Experienced well-being rises with income, even above $75,000 per year(pnas.org)
pnas.org
Experienced well-being rises with income, even above $75,000 per year
https://www.pnas.org/content/118/4/e2016976118
164 comments
> Now, you can be making a couple million a year and only be worrying about who's about to take it from you or whether your assets are going to be worthless in the next financial crash.
Are you being serious? If you're lucky enough to somehow be paid a couple of million dollars per year, you could work for a small few years and retire without any financial worries at all.
That's an absolutely massive salary, and I don't understand how someone could be getting that amount of income and have any reasonable grounds to be worried about their financial situtation.
Are you being serious? If you're lucky enough to somehow be paid a couple of million dollars per year, you could work for a small few years and retire without any financial worries at all.
That's an absolutely massive salary, and I don't understand how someone could be getting that amount of income and have any reasonable grounds to be worried about their financial situtation.
The point is the fabric of society is unraveling quickly in 2021 than 2008. What does it matter if you win the career lottery if every neighborhood is covered in feces, sidewalks are full of tent cities, and your fellow man is 1 health crisis away from becoming an other.
One is forced to wonder if making millions and being surrounded by tent cities is somehow correlated. Almost like wealth is being concentrated in the hands of a relative few or something.
I heard on fox news that the money trickles down to poor. Its clearly their fault. They forgot to build in wealth catchers into their tents. \s
This is obviously sarcastic but sadly not far from what some people actually think. And i guess tent cities is where that thinking gets you to.
This is obviously sarcastic but sadly not far from what some people actually think. And i guess tent cities is where that thinking gets you to.
It matters because you're rich, which means you don't have to live in those neighborhoods.
To add to that - financial wealth is in many ways illusory. If you save up $10M (which in 2000 would've easily been enough to retire on) and it's all in Google stock, that's great while Google remains on top of the world. It can quickly be worth ~$0 if Google's no longer the primary way people find out about things to buy. Employees of Sun Microsystems found this out the hard way - many went from comfortable millionaires to Oracle employees in a decade, if they didn't quit and sell their stocks in time.
The usual answer to this is diversification, but the normal "safe" investments - Treasuries, S&P 500 index funds - are all heavily dependent upon political stability in the U.S. If the U.S. erupts in Civil War, basically all American companies will become worthless. Their employees will be dead and their physical capital will be in rubble, so there's nothing to own.
The usual answer to this is diversification, but the normal "safe" investments - Treasuries, S&P 500 index funds - are all heavily dependent upon political stability in the U.S. If the U.S. erupts in Civil War, basically all American companies will become worthless. Their employees will be dead and their physical capital will be in rubble, so there's nothing to own.
Did you feel the same way in 2019?
I don't think that was the main thrust of their comment, which comes across as mostly a selfish appraisal of a perceived risk to their riches ("only be worrying about who's about to take it from you or whether your assets are going to be worthless in the next financial crash"), rather than concern about others.
I think that's just the rat race. Wherever you go, there you are. The company you keep at 50k / yr is probably different than at 100k / yr and certainly different than at 500k / yr.
It isn’t a rat race, it is inflation. My dad purchased a house in the city for $30,000 in 1981. No amount of stop-the-rat-race mentality gets me a house for $30,000.
My elder cousin purchased a house in the city for $300,000 in 2001. No amount of stop-the-rat-race mentality gets me a house for $300,000.
Prices have gone up, way more than salaries.
My elder cousin purchased a house in the city for $300,000 in 2001. No amount of stop-the-rat-race mentality gets me a house for $300,000.
Prices have gone up, way more than salaries.
Affordable housing is out there -- quite a lot of it too. My parents paid $140k for their house a few years ago in flyover country. $300k would be going overboard. My mom's a nurse and my dad is basically an account executive for a food distributor in the area -- both thoroughly normal middle class jobs. My guess, though, is many folks here wouldn't be willing to do either of those jobs or they wouldn't be willing to live in middle America. If you want an interesting, trendy job in a hot urban center where you're constantly surrounded by the best restaurants, parks, bars, museums, and more, naturally you're going to need to either make a lot of money or make sacrifices in your life.
> No amount of stop-the-rat-race mentality gets me a house for $300,000.
Note that the median price of a home in the US is somewhere in the $250k - $300k range.
> No amount of stop-the-rat-race mentality gets me a house for $300,000.
Note that the median price of a home in the US is somewhere in the $250k - $300k range.
Back in the 50s the beats hung out in North Beach because it was cheap. In the 60s and 70s the hippies all had old victorians out in the Haight Ashbury because it was cheap. San Francisco wasn't some obscure fly-over country place, it was a cool place to be.
Where is cool + cheap now?
Where is cool + cheap now?
Are those kind of people busy hanging out on youtube now?
Are there enough creatives in meat-space to attain the critical mass necessary to generate those places like in the past? Or are many of them staring at their phones all day?
Are there enough creatives in meat-space to attain the critical mass necessary to generate those places like in the past? Or are many of them staring at their phones all day?
We aren't ready collectively to confront these types of truths about the new way of life we have slowly settled into over the last 10-20 years.
Eastern Europe, especially the Balkans
New Orleans
Montreal
Kansas City
Pittsburgh
New Orleans
Montreal
Kansas City
Pittsburgh
I bet you can pick out almost any medium-sized city and find some "cool" neighborhoods that are pretty affordable.
Yeah, but you're comparing a house in the city to a house in flyover country. If you want to make a good comparison, i'd say --
What was the median price of a home in the US in 1980 vs 2020. Then, what was the median salary in the US in 1980 vs 2020. Thats the real comparison.
No reason to note that houses are still cheap in some far off country, thats not really a convincing argument.
What was the median price of a home in the US in 1980 vs 2020. Then, what was the median salary in the US in 1980 vs 2020. Thats the real comparison.
No reason to note that houses are still cheap in some far off country, thats not really a convincing argument.
> What was the median price of a home in the US in 1980 vs 2020. Then, what was the median salary in the US in 1980 vs 2020. Thats the real comparison.
Per the St. Louis Fed [1], the median American home price in 1980 was ~65k. The median American home price in 2019 was ~320k. That's an approximately 4.9x increase. Also from the St. Louis Fed, the 1980 median American family income was ~21k, and the 2019 median American family income was ~86k. That's an approximately 4.1x increase. So it looks like median house price has increased about 20% more than median salary.
[1] https://fred.stlouisfed.org/series/MSPUS
[2] https://fred.stlouisfed.org/series/MEFAINUSA646N
Per the St. Louis Fed [1], the median American home price in 1980 was ~65k. The median American home price in 2019 was ~320k. That's an approximately 4.9x increase. Also from the St. Louis Fed, the 1980 median American family income was ~21k, and the 2019 median American family income was ~86k. That's an approximately 4.1x increase. So it looks like median house price has increased about 20% more than median salary.
[1] https://fred.stlouisfed.org/series/MSPUS
[2] https://fred.stlouisfed.org/series/MEFAINUSA646N
Yes and the interest rates in 1980 were such that the mortgage P&I payments on a 1980 mortgage were $1106 per $100K borrowed vs $422 per $100K @ 3% today.
65K borrowed in 1980 cost $719/mo. 320K borrowed today costs $1349/mo (both are principal and interest only).
$719 in 1980 is $2258 in 2020.
[0] https://fred.stlouisfed.org/series/MORTGAGE30US - I picked 13% as an approximate (somewhat low even) average rate for 1980.
[1] https://www.usinflationcalculator.com/
65K borrowed in 1980 cost $719/mo. 320K borrowed today costs $1349/mo (both are principal and interest only).
$719 in 1980 is $2258 in 2020.
[0] https://fred.stlouisfed.org/series/MORTGAGE30US - I picked 13% as an approximate (somewhat low even) average rate for 1980.
[1] https://www.usinflationcalculator.com/
Yeah the "whats my monthly" being about the same doesn't quite capture what's happening though.
Compare what happens when you get a raise or a small windfall and try to pay your mortgage off early.
I'd pick "small amount, high interest" over "massive amount, low rates" if that were an option.
Compare what happens when you get a raise or a small windfall and try to pay your mortgage off early.
I'd pick "small amount, high interest" over "massive amount, low rates" if that were an option.
That option requires governments to not be printing massive amounts of money, though.
I am planning to refinance again (back to a 30-year mortgage) and won't be in any hurry whatsoever to pay it off early. Borrowing money at 3% nominal with the (hopeful) prospects of economic growth allowing inflation to return means that I expect/hope to be borrowing that money at negative real rates in the back half of that loan.
I am planning to refinance again (back to a 30-year mortgage) and won't be in any hurry whatsoever to pay it off early. Borrowing money at 3% nominal with the (hopeful) prospects of economic growth allowing inflation to return means that I expect/hope to be borrowing that money at negative real rates in the back half of that loan.
Something else to consider: how does the median house today compare to the median house then? Is it bigger and better? Same? Worse? Perhaps expectations have changed in 40 years.
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The question is :will the accounting job still be there in five years? Or will the office or job) move to the city?
Thats what's happening the last five years.
Thats what's happening the last five years.
That's just the world shifting around.
I wish I could find the source, but I read a quote from someone that grew up back around the turn of the last century.
She said, "I never thought I'd be so wealthy as to have my own automobile. And I never thought I'd be so poor to not afford any servants"
Also, housing prices are highly regional. My brother bought his first house (4 bed, 2 bath) in our hometown for $58k about five years ago. Now he lives in a similarly sized house on 20 acres of land that he paid $200k for.
I live in a more populated area, but I also bought my house (3 bed, 2.5 bath) three years ago for $100k.
I wish I could find the source, but I read a quote from someone that grew up back around the turn of the last century.
She said, "I never thought I'd be so wealthy as to have my own automobile. And I never thought I'd be so poor to not afford any servants"
Also, housing prices are highly regional. My brother bought his first house (4 bed, 2 bath) in our hometown for $58k about five years ago. Now he lives in a similarly sized house on 20 acres of land that he paid $200k for.
I live in a more populated area, but I also bought my house (3 bed, 2.5 bath) three years ago for $100k.
Its automation / systemization / manufacturing vs. limited throughput.
Cars can be built on assembly lines, mostly by machines, with very few humans doing the labor, and thanks to the speed of manufacturing, many millions can be built every year.
How do you "build" servants? Right now, a Mommy and a Daddy have to romp around until Mommy gets pregnant, then it takes 18 years and 9 months minimum to build that servant. But what about the systems in place to identify top talent and utilize that servant better? What happens if that servant is tested and has a 140 IQ. Well then we need her to be a nuclear physicist, or a cardiovascular surgeon, or an AI researcher. She's wasted as a servant, and we can't afford to waste our resources in the modern world.
The problem with Agatha Christie's quote is her outdated understanding of the world. In 1910, when Christie was 20 years old, the smartest person born to the lowest class of British society had precisely dick-all chance of rising to become a Fellow of the Royal College of Surgeons, even if it was clear to everyone he interacted with that he could easily do the requisite work.
I suppose one day someone will say, "I never imagined I would be rich enough to afford a robotic kitchen, but too poor to live on Mars..." or some such nonsense.
Cars can be built on assembly lines, mostly by machines, with very few humans doing the labor, and thanks to the speed of manufacturing, many millions can be built every year.
How do you "build" servants? Right now, a Mommy and a Daddy have to romp around until Mommy gets pregnant, then it takes 18 years and 9 months minimum to build that servant. But what about the systems in place to identify top talent and utilize that servant better? What happens if that servant is tested and has a 140 IQ. Well then we need her to be a nuclear physicist, or a cardiovascular surgeon, or an AI researcher. She's wasted as a servant, and we can't afford to waste our resources in the modern world.
The problem with Agatha Christie's quote is her outdated understanding of the world. In 1910, when Christie was 20 years old, the smartest person born to the lowest class of British society had precisely dick-all chance of rising to become a Fellow of the Royal College of Surgeons, even if it was clear to everyone he interacted with that he could easily do the requisite work.
I suppose one day someone will say, "I never imagined I would be rich enough to afford a robotic kitchen, but too poor to live on Mars..." or some such nonsense.
I believe the person who said that was Agatha Christie.
As to measuring inflation generally via the proxy of housing, the relationship is confounded by regulation that subsidizes demand and restricts supply, especially in cities like SF & NY, which is almost guaranteed to raise prices. In lots of other arenas, e.g. access to fresh food, real prices have gone down over time in America.
As to measuring inflation generally via the proxy of housing, the relationship is confounded by regulation that subsidizes demand and restricts supply, especially in cities like SF & NY, which is almost guaranteed to raise prices. In lots of other arenas, e.g. access to fresh food, real prices have gone down over time in America.
And just goods in general, but a lot of jobs with it as a lot of retail markups were from retail inefficiencies.
Now you’re increasingly < 10 miles from a Walmart and Amazon will deliver nearly everywhere.
15 years ago, a lot of this was still accessible, but you’d have to plan your Walmart trip or trudge through eBay or umpteen online retailers to cut out the b&m markups.
Now you’re increasingly < 10 miles from a Walmart and Amazon will deliver nearly everywhere.
15 years ago, a lot of this was still accessible, but you’d have to plan your Walmart trip or trudge through eBay or umpteen online retailers to cut out the b&m markups.
Interest rates have crumbled since then and dramatically so.
That 30k is around 85k today. Interest rates then vs today would make for the same monthly payment in actual dollars of around $500/month. $500/month in 1981 is like $1400 today. This would mean the house should be worth around $300k today at today’s interest rates.
Of course the location may be more or less in demand which greatly influences price.
Where I grew up the houses are more expensive than in the 80’s but the location isn’t in demand so the inflation and interest adjusted cost is well below the cost back then.
That 30k is around 85k today. Interest rates then vs today would make for the same monthly payment in actual dollars of around $500/month. $500/month in 1981 is like $1400 today. This would mean the house should be worth around $300k today at today’s interest rates.
Of course the location may be more or less in demand which greatly influences price.
Where I grew up the houses are more expensive than in the 80’s but the location isn’t in demand so the inflation and interest adjusted cost is well below the cost back then.
I recently saw a graph of the average monthly mortgage payment in the UK (a country where house prices have rocketed in the last 30 years). The average monthly mortgage payment has basically been flat over the last 30 years so I think your point is absolutely correct - affordability on a monthly basis hasn't budged.
But the house could be bought quicker with bonuses from work for example.
Those extra down payments are worthless now..
Those extra down payments are worthless now..
Possibly but would bonuses be adjusted too?
I do think the down payment is more difficult for many people today. The solution to this was to allow less than 20% down. But then the borrower has to pay PMI until they have 20% equity. There are tax rebates for first time buyers too.
People need more discipline in saving and investing and looking for smaller places in areas with less demand. Get into the market and build equity and scale up over time.
I do think the down payment is more difficult for many people today. The solution to this was to allow less than 20% down. But then the borrower has to pay PMI until they have 20% equity. There are tax rebates for first time buyers too.
People need more discipline in saving and investing and looking for smaller places in areas with less demand. Get into the market and build equity and scale up over time.
In major cities in the US it absolutely has, even given the decreased interest rate.
Right - cities have been “revitalized” which has driven demand. Values have stagnated in other places like many suburbs.
I think the main issue with housing prices is some people can’t afford to live where they want to live. And there’s some legitimacy there as people don’t want a long commute for various good reasons. But it boils down to people not being able to finance the lifestyle they want. Hence gentrification where those with limited means move into areas currently populated by people with even less means. And of course that has its own opponents who also generally oppose new development oddly enough.
Maybe remote work will loosen the demand to live in a handful of expensive cities?
I think the main issue with housing prices is some people can’t afford to live where they want to live. And there’s some legitimacy there as people don’t want a long commute for various good reasons. But it boils down to people not being able to finance the lifestyle they want. Hence gentrification where those with limited means move into areas currently populated by people with even less means. And of course that has its own opponents who also generally oppose new development oddly enough.
Maybe remote work will loosen the demand to live in a handful of expensive cities?
For housing there is usually more to the equation than just inflation vs salary.
When my parents got their first house in the 80s, I think the interest was just shy of 20%
If I buy a house today, I can literally get 0%* interest on the loan.
20% interest over 30 years means you have paid almost 6 times the value of the loan with your last payment.
So if they could afford the house at 20% interest, they can afford it at 5 times the price with near zero interest.
This has been one of the main factors for pushing house prices way faster than salary growth. The monthly payment can grow (somewhat) with salary while the sticker price on the house can grow much, much faster.
* Don't live in the US, but house prices in the EU are just as crazy as anywhere
When my parents got their first house in the 80s, I think the interest was just shy of 20%
If I buy a house today, I can literally get 0%* interest on the loan.
20% interest over 30 years means you have paid almost 6 times the value of the loan with your last payment.
So if they could afford the house at 20% interest, they can afford it at 5 times the price with near zero interest.
This has been one of the main factors for pushing house prices way faster than salary growth. The monthly payment can grow (somewhat) with salary while the sticker price on the house can grow much, much faster.
* Don't live in the US, but house prices in the EU are just as crazy as anywhere
This reads similarly to me as conversations that justify medical bills being so high in the US when there’s a closed loop between the those charging and those paying (ie, not the one receiving medical care). “You should be thankful that we saved you 99.5% of this artificially high price tag even though we’re complicit in its fantasy pricing!”
Medical service doesn’t exist for the industry on top of it. Housing doesn’t exist for the industry built on top of it. I wish our government considered the well-being of the host nearly as much as the parasites rather than asking Mr. Mosquito what he thinks would be beneficial.
Medical service doesn’t exist for the industry on top of it. Housing doesn’t exist for the industry built on top of it. I wish our government considered the well-being of the host nearly as much as the parasites rather than asking Mr. Mosquito what he thinks would be beneficial.
Back then you cold use your bonus payments, holiday money, Christmas money, whatever to pay the credit WAY faster.
Now, you would save two months of payments..
Now, you would save two months of payments..
Based on your username I’m assuming you’re around NYC. My wife is from West Islip on Long Island and faced a similar quandary as she was coming of age. $2000 a month to rent a crappy apartment in the mid 2000s, so she moved out to the Kansas City metro area. We bought a 2200 square foot house in the suburbs that cost us $245,000 just a few years ago, maybe $300,000 now.
I’d say the stop-the-rat race mentality is to move to a smaller city, unless you’re literally working on Broadway or some job that’s uniquely tied to a large city, there’s plenty of jobs and lots of space out in flyover country.
I’d say the stop-the-rat race mentality is to move to a smaller city, unless you’re literally working on Broadway or some job that’s uniquely tied to a large city, there’s plenty of jobs and lots of space out in flyover country.
Then the rat race intensifies for those originating in the smaller cities.
> No amount of stop-the-rat-race mentality gets me a house for $300,000.
Many many houses, including mine, cost less than that. Some of them cost an order of magnitude less. If you're not considering moving out of a city with fancy tech career prospects a viable option, then you are possibly not understanding the concept of a rat-race.
Many many houses, including mine, cost less than that. Some of them cost an order of magnitude less. If you're not considering moving out of a city with fancy tech career prospects a viable option, then you are possibly not understanding the concept of a rat-race.
The problem is corporations: they want employees clustered in hubs, not wfh, where they cannot "control" them.
Aside from a couple tech companies out there, good luck trying to relocated and wfh in the mid-west.
Aside from a couple tech companies out there, good luck trying to relocated and wfh in the mid-west.
I do think corps are part of the problem, but not necessarily due to control. Cities are self-reinforcing growth due to the inherent chicken-and-egg problem regarding jobs and companies. Companies don't want to move to the boonies, not enough workers. Workers don't want to move to the boonies, not enough jobs. And everyone wants to be close to universities, because networks, while universities aren't willing to spend resources to move. This was already the case before telecommunication became as advanced as it did in the recent 15 years.
WFH might help break the cycle to some degree, but the majority people will still be in cities (by virtue of, well, being a city), which creates incentives for younger generations to go there (dating + outgoing life), even for those who would rather settle outside the city once they find a partner.
WFH might help break the cycle to some degree, but the majority people will still be in cities (by virtue of, well, being a city), which creates incentives for younger generations to go there (dating + outgoing life), even for those who would rather settle outside the city once they find a partner.
Baked into this theory is the belief that people only live in cities for job prospects, and not because they want to for every other part of their life. The belief is untrue at least for me and everyone I know.
Observer's bias? Of course you observe people in that situation, because of where you are.
I agree though, that folks also live in cities by inertia. They've always lived there, and don't know any better. Even though they've got problems getting employment and housing, they can't see any solution. That's a demographic too.
I agree though, that folks also live in cities by inertia. They've always lived there, and don't know any better. Even though they've got problems getting employment and housing, they can't see any solution. That's a demographic too.
Oh it’s very clearly observer’s bias, I don’t mean to suggest otherwise. That’s exactly my point. I just wanted to push back on the idea that there are two kinds of people - those who don’t live in cities, and those who live in cities reluctantly.
Working from home seems to have a similar narrative on hacker news I’ve found, probably for similar reasons - either you work from home happily or you reluctantly go into the office.
Working from home seems to have a similar narrative on hacker news I’ve found, probably for similar reasons - either you work from home happily or you reluctantly go into the office.
I relocated and wfh in the midwest. It's not been hard at all.
> No amount of stop-the-rat-race mentality gets me a house for $30,000
30 year old 1 room apartments in small town Hokkaido. Just saying.
30 year old 1 room apartments in small town Hokkaido. Just saying.
For all the folks commenting "oh, but you can still buy a house for 30,000 in XYZ city" -- no, when calculating inflation you have to compare likes.
If a loaf of bread cost $0.10 in the US in 1950 and now you're like, well a slice of bread in Vietnam still costs $0.10, thats not really a good argument.
If a loaf of bread cost $0.10 in the US in 1950 and now you're like, well a slice of bread in Vietnam still costs $0.10, thats not really a good argument.
It is more like saying, "a loaf of bread in 1950 cost 10c, and you can buy a loaf of bread for the equivalent in today's dollar. But if you want that brand-name bread that people are out-bidding each other to buy, it is going to cost quite a bit more"
You can get nice house for $300,000, just not in a major metro zone. It works if your "stop-the-rate-race" mentality includes moving to a rural area. Especially if you leave CA or NY.
You definitely don't even have to leave NY State, just the city and its environs. Rural Upstate NY has more in common with rural PA than it does with, say, Westchester or the Hamptons. Or even with most of MA.
I bought my house about 4 years ago for 162K, and am about 45 minutes from a major Midwestern city (Chicago). Plenty of shopping and entertainment, high speed internet, recreation all within reach. Tech salaries are around 6-figure for many jobs (systems engineer), higher for developers. Oh, and if I felt like doing handy-man work, I could have gotten a house for 90K (would be livable, but require renovation to make it "good").
Exactly. Some prices have just gone up way more disproportionately, like housing, making it difficult to compare to older metrics.
For all the folks commenting "oh, but you can still buy a house for 30,000 in XYZ city" -- no, when calculating inflation you have to compare likes.
If a loaf of bread cost $0.10 in 1950 and now you're like, well a slice of bread in Vietnam still costs $0.10, thats not really a good argument.
If a loaf of bread cost $0.10 in 1950 and now you're like, well a slice of bread in Vietnam still costs $0.10, thats not really a good argument.
Not neccesarily. Only if you're the sort of person who values money and chooses to asscoiate with people based on how much money they have. Of course people with lots of money do tend to be people who value having lots of money. But not always.
That's sort of the point of it though, right?
If you equate your income with your self-worth, then you'll never feel that you have enough.
If you can step outside that framework, you'll find that you may still make significant money, but it doesn't really matter so much.
If you equate your income with your self-worth, then you'll never feel that you have enough.
If you can step outside that framework, you'll find that you may still make significant money, but it doesn't really matter so much.
Would your experienced well-being have been higher in 2008 with half-million in income? Would your experienced well-being in 2020 be lower if you were making $100K/yr?
I suspect the answer is yes to both, from which I conclude "2020 was worse across the board by important stability measures that you value, but for any given year, $500K in income is better than $100K."
I suspect the answer is yes to both, from which I conclude "2020 was worse across the board by important stability measures that you value, but for any given year, $500K in income is better than $100K."
> Would your experienced well-being have been higher in 2008 with half-million in income?
Probably not by much. All I really wanted was a basic place to live, enough food on the table, and a reasonable expectation that that'd continue into the future. My job was already doing what I would do for fun beforehand.
"Would your experienced well-being in 2020 be lower if you were making $100K/yr?"
Yes, because those things - food & housing security - are increasingly precarious on $100K/year now. You can still live on $100K/year in the Bay Area, but you're a couple years of rent increases from being priced out, and forget homeownership.
Probably not by much. All I really wanted was a basic place to live, enough food on the table, and a reasonable expectation that that'd continue into the future. My job was already doing what I would do for fun beforehand.
"Would your experienced well-being in 2020 be lower if you were making $100K/yr?"
Yes, because those things - food & housing security - are increasingly precarious on $100K/year now. You can still live on $100K/year in the Bay Area, but you're a couple years of rent increases from being priced out, and forget homeownership.
Semi unrelated, but is FAANG still a comfortable path to such income? I've been debating between doing FAANG or starting my own business for years and the wavering hasn't done me any good.
If it's still possible to make 500k+ working at FAANG now that stocks aren't increasing so rapidly, I need to get on that right away :)
If it's still possible to make 500k+ working at FAANG now that stocks aren't increasing so rapidly, I need to get on that right away :)
Yes. $500K+ is roughly L6 at Google or the equivalent at another FAANG. It's quite a bit easier and less risky to get to that level than to start a business that nets $500K+ annual profit. (Believe me, I tried.)
Yeah that's what I'm realizing. I'm getting too old to gamble again. I think a remote FAANG job would be my best choice.
How high is L6? I've got about a decade of experience, I heard most don't make it beyond L6 but it's all rumors.
How high is L6? I've got about a decade of experience, I heard most don't make it beyond L6 but it's all rumors.
L3 is new grad. L4 is "terminal" in that there's no explicit up-or-out pressure beyond that point. L5 is senior, and I'd say most people don't make it beyond L5 without intent. L6 has a few shifts from prior levels. Notably that a high performing L3 is an L4 and a high performing L4 is an L5 (usually), but simply performing well at L5 isn't enough to get to L6, the scope of work and goals shift between L5/6. You generally won't be considered for L5 without 10+ yoe, as I understand it, although internally you can reach it faster.
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This new paper actually makes conclusions that are the opposite of what their own data shows:
> Two things to note here. (1) the x-axis is logarithmic. There's a HUGE difference in income between the rightmost points. (2) the y-axis spans a TINY effect size. And TINY / HUGE = EVEN TINIER. 3/7
> A randomly sampled highest-income participant ($480.000) would have lower well-being than a randomly sampled lowest-income participant ($15.000) 25% and 33% of the time for the two outcome measures. Income explains 1.5% and 4% of the variance. 5/7
* https://twitter.com/jonaslindeloev/status/135383426475696537...
* https://lindeloev.net/new-pnas-paper-income-is-a-poor-way-to...
> Two things to note here. (1) the x-axis is logarithmic. There's a HUGE difference in income between the rightmost points. (2) the y-axis spans a TINY effect size. And TINY / HUGE = EVEN TINIER. 3/7
> A randomly sampled highest-income participant ($480.000) would have lower well-being than a randomly sampled lowest-income participant ($15.000) 25% and 33% of the time for the two outcome measures. Income explains 1.5% and 4% of the variance. 5/7
* https://twitter.com/jonaslindeloev/status/135383426475696537...
* https://lindeloev.net/new-pnas-paper-income-is-a-poor-way-to...
How can someone take take your income from you ? Assets aren’t income. All assets have a carrying cost / risk, it’s always been that way.
Lose your job, lose your income. That happens increasingly frequently as the pace of change heats up in various industries.
I would think people whose labor is worth $2 million per year also have options, starting with self employment
Not better ones. Self-employment leaves you more exposed to the randomness of the marketplace, not less.
The fewer options you have the riskier your current position. True with income as with assets I guess.
Anecdotally, there was a point somewhere between $x and $y where I just stopped looking at the bank account when making minor purchase decisions.
This fed into an attitude of buying the right thing the first time. It is a contributor to my ability to spend money to eat better and the resulting health improvements that further feedback into a better life.
Furthermore, my attitude has shifted from "get wealthy" (20s) to "optimize for time." (30s) and that too has impacted my perception on what career and lifestyle I want.
All this is to say: I do believe there is a soft cap on what money does for your wellbeing. I think the cap probably varies from person to person, and that everyone should try to figure out how to detect what it is for them, lest they burn non-renewable resources going past it. No amount of money makes you or your kids young again.
This fed into an attitude of buying the right thing the first time. It is a contributor to my ability to spend money to eat better and the resulting health improvements that further feedback into a better life.
Furthermore, my attitude has shifted from "get wealthy" (20s) to "optimize for time." (30s) and that too has impacted my perception on what career and lifestyle I want.
All this is to say: I do believe there is a soft cap on what money does for your wellbeing. I think the cap probably varies from person to person, and that everyone should try to figure out how to detect what it is for them, lest they burn non-renewable resources going past it. No amount of money makes you or your kids young again.
> Furthermore, my attitude has shifted from "get wealthy" (20s) to "optimize for time." (30s)
I always thought the reason for being wealthy was having free time.
I always thought the reason for being wealthy was having free time.
I live on a beach in my 30s with relatively meager income compared to other people on HN and I constantly meet expats aged 60+ who live at the beach, happy to finally retire after 40+ years of grueling work so they can finally live at the beach.
I'm glad I snapped out of the delusion that you need to waste your youth working so that you can finally enjoy life when you're old and have trouble getting a boner.
We have a cultural problem where we don't use money to buy time. We instead use money to buy everything else. You're usually looked down on for making the time trade, like some sort of deadbeat who doesn't want to work hard. We make day to day decisions as if we were immortal.
I'm glad I snapped out of the delusion that you need to waste your youth working so that you can finally enjoy life when you're old and have trouble getting a boner.
We have a cultural problem where we don't use money to buy time. We instead use money to buy everything else. You're usually looked down on for making the time trade, like some sort of deadbeat who doesn't want to work hard. We make day to day decisions as if we were immortal.
Beach bum lifestyle seems appealing, except if you want kids. I'm guessing you don't?
do kids hate the beach? I feel like 'relatively meager compared to HN' could be low 100k and that would be plenty livable, 2-3x the household median income at non super fancy beach towns in the east/south US.
As someone whose kid loves the beach - beach time with small children is very different from beach time as a childless couple. You have to constantly watch the kid to make sure they're not running into the waves, or eating sand, or throwing sand at other beachgoers, or about to fall into the creek. It's not at all as relaxing as going to the beach as a single person or couple is, for reasons entirely unrelated to how much going to the beach costs.
good pt
There's a leisure class at both ends of the socioeconomic spectrum.
Wealthy people have less free time. Most time is spent acquiring the wealth, right?
I'd say a good amount of it is for status.
And yet rich people live significantly longer. Money is important for a lot of things impacting life expectancy
The causation arguably goes in the other direction too. You can't make money if you're unhealthy at baseline. Nor can you as easily acquire more education or new skills.
Yeah. Which is why I'm personally huge on paying plenty of taxes and having lots of social systems. If someone's time is spent fulfilling basic needs, it will take generations for them to get out of that.
I think part of what you’re qualifying as “and yet...” may be exactly what GP is talking about. They worry less and get on with things, comfortable that they can, rather than harming themselves with 1000 “economical” cuts. See too the boot metaphor[0] that is a real impediment to getting to somewhere comfortable. There’s a potential tipping-point that’s personal to each person.
[0] https://moneywise.com/a/boots-theory-of-socioeconomic-unfair...
[0] https://moneywise.com/a/boots-theory-of-socioeconomic-unfair...
It's very likely that since IQ comes from good Gene's, that a least some of the effect is the other way around ; you make more because you are more intelligent, and you're more intelligent in part due to better genetic qualities. a huge part of having average IQ is just being healthy enough to get there.
I think it is also about being smart in what you spend your money on. Being rich doesn't help at all if you buy things that don't actually improve the quality of your life.
Now, what will improve the quality of life varies from person to person, but I don't think it is the case that everyone is getting the most out of their money.
Now, what will improve the quality of life varies from person to person, but I don't think it is the case that everyone is getting the most out of their money.
No one who didn't have a philosophical axe to grind in the other direction is surprised by this.
I think probably this and the original article it's countering are both essentially junk science and represent a serious problem though. We have become used to having strong binary statements about nuanced socio/economical/physcological phenomenon throw out as capital S Science. And then the obvious second paper comes out with the opposite conclusion which is also presented as "Science".
Think of all the stuff online "Science says this is the beset way to fold your clothes" and they link to some weak paper that mentions that there is some benefit to doing something maybe in some constrained situation. Is it any wonder we have a society of people half of whom think it's all bullshit?
Yes, these studies use the same scientific process regarding hypotheses and data collection as a physics or chemistry experiment but the nature of that data is VERY different and conflating the two is a mistake in my opinion.
I think probably this and the original article it's countering are both essentially junk science and represent a serious problem though. We have become used to having strong binary statements about nuanced socio/economical/physcological phenomenon throw out as capital S Science. And then the obvious second paper comes out with the opposite conclusion which is also presented as "Science".
Think of all the stuff online "Science says this is the beset way to fold your clothes" and they link to some weak paper that mentions that there is some benefit to doing something maybe in some constrained situation. Is it any wonder we have a society of people half of whom think it's all bullshit?
Yes, these studies use the same scientific process regarding hypotheses and data collection as a physics or chemistry experiment but the nature of that data is VERY different and conflating the two is a mistake in my opinion.
I’m a very scientifically minded person, but also hang out in some circles that have an anti-science crowd.
My attitude after getting to sort of see things from the outside is pretty similar to yours. I believe in the power of repeatable observations. I’ll pass most science allegiance tests you throw my way. But I’m also pretty damn disappointed in the world of science today. Academic incentives are whack. Journalistic incentives are worse. Then throw some social media on top and it’s just a mess.
My attitude after getting to sort of see things from the outside is pretty similar to yours. I believe in the power of repeatable observations. I’ll pass most science allegiance tests you throw my way. But I’m also pretty damn disappointed in the world of science today. Academic incentives are whack. Journalistic incentives are worse. Then throw some social media on top and it’s just a mess.
Yes, the immediate problem I see with this new study is that it presents the relation between happiness and income as almost linear, which is, on the face of it, almost unbelievable at lower income levels. Can you really believe that going from dirt poor to OK doesn't make more difference than going from very rich to very, very rich? I myself can't without further evidence. I can believe there is no plateau as such, but a linear progression requires explanation.
Scale does indeed matter.
The life you can live at $35,000 a year is going to be dramatically less pleasant than the life you can live at $350,000 a year, just as the life you can live at $35,000,000 a year is going to be dramatically more pleasant than at either of those, but eventually you reach a point where even if you were to make $35,000,000,000 a year, it cannot dramatically change your life.
At some point, you become so wealthy that the only difficulties that life can present to you are difficulties from which no person has immunity.
The life you can live at $35,000 a year is going to be dramatically less pleasant than the life you can live at $350,000 a year, just as the life you can live at $35,000,000 a year is going to be dramatically more pleasant than at either of those, but eventually you reach a point where even if you were to make $35,000,000,000 a year, it cannot dramatically change your life.
At some point, you become so wealthy that the only difficulties that life can present to you are difficulties from which no person has immunity.
Just want to point out that the abstract says the relationship is linear with log(income). And Fig 1 shows an x-axis range of 15,000-500,000; even if their conclusions are true, I wouldn't be surprised if the relationship breaks down beyond those limits.
I feel like there are a few plateaus that are different for everyone, but probably within a fairly tight range.
$a/yr is when you no longer worry about how to pay for food/clothing/shelter and have a little extra for some relaxation, which is probably right around $75K a year in most of the country.
$b/yr is when you no longer need to check your bank account for small purchases.
$c/yr is when you no longer have to maintain a family budget -- you make enough to know that whatever you consider reasonable will be affordable.
$d/yr is when you no longer worry about larger purchases, like cars or cruises or multi-week vacations.
$e/yr is when you no longer have to work.
$f/yr is when you no longer have to work nor maintain a budget.
The order of the last few might change depending on the person and their lifestyle, and obviously if you aren't working you aren't really thinking about dollars per year anymore but total assets. I feel like after "no longer have to work", there is not much to go after that, unless you have a personality disorder where you cannot be happy unless you have power over others.
$a/yr is when you no longer worry about how to pay for food/clothing/shelter and have a little extra for some relaxation, which is probably right around $75K a year in most of the country.
$b/yr is when you no longer need to check your bank account for small purchases.
$c/yr is when you no longer have to maintain a family budget -- you make enough to know that whatever you consider reasonable will be affordable.
$d/yr is when you no longer worry about larger purchases, like cars or cruises or multi-week vacations.
$e/yr is when you no longer have to work.
$f/yr is when you no longer have to work nor maintain a budget.
The order of the last few might change depending on the person and their lifestyle, and obviously if you aren't working you aren't really thinking about dollars per year anymore but total assets. I feel like after "no longer have to work", there is not much to go after that, unless you have a personality disorder where you cannot be happy unless you have power over others.
There is another aspect to these plateaus most people forget: privilege of the rich in paying for better deals.
Don't need to rent when you can buy and break even within a few years. Meanwhile, the poor are perpetually derived from their opportunity of cutting down their monthly expenses. Similar cases exist for first-hand purchases vs second-hand purchases, higher quality goods that will cost less over their entire duration than low quality goods, etc.
It can be that once you get past one income plateau and obtain enough wealth, you can drop down an income plateau and still reap most of the benefits thanks to your reduced costs compared to your peers.
Don't need to rent when you can buy and break even within a few years. Meanwhile, the poor are perpetually derived from their opportunity of cutting down their monthly expenses. Similar cases exist for first-hand purchases vs second-hand purchases, higher quality goods that will cost less over their entire duration than low quality goods, etc.
It can be that once you get past one income plateau and obtain enough wealth, you can drop down an income plateau and still reap most of the benefits thanks to your reduced costs compared to your peers.
This is an excellent breakdown. There was a reddit post some years back that I saved as a text file along with the original poster's name, I think it might be a good analogue to this post.
As originally posted by a1988eli on Reddit, as a reply to a question about the lives of wealthy people:
I can answer this one. For some reason, I attract these people into my life. I don't do anything super extraordinary. I am not famous. But I count many peoplewith ultra high net wealth among my close friends and I have spent more time than even I can believe with 8 different billionaires. This is not just meet-and-greet time. This is small group and even one-to-one time. I dated the daughter of one billionaire several decades ago. So I have gotten a peek into this life.
Let's get one thing out of the way. There are gradations of rich. I see four major breaking points:
Worth $10mm-$30mm liquid (exclusive of value of primary residence). At this level, your needs are met. You can live very comfortably at a 4-star/5-star level. You can book a $2000 suite for a special occassion. You can fly first class internationally (sometimes). You have a very nice house, you can afford any healthcare you need, no emergency financial situation can destroy your life. But you are not "rich" in the way that money doesn't matter. You still have to be prudent and careful with most decisions unless you are on the upper end of this scale, where you truly are becoming insulated from personal financial stress. (Business stress exists at all levels). The banking world still doesn't classify you as 'ultra high net worth'
Net worth of $30mm-$100mm
At this point, you start playing with the big boys. You can fly private (though you normally charter a flight or own a jet fractionally through Net Jets or the like), You stay at 5 star hotels, you have multiple residences, you vacation in prime time (you rent a ski-in, ski-out villa in Aspen for Christmas week or go to Monaco for the grand Prix, or Canne for the Film Festival--for what its worth, rent on these places can run $5k-20k+ per NIGHT.), you run or have a ontrolling interest in a big company, you socialize with Conressmen, Senators and community leaders, and you are an extremely well respected member in any community outside the world's great cities. (In Beverly Hills, you are a minor player at $80 million. Unless you really throw your weight around and pay out the nose, you might not get a table at the city's hottest restaurant). You can buy any car you want. You have personal assistants and are starting to have 'people' that others have to talk to to get to you. You can travel ANYWHERE in any style. You can buy pretty much anything that normal people think of as 'rich people stuff'
$100mm-$1billion
I know its a wide range, but life doesn't change much when you go from being worth $200mm-$900mm. At this point, you have a private jet, multiple residences with staff, elite cars at each residence, ownership or significant control over a business/entity that most of the public has heard of, if its your thing, you can socialize with movie stars/politicians/rock stars/corporate elite/aristocracy. You might not get invite to every party, but you can go pretty much everywhere you want. You definitely have 'people' and staff. The world is full of 'yes men'. Your ability to buy things becomes an art. One of your vacation home may be a 5 bedroom villa on acreage in Cabo, but that's not impressive. You own a private island? Starting to be cool, but it depends on the island. You just had dinner with Senator X and Governor Y at your home? Cool. But your billionaire friend just had dinner with the President. You have a new Ferrari? Your friend thinks their handling sucks and has a classic, only-five-exist-in-the-world-type of car. Did I mention women? Because at this level, they are all over the place. Every event, most parties. The polo club. Ultra-hot, world class, smart women. Power and money are an aphrodisiac and you have it in spades. Anything thing you want from women at this point you will find a willing and beautiful partner. You might not emotionally connect, but damn, she's hot. One thing that gets rare at this level? friends and family that love you for who you are. They exist, but it is pretty damn hard to know which ones they are.
As originally posted by a1988eli on Reddit, as a reply to a question about the lives of wealthy people:
I can answer this one. For some reason, I attract these people into my life. I don't do anything super extraordinary. I am not famous. But I count many peoplewith ultra high net wealth among my close friends and I have spent more time than even I can believe with 8 different billionaires. This is not just meet-and-greet time. This is small group and even one-to-one time. I dated the daughter of one billionaire several decades ago. So I have gotten a peek into this life.
Let's get one thing out of the way. There are gradations of rich. I see four major breaking points:
Worth $10mm-$30mm liquid (exclusive of value of primary residence). At this level, your needs are met. You can live very comfortably at a 4-star/5-star level. You can book a $2000 suite for a special occassion. You can fly first class internationally (sometimes). You have a very nice house, you can afford any healthcare you need, no emergency financial situation can destroy your life. But you are not "rich" in the way that money doesn't matter. You still have to be prudent and careful with most decisions unless you are on the upper end of this scale, where you truly are becoming insulated from personal financial stress. (Business stress exists at all levels). The banking world still doesn't classify you as 'ultra high net worth'
Net worth of $30mm-$100mm
At this point, you start playing with the big boys. You can fly private (though you normally charter a flight or own a jet fractionally through Net Jets or the like), You stay at 5 star hotels, you have multiple residences, you vacation in prime time (you rent a ski-in, ski-out villa in Aspen for Christmas week or go to Monaco for the grand Prix, or Canne for the Film Festival--for what its worth, rent on these places can run $5k-20k+ per NIGHT.), you run or have a ontrolling interest in a big company, you socialize with Conressmen, Senators and community leaders, and you are an extremely well respected member in any community outside the world's great cities. (In Beverly Hills, you are a minor player at $80 million. Unless you really throw your weight around and pay out the nose, you might not get a table at the city's hottest restaurant). You can buy any car you want. You have personal assistants and are starting to have 'people' that others have to talk to to get to you. You can travel ANYWHERE in any style. You can buy pretty much anything that normal people think of as 'rich people stuff'
$100mm-$1billion
I know its a wide range, but life doesn't change much when you go from being worth $200mm-$900mm. At this point, you have a private jet, multiple residences with staff, elite cars at each residence, ownership or significant control over a business/entity that most of the public has heard of, if its your thing, you can socialize with movie stars/politicians/rock stars/corporate elite/aristocracy. You might not get invite to every party, but you can go pretty much everywhere you want. You definitely have 'people' and staff. The world is full of 'yes men'. Your ability to buy things becomes an art. One of your vacation home may be a 5 bedroom villa on acreage in Cabo, but that's not impressive. You own a private island? Starting to be cool, but it depends on the island. You just had dinner with Senator X and Governor Y at your home? Cool. But your billionaire friend just had dinner with the President. You have a new Ferrari? Your friend thinks their handling sucks and has a classic, only-five-exist-in-the-world-type of car. Did I mention women? Because at this level, they are all over the place. Every event, most parties. The polo club. Ultra-hot, world class, smart women. Power and money are an aphrodisiac and you have it in spades. Anything thing you want from women at this point you will find a willing and beautiful partner. You might not emotionally connect, but damn, she's hot. One thing that gets rare at this level? friends and family that love you for who you are. They exist, but it is pretty damn hard to know which ones they are.
cont'd
$1billion
I am going to exclude the $10b+ crowd, because they live a head-of-state life. But at $1b, life changes. You can buy anything. ANYTHING. In broad terms, this is what you can buy:
Access. You now can just ask your staff to contact anyone and you will get a call back. I have seen this first hand and it is mind-blowing the level of access and respect $1 billion+ gets you. In this case, I wanted to speak with a very well-known billionaire businessman (call him billionaire #1 for a project that interested billionaire #2. I mentioned that it would be good to talk to billionaire #1 and B2 told me that he didn't know him. But he called his assistant in. "Get me the xxxgolf club directory. Call B1 at home and tell him I want to talk to him." Within 60 minutes, we had a call back. I was in B1's home talking to him the next day. B2's opinion commanded that kind of respect from a peer. Mind blowing. The same is true with access to almost any Senator/Governor of a billionaires party (because in most cases, he is a significant donor). You meet on an occassional basis with heads-of-state and have real conversations with them. Which leads to
Influence. Yes, you can buy influence. As a billionaire, you have manyways to shape public policy and the public debate, and you use them. This is not in any evil way. the ones I know are passionate about ideas and are trying to do what they feel is best (just like you would). But they just had an hour with the Governor privately, or with the Secretary of Health, or the buy ads or lobbyists. The amount of influence you have can be heady.
Time. Yes, you can buy time. You literally never wait for anything. Travel? you fly private. Show up at the airport, sit down in the plane and the door closes and you take off in 2 minutes, and fly directly to where you are going. The plane waits for you. If you decide you want to leave at anytime, you drive (or take a helicopter to the airport and you leave. The pilots and stewardess are your employees. They do what you tell them to do. Dinner? Your driver drops you off at the front door and waits a few blocks away for however long you need. The best table is waiting for you. The celebrity chef has prepared a meal for you (because you give him so much catering business he wants you VERY happy) and he ensures service is impeccable. Golf? Your club is so exclusive there is always a tee time and no wait. Going to the Superbowl or Grammy's? You are whisked behind velvet ropes and escorted past any/all lines to the best seats in the house.
Experiences. Dream of it and you can have it. Want to play tennis with Pete Sampras (not him in particular, but that type of star)? Call his people. For a donation of $100k+ to his charity, you could probably play a match with him. Like Blink182? There is a price where they would simply come play at your private party. Love art? Your people could arrange for the curator of the Louvre to show you around and even show you masterpieces that have not been exhibited in years. Love Nascar? How about racing the top driver on a closed track? Love science? Have a dinner with Bill Nye and Neil dGT. Love politics? have Hillary Clinton come speak at a dinner for you and your friends, just pay her speaking fee. Your mind is the only limit to what is available. Because donations/fees get you anyone.
The same is true with stuff. You like pianos? How about owning one Mozart used to compose music on? This is the type of stuff you can do.
IMPACT. Your money can literally change the world and change lives. It is almost too much of a burden to think about. Clean water for a whole village forever? chump change. A dying child need a transplant? Hell...you could just build and fund a hospital and do it for a region.
RESPECT. The respect you get at this level is just over-the-top. You are THE MAN in almost every circle. Governors look up to you. Fortune 500 CEOs look up to you. Presidents and Kings look at you as a peer.
PERSPECTIVE. The wealthiest person I have spent time with makes about $400mm/year. i couldn't get my mind around that until I did this: OK--let's compare it with someone who makes $40,000/year. It is 10,000x more. Now let's look at prices the way he might. A new Lambo--$235,000 becaome $23.50. First class ticket internationally? $10,000 becomes $1. A full time executive level helper? $8,000/month becomes $0.80/month. A $10mm piece of art you love? $1000. Expensive, so you have to plan a bit. A suite at the best hotel in NYC $10,000/night is $1/night. A $50million home in the Hamptons? $5,000. There is literally nothing you can't buy except.
Love. Sorry to sound so trite, but it is nearly impossible to have a normal emotional relationship at this level. It is hard to sacrifice for another person when you are never asked to sacrifice ANYTHING. Money can solve all problems for someone, so you offer it, because there is so much else to do. Your time is SOOOO valuable that you ration it. And that makes you lose connections with people.
Anyway, that is a really long answer, but I have a very unique perspective because I have seen behind the curtain of the great and mighty OZ. just wanted to share
EDIT: Wow! An unbelievable response to this (8x gold and 6000 upvotes. OMG) Thank you for all the comments and PMs. I am working 14 hour days right now, so I can't answer most, but to answer the most common PMs:
Seeing all of this doesn't make me want to get into the top tier. Different lives have the same emotional degree of difficulty: I met Sylvester Stallone at a party a few months back for the first time. Great guy. Has a beautiful, smart wife and a great career. He had a special needs son who died young.[1] Nobody has it all. Nobody.
[1] - Poster's comment - He's referencing Sage Stallone, who had a rare heart condition and died at the age of 36.
$1billion
I am going to exclude the $10b+ crowd, because they live a head-of-state life. But at $1b, life changes. You can buy anything. ANYTHING. In broad terms, this is what you can buy:
Access. You now can just ask your staff to contact anyone and you will get a call back. I have seen this first hand and it is mind-blowing the level of access and respect $1 billion+ gets you. In this case, I wanted to speak with a very well-known billionaire businessman (call him billionaire #1 for a project that interested billionaire #2. I mentioned that it would be good to talk to billionaire #1 and B2 told me that he didn't know him. But he called his assistant in. "Get me the xxxgolf club directory. Call B1 at home and tell him I want to talk to him." Within 60 minutes, we had a call back. I was in B1's home talking to him the next day. B2's opinion commanded that kind of respect from a peer. Mind blowing. The same is true with access to almost any Senator/Governor of a billionaires party (because in most cases, he is a significant donor). You meet on an occassional basis with heads-of-state and have real conversations with them. Which leads to
Influence. Yes, you can buy influence. As a billionaire, you have manyways to shape public policy and the public debate, and you use them. This is not in any evil way. the ones I know are passionate about ideas and are trying to do what they feel is best (just like you would). But they just had an hour with the Governor privately, or with the Secretary of Health, or the buy ads or lobbyists. The amount of influence you have can be heady.
Time. Yes, you can buy time. You literally never wait for anything. Travel? you fly private. Show up at the airport, sit down in the plane and the door closes and you take off in 2 minutes, and fly directly to where you are going. The plane waits for you. If you decide you want to leave at anytime, you drive (or take a helicopter to the airport and you leave. The pilots and stewardess are your employees. They do what you tell them to do. Dinner? Your driver drops you off at the front door and waits a few blocks away for however long you need. The best table is waiting for you. The celebrity chef has prepared a meal for you (because you give him so much catering business he wants you VERY happy) and he ensures service is impeccable. Golf? Your club is so exclusive there is always a tee time and no wait. Going to the Superbowl or Grammy's? You are whisked behind velvet ropes and escorted past any/all lines to the best seats in the house.
Experiences. Dream of it and you can have it. Want to play tennis with Pete Sampras (not him in particular, but that type of star)? Call his people. For a donation of $100k+ to his charity, you could probably play a match with him. Like Blink182? There is a price where they would simply come play at your private party. Love art? Your people could arrange for the curator of the Louvre to show you around and even show you masterpieces that have not been exhibited in years. Love Nascar? How about racing the top driver on a closed track? Love science? Have a dinner with Bill Nye and Neil dGT. Love politics? have Hillary Clinton come speak at a dinner for you and your friends, just pay her speaking fee. Your mind is the only limit to what is available. Because donations/fees get you anyone.
The same is true with stuff. You like pianos? How about owning one Mozart used to compose music on? This is the type of stuff you can do.
IMPACT. Your money can literally change the world and change lives. It is almost too much of a burden to think about. Clean water for a whole village forever? chump change. A dying child need a transplant? Hell...you could just build and fund a hospital and do it for a region.
RESPECT. The respect you get at this level is just over-the-top. You are THE MAN in almost every circle. Governors look up to you. Fortune 500 CEOs look up to you. Presidents and Kings look at you as a peer.
PERSPECTIVE. The wealthiest person I have spent time with makes about $400mm/year. i couldn't get my mind around that until I did this: OK--let's compare it with someone who makes $40,000/year. It is 10,000x more. Now let's look at prices the way he might. A new Lambo--$235,000 becaome $23.50. First class ticket internationally? $10,000 becomes $1. A full time executive level helper? $8,000/month becomes $0.80/month. A $10mm piece of art you love? $1000. Expensive, so you have to plan a bit. A suite at the best hotel in NYC $10,000/night is $1/night. A $50million home in the Hamptons? $5,000. There is literally nothing you can't buy except.
Love. Sorry to sound so trite, but it is nearly impossible to have a normal emotional relationship at this level. It is hard to sacrifice for another person when you are never asked to sacrifice ANYTHING. Money can solve all problems for someone, so you offer it, because there is so much else to do. Your time is SOOOO valuable that you ration it. And that makes you lose connections with people.
Anyway, that is a really long answer, but I have a very unique perspective because I have seen behind the curtain of the great and mighty OZ. just wanted to share
EDIT: Wow! An unbelievable response to this (8x gold and 6000 upvotes. OMG) Thank you for all the comments and PMs. I am working 14 hour days right now, so I can't answer most, but to answer the most common PMs:
Seeing all of this doesn't make me want to get into the top tier. Different lives have the same emotional degree of difficulty: I met Sylvester Stallone at a party a few months back for the first time. Great guy. Has a beautiful, smart wife and a great career. He had a special needs son who died young.[1] Nobody has it all. Nobody.
[1] - Poster's comment - He's referencing Sage Stallone, who had a rare heart condition and died at the age of 36.
Interesting, but also disgusting. No-one should be a billionaire.
Having that much wealth and power concentrated in the hands of such a few is a societal sickness.
They're effectively stealing a disproportionate amount of our world's resources for their own pleasure, at the expense of everyone else.
Having that much wealth and power concentrated in the hands of such a few is a societal sickness.
They're effectively stealing a disproportionate amount of our world's resources for their own pleasure, at the expense of everyone else.
> They're effectively stealing a disproportionate amount of our world's resources for their own pleasure,
Not really. Think about this way. One share of Amazon costs $3,292.23. If someone gathers $3,300 and offers to buy that share at that price, Jeff Bezos's wealth just went up $424,000,000. But it's not like he took $424MM from anyone. And he wouldn't actually be able to get that $424MM, because if he started selling his shares, there would need to be enough people with $424MM more than they had before that want to buy it.
At that level of wealth, most of the money doesn't actually exist. It just represents control. It's basically created from nothing.
Not really. Think about this way. One share of Amazon costs $3,292.23. If someone gathers $3,300 and offers to buy that share at that price, Jeff Bezos's wealth just went up $424,000,000. But it's not like he took $424MM from anyone. And he wouldn't actually be able to get that $424MM, because if he started selling his shares, there would need to be enough people with $424MM more than they had before that want to buy it.
At that level of wealth, most of the money doesn't actually exist. It just represents control. It's basically created from nothing.
> At that level of wealth, most of the money doesn't actually exist. It just represents control.
I agree, and that's part of the problem as well.
But also, to use your example of Bezos, he cashes out a few billion dollars of shares per year for his own personal gain. All while Amazon's workers (whose hard work enabled him to do this) are being treated so badly.
I agree, and that's part of the problem as well.
But also, to use your example of Bezos, he cashes out a few billion dollars of shares per year for his own personal gain. All while Amazon's workers (whose hard work enabled him to do this) are being treated so badly.
He does use some of those billions from stock sells to fund other companies like Blue Origin which does benefit the greater good indirectly.
Wow, do we know if that poster was telling the truth or if it’s a creative writing exercise? Interesting nonetheless
From my very limited experience of knowing billionaires, it sounds about right.
I was having a small group lunch with the founder of eBay once when I worked there, and someone asked him how his life is different now that he's a billionaire. He started to mention some of these things, and at the end he said, "I'm still just as ugly as I ever was, but now lots of smart beautiful women seem to be interested".
I was having a small group lunch with the founder of eBay once when I worked there, and someone asked him how his life is different now that he's a billionaire. He started to mention some of these things, and at the end he said, "I'm still just as ugly as I ever was, but now lots of smart beautiful women seem to be interested".
I'm fairly certainly he's a real person. His username means he went to Yale and graduated in 1988 (a 1998 Eli, Eli being slang for someone attending Yale).
He posted a video of his daughter singing a song on YouTube about 9 months ago.
And the most heartbreaking is his post about what its like to date someone vastly richer than you, which is to say, pretty awful.
He posted a video of his daughter singing a song on YouTube about 9 months ago.
And the most heartbreaking is his post about what its like to date someone vastly richer than you, which is to say, pretty awful.
I think the age old adage of happiness not rising after something $80k'ish per year is simply a misapplication of the linear scale to the problem.
There's ample evidence that happiness still rises with income, just logarithmically: https://www.washingtonpost.com/news/wonk/wp/2013/04/29/yes-m...
Which honestly makes a _lot_ of sense to me, since most human senses work on the log scale for better magnitude compression: Light sensitivity, Hearing and lots of others.
The log scale just fits very well with any perception application designed to not overload neural networks — and if you plot this on the linear scale, it always looks like there's a knee in the curve where it stops rising, when in reality, it's just gradually getting slower.
There's ample evidence that happiness still rises with income, just logarithmically: https://www.washingtonpost.com/news/wonk/wp/2013/04/29/yes-m...
Which honestly makes a _lot_ of sense to me, since most human senses work on the log scale for better magnitude compression: Light sensitivity, Hearing and lots of others.
The log scale just fits very well with any perception application designed to not overload neural networks — and if you plot this on the linear scale, it always looks like there's a knee in the curve where it stops rising, when in reality, it's just gradually getting slower.
There are a couple of comments about it here, but I think this point in the paper deserves emphasis: they say that "well-being rises with income" in the sense that well-being increases linearly with the logarithm of income past $75,000. The logarithm they use seems to be base 2 in Figure 1, so that means a person making $500k is roughly 17% happier than a person making $75k. 20% isn't nothing, but it's not much either. Especially since I think a lot of people in tech can get to ~$100k with a lot less effort than ~$500k.
This is a relatively minor nit, but the 75K conclusion was reached in 2010. You can at the very least adjust that to 90K now given inflation. I don't think this changes the refutation, but I've seen a lot of comments talking about the 75K with more granularity, and it's worth pointing that inflation effect out.
$75,000 isn't what it used to be, so this is a pretty comically obvious headline.
The median sale price of a house in the US in the year 2000 was around $163,000. Now it's $324,000.
Meanwhile $48,000 in income then is now $75,000 today inflation adjusted, according to the BLS. If you stayed in that general income bracket, you've been royally punched in the face economically.
And then we get to the cost of healthcare and education over the past 20 years. Someone in the $75,000 tier has spent the last two decades being financially tortured as their disposable income is being eroded by persistently rising costs they can't do much about (go without healthcare, don't buy a house, don't send the kids to college, don't have kids).
That $324,000 house today will cost you $1,500 per month. After all taxes are accounted for, in a normal tax state, you're going to likely have ~$4,250 per month; after that house, you're down to $2,750; and that's before you get to any bills or saving. The only shot a person at $75,000 has today, is to live somewhere where the cost of living is quite low, or to pair up with someone and hopefully double that income (and that still won't be enough if you're in a more expensive location).
The median sale price of a house in the US in the year 2000 was around $163,000. Now it's $324,000.
Meanwhile $48,000 in income then is now $75,000 today inflation adjusted, according to the BLS. If you stayed in that general income bracket, you've been royally punched in the face economically.
And then we get to the cost of healthcare and education over the past 20 years. Someone in the $75,000 tier has spent the last two decades being financially tortured as their disposable income is being eroded by persistently rising costs they can't do much about (go without healthcare, don't buy a house, don't send the kids to college, don't have kids).
That $324,000 house today will cost you $1,500 per month. After all taxes are accounted for, in a normal tax state, you're going to likely have ~$4,250 per month; after that house, you're down to $2,750; and that's before you get to any bills or saving. The only shot a person at $75,000 has today, is to live somewhere where the cost of living is quite low, or to pair up with someone and hopefully double that income (and that still won't be enough if you're in a more expensive location).
And most salaries have not kept up with inflation, especially inflation in scarce desirable assets. Most people are worse off.
Edit: Lol, parent is < 0 at the moment. Downvotes sound fine in theory, but are usually low-effort, passive aggressive enforcements of bias in practice. If you have real counter arguments to make, please make them.
Edit: Lol, parent is < 0 at the moment. Downvotes sound fine in theory, but are usually low-effort, passive aggressive enforcements of bias in practice. If you have real counter arguments to make, please make them.
That $163K house in 2000 at 8% mortgage rate cost you $1196 in principal and interest.
That $324K house in 2020 at 3% mortgage rate costs you $1366 in principal and interest. (assuming 100% financed, decrement both amounts as you see fit)
That's only a 14% increase in monthly payment over 2000, while general inflation has increased by 56% over that same time (all using your figures above, with the exception of researched mortgage interest rates for 30-year fixed mortgages). I'm not saying it's not hard now, but it wasn't easy then either. Life has pretty much always been a struggle for most people.
That $324K house in 2020 at 3% mortgage rate costs you $1366 in principal and interest. (assuming 100% financed, decrement both amounts as you see fit)
That's only a 14% increase in monthly payment over 2000, while general inflation has increased by 56% over that same time (all using your figures above, with the exception of researched mortgage interest rates for 30-year fixed mortgages). I'm not saying it's not hard now, but it wasn't easy then either. Life has pretty much always been a struggle for most people.
This can all be true but unless you combine it with the fact that median household income in the USA is only around $60k, you lose the full impact of what is actually a deeply and immersively political description.
Exactly! 75k is peanuts today, especially if you're single. Most people from my generation aren't even making that...what hope is there for them, let alone for Z.
The only hope is political organization. You can say it's peanuts, but it's also above the median household income. Sit back and think about that: what you consider peanuts (and you may well not be wrong) is more than the median household income in this country. If you are not outraged by this, then sure, there's no hope :)
I think bitcoin as an inflation hedge is another promising answer.
Maybe it's just me but the study (and also the studies it is trying to disprove) seem a bit ridiculous to me, as none of them seem to adjust for cost of living, even though that will vary by a huge factor in basically every country.
$75k varies from hard mode to easy mode, depending on where you live, how you live, and other factors.
It really all depends on the lifestyle you think you need to maintain.
I like to think of money a bit like gasoline.
100 gallons of gas will last you pretty well forever if you ride around on a moped.
It will get you maybe an hour or two down the road if you're driving around in a fully loaded semi.
What most people need in order to be happy is somewhere in the middle. Unfortunately, many people are determined to live in a way where their reach always exceeds their grasp.
You can't outrun financial idiocy.
I like to think of money a bit like gasoline.
100 gallons of gas will last you pretty well forever if you ride around on a moped.
It will get you maybe an hour or two down the road if you're driving around in a fully loaded semi.
What most people need in order to be happy is somewhere in the middle. Unfortunately, many people are determined to live in a way where their reach always exceeds their grasp.
You can't outrun financial idiocy.
> many people are determined to live in a way where their reach always exceeds their grasp.
You mean being able to pay the rent, send their kids to university, pay their medical expenses without getting bankrupt? Because that's the kind of life most people aspire to.
> You can't outrun financial idiocy.
Following this line, most people are financial idiots, which means they are responsible for their poverty?
You mean being able to pay the rent, send their kids to university, pay their medical expenses without getting bankrupt? Because that's the kind of life most people aspire to.
> You can't outrun financial idiocy.
Following this line, most people are financial idiots, which means they are responsible for their poverty?
> Following this line, most people are financial idiots, which means they are responsible for their poverty?
Your whole comment is conflating poor financial planning with actual poverty.
If you break people into: those legitimately without enough resources to get by, those who would have enough if they knew how to manage money, and those who have enough whether or not they can manage money; I would wager that the people with enough money but terrible planning skills would be the plurality, whether or not they were the outright majority.
Once you slip into the "I can afford this because I can make the monthly payments" line of thinking, you are pretty much by definition living at the cusp of your means. That's where most people are, whether or not it's a good idea for them to be.
Your whole comment is conflating poor financial planning with actual poverty.
If you break people into: those legitimately without enough resources to get by, those who would have enough if they knew how to manage money, and those who have enough whether or not they can manage money; I would wager that the people with enough money but terrible planning skills would be the plurality, whether or not they were the outright majority.
Once you slip into the "I can afford this because I can make the monthly payments" line of thinking, you are pretty much by definition living at the cusp of your means. That's where most people are, whether or not it's a good idea for them to be.
I understand what you mean but I find curious the term "idiocy" when we live in a society that doesn't educate us on financial planning and at the same time does everything it can (succesfully) to make us spend more, because the economy itself depends on keeping consumption high at all times.
Financial illiteracy is a better term, since I don't see why we should expect financial planning to be an innate ability.
At some point we have to decide if we want people to consume the most they can or if we want them to be "responsible".
Financial illiteracy is a better term, since I don't see why we should expect financial planning to be an innate ability.
At some point we have to decide if we want people to consume the most they can or if we want them to be "responsible".
Call it what you like. I agree our society goes out of its way to mis-educate people on the matter.
I guess maybe the difference in my mind vs illiteracy and idiocy is that someone illiterate in a matter may still manage to put together that whatever they are doing isn't working and maybe they should try something else.
The idiocy comes in when people know it's not working, and know it's designed not to work, but dammit if they aren't going to live that way anyway and complain the whole time.
I guess maybe the difference in my mind vs illiteracy and idiocy is that someone illiterate in a matter may still manage to put together that whatever they are doing isn't working and maybe they should try something else.
The idiocy comes in when people know it's not working, and know it's designed not to work, but dammit if they aren't going to live that way anyway and complain the whole time.
Lifestyle creep is more like buying a $50k car when it's beyond your means or paying rent on a luxury apartment that you can't afford a less fancy apartment would be a better fit for your needs and budget.
This paper seems to mask just how much of an effect there is. For the people who aren't deep into stats and reading statistical scientific papers, can someone help translate what the z-scores here mean practically? Is this a log scale or just raw? What's setting 0.0? Is +/- 0.1 a notable range?
This always seemed true to me. I was really surprised to see so much acceptance about the findings that put 75k as some magical cut off point. I can say from experience the difference in my life from 75k to what I am at now is monumental especially considering I make 4x more than all of my friends.
Are you 4x as happy as your friends?
The causes behind the relationship likely differ at each end of the income distribution. Below $50k, marginal increases in wealth drive utility primarily through improved material comfort. Above $250k, it becomes more and more about status as the driver of improved utility (e.g. status attenuates chronic stress).
However, I believe part of the relationship below $50k is also status-related, in addition to the material comfort explanation. The people most opposed to the minimum wage are those earning just above it, presumably because it would decrease the status differential between them and the people earning less, which negatively impacts their genetic fitness.
I'd also hypthesize that the correlation above $250k is stronger for men than women, due to status being the likely driver.
However, I believe part of the relationship below $50k is also status-related, in addition to the material comfort explanation. The people most opposed to the minimum wage are those earning just above it, presumably because it would decrease the status differential between them and the people earning less, which negatively impacts their genetic fitness.
I'd also hypthesize that the correlation above $250k is stronger for men than women, due to status being the likely driver.
with 75k you'll have a hard time doing anything else than renting, some saving/investing ... buying a house f.x. will come with a long-term commitment and the stress resulting from owing money. not sure how far you get with 75k in the US. in Germany you won't be able to do much. so, obviously earning more will make life better. somewhere north of 100k one will be able to buy a house with tolerable risk, a car etc. below that - possible but difficult and risky. 75k means either enduring that stress or accepting having to rent forever - which is also a stressful prospect for a couple of reasons.
Outside of major cities in the US, it's enough to live comfortably alone. I made a little less than that when I lived in the Midwest, and it was enough to buy a $125,000 duplex (mortgage came out to ~25% of my monthly wages), pay the bills, and still go out and have fun a couple nights a week. I made retirement contributions, but I wasn't maxing out my 401k contributions or anything.
I would say for much of the US, that's about where life becomes comfortable if you're single (can't comment on with kids, I've never done a budget with them). Bills aren't a worry if you don't make poorly planned large purchases, you can afford a decent place to live, and you've got some money left over at the end of the month to save or work on a hobby or whatever.
This is obviously not true in the hot cities, though. I think $75k is under the poverty line if you have children in the Bay Area.
I would say for much of the US, that's about where life becomes comfortable if you're single (can't comment on with kids, I've never done a budget with them). Bills aren't a worry if you don't make poorly planned large purchases, you can afford a decent place to live, and you've got some money left over at the end of the month to save or work on a hobby or whatever.
This is obviously not true in the hot cities, though. I think $75k is under the poverty line if you have children in the Bay Area.
This is really regionally dependent. It would be extremely difficult to do 75K in the bay area or many parts of the northeast. Very easy in many parts of the southeast and midwest.
Regardless, I think the point of 75K is that it's the threshold where you are generally confident that you can start thinking about future planning rather than immediate needs. Yes you still have to rent, think about budgeting, and be a bit cautious in spending, but at least you know that the basics of living are covered.
Regardless, I think the point of 75K is that it's the threshold where you are generally confident that you can start thinking about future planning rather than immediate needs. Yes you still have to rent, think about budgeting, and be a bit cautious in spending, but at least you know that the basics of living are covered.
I wish I had the source, but around 2004 I learned that the leveling-off point for happiness vs income sat at around 200k-250k per year.
I can imagine that the ability to buy stability drives these happiness curves.
I can imagine that the ability to buy stability drives these happiness curves.
Well duh. Obviously experiencing well-being results in making more money.
[looks around] am I..am I surrounded by lizard people?
[looks around] am I..am I surrounded by lizard people?
Hahaha, I’ve known this to be true. All those articles that kept spouting the $75k threshold nonsense over the years... I just internally chuckled at. It’s just some make-yourself-feel-better fluff.
That number for me is about half a million. We’re all different and I don’t appreciate being pigeonholed by the “experts”!
That number for me is about half a million. We’re all different and I don’t appreciate being pigeonholed by the “experts”!
How did you arrive at half a million?
That is my personal number. I’m not there yet, but after calculating when I want to buy a home in my area (at least three bedroom) and when I would have to pay for my future kids’ private undergrad /grad educations while maintaining a decent lifestyle in retirement... I think this number would just get me past the threshold for being able to do that without stressing on the daily.
Psychology is such a garbage field. It seems like every feel-good counterintuitive TED talk myth of the past few decades is falling apart under scrutiny.
Yes well-being rises with income, yes it's past $75,000 per year.
Yes it still rises at a significant rate past $75,000.
Yes this was already known before this study.
Yes our intuition was always correct, before scientists said it wasn't, than said it was to a level, then corrected themselves, then now gaslight us into thinking they haven't already corrected themselves.
Yes it still rises at a significant rate past $75,000.
Yes this was already known before this study.
Yes our intuition was always correct, before scientists said it wasn't, than said it was to a level, then corrected themselves, then now gaslight us into thinking they haven't already corrected themselves.
Duh.
Whoever authored the original 75k year study had a bias and/or agenda against our current economic system.
We didn't need a study to show that even above a 75k salary, more income is correlated with more well-being.
This is a prime example of why scientific research should be used as a tool to advance society, not as a religion.
Whoever authored the original 75k year study had a bias and/or agenda against our current economic system.
We didn't need a study to show that even above a 75k salary, more income is correlated with more well-being.
This is a prime example of why scientific research should be used as a tool to advance society, not as a religion.
This new paper actually makes conclusions that are the opposite of what the data shows:
* https://twitter.com/jonaslindeloev/status/135383426475696537...
* https://lindeloev.net/new-pnas-paper-income-is-a-poor-way-to...
* https://twitter.com/jonaslindeloev/status/135383426475696537...
* https://lindeloev.net/new-pnas-paper-income-is-a-poor-way-to...
Why don’t we need a study? What is obvious? (Seriously)
For someone to not understand this without a study, I think they would need to be oblivious to the state of the economy, the cost of living in the average metropolitan area where the average American lives, and social dynamics / cultural issues in America.
Also, if you've experienced significantly different levels of salary then this is obvious.
Also, if you've experienced significantly different levels of salary then this is obvious.
"Money doesn't buy happiness" is also considered obvious common sense. The study is looking for the phase boundary where one obvious statement ceases to apply and the other takes over.
I think you've missed the point of science somewhere.
Sometimes common sense lets us take shortcuts without having to wait for or spend on the science.
Apparently you're not aware of a previous study that showed that income above $75k/yr did NOT increase well being.
That study was funded by the international employers society.
Except they didn’t. Their findings got morphed away from the actual study over time.
Here’s the original graph from the study.
https://www.pnas.org/content/pnas/107/38/16489/F1.large.jpg
Here’s the original graph from the study.
https://www.pnas.org/content/pnas/107/38/16489/F1.large.jpg
It would be helpful if you actually posted the study, not a quantitative graph without context of the data contained within. It is misleading.
The study: https://www.pnas.org/content/107/38/16489
"Emotional well-being also rises with log income, but there is no further progress beyond an annual income of ~$75,000"
"We conclude that high income buys life satisfaction but not happiness, and that low income is associated both with low life evaluation and low emotional well-being."
The study states that emotional well-being does not rise with income over 75k. The study also concludes that high income is not correlated to happiness.
These conclusions are clearly erroneous.
The study: https://www.pnas.org/content/107/38/16489
"Emotional well-being also rises with log income, but there is no further progress beyond an annual income of ~$75,000"
"We conclude that high income buys life satisfaction but not happiness, and that low income is associated both with low life evaluation and low emotional well-being."
The study states that emotional well-being does not rise with income over 75k. The study also concludes that high income is not correlated to happiness.
These conclusions are clearly erroneous.
$75k is nothing in the US. It’s the bottom end of living wage.
Edit: $75K is basically two people working at proposed min wage with moderate OT. $3000 per month with even laughably low $1K mortgage would leave you with just enough for family of four.
Edit: $75K is basically two people working at proposed min wage with moderate OT. $3000 per month with even laughably low $1K mortgage would leave you with just enough for family of four.
Where I live it's the 80th percentile. Not everyone in the US lives on the coasts.
Median household income in the US is below that number.
Hahaha. Not in the middle. Many are raising a family and owning homes on $75k a year.
[deleted]
Respecting your edit: $75k is $6.5k/mo, which gives you $1820/mo for a mortgage. That's not enough for a large home in an expensive area, but it's plenty in most of the US.
...in (admittedly populous) parts of the US
In big cities perhaps but it allows you to live quite well in smaller towns.
I know that my subjective well-being was higher with an income of $100K in 2008 than it is with a half-mil+ in 2020. Why? Because the social system around me wasn't crumbling. Pre-GFC it was hard to imagine the degree to which your fellow Americans could end up hating and distrusting each other. $100K/year was a very respectable upper-middle-class income that could buy a house and have plenty left over for savings.
Now, you can be making a couple million a year and only be worrying about who's about to take it from you or whether your assets are going to be worthless in the next financial crash. You're certainly better off with that couple million than without it, though.