My spouse and I earn about $390k a year between us. We are in our early 30s, live in an outrageous COL city, and are expecting our first child in 2020. I often feel like we are messing up financially even though objectively we're not in most metrics.
We're not like the people these articles talk about. We are consciencious about where our money goes and we are running a quite healthy surplus.
On my side of the house, I'm running about a ~$5,500/month after-tax surplus since my 401k contributions and SS taxes maxed out and while covering the majority of our bills except for my spouse's student debt. This surplus also doesn't include a ~$40-50k annual bonus which at least for this year is just totally unspent money.
Reasons we don't feel well off:
- Looking into daycare around here, the three nearest places advertise $2100-$3700 a month per child. Thinking about a huge new expense like that makes you feel like you're falling behind even when you're not. That'll be a huge chunk of my surplus extracted.
- Lots of people have left my job to go to a FAANG. Even the ones who we thought were okay-but-not-great report big raises. Are they exaggerating? Maybe. When a young, so-so colleague passes you by, it makes you feel like you are messing up.
- We don't own a home. Buying an apartment here, especially with room for a whole family, would be a huge money sink so we just can't afford it. When your parents managed to own a home but you don't, you feel like you're falling behind. Also, we're missing out on that home equity.
- We are feeling priced out of this neighborhood by our growing need for space. Not to the extent that we can't pay more, but instead to the extent that we refuse to throw more away on rent.
- We don't have the physical trappings of wealth. My only two possessions of note are a five year old, $1200 guitar and a two year old, $1600 laptop. These are luxuries but not extravagantly luxurious. I bought both before we "made it." We're wealthy in that we live in an expensive city and the numbers on our bank screens are bigger than the numbers on some other people's screens, but we're not touring the world or buying art. Our home is nowhere near as nice as the generic upper-middle class home in the background of every commercial.
- This level of income is pretty new to both of us, so we don't have huge amounts of cash stacked from our 20s. It feels temporary, like good luck that could go away at any time. Student debt is also $2000+/month.
- My spouse has a terrible boss and just has to put up with it for now. The blessing of compound interest is that most of your return comes from just waiting. The tyranny of compound interest is the number of doubling periods until you retire overwhelms other factors like savings rate. We can be very aggressive in our savings and probably afford to bail on the last doubling period and retire a few years early. We definitely can't afford to bail on the last two doubling periods though. You don't feel rich when you have to go to work every day and tiptoe around an asshole boss.
- We both have "other dreams" that we can't pursue until we've set aside more money for retirement. "Real rich people" could do so.
- Neither of us has a family financial safety net aside from each other.
- There are always huge possible medical expenses in America. My mom is getting up there in age and I worry how much longer she can live independently. We have no idea what it would cost to get a nursing home or to take an adult with medical needs into our home should the need arise. It feels like one bad roll of the dice is all it takes to set you back to square one or even further.
- don't have the money to fix anything more broadly wrong with the world. We can't fix the political system, income inequality, anything. We donate to a meaningful charity every year, volunteer, and vote. We cannot hire lobbyists or fix the things we think ill in America right now.
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So, in summary, I guess I'm saying we feel "just like everyone else" because despite the fact we earn a lot of money, we:
- are subject to many of the same high variance events that wipe other people out
- aren't able to buy a home like our parents did
- have inelastic demands (childcare!) that are extortionately priced here
- have to go to work like everybody else and will have to for decades still
- don't have the means to effect meaningful change on any scale beyond our own (rented) backyard
- know people making more for the same work, with less experience, etc, which somehow does matter psychologically.
- are acutely aware that we (the ones with high incomes) are taxed much higher than the real rich (the ones with high wealth). Between the huge chunk of our income that goes to taxes (price of civilization, etc etc) and the huge chunk that goes to our landlord (who probably gets to buy his civilization at half off compared to us), it feels like the game is rigged even from this vantage point.