$250,000+ IS A Life-Changing Amount of Money
Lately (as of my writing this anyway) there have been a number of tweets/posts where people are essentially saying that $250K+ (depending on which one you read) is not a huge or life-changing amount of money. I had at least three of these cross my timeline in under five minutes. To these tweets I ask the following:
Now, there are two ways to take this message: 1) where they are referring to making 250K+ a year and 2) where they are referring to receive a cash amount of $250K+. So, let us go in order here:
Option 1: Making $250K+ a year is not life-changing
Trust me, I get it. Making six figures does not remove all the problems in your life. You can still get sick, discriminated against, lose friends & loved ones, etc. But you know what the difference is here? When you have that kind of money you are in a MUCH better position to deal with all these things.
I was making $26,000 eight years ago, and I am on track to make over $250,000 this year (first time ever!). I can tell you that I have significantly fewer problems now than I did then. I would be devastated if I lost my job right now, but I would have at least 7-8 months before that was a crisis-level concern. Eight years ago, that would have fucking destroyed me in under a month.
As people make more money, they seem to forget that their problems are mild by comparison. Yes, everyone has problems in life, but the problems of someone making under six figures and the problems for someone making 250K+ are not equal. It’s a matter of freaking out because you can’t afford to eat dinner and freaking out that you can’t afford to eat dinner at that one ultra-exclusive restaurant. Both are problems (if you honestly consider the latter a “problem”), but they are not in any way on the same scale.
Another example of this is your problem being the cost of private school while others don’t even have the option and their kids go to public school. Or your problem being the cost of a nanny while others have to work two jobs to make sure their kids have food on the table. Or even your problem being now that you finally made it to making 500K a year, you are STILL unable to have literally everything you want in life (the dream home, the dream car, the luxury vacations, the private school for the kids, AND the expensive clothes). Well, guess what? Most can’t even afford one of those things in their lives.
There is also the last and biggest problem: Potentially losing your $250K+ income. This is a genuine fear and concern that high earners have. It is, however, met with the other problem being never making anywhere near that. All the progress that you are able to achieve due to making such a high income puts you in a better position should you lose it. You are able to have an emergency fund to deplete in the first place. You have the option of selling your home and getting more cost-effective accommodations. Is it ideal? Is it what you want? No. But you have the fucking OPTION. THAT is what your income buys you. Options. Options that others don’t have and THAT is the life-change that you were able to buy that others cannot.
Option 2: Receiving $250K+ in cash is not life-changing.
This idea is even worse if you consider that these people might have meant that $250K+ in cash wasn’t a life-changing amount of money. $250K+ is a house. It’s enough to get a huge amount of people out of debt and then some. That can jumpstart a whole life. The very idea that it is not a life-changing sum is preposterous.
In my case, $250K+ would pay off my mortgage and leave at least $70K extra to invest or use elsewhere. With $500K would literally be me going, “I will wrap up what I am working on and then leave this industry entirely.” The mortgage would be paid off, my mom’s mortgage would be paid off, and would still leave over 150K to invest/put into rental property/etc. That’s a whole fucking life shift.
If a person honestly believes this they have either 1) always had a comfortable and safe existence and/or 2) are a complete fucking idiot.
In short, $250K+ is a LOT of money and life-changing in everyway. Period. Thank you and see you next week.
Honestly I disagree. If you have 20k, 250k is life changing. If you are already in the millions it’s significant but not life changing. If you are Bill Gates it’s pocket change.
Everything in life is relative to your perspective. I might add that’s only with respect to your current perspective as well. Today 250k would be significant for me but not life changing. As a 20 year old from a lower middle class family with huge college debt it would have been life changing. But over time your brain adapts to your current situation.
One word of caution. Money does not solve all problems. I realize that wasn’t your point, but it’s easy to stray into the world of once I fire it’ll be all good. Life doesn’t work that way. Money is just one aspect of life.
I am aware that how much is considered a lot will change as your income and life change. I am also aware that money does not solve all your problems; I actually noted that in the post. This post was about the fact that 250K is a large amount of money to the mass majority of the population (over 95% and that people, especially high earners (myself included), need to be aware of that fact when they make comments that isn’t. Also, that the money that they do have allows them things and options that the other 95% of the united states do not have. That’s all this post is addressing. 🙂
Thank you for your comment and for reading.
If you are poor it is a lot of money, if you are wealthy it’s pocket change. It’s relative. $250K is not significant to me, it was back in the day, but not now. You just can’t make blanket statements about a given amount of money. Sure it would increase your options right now. In twenty years it probably will be pocket change to you too. We all only see the world through our own eyes.
I am aware that how much is considered a lot to a person will change as their income and life change. What I wrote was a response to a few different people making the blanket statement that 250K is not alot/a life-changing amount of money. This post was about the fact that 250K is a huge amount of money to the vast majority of the population (over 95%) and that people, especially high earners (myself included), need to be aware of that fact when they make blanket statements that it isn’t. It may not be significant to you, but it is incredibly significant to over 95% of the people in the united states.
Thank you for reading. 🙂
I’d think it’d be obvious that for the few people for whom $250k is no biggie, this post isn’t speaking for you. But that’s not the vast majority of the actual real world! We make more than we ever have in our lives now but I would still look at a quarter of a million dollars as a lot of money. When I get to the point when that’s not a lot *to me*, well, I’m not gonna sit around telling folks they shouldn’t think of it as much!
100% agree. If I ever get to that point, I better be making some big donations as well.
Thanks for reading. 🙂
As others have said, it’s all relative. But I’d take an extra $250k lump sum right now haha.
The jump from $25k to $250k is enormous. But when you’re at $25k, even a $10k increase is enormous. It’s important to keep everything in perspective, but yes, $250k is a good chunk of change!
250K is definitely a good chunk of change. It would completely life-changing for me. Hell 10K is still a huge difference to me. 😂
Thanks for reading. 🙂
I FIRED 5OCT2012. 250k windfall would be transformative for me.
Late congrats on your being FIRED. 🙂
I think that 250K would be transformative for a lot of people. Even the ones who typically make the comment that it’s whatever money.
Thanks for reading.