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To the degree that your new point may be true (or not)...
is a different discussion and a different point from the one I made.
yeah? i guess i misunderstood your point. how was i not addressing what you said? it seemed you were doubting my claim that most wealth is generated by people earning large incomes.
Extrapolating-this must put a $250k/yr income within the top 2% of US incomes. Would seem to be well above k374's comment of "getting by."
The problem with your analysis is that you are doing a nationwide general comparison rather than a regional analysis based on cost of living. If I earn $250,000/yr in San Francisco bay area where a house comparable to the ones bought in the midwest costs me $1 million instead of $200k then the $250k/yr being in the top 2% is pretty meaningless to me.
For example if you come to Irvine $250k/yr household income would be reasonably common given there are plenty of families with 2 professional working people each making $100-150k/yr. Earning $100k/yr in a job here is not a big deal...almost all my friends earn that much and many earn much more, many are dual income so i'm sure they break the $250k/yr barrier combined.
It's based on where you live hence my original comment "IF you live in parts of Los Angeles/Orange County THEN $250k/yr is getting by"...I did not say $250k/yr is not well off in Wazhoo city, Alabama where a mansion costs $50k.
You are correct-the top 1% is assuredly slightly different in Orange county. They might be the equivalent of the top .1% in less wealthy areas. But, as I showed in post 304, the median income in O.C. isn't nearly as out of whack with the nation as you seem to posit.
Nationwide median income is $55k
California is $59k
OC it is $72k
You mention housing.
Nationwide Median $185400
California is $479
OC it is $625700
You specifically mention Irvine below. Median household income there is $72k. $250k doesn't sound as common as you seem to think.
$250k is still well above "getting by."
Analysis of an area by simple comparison of friends you know is fraught with bias. People of different socio-economic classes, for instance, don't tend to socialize together. This fact alone skews any hope of accuracy.
PS-I will concede that housing in OC is outta sight! But we aren't discussing housing. We are discussing $250k, and how far above "getting by" it is.
Quote:
Originally Posted by k374
The problem with your analysis is that you are doing a nationwide general comparison rather than a regional analysis based on cost of living. If I earn $250,000/yr in San Francisco bay area where a house comparable to the ones bought in the midwest costs me $1 million instead of $200k then the $250k/yr being in the top 2% is pretty meaningless to me.
For example if you come to Irvine $250k/yr household income would be reasonably common given there are plenty of families with 2 professional working people each making $100-150k/yr. Earning $100k/yr in a job here is not a big deal...almost all my friends earn that much and many earn much more, many are dual income so i'm sure they break the $250k/yr barrier combined.
It's based on where you live hence my original comment "IF you live in parts of Los Angeles/Orange County THEN $250k/yr is getting by"...I did not say $250k/yr is not well off in Wazhoo city, Alabama where a mansion costs $50k.
You are correct-the top 1% is assuredly slightly different in Orange county. They might be the equivalent of the top .1% in less wealthy areas. But, as I showed in post 304, the median income in O.C. isn't nearly as out of whack with the nation as you seem to posit.
Nationwide median income is $55k
California is $59k
OC it is $72k
You mention housing.
Nationwide Median $185400
California is $479
OC it is $625700
You specifically mention Irvine below. Median household income there is $72k. $250k doesn't sound as common as you seem to think.
$250k is still well above "getting by."
Analysis of an area by simple comparison of friends you know is fraught with bias. People of different socio-economic classes, for instance, don't tend to socialize together. This fact alone skews any hope of accuracy.
PS-I will concede that housing in OC is outta sight! But we aren't discussing housing. We are discussing $250k, and how far above "getting by" it is.
Median income doesn't tell a tale as there are many Irvine residents who bought their houses ages ago paying $150k and those houses are now worth $800k..so it's also about assets. The newer money - i.e. couples making $250k/yr today are competing with the older money whose assets have skyrocketed in value but they may be making $72k is irrelevant in that case.
Take a hypothetical case, all millionaires move into Irvine, they are all retired and have no job and assume their money is not income generating...so now the median income is $0. Given a median income of $0 you should be rich beyond your wildest dreams if you made $50k but in reality even $200,000/yr would probably be a struggle as you're now competing against millionaires and their expenditure and their price levels. So median income means nothing really.
If you make $72k/yr and have a house worth a million dollars then they are not exactly participating in the affordability equation are they? We are talking about a new couple to the area trying to get by today - buying a home at today's prices, raising children at today's prices...not close to retirement folks who have done all that back in the 70s.
An example would be a former colleague, both kids grown up, has a 3000sqft almost paid off worth $800-900k house in Irvine but earns only $80k/yr. He would never ever be able to achieve all that today at current income levels vs current costs.
There has been SEVERE cost of living inflation in places like Irvine in the last decade so that is the reason $250k/yr does not go that far anymore...
I am simply not going to agree with you about the importance of median income in this discussion. It may not be a perfect measurement, but you've offered none better (or at all, for that matter).
Your mention of Irvine made me wonder what the cost of living is there compared to other areas in the US. So I went to Moderator cut: link removed, linking to competitor sites is not allowed. 73% higher than the US average. OUCH! That is high. And you are correct-it has really skyrocketed in the last decade.
I like to look at numbers to understand things. So, I said to myself, I wonder what adding 73% to the national median income is. Perhaps that will get us an inkling of a "realistic/liveable" income in Irvine. So I took 1.73 x $55k. That's $95150. Still nowhere near $250k. But, I thought, perhaps I should add 73% to the Irvine median. I took 1.73 x $79k (I think thats the median for Irvine). That number is higher-$136670.
Irvine is undoubtedly expensive. But, I can't find any numbers indicating $250k is "getting by." It is not rich, but it is still much better than the average for the area.
Quote:
Originally Posted by k374
Median income doesn't tell a tale as there are many Irvine residents who bought their houses ages ago paying $150k and those houses are now worth $800k..so it's also about assets. The newer money - i.e. couples making $250k/yr today are competing with the older money whose assets have skyrocketed in value but they may be making $72k is irrelevant in that case.
Take a hypothetical case, all millionaires move into Irvine, they are all retired and have no job and assume their money is not income generating...so now the median income is $0. Given a median income of $0 you should be rich beyond your wildest dreams if you made $50k but in reality even $200,000/yr would probably be a struggle as you're now competing against millionaires and their expenditure and their price levels. So median income means nothing really.
If you make $72k/yr and have a house worth a million dollars then they are not exactly participating in the affordability equation are they? We are talking about a new couple to the area trying to get by today - buying a home at today's prices, raising children at today's prices...not close to retirement folks who have done all that back in the 70s.
An example would be a former colleague, both kids grown up, has a 3000sqft almost paid off worth $800-900k house in Irvine but earns only $80k/yr. He would never ever be able to achieve all that today at current income levels vs current costs.
There has been SEVERE cost of living inflation in places like Irvine in the last decade so that is the reason $250k/yr does not go that far anymore...
I am simply not going to agree with you about the importance of median income in this discussion.
Correct. The median numbers have merit but only the -national- median numbers have merit when discussing the overall -national- issue.
There are lots of other pockets around the country aside from Irvine (and in both directions) which have anomalous numbers compared to that national average. Most people know when they live in such a relatively high or low cost areas and make the needed adjustments on their own.
Here are a couple of articles summarizing a recent survey asking what the average american thinks of as rich. Very interesting: Who Counts as 'Rich'? - NYTimes.com
It's like the boak after overindulging in food and drink. The party is over and the whoile country (as well as the richer part of the world) is vomiting on the corners. The sight of food and drink only makes them more sick.
It's very important for people to recognize that people climb and fall on the income brackets all the time. The top 1% isn't the same group of people all the time because people fail to take in account of social mobility. For example, in the housing bubble, a person selling a house for $2 million instantly becomes the top 1% even if that person has a low income. But next year, that person could very well end up in the bottom 10%.
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