Are You Rich Yet? Why Families Still Struggle to Feel Wealthy

Do you remember those commercials from years ago? A financial services company had people walking around carrying these giant numbers. Like how much money they needed to retire or something.

I hope we've all moved past finding out what our so-called number is. But I thought about those commercials when I came across this Wall Street Journal article. (It may be behind a paywall. Even if you can't read the full thing, stick with me. I think you'll get the point.)

The article focused on families earning over $250,000 a year. That means they're in the top 10% of all household income generators in the country.

And they still don't feel rich.

The Pennsylvania Family

One of the families featured in the article lives in Pennsylvania. She and her husband earn about $350,000 a year. They own their home. They have a second home, a vacation property they rent out on Airbnb. They have three children who play club sports and participate in many extracurricular activities.

And that right there, if you're a parent, you know that's it.

Let me back up. They have two houses, not just one. The article doesn't go into detail about how much debt they have, the mortgage rates on these houses, or what they get from renting out the second one. Doesn't matter.

At $350,000 in household income, based on U.S. Census data, you're roughly in the top 4%. Top 4%.

And somehow there's a breakdown about feeling rich.

It's Hard to Measure Our Standard of Living

As my friend Cullen Roche said in an article he wrote, it's really hard for Americans to measure our standards of living.

Think back 100 years ago. Luxuries back then are table stakes today.

I went on an overseas trip to celebrate Theresa's wedding anniversary. Fifty years ago, that would not have been as convenient as it is today. But I'm sure there was something to complain about 😊.

That's the first point I want to make. It's really hard to quantify the rapid improvements in living standards we've seen over our lifetimes.

I'll be 50 this May. If you go back to some stats, you'll see that a greater percentage of the workforce worked in agriculture, getting our food and making our products. I had a podcast about this, a couple of months ago, when I was talking about tariffs and wanting to reshore manufacturing.

Companies are really good at optimizing and cutting costs. If you look at how many people worked in manufacturing and agriculture decades ago, you'll see that the numbers have continually declined.

We have more stuff. We have easier lives in many measurable ways. But we don't feel richer.

The Second Home Problem

The next thing I want to come back to is that this family has not one, but two houses.

I don't disparage anyone who has a second home they use for investment purposes. Full disclosure, Theresa and I have a second home that we rent out.

But I think where it really gets to parents is the kids and the activities.

That's where families really struggle.

I've worked with families over the years that spend not thousands of dollars, but tens of thousands of dollars on club sports, on activities for their kids, you name it.

And I think that is what's really different from years ago when I grew up. I don't want to be that old guy yelling, "Get off my lawn!" But thinking back to my own childhood, you played one rec sport every season, and that was it.

There wasn't a camp for this. There wasn't a camp for that. You weren't going to an overnight camp for a sport. Maybe you went to an overnight camp for something else. Religious camp or Boy Scout camp or something like that, but not a sports camp that you're paying thousands of dollars for.

And believe me, I am just as much in this as any of you are.

I spent a lot of time in Ann Arbor taking Madison (my daughter) back and forth to a swim camp. It was worth it. I liked doing it. I liked spending time with her. But it was still not an insignificant amount of money.

Modern Life Isn't Easy, It's Just Different

When it comes to this mark of feeling rich, it doesn't matter that modern life isn't hard.

Human life is always hard and probably always will be.

While it's easy to see how life is easier today than 100 years ago, we've just created new problems for ourselves.

One of the phrases that Morgan Housel uses that's always ingrained in my mind: One of the challenges within life, financial planning, life planning, whatever you want to call it, is to get the goalpost to stop moving.

I did a podcast the other day about seeing one of my favorite bands that I started listening to in college. You remember how poor you were in college?

I have a hard time thinking back and having a conversation with that person. If I had told Paul in 1996 or 1998 that I'd be standing here where I am today, I would have said no freaking way.

It would have been my wildest dream to have this firm called TAMMA. To be able to live in the house that I do. To live in the community that I do. To help support families the way I do.

It's been an amazing journey. One that I try not to take lightly. Every day, I come into this office to work and to help support not only my family but also the TAMMA families, from a financial and lifestyle-planning standpoint.

But thinking back to where I was then, and maybe the dreams, aspirations, or objectives I had then, they certainly do not line up with where I am today.

Look Back, Not Forward

I've referenced Dan Sullivan's book, The Gap and the Gain, throughout my podcast and writings.

To determine how much progress we've made, it's not about looking forward. It's about being able to look back to see where we started.

Because that horizon is always going to be in front of us.

As Morgan pointed out, the real key is to figure out how to stop the goalpost from moving. Which, in this day and age, with social media, is much easier said than done.

Again, as Cullen put it in his article, human life is always hard, no matter what we have at our fingertips, and likely always will be, because we'll always end up creating problems for ourselves. And once we solve those, there'll be new ones ahead.

Why This Matters for Your Financial Planning

This isn't just an interesting observation about human psychology. This directly impacts how you make financial decisions.

When families don't feel wealthy despite being in the top 4% of income earners, something's broken. And it's usually not the numbers.

I work with families all the time who objectively have more than enough. They've hit the financial goals they set 10 years ago. But now those goals have moved. The number got bigger. The house got nicer. The activities got more expensive.

The problem isn't that they don't have enough money. The problem is they can't stop the goalpost from moving.

Every raise gets absorbed. Every bonus gets spent. Every bit of progress gets normalized within months.

And then they look around and wonder why they still feel stressed about money.

The Kids Activities Trap

Let me be really honest about the kids' activities piece because this is where I see families get crushed.

It starts innocently. Your kid shows some talent or interest in something. You want to support them. You sign them up for club sports, travel teams, or specialized coaching.

Then it escalates. Weekend tournaments out of state. Summer camps that cost thousands. Equipment upgrades. Private lessons.

Before you know it, you're spending $10,000, $20,000, $30,000 a year per kid on activities.

And you can't back out because you've already invested so much. And because everyone else is doing it. And because you don't want to be the parent who didn't give their kid every opportunity.

I'm not saying don't invest in your kids. I do it too. But be honest about what it costs. And be honest about whether it's actually moving you toward the life you want or away from it.

Where You Actually Stand

Check out this tool that shows Average, Median, Top 1%, and all United States Household Income Percentiles. What percentile are you in?

I think you're going to be surprised at how high your income is versus the rest of the people that live in this great country.

Not to make you feel guilty. Not to tell you to feel rich when you don't.

But to give you perspective on where you actually stand versus where you think you stand.

Because if you're waiting to feel wealthy, you might be waiting forever. The goalpost will keep moving. The comparison will always be there. Social media will always show you someone with more.

This Week

Look back at where you started instead of comparing yourself to some moving horizon ahead.

Pull up your tax return from 10 years ago. Look at your income then. Look at what you owned then. Look at what you were worried about then.

Then look at today.

You've probably made more progress than you think. You've probably accomplished goals that once seemed impossible.

But you moved the goalpost. And now you're chasing a new number that will feel just as insufficient when you reach it.

Money is a number. Enough is a story. Make sure you're writing your own.