Why Are High Income Earners Struggling With Wealth Too? (Guest Post)
Does Having Higher Income Also Mean Higher Wealth?
This post was originally posted here. The writer, Brian Halim is a veteran community member and blogger on InvestingNote, with a username known as @3Fs and has 2259 followers.
An interesting article from TODAY (Link Here) shows why for the majority of people, even a highly paid career such as a pilot – they continue to struggle and face the crunch to survive when these are considered high-income earners.
The article interviews a random selection of 12 pilots, and while the sample number is considered relatively small, it gives a good indication of how numbers crunching and dire the situation is for these pilots during the pandemic.
High-Income Earners = Higher Wealth?
Many of us would think that high-income earners have a better correlation to wealth.
After all, if you earn $10,000 as opposed to say $2,000, you should be much better off technically when it comes to your savings rate…. right!?
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| Most People Would Think Linearly That Nothing Can Go Wrong |
As it turns out, this isn’t necessarily the case.
From the article, one of the pilots is earning an income excess of $14,000 (including allowance) yet still struggles when the company had to force a company-wide pay cut to $6,000. Another pilot being interviewed has also admitted to being cash-strapped as his total compensations suffered a major cut down from the earlier of $23,000 to $13,000. We would think that is still a lot by the most standard but when he has an obligation to pay $19,000 in his expenses the whole story is completely different.
It was easy for most of us (the bottom ladders) to assume that with that sort of income earned per month, it would have been a breeze to survive the winter. After all, basic housing, medical and food supplies don’t take up that much of a pile.
But life has a way of making fun of us when we least expect it. …
