Let's Talk Money!
One topic that will continuously be a source of debate on social media (especially twitter) is money. I have some thoughts on some of these debates which I will explore below in some detail. I think the main question is really, "How much money is enough?"
The answer is, "It depends."
If you prefer to watch a video instead of reading, I do discuss this topic in my latest "Get Ready With Me".
I think a lot of people have misguided opinions on how much money is enough because they are living paycheck to paycheck and they feel like all their problems would be solved if they made 20k more or whatever the number is. They see people making more than what they think their "magic number" is and decide that those other people must be hoarding money and make statements like "nobody needs that much money." There is even more pushback if the person making more is saying they want to make even more.
To some extent, this makes sense because there are definitely amounts of money that you couldn't spend even if you wanted to. People who have tens or hundreds of *billions* of dollars literally couldn't spend that much money if they tried. It's just not possible. Plus, they likely only made that much money by underpaying employees or some other questionable practices. However, this same logic doesn't really apply to the doctors, lawyers, engineers, etc who make 100k-500k.
When thinking about what your life would look like if you made x amount more, you also have to factor in that your tax rate gets higher as you make more money. Now you might say, "but rich people don't pay taxes." This is true to some extent. There are certain tax advantages that rich people are able to take advantage of, but generally the prominent people who aren't paying taxes have gotten to a point where they have enough stock accumulated to take loans against it and they don't take an actual salary from their company. Since they are taking loans against the stock instead of selling it, they don't have to pay capital gains taxes. Even if they did sell, the capital gains tax rates are still lower than the regular tax rates, so there is a lot of savings there.
However, what I think many people miss is that you have to pay taxes on the stock when it's initially granted to you. People making low to mid six-figures have likely not accumulated enough stock to take advantage of these loopholes in any meaningful way. What happens is that it's a relatively small percentage of people who don't pay their fair share of taxes and people who don't really know how this works think that the same applies to anybody who is making 100k plus which isn't accurate at all.
Planning for the future
I think another major gap is that when you're struggling to get by, you're not really able to think about the future. People living paycheck to paycheck are often not able to really think about retirement or saving for their kids college expenses or even a vacation that they may want to take in a few months. These things are simply out of the question. Because they can't afford to properly prepare for these things, they often have no idea what they actually *should* be setting aside for these future expenses. When they see someone else say, "100k isn't enough for me, I need to be making 200k", they are in shock because they have no idea how fast 100k goes once you pay bills, eat out every once in a while, take a vacation once a year and actually save at least 20% for retirement. The sad part is that this life should be the norm for everyone. Everyone should be able to afford necessities as well as some fun things and still be able to properly prepare for the future, but in this current day, you pretty much need to be making 6 figures to do all of these things without struggling.