I read an article today which piqued my interest, about how making a six-figure income isn’t the financial milestone that it used to be. Sharing it on Facebook sparked an interesting debate, so I thought I’d bring the discussion to GatorUptown.com for readers who don’t follow me on Facebook.
The basic premise of the article — $100,000 income: No big deal anymore by Craig Guillot — is that reaching a “six figure” income (meaning $100,000 per year) was for quite awhile a common goal that many people aspired to reach. Having a six figure income was a status to achieve, meaning you’d “made it” financially. These days, a hundred grand doesn’t go anywhere near as far.
Consider that in 1990 having a $100,000 income was the equivalent of making $172,103.29 in 2011, adjusted for inflation. Put in those terms, $100,000 isn’t anywhere near as magnificent as it used to be.
Certainly it’s still a worthwhile goal even in 2012, particularly when the median household income in the U.S. is barely half that, and when only 6.03% of individual earners boast a $100,000+ annual income. It’s not, however, quite what it used to be.
The article goes into lots of detail about the facts and figures, which are compelling. It also includes personal anecdotes, which are admittedly less so.
One Facebook friend took umbrage with the article, suggesting that the author had erroneously focused on a certain segment of the population — earners with a specific income level — when the phenomenon of inflation in general affects people in all income brackets. In her opinion (I’m paraphrasing) the article wasn’t interesting because the author focused on that specific group.
Personally I disagree, as I think an article about inflation in general (and even rising housing and college tuition prices in particular) would be kind of bland. Having a specific focus puts a bit more emphasis on a point, which is that the financial “promised land” isn’t as compelling as it once was.
I understand the inclination to dismiss the complaint — you’re not likely to get much sympathy from people who can’t pay rent if you’re complaining that you don’t have much spending money left after paying the mortgage on your giant house, paying for your kids’ private school, and taking the family on the annual vacation to Europe. But that’s really not what the article is saying.
The author is saying that $100,000 isn’t as grandiose as it used to be, and that people find themselves reaching a goal that no longer holds the meaning it once did. That’s a story of working hard, striving for something, attaining it, and realizing that it wasn’t as wonderful as it was thought to have been.
Sure, it’s not exactly a soul-crushing problem, being disillusioned when your sought-after higher income level doesn’t set you up for life. And yes, it’s a better problem to have than working long hours at minimum wage and not being able to keep food on the table or a roof over the head.
But I still think it was an interesting article with valid points. More importantly, though, what do you think? Reply below.