"Is someone making more than $400,000 per year rich?" Yes. Next question.

Why, oh, why does this keep coming up?

Every so often, someone on Twitter will ask whether or not people making $400,000 per year are “rich.” Without fail, someone will respond by saying that it depends on where the hypothetical person with their hypothetical $400,000 per year lives.

Let’s set something straight: if you make $400,000 per year, you’re in the top 2%.

I feel like if you phrased the question in a way that put the $400,000 number in the context of being in the top 2%, you might get more support for the “Yes, that is rich” answer. In 2020, the median household income was $67,521, meaning that $400,000 represented 592% of that figure. Personally, I’d be inclined to say that someone making nearly six times as much money as the median American is rich, and it’s not even a close call.

“Yes, but that doesn’t address the fact that the cost of living in some cities is a lot higher than other areas of the country!” you may be thinking. Okay, let’s address that.

Did you know that the median household income for New York City is actually less than the national median? (~$64k vs. ~$67.5k) So if New York is the standard people are referring to when they add geographic conditions to their answers, you’re talking about a sum of money that represents more than six times the city’s median income.

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Yes, the cost of living in New York City or San Francisco is higher than, say, Lynchburg, Virginia (I googled “most average American town,” and that’s what came up, so let’s go with it), but the fact is that to be “middle-class” in those cities is to have an income in the general vicinity of the median, not the median six times over.

It’s at this point where people tend to respond with a list of things they own/have to maintain/etc. In my replies came this post from someone who noted that local and state income taxes cost money (okay), sales and property taxes (ehhhh), “plus, paying full freight for college tuition because you don’t qualify for financial aid” (ughhhh).

“Not starving, but certainly not rich.” I beg to differ.

I think it’s fair to note that yes, income taxes are a thing (that’s kind of the entire discussion here!), but the rest of the things listed in that tweet are spending choices. You only pay property taxes on property you chose to buy (or were given, in which case, you have the option to sell it if you don’t want to pay taxes on it anymore). Plus, property is a form of investment in itself, not to mention that your choice to live in the area with the higher cost of living is one that you made. Sure, your job may require you to live in or near a specific city, but if the average household in that city is making six times less than you, you must be making some specific choices that contribute to the fact that $400,000 doesn’t seem “rich” or “wealthy.”

And while it’s very nice of you to pay for your kids to go to college, that’s also a choice. Lots of people go to school without financial aid and without parents paying their way. They take out student loans (which is its own kind of hell). Your choice to be a parent who doesn’t want your kids to have to take out loans to get through school (which I am not placing any value on, either positively or negatively) is a decision about how you choose to spend your wealth.

You’re rich. Congrats! For real, I’m not quite sure what it is about this issue that gets people so riled up and insistent that “No, no, $400,000 actually isn’t a lot of money!” when it is by any reasonable standard. And it’s annual. We’re talking about people who consistently make $400,000 per year. I think there’s a need for rich people to feel like underdogs, to feel like they’re part of the middle class. I don’t quite understand it.

But yes, a lot of the “but I spend a lot of money on things!” defenses come down to this, basically:

I’ve never made $400,000 in a year — or six figures at all. And looking at my subscriber figures… ha, that doesn’t seem to be changing in the near future, unfortunately. Maybe that’s why I find it so frustrating and insulting when you have people going into detail about how after they buy their million-dollar homes and fancy cars they’re actually just scraping by. They’re not. For as long as they keep making that amount of money, they’re set for life. I would happily trade my income from now until the day I die for a consistent $400,000 per year, after which I’d be more than willing to report back about whether or not I felt (since the people who argue that $400,000 isn’t “rich” tend to base their position on whether they feel rich) rich as a result. [wink, wink]

And hey, don’t feel bad. Proposed tax increases on people making $400,000 a year would only affect the income over $400,000.

But for now, just, you know, please subscribe. (Or if you’re super-wealthy and want to send me $400,000 or some other large sum of money, you know, for science reasons… there’s always Venmo.)


Back in August, I said that on October 1, I would be randomly selecting and upgrading 3 free accounts to premium accounts for free (forever). Right now, that doesn’t mean much since I’m really trying to keep as much of my content free as possible, but… I’ll be following up with the 3 people whose accounts got the upgrade via e-mail later today!

Have a nice weekend, all.