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The excel spreadsheet is a good idea. These are real numbers. One can actually figure out exactly how much money you need for a certain lifestyle. If you want a cheap car, small apartment and vacations in Mexico, you can do that on a very low salary.
This is just my own personal sense of things. Obviously others will--and do--have different options:
I would say that a single person could live a nice, above-average lifestyle on 50-60 grand a year. (Of course that shows how skewed our perception is, since that is roughly the median income for an entire household based on census data.) For a couple, more like 70-80 thousand for an "easy" but not opulent lifestyle. I honestly nave no idea how much more a family would need.
Well, I doubt you really need that much to live the lifestyle I described.
I didn't say luxury vehicle, just above-average. I didn't say luxurious international vacations, just one international vacation and it can be Mexico (doesn't have to be Europe or Asia). I didn't say you eat out at $20 each meal. You can spend $12 for a good meal too. I didn't say you wear designer clothes or own the newest iPad.
What I meant was one international vacation, a few domestic trips, some eating out, occasional splurges, and generally speaking residing in a nice area.
What I described is an upper middle class lifestyle for a single person: a nice car, a nice apartment, and just "nice" things all around.
This is just my own personal sense of things. Obviously others will--and do--have different options:
I would say that a single person could live a nice, above-average lifestyle on 50-60 grand a year. (Of course that shows how skewed our perception is, since that is roughly the median income for an entire household based on census data.) For a couple, more like 70-80 thousand for an "easy" but not opulent lifestyle. I honestly nave no idea how much more a family would need.
Yes, it is interesting. It actually shows that a lot of people aren't using their money to their full extent. They are wasting their money. With better planning, they can achieve more with the same amount of money.
When someone takes the time to make a suggestion and attaches an income level, you say it is too high. So tell us what the right answer so all of us who are wrong can learn from you. Better yet, open up Excel spread sheet and start typing in the numbers and then post them. Stop making it a mystery.
My answer for a family of 3 (one is out of the nest) and owning everything outright is $100K. You mentioned that you want a used Ford Fiesta, live in a cramped apartment, fly to Mexico for your "international vacation" and eat out at TGI Friday's with ice water. Check! I don't know how much it takes for you but I can tell you it doesn't sound very fun to me.
I didn't have a number in mind. It wasn't a guess-what-I-think game. But I certainly could express my opinions about numbers people came up to discuss them. Mexico was just an example to show that international vacation can be far and exotic or closeby and inexpensive. Plenty of ethnic restaurants serve inexpensive and great food.
You sound like a fun guy. I enjoy discussing with you. So please don't feel bad about it. I think it comes down to HOW you budget and spend your money. There is a pretty big range of flexibility there.
I didn't say luxury vehicle, just above-average. I didn't say luxurious international vacations, just one international vacation and it can be Mexico (doesn't have to be Europe or Asia). I didn't say you eat out at $20 each meal. You can spend $12 for a good meal too. I didn't say you wear designer clothes or own the newest iPad.
What I meant was one international vacation, a few domestic trips, some eating out, occasional splurges, and generally speaking residing in a nice area.
The reason people got confused is you asked about "affluent/Upper middle class" (see your quote below). People don't associate "affluent" with a single BR apartment and an above average car.
Quote:
Originally Posted by manbylake
What's affluent/upper-middle is different in different cities. I have always been curious what household income you would consider affluent in the Twin Cities area given our cost of living.
....
Where would you put the household income "affluent benchmark" for each group?
^^^ is why people attach a higher number. You changed the question to an average lifestyle and a cheap international vacation. When they described what you originally asked for, you changed the definition. Hence, get out Excel and plug in your budget. Because I cannot follow you are really looking for.
The reason people got confused is you asked about "affluent/Upper middle class" (see your quote below). People don't associate "affluent" with a single BR apartment and an above average car.
^^^ is why people attach a higher number. You changed the question to an average lifestyle and a cheap international vacation. When they described what you originally asked for, you changed the definition. Hence, get out Excel and plug in your budget. Because I cannot follow you are really looking for.
Your definition of well-to-do is a cultural one, not an economic one. "Affluence" invokes particular images that are deeply socialized. "Family" is also an implied element of it. To many people, race/gender/housing type all go into this image of affluence. "An affluent household" has many varieties, yet most people are inclined to think of something specific. A single BR apartment isn't affluent to you or many other people because it doesn't fit our stereotype of the affluent.
The authors of The Millionnaire Nextdoor found that most millionnaires (with a net worth of a million and more) live in middle-class neighborhoods. Teachers, despite their middle income, are predictably good candidates for retiring as a millionnaire even though they never lived a so-called millionnaire lifestyle. The same goes with our troubled perception of affluence.
And what exactly is an affluent lifestyle? If a farmer is affluent, then he/she is affluent. Does that lifestyle count as an affluent lifestyle? It is indeed an affluent lifestyle because it is a lifestyle lived by an affluent person. It seems to me that we regard a lifestyle involving higher income and/or higher expenses than ours as affluent. We fantasize it ourselves. We see it in others because it's what's visible. If we go into debt, we can live like that and then we are used as definition for affluence. Affluence is about net worth, not income and not expenses.
A lot of middle-income people live a modest lifestyle, which enables them to accumulate wealth. At a certain point, they become quite affluent in real terms (net worth), even though they don't live our perceived "affluent lifestyle" lived by many who actually aren't affluent. Our sense of how the middle and the affluent live is sometimes the opposite to truth. Many we regard as "affluent" have middle-level net worth. Many we regard as "middle class" have higher-than-middle net worth. You would think those who are actually affluent should get to define the term. But no. Americans define affluence by what seems on the surface. We define it by a fraction of the affluent who spend more. Therefore, they are the visible affluent. The rest of the affluent do exist, you know. Don't underestimate that small bungalow in a typical middle class neighborhood with a Fiesta in the driveway. You don't know their net worth. There are also professional reasons to avoid looking affluent in some professions.
So, who is affluent? Whose lifestyle is an affluent lifestyle then?
Last edited by manbylake; 12-19-2013 at 11:02 AM..
Your definition of well-to-do is a cultural one, not an economic one.
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Here is my definition (the same in the dictionary).
af·flu·ent
ˈaflo͞oənt,əˈflo͞o-/Submit
adjective
1.
(esp. of a group or area) having a great deal of money; wealthy.
"the affluent societies of the western world"
synonyms: wealthy, rich, prosperous, well off, moneyed, well-to-do; propertied, substantial, of means, of substance, plutocratic; well-heeled, rolling in it, made of money, filthy rich, stinking rich, loaded, on easy street;
__________________________________________________ __________
Affluent is not driving a used Fiesta and living in a 1 BR apartment. To a family living in a mud bank on the river. I suppose so this person would be considered rich. But the question was related to Minnesotans.
Here is my definition (the same in the dictionary).
af·flu·ent
ˈaflo͞oənt,əˈflo͞o-/Submit
adjective
1.
(esp. of a group or area) having a great deal of money; wealthy.
"the affluent societies of the western world"
synonyms: wealthy, rich, prosperous, well off, moneyed, well-to-do; propertied, substantial, of means, of substance, plutocratic; well-heeled, rolling in it, made of money, filthy rich, stinking rich, loaded, on easy street;
__________________________________________________ __________
Affluent is not driving a used Fiesta and living in a 1 BR apartment. To a family living in a mud bank on the river. I suppose so this person would be considered rich. But the question was related to Minnesotans.
I disagree. Driving a fiesta doesn't mean a person isn't wealthy. Two millionnaires with the same income. One drives a fiesta and lives a modest life. The other spends a lot more. With everything constant, the first person is more affluent because their expense is lower, yet they make the same income. Based on the definition, the first person is wealthier, richer, more prosperous, more well off, more moneyed, more well-to-do, etc. While the second person spent big bucks on a fancy vehicle, the first person banked that money. They are on an easier street if disaster hits. They are loaded with more money because they spent less. What's more, many years down the road, their savings would have grown into more and more money. They can then acquire properties and generate passive income.They are more "propertied" by your definition (and dictionary's definition). And they might still be driving the Fiesta, but they are "stinking rich" now. The second person may have taken a loan to buy that luxurious vehicle and have changed vehicle several times. Each time, they paid more interest and insurance premiums. They are, therefore, much less moneyed.
Wealth is not the same as expenses (to some, it's in the form of debt). Living like a wealthy person is NOT wealthiness. Similarly, wealthiness isn't always visible as in luxurious vehicles and big houses. The dictionary definition never says you have to spend this much money, only that you must own this much money. It never says your expenses must proportionately rise as your income rises to prove that you are wealthy. Stay in the same apartment when your income rises to a wealthy level, then you are wealthy by definition. Owning stuff isn't the same as owning money. Owning stuff means you spent money to acquire the stuff. It's a loss of money (unless the stuff generates passive income). What you are using is not definition, but popular expectations and beliefs of affluence.
A lot of wealthy-looking people aren't making that much, or aren't saving that much. Either way, the actual money they own may not qualify them as affluent. They are living above their means. You can not call someone affluent because the bank has money they can borrow. By that logic, we are all affluent. These wealthy-looking overspending people are probably middle-class. Affluence is with no regard to where you live and whatever lifestyle you have. It is how wealthy you are!
One can even say that the affluent lifestyle we regard in popular culture is lived primarily by middle-class net worth people who aspire to live "like the rich." The truly affluent people spend a lot, but they own even more. They live well within their means (their means are enormous). It's the middle class that don't live within their means. That's why they are forever middle class on their financial statements.
You asked what appeared to be a sincere question at first, but turned the discussion into a recap of "The Millionaire Next Door. " If saving a million dollars in 20 years is your standard of wealth, you still need to make well over $80,000 a year to reach that goal, even if you are driving a Fiesta and living in an $800/m apartment.
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