I suppose it depends, even those on 80-100k would still be living somewhat frivolously. Perhaps they use the money for kids colleges, paying off mortgages sooner, paying off car loans, paying of student debts entirely, perhaps even going on a holiday. Reducing financial stress would be the main target.

Also there's being able to retire >10 before others, or also being able to retire when others do but with more in the tank.

Above that any additional money allows people to again, pay things off sooner or increase their lifestyle. More holidays, latest gadgets, multiple cars, holidays etc.

None of this is particularly great for the wealthy. They disproportionately own the assets that are tanking in value.

From a quantitative (not qualitative), relative basis and absolute basis, this is worse for the wealthy then for the poor

>They disproportionately own the assets that are tanking in value

You don't seem to understand how this game is played. You keep 10% of your portfolio as liquid money or near liquid assets. This means a rise in asset values increases your dry powder. But since dry powder doesn't go down in value as fast as other assets, you get to buy all the distressed assets on during the fire sale. That is the essence of speculation.

If a 4% mortgage crashes housing prices, your money goes that much further, but you only benefit from the crash if you have enough money to buy the home outright. If you must borrow part of the money, then you must pay interest which means you aren't getting a discount on the house, you're paying the same monthly payment but some of it is going to the bank.

This is a common fallacy.

A crash in asset price only matters if you're required to convert those assets to cash while the asset price is deflated. If you have significant assets and cash you aren't required to liquidate those assets, so a relatively short term drop in value isn't actually that important. What is more important is having liquid assets, or the ability to get loans, that allow you to buy new assets while their value is deflated.

You only actually lose if those assets actually fail, and if you have significant assets at the beginning of a recession you also likely have a reasonable spread of assets so are unlikely to actually have a significant proportion of your assets actually fail completely.

This is something people really need to understand: those "losses" reported for the extremely wealthy are only on paper - in general they have not suffered any significant permanent loss.

Yup. Historically recessions are very profitable for the rich, as they are able to buy assets (property, stock, etc) at vastly deflated prices because they had cash or equivalent before the recession began. Lower income people just lose their jobs, and as a product often have to sell their homes at deflated prices to the rich people who aren't suffering in any way from the recession.

Before anyone mentions the rich losing money on the stock market: That only matters if you _have_ to sell during the recession. If you're rich you don't have to sell anything, so while you may be having to liquidate your life savings and sell your home for a fraction of what you saved, and a fraction of what you paid, none of that impacts the people with money.

Re: 80k, that is _super_ region specific. On 80k in the SF Bay Area, or NYC, or Paris, etc an income like that is never going to give you home ownership - you wouldn't be able to save enough to make a down payment, and even if you had the funds, a bank wouldn't give you a loan large enough to buy anything. Take SF Bay Area salaries: people may be talking (bragging?) about 1-200k salaries, but you cannot look at that in isolation, average rent in SF is $3.76/sqft vs say $1.60/sqft in Atlanta. So a super dumb multiplier comparison would say $80k salary in Atlanta would be maybe $188k in SF, despite 188k appearing absurdly high.

> That only matters if you _have_ to sell during the recession.

Or if the person managing your retirement savings chooses to sell.

  > Historically recessions are very profitable for the rich, as they are able to buy assets (property, stock, etc) at vastly deflated prices because they had cash or equivalent before the recession began. Lower income people just lose their jobs, and as a product often have to sell their homes at deflated prices to the rich

its why i'm very skeptical that a recession will "fix" the housing (prices/supply) issue...

I see this often from people who don't seem to grasp that some of us make six figures but live where it takes that much to simply have any money at ALL left over when raising a family.

I live in a west coast metro and make the proverbial six figures. We save about 10% of our income, and we don't live on beans and rice, and I don't have debt servicing. That's it; it's literally just that expensive to live where I do.