According to this article delinquency rates on car and credit card loans more than doubled for households earning 150k+ from 2023 to (presumably)2024! The delinquency rate MORE THAN DOUBLED!
. . . From somewhere around 0.17% to 0.34% of all loans in this class
So, no households earning more than 150k are not struggling.
Reporting relative percent increases for extremely small values is a journalism sin.
Note that it is still a small proportion of higher-income earners who are underwater, it’s just just a higher percentage than before:
the delinquency rate for households earning at least $150,000 now stands at about 0.34%, versus 1.75% for low-income households.
So it’s not like the rich are suffering, it might be certain people in certain high cost of living places who overextended themselves …
$150k a year income is far from rich. I’m not arguing that they aren’t better off that a household earning $50k but it’s not all lollipops and roses like you’re assuming. Tax wise, these people get hit the hardest because they’re earning enough to pay high tax rates but far from enough to hire fancy accountants or structure their money in a way to pay lower rates.
This doesn’t even account for CoL where some places like the bay would classify $150k as “low income.”
My dad makes this much, in the SF bay area this only allowed us a middle class lifestyle. It’s just so expensive to live here
WTF. My household earns almost 100k/yr. Me, my spouse, and child live comfortably without financial issues. 150k sounds pretty good to me.
It depends on where you are. If your housing is under 2k USD/month total, you probably live in a cheaper area.
Yep. Where I live I am extremely lucky to only be paying 2800 a month for a smallish rental. It’s insane.
Have you considered buying two extra BMWs and doubling the size of your house? Gotta live paycheck to paycheck and make those neighbors jealous!
Luxury SUVs on lease are obviously a wise financial move.
Got to make sure to have 3 kids to make sure your finances are in order.
We had three kids, all grown now. I’m not massively well-paid, earn a standard software-person salary. We never had financial difficulties, despite living in the SF Bay Area for much of that time.
This is a matter of priorities, not of affordability. I’ve always driven second-hand cars and wasn’t a spendthrift when making decisions about holiday destinations, home improvements or other discretionary spending. I seldom borrowed money for anything but genuine capital improvements with positive ROI. Not having any expensive vices helped too. That’s all it took.
It’s not what you get, it’s what you keep that matters. Deferred gratification is an effective strategy. Few of my colleagues had the discipline to do that. Now that I’m nearing retirement, I’m seeing the pay-off: my disposable income will increase considerably once I retire.
1000 sq ft houses in my neighborhood list for 700-800k and sell for well over asking, and this whole area was heavily polluted by heavy industry in the 50s. Rentals start at almost $3k a month. It’s all relative to where you live.
Looking into the article more closely, it has doubled…to 0.34%.
So that’s about 437,000 households, which isn’t nothing. If you put them all in one US city, it’d be bigger than Jacksonville, which would put it into the top 10 by population.
Still, it makes it easy to not be affected; just don’t live in Jacksonville.
What city do you live in? Sounds like a good deal
Its impossible to outearn irresponsible spending
Lifestyle inflation.
People are really, really good at spending all their money, then living paycheck to paycheck with their BMW and too-many-sqft house payment.
Nah, it’s just regular inflation and companies not paying anyone what they deserve. Even people making 200k aren’t getting paid what they deserve, which sounds insane to most people, but it’s true. 150k doesn’t even buy you what used to be a medium quality of life in the 90s, and especially not any earlier than that. Reminder that 200k household income does not put someone in the 1%, it puts them more in the top 15-10%. It’s the top 1% that can be accused of lifestyle inflation, everyone else is just trying to reclaim a decent quality of life in exchange for their lifetime of soul-crushing labor. 150k sounds like a ton: It really isn’t. Even 200k sounds like a ton: it really isn’t.
Do you know a lot of people making $150-200k a year?
I do. 3,500sqft+ home, $80-100k truck(too many with a pristine bed) and luxury SUV or 2x luxury SUV on lease, often a boat or camper, some with vacation property, most with maid service, lots of door dash and rideshare, 2-3 kids, 1-2 foreign vacations a year(usually Mexico with a Europe trip every 5 years), etc.
Income creep is a huge financial problem. If they lived like they made half that, they would be so much better off. They like to live their lives keeping up with the Joneses on Insta and it is dumb as fuck.
I do know a lot of people making over 150k, three of them live in 800 square foot apartments (not luxury apartments), one of them splits a 2200 sqft house with four other people, one couple lives in a mediocre 1900 sqft house with one 12 year old car and 1 new car. None of them have any children, all of them go on 1-2 foreign vacations a year. None of them own cars over 40k MSRP. All of them wish they could save more for retirement, all of them are afraid of medical costs in old age. None of them are posting their glamour on Instagram and none of them care much about social media in the first place.
All these people are certainly living better than my friends who make less money, I won’t deny that! But my point is that they’re not rich and it’s pretty upsetting that just because most people are super super super underpaid they get resentful towards people who are merely underpaid and attribute their financial struggles to irresponsibility. It’s the same icky narrative that the actual wealthy people have pushed for decades to get people to look down upon poor people. You’re right, my 150k+ income friends could live with greater financial comfort if they changed their lifestyle to match my 50k income friends, but it wouldn’t be enough extra that they could retire before 60 anyways, it wouldn’t be enough extra that they could not have to worry about medical bills when they’re older, it wouldn’t be enough to let them afford the houses they actually want, or fix things around the house when they break, etc etc etc. So that’s why people “irresponsibly” go on vacations or buy themselves nice things, discretional spending coming out to probably 10-20k per year. That isn’t enough to make a bigger better difference in their lives if put somewhere else.
I just don’t like to see condescension and judgement directed at the financial habits of anyone making under, like, 400k. Of course, there are people at ALL income levels who spend their money on stupid junk, I know plenty of people like that too. But most people are not like that, and the narrative that they are is a harmful one that turns the bottom 99% on each other.
P.S: Yes, I live somewhere with a fairly high cost of living. But as I mentioned in another comment, this doesn’t disqualify the relevance of what I’m saying, because most people making over 150k are living in a HCOL area.
I just don’t like to see condescension and judgement directed at the financial habits of anyone making under, like, 400k.
It’s not condescending to consider what works and doesn’t work when your means are constrained.
Unless they’re paying child support or making a deliberate lifestyle choice, there’s no compelling reason for someone earning $150k-plus to be house-sharing.
You’re judging people without knowing their plight
When I made a 160k a year now where it went! Medical bills, rent and food
Now fuck off of with the judgemental shit
No you don’t lol.
That’s highly dependent on your location.
Yeah, that’s a true and good point. But at the same time, I bet most households making over 150k are households in locations where it’s not a lot (That’s why their salaries are what they are). Like, out of the households making 150-300k, how many of them are in NYC and the Bay Area alone? Probably a shockingly large percentage.
There are places on CT alone where 150k is barely middle class. And moving isn’t an option because it’s either too expensive or it would take the person out of commuting distance.
Then the layoffs hit and people spend their money paying for the too high cost of living in ct, with little job prospects.
Nah, it’s survivorship bias.
The wealthiest people are wealthy because they always took big risks that kept paying off.
So someone who desires that, never puts safe money away, they never save.
Every penny is invested, every purchase goes on a credit. Because why pay now when you can invest that money for free another 2 weeks?
As long as “numbers always go up” it works…
But then the market crashes, and everything is still tied up. You don’t have funds to pay the bills, and if you sell to pay the bills, you’re realizing market loss.
So it’s “lifestyle change” but not always wanting better stuff
The wealthy literally have a different lifestyle than the “paycheck to paycheck” the majority of people have. We can both have our shit completely fucked overnight thru no fault of our own
For most of us, that’s just reality. For the wealthy it’s a choice.
The wealthiest people are wealthy because they always took big risks that kept paying off.
Like taking the risk of having rich parents…
We can both have our shit completely fucked overnight thru no fault of our own
Regardless of how much you’re investing, you need to take risk into account and diversify to mitigate it. The people I know who got into trouble when the market tanked had a risk appetite that exceeded their means. High-risk, high-reward investments are a bad choice when your financial stability is put at risk when they don’t pay off. Don’t gamble what you can’t afford to lose.
Nothing really crashed, my stocks are doing well. I also had no problem selling stuff at a loss. This is just being irresponsible
Incompetent financial management can afflict people regardless of how high their income is.
I knew a guy who had a pretty impressive company that he build up with a friend. I couldn’t tell you how much money they made, but he would always buy $100k+ dollar cars and then sell them for half the price a month later for various reasons. He’s now 10 years later rather poor.
