It now costs $350,000 a year to live a middle-class lifestyle in a big city

[Koolau]

So many of the potential expenses are at least somewhat controllable. In Honolulu (cheaper than SF, I'm sure but NOT cheap by most of mainland big cities) you can get into a decent condo for half a mil (plus HOA dues of $600/mo). Schools would be the big issue if you are young with kids. Private schools (the only way to go) are very expensive - and worth it. I just don't see $350K/year. We do it for a third of that and could spend much less. YMMV

[Music Lover]

Quote:

Originally Posted by Vacation4us I read the entire article and don’t find it unreasonable. We currently live in the Bay Area rent 500sqft for $1775 but support 2 other homes in SoCal. So our housing costs are easily 6k a month. Combined we make less than 350k but not too far off. Take out 90k in taxes and 50 k in retirement funds and a comfortable middle class lifestyle is all you get. Comfortable not rich no Tesla’s or Ferrari’s. The author clearly stated HCOL areas.

If I read your comment correctly, you support 3 homes on a little less than $350k. If you upgraded your $1775 a month to $3k and didn't support 2 other places you'd be very well off on your income.

Say $300k income less $90k taxes, $50k retirement, $36k rent leaves you $124k a year or over $10k a month AFTER taxes, housing, and retirement savings.

[tb001]

This is pretty close to what our budget was in a HCOL area with young kids. Some items a bit higher, some lower. You’re either paying up for housing or for private school (or both, if you want to live *in* the city). Sure you can raise a family in a HCOL area on less, but you’re likely not funding 529s and retirement accounts and/or you’re living in a less than desireable school district.

It’s interesting that they specified old navy/Toyota. When we lived there I kept asking DH how it seemed like everyone around us had a Tesla and more expensive stuff when we made what I considered to be very good money and lived much more modestly on the surface!

[tb001]

Quote:

Originally Posted by Music Lover If I read your comment correctly, you support 3 homes on a little less than $350k. If you upgraded your $1775 a month to $3k and didn't support 2 other places you'd be very well off on your income. Say $300k income less $90k taxes, $50k retirement, $36k rent leaves you $124k a year or over $10k a month AFTER taxes, housing, and retirement savings.

Take out childcare/school costs and you’re easily down to 75. Lower if you have a nanny but still want to send a child to some form of preschool a couple of days a week.

Eta, then another 20k for property taxes if that 36k is towards a mortgage.

[candrew]

A Bay Area Rapid Transit janitor who makes $234,000 plus $36,000 in benefits

Quote:

Originally Posted by NW-Bound I could not have imagined a BART janitor making that much.

I have to tip my hat to that janitor. According to the article, his base salary for a 40 hour week is about $56K. Dude picked up O.T. hours on an almost daily basis that other janitors turned down. He probably worked most holidays, as well.

Good on him!

[Chuckanut]

Quote:

Originally Posted by Maenad What bothers me about this article is how they conflate "middle class" with "spending everything I make".

+1

Another great example of the low quality reporting that infects the modern news media.

[Sojourner]

Quote:

Originally Posted by candrew A Bay Area Rapid Transit janitor who makes $234,000 plus $36,000 in benefits I have to tip my hat to that janitor. According to the article, his base salary for a 40 hour week is about $56K. Dude picked up O.T. hours on an almost daily basis that other janitors turned down. He probably worked most holidays, as well.

Still pretty hard to believe, IMHO. I'm sure it's possible to significantly boost your income as a BART janitor by working lots of overtime... but more than quadrupling it?? Assuming he made double his hourly wage while working overtime, he would have had to work an additional 3,175 hours over his standard 2,000 yearly hours to get to $234k. That's about 100 hours per week, every single week. Even if he worked 6 days/week every week, that's still over 16 hours/day. Pretty difficult to imagine that.

[candrew]

Quote:

Originally Posted by Sojourner Still pretty hard to believe, IMHO. I'm sure it's possible to significantly boost your income as a BART janitor by working lots of overtime... but more than quadrupling it?? Assuming he made double his hourly wage while working overtime, he would have had to work an additional 3,175 hours over his standard 2,000 yearly hours to get to $234k. That's about 100 hours per week, every single week. Even if he worked 6 days/week every week, that's still over 16 hours/day. Pretty difficult to imagine that.

It maybe hard to believe, but true based on reporting from the S.F. Chronicle:

https://www.sfchronicle.com/bayarea/...c-12873558.php

One system service worker, BART’s title for janitors, made a little more than $271,000 in 2015, with $162,050 of that in overtime. A year later, two other BART janitors joined him in collecting more than $100,000 in overtime pay in a year.

Three years later — after the tale of the high-earning BART janitor became legend and the transit system, and the man himself, became an object of criticism — BART seems to be getting a handle on janitorial overtime, although a handful of its system service workers are still doing quite well.

Compensation data from 2017, obtained through a public records request, show that none of BART’s 138 janitors made more than $100,000 in overtime pay, although five of them made more than $100,000 in total pay compared with 50 in 2015 and 12 in 2016.

[Midpack]

Quote:

Originally Posted by rk911 BS. didn't read the article, don't need to. sister and her hubby live in chicago, are absolutely middle class and while i don't KNOW i do KNOW what they do and there's no way they make anywhere near $350k.

Chicago is a bargain compared to San Fran...

[bigreader]

Live in the Bay Area, read the article and think that it is pretty accurate. It is an expensive area precisely because it offers great business opportunities and cultural and natural amenities. Yep, parking is limited. Yep, homelessness and income inequality is glaring. But for at least for this nano minute in our collective history, many more affluent people want to live here than can fit. As a result, it costs and there are no "deals" in housing (rent vs. own) other than extending your commute.

I think that Maenad has it exactly right. The problem is in the headline. The 2 working parents, two kids in day care/private school/home in one of the most expensive housing markets is not a middle class life. It's an upper-class life for people without inherited wealth. It's not a carefree day at beach and that might surprise folks who think that a higher salary fixes everything. But it certainly doesn't resemble the working/middle class life that I grew up in.
br

[timemoveson]

Quote:

Originally Posted by bigreader Live in the Bay Area, read the article and think that it is pretty accurate. It is an expensive area precisely because it offers great business opportunities and cultural and natural amenities. Yep, parking is limited. Yep, homelessness and income inequality is glaring. But for at least for this nano minute in our collective history, many more affluent people want to live here than can fit. As a result, it costs and there are no "deals" in housing (rent vs. own) other than extending your commute. I think that Maenad has it exactly right. The problem is in the headline. The 2 working parents, two kids in day care/private school/home in one of the most expensive housing markets is not a middle class life. It's an upper-class life for people without inherited wealth. It's not a carefree day at beach and that might surprise folks who think that a higher salary fixes everything. But it certainly doesn't resemble the working/middle class life that I grew up in. br

Sam's post was very accurate in describing what you get and how you might live at that income level in a place like SF (or any number of similar VHCOL cities in US or abroad).

Lived it for 10 years with kids and all the trappings and I know many who live it the same or very similarly, on that income.

It's not an argument. There is no mystery to it; the math defines it all very clearly - assuming that is how you have chosen to maintain your lifestyle and approach to wealth accumulation.

Calling it "middle class" is a point of contention. It is not, in SF or anywhere else.

[Another Reader]

I live in suburban Silly Valley. Run of the mill tract homes start at $1MM for something small in an ok school district. My neighborhood has very competitive schools, thanks to all the Asians and South Asians that have moved here. Houses here start at $1.5MM. Private schools for lower grades start around $36k. College, even UC, is very pricey. Food is a bit higher than Phoenix, except restaurants which are definitely higher. The fabled benchmark Egg McMuffin is $4.89 at the local McDonalds here, vs. $3.19 in Phoenix. Grocery stores are a little higher overall, but the high income folks don't cook much unless someone is at home.

Compensation for the senior software engineers seems to start at $250k and go up from there. Total compensation with the right company seems to center around that $350k number. A person in a lesser position or in a different occupation in a tech company is probably pulling down at least $150k. Lots of $500k income households if both people are working.

I bought my house 30 years ago for around $350k. No way could I afford to buy any house or almost any condo today on what I made in salary or what I would be paid today for the same job.

Sam (the article author) tends to focus on the high wage earners living in SF and he does seem to like to brag. He leveraged his SF real estate investments well and they added a lot to his net worth. He has his blog and some other business investments, plus his nest egg from the investment banking career. He's probably worth $10MM at least if you include the blog, maybe more like $20MM based on some of the numbers he throws around.

You could not pay me enough to be a janitor for BART...

[Another Reader]

Quote:

Originally Posted by timemoveson Sam's post was very accurate in describing what you get and how you might live at that income level in a place like SF (or any number of similar VHCOL cities in US or abroad). Lived it for 10 years with kids and all the trappings and I know many who live it the same or very similarly, on that income. It's not an argument. There is no mystery to it; the math defines it all very clearly - assuming that is how you have chosen to maintain your lifestyle and approach to wealth accumulation. Calling it "middle class" is a point of contention. It is not, in SF or anywhere else.

SF is becoming more like New York. It takes a lot of money to live what would be considered a middle class lifestyle elsewhere. Yes, there are "trappings," but some are required to insure your kids get a good education and you have a decent place to live.

[jkern]

I have lived in the SF Bay Area my whole life and it's certainly possible for a family of four to have a middle class standard of living on $350K per year. However, I would classify it as a good middle class. Totally capable of accumulating wealth over time and becoming upper middle to upper class.

[meierlde]

Quote:

Originally Posted by NW-Bound We used to visit SF all the time in the 70s and 80s by doing road trips. Back then, I could find a free street parking spot right in Chinatown if I drove around a bit. We passed by SF a few years ago on an RV trip. I took the toad into the city, and could not find a place to park. And having been there many times, it lost the appeal. So, we did not spend much time there to see the homeless problem that is so well known.

Of course if the operating time of bart fit one could stay on the east side of the bay or livermore and commute into the city. Basically this is similar to staying at newark ap and commuting to Manhattan.

[daylatedollarshort]

I would say our kids had an upper middle class life growing up in the Bay Area - Hawaiian and European vacations, good schools, maid service, gardener, nice house, etc. When they were little I stayed home with them and they went to city sponsored or church preschools so there weren't any expensive day care bills. They certainly had a lot fancier life than I did growing up. Later on they went to after school day care on their public school campus. We did buy a house when prices were lower but even spending $1M more on a house these days we would still not come close to $350K in annual expenses for us.

Now that our kids are grown and we aren't working our expenses are relatively low - $2 a month ACA plan, low property taxes from Prop 13, we do our own house and yard work now, low energy and water use home, kids went to community college and in state schools with grants, plant based diet, and cheap dates. I just checked and there are 175 events on Goldstar with $25 tickets or less, my main seat filler subscription has about 100 events listed, my $20 senior state parks pass is good for 280 state parks, the library has free tickets to around 50 cultural attractions, and there's a ton more to do between all my other passes and the free / cheap event lists. We looked around before we retired and except for housing we didn't see our expenses being much lower elsewhere.

[24601NoMore]

Here are just a few of the howlers that jumped out at me..

- Childcare plus occasional babysitting for 2-year old...$29,400 (!)

- Preschool for 4 year old - $24,000 (SERIOUSLY?!!)

- Food for 4 ($70/day average) - $25,548 - are they eating Wagu beef every day? Our food budget for 2 is ~$500/mo and even that is high when tracked against actual expenses..and we eat pretty darned well.

- Entertainment - $6,000/yr (really? $500/month?)

Anyway..

[karen1972]

I have no doubt they all this money, the question is since when did private schools become middle class lifestyle, when did eating out all the time become standard middle class lifestyle, etc.

The reality is they are upper middle class which is fine, but I think calling these things "middle" class is a far stretch than what the majority (which use to middle class) lives... ie mean middle class use to mean middle of the overall population. I do not believe that the "middle" of the population even in the most expensive places actually has a $1.8M house in the US. The median home price in Manhattan from what I could find is $1M, if that is true then this 'example" family has a house significantly more expensive than that. Which also means their property tax is also significantly higher.

[24601NoMore]

I just saw a linked article on a couple in NYC that earns $500K/yr and "still end up with very little besides 401K money".

https://www.cnbc.com/2018/03/06/budg...cant-save.html

Where to even start..what's this guy trying to accomplish? His credibility is seriously diminished with articles like these.

[Mr. Tightwad]

Quote:

Originally Posted by kgtest never forget some dude at the basketball court when I was younger showed up in a BMW, I said, nice car, he responded "I can have anything I want, I'm single!" LOL.

The dude is correct. I stayed single and retired at 45. I drive 2 Tesla's. It's easy to accumulate wealth if you don't get married.

And as someone pointed out, the author of the article specializes in clickbait journalism. I gave up on him a long time ago.