A New New Deal?

[Velociryx]

Again KH, I'm not the Pope....I don't have final authority on the numbers, that's just my two cents. If you wanna say Leisure Class is something else, go for it. Kid did, tho I disagree with his definition.

Makes no matter to me.

-=Vel=-

[KrazyHorse]

Originally posted by Velociryx
Again KH, I'm not the Pope....I don't have final authority on the numbers, that's just my two cents. If you wanna say Leisure Class is something else, go for it. Kid did, tho I disagree with his definition.

I hate to tell you this, but people making 150k a year, while quite well off, cannot simply choose to stop working. In most ways their lives resemble those of families making 75k a year much more than they do those of families pulling in a million a year.

[Jon Miller]

I think the leisure class is people who have $10m or can make it within a couple of years.

$150k is just upper middle class.

JM

[Jon Miller]

One of the issues is that it is very very hard to move from the middle class to the leisure class.

You basically have to have a bit of luck or connections.

JM

[KrazyHorse]

Even a couple of million accrued wealth is enough to bring in a fairly risk-free income of ~100000$ per annum.

[KrazyHorse]

Originally posted by Jon Miller
One of the issues is that it is very very hard to move from the middle class to the leisure class.

Why should I give a damn about that? The people who might accomplish that are already living pretty well compared to most other people. Why should our priorities lie in helping those who are already doing fine?

[Velociryx]

@KH, good point, however, I would argue that this is largely by their own choice. I can promise you that if I had ~7 years of that pay band, I could and would be able to stop working (largely cos I don't need 3 Jags and a Beemer in the driveway and a million dollar house).

As your own post points out, a couple million socked away (fairly easy to do with proper planning at a $150k salary) leads to a nearly risk free income stream that can more than support your family in style, putting you in the class where work is optional.

At any rate....I'm not there. I'm most definitely middle class, and unfortunately, from where I'm sitting, there's not a lot of leisure or pampering going on.

Anecdotal? You bet. Still true tho.

-=Vel=-

[Agathon]

Originally posted by Jon Miller
One of the issues is that it is very very hard to move from the middle class to the leisure class.

You basically have to have a bit of luck or connections.

JM

If you even think that anyone in the top 5% could be labelled "middle class", then you've fallen for something.

On the other hand, if you want to define the leisure class as those whose income is primarily spent on competitive consumption (which is one of the characteristics of Veblen's leisure class IIRC - I am too lazy to get off my backside and check my own copy of his book), then people earning over 100K a year fall into that class because most of them spend money on "prestige" goods to maintain or advance their social status.

As has often been noted. Really rich people are mostly quite nice. It's these "aspirational" pieces of ****e that are the problem. I've never met one that I didn't want to violently murder.

[MrFun]

Originally posted by Jon Miller
One of the issues is that it is very very hard to move from the middle class to the leisure class.

You basically have to have a bit of luck or connections.

JM

I'm with KH on this one.

I'm not concerned at all about any middle class family's aspirations to move up to the upper class.

My concern is that of the impoverished, the working class, and the lower middle class who are truly less well off than they have been in the past. (well okay, the impoverished have always been screwed)

[KrazyHorse]

Originally posted by Velociryx
@KH, good point, however, I would argue that this is largely by their own choice. I can promise you that if I had ~7 years of that pay band, I could and would be able to stop working (largely cos I don't need 3 Jags and a Beemer in the driveway and a million dollar house).

People making 150k a year don't generally own a million dollar house. Probably more like 500k. They also don't own 3 Jags and a Beemer. Probably 2 cars, one of them a Volvo, one a Jeep Grand Cherokee. It also looks like you're thinking about 150k for an individual. This is family income, and by the time people make 150k they generally already have at least 1 kid.

As your own post points out, a couple million socked away (fairly easy to do with proper planning at a $150k salary)

After taxes, 150k goes to 100k. Now add in the fact that most people in this range don't get here till their mid-30s at the earliest. Assuming you're able to save 50k a year post-tax and that you buy the most tax-effective investments (index funds) earning a normal return (~6% after inflation?) it will take you ~20 years to save up 2 million.

[Jon Miller]

Originally posted by KrazyHorse
Even a couple of million accrued wealth is enough to bring in a fairly risk-free income of ~100000$ per annum.

But it isn't enough to fly off to the Bahamas for a weekend away when you want. It is true that it is enough to not have t owork if you are careful. But being careful isn't a common identity for the leisure class.

JM

[Jon Miller]

My mom and step dad, and my sister and her husband, both have had incomes at the ~100k range (combined).

And they are definitely not wealthy. They have enough to have a house and some nice stuff. But they can't go on vacation when they want or eat out when they want or many of the general activities associated with being rich.

And I don't see that changing if their incomes went up to 150k.

JM

[Velociryx]

@KH, Yes, using those assumptions, 20 years is about right, but I've generally seen nominal returns listed in the 7-8% range (shaves time off your equation), and your numbers don't take into account the other working spouse (often present). Even if said spouse doesn't rake in that same kind of salary, the household's savings can skyrocket simply by its presence (that certainly factored factor into my planning when I made my earlier statement). In any case, I didn't come here to split hairs, but I did want to emphasize that the assumptions you listed don't necessarily tell the full story, and it'd be *entirely* within the realm of possibility to save a good chunk more than $50k a year on a $150K salary, and again, with proper planning, be in a position to live entirely off interests in relatively short order (which, come to think of it, should probably be factored into the definition of "Leisure Class" - cos at that point, work really IS optional, but again...these are just my random musings. I'm not pushing an agenda, and I'm certainly not gonna be heartbroken if folks don't agree with me.

Just stating an opinion.

-=Vel=-

[KrazyHorse]

I agree with you in terms of what class 150k falls into. And that is my point. Political initiatives aimed at helping the middle class are a waste of money. They are helping people who live fairly comfortable lives instead of those who don't.

[KrazyHorse]

Originally posted by Velociryx
@KH, Yes, using those assumptions, 20 years is about right, but I've generally seen nominal returns listed in the 7-8% range

Nominal doesn't mean crap. Real returns are what you're interested in, because otherwise in 20 years your 100k a year income stream will only be worth 60.