
Why So Many Rich People Don’t Feel Very Rich - pointillistic
http://economix.blogs.nytimes.com/2011/01/11/why-so-many-rich-people-dont-feel-very-rich/
======
narrator
The reality of this phenomenon is that people who have done everything
"perfectly" in their life and academic career feel a bit cheated when their
income tops out in between 100k and 200k. They might be senior engineers or
doctors or lawyers but they've hit this brick wall as far as income, sometimes
in their 30s and yet there are all these people out there that make more than
10x or even 100x their annual income.

Now there are four ways that I am aware of to make more than about 200k/year.

1\. Be an investor/entrepreneur in your own company.

2\. Have stock in a company that IPOs or get bought.

3\. Work in high finance at a well performing hedge fund or a maor wall street
firm.

4\. Be a senior partner in a major law firm or an experienced surgeon in an
in-demand specialty. Though you'll still top out at about 500k, at least
according to glassdoor.com.

Did I miss any?

~~~
kscaldef
> and yet there are all these people out there that make more than 10x or even
> 100x their annual income

Where by "all these people" we mean an extremely small fraction of the
population. If I think about things honestly, I'm paid more than almost
everyone I interact with regularly. Many of these people aren't lazy or stupid
or dropout or what-have-you. They also went to good schools and got good
grades and are excellent at what they do; but it turns out that the "brick
wall" in their field is a fraction of what it is in the tech industry. So,
yes, I know a few people making more than I do, mostly in jobs I don't want to
do, with working hours I wouldn't tolerate; but I'm not feeling too sorry for
myself.

~~~
crystalis
The average person can probably name more movie stars than high school
classmates. It's really easy to hit a number that 'primitive-monkey-brain'
starts treating as 'many'. Reasoned reflection will reveal how silly that is,
but we get to deal with primitive monkey brains with Dunbar numbers full of
incredibly rich people, and things like math are very low on the method
resolution chain.

------
boredguy8
My adult life began with several years at a non-profit making $18k/yr. I've
worked to avoid dramatic changes to my standard of living since then and it's
helped me put money in the bank regardless of where I fell on the income
scale. I also find that I need to "reset" my spending every 6 months or so,
because it's trivially easy to start spending more than you realize, for no
practical gain.

Sometimes I get jealous of people at work who seem to have nicer things. Then
a few days later they start to complain about not having money, and I'm
reminded that I don't _really_ need a TV, much less a 52-inch what-have-you.
Nor do I need to replace my nearly 20 year old car with something newer just
because I can. Or more realistically: I don't need to get a new car because
someone else I know bought a Z3.

~~~
jasonkester
The cool thing about this approach is how nicely it works with compound
interest.

Live like a college kid for the 5 years after you leave college, and I defy
you not to put $10k per year into the market. Fresh out of school with my $32k
salary, I'd regularly find month-old paychecks lying around undeposited
because I simply didn't need the money to support my cheap apartment, used
car, and 10lb sack of potatoes.

With nowhere for your money to go but the market, you quickly discover what
10%/year (or even 5% per year) does to a stack of money. Eventually it's
making more on its own than you're putting in. Financial security for life,
sorted by age 30.

~~~
roadnottaken
Boy I'd be happy with 10%/year or 5%/year right now. I think you're still
living in 1998.

 _Eventually it's making more on its own than you're putting in._

This actually takes a long time.

~~~
benmccann
The S&P 500 was up 11% last year, the Dow was up 9.5%, and the Nasdaq was up
17.5%

~~~
roadnottaken
How 'bout the year before that?

~~~
benmccann
The year before that was much better. The S&P 500 was up over 25% in 2009 and
the Nasdaq was up almost 50%.

------
edw519
Every time I read an article like this, I think of all the people I know who
are well off, yet appear to be miserable. Then I want to share with them this
old wisdom from "The Ethics of the Fathers":

"Who is wise? One who learns from every man."

"Who is strong? One who overpowers his inclinations."

"Who is honorable? One who honors his fellows."

"Who is rich? One who is satisfied with his lot."

~~~
bradly
This reminds me of an HN comment from a few months ago. It was something
like... "Need more money can usually be replaced with need less stuff"

Edit: I found the comment: 'I bet that 9 times out of 10, "I need more money"
should really be rephrased as "I need less stuff"'.
<http://news.ycombinator.com/item?id=2025234>

~~~
meterplech
I definitely get this viewpoint- but I would like to add that per gp comment,
you should be satisfied with your lot. Which for some people may mean spending
money on some things. I've noticed on HN and other sites a fascination with
acquiring wealth. I understand why, but in the end you acquire wealth for the
utility you can gain from using it.

Obviously, this doesn't need to mean spending 5k on the biggest TV, and
doesn't mean outstretching yourself on a huge mortgage for a McMansion. But,
if you save a little less and tactically spend on things that will make you
happier I think that is definitely worth it. This isn't a huge defense of
"stuff," but I think it's also okay to lose some wealth to gain happiness. I
personally like spending money on travel/experiences. There was a lifehacker
article about that yielding increased happiness.

Link: [http://lifehacker.com/5608980/spend-on-experiences-
instead-o...](http://lifehacker.com/5608980/spend-on-experiences-instead-of-
possessions-for-longer-happiness)

~~~
endtime
It's also nice for your kids not to need to take out college loans.

~~~
tptacek
It's also nice for them not to have to build a down payment for a house. Where
does this logic end?

~~~
endtime
I don't understand what you're trying to imply. My point is just that money is
useful and it can make your life and the lives of your family easier, and that
there are reasons for wanting it other than not being Buddhist enough.

~~~
tptacek
I'm saying you can justify a near arbitrary amount of acquisitiveness in the
name of your kids lifestyles.

Generally I think acquisitiveness is fine as long as it doesn't come at
society's expense. But, I also think a lot of benign-seeming acts by
acquisitive people come at a subtle significant cost to society; e.g.,
supporting the repeal of the estate tax.

~~~
endtime
By "society" should I assume you mean "other people who want my stuff"?

I see nothing unjust about an arbitrary amount of acquisitiveness. I don't
think success, or its material reward, are inherently sinful. I _do_ think
it's unhealthy to be obsessed with acquisition for its own sake, as opposed to
when one has healthy intentions for that which is being acquired; but in any
case, that's nothing to do with the collective good to which you refer.

------
ugh
This is just a tangent, but I wonder whether Robert Gibbs really quit at least
partly because his salary was too low. (That’s what Obama’s remark about his
departure seems to suggest.)

I don’t think you become Press Secretary of the White House because of the
salary, you become Press Secretary because you are passionate about it. (For
all you cynics out there: replace “passionate about it” with “power hungry”.)

You certainly don’t have to feel ashamed or poor at cocktail parties if you
are the Press Secretary of the White House, I would much rather suspect that
you don’t actually have time to go to any cocktail parties and that that could
be the much larger problem.

Press Secretary is not a job you have forever (eight years seem like the
natural maximum) and I’m certain that you have great chances of landing a
highly paid job after that.

~~~
roc
As you point out: while it wouldn't be prudent to go into politics for the
_direct_ money, the modern reality is that politics is a route to a staggering
amount of _future_ money. Not unlike paying vast sums to go to an Ivy League
school; not because the _education_ is so much better, but because future
_opportunities_ will be.

In that light, I don't see a huge line between his decision to 'cash-out' at
this particular point in time and the statement 'because his salary was too
low'.

~~~
ugh
I like that angle. Four years as communications director of one of the most
spectacular presidential campaigns of all times, two years as White House
Press Secretary, that certainly opens a lot of doors (and should definitely
land him a book deal).

It’s certainly understandable that when you then feel burnt out after six
years of stress the thought of leaving must be very attractive. It’s still a
bit strange that Obama makes a reference to his modest compensation.

~~~
roc
I've got to imagine he's adjusting expectations and trying to frame the
conversation before the likely stories about how much Gibbs is going to make
in the private sector.

After Peter Orszag's move to the private sector generated a non-trivial
brouhaha, it'd be more surprising if he _didn't_.

------
AlexC04
Perhaps it's because the definition of "rich" that they would need to feel is
one where they'd never have to work again if they didn't want to.

The article points out an annual income of $172,000 as being rich, but by
implication, these people still have to work for their money. Therefore
probably don't feel "rich"

If they could maintain that income or even half that income in perpetuity
without working. If they could spend their days doing just what they want and
not what they have to then maybe that's what feels rich?

Maybe?

~~~
Alex3917
"The article points out an annual income of $172,000 as being rich, but by
implication, these people still have to work for their money."

I think the real issue is that someone making 300,000 probably doesn't have
much more disposable income than someone making 80,000. Whatever extra money
they have is likely just going to a slightly nicer house, their IRA, dental
insurance, a slightly better preschool for their kids, etc. In other words, if
you're making 300,000 per year then you probably can't afford to fly to Hawaii
for the weekend on a whim any more than someone making 80,000 can.

~~~
roc
> _"someone making 300,000 probably doesn't have much more disposable income
> than someone making 80,000"_

I don't think that's borne out by the stats. As I recall fixed costs
essentially flat-line as a percentage of income somewhere south of 200k, up
until you reach the "don't look at prices anymore" brackets. Also, I note that
it _really_ doesn't take much more disposable income to add flashy
consumption. Five thousand dollars is easily two annual trips to Hawaii, which
-- while not remotely a trivial amount of money -- really isn't that hard to
sock away at 300k vs 80k. And two _additional_ annual vacations at 300k is
certainly going to look like 'whimsical' to the guy making 80k who takes one
real vacation a year.

So I'm wondering if we aren't having a disagreement on definitions. And when
you say 'hawaii on whim', you're thinking about trips approaching the opulence
of the "don't look at prices anymore" brackets?

~~~
Alex3917
"So I'm wondering if we aren't having a disagreement on definitions."

I think it mostly depends on whether or not you have kids. Kids can basically
eat up an unlimited amount of money.

~~~
btilly
Absolutely.

When I made a third of my current salary range, I felt well off. Now I have
kids and feel poor.

------
jeremymims
This article wonders why the rich are getting richer and the answer is
compound interest.

Having $1 million in the bank will reliably generate between $25k and $50k per
year.

Having $2 million in the bank will reliably generate between $50k and $100k
per year.

Having $3 million in the bank will reliably generate between $100k and $150k
per year.

So someone with $3 million in savings and still working their 200k job will be
making nearly the same amount as their savings is generating. If they keep
working and don't spend their principle, they'll have another million in about
5-6 years.

For someone putting 30k away each year in savings, it will take them decades
to reach the first $1 million.

This is why the rich get richer. It's not about salary. It's about savings and
investment.

~~~
schammy
I know of no such bank offering interest rates even close to that. You're
talking 2.5% - 5%. That's unheard of these days. At my current bank, $1M in a
money market account would generate about $2,500/year, which is nothing short
of insulting. Who are these fabled banks offering 10x the interest rate?

~~~
artmageddon
Before the subprime crash in 2007, interest rates were well in that range. I
had an ING savings account(regular savings account, not a CD) with a rate that
was earning me $7 __per day __, as opposed to now in which I get maybe $2 per
month.

~~~
schammy
Yeah, I know, interest rate _used_ to be good. I used to get 5% on my emigrant
direct savings account. Now it's 1%, and I don't know of anything higher (for
a money market account anywys)

------
jellicle
It's simple.

Make $100K, live near people making $90K = rich.

Make $100K, live near people making $110K = poor.

~~~
_delirium
I definitely noticed this in grad school. For a few years, I had a $30k
fellowship, when the normal stipend, which all my friends made (and which I
made the other years) was around $20k. I felt like I had more money than I
could reasonably spend, saved about $5k of the excess, and splurged about $5k
on what seemed to me to be luxury items, like fancy beer and trips. From my
perspective I was, if not wealthy, at least well-off. Supposedly $30k is on
the lower end of lower-middle-class, but it didn't feel like it. (Granted, it
also helps that I don't have kids.)

~~~
krschultz
Well at $30k, were you:

A) Paying for your own healthcare B) Saving for retirement C) Saving for
buying a house, a car, retirement, a wedding, future children, or other large
purchases? D) Paying off your loans for undergrad?

Because my girlfriend and I are 22, make over $100k, have less than $30k a
year in expenses combined, and still feel a little "tight" on the budget. But
we're both maxing our 401ks to the company match, paying for our healthcare,
and paying down our student loans (over $60k) in 3 years. Plus saving for a
house, and maybe even a little wedding and a vacation. $100k goes quick.

Note that we both drive 6 year old cars and have no plan to replace them, rent
a relatively small apartment and keep our expenses below $2.5k a month
combined which is pretty good. I don't feel poor by any stretch of the
imagination, nor am I complaining, and the situation is improving steadily as
we pay down debt and have more cash, but the saving really puts a crimp on how
much "fun money" I have.

We are currently (again with 2 people) putting over $3k a month into savings
and paying down debt which are prudent decision but don't feel all that fun
and don't really make us feel any "richer".

------
fingerprinter
I can sum this up for me and my family (fyi...we live quite meekly):

We don't feel "rich" because if something catastrophic happens (one of us
loses our job, major health problem, really bad turn in economy again) we are
not insulated despite all of our savings for the rest of our lives. We have,
perhaps, 2-4 years ability to stave of bankruptcy and the lot. That number is
different for everyone, but the "rich" don't think about that, ever. They are
set and will always be set unless _THEY_ do something stupid with their money.

Bottom line: I am not rich because I am not in control of the rest of my life
still. I am dependent on the system and the people who actually control the
system still. "rich" and "money" have always been about freedom to me. Because
I am not truly free, I am not rich.

Make sense?

~~~
GFischer
So, I should feel richer than you because my country provides a far better
safety net?

(even though I probably make between 10 to 20 times less?)

------
Tichy
What surprises me is that there seems to be no upper limit for lifestyle
expenses. To me it seems certain lifestyle choices are more of a liability
than a bonus. A bigger house needs more cleaning, a cleaning lady, probably
also a gardener. More cars require more maintenance, parking space, taxes.
Yachts, OK, I don't know - they require personnel, but maybe they are nice to
have. Then again, probably it is possible to rent them for the odd occasion?

I think from a certain comparatively low threshold, my worry would be how to
use my money to make the world a better place, not how to get a even more
luxurious lifestyle.

~~~
kbutler
> I think from a certain comparatively low threshold, my worry would be how to
> use my money to make the world a better place, not how to get a even more
> luxurious lifestyle.

I expect many people feel this way, at all income levels. The point is that
the "comparatively low threshold" varies depending on your current income -
the more income you have, the higher your threshold becomes.

"If I had a little more, I'd give."

"I have a little, so I give." (widow's mite)

kb

------
eggoa
Or, to widen the perspective, why doesn't an American making $30,000 feel rich
when he is above the 90% percentile for the world? (And he feels wretchedly
poor because he has to have a roommate and use public transportation.)

------
duke_sam
Reminds me of the Chicago professor who was complaining about repealing the
tax breaks for "rich" people[1] (his household income was in the 250k range).
As a bunch of commentators pointed out he felt like he was just scraping by
because he was attempting to live the life of someone earning 350k+ not the
life of someone earning 150k+.

A growing trend is how quickly the income of those at the top is increasing
relative to those at the bottom[2] and the disconnect this brings[3]. At what
point does someone earning minimum wage stop and think "How exactly is someone
working in a hedge fun worth tens of thousands of me in yearly salary alone?".
Would they push for legislative solutions? Can you even use something as blunt
as the tax code for this?

[1] His blog posts were taken down but you can see commentary:
[http://www.huffingtonpost.com/2010/09/21/todd-henderson-
rich...](http://www.huffingtonpost.com/2010/09/21/todd-henderson-
rich_n_732813.html) [http://www.theatlantic.com/national/archive/2010/09/in-
defen...](http://www.theatlantic.com/national/archive/2010/09/in-defense-of-
the-self-pitying-wealthy-poor/63777/)
[2][http://www.forbes.com/2008/04/30/ceo-pay-historic-lead-
bestb...](http://www.forbes.com/2008/04/30/ceo-pay-historic-lead-
bestbosses08-cx_sd_0430flash.html) \- for reference $1 in 1989 is worth around
$1.70 now so inflation does not account for a near 6x increase.
[3][http://www.theatlantic.com/magazine/archive/2011/01/the-
rise...](http://www.theatlantic.com/magazine/archive/2011/01/the-rise-of-the-
new-global-elite/8343/)

~~~
mdda
Minimum wage for a year is approximately $10k. Ten thousand times that is
$100MM. Hedge Fund salaries are not of that order - topping out at $10MM. I
agree that Hedge Fund bonuses can be large, but as far as the fixed salary
component goes, the person on minimum wage in your example is misinformed.

------
pointillistic
I posted the article here and I find that many comments are missing the point.
Catherine Rampell writes that the exponential growth of the global wealth for
the super-rich oligarchy, especially in the last decades made the comparison
with them so much more difficult. This all at the backdrop of the devastating
recession that thrown many productive people into the object poverty. I might
add that the media and the internet is full of the ubiquitous stories about
the super-rich so they are at the same time everyone's neighbor and no ones
neighbor.

~~~
CWuestefeld
That makes a nice, pandering story, but it's really a very very complex.

There's _some_ truth in the idea that the rich get richer, faster than the
rest of us. But _today_ , in a practical sense, what does it mean for someone
to have much more money than I do?

And what causes it? It's certainly not that some plutocracy is holding our
heads below water, as much some people like to paint that picture.

I'd encourage you to read this article, which has a pretty insightful analysis
of where this inequality originates, and why: [http://www.the-american-
interest.com/article-bd.cfm?piece=90...](http://www.the-american-
interest.com/article-bd.cfm?piece=907)

------
jtbigwoo
The amount of money I have left over at the end of the month makes a much
bigger difference in whether I feel rich than the number on my paycheck. But,
we're trained and encouraged by our culture to spend up to and beyond our
means no matter what our income. Even the "responsible" rules of thumb like
buying a house for 3x annual income or having debt payments of 40% of income
encourage us to increase our expenses as our incomes increase.

It's easy to see why somebody making $200,000 wouldn't feel rich if they own a
$600,000 house. Their mortgage costs almost $50,000/year! Design your life to
maximize the money in your pocket and you'll feel much richer.

~~~
kmfrk
I think it has to do with a lack of a broader education and spiritualism that
most people are devoid of.

Because they don't know any better, money becomes a hammer, and every problem
looks like a nail.

~~~
tomjen3
I doubt that - the potus press secretary has have a pretty broad
understanding.

~~~
kmfrk
I'm not including him in that group; I'm not convinced that he left for
financial reasons.

------
chris_atwood
Why did they put a non-linear x-axis on that graph? From 0% to 80% of income
is only the first 40% of x-axis space! Then tick marks (with equal physical
spacing) change from 5% to 1% increments.

~~~
jtbigwoo
We're talking about the top 90% of earners so it makes sense to enlarge the
right side of the graph. They're trying to illustrate the huge changes in
income for every percentage point. A linear axis would be basically vertical
at the right end.

~~~
chris_atwood
I think a vertical line would show the point more clearly. The idea is that
there is a lot more change at the top end than the rest, and a vertical line
does that.

Resolution does become an issue (I agree that showing the change from 99.5 to
99.9 is good and a linear scale makes seeing those points harder). A way
around that is to have the graph scroll left to right -- which should be easy
given that it is an interactive JS/flash graph widget.

------
seb
Because they don't know what it means to be poor?

~~~
modoc
I disagree with this. While I'm not saying I was ever "poor" (as I never felt
poor), I started out working for $5.15/hour, and sleeping on a friend's couch
while I tried to find an apartment I could afford. Then I moved into a boston
apartment that was $1000/month for three of us. It was falling over, and I ate
homemade burritos every single day because beans and tortillas were cheap.

Now I own a big house, drive nice cars, and earn a lot more than back then,
but I still don't feel rich. The rise in income over 12 years, was more or
less matched by a rise in lifestyle and spending. Don't get me wrong, life is
more comfortable, and I'm able to do lots of things I want to do that weren't
possible before, but I still don't feel "rich" (I do feel lucky and blessed,
etc...). I hate my 1/2 working 30 year old electric cooktop. I want a new gas
cooktop, but that means new counter tops, and running a gas line, and if I'm
doing new counter tops I should probably re-do the cabinets at the same time,
and if I'm doing those, I should do the floors, and if I'm doing cabinets I
should really replace the wall oven and fridge while I'm at it. But I don't
have that kind of money! And I still have to bust my ass every day at work. So
until you're really "RICH", and you still have to set the alarm and work every
day, and you have things you want, but can't afford, you don't "feel" "rich".

Is this a healthy well adjusted mindset, probably not. Just pointing out that
slow acclimation can make you feel like you really haven't moved much,
regardless how far you've travelled. I've lost 35+ lbs in the last 3 years,
but I don't feel "thin".

~~~
Retric
_if I'm doing new counter tops I should probably_

This is the mindset that makes high income people feel poor. You can get a
vary nice gas stove installed wihtout looking out of place for ~10k or you can
spend ~100k and get the same thing but shiny.

~~~
modoc
10k is a lot of spending money. I'm trying to build up some savings/retirement
money, so finding a "spare" 10k+ isn't easy.

~~~
Retric
I don't know much about your income, expenses, etc. However, I am suggesting
that dealing with the _I hate my __ list does not need to be that expensive.
Relative to "I own a big house, drive nice cars* etc.

Home Equity Line of Credit + reasonable expectations means you could get a gas
stove that does not look ugly for around 120$ a month. And in the increased
value of your home and the real cost could be less than 80$ a month. (AKA 40$
a month becomes another form of savings.)

Now for you personally it's hard to (edit: quickly) cut 120$ a month from your
nice cars and big house. But, I am willing to bet you would get more enjoyment
from that 120$ than getting the "nicer" versions of other things in your life.

PS: It was vary freeing when I realized I was not spending my money to
optimize my happiness. Rather I was buying things based on the amount of spare
money I had when I was buying it. (Edit: Not that you have this problem, but
it seems common.)

------
jhamburger
People only look up when it comes to wealth, everyone who makes less money
than you might as well not exist.

I read an article once about what well-off people (net worth in excess of $5
million) consider to be rich. The consensus was about $50 million liquid net
worth- Basically the point where you can realistically consider owning private
jets and yachts so there isn't any shit to be jealous of your neighbors about
anymore (except maybe a bigger yacht).

------
jkaufman
Interesting take on rich vs uber rich. I grew up in an area with a lot of that
90th-95th percentile group but everyone seemed to believe they were "upper
middle" class. The "rich" people were the few at the very top making millions
more.

A family making 250k/year is doing very well, but when they look at someone
making a few million - they don't group themselves in that category.

I also wonder if this is reinforced by the numerous 'reality' tv shows that
document the uber rich lifestyle. Even in a town full of people that are well
above average, no one is living like those top 1-2% of earners and therefore
don't consider themselves rich.

------
r0h4n
Spend one week in India and you will feel like a Billionaire for the rest of
your life.

~~~
loewenskind
A lot of people from india work in the west, send that money back home to have
a mansion (servants and everything) and _live_ like a billionaire for the rest
of their life (well, presumably. I obviously don't know any that have done
this and died of old age yet).

------
jond2062
This topic always brings me back to the same place: As a culture, when it
comes to the "rich" and the "wealthy" we tend to focus almost exclusively on
revenue (income) and assets (stuff). Anyone who looks at a simple income
statement and balance sheet knows that there is a lot more to the equation.

If someone makes $500k and spends $500k, not only is their net income $0, they
have added nothing to their net worth. Conversely, someone who makes $75k and
spends $30k has a positive net income of $45k and adds $45k to their net
worth. However, because we don't have nearly as much insight into the income
statements and balance sheets of our neighbor, we compare our "income" and
"stuff" to their "income" and "stuff" (as opposed to what we really should be
comparing which is net income and net worth).

I'm also reminded of a great book by P.T. Barnum called The Art of Money
Getting (<http://manybooks.net/titles/barnumptetext05barnm10.html>). It was
published in 1880, but it's amazing how relevant it still is. He tells some
great stories about life, money, and wealth. This is one of my favorites:

"I know a gentleman of fortune who says, that when he first began to prosper,
his wife would have a new and elegant sofa. "That sofa," he says, "cost me
thirty thousand dollars!" When the sofa reached the house, it was found
necessary to get chairs to match; then side-boards, carpets and tables "to
correspond" with them, and so on through the entire stock of furniture.

When at last it was found that the house itself was quite too small and old-
fashioned for the furniture, and a new one was built to correspond with the
new purchases; "thus," added my friend, "summing up an outlay of thirty
thousand dollars, caused by that single sofa, and saddling on me, in the shape
of servants, equipage, and the necessary expenses attendant upon keeping up a
fine ’establishment,’ a yearly outlay of eleven thousand dollars, and a tight
pinch at that: whereas, ten years ago, we lived with much more real comfort,
because with much less care, on as many hundreds.

The truth is," he continued, "that sofa would have brought me to inevitable
bankruptcy, had not a most unexampled title to prosperity kept me above it,
and had I not checked the natural desire to ’cut a dash’."

------
bm98
People between the 70th and 90th percentiles feel squeezed by a lot of
expenses that cost less for those lower on the scale, due to price
discrimination, progressive taxation, subsidies, etc. College tuition is a
good example. It's high enough to take a big chunk of the income of a 70-90th
percentile earner, but it doesn't hurt as much to someone higher (spare
change!) or lower (financial aid) on the income scale.

------
bane
There's definitely a middle ground though. Being poor sucks...bad. Not because
you can't the things you want, but because you can't get the things you
desperately need (and I mean things in the physical sense).

I remember reading various studies a few years ago (sorry, can't find them
now) showing folks who make 40-50k/yr in the U.S. tend to be the most
satisfied with life. With inflation that's probably more like 60-70k (and
possibly more for the Bay Area and NYC), but the point stands. You can cover
most life needs with that and have a little left over for indulgences. But not
so much that you get caught up in material wants.

Also I noticed many people with money who are unhappy, tend to be unhappy
because of the social isolation that brings. As it turns out, human
interaction is something we need, and also happens to be very cheap/efficient
in most cases.

~~~
kin
Agree especially to the last line. Being the only person in my group of
friends in the 60-70K category while they're in the sub 40K category keeps me
on a college budget. Cheap dates, happy hour, home cooking, take-out, etc.

------
yason
The thing is, if you're of this "I don't have enough" sort of type (or one of
its numerous manifestations) it doesn't matter how much you have. You, thus,
by your own words, never have enough of anything and your life is much worse
off because of that.

If you're poor, you have worries most people can understand but your worries
are real to you. If you're rich, you have worries that seem outrageous to most
people and your worries are (still) real to you. Hence, you're not any better
off in reality, even if you don't have to starve.

Of course you're not any better off because you still think you don't have
enough.

And the funny thing is that it you don't have to become rich to have enough.
When you're happy with first what you have, then everything is restored to
back to 'okay'. And you can still try to get more but you don't have to try to
get more.

------
acconrad
I'll save you reading the article and summarize it in 1 sentence: income
distribution is exponential, so rich neighborhoods can have significantly
(relatively) richer/poorer residents, while poor neighborhoods all make
relatively the same.

------
kin
I once had an hour long conversation with a stranger at a bar about this.
Coincidentally, we were in the same field, hacker. And he told me that coming
out of college it's a little bit too easy to just work for the man. Being
young and fresh out of college, you really can afford to take risks and be in
that small percentile of people that are so much richer. Of course, it's a
risk, and you have to take it and put your heart into it.

------
hoag
The argument presented in the article is plausible, but I call it "the guy
with the S65 AMG Benz admiring the guy with the Maybach" argument, i.e., the
Maybach is a few hundred thousand dollars dearer than the Benz, itself a $200K
car. While valid, I think it illustrates the effect of the unhappiness problem
rather than the underlying cause.

I call the root of the problem The SimCity Effect.

The SimCity Effect -- as I describe it -- is essentially a real life
application of the economic principle of diminishing marginal value, i.e., the
more of a given good you gain, the less value you gain from each subsequent
good.

I think wealthy peoples' unhappiness with life is due to the far greater
decrease in value -- or utility -- they gain each time they move up the ladder
than those with lesser means.

This is in turn is caused by a fundamental failure by most people to have a
predetermined sense of "satisfaction" or "accomplishment" in life. This is
where the SimCity analogy comes to play.

Those of you who grew up playing SimCity probably experienced this phenomenon:
you start building a city, eagerly growing larger and larger, with more and
better public utilities, education, etc., and your satisfaction curve probably
faced an initial upward curve: all things being equal, the goal of SimCity was
arguably to build the largest, cleanest, most educated, and high tech city you
could manage.

Trouble is, that's a pretty vague goal: what does "large" mean? 1M people? 2M?
10M? In the absence of a clear and defined goal, and no way to "win" the game
in the traditional sense, most SimCity builders suffered a very real sense of
diminishing marginal value, and thus their satisfaction -- joy with the game,
etc. -- decreased as well.

This is not to say that one should set finite goals beyond which we should
strive no further, but rather that we should at least set a mental note
alerting us to when, in our life, we have obtained our goals, so we can at
least breathe a sigh of relief and say "I've done it." Anything beyond that
would be a bonus and it would essentially reset our internal "utility" curve
accordingly to, perhaps, begin anew. This would certainly explain serial
entrepreneurs and the like.

This to me is the real problem with happiness -- or lack thereof -- at the
highest echelon of society: it is not unhappiness per se, but rather a lack of
satisfaction due to what can be best described as satisfaction
desensitization.

Just my 2c.

------
skittles
My idea of being rich is when you don't have to work to maintain your
lifestyle (as long as you are happy with that lifestyle--being a miserable
homeless person doesn't count). The problem with a majority of high-earners is
that they have too many on-going expenses that force them to keep working.

------
anthonycerra
It must be tough to have a smaller yacht than your friends.

~~~
larrywright
$172,000 per year is not a yacht level income. It's a good salary (some might
say great), but you're not going to have a mansion and a yacht.

~~~
sedachv
That depends on what you mean by "mansion" and "yacht." Outside of NYC and the
Bay Area you can definitely afford a mortgage on a nice house, two good cars,
and a decent-sized sailboat and manage to feed a family of four on that income
(assuming you don't send the kids to private school).

~~~
sedachv
I was looking at ads for places today, and happened across this listing:

[http://montreal.kijiji.ca/c-housing-house-rental-ST-
COLOMBAN...](http://montreal.kijiji.ca/c-housing-house-rental-ST-COLOMBAN-
COTTAGE-DE-LUXE-FINANCEMENT-100-PROPRIO-W0QQAdIdZ253342623)

Small mansion 1 hour commuting distance from Montreal, $400,000

Let's look at craigslist:

<http://montreal.en.craigslist.ca/boa/2116842083.html>

35' cruising yacht, good condition, $49,000

This is certainly doable on $172,000

------
T_S_
Greed feels like a ladder but is actually a hamster wheel.

------
joshwa
<http://en.wikipedia.org/wiki/Hedonic_treadmill>

------
Gilpo
What does it take to _feel_ rich? These articles never seem to say.

~~~
Gilpo
I guess what I mean is, what does it feel like to feel rich?

------
kentf
Excellent article. Thank you for sharing.

------
kahawe
I think you are only really "rich" when you are making a decent (e.g.
middle/upper middle-class) monthly salary without even (theoretically) setting
a foot out of bed, ever.

Given the complete freedom to do a lot of things in your life without ever
HAVING to participate in the rat race of daily work has got to be the ultimate
freedom and should be the bar for "rich" for me.

Everyone below that is more or less well off.

~~~
jhamburger
You are confusing 'rich' with 'idle rich'.

~~~
gaius
No, it's not that you _do_ do that, it's that you have the option.

------
sabat
One reason I can imagine that you wouldn't feel rich: because it feels
unstable. If you're afraid you're going to lose it all at any moment, you just
feel momentarily lucky.

