mj,

I know this might be a hard concept, but what if someone chooses a $250k/yr job as a lawyer in Manhattan over a $150k/yr job as a lawyer in Utica? Did he voluntarily make himself poorer?

subjective value/psychic profit fail ITT?

Of course not. But he didn't make himself 100k richer either.

lol there is no way someone could live in NYC and have a nice house, drive a nice car, and send 3 kids to private schools all on 250k/year. No chance.

I know many, many people who have done it on far less.

In the NYC metro area?

In New York City proper.

I mean, I went to a private high school in New York City. I definitely went to school with some rich kids, but they mostly commuted in from Westchester, and some lived on the upper east side. I knew a lot of guys who lived in the Bronx, Manhattan and Queens, whose families weren't making anywhere near $250K.

Clearly there is some monetary value in choosing to live in the more expensive area. That is part of one's wealth.

zan, when you use terms like "psychic profit" that are not widely used(or used at all), you aren't helping the debate. But no that concept is inapplicable to why rich people don't think they are rich. I mean, everyone wants more money. Everyone allocates 100% of their income each month to some purpose so they, in their hearts, think of themselves as living paycheck to paycheck with their multiple luxury cars, cleaning services, maxed out retirement accounts, etc. There's also the thing that DeLong/Krugman note where people are always looking upwards. There's always somebody with more.

That is true, but I consider it to be negligible. That someone else might consider it non-negligible is not really relevant because I am using my subjective standards to judge if their lifestyle is "rich" or not.

Remind me, how did lifestyle come into a discussion about income tax brackets?

If it's negligible, then why aren't all those poor, unfortunate lawyers and bankers who are forced to live below mjkidd's NYC poverty line flocking to Utica, Buffalo, Syracuse, Binghamton and Rochester? They could actually be rich in those cities!

If I were to just outright give you place of residence, would you rather I give you a 2000 sq ft condo on the Upper East Side, or a 2000 sq ft condo in Palmyra? For the sake of this thought experiment, you'd have to live in it in order to qualify for accepting my gift -- you couldn't immediately sell it. Which gift would make you wealthier?

Better question is how much of your day are you willing to spend commuting if your work week is 90+ hours? As i said in the other thread, it sounds silly that 250K doesn't leave much for savings but some housing markets and some jobs are forcing you into a bit different kind of spending. Some things that sound like luxury are really just job necessities or byproducts of workaholic lifestyles. Consider them to be a tax for a demanding career choice if you will.

You're definitely a gimmick. This makes it official.

I live in SF, but looking on Zillow real quick it seems you can get a 4 bedroom house in Daly City (borders SF to the south) for $600k, Emeryville (right across the Bay Bridge, easy commute to SF) for $400k, Berkeley for $300k to $900k, and that's just the area immediately surrounding SF. You can buy 4 bedroom houses within SF for $600k too. It wouldn't be a Pacific Heights condo but it wouldn't be in the ghetto either.

This "discussion" with mjkidd only makes sense if you consider the value of the dollar an unknowable abstract quantity.

Unfortunately for the coherence of mjkidd's perspective, but fortunately for everyone else, we can actually look and find out that one can, in fact, buy a four bedroom home within an hour commute of pretty much any densely populated area of the US for under $800K.

Not rich is not the same as poor. Many people certainly would move to another city if thier standard of living would increase.

If I couldn't sell it ever I would say it wouldn't make any difference to my wealth, assuming that I lived equidistant from my workplace in either place. If I could eventually sell it, obviously the more valuable one.

edit: and actually depending on how much higher my expenses were on the upper east side, I would probably be less wealthy if I lived there and could never sell the condo.

Not true at all. I'm simply using disposable income as a metric for wealth, not net.

And someone with 3 kids commuting an hour each way every day is not rich imo unless his income is well over 250k, even if he lives in a 400-500k home.

Let's say you have 2 or 3 kids. In the metro area where - am from there is only one county in which you would want your kids to go to public schools, and guess what, they have much more expensive homes. That is part of what you guys don't seem to get.


Yes, its possible to live decently on 250k for a family of 5, but the parents will end up working til they are 80 if they want to send their kids to good schools, help pay for weddings, help out their parents who may hve to go to a nursing home, etc.

Fly,

You are right. I don't make 250k. I will one day though and I will have a family and don't want to spend 50 percent of my income on taxes. Have you ever had a job btw? Or are you still in school somewhere?

Well, that's the problem. When you say people "don't know how well off they are", what you mean is "they don't truly understand how poor people live", which is not the same thing. Like, at all. I have a thorough understanding of how well off I am. I have a thorough understanding of the lifestyle of the typical Canadian. I also know that when people start talking about "the rich" in a political context they are imagining someone with a much, much more luxuriant lifestyle than I have, which has been demonstrated conclusively with the "private schools and new cars for teenagers" talk in this thread. The bottom line is that there is a clear disconnect between what someone who makes $50,000 per year thinks about the lifestyle of everyone who makes $250,000 per year and reality, so when that person says "everyone making $250,000 per year is rich", they're wrong. They're wrongness is apparent in their stated vision of what the lifestyle of someone making that much money is, and what the actual lifestyle is for many people in that income range making reasonable choices. That stated vision is a fact, that reality is a fact, and they aren't the same thing. There's an objective wrongness here.

As usual, this discussion begs for "someness". The categorization of all peoples everywhere all making $250,000 per year as all rich is clearly wrong because of the "allness". The failure (or refusal) to deal with someness/allness is a perpetual theme in political discourse and persistently and predictably leads to wrong conclusions. This is one such example.

This subthread is ridiculous.

People making $50k are insanely rich.

I remember this scene where a dad had to pick between a new ipod and a flatscreen TV.

heartbreaking.

That's the thing, though. A lot of people consider "being in Manhattan" an essential part of their standard of living. That's why so many people are willing to pay more to to live there compared to, say, Detroit, where someone could buy up vast quantities of land for very little and then build a mansion on it for what they pay to live in New York, provided they don't mind getting shanked in the middle of the night.

You can't strictly say that someone who has a nicer car and a bigger house than someone in Malibu has a higher standard of living than that person in Malibu, because the person might be dealing with Buffalo's winters, or Seattle's rain, or being in some other city, or even just in some other part of town that just isn't as cool/safe/pretty/featuring top public schools/etc. Heck, take two guys in Malibu making $250k. One gets a smallish place, but on the beach. Another guy gets a much bigger place, but without a view for the same price. Who has the higher standard of living?

No, I mean you have no idea how well off you are because you think the things you decide to spend money on are things you have to spend money on, so you bemoan your lack of disposable income when you've simply allocated your disposable income towards saving and building equity.

It's the same thing when mjkidd used the word obligations. Paying your mortgage on your fancy Toronto home isn't an obligation, it's a consequence of choosing to buy that home.

It comes off as extraordinarily out of touch and borderline delusional. You make more in a month than many families make in a year. Do you think those people would consider you rich? How do you think they would feel listening to you explain how you aren't because you only make $12k a month after taxes and that after you spend or save all of that you don't have any left over?

Everyone making $250k is rich. You're trying to play it reasonable by conceding that some people making that much might be rich(but not you of course) but I think you'd have a lot of trouble identifying exactly who those people are, like sketching out what their monthly budget looks like. It seems like you and mjkidd are gradually getting around to arguing that someone with a high income and a crappy house in a bad neighborhood is richer than someone with the same income who buys a nicer house.