How do you earn $500k and still feel average?
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My father passed away last week. I had wills written up for him, he has a small c corp, and we don’t live in a community property state. Mom’s still with us, fortunately.
Besides informing social security, filing a life insurance claim, getting a death certificate, flagging his credit card, and starting the probate process, is there anything else I need to do immediately (in a financial/regulatory sense)?
I’ve been following the guide here: https://www.reddit.com/r/personalfinance/wiki/death_of_loved_one/ but others guidance is always appreciated.
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Rising Star
I wish I knew. It’s not a feeling I enjoy having - and expect zero sympathy from anyone about it.
But since you asked…
You - compare yourself to others, think about everything else you want in life, have a much higher marginal tax rate that you did at a lower salary so while you’re making a lot more gross the net isn’t as great as you want it to be, are often older (30s vs 20s or 40s vs 30s) so have more expenses and responsibilities, and often live in a HCOL area so $500k gets you only so far compared to your neighbors.
Rising Star
Thanks SC1 - wasn’t looking to solicit advice. Just sharing the not rational thoughts behind why someone w that income might feel that way.
The true answer is that someone making $500k and going on 3 vacations a year either never knew what it was like to be average or has completely forgotten. Nothing about this budget is average for most Americans. 3 vacations a year? Maxing out 2x $401ks? $1.5m home and two expensive cars? The median household income in the US is $70,000. These people are oblivious.
Enthusiast
That’s what this entire post is about
Rising Star
If you’re making $500k and everyone else in the social circle is making way more than that, it’s easy to lose perspective.
You are on this app
Or you work at KKR
Comparison is the thief of joy my friends
Or it’s the kick in the butt you need to reach your full potential
I dont feel average but many of my friends have a significantly higher NW that I will never be able to achieve (think 50M+). It all depends on reference points
But my family and I have a great life and I am grateful for it.
Now the big questions is… how can I be your friend that’s also comes onboard?
Oh, are you talking about this??
😂
Rising Star
You live in LA or NY.
The west side of LA is absolutely just as expensive as SF and NYC. $500k will make you feel very average, potentially even below average, living in Santa Monica. You get a small 2 bd condo for $1.5m - forget about a sfh.
The true answer is that these people save a lot of that $500k and so don’t feel anything different in lifestyle.
If $500k folks actually started living at their means instead of below their means they would definitely not feel average.
No kids. But we’re only at $350k HHI and save over 50% take home. Not including 401k (obviously since it’s not take home). These guys are not doing it right.
Because you lack perspective.
Correct.
Enthusiast
Losing perspective. I don’t make half that and I’m still well aware that I’m not average even in a VHCOL area. I live like I earn less and prefer to socialize with those who live similarly (regardless of whether it’s by choice or necessity).
You live in NYC?
As someone who's never made more than 50k...
Yikes.
Have average of all your peers and people who set your frame of reference be $500k according to your biased perception, which depending on the bias can be quite easy.
I make $800 and still feel avg. Money comes and goes.. Lifestyle stays the same’ish
Wow! Could you link us to that bowl. Interested in learning more
Relating to the trending post?? It's actually very possible based on the breakdown.
Conversation Starter
I make $450 tc but still live in a very modest house (2 story, 1300sqft), lease a $25k suv, and usually shop at macys and Nordstrom Rack. Live in MCOL T2 city. I guess I just have an average taste and don’t really wish for more. I feel lucky I get to have all my groceries delivered and don’t think twice about getting delivery when I feel lazy or fly first class on leisure domestic trips.
I'm not the OP but the pricing for seats at the front of the bus is pretty fluid.
Also some would choose destination based on flight price. Columbia on Delta right now you can get there in Delta 1 for $600 round trip.
My favourite upgrade was a winter break NY to St Thomas. $400 coach and close in the airline was offering first for $450. I needed extra luggage they upgraded the seats for no change fee so first for the cost if the checked bag.
My economics professor once said relative comparison will always beat out absolute comparison. To the rest of the world $500 is more than enough but depending on factors such as location and social circle, relatively it could make one feel average.
It’s people putting themselves down, looking for someone on here to say “no man, you’re not average, you’re doing great” so their pp will go up.
Because it's never been about money. And people just can't grasp that. You can be depressed at 7 figures. You can be unfulfilled at 8 figures. You can be directionless and have a trust fund taking care of you.
Meaning. Purpose. Direction. Happiness. None of it is tied to income.