Unable to Scrape by on 250K+ a Year

[obgyn65]

Sorry TooFrugal- I did not imply that using facts from a direct quote is presumptuous. I was not taking about you. What sounds presumptuous is the fact that these people being referred to (being a lawyer + MD) claim they are not being able to make ends meet. I don't have much sympathy for them.

Sorry for the confusion.

Those are facts taken from the original blog post. I'm unclear why using a direct quote is presumptuous or has anything to do with anyone's ego.

 

[Bestwifeever]

I don't have a lot of sympathy for someone who makes that much money and can't figure out how to make ends meet, but he teaches at an extremely competitive top tier law school so it is unlikely he is a hack who couldn't make it in the real world. The University of Chicago's neighborhood is an expensive oasis in the middle of some of the most dangerous neighborhoods in the city, so their home is likely in Hyde Park or Kenwood (where the president's million-dollar home is), as their choices are very limited. And his wife's practice is likely with the university's medical center, so they are pretty much married to the area. The public schools are dismal so their children probably go to the university's Lab School. Finally, the University of Chicago is a private school, so any taxpayer subsidies it receives are indirect and nothing like those that support the public University of Illinois at Chicago--many people confuse the two schools.

It is probably the student loans that are killing them; when they are paid off and the wife is established in her practice, the couple will be on easy street.

 

[Emeritus]

"The rich pay more because they have and get so much more"


Sorry, but I have to take issue with that comment. The "rich" make more money (if they are like my wife and I) because we work our asses off, employ and pay health insurance, life insurance and disability for several employees, have gone to school for many years to earn a law degree from a prestigious university and took the risks of leaving a cushy law practice to venture out on our own.

We've never been given anything. We earned every last penny we have and I get real tired of the class warfare (i.e. jealousy) that is apparent even on these boards.

I also love the politico speak "a tax cut for the rich". Thanks so much for characterizing letting me keep some of the money I have earned (for which the government hasn't done a damn thing) as a tax break. Jeez, thanks for doing nothing (big Government) and allowing me to keep less than 50% of what my sweat and toil has earned.

We don't "get some much more", we work hard, employ others and earn it. Show me a poor man who creates jobs for others. Good luck,

OFCS The Saudi Arabian ruling class makes all the same arguments.
I don't buy it from them either.

1) The rich get their opportunities from the government and are protected by it. The government provides the entire infrastructure that lets people make money. If you think you made it on your own go to Afghanistan and show us.

2) contempt for the poor is class warfare

3) I'm a lawyer too. Lawyers specifically depend on the public legal system to make money. We dont pay for it, but we profit from it.

4) We have a contingent fee system precisely so that poor people can create jobs for lawyers.

 

[Emeritus]

Mr Henderson got his degree in 1999, clerked for 2 years and worked at a law firm - corporate tax law for 1 year prior to teaching. 3 years of "experience" makes a talented professional? Sigh. He is teaching from a script. It is not rocket science. Follow the script, throw in some humor, act concerned, kiss a**, collect the check.

Of course, you are completing overlooking the factoid our tax payer dollars are subsidizing his salary.

I got my law degree in 1975, clerked for two years and began teaching law to engineers and economists. I respectfully suggest that you have no idea of the job of law professor. In many ways the law is much more complex than rocket science.

 

[Gone4Good]

Both sets of numbers ultimately come from the census bureau. The 47K per year is for new york city as a whole (the greater metro area) whereas the 100K per year is for manhattan itself. This is clearer if you go to

I'll also point out that $47K is MEDIAN FAMILY income whereas $100K is PER-CAPITA INCOME. Per-capita income is a pretty useless statistic when looking at income data in an area with large income inequality, like NYC.

Example: Assume NYC has only 5 residents, 4 make $50K and one makes $5MM. Median income is $50k, but per-capita income is $1MM. Master Blaster moves in to town earning $250K, and feels poor because he's not making $1MM, but conveniently ignores the fact that he's still earning 5x more than 2/3 of the population.

For some reason most folks define "rich" as "those who make more than I do," regardless of how much they make. It lacks any sense of perspective. I also don't know when "Middle Class" was redefined to include incomes many multiples higher than median incomes. Middle means middle, not top quartile, or decile.

 

[donheff]

Lets not forget that this whiner was undoubtedly doing just fine throughout the Clinton Administration right up until Bush tossed him a TEMPORARY windfall scheduled to expire this year so as not to bust the US budget long term. This guy sucks up all the extra cash and then cries when he can't adjust to the return to a slightly lower spending level.

 

[photoguy]

Mr Henderson got his degree in 1999, clerked for 2 years and worked at a law firm - corporate tax law for 1 year prior to teaching. 3 years of "experience" makes a talented professional?

According to his CV (M. Todd Henderson : Curriculum Vitae | University of Chicago Law School) he didn't become a professor until 2005 leaving 7 years of work experience.

 

[Orchidflower]

After reading this thread, I see I'm not the only one who thinks these whiners are ridiculous. Whatever would these two do if we had a war or some national disaster where they really lost everything (think Jewish professionals in WWII who ended up in the death camps)? Would they be able to make it out? Not so sure with the sense of entitlement I'm picking up in their whine.

I have no pity for these two people when there are single moms out there raising 3 kids by themselves and lacking the skills to do it even at a middle class level. These two need to get into reality about their situation IMHO.

 

[photoguy]

I'll also point out that $47K is MEDIAN FAMILY income whereas $100K is PER-CAPITA INCOME. Per-capita income is a pretty useless statistic when looking at income data in an area with large income inequality, like NYC.

Good catch. For some reason I was thinking median personal income although I don't know why. averages as you state can easily be skewed. Still, when I look at the median numbers in my home state (CA) it's quite easy for certain cities to have double the average.

For some reason most folks define "rich" as "those who make more than I do," regardless of how much they make. It lacks any sense of perspective. I also don't know when "Middle Class" was redefined to include incomes many multiples higher than median incomes. Middle means middle, not top quartile, or decile.

For me, I define rich as having high net worth. Having high income gives one the potential to be rich but by does not qualify by itself.

Personally, I know that my household income in a high cost of living area is several times what some of my relatives make in the midwest. However, I can't say that my lifestyle is much different. I have a smaller home, still drive a 15 year old car, don't eat out much, etc.

 

[TooFrugal]

Sorry TooFrugal- I did not imply that using facts from a direct quote is presumptuous. I was not taking about you. What sounds presumptuous is the fact that these people being referred to (being a lawyer + MD) claim they are not being able to make ends meet. I don't have much sympathy for them.

Sorry for the confusion.

Okay, sorry for being too dense to understand what you meant.

 

[Gone4Good]

Personally, I know that my household income in a high cost of living area is several times what some of my relatives make in the midwest. However, I can't say that my lifestyle is much different. I have a smaller home, still drive a 15 year old car, don't eat out much, etc.

I'd wager differences in savings rates contribute to a substantial portion of this apparent discrepancy. The cost of living in NYC is approximately 120% of the national average, not multiples.

 

[TooFrugal]

It is probably the student loans that are killing them; when they are paid off and the wife is established in her practice, the couple will be on easy street.

Maybe. But I know from a friend who works in the financial services industry that some high income people live pay check to pay check, despite being in a top earning category compared to most households.

 

[Gone4Good]

Maybe. But I know from a friend who works in the financial services industry that some high income people live pay check to pay check, despite being in a top earning category compared to most households.

A lot of them do.

The guys in the back office making $150K hang out with low-level front office folks making $250K and feel poor. The low-level guys in the front office see the mid-level guys making $500K and feel poor. The mid-level guys look at the MD's making seven figures, and they feel poor. The MD's look at their friends who went off and run hedge funds making eight figures, and they feel poor. Meanwhile they're all spending like they're earning the next rung up, and almost everyone feels pinched. It's insanity.

 

[haha]

Both sets of numbers ultimately come from the census bureau. The 47K per year is for new york city as a whole (the greater metro area) whereas the 100K per year is for manhattan itself. This is clearer if you go to

And both numbers include many sources of support that are not tallied. Food stamps, Medicaid, child welfare, various forms of free services that are delivered in kind. It also may not include refundable cash tax credits such as EIC.

Those with zero experience who think this couple should be able to live on much much less, even after paying huge taxes should just try it- with the same constraints of wanting one's children to go to school where someone speaks English, and where the teachers are not all just clock punchers and may even know something about the subjects that they teach.

Of course most of the biggest know-it-alls have never lived anywhere expensive, have no children, and have as their sole aspiration to miser up a big pile of money.

Ha

 

[Nick59]

And both numbers include many sources of support that are not tallied. Food stamps, Medicaid, child welfare, various forms of free services that are delivered in kind. It also may not include refundable cash tax credits such as EIC.

People always seem surprised when I tell them that people in the lowest quintile of income spend more money than it takes to be in the second lowest income quintile.

 

[TooFrugal]

Of course most of the biggest know-it-alls have never lived anywhere expensive, have no children, and have as their sole aspiration to miser up a big pile of money.

I live some place expensive and have kids. But we waited to have kids until we had a nest egg saved up and we moved to a neighborhood where we wouldn't have to pay for private schools.

In Chicago you don't have to live near where you work. Many people commute from the suburbs into the city. Some people commute from Wisconsin. The blogger doing the complaining about his expenses made a lot of financial choices that got him into the situation he is in. And even that is okay. What people do with their own finances is their business.

But I think what stirred up such a hornet's nest is that he cried poor when they are obviously leading a privileged life compared to over 99% of the people in the world.

 

[photoguy]

I'd wager differences in savings rates contribute to a substantial portion of this apparent discrepancy. The cost of living in NYC is approximately 120% of the national average, not multiples.

I don't know how much is due to savings rate, but I do have some ambitious goals this year. However, I think that is facilitated in large part by being DINKS as opposed to having multiple children. With a large family our savings rate would go pretty close to zero here.

Regarding NYC, did you mean +120%? That's more consistent with what I see reported (Cost of Living Index for Selected U.S. Cities, 2005 — Infoplease.com) and what matches closer with my own experience.

 

[martyp]

I am a little sympathetic to the problem of excessive student loans and living in an area with a high cost of living . . . just a little. However, as some have pointed out, they jumped into a high standard of living way to early in their careers. My wife and I make a pretty high combined salary but that is after 30 years at the same employer. Over time it just builds up. We still live in our original small house which, for a long time now, has been a case of living below our means. We also live in the high cost San Francisco Bay Area.

This debate about the $250k dividing line has been very interesting. It sounds like another one of those numbers that economists come up with that don't sync with what people think and feel about their wealth. I think most people, when given a chance, will realize they are not going to become super rich. But what do most people think is rich? It is obviously not too difficult for people to imagine that they or their children could become doctors and lawyers and find themselves at the $250k income level. Or maybe owning a small business that gets them there. I think the politics of this would change dramatically (in the Democrats favor) if they moved the line to say, $5 million. The debate should reflect people's perceptions, not a statistical definition of rich. At $5m you could credibly talk about high cost of living areas or student loans or hired help or whatever.

 

[haha]

. But I think what stirred up such a hornet's nest is that he cried poor when they are obviously leading a privileged life compared to over 99% of the people in the world.

Which in my opinion is 100% irrelevant. He is not in the thirld world somewhere, he is in an expensive area of the USA. He is not trying to get anyone to else to underwrite his lifestyle, only trying to point out some things that may not be easily understood by those who have never experienced them.

The uproar is caused by simple jealousy and class hatred, which is an easy thing to get fired up lately, even in an unexpected place like this board which is full of well to do people. My interpretation of this is that his critics are not as happy with their own lives as they like to claim, else why care what he says? He is not trying to get money sent from our pocketbooks to his, which is rare enough today and IMO quite commendable. Maybe trading one's youth for a bit of money is not always a pass through the gates of paradise?

Ha

 

[Gone4Good]

Regarding NYC, did you mean +120%? That's more consistent with what I see reported (Cost of Living Index for Selected U.S. Cities, 2005 — Infoplease.com) and what matches closer with my own experience.

Yes, as in it cost a New Yorker on average $1.20 for ever $1.00 spent by the rest of the country.

 

[donheff]

Of course most of the biggest know-it-alls have never lived anywhere expensive, have no children, and have as their sole aspiration to miser up a big pile of money.

Ha

DW and I live in a very expensive area, used private schools, had in-house day care etc. At the time of the Bush tax cuts we were way above $250K and profited significantly from the cuts. Nevertheless, we both ranted against the cuts at the time. Were we still at that same level of income we would continue to call for termination of the cuts today. We live well beyond 90% of the country in either case and anticipate leaving a decent pile to our kids. The couple in that article are pathetic.

 

[LOL!]

I think we are only jumping on him because with his living way above his means he is not on the path to early retirement, then has the gall to bitch about it.

 

[haha]

The couple in that article are pathetic.

I can't understand the source of your animus. What threats do this very productive, obviously socially useful couple represent?

Ha

 

[Gone4Good]

Of course most of the biggest know-it-alls have never lived anywhere expensive, have no children, and have as their sole aspiration to miser up a big pile of money.

And some of us know-it-alls have spent the past 20 years in NYC and have some idea what a higher-cost environment than Chicago is like. And we know that you can live here cheaply, or extraordinarily expensively. If someone chooses to live expensively, that's fine. But he shouldn't bitch about how much things cost when he could make other choices. And maybe, instead of feeling sorry for himself, he should be happy that he can afford the things he can. Most everyone else can not.

 

[photoguy]

Yes, as in it cost a New Yorker on average $1.20 for ever $1.00 spent by the rest of the country.

The results I see reported imply that for every $1 spent by the rest of the county it is $2.20 for NYC. And for every $1 on housing it is $4 in NYC.

Given that it's not unusual to see apartments renting for 3K/month, I don't see how the 20% extra figure could be correct.