Bridget, that 250k depends entirely on where you live and what college you are sending your kids to.

I mean that family's going to drop what 40-50k of that in income taxes off the bat (depending on state/local taxes), 30k towards retirement, and college savings for all 4 to go to in-state public schools* is another 15k. So we are though 40% of that income before we touch on clothing (normally for jobs that pay like that your spending more on business cloths) food, house, car, insurance, etc. Yes you can live well but only because you've been properly budgeting since you started. Yes you will be better off than most people but no it doesn't make you anywhere close to rich/wealth but after a years of savings and proper spending control you might get comfortably upper class once your kids can support themselves. Maybe get yourself that Lexus when you're 55



*Using NCSU as an example (4 kids if all of them started this year given recent increases as a base line with savings starting at the moment of conception and a 4.5 year graduation time (either by 1 extra fall/spring or use of summer school). Thankfully its a relatively cheap place to get an eduction, forget private schools or out of state or anything like that. Pricing off of duke would take 56k of saving/payments are year

[Edited on February 16, 2011 at 11:45 AM. Reason : a]

[Edited on February 16, 2011 at 11:46 AM. Reason : 're]

2/16/2011 11:44:51 AM

Quote :

"Geppetto: Your comments display your ignorance. On this site, and IRL, I've argued for certain government programs and have most often done so against destoryer (he can attest to this). Despite my awareness that certain programs are needed that does not mean I agree that all individuals at a certain income have equal disposable income or that a certain salary dictates how much you can afford. However, despite the evidence to the contrary you, in your stubbornness, refuse to acknowledge this fact and stipulate that income is synonymous with wealth. I have never stated that some people at $250k aren't well to do, only that in some situations $250k is barely upper class and is definitely not rich. I believe you refuse to acknowledge this because you have, without rationale, argued so vehemently the other position that to state otherwise would tear a gaping hole into the poorly structure fabric of your beliefs."

You are the only one in this thread who has claimed that 250k may barely qualify a person as upper middle class. You've morphed that into "upper class" now, but I'll remind you of what you said originally:

Quote :

"Geppetto: I could further rant how 250k/year isn't rich and how 250k/year may barely cross someone into what I would subjectively consider upper-middle, but I would rather hear your thoughts and opinions."

If anybody is refusing to acknowledge a point, it's probably the guy who has to slowly change his language throughout the argument.

Quote :

"Geppetto: Your assertions of wealth and income would indicate that you do not. We did not attempt to edify all, only you based on your commentary."

Nope. In fact, I've actually passed along the "million ain't shit for retirement" bit myself right here on TWW. I'm so classy.

Quote :

"Geppetto: You clearly refuse, or are not capable, to do the math."

You do the math. You're the one asserting that it's not upper middle and that those things can't be done comfortably. Remember, you're the only one asserting that.



^I'M HANGING ON TO RICH NO MATTER WHAT!!!

You've pointed out that they may not reach upper class until later in life. But please tell me does it qualify them as upper middle? I'm interested in your insight here.

2/16/2011 11:58:37 AM

there are parts of rural America where a salary of $250k a year makes you ruling class. In some DC suburbs, $250k barely affords you enough to move out of the slums without renting.

2/16/2011 12:00:38 PM

^Dude, you think I'm not aware? I've grounded the debate in Wake County, by the way.




And about rich, my use of it (vs wealthy) is largely informed by ideas like this:

Quote :

"—Synonyms 1. well-to-do, moneyed. Rich, wealthy, affluent all indicate abundance of possessions. Rich is the general word; it may imply that possessions are newly acquired: an oilman who became rich overnight. Wealthy suggests permanence, stability, and appropriate surroundings: a wealthy banker. Affluent usually suggests a generous amount of income, with a high standard of living and some social prestige and privilege: an affluent family. 5. bountiful, copious, luxuriant. 7. precious, high-priced, dear. 12. intense, vibrant. 14. aromatic. 15. fruitful, productive, prolific, luxuriant. 16. bountiful, copious, abounding, bounteous."

I only use affluent for my PC convos.

[Edited on February 16, 2011 at 12:06 PM. Reason : I'm not just making it up.]

2/16/2011 12:03:41 PM

Quote :

"Do you mean to imply that individuals are property of the state and, therefore, by extension so are all good produced?"

No. I merely said that society helped to create much of what you have, in addition you owe it for use of capital.

Quote :

"How do you conclude that I had no hand in creating the capital acquired?"

I conclude so by the very definition of what capital is. It is natural resources. We can't "make" resources, we can only change them into other things. You cannot make anything, only add value to it.

Quote :

"Furthermore, the capital I have acquired is a direct result of my labor and has been acquired by a fair exchange of my labor for capital that is then fairly exchanged for goods. "

You can't make resources. You can make resources into things, but you can't make them, and as such, you owe society for it letting you exlcude others from the use of those materials.

Quote :

"In some DC suburbs, $250k barely affords you enough to move out of the slums without renting."

That's not true.

[Edited on February 16, 2011 at 12:06 PM. Reason : ]

2/16/2011 12:05:07 PM

People are poor because they are lazy, unintelligent, have drug dependencies, or mental problems. No one is "holding them back" from working hard to become wealthy. [/thread]

[Edited on February 16, 2011 at 12:12 PM. Reason : a]

2/16/2011 12:12:07 PM

Quote :

"We can't "make" resources, we can only change them into other things. You cannot make anything, only add value to it."

And when you take something worth zero and make it worth something, you have created something that was not there before.

2/16/2011 12:42:05 PM

Quote :

"you have created something that was not there before"

You have added value, but you have created nothing.

2/16/2011 12:50:33 PM

Quote :

"People are poor because they are lazy, unintelligent, have drug dependencies, or mental problems. No one is "holding them back" from working hard to become wealthy. [/thread]"

Of course, because if everyone were smart, ambitious, drug-free and mentally sound, then everyone would be rich.

2/16/2011 1:25:37 PM

Quote :

"You've morphed that into "upper class" now, but I'll remind you of what you said originally:"

You're right. I meant to type upper-middle, not upper class. It was a typo and I can understand how that would confuse you, even though it doesn't make any of my points - which you avoided addressing- any less credible.

Quote :

"If anybody is refusing to acknowledge a point, it's probably the guy who has to slowly change his language throughout the argument."

At this point you're just rambling without grounds. No language was changed through-out; however, there was a typo made in one instance.

Quote :

"Nope. In fact, I've actually passed along the "million ain't shit for retirement" bit myself right here on TWW. I'm so classy."

Not until it was pointed out that you probably did not recognize otherwise.

Quote :

"You do the math."

I have done it, and others have done it for you on this very page. I can't help that you choose to ignore it.

Quote :

"You're the one asserting that it's not upper middle and that those things can't be done comfortably. "

Your point is?

Quote :

"Remember, you're the only one asserting that."

Really? So this entire thread is people disagreeing with me and supporting you? It certainly looks otherwise from my screen.

Quote :

"Dude, you think I'm not aware? I've grounded the debate in Wake County, by the way."

In a conversation about federal tax codes, a national sentiment towards high wage earners, and discusses the subjectivity of rich you have limited the scope of you conversation to Wake County? That sure seems to fit the scale of the conversation...



[Edited on February 16, 2011 at 1:39 PM. Reason : emphasis added]

2/16/2011 1:37:46 PM

Quote :

"We can't "make" resources, we can only change them into other things. You cannot make anything, only add value to it"

so people shouldn't be rich because it violates the law of Conservation of Mass? brilliant!

2/16/2011 1:43:29 PM

Quote :

"so people shouldn't be rich because it violates the law of Conservation of Mass?"

No, the point I am making is that taxes are merely the rent that they must pay for using society's capital.

2/16/2011 2:32:01 PM

If it belongs to no one how is it society's capital?

2/16/2011 2:34:03 PM

I think we're running into a bit of equivocation around the use of the word "one". No individual rightfully own's capital, it belongs to everyone, thus society owns it.

2/16/2011 2:40:24 PM

Quote :

"No individual rightfully own's capital, it belongs to everyone, thus society owns it. "

You honestly believe this?

And if YOU cant own it.....who is "society"?

So no one can own anything, but still have an obligation to others. To each according to their needs.. huh.

2/16/2011 2:46:56 PM

Quote :

"There is no such thing as "do whatever the hell you want" income. If you want proof of that, just ask one of our nation's many beloved but bankrupt professional athletes or every third person who has ever won the lottery. "

I beg to differ. In both of your examples the income stopped. They both did what ever the hell they wanted while they had the income. Making a ton of money is no guarantee you will have wealth.

As Geppetto stated earlier fiscal restraint and delayed gratification are hard for a lot of people. Which is probably the main reason we dont have more wealthy people in this country than we do. I would say those traits matter more than income actually.

2/16/2011 3:17:40 PM

Quote :

"And if YOU cant own it.....who is "society"?"

I would describe it as everyone who lives in that particular area and functions as group.

Quote :

"So no one can own anything, but still have an obligation to others."

They would have nothing if it weren't for others.

2/16/2011 3:46:29 PM

May I go into someone's home and take a possession of theirs that they could not otherwise have without the contribution of my labor?

What possessions of yours may I take and use for my own personal use?

2/16/2011 3:57:29 PM

Quote :

"I would describe it as everyone who lives in that particular area and functions as group. "

You will have to explain this to me. Im unsure how everyone in an area functions as a group. Or how you define how anything should get done, if no one owns anything.

If you are entitled to the same "share" of capital as some who operates a factory or farm, and you dont work at all, why would you expect this to work?

2/16/2011 4:01:07 PM

Quote :

"May I go into someone's home and take a possession of theirs that they could not otherwise have without the contribution of my labor?"

As I stated before, you rent those things from society, it is up to society's rules whether you can take them. For example if you were a bank that loaned me the money to buy the materials to build my own house, you would be able to take my house. It is up to society to define those rules.

Quote :

"You will have to explain this to me. Im unsure how everyone in an area functions as a group. Or how you define how anything should get done, if no one owns anything."

You live within an area that functions as a group, the United States.

Quote :

"If you are entitled to the same "share" of capital as some who operates a factory or farm, and you dont work at all, why would you expect this to work?"

You are entitled to the share that society decides you are.

2/16/2011 4:16:08 PM

Kris, i don't know if you're aware of this, but you are a socialist

2/16/2011 4:23:13 PM

^yep

So in your mind everyone has the same value? And your example about the bank doesnt make sense. It is the CONTRACT you sign to borrow the money that allows them to repo it, not the fact that you can never own the capital.

If you used your own money to build your house, a bank cannot come take it. Neither can the people who sold you the lumber, or the bum on the street.



[Edited on February 16, 2011 at 6:26 PM. Reason : .]

2/16/2011 6:25:18 PM

Close, I'm a communist, but ITT, I am using the common justification for social contracts we all abide by everyday.

Quote :

"So in your mind everyone has the same value?"

Irrelevant. What I am explaining is why when you make money, society has some right to it, through taxes or some other means. The reasoning is that the money you made was through excluding others from some capital as well as being within the society no individual has created. Everything the individual makes comes along with some level of debt or rent to society.

Quote :

"And your example about the bank doesnt make sense. It is the CONTRACT you sign to borrow the money that allows them to repo it, not the fact that you can never own the capital."

What gives that contract legitimacy? Society. Who else would enforce it?

Quote :

"If you used your own money to build your house, a bank cannot come take it. Neither can the people who sold you the lumber, or the bum on the street."

Yet you didn't make the lumber or the land it is on, or any of the other things that went into that house. You only added value to those things. This is why you would still have to pay taxes on that house. You are still endebted to society in that it allows you to exclude others from that capital as well as the fact that it built the infrastructure for you to be able to buy those materials, transport them, etc.

[Edited on February 16, 2011 at 6:40 PM. Reason : ]

2/16/2011 6:37:59 PM

^society didnt provide the land or lumber. Individuals did.

Yes, people should pay taxes for certain things.

So it seems a lot better to not produce anything or do anything. That way "society" rewards you, instead of penalizing you. correct?

2/16/2011 9:35:04 PM

http://money.cnn.com/2011/02/16/news/economy/middle_class/index.htm?hpt=C1

How the middle class became the underclass

2/16/2011 10:15:08 PM

^more unions is clearly the answer.

I dont see any mention of the number of millionares that have grown over that time. Would be interesting.

just your basic envy piece

http://www.businessweek.com/news/2010-03-09/u-s-millionaires-ranks-rose-16-in-2009-study-says-update1-.html

best i could find. I would imagine the number of millionares has really gone up over this same period.

[Edited on February 16, 2011 at 10:35 PM. Reason : .]

2/16/2011 10:23:22 PM

For those who are concerned I have provided the math for 250k/year with a family of 4. If you have any questions regarding the calculations, just ask and I will address them as openly and directly as possible.



This calculation assumes the following realistic situations

10% set aside for a 401K
5k/Year per available IRA account
Pay back student loans for JD/MD/MBA
Basic cable package with internet
3 cell phone plans at ~80/phone after taxes and fees
1 $400 car payment
4 College funds projecting equal rise in tuition costs to that over past 30yrs
Car Insurance for 3 cars
Gas for 3 cars
Oil Changes, servicing and inspection
Basic Bills
Food for 6
Mortgage and property tax for 550k Home [5 bedroom home]
Home Insurance and HOA fees
Day Care for 2 kids (not all will be there at once)


This does not include
Clothes/Dry Cleaning
Medical for 6
Dental for 6
Vacations and Leisure
Accessible savings/Investments

2/16/2011 10:34:07 PM

^car insurance seems high. And you are only taxed SS to 106k. Medicare is uncapped.

But your medical insurance would kill any adjustment and your remaining.

[Edited on February 16, 2011 at 10:40 PM. Reason : .]

Found one. Good news is the number of Millionare and Billionares has really risen. The bad news is the value of a dollar has really fallen.

http://www.dba-oracle.com/t_billionaire_next_door.htm

its the second graph

[Edited on February 16, 2011 at 10:48 PM. Reason : .]

2/16/2011 10:38:03 PM

I only taxed SS to 106. The 106 in the left hand corner is connected to a formula under the FICA column. I actually left medicare capped as well since I put it all in FICA, but I'll leave the family under taxed.

For car insurance I took my fiancees car insurance, mine and the average of the two to come up with a car insurance value for 3.

2/16/2011 10:52:47 PM

they should dial back the college contributions until the kids are out of day care

but even in that situation they are saving $20k a year not for retirement. that is significant. i realize that you have it earmarked, but that is money that is available to them in an emergency. even if its in a 529 plan or something (which your tax amounts do not indicate), even paying a penalty that is more in savings than most people by a lot. even with your math that still looks pretty comfortable with me. with your plan, aside from a house payment these people can live without any debt, that is also significant. (and i came from a family that size with an income not much higher and grew up in a comfortable house in 5 points)

2/16/2011 11:00:50 PM

the real place those #s are out to lunch is assuming a $550k house. Also, in the places I've dealt with, daycare is not as expensive as the assumption made there.

The car insurance #s are pretty reasonable.

2/16/2011 11:20:40 PM

Quote :

"society didnt provide the land or lumber. Individuals did."

individuals didn't create the trees or the land to grow them, those belong to everyone, you used them and added value to them, for that reason society gets its cut of what you make off of them.

Quote :

"So it seems a lot better to not produce anything or do anything."

Is it, the life of the impoverished is not as cheery and fun as you might like to think it is.

Also what the hell is with the imaginary budget? Who gives a shit?

2/16/2011 11:30:16 PM

Quote :

"individuals didn't create the trees or the land to grow them, those belong to everyone, you used them and added value to them, for that reason society gets its cut of what you make off of them."

You are begging the question. Why do the trees belong to everyone? Because you say so? Did God proclaim it so? That the trees exist is objective fact, who they belong to is not. I believe the trees belong to their single owner, you believe they belong to everyone, and some others believe they cannot be owned at all. Which you believe is a philosophical question, so you cannot use it as evidence for anything.

2/17/2011 12:21:54 AM

Quote :

"You are begging the question. Why do the trees belong to everyone? Because you say so? Did God proclaim it so? That the trees exist is objective fact, who they belong to is not. I believe the trees belong to their single owner, you believe they belong to everyone, and some others believe they cannot be owned at all. Which you believe is a philosophical question, so you cannot use it as evidence for anything."

You are correct that I have assumed that the trees belong to everyone, but I did not use that as evidence, I explained why, using the common definition of ownership, you do not own the trees.

2/17/2011 12:26:25 AM

Quote :

"the real place those #s are out to lunch is assuming a $550k house. Also, in the places I've dealt with, daycare is not as expensive as the assumption made there."

The day care assumptions I made were based on the cost of day care for the children of my coworkers and people I personally know. The average figures for the people in my office appear to be $1300 - 1500 per month for one child. I found $2000/month for two children to be reasonable.

A 550k home may be able to get you a lot in Raleigh, but in DC Metro, NJ, NY and much of the western seaboard it doesn't get you much at all.

2/17/2011 8:18:14 AM

Quote :

"4 College funds projecting equal rise in tuition costs to that over past 30yrs "

Thas is a rediculous assumption. Sorry to my future kids, I am not giving them a 100% free ride.

2/17/2011 8:55:42 AM

Quote :

"You are correct that I have assumed that the trees belong to everyone, but I did not use that as evidence, I explained why, using the common definition of ownership, you do not own the trees."

Again, that may be the common definition to you, a communist, but to the rest of us your definition is down right strange. The rest of us accept government as legitimate not because it has a legitimate claim upon my property but because it has a claim upon me.

2/17/2011 9:16:07 AM

LOL it was inevitable that this thread become about creating specific lifestyle scenarios and judging them.

Quote :

"A 550k home may be able to get you a lot in Raleigh, but in DC Metro, NJ, NY and much of the western seaboard it doesn't get you much at all."

Living in downtown NY or DC is not a neccesity. Same goes for daycare, sending your kids to college w/o loans, international vacations, setting aside more than 7% for retirement, living in a HOA neighborhood and owning multiple cars.

The title of this thread is "What is Middle Class to you?". I do not associate these things with middle class. To me, these are luxuries; no "middle-class" household would be able to afford to do all these things.

Correct me if I'm wrong: Your household assumes a single earner of 250k, right? Then why do you have to pay for daycare? So what is that wife/husband doing all day? Living comfortably without working *gasp*

[Edited on February 17, 2011 at 9:28 AM. Reason : .]

2/17/2011 9:25:51 AM

It is clear that you haven't looked at any real estate outside of North Carolina. Even 30 minutes outside of DC, homes that are ~550k are not remarkable by any means. Hell, even in parts of wake county a 550k home isn't what you would think it is.

Please see page 1. The posed situation is that we have a dual income family with 4 children, and I put this in contrast with a single income family with 1 child, both making 250k/year. This was done so intentionally as to highlight the subjectivity of income and class to further express how income does not equal wealth or class status.

me from page 1

Quote :

"me:I would tend to agree with you, but do you give $250k the same class status when the family is composed of two workers with 4 children as when the family is composed of a single income earner and 1 child? "

2/17/2011 9:36:11 AM

If they're paying too much for a shitty house, that's their fault.

Where did you get $146k after total taxes of $79k? Are they making $225 or $250?

2/17/2011 10:33:50 AM

As listed under the image, the salary is 250k and they contribute 10% to a 401k. 250,000 * .1 (that is 10%) = 25,000.00 250,000 - 25,000 = 225,000.

401k contributions are made with your before tax income and that is why all* taxes apply to only 225K instead of 250k.







*all except SS and Medicare. SS has a 106,800 limit, but Medicare has not cap. However, when I did my calculations I under taxed medicare. I will live with that under calculation, just as there are many items not listed in the calculations, such as clothes, pets, summer camps, dental, medical, sports for children, etc...

2/17/2011 11:01:30 AM

529 contributions are going to reduce their taxable income too

2/17/2011 11:07:34 AM

That is an oversight of mine. I did not do the college savings in a 529 plan, but that would be a reasonable adjustment to make.

2/17/2011 11:18:31 AM

Quote :

"setting aside more than 7% for retirement"

People should put away more than 7% for retirement, unless they want to work until they're 75 or have a major step down in quality of life when they retire. 10% would probably be about the minimum, and even then only if you start saving 10% right when you start working.

Quote :

" The title of this thread is "What is Middle Class to you?". I do not associate these things with middle class. To me, these are luxuries; "

Dude, having daycare, owning a 2nd car, helping your kids pay for college--these things may be luxuries, but they aren't beyond the realm of middle class.

2/17/2011 1:11:28 PM

just incase you guys hadn't heard of wikipedia:

http://en.wikipedia.org/wiki/American_middle_class


the range that defines middle class is representative of the broad viewpoints here.

[Edited on February 17, 2011 at 2:07 PM. Reason : ]

2/17/2011 2:05:35 PM

^^"Middle-class" is an ambiguous term with no specific boundaries. Do you see why I cited the title of the thread? You have your opinions and I have mine. I don't think a typical middle-class family would be able to afford all those things.

In the context of Geppetto's 250k hardscrabble household scenario, these things are presented as necessities.

2/17/2011 3:24:52 PM

heres the flow chart:

do you need to work?
No -> you're rich (congrats)
Yes -> go to next step

How long would it take to train someone to replace you at work?
years -> upper-middle
months -> middle
weeks -> lower-middle
days or less -> poor

2/17/2011 3:55:08 PM

^I like it.

2/17/2011 4:25:04 PM

Quote :

"The rest of us accept government as legitimate not because it has a legitimate claim upon my property but because it has a claim upon me."

Then how do you have a legitimate claim on property?

2/17/2011 8:26:09 PM

^ By "the common definition of ownership" as I see it. More specifically, the same way you claim society has a legitimate claim: our particular brand of philosophy tells us so. I can claim historical experimentation has shown my philosophy to produce better results than yours (the people of New Zealand live better than the people of Cuba), but absent the existence of a God there is no scientific way to justify either.

2/18/2011 1:02:59 AM