The term is HENRY. High Earner, Not Rich Yet. People making $100-250k are surprised to find themselves still living paycheck to paycheck, struggling to save for retirement or afford things their parents did like take a vacation, improve their homes, or having children.
They’re not struggling to survive, but they aren’t living a life of luxury without going into debt.
You’re not looking at the cost of living. your actual income is usually irrelevant. you could be making $100-250k, it doesn’t matter, if the cost of living (and being able to actually get to your job) is 95% of that income.
For example, my buddy moved to the UK from BA where he was making $8000/mo and living paycheck to paycheck and going into debt. they didn’t tell him they would cut his salary down to $4500/mo until he actually got there. He had a panic attack, until his first set of bills arrived, and he realized he still had some 80% of his paycheck left for himself due to drastically lower cost of living.
Excuse me what? Someone earning that much money is only living paycheck to paycheck because their lifestyle is that expensive. And then it actually is their own fault for buying the 15$ Latte with a 30$ Avocado toast every morning, driving to work in their leased 100k $ car, while their wive drives her own 100k $ car.
Cost of living is not the same as the cost of one’s specific lifestyle.
“Cost of living data includes the expenses incurred for food, shelter, transportation, energy, clothing, education, healthcare, childcare, and entertainment. A cost of living index tracks how much basic expenses rise over time and among different regions.”
I get the concept. But realistically that would mean three things:
In a region where people make 250k a year for them to live paycheck to paycheck the cost of living would need to be somewhere around 4-5x higher than in an area where people would make 50k a year.
That would further mean that in the areas where people make 250k a year noone would exist that could afford anything less than that. So the grocery store cashier and the gas station clerk and the postman would all need to make the same money as google software engineers. That is clearly not the case.
And thirdly that means that either the people who make that much money living paycheck to paycheck are economically illiterate and dont grasp such simple concepts… Or which is far more likely, the quality of life in high cost of living areas is in fact so much better, that it is worth paying the extra.
Either way someone who can make 250k a year is choosing to life paycheck to paycheck by choosing to pay such expenses. They definetely have the means to work somewhere where the difference between cost of living and paycheck allows for saving signficant amounts of money over time. Claiming those people would be victims of the system who were forced to live paycheck to paycheck is simply not true. It is still very much their own choice.
So where is that place, where the cost of living fully eat up a 250k salary, or even a 100k salary? And by eating up i mean actually living paycheck to paycheck, not as given in the examples enjoying many small luxuries that add up, but are not realised as such.
Yeah, it does happen but because people spend too much on shit they dont need
Edit: I got a 6 figure job. Lived in a cheap shitty basement, rode a bicycle, and took public transportation to work (which was subsidized by the gov). After a few years I quit and had enough to mostly retire
