Save. Spend. Splurge.

Why rich people are complaining about barely making it on $$$ salaries

Disclaimer: Read all the way to the end before coming at me with a pitchfork, thanks.

I’ll admit it.

I’m one of those annoying 3-percenters who don’t feel rich or feel like they are THAT wealthy and yet when you look at a snapshot of my finances, I’m definitely in the wealthy range.

I mean, I’m not an Ultra-High Net Worth individual but I’m no slouch in my stats:

  • $300,000 half of my house paid in cash
  • $100,000+ car paid in cash – In full
  • $250,000 invested in tax-sheltered & outside accounts
  • $200,000 in free cash sitting in high interest savings accounts*

*I have this much because I need to cover the next 5 years for myself and my business expenses because I’m crazy conservative like that and want to choose the contract rather than take anything out of desperation. I don’t want to sell any investments to pay for living either.

And yet I still feel like I spend like a normal person. Just that I have nicer things and definitely don’t worry as much about money.

That’s the gist of it.

I’m not going to lie and say it is the same as living in the middle of nowhere and driving a tiny car feels the same — it doesn’t AT ALL and I know it for a fact because I have done it; I have lived in a trailer with an outside john and driven a crappy car that had no heat, no locks and where the battery would die every week for no reason.

I am privileged now, and I know it which is exactly why I live where I live and drive what I drive, because I made the choice to spend X amount of money more to reach that level of comfort — I traded my savings for that extra comfort because I deemed it necessary for me..

(But if I couldn’t afford it or had to go into debt for it, no thanks.)

So even though I am in the “wealthy folk” category based on my working income, I realized that I do not have their recurring expenses….

Wealthy Folk Expenses

So, I guess I am ‘wealthy’, but I don’t have the other “wealthy folk” expenses I’m reading about in these articles:

In these expenses, I seeing that they have:

  • A driver and/or bodyguard
  • A nanny
  • A gardener
  • Events/Galas where I need $10K dresses
  • A second home
  • Private school tuition (granted, I only have 1 child)

… so I can ABSOLUTELY see the outrage directed towards people who whine about how they have expenses like staff to pay for to make their lives run smoothly, when they are in a certain pay range.

I myself, am also shocked they cannot make it on $250,000 up to $500,000 a year.

The ONLY thing I can say in their tiniest of defenses is that $250,000 in an eye-wateringly expensive city like NYC or Bay City areas versus a mid-sized town, does not go very far.

Then again, people live on far FARRRRR less than that in the same city, so the leg they have to stand on is pretty wobbly.

And yet.

I am in that group, but .. not really

See, there is a key difference between me and these folks:

We only earn like they do …. When. We. Work.

And therein I think, lies the source of why I don’t feel wealthy even though I have a lot saved especially for my age.

I don’t make that salary ($250K) on average.

My average salary over the years is something like $87,000. A young professional but not in the sphere of $250,000 a year.

In exchange, I don’t work half the time (we just take off for the summer and go and visit folks), and I have to conserve my money very carefully (see the note on the $200K stash of cash I’m sitting on to see me through 5 projected years of unemployment).

I suspect that this is why I don’t feel rich.

I have to still budget and watch my expenses like everyone else but the difference is that I can absorb bigger hits of unexpected expenses than the average Jane.

So why are these rich people all so stressed if they have all this money?

The real problem with why rich people can’t save their money is actually quite simple — their social circle and lifestyle won’t allow them to.

I mean, aside from the fact that the ones making that kind of dough are usually guys who work 100+ hour weeks and have ZERO time to clean, watch their kids, etc, and their wives even if they are stay-at-home aren’t really interested in doing that either for image reasons (“why don’t you just get a cleaner?“) or just simply don’t think they have to (“why do we have all of this money if I have to scrub the toilets weekly?“), paying for hired help is a hassle-free option that makes everyone happy.

The truth of the matter is that to be part of that glitterati…

You NEED to run into other movers and shakers in the Hamptons who are there in their summer homes, to be in your own summer home to invite them over for catered dinners and drinks

You NEED to be at these $$$$$ charity galas and look successful to get more business

Your kids NEED to be in the same schools as seen in Gossip Girl

You NEED to live on a certain street with a certain type of house to not always feel like the loser in your group of winner friends (again, could be lies but it is all perception)

If you decide to opt out of all of this (let’s be real here, no one is forcing them to do this), it means you are consciously cutting yourself and your family out of the social network and circle which let’s face it, could affect your work deals and subsequently your job if you need a lot of high power broker interactions.

You turn yourselves into social pariahs.

I am not defending them to be sure, but I am trying to see it from their perspective — they don’t want to be social pariahs, they just want to be accepted and it is their lifestyle that is doing it to them.

Their friends and colleagues whom they live with, are all expecting a certain level of participation in a lifestyle they all deem to be appropriate to their social class and status.

If you don’t opt in, it is a different world.

I remember a few friends of mine saying they wanted to live on some street because they thought it was cool and interesting, and when the husband told his boss, his boss was HORRIFIED and told him under no circumstances was he to ever live there, and he would lend him his personal real estate agent to find a better apartment to live in, because no one in that company (big management consulting firm) could ever be socially allowed to live there.

It was just NOT. DONE. and if clients ever found out where he was living, they could potentially decide to stop working with the company.

So, their rent went up $2000 a month because of this social perception of living on the “right street” in the “right neighbourhood” in the city, and they sort of had no choice in the matter, so to speak.

They could have lied for sure, but it is hard to keep up a lie that big, you know? It stresses you to have to remember to lie and to keep up the façade.

So what am I getting at?

It is all about social networks, really…

And .. it really isn’t different if we look at our own lives, just scaled down.

Let’s say you’re a single guy who loves Burning Man and has gone for every year since it started and also does monthly meet-ups with these friends. Imagine if you couldn’t shell out to go to it any more because you need that money to save for .. whatever.

Do you think you’d continue to keep those same ties with all of your friends who go to Burning Man annually?

They’re going to have shared memories created without you, while on these annual trips that they fondly refer back to as they get together. And maybe, eventually, they just don’t call you any more because — what’s the point?

You can’t go to Burning Man, so maybe you also can’t go out and hang any more, which is awkward and not as fun.

Or what if you’re a middle-aged couple who has friends who have cottages (like you do) up north? If you didn’t go every summer for a month, would that social network still be as strong?

Would you still get invited to cottage-y things, like clambake every start of the summer? Probably not. You’re not even at that cottage any more, so the invitations stop.

Or if you didn’t go out for beer and wings every Friday to your favourite sports bar because you need to save up for a new car? Wouldn’t you feel like you’re missing out on the new stories, the camaraderie and your network?

It is the same for the rich — it is just with nicer things and fancier events, but at the core of it all, it is all about socializing and fitting in.

Something we as a species prize quite highly.

And am I any different?

I thought about this a lot.

I feel strange about the whole situation because I am slightly defensive about the income (long hours, I worked for this, I took a risk, it didn’t happen over night, bla bla bla), and yet I am a bit judgemental about what people consider to be a necessary expense (I try hard not to be biased but it is difficult not to roll my eyes when I read that a driver or a gardener is a necessity — what, we can’t take cabs any more or plant things that don’t need to be maintained?)..

Amongst my colleagues and those earning the same as we do, we do not have hired help which are apparently at our social class and status, considered to be standard expenses (even readers have written in asking me where my nanny is in all of my Week of Money diaries, to which I replied — What nanny? I’m the effing nanny…), to my colleagues often expressing surprise at my not having a cleaner come in at least once a month (Again, what cleaner? I’m the effing cleaner…), we just don’t socialize with people who have such lifestyles.

Not by choice of course, but just .. that’s how it panned out.

We didn’t go to private schools as kids, grew up poor and middle-class, and I never clicked with more than a handful of my school friends at any given time; in fact, we have all lost touch with each other because we have grown so far apart  due to distance (I live 7 hours away), and due to lack of shared interests outside of having been friends at school.

I suspect we as a couple we have also managed to avoid this kind of social pressure to buy a second home and so on because we have very few close friends whom we trust and treat like our family, and your true family (blood or not) doesn’t care what you have or don’t have.

For the friends we do have, I wouldn’t judge any of my friends if they had nannies and cleaners (almost all of them have one or both), but it wasn’t a choice we made for ourselves, and while I can see it being as a great solution to all my complaining sometimes about how much it takes to run a household, I guess in some small way, we are also trying to limit our lifestyle creep and inflation by not allowing ourselves to see it as a necessity or an option.

They don’t care whether or not our kids will be in the same private school. And frankly, if they don’t want to be friends with us or talk to us because we refuse to pay gobs of money on education where we don’t see a net benefit and have differing views, then so be it.

Our REAL friends are still friends with us even if we don’t have any money and don’t or aren’t able to go out and spend money on our shared interests.

They don’t care about being outdone or outdoing us — why would they?


I am confident that if I told my friends — Hey, I have to cut back on eating out. Can you just come over and we’ll cook something together? — they would be even more excited to do something more personal and cheaper than going to a restaurant.

What we care about is raising up our friends to be the best they can be (helping them with negotiations, giving them tips, even considering business proposals together), and being… FRIENDS.

So I think the real message here, is yes, those annoying stories about folks who make more than a quarter of a mil a year complaining about how they are barely getting by — they are just trying to fit in to their social class and circle.

They’re keeping up with their own version of the Joneses, just as we do.

They of course have a choice, like we do, to opt in, or out of doing so, but how many of us, would choose to willingly opt OUT of our social networks and downgrade, so to speak?

Would you want your friends to stop sending out invites to regular gatherings for old car shows because you no longer have a car to get to said car shows? Or to not hang out because they’re sensitive (and feeling awkward) that you are in another financial headspace right now and cannot afford it?

It can get awkward. So people just avoid you. And it hurts.

I know a lot about being excluded and being avoided (lived through it most of my young life starting as a young kid in school up until college years), and it can hurt if you aren’t used to it (I was hurt the first few times I experienced it, but now I’m blasé about it.)

Well, it’s the same for rich people — they don’t want to opt out either but their pond is far more expensive than yours or mine.

(Again NOT defending anyone here, you make your own choices about how to spend your money and that’s it.)

What say you?


  • steveark

    I buy that they feel social pressure but I think the cases where their high salaries are at all tied to their social lives outside of work are very rare. CEO’s don’t keep that job because they go to the right parties, they keep their jobs because the profits and stocks keep going up. Maybe if they are running an advertising agency yes, but if they are running an oil company or WalMart their boards don’t care much at all about their social life as long as they don’t get arrested. And what is true for CEO’s is also true for their C-suite minions and for the VP’s below them. I made big money in a corporate officer’s role and nobody cared that I lived in the same house for my entire career and drove used cars while they had mansions. They are still working to pay for their stuff and I’ve been retired for years!

  • Amy

    Great topic, with so many nuances. I see with my own eyes how the benefits of being in a certain social network impact a person and their entire family, for generations.

    Example one – I just found out a super nice house down the street was sold privately. Networking!
    Example two- I went to an Ivy League school where big wall street firms recruited, they sure don’t recruit at the small uni I teach at!
    Example three – my wealthier sister travels with other people in her income range b/c it doesn’t feel uncomfortable. Both she and I have, in many ways, risen to financial status higher than our peers growing up. If I want to go on vacation, I can’t call on 90% of my friends. Of course, that doesn’t mean I’m not going to be friends with them, just that I need to find some more friends. I think that pertains to other aspects of life as well, similarities. Often my only social time is hanging out at school drop off and and dance lessons. So, I’m more likely to meet other parents.

    I do think that we are affected greatly from the social networks we are in, with respect to business and finances etc.

    • Sherry of Save. Spend. Splurge.

      I have the exact same feelings — I feel uncomfortable unless I know they are in the same salary range as I am, otherwise I will not discuss money. I just don’t want to start anything.

      My university was also a place where the big firms recruited, particularly my school, so that networking advantage was worth all that money.

  • Hawaii Planner

    We are similar to what Revanche posted. We live in a crazy, crazy expensive area in the bay. But, we own our choices. We have made tradeoffs to keep our kids in the school district we moved to 5.5 years ago. It’s expensive, and we have about six more years until the kids are done with high school. We’ve prioritized stability & minimal commute for now. I clean our house, my husband maintains the cars, yard, & pool. A pool is a luxury we didn’t want, but the only house we could remotely afford in our neighborhood came with a pool. . . We do prioritize travel, and our kids are at a super fun age for trips, & we can afford it, so we make it happen. We rarely eat out, my shopping budget is $500/year, etc. We’ve prioritized the things that matter to us. We don’t hang out with people who try to push different values on us.

    • Sherry of Save. Spend. Splurge.

      That is very admirable and difficult to achieve if you are not disciplined and thinking about it in a rational manner.

      Your tradeoffs all sound reasonable, but I feel like these people just go with the flow…

  • SP

    I don’t feel for them. We live in a high cost area with incomes on par with some of those numbers, and still manage to save over half of our income. Well, probably not half anymore now that we have the drain of childcare, but still.

    We recently hired out some landscaping work and are having the guy help us with maintenance. We planted the most low maintenance things possible (mostly to avoid a huge water bill and because of the environment). But, we spend quite a bit of time working on the rest of the yard because things just DON’T STOP GROWING here. It still pains me that we hired him, but it was either that or lose my husband more hours each weekend to yard work.

  • Revanche @ A Gai Shan Life

    Meh, I don’t feel for them. I live right here in the SF area, making what would be fantastic money anywhere else, and yeah, we feel squeezed between mortgage, high property tax, and the high cost of childcare. To balance it out, instead of keeping up with anyone, we drive old cars, we don’t take fancy vacations, we don’t have any help whatsoever other than the childcare (which is VITAL), and we save tons because those are our priorities. We hang out with the few friends we like enough to spend time with and they make a lot more than us or less than us without making a big deal of it. We go to free events or offerings, we take turns hosting meals to control costs, we don’t cast judgement on them for looking into private school options and they don’t have anything to say about whether or not we’re going to.

    I just roll my eyes at those folks who feel like they HAVE to do everything that everyone else is doing and then cry about feeling average. Because you are so not, nor are we. We pinch and squeeze every penny so we can save, sure, but that doesn’t make us average by a long shot nor does this struggle come anywhere close to the real struggle of having a lot less money. We recently had a big fat fight with a “friend” (haha no) who was *beyond* entitled about wanting us to spend huge gobs on a meal and then angry with us because we pointed out that while it might be within their reach, it was not ours. She was angry because she thought that it was rude of us to point out that we didn’t have as much to spend. But it wasn’t rude of her to tell us that we should be happy to spend $500 on a meal. I might be a little sick of the people around here ;D

    But I will admit that some of this also comes of being a much less social person than most. I would HATE to have social obligations with work people every week. 🙂

  • Kate

    I understand what you are saying, I as well feel like an average middle class. Daycare for two kids in Chicago is around 4-5K per months, health insurance for a family of four is $1200 a month, we are contractors, so we have to buy our own health insurance. That’s when I get jealous of you Canadians and want to move to Montreal, where my brother lives 🙂 We only have one car, purchased for cash, no school loans, regular size house in a good and safe neighborhood, but no fancy renovations. I pray for my kids to go to public school in few years because we will finally be able to save those extra 5K per months that is being spent on daycare.

    • Sherry of Save. Spend. Splurge.

      The daycare costs are astronomical. In Montreal they are subsidized but not by much, really. In Ontario, ridiculous… I am amazed at people being able to work when they have kids under 5.

      Your own health insurance is one of the reasons why I found the U.S. so hard to live in, as being an employee would make such a big difference..

  • liteadventurer

    This is one of the reasons why I don’t hang out with other people in my profession. It’s much easier to live a modest life and save a ton of cash when you surround yourself with peers who also live modestly. I opted out a long time ago and haven’t missed it at all.

    I’m not sure whether or not this has turned me into a social pariah with others in my income range; honestly, those people’s opinions do not matter to me, so I truly don’t care. What I do care about is potentially not needing to work ever again by the time I hit my early 40s. That is legitimately awesome and far outweighs any social pressure to live in the right type of neighborhood and drive the right type of car.

    • Sherry of Save. Spend. Splurge.

      That is a great attitude to take, but some people like even ones in my family, I can tell you they don’t have such visions of their own futures. They’re more into showing off, huge parties, catered affairs.. and all of this I keep my mouth shut on, because they can do what they want with their money but it makes me wonder if they are happy.

  • Sense

    Hmmm. It is really hard to feel for them because those of us who have had to scrape by, and are privileged enough to have some time, health, and smarts to think things through, well…WE GET CREATIVE instead of spending more money when there is something we want/need but we can’t afford it (or if we just don’t want to spend the money on it).

    With your examples above, most of us PF nerds recognize which hobbies and activities and lifestyles give us the most joy (e.g. your car shows, Burning Man examples). If we needed to, we would come up with creative ways to cut back on other things to save up for the “social circle activities” that bring us joy. I mean–they could carpool with their friends to the car shows. They could go to BM every other year, or for one day a year, or host their own mini-BM or volunteer at BM in exchange for entry, or some other compromise. They could go to the bar and share a plate of wings instead of getting their own plate every week. We’d see if there was a way to get what we wanted without compromising our finances.

    For example, I wanted to live in the Auckland CBD so I could walk to/from work within about 15 mins–very important since I am in the lab until 11 or 12 at night and I abhor dealing with the Auckland bus system. The CBD is one of the most expensive places in Auckland to live, and I am on a PhD salary. I can’t really afford it. Instead of paying outright to rent an overpriced studio or one bedroom, I found a great 2 bedroom place with a flexible landlord who lets me basically hack my rent. I let out the parking space which comes with my flat, and live with a couple instead of one other person (or nobody). This also helps me share the utilities costs.

    I also love driving, but can’t afford my own car (and I rent out my parking space, anyway…). Instead of owning a car, I use a carshare company. I get to drive but I don’t pay for parking, petrol, maintenance, insurance, etc., and this is also better for the environment.

    I LOVE travel and love seeing my family, but flights anywhere from NZ are expensive. I save up for years and take advantage of credit card airmiles deals to pay for my flights, stay in hostels and split the cost with a friend, and get groceries and make most of our own meals instead of eating out every meal on trips.

    In my examples, I have gotten what I wanted and what brings me joy, for MUCH less than what I’d pay outright using traditional means. WHILE saving 25% of my income! That kind of creativity feels like it is missing from their lifestyle.

    With your rich person examples, they are opting into things and activities that a. they cannot afford AND b. do NOT necessarily bring joy or value to their lives. Double whammy. They are doing it for empty reasons–because other people do it or expect it of them? To be honest, if you are working that much to pay for things that are meaningless to you and are just for your image…that’s on YOU. I can’t feel for them in those cases. I mean, at least TRY to be creative and limit your spending on things you don’t value! Go to fewer galas or vacations, try rent the runway instead of buying a whole new dress. Get drought resistant, low maintanence landscaping, something. Why TF are you spending $500/month on WINE?! There’s 2 buck chuck at Trader Joes, or treat yourself to a nice one fewer times in the year. FFS.

    I just don’t see them doing this kind of creative work in the links you posted, and that keeps me from feeling any type of bad for them. There are WAYS and they just aren’t taking them, either for image sake or just because they haven’t knuckled down and explored them. They haven’t had to like we have had to, but they should have done so before and _instead_ of complaining. It is really insulting to the people that live on much less, and to those that are going hungry or homeless in their same cities. That is the heart of the issue for me.

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