I can't make this up

[theanimal]

Ha! $30k per year for groceries and $15k for utilities!! What the hell are these people doing? And not to mention $25k for 2 (!!) vacations.

[Dragline]

That was just stupid -- makes you wonder where they got those figures. $12K for club dues and only $10K for education on a $400K income? But you know it starts with that ridiculous real estate brokers association push that you should buy a house worth 3 times your gross income. Consumerist propaganda 101.

It makes me wonder why this was created. Perhaps you are correct that its just click bait. But its well produced by the WSJ. Sounds like "pity the makers" see-rap. Otherwise known as "crap".

Good inverse education -- what NOT to do.

[workathome]

You guys just don't get how hard it is to own a 40,000 square foot home with forced air. I mean, I can't help but heat the whole thing. Life is hard, and I'm not responsible for my choices :'(

[slsdly]

I know a well off couple who complained about how much it cost to heat a rather large home that was gifted to them by their in-laws. I am quite certain this video speaks truth to a certain demographic.

[GandK]

This reminds me of Chicago law Professor Todd Henderson's famously out of touch blog post about how he's not really all that rich taking home $250k a year. The original was deleted by him after the backlash, but here's a cached copy (it's at the end of some commentary, in blue):

Todd Henderson's We Are The Super Rich

A quick look at our family budget, which I will happily share with the White House, will show him that like many Americans, we are just getting by despite seeming to be rich. We aren’t.

He then lays out his budget and says that he might have to sell his house if his taxes go up. Predictably, many of the responses to his post are less than friendly. And the guy who preserved the cached copy of the blog post posited his views on why Professor Henderson feels like he isn't rich:

He doesn't say: "Wow! My real income is more than twice the income of somebody in this slot a generation ago! Wow! A generation ago the income of my slot was only twice that of somebody at the bottom of the 10% wealthy, and now it is 3 1/2 times as much!" For he doesn't look down at the 99% of American households who have less income than he does. And he looks up. And when he looks up today he sees as wide a gap yawning above him as the gap between Dives and Lazarus. Mr. Henderson doesn't look down.

Instead, Mr. Todd Henderson looks up. Of the 100 people richer than he is, fully ten have more than four times his income. And he knows of one person with 20 times his income. He knows who the really rich are, and they have ten times his income: They have not $450,000 a year. They have $4.5 million a year. And, to him, they are in a different world.

And so he is sad. He and his wife deserve to be successful. And he knows people who are successful. But he is not one of them--widening income inequality over the past generation has excluded him from the rich who truly have money.

And this makes him sad. And angry. But, curiously enough, not angry at the senior law firm partners who extract surplus value from their associates and their clients, or angry at the financiers, but angry at... Barack Obama, who dares to suggest that the U.S. government's funding gap should be closed partly by taxing him, and angry at the great hordes of the unwashed who will receive the Medicare, Medicaid, and Social Security payments that the government will make over the next several generations.

Do I wish that Professor Henderson had a little more self-knowledge? Yes. Is it pathetic that somebody with nine times the median household income thinks of himself as just another average Joe, just another "working American"? Yes. Do I find it embarrassing that somebody whose income is in the top 1% of American households thinks that he is not rich? Yes.

Do I hope to educate him so that he has a better grasp on reality and better understanding of America and of public policy? Yes.

[workathome]

"As long as there are people richer than me I'm not rich" - eh?

[llorona]

I'm still marveling at the $30K for groceries. What could anyone possibly eat on a consistent basis that would cost that much?

And to think, the $400K budget didn't include clothing, dry cleaning, telecommunications, medical insurance, orthodontics, charity...

[Sclass]

I guess the issue here is that it is ridiculous right? Not that it is unbelievable?

This budget sounds like a lot of people I know. I live in a bedroom community filled with VPs of tech companies in Silicon Valley. Not wealthy but rather servants to the wealthy. The families have incomes between $500k and $1M and they are always complaining about not having enough money for an exotic vacation, bathroom remodel, junior's kayak camp in Alaska, psycho therapy for mom, psychotherapy for kids, rehab, horse stabling, etc.

Ridiculous, yes. But very real. The best one was today when a lady I know said she wanted to buy a new car but didn't know if she wanted to start another loan. She was debating on spending $5k on a repair to her luxury car and asked me for mechanical advice. I was a bit shocked that she actually needed to take out a loan for a $60k car in the first place. I assumed she had money coming out of her ears. Then it dawned on me. They're tapped. They buy as much lifestyle as they can afford and that means using credit.

I'm starting to think a high income isn't enough to make you wealthy. These people just have a lot of stuff and activities. Funny they feel poor, but I guess you have to ask yourself what makes you feel rich? Somehow I wouldn't feel rich working for Acme Inc. as senior VP of sales when I can be knocked back to the middle class when my market evaporates. A lot of these folks moved here from average neighborhoods. This place is like a magnet for the up and coming. They come and go fast.

It would be fun to see how the next decades play out for these people. I had fun going through the twenty years of service records on my latest Mercedes. The prior owner was this kind of spendthrift. I was able to back out his job (he made Mercedes Benz write his job title of president for Indiana Savings and Loan on his invoice), his homes as he moved out of his executive estate in the late 80s to a slum in CA. His wife's depression (they mixed in the shrink bills with the car records). His country club bill (odd even though he lived in a lower middle class home far from the club). He kept a residential PO box near the club. And through it all he kept and serviced his Mercedes to the tune of $30k in maintenance though he got the car for $40k in 1982. Google earthed his homes and saw the slide down as he drove his aging Benz across town. It was an interesting story to puzzle together. Obviously a victim of the S&L crisis. All in the bills. He held the car tight.

Right now I'm watching the guy next door who bought his home two years ago for $2.7M. He lost his job six months ago. He didn't tell me but heck, I sit on my porch reading all day and I figured it out. An army of handymen have shown up this month and I think they're gonna sell or rent out.

On the other side of me the guy is telling me that he margined his home and blew an investment (in millions). He comes over when I work on my car to talk to me about finance but the conversation always moves to his debt. He obviously needs to talk it out to somebody other than his wife who recently got a job to make ends meet. But then he just got a new BMW two door...I don't get these people.

Come to think of it I don't know many people under 40 who have much wealth outside their homes...except for the people in this forum.

[Tyler9000]

Wow. Thanks for the vignettes, Sclass.

[Ryannis]

I loved the end "... while you still have an income."

[teresajs]

I'm seeing the same trends as Sclass in my area (roughly 1.5 hours outside of NYC). There are a few of the people spending big who really do have their finances situated (and can afford the big house on the lake, the fancy vacations, the country club membership...). And there are far, far more people who are making six figure incomes but whose lives are completely and utterly leveraged.

Around here, it's the mcmansion on the lake, boat, luxury automobile (one guy has a frickin' Bentley), international vacations, wife who stays at home (she's usually wearing a large diamond on her finger and regularly goes to the spa), country club membership, nanny, private school, etc... But so much of it is a matter of trying to one-up the neighbors. Talking to some friends who live near the lake, I know that there is immense pressure from certain quarters to send your kid to private school for high school ($35k per kid per year for schools that provide only a modest academic benefit over our good public school) whether or not it makes sense (sending a C student to a $35k school? spending college savings on high school?).

When the economy was red hot, that crowd had a round robin of parties (top shelf liquor, catered meals, entertainment... $$$$). If you were on the guest list for more than a few of those parties, you were expected to reciprocate by inviting those folks to your party in the very near future. Similarly, with expensive meals, weekend trips away, etc... (True Story: One time, a local couple had a check to a local charity returned for insufficient funds. It took months of them dodging any discussion of the matter before they made good on the check. Within 6 months, they hosted a hugely expensive party to show off their new wine cellar.)

The thing is, though a very few of these people may have the money to live that kind of lifestyle, most do not. A lot of these folks might be making $250k-$300k. That's damn good money, but it's barely enough to pay their mortgage not to mention all of the other expenses. As the economy tanked, the parties became non-existent and none of these people is as publicly flaunting their wealth as they were in 2007. A few have lost their homes. I've heard others talk about how bad things are for them (not enough money put away for retirement, kids starting college and not enough money put away...).

As I tell my husband when he sees some guy our age drive buy in a luxury automobile, "The car is leased, he has no equity in his house, and he has no money put away for retirement."