- Joined
- Jun 6, 2015
- Messages
- 1,039
- Reaction score
- 700
Most lower-income physicians I know drive beat-up Hondas and live in low SES housing downtown. 
Can average income Physicians afford big houses and nice cars?
- Thread starter Outlanding
- Start date
- Joined
- Aug 21, 2015
- Messages
- 857
- Reaction score
- 1,138
While the numbers are mostly right, I am slightly bothered by the tax bracket statement.
Top tax rate is only marginal, and if you are making 200K, you are not hitting the 39% bracket by far. The effective tax rate at 200K is ~25%
+ ~7.5% of social security and medicare tax, assuming worst case scenario of ~12.5% for state and local taxes, you would still have ~90K left over after maxing out your 401(k) (currently at 18K)
Top tax rate is only marginal, and if you are making 200K, you are not hitting the 39% bracket by far. The effective tax rate at 200K is ~25%
+ ~7.5% of social security and medicare tax, assuming worst case scenario of ~12.5% for state and local taxes, you would still have ~90K left over after maxing out your 401(k) (currently at 18K)
D
deleted393595
- Joined
- Jul 21, 2015
- Messages
- 679
- Reaction score
- 937
He has my vote.
- Joined
- Dec 20, 2004
- Messages
- 30,873
- Reaction score
- 10,063
I stated that it was graduated and that he should use a tax calculator. Our system creates bigger and bigger disincentives the more you earn. I assumed people understood the taxing regime in our country, my bad. The short answer though is between federal, state, social security, self pay benefits, etc it's just mind boggling that the guy thinks he will still have 160k left after 200k. ( and went so far s to say he's "run the numbers"). He won't -- he will probably have about half. This is the world some of us already live in, not a guess.
- Joined
- Jul 27, 2013
- Messages
- 38,498
- Reaction score
- 75,461
- Monthly Gross Pay$16,666.67
- Federal Withholding$3,850.61
- Social Security$1,033.33
- Medicare$241.67
- Connecticut$945.00
Net Pay$10,596.06
After all is said and done, a 200k income pays just over 127k in my home state, before payroll deductions (of which there are many). After deductions for retirement, insurance, and the like, about 110k. Just to reinforce your point.
D
deleted480308
I'm with you on this....I'm not writing a check for a $70k BS in 14th century women's haiku studies...and I'm not paying for half an MBA that they quit so they could "find themselves"
- Joined
- Dec 20, 2004
- Messages
- 30,873
- Reaction score
- 10,063
Right, and some states and municipalities tax higher than that. And if you job doesn't cover all benefits, or does 401k matching only if you put a certain amount in, etc you'll find your net paycheck even lower. That's why I'm saying conservatively consider your paycheck to get cut in half. Makes for easy math, at least.
- Joined
- Dec 20, 2004
- Messages
- 30,873
- Reaction score
- 10,063
Well it's a family values thing. If your family value system puts education on a pedestal, as the one thing the parents can get behind, you'll pay for more. If you approach life wanting your kids to have it better than you, to go further, you'll pay more. This is actually why you see certain races and ethnicities disproportionately dominating certain fields of higher education. You'll never see certain families of recent immigrants buy their kid a car but you can bet they will skimp and save so s/he can attend college. It's not a bad thing. It's why certain demographics move ahead. They aren't smarter or better at math or whatever stereotype they've earned. They just have a family emphasis on different things and a willingness to skimp and save to fund them.
- Joined
- Nov 6, 2011
- Messages
- 3,565
- Reaction score
- 3,654
He must think Park Slope is a representation of how Brooklyn is. I bet he's never been east of Bedstuy or south of Flatbush
Hey now, we have a Dunkin Donuts, Nathans, AND a Target. What more could you ask for?
Just remember to carry an extra fake wallet with a couple 20s for when you get mugged or shot.
- Joined
- Aug 26, 2015
- Messages
- 355
- Reaction score
- 1,058
This. $200K isn't enough money that you'll be able to have everything you could possibly want. It is certainly enough money that you can pick a few things that are important to you and have plenty of money to spend on those things, though. I personally love good food/drink, and enjoy traveling. I'm sure that I'll be able to indulge these interests as an attending.
I don't expect to be able to live in an expensive house, drive a fancy car, and still travel regularly and eat great food consistently. But I'll be able to pick the things that I care about and spend money on them without worrying that my rent check will bounce if I order a the bottle of wine I want (which will be a damn good feeling after being a spending a whole lot of years as a broke student).
Federal tax for a married couple filing jointly on $200,000 is $43,051.50, but that's before deductions: dependents, mortgage interest, 401k contributions, etc. Of course, you have to add state tax to that, but I would say $40k is a fair estimate, certainly in the ballpark.
I agree with this. As a physician, you will make much more money than most people. To be financially secure, however, you will need to pay off your loans, save between 25-50% of your salary, and invest the savings wisely. ( An appropriate mix of traditional and Roth IRAs, invest in a Vanguard Total Market Index Fund, or Vanguard Target Date Funds, have term life insurance, and disability insurance. Don't listen to so-called financial advisors, no individual stocks, no IPOs, no managed mutual funds, no start-ups, no whole life insurance, no annuities. Beware of real-estate, some is good, mostly bad. No private investments that your doctor friends are investing in ).
Once you have put aside your savings and paid down your loans each month, you are free to spend what's left. Regardless of your salary, if you save at least 25%, you'll eventually be able to retire comfortably.
You should be able to afford a nice house in a nice area. If you work in Manhattan, you will be able to afford a very nice house in parts of Westchester or New Jersey, or parts of Queens, but you will need to commute.
Apartments in Manhattan are affordable for physicians, (at least for specialists ) but will certainly be smaller than you would want and they won't be in the best buildings or the best parts of the best neighborhoods. You need to have perspective. Some apartments in Manhattan sell for several $100 million. You won't be living in those. There are nice apartments in Manhattan for about $1.5 million, shocking, but affordable for most physicians if you're careful with your money. You won't have or want a car in Manhattan, though, nor a boat, so you save some money there. In return you get to live in Manhattan. You will be able to walk to the best Ballet, Symphony, restaurants, Theater, and museums in the world. Central Park is like being in the countryside. It's not for everyone, but for those who want that environment, it's worth not having a real house or extra rooms. That's a value judgement that everyone has to make for themselves. But, can doctors afford to live there? Yes, of course. Many do. The problem in NY is that you may want to send your children to private schools, which are probably around 25k for preschool and kindergarden, and go up to around 45-50k for private high schools. That would wipe out your income right there if you're earning 200k.
There are some wonderful areas in Queens, one in particular I'm thinking of, with beautiful homes, and a 5 minute walk to the subway and 10 minutes into Manhattan from there. These houses are expensive but affordable for physicians.
I have lived in Manhattan, Brooklyn, and Queens. I see the advantages of all of the above locations, although I wouldn't choose to live there myself right now, there are good reasons why many people choose to live there.
While houses in Silicon Valley and Manhattan are very expensive, I have done the math, and I can tell you that homes in Silicon Valley appreciate at the same rate as the stock market ( S& P 500 ) . This a far greater rate than houses elsewhere, so if you buy in one of those ridiculously expensive areas, you actually come out ahead.
However, what you can't do is buy the biggest house in town, a few expensive cars, send your kids to private school, buy a boat, take lots of vacations, buy every new toy you see, belong to the expensive country club, etc etc.because then you won't be able to save. But as long as you are careful, you will have a very comfortable life.
Every so often, you will read in the newspapers about some school teacher or custodian who dies with an estate of 9 or 10 million dollars and donates it to the local college. That's actually attainable for most people if they start out investing properly from the start. If you're a physician, and avoid making the classic mistakes, and start saving and investing early, you should be able to retire with a net worth of several million dollars. If you do it right and you're a specialist, maybe with a spouse who earns a similar income, you can end up with a net worth in the 8 figure range. But too many doctors spend everything they earn and end up with nothing.
- Joined
- Dec 20, 2004
- Messages
- 30,873
- Reaction score
- 10,063
First nobody said married couple filing jointly.but putting that aside, Second as mentioned above there's also Medicare and social security which come out. Not optional and not small. State taxes can be high. And you'll have other benefits you need or want to pay for. 401k is "optional" but if they are matching it's *****ic not to put money into that. Not every place covers all of your health, vision, dental, parking. Your paycheck gets very small pretty fast. So don't delude the kid into thinking he"s right only $40k will come out. I don't know your finances but I'd take a much closer look at your next paycheck. You'll see that this isn't anything close to a "fair estimate" or " in the ballpark" -- It's so far outside of the ballpark you've got to root for another team. When all is said end done you'll net much closer to half of your income to work with, not 80%. Go look at one if the various online calculators or Mad Jack's numbers above, and add in your local state amount. And then assume some % of your pretax money needs to go to benefits you have to self fund. And see what's left. And be conservative -- not try to ignore social security, Medicare and state tax as nothings (they are bigger than apparently you think).
Last edited:
- Joined
- Nov 16, 2010
- Messages
- 7,139
- Reaction score
- 11,293
you're not wrong, but as L2D said, the taxes you "pay" and the the money you "get" are separate things. It was an important distinction to be made.
(now to go read the rest of the wall of text that is your post)
- Joined
- Mar 28, 2015
- Messages
- 36
- Reaction score
- 20
To be fair, I got that number from a tax estimator calculator where I just plugged in some hypothetical numbers, inserted estimated age, marriage status, number of dependants, and state of residence. Fair enough point, I've never lived in a household that broke the 40K barrier on taxes, so I don't understand fully how the upper tax brackets work.
I still don't see how you can't live comfortable enough doing something you love that offers decent enough financial stability, but I think my definition of comfortable is a little different from everyone else's on here.
Sent from my SGH-M919 using Tapatalk
Whaaat? Pretty much bet on hitting that or pretty close. 25% my ass. If you work in the city, there is city wage tax--parking--bridge tolls, etc. People aren't doing the detailed dirty work in counting the costs.
- Joined
- Nov 16, 2010
- Messages
- 7,139
- Reaction score
- 11,293
one other thing people aren't bringing up in this thread is that your ability to afford things as an attending isn't really static. What I have for purchasing power to afford when it comes to luxury items etc as an attending just starting out isn't going to be the same thing as when I'll be in my 40s with significant savings. People act like you're just going to sign that contract and suddenly it's going to be all..
Wealth builds over time. I'm going to be "living like a resident" for at least the next half decade, then maybe I'll buy that Lexus once the wheels finally fall off my beat up Ford Focus. And considering how I was able to live as a resident in one of the trendiest neighborhoods in the country and still have money for trips, eating out, sporting events, etc, that ain't bad.
Wealth builds over time. I'm going to be "living like a resident" for at least the next half decade, then maybe I'll buy that Lexus once the wheels finally fall off my beat up Ford Focus. And considering how I was able to live as a resident in one of the trendiest neighborhoods in the country and still have money for trips, eating out, sporting events, etc, that ain't bad.
- Joined
- Dec 20, 2004
- Messages
- 30,873
- Reaction score
- 10,063
Well I think that's the point. Will you have a place to live and a newish reliable car and ability to service your student loans, and maybe even start saving a little as a new attending? Absolutely. And by some definitions that's "comfortable". Will you be able to buy a mansion, a luxury car, etc. No. At least not in the first decade of post-residency practice.
- Joined
- Mar 28, 2015
- Messages
- 36
- Reaction score
- 20
I think another factor that's been brought up already is desired location. Some people want to live in LA, NYC, Miami, etc. I'm perfectly happy living in a little town somewhere in the Midwest where the COL is cheaper.
If I can have a decent house, something in the 200-300K range maybe, in a good /safe neighborhood, driving a car made in the last 10 years, with enough money to have dinner with friends now and then, not forced to live paycheck to paycheck, and put some money into savings each month? I'm happy.
Also to the guy who keeps calling me a guy, it says on my profile I'm female. Not splitting hairs, just kinda awkward.
Sent from my SGH-M919 using Tapatalk
- Joined
- Sep 26, 2011
- Messages
- 1,468
- Reaction score
- 820
What a lot of people seem to ignore is that when you're with someone, you have to accommodate your spouse also. Like, I'd attend any medical school under the sun (within the US), but I know I'm not going to be able to because my fiancee is very particular on location. If you're with someone, or you get together with someone, there will be things that you'll have to accommodate.
The human potential to f*ck things up doubles with a spouse. So you need to save accordingly.
The human potential to f*ck things up doubles with a spouse. So you need to save accordingly.
Yes. And if your kid/s do FASFA, parental tax information is required, and often enough that means that the programs will expect parent contribution, unless the student is fully independent--independent family of their own, etc--meeting specific guidelines.
"Even if you fully support yourself, pay your own bills, file your own taxes, you may still be considered a dependent student for federal student aid purposes, and therefore, you’ll need to provide parent information on your FAFSA. Dependency guidelines for the FAFSA are determined by Congress and are different from those of the IRS. Find out whether or not you need to provide parent information by answering these questions."
http://blog.ed.gov/2015/01/7-common-fafsa-mistakes-2/
So then, at best, in many instances, the student can only be eligible for unsubsidized loans, which can get outrageously high, even as education costs only continue to escalate to the point of being beyond reasonable.
It is not, however, unreasonable to expect that your child demonstrate motivation, be a good and committed student, and have looked carefully into evaluating why he or she wants to study what they will study, and even how sustainable such will be in the market place.
I wish I had a dime for every stinking nursing student I had to mentor or teach that was whining b/c they majored in psych at some four-year--not necessarily cheap, and some schools very expensive, only for them to decide to go into an accelerated nursing program--which I am not big on in the first place. I mean, none of them had anyone sit down with them and tell them that they will have to go for the terminal degree for it to be financially worthwhile??? I mean, really, why go for psych undergrad if you are not going for the terminal degree or at least a Masters? Sadly, those working at certain supermarkets make more than those attempting to work in psych with merely a BA. [And forget the OT fact that most of these psych undergrad programs teach students almost nothing about psych in terms of application and clinical perspectives It's all very nebulous crap to them, and the best that they can try to relate to it is in their own lives or with friends; but getting them to some clinical sites to see it for what it is would be more valuable than simply teaching them the theory. I have found just about every undergrad psych program to be mostly BS.]
I know of a friend with a kid that now wants to change the major from psych to culinary arts, and the CA school is NOT cheap--I mean, I was blown away at the cost of attendance. I am not sure the kid even realizes how stressful being a chef can be. . . at all. Not at all sure that the kid knows what kind of hours that must be worked in order to succeed. They just look at Food Network and think, "Ah, that looks like fun." LOL Forget how many chefs are killing themselves working > 14 hours per day-- and how many smoke and drink a lot. Starting one's own restaurant as a future hope? Very risky business. So, I would have a lot of homework and expectations for this kid before I helped them in this endeavor.
And this is why I say "medi0" students should kick butt in a reputable community college and then transfer. Heck, in order to save money, I know kids that are doing this and they are superior students and are attending CC in order to save money. Not every bright, hardworking student gets full ride scholarships--or really knows what s/he wants to do for that matter. Better to figure it out in CC, while getting core, transferable general education courses, than to take on the whole load of a four-year and switch majors several times and still be confused. School has become too expensive for this kind of thing.
Last edited:
- Joined
- Aug 26, 2015
- Messages
- 355
- Reaction score
- 1,058
On the other side of the coin, though, most people also aren't accounting for the income of a spouse. If we're assuming the presence of a spouse, we have to consider both the hinderances and the benefits. Yes, your expenses go up if you have a wife and kids, but then you have two incomes instead of one.
Those are expenses, not taxes.
That's called savings. Do it in a 401k, it's deductible. Health expenses, in a HSA account, ditto, up to $5k. Childcare, ditto, up to 5k, in a Dependent care account.
I'm not sure what this means. You get all of your salary, less your taxes. If you're referring to payroll taxes, sure, they are there, but they don't amount to all that much. Deductions should wipe them out.
As it happens, the Whitecoatinvestor.com ran the numbers on a worst case scenario $200,000 salary for a single employed doctor in California with no mortgage deduction and only a $15,000 401k deduction. ( See here: http://whitecoatinvestor.com/2012/02/20/ )
The total taxes due including state and payroll taxes, was 32.4%. So, a real life doctor, with a spouse, kids, mortgage deduction, more 401k deductions, maybe a Health Savings Account deduction, Childcare Dependent Care FSA account, charitable deductions etc, would likely get her taxes down another 10% quite easily. If you're in a state with lower state taxes, which is likely, your tax rate will of course be much lower.
Note: The California marginal rate over $101k is 9.3% .
Last edited:
If that spouse is working and continues to keep working. Many spouses drop down to part or 0 time after having kids--to them, it is that much of a commitment, and the whole things flies by pretty fast. Even w/o kids, you can't always consider a spouse as a contributor. I know some couples where the partner is disabled for one reason or another. This is true especially if they were vets. A freaking bad car accident can put people out of work. Serious chronic disease can do so. It can be a plus/minus and that can flip at any point.
I hear you, but disagree. One could employ all this and find so much is being eaten up, and no--still not close to 25%. I wish.
Last edited:
Sure, if you're earning $500,000, it's easier to save 25% than if you're earning $200,000. Yet some people raise families on 100k, or even 50k. So, it can be done. The people who can do it, end up comfortable. The ones who can't, end up broke.
It would be so nice if when people quoted me, they would fix my blatant errors (employee rather than employ).
I say it depends upon the particulars in raising a family on $50,000, including COL area and a number of factors. It my state taxation is crippling, and it will only get worse. B/c of it, you cannot say that you really own your land outright. For many people, $50,ooo is not going to cut it for a family of 5 or 6. 30 years ago, sure. Today, unless you are using members as farm hands and raising your own food--and forget cable and Internet and cell phones--that would be a challenge. LOL. I am personally disgusted with cable and would cut that expense in a heartbeat if my spouse wouldn't bitch about it.
Sure and another huge expense. LT and ST disability are not cheap.
I'm amazed that people don't realize that you don't get something for nothing or almost nothing. Most "somethings" are costly in one way or another. People underestimate expenses, period.
Last edited:
Also, it doesn't pay to have a very huge home unless you can pay someone to help you keep it up. Huge homes require a lot of daily care. Cooking well requires a lot of planning, know-how, time, prep, careful attention and clean up. Just like people tend to underestimate the cost of things, they also underestimate the cost of time. In life, almost everything takes more time than we tend to estimate, and there is only so much of it. You can try to compensate, by doing things like typing fast, like I do--only to be annoyed by idiotic typing errors. LOL. It's all about counting ALL the costs.
- Joined
- Apr 2, 2013
- Messages
- 2,992
- Reaction score
- 1,897
- Joined
- Jul 27, 2013
- Messages
- 38,498
- Reaction score
- 75,461
I'll tell them they can have my money when they earn it, just like my parents did with me. In college though, all they're getting is books.So when your son says, "dad, can I get tree fiddy?" you are going to say no?
- Joined
- Apr 2, 2013
- Messages
- 2,992
- Reaction score
- 1,897
Right on. So what do you do now, Mad Jack? In medical school? gap year?
Alrighty then. We'll see.
Apparently you don't know the power of a cutie, daddy's girl.
- Joined
- Nov 16, 2010
- Messages
- 7,139
- Reaction score
- 11,293
ironically enough, books were one of the few things I was responsible for paying for in college. Helped me discern which ones were necessary and which weren't.
- Joined
- Jul 27, 2013
- Messages
- 38,498
- Reaction score
- 75,461
OMS-II
MONEY IS ALWAYS A "TRIGGER" ON HERE. No matter what motivations, or lack thereof, people have for asking if doctors make lots of money, it seems that many people on here are always triggered into responding with defensive statements.
A psychological exercise:
1. Ask yourself if you are making any assumptions about OP's reasoning, and if so, why.
2. Ask yourself honestly, if you feel strongly about something related to this topic, and what biases might result. Be aware of those.
A psychological exercise:
1. Ask yourself if you are making any assumptions about OP's reasoning, and if so, why.
2. Ask yourself honestly, if you feel strongly about something related to this topic, and what biases might result. Be aware of those.
- Joined
- Sep 26, 2011
- Messages
- 1,468
- Reaction score
- 820
A lot of people (myself included) grew up on the lower end of the financial spectrum. Hell, my parents could have qualified for food stamps when I was little- and I watched them slowly climb up the ladder over the years. Together, they probably make what one physician makes, and that's still a hell of a lot better than a lot of people do over the course of their entire lives.
I suppose growing up without a lot gives me and people like me an entirely different perspective on money than most people. We see money as more of a thing we use to encourage stability in our lives, not necessarily something to splurge on at the drop of a hat. Seeing people use money in that way probably digs up a lot of those old issues; at least, I think that's why I get a little uncomfortable with these discussions.
I like reading them, though- I need to understand and force myself to try to see things through different lenses every day. I also appreciate some of the practical advice people like @Law2Doc give about real-world finances, since that's not something I know about. Just my two cents.
- Joined
- Dec 20, 2004
- Messages
- 30,873
- Reaction score
- 10,063
Obviously, but if you read the guy's post I was responding to he was talking about netting 160k on his $200k paycheck from which to purchase a home and to pay down his debt in year one. So all the stuff that comes out of the paycheck (Taxes or otherwise) and lowers the net he has to work with is relevant to his post.
Also I have to agree with jl lin here, regardless of what white coat investor or other web resources might say, some of us actually have very tangible evidence (in the form of pay stubs), of exactly what kind of vig we are paying each month, so you'll really never convince us otherwise.
Last edited:
D
deleted407021
But ... on SDN, everyone has backpacked through every country in Europe, and you should def. do that during your gap year.
- Joined
- Sep 26, 2011
- Messages
- 1,468
- Reaction score
- 820
I seriously wonder if people understand that some people have to stop their education because of finances. Involuntary gap years suck, man. I'm not in school right now because I seriously can not afford it. So I'm trying to find work and save up to finish my pre-reqs and apply in June.
- Joined
- Oct 22, 2013
- Messages
- 8,597
- Reaction score
- 19,854
Ive been all over the income spectrum in my life. I can understand where both sides are coming from.
On the one hand, I agree with @Conflagration that it is very difficult to understand arguments where several times the income your family has ever made is being constantly labeled as "insufficient", "too little", "not worth it" or in the worst cases "unable to support a lavish life". It is almost impossible to take such arguments seriously when 20k or less is all of you have ever known. It's also difficult to hear people talk about taxes as if they are a totally sunk cost. If you are poor but not dirt poor it is very difficult to afford benefits like health, life and car insurance, or get a loan from a bank, or purchase anything on credit for that matter. If you are poor people's taxes pay for your food stamps, Medicare, unemployment, and the grants that help you go to school. When you are a beneficiary of those programs it is unsettling to hear people talk about taxes as if they just disappear into thin air or get tossed into a fire after being collected. When I look at it from this perspective I don't read "and then you only have 60k after taxes and benefit deductions to spend!" and instead I see "Even after paying the government what I owe them and having a part of my income dedicated to my family's insurance plans and legal coverage for my practice, I still have 60k to do whatever I want with!". You're not going to get much empathy from posters on here who don't think that's a paltry sum.
On the other hand, after living in an affluent area I can understand the pressure to want a good lifestyle. Especially if that is all you have ever known, it is scary to think that you could provide less for your children than you received or have to struggle to afford things your family never struggled to afford even if those things are as "necessary" as a BMW M5 and a two story house in a gated community within a metropolitan area. Privileged people don't tend, in my experience, to be unaware of the advantages being wealthy affords them (a few special cases aside) but are instead hyper-aware of how ****ty is to be poor. The thing is if you have never been "poor" you may have a very misguided sense of what that means. I'm not arguing that doctors are poor and anyone who does is a liar but if you have lived on 150-300k your entire life the prospect of only having 50-100 for several years or most of your life can be very frightening.
There's also an important aspect of competition among the wealthy. We see our peers getting very high paying jobs in prestigious fields and feel that we had the same opportunities they had but chose to make less anyways. Knowing that you could have made far more than you will if you made a very small set of different choices (where you went to college, what you majored in, what you did) is probably a reoccurring source of stress for some individuals. This insecurity probably drives many to the "money doesn't matter! Don't do anything for the money! Money is evil!" camp as they are trying to compensate for their insecurity by turning the problem into a moral question which they have the superior answer to when compared to their greedy, degenerate peers.
Finally, I think you just look at money differently depending on how much of it you have. When we were poor, money was (and I still look at it this way) simply a means to an end. It buys us the stuff we need to live and that's it. For that reason, having it is very nice and making it is important. However, after it meets its initial utility, it's fairly inconsequential. Maybe we go to a nice restaurant or take a nice vacation every now and then but even in those situations (which my family can now afford) we feel very out of place and I think even guilty at times at the level of decadence and indulgence. Even if we can afford the nice steak we may go for the cheaper option just because the steak seems extravagantly priced. I guess my family still thinks as if we were poor rather than wealthy. We are not comfortable amongst the country club crowd.
When you are wealthy money can be seen as an end in and of itself. You go to school to make money. You invest wisely to make more money. You make prudent financial decisions because you can earn more money. You pick a job because it pays more. You don't spend and instead amass your wealth so that you can leave more money for your kids. What the money gets you is not as important as having it and having a lot of it.
On the one hand, I agree with @Conflagration that it is very difficult to understand arguments where several times the income your family has ever made is being constantly labeled as "insufficient", "too little", "not worth it" or in the worst cases "unable to support a lavish life". It is almost impossible to take such arguments seriously when 20k or less is all of you have ever known. It's also difficult to hear people talk about taxes as if they are a totally sunk cost. If you are poor but not dirt poor it is very difficult to afford benefits like health, life and car insurance, or get a loan from a bank, or purchase anything on credit for that matter. If you are poor people's taxes pay for your food stamps, Medicare, unemployment, and the grants that help you go to school. When you are a beneficiary of those programs it is unsettling to hear people talk about taxes as if they just disappear into thin air or get tossed into a fire after being collected. When I look at it from this perspective I don't read "and then you only have 60k after taxes and benefit deductions to spend!" and instead I see "Even after paying the government what I owe them and having a part of my income dedicated to my family's insurance plans and legal coverage for my practice, I still have 60k to do whatever I want with!". You're not going to get much empathy from posters on here who don't think that's a paltry sum.
On the other hand, after living in an affluent area I can understand the pressure to want a good lifestyle. Especially if that is all you have ever known, it is scary to think that you could provide less for your children than you received or have to struggle to afford things your family never struggled to afford even if those things are as "necessary" as a BMW M5 and a two story house in a gated community within a metropolitan area. Privileged people don't tend, in my experience, to be unaware of the advantages being wealthy affords them (a few special cases aside) but are instead hyper-aware of how ****ty is to be poor. The thing is if you have never been "poor" you may have a very misguided sense of what that means. I'm not arguing that doctors are poor and anyone who does is a liar but if you have lived on 150-300k your entire life the prospect of only having 50-100 for several years or most of your life can be very frightening.
There's also an important aspect of competition among the wealthy. We see our peers getting very high paying jobs in prestigious fields and feel that we had the same opportunities they had but chose to make less anyways. Knowing that you could have made far more than you will if you made a very small set of different choices (where you went to college, what you majored in, what you did) is probably a reoccurring source of stress for some individuals. This insecurity probably drives many to the "money doesn't matter! Don't do anything for the money! Money is evil!" camp as they are trying to compensate for their insecurity by turning the problem into a moral question which they have the superior answer to when compared to their greedy, degenerate peers.
Finally, I think you just look at money differently depending on how much of it you have. When we were poor, money was (and I still look at it this way) simply a means to an end. It buys us the stuff we need to live and that's it. For that reason, having it is very nice and making it is important. However, after it meets its initial utility, it's fairly inconsequential. Maybe we go to a nice restaurant or take a nice vacation every now and then but even in those situations (which my family can now afford) we feel very out of place and I think even guilty at times at the level of decadence and indulgence. Even if we can afford the nice steak we may go for the cheaper option just because the steak seems extravagantly priced. I guess my family still thinks as if we were poor rather than wealthy. We are not comfortable amongst the country club crowd.
When you are wealthy money can be seen as an end in and of itself. You go to school to make money. You invest wisely to make more money. You make prudent financial decisions because you can earn more money. You pick a job because it pays more. You don't spend and instead amass your wealth so that you can leave more money for your kids. What the money gets you is not as important as having it and having a lot of it.
D
deleted480308
When your money is taken from you and given to someone you didn't want to give it to.....it's a sunk cost
But I agree with you that some people's obsession with proving they don't actually think money is important is about trying to pat themselves on the back
- Joined
- Oct 22, 2013
- Messages
- 8,597
- Reaction score
- 19,854
Like I've tried to convince you of before, taxation is not coercion. You enjoy the benefits of your and other people's tax money and therefore it is not a sunk cost.
D
deleted480308
I don't enjoy the benefit of buying someone I don't know food stamps or subsidizing their housing. That is a sunk cost.
D
deleted407021
D
deleted480308
A well structured argument indeed
D
deleted407021
You're taking teh Interwebz too seriously on this fine Saturday morning, sir.
D
deleted480308
You have me there...kudos
