Dennis Cauchon, writing in USA Today, asks “Our Standard of Living: Is it Better than Ever?” He points out that our income today is significantly higher than it was in 1980, that our homes are bigger, that we are expected to live longer, and that we spend more of our income [inflation adjusted] on recreation, housing, vehicles, etc.
But here is the other side of the equation. According to the accompanying USA Today/Gallup poll of 1,032 adults nationwide . . . “only 31% of Americans thought they could live comfortably for less than $50,000 [income] a year . . . .” If this is true, there may be a whole lot of people who are not in the “living comfortable” category. Today the median household annual income in the U.S. is just over $50,000. So one-half of the approximately 115M households (57.5M) already makes less than that amount. At best, even if the 21.8M who say they can’t live comfortably given this income all come from the under $50,000 category, it is still translates into a lot of dissatisfaction.
Also the article reported that 24% would need an income of $100,000 or more to make them comfortable. Only about 16% of the households in America have annual incomes of $100,000 or more. Translated, at a very minimum, there are over 9M people who need to have an income in this category to be comfortable but don’t.
Contrast these results with 1,138,000 millionaires [28.3% of total] who live in homes valued at under $300,000. More than 90% live comfortably. And most say that comfort is more a function of their net worth and living well below their means than the incomes they generate.
Thomas,
What do you suggest for gen xers who live in the NorthEast? Many of us did not own homes during the huge price run up, or bought at the top of the market.
Great insights sir. We’ve finally become debt free via the Dave Ramsey plan and we are well on our way to being millionaires at 50 (I’m 30 now). Come on 401ks and discipline!
nicodemusatnite.com
Agree with what Fred is alluding to.
Thomas, how do millionaires rank homeownership among important values. I would guess that owning your own home is an important part of the overall lifestyle. IT’s bene a while since I read the books but I know you’ve covered the strategy on what types of homes they own, but using stats like you do that are skewed by the housing costs in high cost of living areas seems like it is confusing issues.
Also, I’m curious about millionaires who live in high standard of living areas near urban centers – or is that just getting away from the fact that there are plenty of millionaires who don’t and that might be part of their achieving millionaire status (reduced overall cost of living)?
It’s not as hard as some people think to live and work in high cost-of-living areas. But it does require creativity, ingenuity, and a strong will to become wealthy via a “different” mode of living. You can rent a room in a home, buy a home and then rent most of it out, or, as one wealthy person I know does in San Francisco, live in an RV and do not own a car.