I'm married, late 30s, three kids (under age 10), and according to CNN money we earn in the top 5% for the US. We have no debt, relatively stable jobs, always max 401k matching, take advantage of ESPP, have a couple years salary in savings, etc. Our parents aren't rich, but they are doing alright and I don't anticipate having to support either of them.

And yet, I don't feel like I can afford a nice house in a nice neighborhood furnished with nice things.

What am I doing wrong?

Do I have unrealistic standards and want to live like the 1% instead of appreciating all that life has to offer the top 5%? Am I just saving too aggressively and should learn to spend and enjoy a little more now?

Why don't I feel rich, even though I'm firmly upper middle class, better off than I grew up, and well on the way to building a nest egg for retirement?

I'm tall, so flying generally kind of sucks; but I don't feel like it is so bad as to justify shelling out for first class -- but I have flown first class once or twice for business, and it is ****ing awesome. Am I just following my natural tightwad tendencies and patting myself on the back for "being responsible?"

Maybe I've answered my own question, but I'm just not objective enough to know.

Sounds like you're doing things right. Take advantage of your accomplishments and splurge on something you can enjoy.

as you are saying: "feeling" is different than "being".

rich/happiness, are state of mind*, you should train and master your mind and being satisfied with what you have already, because once you'll be in the top1% (if you get there), you won't feel satisfied or rich...

this lack of money will haunt you down, forever, no matter how much you will be worth.

the solution is inside you.

*you are rich when you are satisfied with what you have already (of course if you are in debt, and can't pay the bills you can't be satisfied).

I say embrace the fact that you still want things, you have a reason to wake up and get going in the morning. You could have bought a lot more stuff if you didn't have 3 kids, but that's not the point right?

I will say that I relate to this feeling, you're realizing that you may not achieve some of the goals you had for yourself without sacrificing things you're happy with already. Like maybe you could get that house by working weekends and having less time with your kids but you don't want to give up your time with your kids.

I solve that by embracing my ambition on a longer time frame, sure maybe I can't get there quickly without sacrificing good stuff but can move towards big opportunities. Is this actually going to get your goals accomplished? Probably not, but it might keep you happy and sane. I think self delusion is a great skill once you've demonstrated you can make the rationally needed financial decisions (as you have).

Funny question. I dont think you will ever feel rich.

When I was a kid growing up with very little I figured I would feel rich when I could make a couple of grand a month.
When I started earning that I figured I would feel happier if I was in management earning more than a couple of grand a month so quit and went to college.
In college I got a sales job earning 50k a year working part time selling phones and figured one day I would feel rich if I earned 100k a year.
Then I became an affiliate marketer and started earning +250k a year. Bought a nice house, nice car etc. (I am only 26)

Now I feel I will be rich once I am earning 1mill a year....

I know once I hit that Ill be looking for 5mill right?

How can one feel rich when working a job? The only way to feel rich is by earning obscene amounts of passive income.

This is a great topic. I think the urge to be rich really comes for a need for control. I definitely felt out of control in my early twenties (despite being a relatively responsible person), there wasn't anything I wanted more than to be rich or die trying. Then there's been times in my life where I've been broker than broke and I was totally comfortable, didn't worry about money at all. I've also had times were I've been quite flush and in a state of near constant panic.

For me, this has been primarily driven by my perception of the work/life I was doing at the time, did I enjoy it? Did I want to continue down that path or did I not know the next step?

Overall I'd say when downtime/relationships/health/work are in a good place, I don't worry about being rich. A lot of times that was driven by perception more so than reality, improving self awareness and my understanding of the world in general seems to have helped. I still get the "rich" urge from time to time but it's a way less prominent and I realize it really has nothing to do with reality.

There's no such thing as passive income, only high hourly rates.

It's a prerequisite for hitting the mark....

passive income is when you have high amount of money that loss of not making new above market returns is so insignificant on utility score that you can do nothing and sell books on how you made your money....

OP where do you live? It's easy to live in places like the NYC, SF, or LA suburbs and have that feeling, where the houses you describe can easily run 7 figures.

You're rich compared to most everyone else, but that's an internal feeling up to you.

Perhaps the biggest issue is simply the more money you have the more you worry about it.

Ya, I would say feeling rich is when you are financially free and don't have to work. You have enough cash flow coming in from investments to cover what your lifestyle is.

You still have to write and market the books about how you made your money. If you spend even 1 minute generating the money cwar is mathematically correct.

Isn't the general consensus that passive income is something you don't have to put in many hours doing?

If your going to get all goofy and look at it like a high hourly rate.. who's to say it's high, hell compared to Bill gates it's low as **** so technically cwar is mathematically incorrect.

Passive income is kind of like Warren Buffets quote of "If you don't find a way to make money while you sleep, you will work until you die"

Let's say I have $500k and I'm working for $85k/year at a job. Why don't you outline for me how I get 'passive income' within 5 years that will allow me to leave my job. Your answer is not allowed to be 'just go index!' You're answer also isn't allowed to be work 20 hours a week learning some tangential skill without comparing that to the opportunity cost of hours you could spend in your existing career.

Warren Buffet lies out of both sides of his mouth when he's marketing BRK, considering he fully plans on working till the day he dies I think this should be obvious.

These options are what passive income really means based on common usage:
#1 You're marketing something and you're lying.
#2 You have enough money to last until you die, who will know the difference if you claim some random income while you effectively retire (tl;dr, you're lying for different reasons).
#3 You've already spent an enormous amount of time becoming extremely sophisticated in an activity that regularly has opportunities pop up that you can dump money into without spending a lot of additional time.
#4 You don't consider the actual work you're doing work because you find it pleasurable.
#5 You've been lucky/fortunate based on some specific marketplace conditions that may or may not continue to the same degree in the future.

The rule of money is very simple, you trade pain for money. Plenty of variations on this:
-You can take on risk of loss
-You can work an activity the majority of humans find unpleasurable / difficult
-Manage regular loss of capital while fighting human nature
-Give up periods of your life dedicated to work
-Work for large organizations
-Etc.

Read a good Rockefeller quote today:
"All the fortune that I have made has not served to compensate me for the anxiety of that period."

You want to make money? You're going to have to choose how you're going to take a substantial amount of pain.

sucks for JC Alvarado, he traded money for pain

I used to feel rich, now I'm in your camp OP. time to trade some pain

IMO it's relative to your expectations. If you set a goal to make 100k and you achieve it, it likely feels like you worked for that money. If you blow away your expectations, you'll feel very differently.

The problem is interest rates. On $500k, in a normalized rate environment, 500k can get you a pre-tax risk free FDIC rate of 6% and that's $2500 a month, which objectively speaking is decent income for just sitting on your a$$. Now with all these central bank machinations, we're being pushed out on the risk curve or stuck with $500 a year on risk free products.

So can't be done anymore, 10 years out of phase.

Maybe wait for credit markets to freeze up and and right before Uber blows up buy a (bunch of) taxi medallion(s). But that's a binary risk-reward proposition with huge variance on return.

Not all passive income lets you leave your job. The type of passive income that makes you feel rich does. I wasn't saying he can or can't achieve that, his question was when will he fill rich and that's what I would think would make me feel rich. No need to work.

See #5, you're basing this belief on things that are not fundamentally real. You could have also given Warren Buffet cash in 1959, but that's not available to the same degree now:
Contextually I'm correct because that's not what anyone is talking about when they say "passive income" (including the original post I responded to). You're just talking about saving money which OP has already done and doesn't feel rich.

"Sounds like you're doing things right. Take advantage of your accomplishments and splurge on something you can enjoy."

The mentality of rewarding yourself for making money by splurging on mindless consumerism is what ties people to jobs they don't enjoy for way longer than they need to. It's like when fat people reward themselves with decadent treats for exercising.


I think what a lot of people who make high incomes at jobs they don't really love in expensive areas end up doing is living modestly so they can retire early and live like a king in a small town.

Warren can careless about marketing BRK anymore. I am sure he hopes it goes down. He seems to like the fame though. The biggest mistake people make in investing is probably chasing recent past performance. The 3 year highest return mutual fund. I would be willing to bet Warren Buffett really does not feel rich. I would be not be scared to be 100% invested in BRK for the next 5 years, when he dies their might be a sell off though.

Over a 20 year period the sp500 index will probably beat, 90% of all hedge fund, mutual fund and etf managers. I actually saw a pretty good talk today at google. The markets seem fairly valued today. Ask 10 people on the actual street what are the best and worst investments remember in 2010 everyone was saying no stock market, no housing, and buy gold. Today they are saying no gold and commodities, no emerging markets, and yes stocks.

https://www.youtube.com/watch?v=rVjlXzWwxXk

"The problem is interest rates. On $500k, in a normalized rate environment, 500k can get you a pre-tax risk free FDIC rate of 6% and that's $2500 a month, which objectively speaking is decent income for just sitting on your a$$. Now with all these central bank machinations, we're being pushed out on the risk curve or stuck with $500 a year on risk free products."

If you are average 3% is a good rule in today's low yield environment so $15000 per year. If you buy BRK maybe 5%, $25000 per year. I am starting to wonder if people should do investing themselves. I think you start to worry too much and it actually takes more and more of your time. So maybe a real advisor, a regular business, or index funds would be better for 75% of people.

However if you elect to use an advisor, a 1% may seem little but it could be 33% of your real returns.

I don't remember anyone with any credibility arguing to put a significant percent of your net worth into gold. Though I'm sure there were people who made on effectively speculating. They're just highly unlikely to tell people about it unless they're close friends or family.

Probably closer to 99%.

But that won't stop people from being completely delusional about theories that can't be tested. It's probably even more deceptive than poker, because you can't ever actually be that bad and it would take a fairly large sample size and a high level of technical competence to test anything that would give meaningful results.