Thoughts on what it takes to be rich in Chicago

I recently read an old blog posting from US News by Rick Newman. He published a discussion and table of what the top 20% and top 5% earned in 40 of the largest metro areas.

The article was most likely spurred by Obama's tax initiatives aimed at those families who earn more than $250,000.

I was very impressed by the great disparity of what qualified as rich <$200,000 in El Paso for families without children and >$750,000 in NYC for families with children.

Although I'm strongly against increasing taxes in general, I'll avoid a polemic here.

One thing I found is that if being rich means being in the top 5% of income earners in the Chicago area, it means your family has income of greater than $578,000 a year. While it's substantial, I do know people who earn that much and virtually all of them do not consider themselves rich.

Fundamentally, very few high income earners succeed in holding or sustaining their living expenses as their income increases. Far too many people "live up" to their incomes. I myself am far too guilty of this, as well.

Part of the problem is the stage of life when these large incomes appear. I've noticed that the younger people are (under 50), the more these incomes are absorbed in every day expenses or luxurious upgrades of the same expenses.

For me, rich does not seem to be a measure of what you earn as much as the ability to live off your savings without diminishing them. That's a very different definition of rich than annual income.

Regards, makingourway

ps, here's the link to the article and table.