5 ms·

If you make >100k, I can assure you, you are not middle class. You are part of the "not rich enough" class. This class has a lot of money and can reasonably d

If you make >100k, I can assure you, you are not middle class. You are part of the "not rich enough" class. This class has a lot of money and can reasonably do anything they want, but compare themselves to the ultra rich and think "I'm not rich". The problem is they are always looking up and forget to look down. I grew up in a ~30k household in the 90's. Something I would call lower middle class. Upper middle class is probably ~70k-100k.

nilkn 13y ago
Please tell me you're taking into account cost of living here. $100k does not go very far in San Francisco and Manhattan. Nobody making $100k in those places could reasonably afford a Tesla without severe over-spending (which they're welcome to do if they want to--whatever floats your boat). If you view the middle class as owning detached single family homes with yards, you would be lower middle class at best in those cities at $100k. If your spouse also made $100k, you could afford the crappiest single family home that was still livable. But it's a really good salary in Denver or Houston; you could definitely find a nice house to buy and afford comfortably, though it might have a bit of a commute. If your spouse also made $100k, you could afford a nice home in any neighborhood with no commute. And it might nearly qualify you as wealthy in a small rural town of 15k people total, where you would never need to spend more than $150k on any house.
- farinasa 13y ago
  Of course it's not a universal statement. Estimates are never aimed at outliers.
  - mixmastamyk 13y ago
    People in San Francisco, Manhattan, and London are a major constituency here... not outliers.
    - joshred 13y ago
      Population of earth: 7.1 billion. Population of San Francisco: 0.8 Million. Population of Manhattan: 1.6 Million. Population of London: 8.1 million. Percentage of the world's population living in either San Francisco, Manhattan or London: ~0.0015% Exactly what do you think an outlier is? If you live in one of those three urban areas, you're already a member of an elite class.
      - nilkn 13y ago
        He was referring to the Hacker News demographic, where these places are not such an outlier, and whether or not living in a place like San Francisco puts you in an elite class you still could not reasonably afford both a nice place to live and a Tesla there on $100k, which was my original point. But I don't really understand why living in an expensive urban area automatically puts one in an elite class. The standard of living is not much better than other places for one thing--what you gain in diversity is lost in housing conditions. Also, it's not like $100k wages there are super rare. You don't need to be a 4.0 Ivy League graduate to score a livable wage in San Francisco. That's the starting salary for a lot of professions in cities like that, not just software developers. Police officers in the SFPD can make as much as a Twitter engineer fresh out of Stanford: http://www.sf-police.org/index.aspx?page=1655 http://www.sf-police.org/index.aspx?page=1655
      - benatkin 13y ago
        Very good point. I would, however, write that as 0.15%.
        joshred 13y ago
        Derp. Thanks. Edit: I can't edit my prior comment. Time window?
        benatkin 13y ago
        Apparently. I'm not crazy about percent notation. I find it confusing. I might have written it thusly: > 0.0015 of Earth's population are living in San Francisco, Manhattan or London
- runamok 13y ago
  Cost of living is always a factor. I live in the bay area. The salary of a programmer is usually 6 figures here. Granted it's almost impossible to buy a home but if you are frugal with your rent ( for instance getting roommates or living further from your job or in a less hip neighborhood) you have a pretty large amount of disposable income. Teslas don't cost less in South Dakota than northern California. I think cost if living is sometimes overstated because besides housing I don't find other critical staples like food, insurance, utilities to differ appreciably by state. If you want to own THEN the situation changes dramatically.
  - nilkn 13y ago
    I'm not really sure what you're getting at. Having to move far out and getting several roommates just to swing the payments on your Model S is not exactly my idea of comfortably affording the car. I wouldn't buy a Tesla on $100k in North Dakota either. Maybe, if I felt like blowing through money, I'd get a BMW 3 series or Audi A4, both of which are still considerably cheaper than a Model S.
    - runamok 13y ago
      I'm not disagreeing with you re: the Tesla S is way out of reach of someone "only" making $100k. I was just pointing out that besides housing (especially owning) the cost of almost everything in CA is the same if you move somewhere where the cost of living is lower yet the salaries elsewhere are significantly less. So there is an opportunity to save a lot of money if you are willing to compromise somewhat on your living conditions. I suppose it depends on whether you think it's important to own your home and/or you mind having roommates. When I first moved to CA I had severe sticker shock re: the rents so I rented a room in nice houses with other young professionals for the first 5 or so years I lived here.
- declan 13y ago
  Exactly. Also, California is the highest-taxed state in the republic, so adjust that pre-tax salary of $100K downward a bit more in real terms. Consumer goods like cars and laptops and TVs will cost the same, to a first approximation, anywhere in the continental U.S. But in some coastal areas, you have real estate costs that are 20x that of cheaper areas with salaries/compensation packages that are generally not 20x higher. In central Pennsylvania towns the median household income, for instance, tends to be around $26K and the median house cost is $64K, meaning houses are 2.5X median income. In Palo Alto, on the other hand, the median house cost is around $2.25M, and the median family income is around $160K, meaning houses are 13.75X median income. Part of this are older PA families who bought when land was cheap many decades ago and are grandfathered in with lower tax rates, but part of this is also people who are stretching their finances dangerously to be able to afford there. (Even though those $2.25M median homes are often smaller than the national average, measured by square footage.) It's possible to make $100K in the SF bay area and be, in real terms, poorer than someone making half that in central Pennsylvania.
- encoderer 13y ago
  Here in SF, housing costs are significantly higher. Other costs are somewhat higher. But you know what isn't? Mass produced consumer goods for one. An xbox (or tesla) costs the same whether you make $100k in SF or $50k in middle America. You know what else? Travel. Domestic and international travel is a LOT more affordable when you're making $100k in SF. And a big one: Retirement. You sock away your SF salary for 40 years and then retire in a cheaper COL area with no state income tax. The truth is, even here, $100k is a lot of money. It really is. It's not rich by any stretch, but it's certainly not average middle class living. It is frustrating that a couple making over $200k can hardly buy 1000sq ft house while staying inside 30% (of gross income) housing budget, a metric widely seen as "affordable housing." But still, on balance, that couple making $200k is doing very, very well. And the truth is, there are a lot of engineers here that, with liquidity events (which might just mean vesting your RSU's in an already public company), are earning $200k a year. That literally puts you in the top 1% of wage earners. (But not in THE "1%" of course which is usually a term referring to net worth and not gross income. But still.) Edit: The math is different of course if/when you add children to the mix. But I deliberately left them out, because in reality, it's just not a common lifestyle choice in San Francisco.
  - etjossem 13y ago
    "You sock away your SF salary for 40 years and then retire in a cheaper COL area with no state income tax." Small correction -- state income tax in CA is a big deal even if you're saving for retirement. And once you retire, you presumably won't care what the state income tax is.
    - encoderer 13y ago
      That's not how it works. Retirement savings goes into tax advantaged accounts like 401ks and iras. This is pre tax income. You pay the taxes at the end, when you're drawing from your accounts during retirement.
      - etjossem 13y ago
        Not necessarily; you might have chosen a Roth for individual retirement savings. The contribution limit on that type of account is effectively higher than a traditional IRA, since it's expressed in post-tax dollars - very useful for someone trying to stash away as much as possible. Once the money is in the account, it grows tax-free. But for those people, taxes are immediate rather than deferred.

nilkn 13y ago

Please tell me you're taking into account cost of living here. $100k does not go very far in San Francisco and Manhattan. Nobody making $100k in those places could reasonably afford a Tesla without severe over-spending (which they're welcome to do if they want to--whatever floats your boat). If you view the middle class as owning detached single family homes with yards, you would be lower middle class at best in those cities at $100k. If your spouse also made $100k, you could afford the crappiest single family home that was still livable. But it's a really good salary in Denver or Houston; you could definitely find a nice house to buy and afford comfortably, though it might have a bit of a commute. If your spouse also made $100k, you could afford a nice home in any neighborhood with no commute. And it might nearly qualify you as wealthy in a small rural town of 15k people total, where you would never need to spend more than $150k on any house.

farinasa 13y ago
Of course it's not a universal statement. Estimates are never aimed at outliers.
- mixmastamyk 13y ago
  People in San Francisco, Manhattan, and London are a major constituency here... not outliers.
  - joshred 13y ago
    Population of earth: 7.1 billion. Population of San Francisco: 0.8 Million. Population of Manhattan: 1.6 Million. Population of London: 8.1 million. Percentage of the world's population living in either San Francisco, Manhattan or London: ~0.0015% Exactly what do you think an outlier is? If you live in one of those three urban areas, you're already a member of an elite class.
    - nilkn 13y ago
      He was referring to the Hacker News demographic, where these places are not such an outlier, and whether or not living in a place like San Francisco puts you in an elite class you still could not reasonably afford both a nice place to live and a Tesla there on $100k, which was my original point. But I don't really understand why living in an expensive urban area automatically puts one in an elite class. The standard of living is not much better than other places for one thing--what you gain in diversity is lost in housing conditions. Also, it's not like $100k wages there are super rare. You don't need to be a 4.0 Ivy League graduate to score a livable wage in San Francisco. That's the starting salary for a lot of professions in cities like that, not just software developers. Police officers in the SFPD can make as much as a Twitter engineer fresh out of Stanford: http://www.sf-police.org/index.aspx?page=1655 http://www.sf-police.org/index.aspx?page=1655
    - benatkin 13y ago
      Very good point. I would, however, write that as 0.15%.
      - joshred 13y ago
        Derp. Thanks. Edit: I can't edit my prior comment. Time window?
        benatkin 13y ago
        Apparently. I'm not crazy about percent notation. I find it confusing. I might have written it thusly: > 0.0015 of Earth's population are living in San Francisco, Manhattan or London
runamok 13y ago
Cost of living is always a factor. I live in the bay area. The salary of a programmer is usually 6 figures here. Granted it's almost impossible to buy a home but if you are frugal with your rent ( for instance getting roommates or living further from your job or in a less hip neighborhood) you have a pretty large amount of disposable income. Teslas don't cost less in South Dakota than northern California. I think cost if living is sometimes overstated because besides housing I don't find other critical staples like food, insurance, utilities to differ appreciably by state. If you want to own THEN the situation changes dramatically.
- nilkn 13y ago
  I'm not really sure what you're getting at. Having to move far out and getting several roommates just to swing the payments on your Model S is not exactly my idea of comfortably affording the car. I wouldn't buy a Tesla on $100k in North Dakota either. Maybe, if I felt like blowing through money, I'd get a BMW 3 series or Audi A4, both of which are still considerably cheaper than a Model S.
  - runamok 13y ago
    I'm not disagreeing with you re: the Tesla S is way out of reach of someone "only" making $100k. I was just pointing out that besides housing (especially owning) the cost of almost everything in CA is the same if you move somewhere where the cost of living is lower yet the salaries elsewhere are significantly less. So there is an opportunity to save a lot of money if you are willing to compromise somewhat on your living conditions. I suppose it depends on whether you think it's important to own your home and/or you mind having roommates. When I first moved to CA I had severe sticker shock re: the rents so I rented a room in nice houses with other young professionals for the first 5 or so years I lived here.
declan 13y ago
Exactly. Also, California is the highest-taxed state in the republic, so adjust that pre-tax salary of $100K downward a bit more in real terms. Consumer goods like cars and laptops and TVs will cost the same, to a first approximation, anywhere in the continental U.S. But in some coastal areas, you have real estate costs that are 20x that of cheaper areas with salaries/compensation packages that are generally not 20x higher. In central Pennsylvania towns the median household income, for instance, tends to be around $26K and the median house cost is $64K, meaning houses are 2.5X median income. In Palo Alto, on the other hand, the median house cost is around $2.25M, and the median family income is around $160K, meaning houses are 13.75X median income. Part of this are older PA families who bought when land was cheap many decades ago and are grandfathered in with lower tax rates, but part of this is also people who are stretching their finances dangerously to be able to afford there. (Even though those $2.25M median homes are often smaller than the national average, measured by square footage.) It's possible to make $100K in the SF bay area and be, in real terms, poorer than someone making half that in central Pennsylvania.
encoderer 13y ago
Here in SF, housing costs are significantly higher. Other costs are somewhat higher. But you know what isn't? Mass produced consumer goods for one. An xbox (or tesla) costs the same whether you make $100k in SF or $50k in middle America. You know what else? Travel. Domestic and international travel is a LOT more affordable when you're making $100k in SF. And a big one: Retirement. You sock away your SF salary for 40 years and then retire in a cheaper COL area with no state income tax. The truth is, even here, $100k is a lot of money. It really is. It's not rich by any stretch, but it's certainly not average middle class living. It is frustrating that a couple making over $200k can hardly buy 1000sq ft house while staying inside 30% (of gross income) housing budget, a metric widely seen as "affordable housing." But still, on balance, that couple making $200k is doing very, very well. And the truth is, there are a lot of engineers here that, with liquidity events (which might just mean vesting your RSU's in an already public company), are earning $200k a year. That literally puts you in the top 1% of wage earners. (But not in THE "1%" of course which is usually a term referring to net worth and not gross income. But still.) Edit: The math is different of course if/when you add children to the mix. But I deliberately left them out, because in reality, it's just not a common lifestyle choice in San Francisco.
- etjossem 13y ago
  "You sock away your SF salary for 40 years and then retire in a cheaper COL area with no state income tax." Small correction -- state income tax in CA is a big deal even if you're saving for retirement. And once you retire, you presumably won't care what the state income tax is.
  - encoderer 13y ago
    That's not how it works. Retirement savings goes into tax advantaged accounts like 401ks and iras. This is pre tax income. You pay the taxes at the end, when you're drawing from your accounts during retirement.
    - etjossem 13y ago
      Not necessarily; you might have chosen a Roth for individual retirement savings. The contribution limit on that type of account is effectively higher than a traditional IRA, since it's expressed in post-tax dollars - very useful for someone trying to stash away as much as possible. Once the money is in the account, it grows tax-free. But for those people, taxes are immediate rather than deferred.