Thursday, June 12, 2008

$200,000 a Year Makes You Rich

(Felix Salmon) Of the 116 million households in the United States, just 4 million are fortunate enough to earn more than $200,000 per year. This top 3.5% of the US population has a level of wealth and comfort that would be almost unthinkable to most people in the world and to most people throughout history.

And yet:

As recently as 2004, the Obamas' adjusted gross income was $207,647, according to their federal tax returns. That's much higher than the national median household income of $48,201, but for a family of four living in high-cost Chicago, $200K isn't exactly rolling in it.




In some places in America, $200,000 will go a long way. It may even qualify you as rich. But in many of our biggest cities, that will barely buy a family with two children their way into the middle class.

Let's get some perspective, people! We judge ourselves by those around us, and journalists have a tendency to be surrounded by people earning well over $200,000 a year. It skews their perspective. It's worth pausing for a minute to realize that "rich" does not mean "people who earn twice as much as me". And to remember that in cities like Chicago and New York, there are a hell of a lot of families of four who consider themselves to be middle class and who don't have a household income of even $50,000.

I'll say it, if nobody else will: a household income of $200,000 means you're rich. If you're childless, a household income of $100,000 qualifies as rich. Rich doesn't mean you have no debt. Rich doesn't mean you don't want more money. Rich doesn't mean you can have whatever you want, or that you can live on the interest on your interest. And rich certainly doesn't mean you have no worries and are satisfied with your lot in life.

Rich doesn't mean the top half of the population, or the top quarter, or the top eighth, or even the top sixteenth. But the top 3.5%? Sure.

Are you in that income bracket? Then admit it. You're rich. It's nothing to be ashamed of.

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