it was enacted and adjusted it every year for inflation. I don't have the data to do this, but I imagine that it would kick in at a level that most people would find acceptatble, the level that reaches the tax shelter folks. I have always thought it silly that if I buy a house for $100k and sell it 20 years later for $300k that the government believes that I have made a $200k profit. After 20 years, my real gains wouldn't be half that.

Posted by: NVA | October 26, 2007 10:14 AM

I am rich beyond measure. I work my 40 hours, commute 10 minutes to work (15 on a bad traffic day), don't work nights or weekends, and have lots of TIME to spend with my wife and child. We're a single income family, one working for the government, and live within our means. So while that means a small house and we don't try to keep up with the Jonses, we are happy and prosperous. What more could we want?

Posted by: Anonymous | October 26, 2007 10:15 AM

budgetdude, don't forget insurance when you are tallying monthly expenses.

health insurance: $400 (if you are lucky)

prescription meds for the whole family: $75 (allergies for all, blood pressure for one)

disability insurance: $100

Our income comes froma small company, in which we invest as shareholders. This means that a good portion of the $200k goes right back into buying shares, not into our household expenditures. The IRS doesn't really care, but it means that our remaining $725/month doesn't actually exist. Add to that private school for our mildly challenged child (so don't even bother to berate me for wasting money on private school, when it's the best choice we could make for our child right now, and he is thriving), and all of a sudden, we are down to $140 that is not committed every month.

We save by not spending $100/month on clothes, keeping our cars as long as possible, having one commute between two of us, taking lunch to work and skimping on everything else.

I'm ready to do my part for my community and country, but when you talk about raising my taxes because I'm rich, I wonder how small my $140/month is going to get.

Posted by: notrich | October 26, 2007 10:18 AM

If there are people in this country making boatloads of cash, we should WANT them to spend their money. Some entrepreneurial folks figured out that the elite want someone to decorate baby rooms and that they are too busy to plan parties and events so they step in. Maybe they get successful and hire other employees/caterers/servers, pay income taxes etc. Remember when the govt put a huge tax on yachts? Who suffered? Not the rich but the workers who put those boats together.

Posted by: AD | October 26, 2007 10:20 AM

Marc, I think your argument has more to do with wealth than being rich. Substantial and abundant wealth can afford one any lifestyle they choose. Doesn't necesarily mean their lives are rich. I am by no means wealthy but I do consider myself to be rich. I define richness in my friends and family, my health, my marriage, the impending birth of a child, my neighbors, my 11 month old puppy, etc. There is more than one way to define oneself as rich.

Posted by: Anonymous | October 26, 2007 10:21 AM

Rich is when you don't have to ask yourself, "Am I rich?", you just don't think about it, it simply "is."

Posted by: Ryan | October 26, 2007 10:25 AM

"If you're making 6 figures, you're rich. Maybe not filthy rich, but you're rich. You don't have to worry about being able to buy groceries in a given month or is the power is going to be cut off."

Absolutely.

"You worry if you're going to be abel to afford UPenn or Yale for your kids, not Salisbury or York College."

Hardly. This is up there with the nanny, yacht, and BMW. Ivies cost, what, $30K a year, just for tuition? A third of your massive $100K salary. Our kids are on their own for college. We can't take out a loan for our retirement.

Posted by: Anonymous | October 26, 2007 10:27 AM

NVA: Where can you buy a house for $100K now? Studio condos in DC start at $300,000; any single-family house under $450,000 is a 'fixer upper' or handyman special. There is a site on Route 301 in Upper Marlboro (way out in the sticks to those who live in DC) selling homes 'starting in the $900s.' Another down in Calvert County 'starting in the $800s.' Nobody can work in Upper Marlboro or Calvert and afford those houses so they have to commute to DC. It doesn't take a rocket scientist to figure out why the roads are jammed with commuters.

The contractor who installed my kitchen floor said he has been in a lot of these McMansions and they contain a TV set, a kitchen table, and a bed. With such mortgages people can't afford furniture. In a few years we'll have these huge McMansions full of elderly empty nesters who can't maintain them. The cost of utilities alone makes me want to urp.

Posted by: Doing OK for now...... | October 26, 2007 10:28 AM

If I'm making way under $200,000, then can I get food stamps, free medical care, Section 8 housing, anything else the poverty-stricken folks can get handed to them on a silver platter? I've been working all my life, paying taxes, but have not been handed anything special like the non-working sector of society.

Posted by: Way under $200,000 | October 26, 2007 10:32 AM

Wait... Are you talking about country music hit-makers Big & Rich?

...because they suck.

Posted by: Pompous Magnus | October 26, 2007 10:33 AM

I'm close to Sonia's level, but not quite there, with a spouse and 2 kids. I'm rich in that I can now, unlike when my first was born, buy groceries without checking my account balance first, buy a round of drinks for my friends, go to nice restaurants on special occassions, and fix my car (not a Mercedes) when it breaks. It's still hard, however, to put money together for a down payment on a 3 BR house or pay off my 100k of student loans. To me, this sounds more like what "middle class" should be than it does "rich"--enough income to take care of everyday living without worry but not enough to throw around on extravagances.

Posted by: Richie Rich | October 26, 2007 10:34 AM

It doesn't make sense to talk about wealth as fixed number because the cost of living varies by so much in different areas of the country. I think a better line for determine who is rich and who is not is median home price. For example, I think you could define as "rich" anyone who's household makes more than 1/2 the median home price in their area. If the median home price in your region is $400,000 then you would be rich if you made more than $200,000 per year. If the median home price is $100,000 then you would be rich if you made more than $50,000 per year.

Posted by: Josh | October 26, 2007 10:34 AM

the issue with wealth is that like real estate it's all relative. I have a retired uncle who lives in a 3000 sq ft cabin on a lake in Montana. His house cost $150k to build and the land cost him $10k when he bought it years ago. The people who helped him build the house did it for pennies because they had no other work to do. A retired school principal in their town runs a daycare that's apparently so nice my cousin sends her kids to it for part of the summer so they can stay with their grandparents. Daycare costs $100 per week. They get almost all of their produce (think a car trunk full of potatoes) free from a nearby farmer who they let use their boat slip and dock for free. Elk meat and fish are virtually free via hunting either doing the hunting by oneself or from generous friends.

Compare that to Washington, DC. a Townhouse in DC can sell for $900k, food for our family costs us about $150 per week, daycare for us is $2025 per month and daycare for a friend of ours is a blistering $3500 per month. Another couple has a $3900 mortgage- ten times my parent's mortgage!

So sure, I make six figures, but I still have to scrimp and save. I was definitely "sold a bill of goods" by the media that portrayed "the good life." Once I hit a certain salary I thought my life would change because I'd seen that idea on tv and in books. The reality is for most of us- that extra 10% that pushed us over the top into "wealthy" goes straight to our 401ks because we need a 7 figure retirement nest egg to live out 25 years.

Posted by: DCer | October 26, 2007 10:38 AM

ANYBODY who genuinely envies the life of someone else is not rich, period. They might be wealthy or poor, but they are not rich.

I have a sibling in the $2M+ a year club, and I would not swap lives. I think mine is much better.

I don't earn anything near that, but here are my riches. I can walk to work. No need to squander my life commuting (did you know no amount of money can buy back lost time?). I love my job. It is interesting, fulfilling, and gives me a great sense of purpose. I earn enough that I can live comfortably without debt. Whether it is an occasional dinner out, a reasonably modest car, or replacing a major appliance, I know that I can do that without borrowing and without feeling that I am getting near the financial edge.

I feel absolutely no need to impress anybody else, nor do I feel impressed by the possessions of others. A gold or diamond Rolex is hardly an achievement of which one should be proud; a baboon with money could attain one.

I wake up every morning excited at the prospect of one more day of my life, and on weekends I sometimes wake up at 5:30 AM and simply cannot get back to sleep because I have so many fun things to do.

Walk the dog; wash the car; hike the nearby trails; visit an art gallery; enjoy my loved ones; go bike riding; treat myself to an ice cream cone; fish; read a book; etc. Anybody who envies someone else when there are all these inexpensive things to enjoy is poor indeed.

As a wise man once said: "You can't have everything. Where would you put it?"

Posted by: Gasmonkey | October 26, 2007 10:45 AM

I make a little less than $60k a year at a very stable (federal) job. My wife stays at home with our two small children during the day, and goes to law school at night. She has a tiny income as a research assistant for one of her professors. We don't own a fee-simple home. We live in a limited equity cooperative, which is a small step up from renting.

Things are always tight financially, but we survive (with some help from student loans). We do not get luxuries, but we never want for neccessities.

The point is, when I get home from work and hug my kids and kiss my wife, I know I am the richest man alive. I'm not sure how much richer I will feel after my wife graduates and our income doubles or triples.

Posted by: Richie Rich | October 26, 2007 10:55 AM

When I was growing up, my definition of "rich" was when any of the following applied to my classmates:

They are the first owner of all of their clothes

They go to doctors

They go to dentists

They have braces

They stay in hotels or motels when they take vacations, not the homes of friends and relatives

They eat meat more than three times a week

Nobody shares a phone line with them (yeah, I'm old enough to have grown up with a party line)

They have a color TV (I'm old, remember)

Their parents bought a car that was new when they bought it

They can take music lessons or ballet class without having to work as a housekeeper or babysitter for some rich person to pay for it

Their mother doesn't cut their hair - they pay someone for that

They are the first owner of all the furniture in their home

To this day I don't feel the kind of envy you describe when it comes to the super-rich. I find them vulgar and obscenely wasteful. I won't cry over the mansion that burns in Malibu the way I would for the single-wide mobile home that gets washed away in a Texas flood.

Posted by: Amy | October 26, 2007 10:58 AM

For the definitive statement on the issue, I point you to Chris Rock:

"Shaquille O'Neill takes in about $100 million a year. He's rich. The owner of Shaq's team, the man who signs Shaq's paycheck, he's wealthy."

Posted by: Mister Methane | October 26, 2007 11:01 AM

Yes, we grew up poor in the 1950's. My definition of 'rich' was when you had an indoor bathroom and running water, or if your mother could drive a car, or if you subscribed to a newspaper. Thank God we had good teeth and no allergies -- we would not have gotten any medical care. If you had to pay for it, we didn't get it. I remember seeing the first color television being raffled off at a carnival and thought 'Is it really supposed to look like that?' The colors were really fake looking. I was in high school before we got a phone -- until then if we really, really needed to make a phone call, we went next door to our rich neighbors who had a phone and paid them a dime to make a call.

Posted by: I"m with you, Amy.... | October 26, 2007 11:06 AM

"The point is, when I get home from work and hug my kids and kiss my wife, I know I am the richest man alive. I'm not sure how much richer I will feel after my wife graduates and our income doubles or triples."

I think maybe this is leading to the central point that we're all trying to make. Although Richie Rich feels rich because of what he has in his family, what about the person who makes the same amount of money but doesn't have anything to look forward to, no one to hug and no one to care for or about?

Are people like Richie saying that true and authentic richness and wealth can't be measured in dollars?

If so, I'd have to say that I can't fully agree because I don't know what it's like to have a household income of above $50,000. The most expensive place I've ever dined in is B. Smith's at Union Station. While I have family and friends, and a job, these things don't make me feel rich. Some days, its hard for me to be grateful, just because I always feel left behind and less than others. And I have to say that right now, I'd give almost anything to trade places with the stressed out, high-earning executive, because I can handle having family problems, but I don't like having money problems.

Posted by: YourStrawberry23 | October 26, 2007 11:12 AM

Is being rich really about your yearly salary? Or is it about your ability to afford what you have and being happy that those people called "Jones" don't rule your life?
jesse

Posted by: Jesse Russell | October 26, 2007 11:16 AM

Interesting debate. Problem seems to be taht there is no accepted definition of "rich".

I think that there is a difference between "living richly" and being "rich". "Living richly" is generally a function of living off of wages. Thus, someone earning $200K per year but spending or even spending more than it, may be living richly (ie, being able to afford the thing they need and the things, with in reason that they need) but I'm not sure they are actually "rich" and I can see that they may not feel rich. As thier lifestyle requires that they maintain the income level they feel trapped.

Being rich on the other hand may mean having enough wealth that your assets pay for your life style. You are basically free to do the thing you desire without having to worry about where in the money is going to come from. Rich may actually be a feeling of freedom.

That being said, rich may be in the eye of the beholder. Someone earning $50K per year who can pay for the things that he/she wants and has a level of financial sercurity may feel rich. Maybe they are.

On the other hand, a family earning $300K per year that spends it all may feel very insecure. A feeling not generally equated with being rich.

But the real debate here is who is going to pay more taxes. Generally nobody wants to. So, its easy to say tax the rich as long as your not considered rich. But I beleive that the truly rich, those who feel secure and those who actually live within thier means, may not like paying more taxes but generally accept it as part of the cost of being fortunate enough to live in a country where they can actually be rich,

Posted by: Anonymous | October 26, 2007 11:18 AM

My husband & I make about $200M. Last year we paid over $55M in federal, state, local, social security, medicare and property taxes. We also spent about $40M on tuition for 2 kids and put maybe $15M away for retirement. That doesn't leave a lot left over. In the early 90's, I stayed home with the kids for a few years, in none of which did we have a gross income of more than $35M. Consequently, we were not able to save much for either retirement or college for the kids. Some, but not much. I can say that $200M is way better than $35M, and a lot nicer than $100M,but in the DC area it makes you comfortable, not rich.

Posted by: NotRich2 | October 26, 2007 11:22 AM

Budgetdude: you forgot one - the tens of thousands in graduate loans...my spouse and I make north of 100K and still basically live paycheck to paycheck (save a little, but you really can't save that much)...I didn't grow up around here, but I would have gladly taken a 100K income at pretty much any point before I graduated college thinkin' I be living the dream - which i guess i am in our 2 bedroom!

Posted by: ballgame | October 26, 2007 11:28 AM

"Why not ask if being rich equates to being happy? How many of you rich yuppies making $100,000+ are worthwhile human beings?"

The only thing dumber than the assumption that money can buy happiness is the bitter, envious assumption that high-income earners are either unhappy or deficient human beings.

Money can't buy happiness, but it sure can give you peace of mind.

Posted by: Anonymous | October 26, 2007 11:29 AM

It's all relative. Problem is the media has take rich to new levels. So now the rich don't feel rich any more. It's the glamour party latest gadget, best clothes, pricey purse. To feel rich now you need to spend serious cash. Your drinks must be French cognac, your suits custom from Hong Kong or Saville Row, your fragrance Chanel, your scarf Hermes, your bag better cost 4 figures (honey, Coach is middle class now), your shoes better be Manolos. Vacation -- Ibiza, Milan, St. Tropez. See what I mean? Look at DC Style or GQ or the New Yorker. If you aren't making $500,000, or look like Jessica Alba, sorry. That lifestyle isn't going to be yours. Best you can do is enjoy bits of it now and then. But it still leaves you wanting.

The thing to remember, though, is that this isn't real. This idea of wealth and what it means to be rich is insane. A $50,000 handbag? Someon in DC just bought one, just to have one of only 5 made in the world.

So am I rich? Compared to PDiddy and Bill Gates I'm a pauper. Compared to 99 percent of the world's population I am seriously wealthy. Around here a combined income of $200,000 gets you a small 1930s brick house (one bath) in Arlington and a Honda. It's middle class. But what's our standard? Am I comparing myself to my friend in the Hamptons, my immediate neighbors, folks in Anacostia, or folks in the Sudan?

Posted by: DC Lawyer | October 26, 2007 11:30 AM

We are at about 160K and don't feel rich, but that is because we max out our 401(k)s - about 30k per year, have a 2300 mortgage on our townhome (Which we have 85k in equity in). We also save 2500/year for little one's college. As our income has grown, we've made more of a concious effort to eat pesticide free and more natural meats- we also realize that is a privlidge we have. (Sorry - 160k didn't get me good spelling!)

We are definitely fortunate to be able to do all these things. We feel like cash flow is tight, but we know its because we save so much, and we don't want to trade that. We don't go nuts at Christmas, though we could. We usually adopt a family.

I buy $5 sunglasses at target and drive a 10 year old car. I sometimes am envious of neighbors who look like they have so much more, but then I have to wonder, do they save as much for retirement? are they in debt up to their eyeballs?

Posted by: In Between | October 26, 2007 12:00 PM

To: NotRich2

Is it safe to assume that you mean you make $200,000 ($200k) and not $200,000,000 ($200M)? Because you've got some serious problems if you can't make it work with $200 Million bucks year! ;)

Posted by: Danielle | October 26, 2007 12:07 PM

My wife and I earn a combined 250K and we live comfortably in Loudoun County.

Does that mean that we're jetting every weekend, NO. Do we take a nice vacation once a year, YES.

Between our Mortgage, Taxes, Insurance, Day Care, etc.. we are lucky that we can actually put some money aside at the end of each month.

Agree with the poster who said that "rich" should be defined as earning an yearly income equal to 50% of the average home value in your community.

In our case "rich" would be about 350K a year, so at 250K we would be just where our lifestyle puts us, square in the middle class!!

Posted by: Nick | October 26, 2007 12:07 PM

I am always amused when I read the Washington Post. Everyone complains about the high costs of homes and food, long commutes, crime, etc. My wife and I earn $120k in Des Moines, Iowa. We have a 12 minute commute, never lock our doors, and live in a 2300 sq food home we bought for $170k and is now worth $225K. We have 4 bedrooms, a fenced in backyard, and live in an upper middle class neighborhood. We may not have the same opportunities for fun or culture as DC, but in 2007 alone we have spent 4 days in Chicago, 4 in San Francisco, 3 in Las Vegas, and 12 days in Hawaii. All trips easily paid off within a month. If you want to be rich on 100K + then move out of DC.

Posted by: John | October 26, 2007 12:17 PM

Marc Fisher:

You should stay away from financial topics, as you've shown on many occasions you know nothing about personal finance. $200K rich? NO WAY. In my book, rich means you don't worry about paying for a comfortable life. A rich person pays this year's college tuition from current income rather than from savings built up over 20 years. A rich person pays cash for a fancy new car (or any new car). A rich person doesn't worry about the cost of a new roof or whether the furnace will finally die this year. The average resident of the DC metro area can't do these things on 200K/year.

Problem is, most folks (excepting, of course, most people posting to this blog) are financially illiterate. This is an indisputable fact. They have no idea how much it will cost to retire, etc. Examples: want to send a kid to a private college? If your kid is born today, you'll need around $500,000. Figure on saving around $18,000 per year for 18 years. Have 3 kids? That's 25% of your 200K gross income right there. Expect to retire at 65 (for what is likely to be around 30 years)? You'll never pay for that with your 401(k) alone. Everyone knows that real estate in the DC metro area is prohibitively expensive, especially in good school districts. How about non-religious private school (if, for example, you live in a bad school district)? $25K per kid (and that's not just the fancy schools). Bottom line: on $200K per year, one cannot live in DC, save for a 30 year retirement, and save for private college tuition for 3 kids. It just cannot be done. Crunch the numbers and see for yourself.

Posted by: WaPo's Next Metro Columnist/Blogger | October 26, 2007 12:25 PM

Love the idea of defining "wealthy" as one half of the median price for a home in your community. however, it still isn't perfect-- annual income is just partial snapshot. What about those that have inherited major money but don't work? Or those with very unstable incomes?

to the person who mentioned a house increasing in value $200k over 25 years, I don't believe that that gain is taxable. At least not by the feds. If it's your primary residence, once you sell the property and realize the gain, it isn't taxable, right?

Please correct me if I am wrong!

Posted by: baby-work | October 26, 2007 12:28 PM

200K is not rich and remember the federal government does not care if you are rich in non-monetary terms. They only care if they can call you rich in order to paint you as a person who needs to give them more tax dollars. remember the old line that your a democrat if you make over 100K but a republican if you make over 200K.

I'm fortunate to make over 200K and have my wife stay home and devote her time to our 3 daugthers and volunteering in all of their activities. She left the work force to give back to them and the community we live in. To do that our lifestyle has changed as we like to save for retirement and our children's education. We live in a modest home and both drive vehicles with more than 100K miles on them. I'd prefer to consider that fortunate but definitely not Rich

Posted by: jamalitimore | October 26, 2007 12:29 PM

Amen to John...

I am the above Loudoun poster.

I used to live in Columbia Missouri about 5 years ago where I transferred by my company for a few years.

I was able to keep my east salary of 135K at the time and I was living like a king. Rent was $600 on a month, insurance on two cars was $450 PER YEAR!!, utilities were 50% from what they are in this area,etc...

PLUS, this town had so many cultural / entertainment activities tied to the university that I went to many more events than I do now in DC where the average Verizon center event $100 per ticket.

We are seriously considering moving back

Posted by: Nick | October 26, 2007 12:32 PM

John, I'm glad you're happy. But I've been to Des Moines, and I wouldn't live there for a million a year. I'd rather be poor in NYC than rich in Des Moines.

Posted by: Gasmonkey | October 26, 2007 12:33 PM

450/year for car insurance for 2 cars!!! Ours is 3x times that for two hondas!!

Columbia, MO, here we come.

Posted by: Costs | October 26, 2007 12:36 PM

Way Under - yeah sure, you can have food stamps (enjoy the government cheese), free medical care (if you can find a doctor that accepts payment from a federal program - no healthcare if you are an adult), Section 8 housing (enjoy your 5 years on the street while you are on the waiting list), and anything else that poverty-stricken folks have. Feel free to quit your job and live in crime and poverty. I think you'll soon learn that none of these programs hands anything to anybody on a "silver platter" nor can you consider food stamps or eking out a living in section 8 housing anything "special."

Now if your point is that people who are in the lower to mid - middle class could use some help making in this country, then I can agree. Things like healthcare programs and childcare would go a long way in helping and improving the quality of life for the working class people of this nation. However, with the hate-the-poor attitude that a lot of people have, which was exemplified by your post, is it any wonder why our government wouldn't extend assistance to hard-working, tax-paying Americans like yourself?

Posted by: JTR | October 26, 2007 12:43 PM

Rich is such a relative term. I would definitively say that anyone who doesn't ever have to worry about food, shelter or whether they'll have a way to get to/from their place of employment is rich.

You beg to differ Mr. and Ms. "our combined income is 200,000 but we're not rich"? Go visit somewhere on this planet where people know what it's like to not have what they need and you will never have the lack of shame to say that you're "not rich" again. Our household's combined income is 60,000 and we are still within the top 1% of richest people on this planet.

It seems unbelievably ignorant to me that you can call yourself "not rich." Would you say that in front of someone whose children don't have clean water to drink? Well realities like THAT, my rich friends (myself included), is what most of the world deals with. So let's just be honest and admit it-we are filthy, filthy, FILTHY rich.

Posted by: Emily | October 26, 2007 2:13 PM

I suggest some of those $200,000+ income families take a trip down to eastern Kentucky in the coal mining regions where they are out of work and have a look around. The poverty in our own country is shameful. Our church takes vans full of warm clothes, blankets, school clothes, shoes, food, toothpaste, shampoo. Can't imagine people living without cell phones, iPods, Gucci, Beamers in the driveway? Just dying for a $5.00 latte? Bored silly without your Blackberry and laptop DVD players? Walk a mile in their ragged shoes, Bub.

Posted by: Anonymous | October 26, 2007 2:47 PM

Some of these rural paradise stories reminds me of a couple we knew. They were sick of inside the beltway costs and moved up to Frederick County a few years back. Bought a starter home for $200k+. They were there for about a month when a local group of skinheads put swastikas all over their neighborhood. Then there were mysterious shots fired multiple times over a weekend with no one hurt. Then someone's car got keyed. Then someone was carjacked. That's when they realized they thought they were moving to an inexpensive rural area, but they moved into something one step above the trailer park.

DC is no picnic, there is plenty of crime to go around , but I have relatives in depressed steeltowns in the midwest and those areas have all kinds of "meth factory in a barn" problems that we don't. I've visited some places in Ohio that seem to be dens of poor dentistry.

My relatives in Los Angeles are always telling me about the perfect cities they will retire to (Santa Fe, Coer D'Alene, Denver) and as soon as I check the prices are about 75% of what they are in DC ($600k for a big home) BECAUSE PEOPLE IN LOS ANGELES ARE MOVING IN!

Posted by: DCer | October 26, 2007 2:51 PM

Sorry, but $200K isn't rich in DC, despite the fact that there are people in the Alabama black belt without shoes. I owned a house in Birmingham ($88,500) and supported my husband who was in school full time on $30K a year. We could live nicely there on $60K, and I wouldn't have to work. People react to the number $200K, but they also react to the fact that a 1300 sq ft fixer upper is $500K. I know $200K goes far in lower Alabama, but not here. Not to mention that there are no jobs that pay that well in "LA."

Posted by: atb | October 26, 2007 4:05 PM

Income is only a part of being rich unless you define income as salary and investment income. Rich is being able to not work or retire at any age. I make 600,000 a year salary, but a couple of million investable assets at 43 does not make me rich because I could not stop work today. And just because I have a high salary, that does not make me a miserable person. I love my job and my life. Those are not mutually exclusive.

Posted by: not rich | October 27, 2007 4:56 PM

A 6-FIGURE INCOME IS NOT RICH AT ALL AND BEQUEATH THE RECENT HOUSING MARKET AND WHAT YOU GET FOR THAT SAY $200G SALARY IT IS NOT RICH AT ALL, THIS WOULD ALL DEPEND ON YOUR LIVING SITUATION, FAMILY SIZE ETC. AND FOR THE VERBAGE ABOUT ONE MAKING MORE THAN 9 OF THEIR NEIGHBORS, IT IS A QUESTION OF WHERE YOU LIVE AS MANY SECTION 8 RENTALS ARE NOW SCATTERED ABOUT IN THE FINEST OF NEIGHBORHOODS, SO ARE YOU COUNTING THAT SECTION 8 INCOME AS ONE OF YOUR SURROUNDING? AND THE LADY THAT TOUTED MAKING 200 MILLION? SHE WOULD BE CONSIDERED RICH BUT HAS SEEN RICHER SO SHE CALLS HERSELF SOMETHING ELSE. WHEN IN FACT THE STATUS OF "COMFORTABLE IS SYNOMYMOUS WITH RICH ISNT IT"? AND IT DEPENDS ON WHAT YOU ARE CONTENT WITH TOO. SOME FOLK MAY BE ABLE TO LIVE CONFORTABLY AT 7 OR 8 MILLION, NOT 200 MILLION.

Posted by: cheryl | October 29, 2007 5:34 PM

What defines the Rich?
The answer never wavers.
Two times what I make.

Posted by: Rich Haiku | October 29, 2007 7:47 PM

You are not rich until your money works you, not you work for you money.

________________________________________

Love is bigger than herpes:

http://www.pozgroup.com/blogs/blog_messages?blog_id=6260

Posted by: Kate | October 29, 2007 11:10 PM

I just wanted to thank Sonia for "bearing the burdon for everyone". We really appreciate that!

Posted by: Jazz | October 30, 2007 12:19 AM

Throughout this thread, taxes seem to be part of the thinking, here. The new paradigm is the FairTax, where the only tax paid is on new things and on services. The income tax and the IRS will disappear. Instead, there'll be a national sales tax with a prebate to everyone who applies for it, which untaxes necessities. This keeps the tax from being regressive.

Someone was concerned about paying a tax on a house. A used house is not taxable under the FairTax. Nothing used, is taxable.

There are those who believe the current income tax system is here to stay, and they intend to keep it. Why? Because it is a tool of manipulation and propaganda. Why should the rich pay a higher percentage? That is Marxist thinking. Also, it's a mistake to claim that more taxes leads to more revenue for the government, when what it really does is slow down the economy and discourage investment. The FairTax will encourage investment and savings because it takes away all embedded taxes, including FICA, Medicare, Corporate taxes, and so forth.

The smart ones -- and I think most of you are smart based upon what I've read -- will look into the FairTax and support it, once they know it's neither a "pipe dream," nor "too good to be true."

Please see the Wikipedia article:
Predicted Effects of the FairTax
http://tinyurl.com/2vepop

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I remember seeing a definition of rich in Forbes as income of $1-10 million per year with a net worth between $10-100 million. That is the definition I like to use. Superich was defined as income of $10-100 million with a net worth of $100+ million. I don't recall what the divisions of the other classes were.

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