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Old 03-16-2011, 04:39 PM   #21
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Didn't I read that Charlie Sheen is broke? Wasn't he earning $1.2 million per episode of Two and a Half Men?
I read somewhere that he is still going to earn $40 million/yr with syndication rights. I'll take one year of that please....
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Old 03-16-2011, 04:47 PM   #22
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$1200/yr for dry cleaning? Let's see...

That's $100/month or $25/week. A place near me advertises the price of $2.5 per item. That's 10 items/week, which is 5 items per week for each of the couple, or 1 item per workday. Bingo!
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Old 03-16-2011, 09:27 PM   #23
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Don't understand your point. Are you saying a family in a NY suburb would pay less than that or more than that? I live in a NY suburb and use Metro North. It costs $240 a month. Plus we also buy lots of gas (very expensive in NY), mostly for shuttling our 3 kids around to activities and social things.
I was questioning the $2K in "gasoline taxes" that the article mentions.
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Old 03-17-2011, 05:13 AM   #24
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$1200/yr for dry cleaning? Let's see...

That's $100/month or $25/week. A place near me advertises the price of $2.5 per item. That's 10 items/week, which is 5 items per week for each of the couple, or 1 item per workday. Bingo!
You took the words right out of my mouth...

In our case the price is a little over $3 per shirt, but suits are much more, as are coats and leather goods. DW does not work outside the home, so very few shirts for her. Considering vacations and holidays, we spend $700 per year on my shirts alone. With suits and coats added, it easily adds up to $1200 a year. Good thing FIRE t-shirts, shorts and jeans don't need dry cleaning. I also prefer jean jackets and fleece...washable. Most cleaning bills in FIRE will be DW's jackets and coats.

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Old 03-17-2011, 08:30 AM   #25
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My 2-cents worth: This article represents another futile attempt to convince us that a high income (top 2.9 percent in U.S.) is not that great while more than 97% making less in the U.S. and a lot higher than the rest of the population on other parts of the world -- give me a break!!!!!!!
Playing devils advocate. Right out of college and over 30 years ago, I took a job in orthopedic research as a Laboratory Specialist/Researcher. It paid a little of $9,000 if memory serves me correctly. I was also licensed to teach. The reason I took the research position over a teaching position is it paid $1,500 more than teaching....plus I didn't want to be a teacher. I just looked up the average salary for the same research position and today it pays an average of $32,000. In 30 years due to CPI, the salary went up 3.6 times.
So...if you take the $250,000 and divide it by 3.6 you get a salary for what was $69,444 back in 1977. Would we consider someone making $69,777 back in 1977 rich?

I get that the $250,000 is AGI...so let's bump that $69,777 to say $85,000.
Was that person rich?

I think what has gotten lost in the political mantra is what CPI has done to salaries over the years.

I also get that the government tells us that someone with a AGI of $250,000 is in the top 5%...but I question that....as I know a LOT of people that surround me in my small city of 9,000 that make that. So...next question is do we really believe that at that level...it is only the top 5%?

Some of the federal and state tax bills quoted in articles like this astound me. I WISH I only paid $29,000 in federal taxes. Believe me, I pay way more...but then I don't have a huge mortgage deduction. Anyone making that already is getting hit with the extra AMT tax, loosing most tax credits and deductions...so....my take is that if they are paying less in tax...they are donating a fair portion to charities, church whether directly or thru charitable remainder trusts.
Simply put...I remained baffled...that the designated $250,000 is considered RICH. No doubt ...well off...and "trying to get there"...but it takes many years....even at this salary level to "get there".
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Old 03-17-2011, 09:27 AM   #26
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Old 03-17-2011, 09:52 AM   #27
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Playing devils advocate. Right out of college and over 30 years ago, I took a job in orthopedic research as a Laboratory Specialist/Researcher. It paid a little of $9,000 if memory serves me correctly. I was also licensed to teach. The reason I took the research position over a teaching position is it paid $1,500 more than teaching....plus I didn't want to be a teacher. I just looked up the average salary for the same research position and today it pays an average of $32,000. In 30 years due to CPI, the salary went up 3.6 times.
So...if you take the $250,000 and divide it by 3.6 you get a salary for what was $69,444 back in 1977. Would we consider someone making $69,777 back in 1977 rich?

I get that the $250,000 is AGI...so let's bump that $69,777 to say $85,000.
Was that person rich?

I think what has gotten lost in the political mantra is what CPI has done to salaries over the years.

I also get that the government tells us that someone with a AGI of $250,000 is in the top 5%...but I question that....as I know a LOT of people that surround me in my small city of 9,000 that make that. So...next question is do we really believe that at that level...it is only the top 5%?

Some of the federal and state tax bills quoted in articles like this astound me. I WISH I only paid $29,000 in federal taxes. Believe me, I pay way more...but then I don't have a huge mortgage deduction. Anyone making that already is getting hit with the extra AMT tax, loosing most tax credits and deductions...so....my take is that if they are paying less in tax...they are donating a fair portion to charities, church whether directly or thru charitable remainder trusts.
Simply put...I remained baffled...that the designated $250,000 is considered RICH. No doubt ...well off...and "trying to get there"...but it takes many years....even at this salary level to "get there".
The claim is that people making $250k "can barely get by". That's nonsense since the great majority of Americans make it on just a fraction of that amout. The word "rich" is like "tall". A 6'6" NBA player wouldn't consider himself "tall".

I'm sure that you know people that make that amount. I'll bet Bill Gates knows even more. If the 5% is right, then 450 people in your town of 9,000 would be in $250k families. That would be "a lot" of people, more than you can personally hang out with, but it would be consistent with the statistic.

The other 8,550 are living on less.
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Old 03-17-2011, 10:03 AM   #28
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The other 8,550 are living on less.
But would you really call that "living"?
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Old 03-17-2011, 10:51 AM   #29
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The claim is that people making $250k "can barely get by". That's nonsense since the great majority of Americans make it on just a fraction of that amout. The word "rich" is like "tall". A 6'6" NBA player wouldn't consider himself "tall".
That was not my take away from the article. While the article was showing they "were getting by", or "barely making it"...my take away was...that in order to support a family of 4 in some locations and with what some might feel are necessities..whether it is due to both spouses working or clothes needed for jobs or educations because the public school systems (s..k)....plus all the TAX hits......this is what it took. And the life style is what some would have considered "on the high side of middle class" or "upper middle" ....30 years ago and ....even today.

On another thread...the theme is 7 million is now needed to have what equates to the 1 million 30 years ago. Why are salaries any different.?
My 9k 30 years ago should equate to $56K today but it doesn't. Salaries in general have not kept up with the cost of living....if you subscribe to the thought that you now need the 7 million.

And I suppose my major point...is the lack of conversation by our government or articles such as this... on what CPI has done to salaries over 30 years...and what that really means...and where those households truly are in the social strata.
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Old 03-17-2011, 11:02 AM   #30
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If the 5% is right, then 450 people in your town of 9,000 would be in $250k families. That would be "a lot" of people, more than you can personally hang out with, but it would be consistent with the statistic.

The other 8,550 are living on less.
And the people in my town making that are not considered rich. They are upper middle class, doing well, paying their bills, educating their children and trying to be independent in retirement.

I can't help what other people have been willing to accept in their lives. Nor am I responsible for the decisions they made. But all of this talk by our government is ...going to make us all responsible. There goes MY American Dream.....

The "other people are living on less" statement ...ummm....what is that about? All one can do in life...is take responsiblity for ones self.
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Old 03-17-2011, 11:11 AM   #31
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$1200/yr for dry cleaning? Let's see...

That's $100/month or $25/week. A place near me advertises the price of $2.5 per item. That's 10 items/week, which is 5 items per week for each of the couple, or 1 item per workday. Bingo!
I still don't get it. My work shirts go in the washing machine and then I iron them. (Well, just occasionally DW irons them. ) It would not occur to me to have someone else do my daily clothes washing for me, unless I was, er, rich...
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Old 03-17-2011, 12:47 PM   #32
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That was not my take away from the article. While the article was showing they "were getting by", or "barely making it"...my take away was...that in order to support a family of 4 in some locations and with what some might feel are necessities..whether it is due to both spouses working or clothes needed for jobs or educations because the public school systems (s..k)....plus all the TAX hits......this is what it took. And the life style is what some would have considered "on the high side of middle class" or "upper middle" ....30 years ago and ....even today.

On another thread...the theme is 7 million is now needed to have what equates to the 1 million 30 years ago. Why are salaries any different.?
My 9k 30 years ago should equate to $56K today but it doesn't. Salaries in general have not kept up with the cost of living....if you subscribe to the thought that you now need the 7 million.

And I suppose my major point...is the lack of conversation by our government or articles such as this... on what CPI has done to salaries over 30 years...and what that really means...and where those households truly are in the social strata.
Well, if the real concern is changes over time, then it pays to get some data on that. AFAIK, this guy has the best data series Emmanuel Saez's Home Page if you download the red "Updated to 2008" excel worksheet and do some looking around (unhiding the "Thresholds" tab), you'll find that in 1977 the nominal minimums for the 90th, 95th, and 99th percentiles of income were $26,934, $34,444, and $64,024. Those numbers, adjusted for the CPI, would be $87,765, $112,237, and $208,627 in 2008. But, the incomes actually required to get into those percentiles in 2008 were
$109,062, $152,726, and $368,238.

This says that upper income people gained against the CPI in those 31 years, and the further up the ladder the greater the percentage gain.

I think stagnant wages in the US are a real problem, but the people who didn't make progress were the median workers, the top earners made progress, and the very top is gained a lot.
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Old 03-17-2011, 01:02 PM   #33
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And the people in my town making that are not considered rich. They are upper middle class, doing well, paying their bills, educating their children and trying to be independent in retirement.

I can't help what other people have been willing to accept in their lives. Nor am I responsible for the decisions they made. But all of this talk by our government is ...going to make us all responsible. There goes MY American Dream.....

The "other people are living on less" statement ...ummm....what is that about? All one can do in life...is take responsiblity for ones self.
If there's one thing we can observe about the word "rich", it's that most people use it to mean "someone who makes more than me, certainly not me". It's such a subjective term that it's meaningless.

You have a science background, I'd expect you to favor objective stuff. We can say with confidence that the great majority of Americans live on much less than $250k per year. People who think they are "just scraping by" on that amount certainly have an unusual definition of "necessities".

This post seems to say that the only reason people make less is "the decisions they made". If that's the case, then it's equally true that the only reason the $250k couple isn't earning $1 million is the decisions they made. Instead of explaining how they can't get by on $250k, they should make some different decisions and start making $1 million.
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Old 03-17-2011, 01:30 PM   #34
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This post seems to say that the only reason people make less is "the decisions they made". If that's the case, then it's equally true that the only reason the $250k couple isn't earning $1 million is the decisions they made. Instead of explaining how they can't get by on $250k, they should make some different decisions and start making $1 million.
uummm... but that is not what I said. I said "about all one can do in life is take personal responsiblity" meaning...for oneself.
And I don't think...the article stated that the couple making $250K was "not getting by". It just showed how it was spent.

But given your ...analogy...it probably is or would be the personal decisions of those making $250K not to make the $1million. Perhaps they are not willing to spend all their time traveling, or go get that masters or PhD, or borrow that seed money to start their own company...or...etc. Are these not personal decisions

Likewise is it not a personal decision if one:
1. Decides to drop out of high school
2. Not to go to college
3. Had 3 children before age 20
4. Decided to do drugs or alcohol
5. Become a criminal

I know we can not control everything and some are dealt really unlucky cards
. Not talking about those situations. Just saying that at a basic level...the cumlative effect of all of our personal decisions...have a bearing on where we end up. No?
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Old 03-17-2011, 01:53 PM   #35
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Yes, people's decisions have a large impact on where they end up.

It just gets a little tiring listening to people who were born on 3rd base talk about how great they are for getting to home, and how worthless all those lazy poor people are.

There are an awful lot of people from the lucky sperm club that talk endlessly about how they got there on their own.

My wife and I make about double the median income in the US. We've worked for what we have, but it has come a whole lot easier for us than for a lot of people I know.

Our tax burden seems very modest to me. We must be the only people in the country that aren't over-taxed

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I know we can not control everything and some are dealt really unlucky cards . Not talking about those situations. Just saying that at a basic level...the cumlative effect of all of our personal decisions...have a bearing on where we end up. No?
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Old 03-17-2011, 01:55 PM   #36
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You have a science background, I'd expect you to favor objective stuff. We can say with confidence that the great majority of Americans live on much less than $250k per year. People who think they are "just scraping by" on that amount certainly have an unusual definition of "necessities".
Not necessarily disagreeing with you. But because I do have the science/researcher background as well as an Info Systems background...I like data that makes sense. Data without making sense "means little". It has to pass the reasonability test...right?
I get that there is all sorts of data out there to say those making $250K are in the top 5%. Guess who is providing the data? The government.

When the data...contradicts...my observations of the real world...then in my mind it is questionable. The real world says to me...that those at the $250k range...are doing extremely well....for that one year....but it doesn't make them "Rich".
For me...it still leaves out a critical element..and that is net worth.
Now...say to me...X is making $250K a year and they have a net worth of 1 to several million...and I would agree that is rich.
So...we come back to the income versus net worth argument. I suppose I'd feel better about what our government is doing if they would include a net worth element in the calculation. Why? Because...it prevents those that are striving to get there ....to get there. And that ..cuts into the American Dream.
All in my humble opinion.
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Old 03-17-2011, 02:02 PM   #37
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It just gets a little tiring listening to people who were born on 3rd base talk about how great they are for getting to home, and how worthless all those lazy poor people are.

There are an awful lot of people from the lucky sperm club that talk endlessly about how they got there on their own.
I don't think anyone was saying that. But oh well....
I suppose I need to stay out of these discussions....because I thought we were discussing...on hypothetical levels....
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Old 03-17-2011, 02:27 PM   #38
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Yes, people's decisions have a large impact on where they end up.

It just gets a little tiring listening to people who were born on 3rd base talk about how great they are for getting to home, and how worthless all those lazy poor people are.

There are an awful lot of people from the lucky sperm club that talk endlessly about how they got there on their own.

My wife and I make about double the median income in the US. We've worked for what we have, but it has come a whole lot easier for us than for a lot of people I know.

Our tax burden seems very modest to me. We must be the only people in the country that aren't over-taxed
...uh, oh...it's getting so deep the pig is wearing boots this time!
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Old 03-17-2011, 02:36 PM   #39
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Well, if the real concern is changes over time, then it pays to get some data on that. AFAIK, this guy has the best data series Emmanuel Saez's Home Page if you download the red "Updated to 2008" excel worksheet and do some looking around (unhiding the "Thresholds" tab), you'll find that in 1977 the nominal minimums for the 90th, 95th, and 99th percentiles of income were $26,934, $34,444, and $64,024. Those numbers, adjusted for the CPI, would be $87,765, $112,237, and $208,627 in 2008. But, the incomes actually required to get into those percentiles in 2008 were
$109,062, $152,726, and $368,238.

This says that upper income people gained against the CPI in those 31 years, and the further up the ladder the greater the percentage gain.

I think stagnant wages in the US are a real problem, but the people who didn't make progress were the median workers, the top earners made progress, and the very top is gained a lot.
Thanks for that Independent. I'll take a look at these tables...
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Old 03-17-2011, 03:14 PM   #40
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I suspect that your observations reflect a very selective portion of the real world.

If you make $250k/year or more, you very likely live in a neighborhood/town/state/part of the country that has a much higher income (and living cost) than the average.

If you live in New York City or San Jose, you might very well assume that $250k is not a ton of money. You would also think that it is normal to spend $500k+ on a home.

If you live in Benton Harbor, Michigan, or LaCrosse, WI, or Cinncinati, OH, you would think otherwise. I'd be stunned if more than 5% of my high school class earn more than I do currently. And I make a good bit less than $250k.

Those of us in fly-over country are generally stunned by the dollar figures earned and spent on the high-cost coastal areas.

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Not necessarily disagreeing with you. But because I do have the science/researcher background as well as an Info Systems background...I like data that makes sense. Data without making sense "means little". It has to pass the reasonability test...right?
I get that there is all sorts of data out there to say those making $250K are in the top 5%. Guess who is providing the data? The government.

When the data...contradicts...my observations of the real world...then in my mind it is questionable. The real world says to me...that those at the $250k range...are doing extremely well....for that one year....but it doesn't make them "Rich".
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