If You Can Afford The Average New Car, You're Rich

We live in a world where, unless you're Elon Musk, there's always going to be someone with more money than you. And if the value of this Tesla stock continues to drop, that could soon be the case for Musk, too. If you make enough to finally afford a new Porsche 911, someone will come along in a Ferrari worth twice what you make in a year. Buy a beach house, and you're bound to run into a neighbor with a yacht. And the more time you spend around people who make similar money, the more normal it becomes. So you may be surprised to hear that, in the U.S., a household income of at least $250,000 a year puts you in the top 10 percent of all income earners. A full 90 percent of households make less money.

That isn't exactly a new statistic, but it popped up again in a recent Bloomberg article exploring the answer to the question of who the heck is buying all the stuff that's supposedly propping up the economy. As it turns out, it's the small number of folks at the top who are, as the headline put it, "firing a cash cannon at the US economy." It's a fascinating post that isn't directly about cars, but considering the average transaction price on a new car is nearly $50,000, you should read it anyway because more than half the workers in this country don't make that much money in a year.

Look, I get it. It probably doesn't feel like you did anything that special. If you graduate college, marry or cohabitate with someone in your social circle, and do a decent job at work for a decade or so, honestly, it's pretty reasonable to expect to both make an average of $125,000. That's both a massive amount of money that would completely transform a low-wage worker's life and also far from impressive. Heck, as our friend T-Pain recently pointed out, you can't even fly private from Atlanta to Las Vegas and back for $125,000. And when there's just a pre-owned BMW 5 Series and a Kia Telluride sitting in your garage, of course it's going to feel like you're pretty normal. After you pay all your bills, fund your retirement and move the recommended amount of money into savings, you may not even have that much leftover at the end of the month.

It's also entirely possible you live in an ultra-high-cost area of the country where rent costs thousands of dollars a month, and you actually do have to keep an eye on your spending, while someone making less money in a lower cost of living area is able to live better. Aside from where you live still being a choice and one you can only make if you have a job that pays enough to afford it, let's also not pretend you don't have significantly more earning potential, especially when you regularly rub elbows with people who can explain what an RSU is. To be clear, that also applies to me, since even though I currently make way less than $125,000, much less $250,000, it would be far easier for me to change careers and finally make some actual money than the typical person who's a decade into their career and still making about what I do. 

To be clear, my LinkedIn inbox is absolutely not full of recruiters trying to convince me to leave my job for more lucrative positions. I said it would be easier in comparison, not that I could do it any time I wanted to.

There are certainly some companies out there that are straight-up evil, and I'd question what was wrong with you regardless of how much they paid you to work there, but on the other hand, the biggest problems in this country generally aren't caused by nurse anesthetists, sysadmins, or salespeople who are good at their jobs. You just happen to be part of a relatively small group of people in this country who are still being compensated fairly and probably don't even care about flying private. No, the people screwing everything up are the people who own the companies that own your companies, and I promise you have far more in common with the rest of us than you do with billionaires. 

Still, when you outearn 90 percent of the country and can afford a car that costs more than most people make in a year, there's really no getting around the fact that you are rich. Does it feel like it? I bet it doesn't, and I also bet it's a little uncomfortable to think about the fact that your household's income puts you in the top 10 percent. You're probably good at what you do and work pretty hard, but that doesn't exactly explain how you ended up rich. So either 90 percent of this country is lazy, incompetent or hates making money, or the wealthy people who you actually consider rich have spent decades tilting everything in their favor, and it's only a matter of time before they figure out how to gut your industry too. It's absolutely a weird position to be in, and unfortunately, I don't really have any advice on how to handle the weirdness, but as uncomfortable as it may feel, the truth is, if you can afford to buy a new car that costs more than most people make in a year, you're rich.