One-Quarter of Americans Earning $100,000 or More Say They’re StrugglingIt may be difficult to sympathize with, but many Americans earning six-figure incomes are living paycheck to paycheck.
It may be difficult to sympathize with, but many Americans earning six-figure incomes are living paycheck to paycheck.
Reporter Jana Kasperkevic writes at The Guardian:
The trend of Americans earning six-figure paychecks living from paycheck to paycheck grew during the 2008 recession from 21% to 30% in 2009, according to a CareerBuilder.com survey. A recent survey by SunTrust found that things have not improved much by 2015. About 25% of those making over $100,000 a year still live paycheck to paycheck.
In 2014, a Brookings Institute paper found that about one-third of US households, live hand to mouth. That’s about 38 million households. About two thirds of these American households living from paycheck to paycheck are not actually poor but instead are middle class or richer. They might have liquid assets or own a home that they are paying off. There is just one catch: they are spending everything they are earning even if its $100,000 or more a year.
Living from paycheck to paycheck despite having a decent income is especially an issue among millennials – those 18 to 35 years old. According to a recent survey by LendingTree, 44% of millennials earning between $100,000 to $149,000 lived paycheck to paycheck. Interestingly, just 33.5% of those earning $50,000 to $75,000 said they lived that way.
The problem, say financial advisers, might be that the millennials are not used to earning such big paychecks and give in to buying urges. It’s also very likely that they think they have to maintain a certain lifestyle – keep up with the Joneses’ if you will, now that they make six figures.
For some, however, it could just be the added cost of their everyday necessities.
For others, such as professionals in the field of finance or law, the problem can come from trying to match their lifestyle to that of their clients.
“They are serving wealthy people and they start to think: ‘I need to have that too so I look good for them, so I look respectable’,” explained Carina Diamond, managing director at SS&G Wealth.
“When I was a young adviser, I was meeting a client at his house. He came out of the house to meet me. I thought he was just being friendly. He wanted to see what car I was driving. I was shocked. He said: “If you were not driving a great car, I would not think you were a great advisor. I wouldn’t think you were successful enough.” Which was a little shocking to me. Fortunately, I made the cut and I got his business.”
Read more here.
— Posted by Alexander Reed Kelly.Wait, before you go…
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