Scraping By On $500,000 A Year

davomcdave

http://www.financialsamurai.com/scraping-by-on-500000-a-year-high-income-earners-struggling/

I’ve highlighted in a previous article how living off $200,000 a year in an expensive city is really just an average lifestyle. In this article, I’ll discuss how one couple is living paycheck to paycheck while making a combined $500,000 a year. They are a real couple who shared with me their financial details to anonymously share with you. Judging others, after all, is an American pastime!

$500,000 a year or higher is a level which I think is considered rich. Anybody who thinks otherwise has no concept of financial reality. Even the government almost agrees after compromising by raising the income level for when the highest marginal tax bracket kicks in to ~$400,000 from $200,000 back in 2013.

lisyloo

How can 3 holidays, 2 nice cars, expensive home, new clothes, date nights, extra to give to charity be deemed to be "scrapping by"?

davomcdave

lisyloo wrote: »

How can 3 holidays, 2 nice cars, expensive home, new clothes, date nights, extra to give to charity be deemed to be "scrapping by"?

It doesn't seem unreasonable for a couple making half a mil!

the_flying_pig

Yeah, it's fairly silly overall.

In places not internally consistent, e.g. these people seemingly simultaneously face metropolitan housing costs combined with suburban/rural motoring costs (why would a Manhattan couple who work long hours in the city and have two babies/toddlers lease two expensive cars???)

That level of student debt isn't unheard of but is rare, certainly most of the hypothetical model couples on that list would not have so much. Similarly the oldest couples on that list wouldn't have kids in full time daycare, or such a huge mortgage, and a few are explicitly listed as not living in NY.

The charitable/alumni donations are pure fantasy for anyone with half an eye on their outgoings.

KIds' private lessons at that kind of cost are only really acceptable for the super rich. The holiday costs are similarly nudging towards not super rich but certainly properly rich levels, whereas $500k pa joint in NY is truthfully only moderately rich.

Being brutally honest also the costs seemingly represent something that's rare in the UK and exceptionally rare in the US, namely social mobility, i.e. two people both hitting the financial big time with seemingly little parental backing, hence the huge student debts and huge mortgage. I'm not really sure this is all that common.

lisyloo

davomcdave wrote: »

It doesn't seem unreasonable for a couple making half a mil!

It's not unreasonable at all for two high earning people, but I think most people (median £24k in U.K.) would have a different idea of what "scrapping by" means. To me it means only just able to afford the essentials.

Spidernick

At least this couple had the sense to remain anonymous. I expect the Brownsons wish they had done the same. They must have spent a fortune trying to cover up their mess, but haven't quite got all references removed yet:

https://uk.finance.yahoo.com/news/earn-190k-sell-flat-afford-083610868.html

Marine_life

A friend of mine who is American makes a considerable sum of money and now has three kids at university in the US costing him $210k a year out of net pay. Its not wrong or right ....its just different. The point is that money gives you the choice to live that lifestyle.

I think the word scraping by (one "p") is incorrect because scraping by implies "no choice"

Herzlos

I think the moral here is that if you socialize with richer people and try to keep up with them, you're in for a world of hurt.

kinger101

If you want a laugh read this one. It's would have made more sense in the daily mash.

https://www.theguardian.com/money/2010/oct/09/child-benefit-stay-home-mother

Aside from the fact that the child benefit cut hadn't actually been implemented at the time the article was written, the howler in this was they didn't even consider living somewhere nearer to where the husband work (and it's actually a 55 miles bewtween Ipswich and Cambridge, not 70).

Malthusian

kinger101 wrote: »

Aside from the fact that the child benefit cut hadn't actually been implemented at the time the article was written, the howler in this was they didn't even consider living somewhere nearer to where the husband work (and it's actually a 55 miles bewtween Ipswich and Cambridge, not 70).

They lived in a village near Cambridge - play around on Google Maps and you'll see that the outskirts of Cambridge to the outskirts of Ipswich by the quickest route could easily be a 70 mile journey. Still a very strange decision, of course.

But if he'd rather sit in traffic than spend time with his family then that's his choice. You can make it but you don't get to moan about it.

kinger101

Malthusian wrote: »

They lived in a village near Cambridge - play around on Google Maps and you'll see that the outskirts of Cambridge to the outskirts of Ipswich by the quickest route could easily be a 70 mile journey. Still a very strange decision, of course.

But if he'd rather sit in traffic than spend time with his family then that's his choice. You can make it but you don't get to moan about it.

I suspect more likely they're exaggerating given the melodrama of the piece. It's an absolute crime that the taxpayer is no longer willing to give her child benefit to spend on wine.

Coming to think of it, now you mention it, perhaps sitting in traffic is preferable to coming home to someone who'll blow everything out of proportion.