Comment by deadbabe
12 days ago
As you access higher incomes the possibilities of things you could buy expands, thus you want more and more money to afford them, thus requiring bigger pay raises.
12 days ago
As you access higher incomes the possibilities of things you could buy expands, thus you want more and more money to afford them, thus requiring bigger pay raises.
Incrementally increasing expenses as your income raises seems dumb, for me there are only three financial levels:
1. Can't afford lifestyle.
2. Can afford lifestyle.
3. Can retire.
Raises and budgeting can take you from 1 -> 2 quickly, but going from 2 -> 3 would require such a humongous raise that even a 10% one would be pointless.
Definitely a privileged take, but it does kinda suck when you are in the "Well at this income level I can safely retire in ~15 years... see ya then". Do you just grind it out safely? Or do you take risks to see if you can jump to number 3 immediately?
Affording a lifestyle is largely about stability of housing costs. If you don't have at least $30k, you can't afford a house, and thus are subject to the whims of your landlord and the rental market. If you have $30k-$300k, you either just bought a house or are looking to buy one (somewhere...). If you have $300k-$3m assets you probably have already owned a house for 10 years and have substantially lower housing costs, so you can coast at your current lifestyle. If you have $3m (including a house) you can retire.
So much this... You hit closer to the 5% mark, and you still have to work and struggle. Having a job hunt take 7 months after surgery is pretty rough when you only had enough set aside for a couple months. You come out in debt up to your eyeballs and have to make as much as before or you're going to have to sell your home and start over at 0. Now looking at 5-10 years to get back to good.
Moving to a better neighborhood, getting a new car next year, or getting more repairs done on your home start taking a back seat. It's hard to even imagine making half as much and trying to hold anything together.
And you're seeing jobs that literally pay what you made 15 years ago for "expert" level experience.
I don't know what to think any more.
That's probably part of it. In my observation income changes its meaning starting at a certain Point. Most people I know making upwards of 200k EUR pa don't want or need more money to buy more stuff but to keep score with their peers and, in more extreme cases, to distort public opinion -- even if it is only about the local Kindergarten.
Yup. These days I pretty much have to spend like $3k on a purse.
At a certain point though you start saving or investing hand over fist the excess you cannot manage to spend. A coca cola costs the same no matter how much you make after all.
Right but the salary ranges here are not that tipping point. Sure, a coke is a coke, but how many people can even consider the other options when it's 5 dozen for $10 for that or 5.99 for 8 Aura Boras? Having significant excess income allows you to stop making minimum choices and start choosing for quality, which leads to lots of benefits. For example, you may want to source your groceries from local farms and small grocers, which keeps money in the local economy rather than pushing it back to shareholders at kroger or amazon. You can afford high quality natural materials for your clothing a la the boots problem, leading to both greater longevity of your own personal wardrobe and also a reduction in microplastics down the road. You can consider the full range of brands of sodas, some of which are both smaller creators and perhaps zero calorie too, making you slightly healthier and at the same time pushing competition in favor of newer innovative companies.
I think what we are seeing in these data is that people with less than enough money to have even started to conceive of these decision points simply don't factor it into their perceived desires for more income at all, and that has a sort of cliff effect on desired salary increases that falls off once people actually get out of the rut of survival wages. No one at 200k is being forced to buy the cheapest everything and pinching the pennies, but theyre also in no way "set for life" unless they've indeed been doing so.
You can do all of this stuff yet the small lot milk is only $8 and the smoothie at Erewhon is only like $10 still. This is what they mean by things being more expensive for poor people. Even with being choosy, prices can only realistically be so high. Say you are a working professional: the local economy by default has to price things such where they are somewhat affordable to a certain number of people to support the business. Unless you live in Monaco chances are you having a degree and using it in your work puts you at the elite end of the wage earning scale in your local city. Therefore to satisfy business cases, things are relatively cheaper for you and relatively more expensive for everyone else. This is true for coca cola, erewhon smoothies, local farmers markets, cars, plane tickets, and homes. Whatever it is. It's even more egregious for the filthy rich. How shameful we let someone like Lionel Messi only pay $10 for an Erewhon smoothie or only $100k for a mercedes considering what that relatively means to their bottom line compared to what it means for ours.