4 ms·

What's your definition of rich white people? Just curious. AFAIK I've never met any "rich white people" of the type portrayed in nearly every Hollywood movie ab

What's your definition of rich white people? Just curious. AFAIK I've never met any "rich white people" of the type portrayed in nearly every Hollywood movie about school (high school or collage). I'm not saying they don't exist just that I haven't met any so I'm wondering if maybe I did and didn't know it. I certainly didn't met any kids in high school that had any kind of money to flash (a fancy car or other expensive things to show off).

Retric 10y ago
I worked near a 'nice' high school whose parking lot was filled with BMW's. Which is not really 'rich' but dual income in that area often meant 300+k family income by the time kids where in high school. Economically this meant a 5 year old car that might have been 50k new was not really unusual. In many ways the gap between 30k / year and 300k/year is larger than the gap between 300k / year and 3 million per year. PS: I actually know several people that inhered low to mid 7 figures. But, they are really more upper middle class than the kind of 'Rich' you see in a Hollywood film. But, plenty of people would consider that rich.
- mconzen 10y ago
  Considering the median salary in the USA is $51939, which is the equivalent of 5.1% return on $1M cash, I would say the plenty of people who consider that more than "upper middle class" are correct.
  - Retric 10y ago
    5.1% return above average but still reasonable. However, inflation is ~2.5 - 3%. So, unless your spending principle that's 21k/year ignoring taxes. Also, many people get discounts on health insurance and other benefits that don't apply. Sure, you can burn down your principle based on life expectancy. But that's only really useful if your old. At 40 even 1% in your first year will probably cause you to run out of money.
    - cjlars 10y ago
      Long term returns on the S&P 500 have averaged ~7% real returns including dividends. In personal finance there's a "4% Rule" which is supposed to be your target annual withdrawal if you're living off the money as a retiree. The 3% spread allows for market crashes, long periods of stagnancy in returns and a small increase in living standards as you age, however, if you're young I do agree a smaller 2-3% withdrawal level is appropriate. source: http://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp http://www.investopedia.com/ask/answers/042415/what-average-...
      - Retric 10y ago
        Good point, though the S&P has not averaged 7% annual returns if you consider reverse cost dollar averaging. There where two decades when the S&P went negative in real terms including dividend reinvestment. It's actually tricky to find what percentage you could take out every year from 1950 to now and have the same amount adjusted for inflation at the end, and that's assuming things don't get worse. Basically, you take out a lower percentage of your money on good years than bad. Further, you need to take taxes out to cover inflation. Aka, you pay taxes on 7% even if your real return was only 4%. PS: There is a reason many institutions are ok with a very steady 3.5% ROI there is a lot of risk going for more.
      - hkmurakami 10y ago
        You're not putting 100% of your portfolio in equities if you're living off its cash flow [1]. ZIRP means your fixed income can flow is weak. Things to consider when allocating as a retiree. [1] imo it's okay to do this while you're in the workforce since you're salary effectively acts as your fixed income portion of the portfolio.
        cjlars 10y ago
        My prior comment may not have been 100% correct. I believe the specific research that lead to the so called 4% rule did include a mix of stocks and bonds. As you point out, you would tend to roll back your risk tolerance as you reach retirement. Here's more on it for anyone interested: http://blog.cordantwealth.com/how-much-can-i-spend-in-retirement-our-take-on-the-4-rule http://blog.cordantwealth.com/how-much-can-i-spend-in-retire...?
- ido 10y ago
  In old movies, you definitely see "millionaires" as the definition of "rich". $1m in 1950 is about $10m today, so that seems like a pretty safe bet for "Hollywood rich".
  - Retric 10y ago
    1950 1m as the gateway for millionaire ~= 10m today so having 6m is close, but not quite there yet. Considering there are 1,810+ billionaires globally you have not heard of most of these people. But, if someone is defined as unusually rich not just 'comfortable' that seems to be the new movie millionaire.
misterbowfinger 10y ago
Tbh, my definition would be based less on fact than feeling. I lived in Brooklyn, and not terribly nice area of Brooklyn, so to me, "rich white people" were the ones who lived in nice apartments in Manhattan, or in really nice neighborhoods in Brooklyn. So I'd doubt all of their parents made more than 1mil/year, but I'm sure some did. If I had to ballpark, they probably made ~500k/year on average. > I certainly didn't met any kids in high school that had any kind of money to flash (a fancy car or other expensive things to show off). I've never met anyone that's similar to Hollywood movie characters. I'm not sure they really "flashed" their money, but it was clear they had access to nice things. Their clothes were definitely nicer, their parents would take them out to plays and expensive dinners. It's possible this is the case because I grew up in NYC as opposed to the suburbs. The stereotypical "rich white person" in New York is exorbitantly rich. Maybe I'm just referring to those who were upper-middle class

Retric 10y ago

I worked near a 'nice' high school whose parking lot was filled with BMW's. Which is not really 'rich' but dual income in that area often meant 300+k family income by the time kids where in high school. Economically this meant a 5 year old car that might have been 50k new was not really unusual. In many ways the gap between 30k / year and 300k/year is larger than the gap between 300k / year and 3 million per year. PS: I actually know several people that inhered low to mid 7 figures. But, they are really more upper middle class than the kind of 'Rich' you see in a Hollywood film. But, plenty of people would consider that rich.

mconzen 10y ago
Considering the median salary in the USA is $51939, which is the equivalent of 5.1% return on $1M cash, I would say the plenty of people who consider that more than "upper middle class" are correct.
- Retric 10y ago
  5.1% return above average but still reasonable. However, inflation is ~2.5 - 3%. So, unless your spending principle that's 21k/year ignoring taxes. Also, many people get discounts on health insurance and other benefits that don't apply. Sure, you can burn down your principle based on life expectancy. But that's only really useful if your old. At 40 even 1% in your first year will probably cause you to run out of money.
  - cjlars 10y ago
    Long term returns on the S&P 500 have averaged ~7% real returns including dividends. In personal finance there's a "4% Rule" which is supposed to be your target annual withdrawal if you're living off the money as a retiree. The 3% spread allows for market crashes, long periods of stagnancy in returns and a small increase in living standards as you age, however, if you're young I do agree a smaller 2-3% withdrawal level is appropriate. source: http://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp http://www.investopedia.com/ask/answers/042415/what-average-...
    - Retric 10y ago
      Good point, though the S&P has not averaged 7% annual returns if you consider reverse cost dollar averaging. There where two decades when the S&P went negative in real terms including dividend reinvestment. It's actually tricky to find what percentage you could take out every year from 1950 to now and have the same amount adjusted for inflation at the end, and that's assuming things don't get worse. Basically, you take out a lower percentage of your money on good years than bad. Further, you need to take taxes out to cover inflation. Aka, you pay taxes on 7% even if your real return was only 4%. PS: There is a reason many institutions are ok with a very steady 3.5% ROI there is a lot of risk going for more.
    - hkmurakami 10y ago
      You're not putting 100% of your portfolio in equities if you're living off its cash flow [1]. ZIRP means your fixed income can flow is weak. Things to consider when allocating as a retiree. [1] imo it's okay to do this while you're in the workforce since you're salary effectively acts as your fixed income portion of the portfolio.
      - cjlars 10y ago
        My prior comment may not have been 100% correct. I believe the specific research that lead to the so called 4% rule did include a mix of stocks and bonds. As you point out, you would tend to roll back your risk tolerance as you reach retirement. Here's more on it for anyone interested: http://blog.cordantwealth.com/how-much-can-i-spend-in-retirement-our-take-on-the-4-rule http://blog.cordantwealth.com/how-much-can-i-spend-in-retire...?
ido 10y ago
In old movies, you definitely see "millionaires" as the definition of "rich". $1m in 1950 is about $10m today, so that seems like a pretty safe bet for "Hollywood rich".
- Retric 10y ago
  1950 1m as the gateway for millionaire ~= 10m today so having 6m is close, but not quite there yet. Considering there are 1,810+ billionaires globally you have not heard of most of these people. But, if someone is defined as unusually rich not just 'comfortable' that seems to be the new movie millionaire.

misterbowfinger 10y ago

Tbh, my definition would be based less on fact than feeling. I lived in Brooklyn, and not terribly nice area of Brooklyn, so to me, "rich white people" were the ones who lived in nice apartments in Manhattan, or in really nice neighborhoods in Brooklyn. So I'd doubt all of their parents made more than 1mil/year, but I'm sure some did. If I had to ballpark, they probably made ~500k/year on average. > I certainly didn't met any kids in high school that had any kind of money to flash (a fancy car or other expensive things to show off). I've never met anyone that's similar to Hollywood movie characters. I'm not sure they really "flashed" their money, but it was clear they had access to nice things. Their clothes were definitely nicer, their parents would take them out to plays and expensive dinners. It's possible this is the case because I grew up in NYC as opposed to the suburbs. The stereotypical "rich white person" in New York is exorbitantly rich. Maybe I'm just referring to those who were upper-middle class