CNBC did a piece a year ago (but retweeted it Tuesday) that seems to be making the case that a couple can make $500,000 a year and yet still feel “average.” We’re not sure of the point — are we supposed to empathize with them? Point out how reckless their spending is? What?
Maybe this will make some sense:
Americans are falling short when it comes to saving. Even some families earning six-figures have little to no savings.
As the example of one New York City couple shows, you and your partner could be making $500,000 a year and still end up with very little besides 401(k) money.
Sam Dogen of “Financial Samurai” breaks down the budget of two New York City-based spouses, each of whom makes $250,000 a year as a lawyer. They’re 35 years old and they have two young children. “This one couple shared their story and I decided to anonymously highlight their reported expenses,” Dogen tells CNBC Make It, with a focus on why they end up feeling “average” even though they’re such high earners.
…
As Dogen puts it, they’re effectively “scraping by,” in part because they’re still living “paycheck-to-paycheck,” despite their generous salaries.
You know, socialism could really take a load off their minds by taking all that income and distributing it for them. Maybe that’s the point?
Anyway, here’s their budget:
Here's a budget breakdown of a couple that makes $500,000 a year and still feels average. https://t.co/mauqIGvcRw pic.twitter.com/eh7xBwvMV1
— CNBC (@CNBC) March 26, 2019
“There's only $7,300 left each year,” the article says—which is *after* they save $36k/yr for retirement, somehow spend $9,500 on clothes and $18k in donations/yr, set aside $10k for whatever, and they have a $1.5m 1,700sf(!) Brooklyn condo w/ a BMW and Land Cruiser. YOU'RE FINE. https://t.co/uZzQo7RtOc
— Tony Webster (@webster) March 26, 2019
Nobody is going to say anything about the over $200,000 in income and property taxes?
— Ordy's Amish School of Coding (@OrdyPackard) March 26, 2019
If you own a $1.5M home, you are not “average” anywhere but LA, SF, NY or some other deep blue shithole.
— Stacey (@ScotsFyre) March 26, 2019
Nor is taking 3 vacations a year “average”. Nor is two date nights a week when you have two kids. “Average” what does it mean? pic.twitter.com/bQ7ZW7D3eT
— Stacey (@ScotsFyre) March 26, 2019
A hill I'm willing to die on is pointing out that 401k contributions are savings, not expenses.
— Morgan Housel (@morganhousel) March 26, 2019
So $36K in 401k contributions should be added to "what's left over," along with $18K in charity contributions (not an expense either).
— Morgan Housel (@morganhousel) March 26, 2019
If you fix that then the headline becomes "This couple that makes $500K and spends too much money still saves more than 20% of their after-tax salary, which is what happens when you make a lot of money."
— Morgan Housel (@morganhousel) March 26, 2019
Its almost like CNBC’s headlines are consistently misleading
— Baba Vagna (@BabaBabaVagna) March 26, 2019
“something always comes up” lmao *plays violin*
— pony starwars (@tigersgoroooar) March 26, 2019
Good thing the kids are literally taking violin.
— Mark Goodhart (@GoodhartMark) March 26, 2019
To be fair is it really playing if you don’t have a Stradivarius? Little Titania must have one!
— Mark Goodhart (@GoodhartMark) March 26, 2019
Does anyone else notice the 1.5mil home? The BMW car payment? Three 6k vacations? Shit man…. I feel for this family. ?
— TheCrypto฿anker (@TheCryptoBanker) March 26, 2019
Possibly the dumbest thing I will see on the internet today
— Seton (@HiMyNameIsSeton) March 26, 2019
500k…..chump change, right Seton?
— Chad Williams (@tool1934) March 26, 2019
$1.5 mill house, a 5 series BMW and 3 vacations a year. SO average.
— Seton (@HiMyNameIsSeton) March 26, 2019
"three vacations a year" is really snuck in there
— Dana Schwartz (@DanaSchwartzzz) March 26, 2019
I keep $20 in my wallet for 'whatever comes up." Should I increase that to $10,000?
— Lita Smith-Mines ? (@LitaTweets) March 26, 2019
I feel like I’ve seen this family on House Hunters…
— Matthew Smith (@MattSmithWXYZ) March 26, 2019
"We have a modest budget, I mean, we only want to spend 4 million. Does it have an open concept kitchen?" ?
— Liz Dueweke ? (@LizDueweke) March 26, 2019
Did we mention the husband’s job is to capture butterflies?
— Matthew Smith (@MattSmithWXYZ) March 26, 2019
I think the more hilarious part is all the interest they are accruing on the student loans that they could easily pay off
— Tiffany (@pedroiar) March 26, 2019
I see we are back to everyone dunking on this dumbass hypothetical.
Let's make it clear: there are plenty of dumb things in it. However, the dumbest is the idea that they live in NYC but spend $5000/year on gas. That's like 36,000 miles.
— Alan Cole (@AlanMCole) March 26, 2019
Dunking on this is the unity our culture needs, man.
— Will Truman (@trumwill) March 26, 2019
endlessly driving around the island of Manhattan in my Toyota
— ok (@mascdonna) March 26, 2019
“After we pay for our kids’ private school, our $1.5 million home, our BMW and Land Rover, and 3 vacations we just don’t have any money leftover for life’s luxuries”
— Evan Robertson (@evanrobertsonDC) March 26, 2019
@CNBC keepin' it real
— O.M. Ken, PhD (Conflict Analysis and Resolution) (@elevate67) March 26, 2019
Please tell me this is satire @CNBC ? ?
— Jesse Van Tol (@jessevantol) March 26, 2019
So after three vacations, three vehicles (One BMW) , two date nights a week, childcare, $60K mortgage, 401k investments, etc. they still have $7K to burn…. I’m confused. ?
— Manny Romero (@iiiRoMan12) March 26, 2019
Ummm it was a date night every two weeks can you get it right please. The struggle is real.
— John Evans (@John_Evans_) March 26, 2019
finally someone is telling *our* story
— law dog, esq. (@ggooooddddoogg) March 26, 2019
please help our family is starving
— Mike Pfeil (@mikeFAIL) March 26, 2019
give what you can. without a private chef they may starve or have to do the shopping at whole foods by themselves. i feel so dearly about their situation.
— Paul Richard Cook (@paulrichardcook) March 26, 2019
omg that’s horrible will they be okay?
— Colonel J. (@TheColonelJim) March 26, 2019
Oh man, is there a GoFundMe for these people?? I want to help out however I can
— Connor Wroe Southard (@ConnorSouthard) March 26, 2019
Just another “average” American family scraping by.
Related:
Hot take: If you make $60K and don’t pay more tax, you condemn millions to poverty https://t.co/eH91uP7OC2
— Twitchy Team (@TwitchyTeam) January 25, 2019
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