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I thought it would be interesting to post a official non-biased link to show people what a typical high earner really earns. Many people feel that unless your earning 100K-150K your nothing. This feeling is based on ideas and perceptions that have very little factual backing. Yet, their perception vs what actual reality is are worlds apart. To anyone that's going to start off their post with "well in NY (replace that with any other metro area) that income is nothing and I would live like a begger!" please save yourself the trouble. Those areas are the exception not the norm. In general and for most of the population in the US the data in the BLS study reflects what is considered a high income.
Couple of important points. The data is ONLY considering FULL TIME WORKERS OVER 25, so the incomes are actually skewed upwards. Meaning if everyone 18+ in each education group was included, the median would drop dramatically.
Notice that the degree with the overall highest median income (professional degree) only has a median of $89K. Inflation adjusted for 2014 that's $92K. Translated to the entire population, $92K puts you in approximately the 90th percentile in terms of individual income.
Frankly my reason for posting this data is I've been getting really tired of posts in threads where people brush off 100K incomes like it's "only middle class income," when nothing can be further from the truth. If you look at income's objectively without regional bias, most people making over $60K (except the people in very high cost of living metro areas) are extremely lucky with an excellent income.
Love that part, sounds exactly like my wife and I. I'm sure you will agree that by doing that your net worth is way ahead of the curve.
That's correct. I will add that we are in a good area for our COL and our mortgage is on par with our annual income so we have more flexibility/the income goes further with that and no kids
I thought it would be interesting to post a official non-biased link to show people what a typical high earner really earns. Many people feel that unless your earning 100K-150K your nothing. This feeling is based on ideas and perceptions that have very little factual backing. Yet, their perception vs what actual reality is are worlds apart. To anyone that's going to start off their post with "well in NY (replace that with any other metro area) that income is nothing and I would live like a begger!" please save yourself the trouble. Those areas are the exception not the norm. In general and for most of the population in the US the data in the BLS study reflects what is considered a high income.
Couple of important points. The data is ONLY considering FULL TIME WORKERS OVER 25, so the incomes are actually skewed upwards. Meaning if everyone 18+ in each education group was included, the median would drop dramatically.
Notice that the degree with the overall highest median income (professional degree) only has a median of $89K. Inflation adjusted for 2014 that's $92K. Translated to the entire population, $92K puts you in approximately the 90th percentile in terms of individual income.
Frankly my reason for posting this data is I've been getting really tired of posts in threads where people brush off 100K incomes like it's "only middle class income," when nothing can be further from the truth. If you look at income's objectively without regional bias, most people making over $60K (except the people in very high cost of living metro areas) are extremely lucky with an excellent income.
Relatively high income doesn't translate into high standard of life. Most peoples incomes are compressed in a range, smaller than the range within the one percent. A household income of six figures may not get you far if you have student loans, kids, etc.
I would say that if both are making close to six figures, you are in very good shape.
Keep in mind that those careers are not always stable. You have to save while you are at it. You have to cautious about raising your standards of living.
Although I agree with the idea that $100K per year is a non-trivial amount of money, the data in the OP is an over simplification of what it takes to earn a certain amount of money. Most of all it lumps all degree groups together.
No one should think that they can go to college, earn a psychology degree, and hit the median income for people with degrees.
A 22 year old with a petroleum engineering degree can earn $80K/year right now. The psych degree will probably earn less than $30K, if they can find a job.
Relatively high income doesn't translate into high standard of life. Most peoples incomes are compressed in a range, smaller than the range within the one percent. A household income of six figures may not get you far if you have student loans, kids, etc.
I would say that if both are making close to six figures, you are in very good shape.
Keep in mind that those careers are not always stable. You have to save while you are at it. You have to cautious about raising your standards of living.
What your stating is the underlying issue behind why there is so much misconception in understanding what's considered a good income. You can only compare based on what is relitive to a certain level, after that it just becomes your opinion that has no basis in objective reality.
One of the basic principles of economics is they objectively define what level to break down relativity to and then they deal with absolutes. For the USA you can only break it down to the income of individuals of the USA, then you deal with absolutes. Because if you go beyond that its "relative" to your perception of well off. Yeah a six figure income is nothing compared to a millionaire but then you can say the same for a millionaire vs a billionaire.
The point is we live in one of the richest countries on the plant with an extremely high standard of living. If your making more money then 80% of the population, the fact is your are one of the highest income earners in a country with a high standard of living. That is a fact and is undisputable.
So in your example of the six figure household "not getting far" is irrelevant. The fact is they have more money then most US households. So they can afford a lifestyle better then most people in one of the richest countries on the plant. Therefore no matter how you spin it, fact is they have the ability to afford a lifestyle better then most people in the US. If they choose to spend the six figure income in a way where they are "struggling" that says more about their terrible money management skills/priorities then it does about whether 100K is a good income. It doesn't change the fact that they make more money then most people in the US, earn a high income and have the ABILITY to have an extremely high standard of living in one of the richest countries on the planet.
Quote:
Originally Posted by hoffdano
Although I agree with the idea that $100K per year is a non-trivial amount of money, the data in the OP is an over simplification of what it takes to earn a certain amount of money. Most of all it lumps all degree groups together.
No one should think that they can go to college, earn a psychology degree, and hit the median income for people with degrees.
A 22 year old with a petroleum engineering degree can earn $80K/year right now. The psych degree will probably earn less than $30K, if they can find a job.
I agree with this 100%. I was never trying to dispute that fact. My original post was made to point out that people have a skewed perception of how much income people in the USA make and what's considered a good income.
My household income is pretty good, but we live like we're netting 26k a year, for a family of three. Once you get over the addiction of consumption (which is just used to impress people that don't care about you) you can live well.
Get addicted to the things you can't buy: fitness, love, time with family, education as those are true markers of wealth.
According to this world comparison website, my income is top 0.02% and wealth 0.2% globally.
However, I still have to budget, save for purchases, look for sales, plan educational costs, plan for home improvement costs, etc. What I *can* do is maximize my retirement savings and have a nice thing here and there/now and then.
Maybe THAT is why $100k doesn't feel like very much.
Because you're not freewheeling and lighting your cubans with 100 dollar bills. You're not flying first class to go pick up your new Ferrari or eating beluga caviar. You have no butlers, no cooks...maybe a once a week yard guy or maid sometimes. Your kids go to public schools and you drive yourself around and run all your own errands. You aren't popping off to vacation all over the world, your fridge is not stocked with Dom and Cristal, and you wash your dog yourself in the back yard. You're don't own a ski chalet in Vail and you don't have a beach house in the Keys. You are not doing that at $100k and you're not even doing that at $500k.
For those of you who would say, "Oh, yeah! Well, that's better than some or most or whatever..." You are the same who would not let the same logic fly if I pointed out that poverty in this country is pretty much middle class to upper middle class standard of living in MANY other countries.
My household income is pretty good, but we live like we're netting 26k a year, for a family of three. Once you get over the addiction of consumption (which is just used to impress people that don't care about you) you can live well.
Get addicted to the things you can't buy: fitness, love, time with family, education as those are true markers of wealth.
Great post.
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