Current Events > A serious article on how making $400k/year is barely scraping by.

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Title: Joe Biden defines income of $400,000 as wealthy, but heres why its barely scraping by for some

Article:
Joe Biden defines that threshold as wealthy, and, according to CNBC, those making that much money represent the top 1.8% of taxpayers, but the reality on the ground in pricy big cities tells a different story. In fact, at least one financial number-cruncher says that kind of salary barely covers the bills in New York, San Francisco, Los Angeles, etc.

Based on the expenses, a $400,000 household income provides for a relatively middle-class lifestyle, popular Financial Samurai blogger was quoted as saying on CNBC. A middle-class lifestyle is defined as: owning a home, having two kids, saving for retirement, saving for college, going on modest vacations several weeks a year, and retiring in ones early 60s.

Heres how he breaks it down:
https://imgur.com/NrTlzkh

So $400,000 a year leaves you with $34?

Of course, that includes maxing out your 401(k), owning a nice home, taking a vacation, etc. Not a lot of tears are being shed by those who earn much less and cant make ends meet, but still, its easy to see why someone with that kind of salary doesnt exactly feel wealthy.

They are not living it up on $400,000 a year, the Financial Samurai said.

And it just keeps going:
https://www.marketwatch.com/amp/story/joe-biden-defines-income-of-400-000-as-wealthy-but-heres-why-its-barely-scraping-by-for-some-11602010209

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Fuck well let's start getting the minimum wage raised. My wife and I combined barely make six figures, I'm surprised I'm not homeless and naked right now.

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If 400k a year is barely scraping by, I guess the majority of Americans are working class in need of a revolution.

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Doe posted...

If 400k a year is barely scraping by, I guess the majority of Americans are working class in need of a revolution.

I mean even if the former statement isn't true, the latter definitely is.

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Seems to be true by some definition. If losing your job could put you in instant financial ruin due to lack of savings, you're definitely not well off in that sense, but much of that can be owed to living above one's means. Truly scraping by would be essential items taking up the grand majority of income.

One tenth of that isn't even scraping by in most places

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1.6 million dollar mortgage? 40k daycare? It seems like some of these could be just living a bit more frugal or having family take care of kids.

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"You can't take money from people making 400k to help people making under 40k! Do you have any idea how hard it is to survive on just 400k?" They said, completely unironically.

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idk I'd consider all that stuff upper middle class. not everyone is paying that much for daycare or a private preschool. and most mortgages are like 1/5 that around here unless it's a really big house in a nice town

and don't even get me started on 3 vacations a year

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This is what happens when you let people pretend that choosing to live exactly where they want is some kind of right. Anyone complaining about not being able to live on 400k is free to move to ohio, but they want luxury and also to live in one of the most in-demand places on the planet.

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I'd love to be scraping by with $400k. Even in an expensive city.
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IdiotMachine posted...

A middle-class lifestyle is defined as: owning a home, having two kids, saving for retirement, saving for college, going on modest vacations several weeks a year, and retiring in ones early 60s.

Is this a parody article

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$400k I can buy 3 houses in Houston live in one and rent out the other 2 and retire the moment I do this.

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The math checks out. People living on 400K a year are the REAL victims.

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People making $400k/year be like

https://media.giphy.com/media/1GT5PZLjMwYBW/giphy.gif

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I used to live in Seattle on $20k a year. It turns out even poor people still have to find a way to live in an expensive city. This is such a joke, I am sorry they can't have the dream lifestyle they want despite living on the edge of the literal top 1% (cutoff for that is about $500,000 a year).

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This is so fucking out of touch with reality.

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They can go fuck themselves. Millions upon millions of people would love to make 400,000 a year. These people sound like they just have absolutely no idea how to save money or be anything even approaching financially responsible.

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LOL I can buy a fucking mansion here with that much money.

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The problem outlined by the article is real though

Inasmuch as if you are middle class, your expenses are split between so many things

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MedeaLysistrata posted...

The problem outlined by the article is real though

Rich people can spend a lot of money to live a better lifestyle to the point that it might be beyond even their large income? Is that the problem?

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and here I thought making $13,000-$15,000 a year was living life on impossible mode.

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ssjevot posted...

Rich people can spend a lot of money to live a better lifestyle to the point that it might be beyond even their large income? Is that the problem?

No

A family can make 80k a year and still not turn a surplus. If the family is the primary organizing model for private citizens, that's silly

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Christ.

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Step 1, don't have kids.

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MedeaLysistrata posted...

The problem outlined by the article is real though

Inasmuch as if you are middle class, your expenses are split between so many things

Not really. There are always people who feel rich compared to you and hell a lot of people here probably appear to be rich compared to people a lot less fortunate.

But if you're living in a major city, going on family vacations, saving up enough money to retire at 60 and making $400k a year you aren't barely scraping by. I make significantly less and live in one of the most expensive cities in the world and I'm not barely scraping by.

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wow, how out of touch can you be

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Jesus christ

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Darmik posted...

Not really. There are always people who feel rich compared to you and hell a lot of people here probably appear to be rich compared to people a lot less fortunate.

But if you're living in a major city, going on family vacations and saving up enough money to retire at 60 and making $400k a year you aren't barely scraping by. I make significantly less and live in one of the most expensive cities in the world and I'm not barely scraping by.

Sure, I guess an upper class life style has upper class costs associated with it, I wouldnt get to caught up on the 'scrapping by' hyperbole

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$400k a year is barely scraping by if you're living WWWWAAAYYYY beyond your means...

and of course this article ignores the fact that the biggest changes will be to the marginal tax rate, so even if you make over $400k a year the only income that will see that jump in tax is above that $400k mark.

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They have two kids, who are simultaneously every age between 0 and 22. 4th dimensional offspring are expensive.

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pauIie posted...

basically this

MedeaLysistrata posted...

No

A family can make 80k a year and still not turn a surplus. If the family is the primary organizing model for private citizens, that's silly

Uh, it says 400k a year, not 80k.

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MedeaLysistrata posted...

Sure, I guess an upper class life style has upper class costs associated with it, I wouldnt get to caught up on the 'scrapping by' hyperbole

But that's the entire point of the article.

Apparently they're spending $87,600 in childcare and education for their two kids every single year. That's nearly a quarter of their annual income alone.

They have a home that's worth 1.6 million that costs $80k a year to pay off the mortgage.

They're spending $7,200 a year on vacations and they're spending $3,000 a year on charity.

There is plenty of room there to make some major cutbacks and still live a high class lifestyle never mind middle class!

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ssjevot posted...

Uh, it says 400k a year, not 80k.

Yeah

I just used the same logic and applied it to a lower income... lo and behold it makes even more sense

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Darmik posted...

But that's the entire point of the article.

Apparently they're spending $87,600 in childcare and education for their two kids every single year. That's nearly a quarter of their annual income alone.

They have a home that's worth 1.6 million that costs $80k a year to pay off the mortgage.

They're spending $7,200 a year on vacations and they're spending $3,000 a year on charity.

There is plenty of room there to make some major cutbacks and still live a high class lifestyle never mind middle class!

I remember this exact article came out a few years ago, it seems to be a repost or something

I dont feel bad for anyone making 400k

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The other irritating thing here is that someone who has an annual income of $400k is likely going to be getting income from investments as well as a wage or by owning a business.

Saying they're scraping by is honestly just so baffling ignorant and stupid. It's not even something you can spin to appear like it and if you somehow do you're just making it look even worse for the people who really are struggling. If $80k a year for daycare and education is a necessity how fucked are most people?

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Why does this board hate anyone with remotely any money

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I feel so sorry for them. I really do. This is a twavesty

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MedeaLysistrata posted...

Yeah

I just used the same logic and applied it to a lower income... lo and behold it makes even more sense

But no one is claiming this doesn't apply to an income less than 1/4 of $400k, they're saying it doesn't apply to $400k.

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darkprince45 posted...

Why does this board hate anyone with remotely any money

I don't hate people with money.

I dislike people with money who pretend they're struggling the same as people who don't have money

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Darmik posted...

I don't hate people with money.

I dislike people with money who pretend they're struggling the same as people who don't have money

This

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This was the funniest thing I read all day.

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ssjevot posted...

But no one is claiming this doesn't apply to an income less than 1/4 of $400k, they're saying it doesn't apply to $400k.

Yeah, I just hadn't thought about family surpluses until reading this

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darkprince45 posted...

Why does this board hate anyone with remotely any money

I don't hate them. But it would be like a 6'2" tall guy telling about how hard it is to be short. People would be like, that makes no sense, you are way taller than the vast majority of people.

I only make $50k a year, but since I spent most of my life on $20k a year or less I feel like I am doing great now. I don't tell anyone I am struggling and certainly don't feel that way. Even when I was objectively poor I didn't whine about it. If you are making $400k a year I am incapable of feeling bad for your financial situation.

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An asshole definitely wrote that article lol
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This is old...when was this last a thing?

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darkprince45 posted...

Why does this board hate anyone with remotely any money

This is definitely a take you'd have in response to this.

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I hate this financial samurai motherfucker. he's rehashed this article for what seems like the past 10 years and every time this topic pops up on CE. one time it'll be a lawyer couple in New York, next time it'll be a tech executive couple in San Francisco. they don't change the rows on the chart and every time they pass it off as some revealing concept and the rubes line up to get upset. he and the site it's on at the time do it for the clicks and traffic because they know it pisses everyone off and gets arguments going. then I post this exact same paragraph on the CE topic every time, just a little bit angrier than the last.

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