The Haves, Have Nots, & Have Lots - Reformulation of the Middle Class

[TheMetetron]

[ QUOTE ]
One thing, when you dont have money, being rich might not seem like that big of a deal to you, but once you get alot of money, you DO NOT want to go back.

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Just reading through the thread now. Agree 100%.

[natedogg]

1) Are you a Have Not, Have, Have Lots?

I am currently middle class (a Have I guess).

I come from a very poor family. We survived on the kindness of strangers at times, getting food and clothing from charities, our church, etc. Now I own a home in the bay area (got lucky and bought one in 2000 when it was cheap) and I feel like one of the richest people who ever lived. Technically, I am, as some of the posters have pointed out.

Despite the fact that my household income is nothing special, I feel incredibly wealthy.

2) How important is this to you going-forward?
I really don't care much about material things but the most valuable thing money can buy you is *time*. I'd like to retire ASAP so I can spent most of my time backpacking, writing, playing games, and having fun with my kids and friends. I don't care much about my car, or getting a big house, and I certainly don't care about my clothes or accessories.

I wear jeans, and drive a civic, and wear $10 shades.

The biggest luxuries that I will buy with my money are health care, and time, all of which I feel are worthy any price. (This year I spent almost all of my disposable income on health care for my wife, who required a lot of treatments that weren't covered).


3) Will this impact your decision to have a family, number of children?

It didn't. And it wouldn't.

People worry WAY too much about the cost of college. My parents spent $0 on my college education. I intend to spend close to that for my kids. We live in California and the UC system is great.

It looks like I'll probably pay for private high school though, if I can get my wife to start working eventually.

4) Is your sense of what I wrote above true? Is this true only in expensive metropolitan areas?

A lot of people get sucked into the rat race. I know people who make 3 or 4 times what I make and are strapped. They have no equity in their house, no money in the bank, nothing. I don't even know how they get themselves into that spot. There's definitely a HUGE disparity from household to household in terms of what they get out of their money.

I think most people are idiots when it comes to their finances.

natedogg

[NajdorfDefense]

'Households headed by people in their 50s or over dominate wealth holdings in this country. In 2004, the aggregate net wealth in the hands of households headed by those in their
50s amounted to nearly $15 trillion. Households headed by those in their 60s held about $11 trillion in total aggregate net wealth, as did households headed by those over 70.
Together, these three groups held $37.2 trillion worth of net wealth or 74 percent of total household net wealth, while accounting for only 49 percent of all households.'

Data: FRB, FoF data

[The DaveR]

ND, The article I linked leads with, "Income inequality grew significantly in 2005, with the top 1 percent of Americans — those with incomes that year of more than $348,000 — receiving their largest share of national income since 1928, analysis of newly released tax data shows." It also states, "The new data also shows that the top 300,000 Americans collectively enjoyed almost as much income as the bottom 150 million Americans. Per person, the top group received 440 times as much as the average person in the bottom half earned, nearly doubling the gap from 1980."

Additionally, it has data that confirms what you stated originally, namely that top tier income (top 10 and 1 bps of population) declined from 2001 to mid 2003 but have since rebounded back to 2001 levels.

Shockingly, there's this sentence in the article, "The analysis by the two professors showed that the top 10 percent of Americans collected 48.5 percent of all reported income in 2005."

[turnipmonster]

nice post, I'm definitely in the income is nothing special but I feel really rich camp.

[NajdorfDefense]

[ QUOTE ]
"The analysis by the two professors showed that the top 10 percent of Americans collected 48.5 percent of all reported income in 2005."

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That's not shocking, that's fairly well-known.

What's shocking is that the top 10% pays 68.2% of all Federal Income taxes, or 41% more than their proportional share of income. [BTW, $99k puts you in this group, it's really not *that* high a bar for the educated posters at 2p2/good poker players and gamblers.]

The bottom 50% pays 3.3% only. Obviously, most of the bottom pays nothing and receives tax credits to boot.

Source: IRS, 2004 tax data.

[Aloysius]

Naj - thanks for the stats (interesting stuff), but unless I'm reading it wrong I'm not really sure how this really refutes the basic premise here. I think this is why DaveR continues to post haha.

Nate - nice post also:

[ QUOTE ]
I think most people are idiots when it comes to their finances.

[/ QUOTE ]

Very true - basic personal finance class should be mandatory in highschool.

-Al

[somapopper]

I don't find that terribly shocking. It's pretty obvious that if you have 100k in income, paying 30k in taxes is less of a burden to you than to your neighbor making 50k and paying 15k.

A graduated tax system seems logical to me. So logical in fact that I don't exactly know how to argue for it, but I'd be willing to try if you want.