Ok how does this work in Europe. In Amsterdam, high salaeries are around 72000 per year. Of which 50% goes to the tax. So you only have around 3k per month...
I imagine the advice for a European with a salary cap of approximately 70-80k is the same for an American with a salary cap of 85-90k: wealth is most likely only going to come from entrepreneurship or blind luck.
Now if you're in the US and pretend to have an EU salary by stashing away a big chunk of it, then yes that is most desirable.
I think people also make bad comparisons when doing cost of living exercises. While it is true that potentially much more $$ will be going to rent/mortgage in a high cost of living area, many other things are going to be the same as anywhere else. A $100k Tesla is $100k in SF just like its $100k in North Dakota. After tax + basic needs costs and someone in a large tech city is going to have significantly more disposable income still than someone making much lower salary with much lower cost of living.
If you take an average middle class person in the US, your company will provide you with health insurance, so that's covered. If you come down with a horrible illness and can't work, your employer provides LT disability insurance. If you run out of that, you have Social Security disability insurance. And even if that runs out, you have Medicaid disability insurance.
I won't argue that the EU provides a more comprehensive safety net (probably easier access as well), but US isn't that far behind.
Unemployment benefits in the US are both incredibly stingy and time-limited.
Another thing is that there is a strata of people who fall into the donut hole: they make too much to get ACA subsidies, and too little to get a reasonable plan (http://kff.org/health-reform/issue-brief/the-coverage-gap-un...) If you get stuck with a major condition in that situation, you're going to be in a lot of trouble, not to mention that even the insured may not have everything covered. Medical bankruptcies are the most common in the US still: http://www.cnbc.com/id/100840148
"Even outside of bankruptcy, about 56 million adults—more than 20 percent of the population between the ages of 19 and 64—will still struggle with health-care-related bills this year, according to NerdWallet Health.
And if you think only Americans without health insurance face financial troubles, think again. NerdWallet estimates nearly 10 million adults with year-round health-insurance coverage will still accumulate medical bills that they can't pay off this year."
So yes, in the US, you absolutely need your own safety net.
Rents may be high in some cities, but compare that to London or Geneva?
Unemployment benefits in the US were extended to 98 week during the last recession. That's two years. Most of the folks I know who went on unemployment insurance had no issues with getting the benefit.
I won't argue with you that the ACA has some stupid income limits. Those don't exist outside of the US?
The medical bankruptcy data that gets thrown around is misleading. It's true that a lot of people that go bankrupt have medical debt, but it's not necessarily the cause of their bankruptcy. That data came from a Harvard study that has been severely criticized.[1]
And health can cause bankruptcy in countries with single payers. There was an article in Canada that health problems are a big cause of bankruptcies in that country as well.[1]
Approximately 15 percent of bankrupt Canadian seniors -- those 55 and older -- cited medical reasons, including uninsured expenses, as the main culprit for their insolvency. In fact, the rate isn't that far off from what you see in the US.
[1]http://thehill.com/blogs/congress-blog/economy-a-budget/2635...
The 99 week extension ended, and it differs by region anyway:
"Workers in most states are eligible for up to 26 weeks of benefits from the regular state-funded unemployment compensation program, although ten states provide fewer weeks and two provide more. " That's nothing.
http://www.cbpp.org/research/economy/policy-basics-how-many-...
The maximum amount in California is $450 per week, not even enough to pay the median rent for a studio: ($2,722 in August 2015.) Start adding in food and bills, and it's a laugh.
The many sources I've read support the medical bankruptcy stats. I'm aware of the criticisms, but they don't seem to diminish the core case much at all. Other developed countries have medical bankruptcy, but nothing like the US.
Sure, if you pick the most expensive city in the US right now. How does the unemployment insurance in the UK stack up?
We'll just have to agree to disagree. The EU might have a very generous safety net, but it's incorrect to say that the US is that far behind.
You can repeat the experiment on other job-creating cities like New York, Boston, or San Jose. Or scale back to "cheap" Oakland (median rent ~2100) and it still looks terrible.
Let's compare just unemployment insurance between the US and Germany. Similar cases can be made for health care, pensions, time off, public/social housing, and even college funding. This doesn't even include things the US doesn't have at all, like Kuzarbeit.
US: maximum 99 weeks during the crisis, now back down to 26 weeks in most places
Germany: "benefit recipients aged 50 to 54 now receive an unemployment benefit for 15 months, those 55 to 57 for 18 months and those 58 or older receive benefits for 24 months. For those under the age of 50 who have not been employed for more than 30 months in a job which paid into the social security scheme, full unemployment benefit can be received for a maximum period of 12 months" then "If a worker is not eligible for the full unemployment benefits or after receiving the full unemployment benefit for the maximum of 12 months, he is able to apply for benefits from the so-called Arbeitslosengeld II (Hartz IV) programme, an open-ended welfare programme which, unlike the US system, ensures people do not fall into penury. A person receiving Hartz IV benefits is paid 399 EUR (2015) a month for living expenses plus the cost of adequate housing (including heating) and health care."
Perform the same comparison between the US and Sweden (with multiple levels of UI, followed by the Job and development guarantee), Austria (unemployment assistance is payable for one year (52 weeks) and may be extended ‘indefinitely’ by application, provided that the qualifying conditions are fulfilled), Denmark (90% of their average earnings for up to four years), or the west/north European country of your choice and you come up with similarly large contrasts. When you start putting those together with their health care, housing, and more general welfare programs, the differences are not small at all.
[0] 2010, the most recent I could find - http://www.economist.com/blogs/freeexchange/2010/09/income_i...
The usual suspects have the highest social mobility - Denmark, Norway, and Finland plus Canada.
https://en.wikipedia.org/wiki/Socio-economic_mobility_in_the...
Social safety nets actually lead to an increase in social mobility.
http://www.newyorker.com/wp-content/uploads/2013/11/cassidy_...
If you actually read the Wiki I linked you'd see that it mentions race/racism and gender/sexism as factors as well.
Which is funny because a lot of Canadians come to the US because it has better career (and salary) opportunities than Canada.
This equals a net income of 45K, which is 3.75K per month.
The pension alone should be enough to live and even travel on.