this is a huge problem because if you're in the top 1% then you're probably also living in the top 1% most costly cities and towns (at least in terms of housing cost). take into account the much higher taxes and you'd only be doing a tiny bit better than the average person nationwide.
I think "a tiny bit better" underestimates how big the gap is between "median income" and "1% income." The median individual income for the US in 2019, from data I can find (on "Don't Quit Your Day Job," which uses census data rather than Social Security data), is $40,100; the average income is $48,380. The threshold to enter the top 1% is $328,551.
I live in one of the most expensive cities in the country (San Jose, CA) in terms of both cost of living and taxes, and I'm making well under that $328K level. And I assure you I am doing more than "a tiny bit better" than someone making under $50K in a metro area closer to the national median.
tl;dr: I really don't think anyone who's in "the 1%" is having a huge problem with their finances, unless they're staggeringly bad at money management.
GP is overstating a bit but not by too much. I have friends in non-coastal states and $50k is a kingly amount of money out there. As in, renting a nice family-sized house for $500/month.
At san jose's going rate of roughly $4k/month for the same thing, that would be the equivalent of a $400k/yr salary.
> At san jose's going rate of roughly $4k/month for the same thing, that would be the equivalent of a $400k/yr salary.
No, it wouldn't -- conflating absolute dollars with percentages is a mistake in this kind of comparison, even though it's a very common one. You need to look at the amount of money you actually have left over after expenses. Let's throw in federal taxes based on 2019 rates for a better comparison.
Person A: $50,000 a year - $8200 in taxes - ($500/mo * 12) = $35.8K after housing
Person B: $400,000 - $127,000 in taxes - ($4000/mo * 12) = $225K after housing
Even if we assume everything else costs eight times as much for Person B as it does for Person A, they'll still have several times left over after paying those expenses than Person A had before expenses.
I think you did follow! I was talking about housing costs, not the rest of living costs, because in general housing is (a) your biggest expense and (b) most tied to the region you're in.
Sure: gasoline, utilities, and groceries are certainly more expensive here in Santa Clara than they would be if I was still living in Tampa, Florida. But the difference is much smaller in magnitude than the difference in housing costs, and the absolute amount of money that I'm spending on those things is also less. (e.g., I pay around $3.60 a gallon in gas right now; in Tampa it's around $2.40/gal, which is a pretty astounding difference objectively, but it's not eight times less. if I drove 15,000 miles a year in a car that got just 30 mpg, I'd pay about $50 a month more here.
In general, everything else follows similarly. If the $30K number you produced is "stuff Person A spends on non-housing costs," in practice Person B, even in the most expensive area, isn't spending anywhere close to $240K on the same things. It's extremely unlikely they're spending anywhere close to $60K on the same things.
