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According to the US Census Bureau, the average US income is just over $70,000 a year.
There is quite a range of results around the median, which helps break down further by percentile.
DQYDJ has a good breakdown of the data showing the bottom 10%, bottom 25%, median, top 25%, top 10%, and top 1% of earners.
You can also see these breakdowns by age.
These numbers help you understand where you are in terms of your earning power, but as the old saying goes, your current position is a function of where you sit.
Income is distinctly different from wealth. No matter how much you earn, if you don’t save, you can’t really be rich.
A person who earns $40,000 a year but only spends $30,000 and saves the rest is building wealth. A person who earns $2 million and he spends $2.5 million and has nothing saved is not actually wealthy.
But there is a perception that high income makes you wealthy, and that perception often comes true when it comes to how people think about their finances.
There are many factors that determine how you feel about your income level.
where you live. Your family status (single, married, children, etc.). level of your spending. Relative income and wealth of people around you. Cost of living.
Nor does it help that income levels have changed dramatically over the past 50 years or more. Pew Research compared the breakdown by bottom, middle and top strata from 1971 to 2021.
The good news is that more people are now in the high income bracket.The bad news is that more and more people are in the low income bracket.
The strange thing about the growing upper class is that many of them look unhappy.
Earning just over $200,000 a year puts you in the top 10% of all earners in the nation. It seems to work pretty well for me.
However, someone who lives in Manhattan or San Francisco and makes that much money might try to argue that such salaries belong only to the upper middle class, not the wealthy elite.
And even those who are objectively wealthy may struggle to be content with what they have in places where wealthy people flock.
Last month, New York Magazine had an article that profiled people in New York City who were wealthy but didn’t feel wealthy, based on peer groups.
“It’s so crazy how rich you have to be in New York just to live comfortably, just comfortably,” she told me, gasping for a moment, as we rushed to a meeting. “There’s a very subtle heartbreak that maybe people have made better life choices than you and their homes are bigger and happier.”
It’s understandable to feel out of place in a city where some of the wealthiest people on the planet live. But here’s the kicker for the person quoted here:
Crazy enough, this friend is 45 and not only has an apartment in the city, but a weekend home in the suburbs. She buys with the income she earns from her successful career and enjoys it with her partner and children. She is happy, but undeniably exhausted from trying to stay that way in a city where exorbitant wealth—two nannies and a chauffeur, St. Bart’s spring break wealth—is everywhere. increase. “She’s in her 40s and still lives in New York, and if she’s still busy and trying, she’s completely overwhelmed and a little sick in parts,” she says.
This person is definitely rich, but they don’t feel rich because their benchmark is someone who is even richer and more successful.
We shouldn’t feel sorry for wealthy people who aren’t happy, but it makes sense why this is the case. degree will be lower.
In today’s world it’s easier than ever to compare yourself to others. And there will always be people who are richer, smarter, more successful, or better looking than you.
Rich is a subjective term, so there is no right or wrong answer for this blog post title. No matter how much you earn or how much you have in the bank, there are many ways to live an abundant life.
The problem with using arbitrary numbers to judge yourself is that once you get there, you’ll probably move the goalposts or feel unsatisfied.
Lack of income or wealth can certainly make you miserable, but it doesn’t necessarily make you happier after a certain point.
The only book I really read this week was about flights to and from Chicago.it is called Good Life: Lessons from the world’s long scientific study of happiness. I thoroughly enjoyed it.
I’ll have some thoughts on that next week as it relates to what actually makes us happy.
In this week’s Animal Spirits video, Michael and I discussed income levels and more.
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References:
perfection is the enemy of good
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