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Your story is another fantastic example of how social class is culture, and that money alone isn't enough to advance from one social class to the next, you have to be able to put on the performance of the higher class as well, which is something you simply have to learn.

I highly recommend this piece about social class in the US: http://siderea.livejournal.com/1260265.html?format=light

What's your definition of rich white people? Just curious. AFAIK I've never met any "rich white people" of the type portrayed in nearly every Hollywood movie about school (high school or collage). I'm not saying they don't exist just that I haven't met any so I'm wondering if maybe I did and didn't know it.

I certainly didn't met any kids in high school that had any kind of money to flash (a fancy car or other expensive things to show off).

I worked near a 'nice' high school whose parking lot was filled with BMW's. Which is not really 'rich' but dual income in that area often meant 300+k family income by the time kids where in high school. Economically this meant a 5 year old car that might have been 50k new was not really unusual.

In many ways the gap between 30k / year and 300k/year is larger than the gap between 300k / year and 3 million per year.

PS: I actually know several people that inhered low to mid 7 figures. But, they are really more upper middle class than the kind of 'Rich' you see in a Hollywood film. But, plenty of people would consider that rich.

Considering the median salary in the USA is $51939, which is the equivalent of 5.1% return on $1M cash, I would say the plenty of people who consider that more than "upper middle class" are correct.

5.1% return above average but still reasonable. However, inflation is ~2.5 - 3%. So, unless your spending principle that's 21k/year ignoring taxes. Also, many people get discounts on health insurance and other benefits that don't apply.

Sure, you can burn down your principle based on life expectancy. But that's only really useful if your old. At 40 even 1% in your first year will probably cause you to run out of money.

Long term returns on the S&P 500 have averaged ~7% real returns including dividends. In personal finance there's a "4% Rule" which is supposed to be your target annual withdrawal if you're living off the money as a retiree. The 3% spread allows for market crashes, long periods of stagnancy in returns and a small increase in living standards as you age, however, if you're young I do agree a smaller 2-3% withdrawal level is appropriate.

source: http://www.investopedia.com/ask/answers/042415/what-average-...

Good point, though the S&P has not averaged 7% annual returns if you consider reverse cost dollar averaging. There where two decades when the S&P went negative in real terms including dividend reinvestment. It's actually tricky to find what percentage you could take out every year from 1950 to now and have the same amount adjusted for inflation at the end, and that's assuming things don't get worse.

Basically, you take out a lower percentage of your money on good years than bad. Further, you need to take taxes out to cover inflation. Aka, you pay taxes on 7% even if your real return was only 4%.

PS: There is a reason many institutions are ok with a very steady 3.5% ROI there is a lot of risk going for more.

You're not putting 100% of your portfolio in equities if you're living off its cash flow [1]. ZIRP means your fixed income can flow is weak. Things to consider when allocating as a retiree.

[1] imo it's okay to do this while you're in the workforce since you're salary effectively acts as your fixed income portion of the portfolio.

My prior comment may not have been 100% correct. I believe the specific research that lead to the so called 4% rule did include a mix of stocks and bonds. As you point out, you would tend to roll back your risk tolerance as you reach retirement. Here's more on it for anyone interested:

http://blog.cordantwealth.com/how-much-can-i-spend-in-retire...?

In old movies, you definitely see "millionaires" as the definition of "rich". $1m in 1950 is about $10m today, so that seems like a pretty safe bet for "Hollywood rich".

1950 1m as the gateway for millionaire ~= 10m today so having 6m is close, but not quite there yet.

Considering there are 1,810+ billionaires globally you have not heard of most of these people. But, if someone is defined as unusually rich not just 'comfortable' that seems to be the new movie millionaire.

Tbh, my definition would be based less on fact than feeling. I lived in Brooklyn, and not terribly nice area of Brooklyn, so to me, "rich white people" were the ones who lived in nice apartments in Manhattan, or in really nice neighborhoods in Brooklyn. So I'd doubt all of their parents made more than 1mil/year, but I'm sure some did. If I had to ballpark, they probably made ~500k/year on average.

> I certainly didn't met any kids in high school that had any kind of money to flash (a fancy car or other expensive things to show off).

I've never met anyone that's similar to Hollywood movie characters. I'm not sure they really "flashed" their money, but it was clear they had access to nice things. Their clothes were definitely nicer, their parents would take them out to plays and expensive dinners.

It's possible this is the case because I grew up in NYC as opposed to the suburbs. The stereotypical "rich white person" in New York is exorbitantly rich. Maybe I'm just referring to those who were upper-middle class

> It really does taking meeting someone face-to-face to realize that they're not so different from you

Idk, from my Ivy league experience many of them are in fact completely different from you. Many of them are not, but many are. "Oh we're all the same" is too much of a generalization. I'll jog my memory a bit, although many are extreme data points that still come to mind years after...

I had a friend (guy) who would enjoy sitting and making fun of people for the way they dressed, which was usually just them looking poor or working class. To me that was new, the idea that some guys at 18, 19, 20 spend a lot on clothes and snark at the way other guys dress.

I had another friend who would invite a huge group of us to VIP bottle service at a club every so often, dropping maybe 4, 5, 6 thousand on a Saturday, but then would occasionally point at someone, usually someone he didn't like, and say "Hey - why don't you chip in" and put them on the hook for 800 dollars.

I remember staring in disbelief when I learned some guy in my building would order in sushi in the mornings to his room instead of going to the dining hall. (Of course, dropping $35 on a Postmates delivery for one is not unusual for tech workers in SF today, but at 18/19, and many years before Postmates, it felt like they were living on another planet). Another would just take off to Tokyo for a weekend if he felt like he 'needed a break', and other students, usually rich girls, would fawn over how "deep" he must be, his feeling the need to fly off to Tokyo, etc.. Someone else in that building also installed a stripper pole in his room, and not surprisingly a lot of girls who were attracted to his levels of "richness" and "lifestyle" actually went over to indulge him.

They formed their own "fraternities" although some were kicked off campus because, of course, cocaine. (Cocaine and richness is another topic). Additionally one of the super rich guy frats was one that had the roofie reputation. Another had the asshole reputation. I just remember going to one of their parties for 'rush' freshmen year and basically getting laughed at for the cheap suit I was wearing.

That all said, of course there were many jovial, standup guys from rich families who try to relate to everyone, who maintain an ironic distance from their "richness"... but my Ivy experience (which was maybe more unique to this particular Ivy), which I enjoyed very much, still exposed me to a lot of guys I could never relate to nor would want to.

> usually rich girls, would fawn over how "deep" he must be, his feeling the need to fly off to Tokyo, etc.. Someone else in that building also installed a stripper pole in his room, and not surprisingly a lot of girls who were attracted to his levels of "richness" and "lifestyle" actually went over to indulge him.

It's pretty well known that a lot of girls at universities are there not only for academic purposes, but also to lock down a 'nice' future husband. Biology is what it is..

Edit: be PC and downvote all you want, but its a pretty obvious truth for anyone that did actually attend university.