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Old 06-08-2010, 03:30 PM   #61
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Does you income level, clothing, etc. affect how you are perceived by others? Of course. It is popular to deny this, but at least 75 years of research and hundereds of years of literature suggest otherwise. And do others' perseptions of your income and social standing affect your own contentment? Again, I would expect many denials, but research and human history and culture suggests very strongly otherwise.

So there can be large disconnects between what works for the experiencing self, and what feeds the remembering self.

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I think you are right. Income, clothing, cars and homes do affect how we are perceived by others (and how we perceive others). But I think that many people on this board really don't care how they are perceived by others. Attitude, I think, is the key. That's why we have so many people living happily on what might otherwise be considered a middle class income. Maybe we are wired differently.

I don't really know how people perceive DW and me. Our careers are not considered lucrative or prestigious, we drive low key Japanese cars, our house is in a middle class neighborhood, etc... Just looking at how we live, there is no way any one could guess we are comfortably in the top tax bracket (we live on only 17% of our gross income, the rest goes to taxes and Vanguard and remains unseen from the public). For all intended purposes, we look squarely middle class. It doesn't bother us at all. When people that I perceive as "rich" invite us for a cocktail party at their 5,000 sq. ft. house with pool, I feel no shame parking my Toyota in their driveway and sporting my well-cut Banana Republic suit in the middle of a sea of Armani suits. And I feel no shame hosting a dinner party for those "rich" people in my "humble adobe" either.

Don't get me wrong, keeping ahead of the pack is important for my own contentment. It's just that we do not seek validation from other people. I can't deny that having an income higher than the vast majority of Americans is a great source of personal satisfaction and confidence. Sometimes, I wonder how it will feel to see our income plunge to middle class levels when we retire. I guess, at that point, the knowledge that our net worth is higher than that of the vast majority of Americans will become a great source of personal satisfaction and confidence. It is vastly different to live on $60K a year with $2M stashed in a bank account and live on $60K a year with no safety net. The two situations might not be perceived as different by the casual onlooker (who only sees the $60K lifestyle), but the difference is real nonetheless.
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Old 06-08-2010, 05:18 PM   #62
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Don't get me wrong, keeping ahead of the pack is important for my own contentment. It's just that we do not seek validation from other people. I can't deny that having an income higher than the vast majority of Americans is a great source of personal satisfaction and confidence. Sometimes, I wonder how it will feel to see our income plunge to middle class levels when we retire. I guess, at that point, the knowledge that our net worth is higher than that of the vast majority of Americans will become a great source of personal satisfaction and confidence. It is vastly different to live on $60K a year with $2M stashed in a bank account and live on $60K a year with no safety net. The two situations might not be perceived as different by the casual onlooker (who only sees the $60K lifestyle), but the difference is real nonetheless.
I agree completely. It's the same psychology of a guy driving an old Dodge Dart with a big hemi engine. Kind of a reverse snobbery. We are all snobs of one kind or another. A close reading of this board is all you need to prove that. Some, like you, have insight into this, some others may be thinking this way without realizing what they are depending on to maintain a high level of satisfaction in their rembering selves.

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Old 06-08-2010, 08:40 PM   #63
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I think you are right. Income, clothing, cars and homes do affect how we are perceived by others (and how we perceive others). But I think that many people on this board really don't care how they are perceived by others.
I went into Fidelity a couple of weeks ago to open an account. I looked even crappier than usual. I had on baggy clothes, wild hair and generally looked like cr@p. I had just come back from the midwest where I spent two weeks dismantling my childhood home (Mom died in December). On top of that I had been sick in bed for two days and could barely talk.

They were polite to me when I walked in but as time went on I detected a change in their attitude to one of bending over backward to welcome me. I had given them info like my annual salary, estimated net worth and the size of the account I would be transferring to them. I also told them I had another account at Vanguard and which ever firm I liked better would get the combined accounts.

I kind of chuckled later as I pictured what I looked like compared to my net worth. I'm sure they have seen much higher net worth individuals looking not so rich before though.
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Old 06-08-2010, 10:17 PM   #64
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I agree completely. It's the same psychology of a guy driving an old Dodge Dart with a big hemi engine. Kind of a reverse snobbery. We are all snobs of one kind or another. A close reading of this board is all you need to prove that. Some, like you, have insight into this, some others may be thinking this way without realizing what they are depending on to maintain a high level of satisfaction in their rembering selves.

Ha
I agree. I'd like to think of myself as someone who is frugal-minded and don't care about frivolous things such as appearances. However, I know when I am upgraded to first class on a flight (because of my frequent-flier status, based on no merit of my own), I feel just a little snobbish for being able to board first. It's silly and I try not to feel that way, but I can feel it's there.
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What's $60k?
Old 06-08-2010, 10:44 PM   #65
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What's $60k?

As seems so typical with articles like this, the author/speaker fails to do an adequate job of defining what the $60k is.

Pre or post tax?

For a couple or a single?

Are there non-cash income sources beyond the $60k? These might include company or govt paid hospitalization insurance, the equvalent value of a owned home, car or other major capital items.

High or low cost of living area?

For DW and I, given a paid for house, new cars, someone else paying our $12k/yr hospitalization insurance bill, MIL not needing financial help, no extended family issues we need to help with and no other unexpected financial "surprises," $60K/yr post tax each would work out just fine......
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Old 06-09-2010, 09:34 AM   #66
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Don't get me wrong, keeping ahead of the pack is important for my own contentment. It's just that we do not seek validation from other people. I can't deny that having an income higher than the vast majority of Americans is a great source of personal satisfaction and confidence. Sometimes, I wonder how it will feel to see our income plunge to middle class levels when we retire. I guess, at that point, the knowledge that our net worth is higher than that of the vast majority of Americans will become a great source of personal satisfaction and confidence. It is vastly different to live on $60K a year with $2M stashed in a bank account and live on $60K a year with no safety net. The two situations might not be perceived as different by the casual onlooker (who only sees the $60K lifestyle), but the difference is real nonetheless.
You are very right. Typically when I'm looking at the neighbors 5,000 sq ft home and fancy cars I'm thinking to myself about the size of the mortgage and other loans he carries (The "Big Hat" metaphor) and a feeling of quiet contentedness comes over me when I think that my $60 k/year expenditures (where I've actually been for many years) are backed by substantial NW - and zero debts
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Old 06-09-2010, 10:08 AM   #67
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I went into Fidelity a couple of weeks ago to open an account. I looked even crappier than usual. I had on baggy clothes, wild hair and generally looked like cr@p. I had just come back from the midwest where I spent two weeks dismantling my childhood home (Mom died in December). On top of that I had been sick in bed for two days and could barely talk.

They were polite to me when I walked in but as time went on I detected a change in their attitude to one of bending over backward to welcome me. I had given them info like my annual salary, estimated net worth and the size of the account I would be transferring to them. I also told them I had another account at Vanguard and which ever firm I liked better would get the combined accounts.

I kind of chuckled later as I pictured what I looked like compared to my net worth. I'm sure they have seen much higher net worth individuals looking not so rich before though.
I used to - briefly - be a financial planner. (One of many former careers...) I learned very quickly not to assume anything based on what people wore. Some of the richest clients came in dressed out of Wal-Mart.

That job WAS an eye-opener as to what people thought was normal - like always having $5K in credit card debt (not current - paying interest) when their salaries were entirely sufficient to pay it off. Always having a car loan. I had never lived like that...

Sorry to hear about your mother - mine died abruptly 2 years ago and it's still rough.
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Old 06-09-2010, 10:57 AM   #68
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We used to volunteer at oriental rug shows - we got to get really up close and personal with some museum quality carpets and avoided participant fees, which were quite healthy. I remember exhibitors showing just some of the rugs from their collections - hundreds of thousands of dollars worth of wool and silk - and a couple that impressed me the most was just the nicest dumpy middle aged down to earth pair you would ever want to meet. Checked shirts over Ts. They knew their stuff, they had great rugs, they could have bought and sold groups of the other participants, and they wouldn't have raised an eyebrow at any small town hardware store. That's when we started using the phrase "dress like a millionaire". When you got it you don't need to flaunt it.

In contrast, a good friend works hard and well, makes very decent money, and spends pretty much all of it on travel and high end equipment. He uses his toys though, and knows what every button does on all his gear. He drinks the good stuff, dresses well, drives very nice frequently replaced cars - can't say that there is anything at all wrong with his style of life either.
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Old 06-10-2010, 10:09 AM   #69
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Thought the primary determinate of happiness for a person was comparison to one's peer group. If your neighborhood is all making ~$25k and you are making $35k life is good. If your neighborhood is all making $45k and you are making $35k, not so much. If Fritz' $50k median US income is correct, then that $60k number should be pretty true in most neighborhoods. Lots of different levels, and if you are floating at the top of yours you are happy. Level creep is the joy killer - I was happy with margarine till I had butter.

Completely agree with this and have read studies to back that up. This is why the $60K number works nationwide. It means you are making more than most nationally and thus "happy".

Before reading any of these articles I had come to the same conclusion about myself. For me the number was slightly higher and around $75K. I have been no happier and spent no more money as my income has risen past that level. However, the more I make past $75K the more I am saving, which means the sooner that I can quit working (which will make me VERY happy). So it depends on how you look at it. Making more is going to take me to the ultimate "happiness level" sooner.
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Old 06-10-2010, 10:17 AM   #70
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I think $60K per year would be the sweet spot for most people too--it is enough money to support almost any lifestyle less than country-club living.

But isn't it funny to look back at ourselves starting out, making hardly any money, and remember that time as the best days of our lives....
A lot of truth to that. The most fun I ever had in my life was the four years I spent in college and I only had about $30 per week to spend on entertainment. $25 of that probably went toward beer with the occasional late night burrito or pizza soaking up the rest!

However, I have been working for megacorp ever since so when I FIRE, perhaps I will get to experience even better times.
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Old 06-10-2010, 10:52 AM   #71
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Because we are creatures of comparison, it’s harder to get happier and happier
Net-Worth Obsession - NYTimes.com
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Old 06-10-2010, 12:57 PM   #72
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I'm pretty happy at my current ~$50k, but was happier at ~$85k...

Not because I bought more "stuff", but because I could save/invest more, and splurge without much thought. I'm not real big into stuff anyway, and my cheap bastardhood expenses are ~$25k...
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Old 06-10-2010, 01:59 PM   #73
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My wife and I, combined, get, after taxes, around 80.000 euros/year, with adjustment to the cost of living index. No family charges. What would our lifestyle in the USA be like?
Donīt worry, we arenīt about to impose ourselves on you all! If we were younger....
Itīs yet another of my absurd questions.....
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Old 06-10-2010, 02:12 PM   #74
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My wife and I, combined, get, after taxes, around 80.000 euros/year, with adjustment to the cost of living index.
Not knowing how the cost of living here (Northern Mexico ) compares to where you live in Spain, it is difficult to know the relative purchasing power. But if the cost of living in our two locations are roughly equal, you are eating considerably higher on the hog - even after the recent beating the Euro has taken vs the dollar.
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Old 06-10-2010, 02:33 PM   #75
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I'm happier at 30K retired than I was at $75K working.
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Old 06-10-2010, 03:23 PM   #76
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Living on a sailboat jolted us out of the fancy yuppy threads lifestyle. We took to the boat bum lifestyle (and way of dressing) like bears to honey, and have never looked back.

The surprising thing is how little difference it has made. Sure, occasionally we get the bum's rush, but not much more often than before. (Every now and then some maitre d' is going to decide that he/she doesn't like the way you look, no matter how you are dressed.)

Part of this might be that we live in Austin, a town full of millionaire high tech geeks dressed every bit as badly as we are. Hospitality and sales folks probably have learned to place little weight on appearances.

Seems like a smile and a pleasant word still work, even when wearing jeans and a tee-shirt.
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Old 06-10-2010, 03:34 PM   #77
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Much like the old farmer joke, wherein the yuppie driving the $100k Euro car gets stuck in the ditch. He knocks on the farmhouse door, and inquires if the farmer could maybe use his tractor to pull him out. All the while, he's telling the farmer to please be careful not to damage his "$100k car". So the farmer jumps back on his tractor, and leaves, telling the yuppie he doesn't want to damage his $200k tractor...
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Old 06-10-2010, 04:11 PM   #78
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Hard core cheap SOB in early ER, 1993 and gradually drifted up spending wise with time and Mr Market.

Ho hum suburbanite now (except retired) but I do get periodic thoughts - joy of fugal and all that.

heh heh heh - we had several 'how frugal can you get' threads in the early days of this forum.
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Old 06-10-2010, 04:13 PM   #79
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Hard core cheap SOB in early ER, 1993 and gradually drifted up spending wise with time and Mr Market.

Ho hum suburbanite now (except retired) but I do get periodic thoughts - joy of fugal and all that.

heh heh heh - we had several 'how frugal can you get' threads in the early days of this forum.
I am still exceeding frugal. Spend ~$25K per year. Tend to give away the excess.
BTW: Don't ask for money
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Old 06-10-2010, 05:27 PM   #80
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I'm happier at 30K retired than I was at $75K working.
Same here. I was happier at $50k working P/T than I was at $75k F/T. Then, I was happier at $30k working a lesser P/T than I was at $50k P/T.

Finally, I am happiest at $30k retired than I was at $30k (lesser) P/T. I just took the scenic route to get there!
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