99% of the country doesn't pay $50K per year in rent. Nor $50K per year in food. Nor $50K per year in transportation. Nor an additional $25K per year in food.
For example they think they pay 2K/mo in rent but that easily blows up to 4K after hidden costs that aren't on the sticker price of the lease.
Utilities, utilities of others that landlord charges to you because the lease said they could (and so does every other lease in a 100 mile radius), maintainence and safety issues that landlord doesn't cover, moving costs averaged over time, extra months of rent you have to pay because of stupid 12 month lease systems, tax or whatever other stupid fees charged by the rent payment systems, pest control, mold control, cleaning costs, furniture costs, ... only after all that does the place become even livable.
Sorry buddy. I track my finances - since 2007. I rarely look at them, but I have all the data for me. And I'm not frugal.
Do you have yours?
> For example they think they pay 2K/mo in rent but that easily blows up to 4K after hidden costs that aren't on the sticker price of the lease.
This may drive you nuts, but in every place I've rented, I've never paid water, trash, sewage or parking. And I did not seek out these places. I know places do charge for these, but they are locale dependent. In a number of apartments I didn't pay for heat either.
Moving costs? Only paid them once. Otherwise just moved with friends, or had the company pay. OK, I did have to pay U-Haul. You got me there.
No hidden fees. Sorry.
As I said, there's a whole country you haven't seen.
My landlord charges me $60/month for water/sewer. I pay about $120 for electric and gas combined most months. This is in an area of the country where it gets above 100F in the summer and can easily dip below 15F in the winter.
> moving costs
Stop moving so much? I know very few middle class people that would pay a moving company. Renting a truck and loading it yourself, or using one of the several pod type services is the norm for most middle classers. I certainly wouldn't qualify this as rent. A moving company is a luxury purchase. Ideally if you have to move for work, your company would pay for this if needed.
> tax
Eh? There is no tax on rent. Your landlord doubtless has to pay property tax, but they would have to make that up via the rent.
> extra months of rent you have to pay because of stupid 12 month lease systems
Once again, stop moving so much. A lease is a protection against your landlord raising the rent on you. If you don't like it, then go month-to-month and pay more.
> pest control, mold control
Depends on the state, but landlords are generally legally responsible for mold. It sounds like you had a specific issue with mold, because you keep talking about mold problems. There is almost always an underlying cause of mold that should be dealt with directly.
> cleaning costs
I do not expect my landlord to clean my toilet. If you are hiring a maid, you are by definition not middle class anymore. Middle class people scrub their own toilets. No, really, they do. Well, some of them don't, but that's a different problem.
> pests and bedbug-ridden furniture
I'm not okay with pests, and my total furniture cost did not come close to doubling my rent. I also don't buy new furniture every year, and I'm okay with using a bookshelf that is 5 years old.
Most middle class people are not frequently purchasing new furniture, and if they are, they are going into debt really fast.
> mold
Again with the mold. We're not all breathing in mold, okay? Paying $50/month for "mold" makes no sense. How much bleach are you buying with that? It sounds like you have a water leak.
> shitty internet access
Sure, get good internet, but that's still not going to double your costs.
> no moving companies
Yeah, that is how middle class people move. We rent a truck or a pod thing and ask nicely for our family and friends to help load the coaches. If you're moving for work, the company gives you a signing bonus to pay for moving costs. Once again, stop moving so much.
Adding everything up in your post, I suspect you live in a very high cost of living area with a limited amount of old generally poor quality housing stock in a humid area (mold mold mold), probably the Bay Area. If you choose to live in the Bay, then your experience has very little correlation with what the rest of the country is like.
At any rate, if you earn $500k/year, then you are by definition not middle class. That's probably why most middle-class people don't live in the Bay.
Sure but
> Again with the mold. We're not all breathing in mold, okay? Paying $50/month for "mold" makes no sense. How much bleach are you buying with that? It sounds like you have a water leak.
Why do you think I moved?
> We rent a truck or a pod thing and ask nicely for our family and friends to help load the coaches.
That works in the outback but where I live friends don't ask friends to move. Many of my friends have kids and are overworked, nobody has time.
> pod thing
My new property manager banned pods
> We rent a truck
Yep, I did this. Rented a U-Haul 3 times over 3 weekends. Wasn't cheap, AND tiring. I moved most of my own stuff, and it cost me close to $600 for everything, including the U-Hauls, the Uber rides to/from U-Haul, etc. And then another $400 for a couple guys to move a couple furniture items I couldn't move on my own.
- health insurance rarely pays for what they do, balance bill you several thousands of dollars every time you have a regular check up for an incurable health issue, and it often requires legal notices and lots of lost work hours on the phone with debt collectors, insurance, hospitals
- rent figures don't include my $200 electric bill, $200 water bill, $70 internet bill that comcast decided to charge me $170 last month out of nowhere, $50 trash bill, another $200 in maintainence just to keep the place livable because the landlord won't do it for you
- transportation isn't cheap. a rock hit the bottom of my car last month on the highway and it cost $700 to repair. tires wore out and that costs $1000. DMV charge me $600 a year just for the hell of it. insurance costs $200/month. other costs are upwards of $200/month just to use the damn thing. and then there's parking, energy costs, fastrak costs, ...
Despite what the news will tell you, most SW engineers don't deal with this. In over a decade of working, with lots of interactions with the medical system, not one of these has manifested for me nor for my friends.
> transportation isn't cheap. a rock hit the bottom of my car last month on the highway and it cost $700 to repair. tires wore out and that costs $1000. DMV charge me $600 a year just for the hell of it. insurance costs $200/month. other costs are upwards of $200/month just to use the damn thing. and then there's parking, energy costs, fastrak costs, ...
There's a whole country out there where you don't pay most of these fees. I pay a sixth of what you do to the DMV, and half what you pay for insurance (and I have more than the bare minimum). Repairs? Yeah, sometimes I have to pay a lot. But something on the order of $700 for a single repair is one of those "once every 3-4 years" things for me, for 2 cars.
I'm a software engineer, and I dealt with this multiple times a year until I joined a big corp. In all my years of startup life it was the norm to constantly battle the system and have several thousand dollar medical bills thrown at me all the time even though I had insurance. I don't actually talk about it a lot, because there's nobody to talk to who will actually fix the system, short of moving to another country. As I understand it, this is the state of "21st century life in the US".
At a big corp, things are different, insurances are shit scared of big corp HR ditching their policy so they pay for everything.
(Either that or understand your insurance better).
Back when I was a contractor I was on $850/month insurance and they paid for almost nothing. Deductible was $6K and even after that they paid for almost nothing.
Maybe $1600/month+ insurance would pay for something, but then it's questionable whether it's a good deal.
None of the marketplace plans covered the only couple of medical institutions in my area I trusted to give me a life-saving medical implant for a condition not well understood.
And yes, marketplace insurance is poor. I get paid a fraction of $500K and the deductible for the whole family is under $4K. Max out of pocket is about $5K, but we never hit it. I don't pay any premiums. If I were single, it would be much cheaper - I mostly pay for the dependents. Big companies negotiate good deals, and they'll often have employees who will act as your advocate for weird billing problems. Insurance companies don't want to upset a big client.
Sad fact of life in the US that one of the reasons people cling to soul sucking jobs is this - even when they have enough money to retire (but still too young for Medicare).
But the government will steal $250K of it right off the bat. And then probably another $50K because at least in CA you get double-taxed both when earning and when spending.
You're left with only $200K real dollars.
[1]: https://www.avalara.com/taxrates/en/state-rates/california.h...
Which is $140K in year 2000 dollars.
Houses here cost $1M for a dump, or $2M for something decent. 20-30 years ago, being able to afford a home was a pretty standard thing for anyone in the middle class.
A 1-bedroom rental apartment costs $2500/month for something moldy and not wired to modern electrical code, or $3000/month for something clean, safe, and sanitary (you pick). Plus $500 for basic utilities (water+gas+electric+internet+phone).
Seems pretty squarely middle class to me.
Median US household income after taxes in 2022 was $64,240. If you make *quadruple* median household income after taxes, you are not middle class.
Median post-tax household income was $34,123 in 2000, so $140k was quadruple that too.
Median pre-tax household income in San Francisco is $126k.
The standard guideline for an apartment being affordable is "30% of your pre-tax income or less"; a $3k apartment would be affordable by that metric for someone making $120k before taxes.
In San Francisco itself, single-family houses do start at around $1M, but it is not remotely true that you need to spend $2M for "something decent" - there are tons for like $1.2M, I'm looking at Zillow right now. You can get a two-bedroom condo in a pretty good neighborhood for like $750k.
House price affordability guidelines are "3-5x pre-tax annual income", so even in SF, the paradigmatic housing-crisis city, you could afford a $1.2M house on $250k or a $750k condo on $150k.
All of this is just setting aside the question of "if you can just afford to buy a house in one of the most expensive places in the country, does that make you middle class", for which the actual answer is no.
But by absolutely no sane metric is $500k/yr "squarely middle class".
That makes sense in a world where taxes are 15%. But in a world where taxes are close to 50%, you probably want to be thinking about 30% of POST-tax income, not pre-tax.
If you rented at 30% of pre-tax, take away 45% for taxes, you have only 25% left. There's no way you'll live on 25% AND have room for savings for purchasing housing.
> House price affordability guidelines are "3-5x pre-tax annual income"
Uh, no, I'd say 3-5X post-tax post-food post-rent post-everything-else. That would mean you could afford a house in 3-5 years.
Seriously, I live here and almost nobody with a total household income of less than 600-800K actually owns a home here.
You can't live a "normal" life of the standards of 20 years ago with less than $500K+ in salary.
I'd consider "being able to save enough to continue a modest quality of life for retirement" a normal feature of what describes middle class life.
If you are living paycheck-to-paycheck you'll suffer when you hit old age or have a disabling condition that prevents you from working.
Sounds outrageous but most people have been brainwashed into thinking living with roommates in a cramped flat full of mildew, giving up all dreams of owning a home, and driving an old, unsafe car is the new norm.
Given that, $10M isn't really that much, considering you need to hire software devs to do any of the work they propose, and those software devs are getting $500K+ offers everywhere else.