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April 24, 2017

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Ayuuup. This is how someone who brings in $100k a year can still be considered poor. In my view, a person isn't genuinely rich unless they can live beneath their means. That means you can be rich regardless of income, as long as you live below the money you bring in.

I don't see a link to the original survey in the article, but if their raw data includes zip code, it should be able to tell how much is related to local cost of living. In silicon valley there's over a million "households that brought home a combined income of $75,000 or more" because median household income is >90K here, and due to high housing costs, those at the low end of this range are very likely unable to save. The question would be whether this subset has about the same paycheck-to-paycheck rate as the >75K in zipcodes in flyover, and I would guess the answer is it's much higher. I think this distinction is important because if a family is living paycheck-to-paycheck while building up home equity, that's really savings as opposed to consumption which is gone forever.

Amen FMF! It's amazing how many people don't get that it's not income or net worth alone but the RATIO of Net Worth to Living Expenses that determine your financial independence. Even mainstream media misses this often. Also, it is important to translate the high income to corresponding net worth if anyone is interested in FIRE.

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