There are two things people seem to want more than anything else: money and power.
For the sake of money and power, we study like crazy, work like dogs, delay starting families, then abandon our children once we have them, all for these two things that really don’t make us much happier. How strange we are.
Billionaires are in the top 0.1% of wealth. They make “everyday multi-millionaires” sometimes feel like uncomfortable failures.
But who are the billionaires of power?
They are our politicians who pass laws that affect the livelihoods of millions. Members of Congress, The President, and Supreme Court Justices are all part of the top 0.1% of power.
The Goal Of Financial Education
As a Financial Samurai, it is my purpose to share as much free financial education as possible so that everybody, not just the rich and powerful, can rise up to lead better lives. Free information on the internet is one of the main reasons why I’m hopeful for the future.
Imagine a world where everybody has their finances in order. For one, we’d all be less stressed. And when we’re less stressed, we’re happier. Happier people make better decisions. Happier people are also nicer, more confident, and tend to help others more instead of lashing out.
If everybody can gain access to good financial information for free, more people will eventually achieve financial independence as well. When you achieve financial independence, not only do you remove strain from the system, you also give back to the system. When you give back to the system, the system is subsequently able to help even more people in need.
Finally, with good free financial information, parents and students will no longer need to go into tremendous student debt to get a college education reserved only for the brilliant or the wealthy. Without massive student debt, no longer will millions of students need to put their lives on hold. Graduates can work in jobs they love. They will have an easier time saving for a home. There will also be less need to delay having children, which may increase fertility rates, decrease heartbreak, and decrease the need for expensive treatments such as IUI and IVF.
With so much opportunity to help others, if we have helpful information to share, we should do our best to share it for all to benefit.
Overcoming The Blindspot
One of the biggest reasons why so many people have a difficult time with their finances is because they are unable or unwilling to plan for the future. They cannot forecast their misery to lead a happier life.
For example, younger folks often can’t imagine one day hating their jobs. Therefore, they don’t save enough in the moment to give themselves options when that time inevitably comes. With insufficient funds, they’re forced to continue doing a job they hate for longer than desired.
One of the main ways I help people see what they cannot or are unwilling to see in the future is by sharing financial archetypes to ponder.
One such financial archetype is a family of four with two kids under 18 living in a high cost of living area. There’s nothing unusual about this financial archetype.
According to the National Oceanic and Atmospheric Administration, coastal counties of the U.S. are home to over 126 million people or 40 percent of the nation’s total population. Yet the coast accounts for less than 10 percent of the nation’s landmass (excluding Alaska).
Meanwhile, according to Statista, the average family has 1.9 aged under 18 children. In other words, a family of four living in a expensive city is quite common.
To understand and describe the pressures of raising two children in a high cost area of the country where 40% of the United States population lives, I published a guest post on CNBC entitled, It Now Costs $350,000 A Year To Live In A Big City With Family. The post was the most popular post on CNBC’s website for a couple days.
The post was so popular that MarketWatch decided to pick it up and put its own spin on it, entitled, This Budget Shows How A $350,000 Salary Barely Qualifies As Middle Class, thereby pushing the boundaries of what I had written.
As the buzz began to grow, MarketWatch decided to send out one last poke, “$350,000… and STILL struggling,” that caught NY Congresswoman Alexandria Ocasio-Cortez’s attention.
I loved AOC’s tweet because she approached my budget with good humor (why MarketWatch removed FS as the source at the end of the graphic, I don’t know). She also shared the budget with her 5.6 million followers. This is great because it got people talking about important things such as:
- Money and happiness
- The importance of staying on top of your finances and living within your means
- Whether it’s worth being a two-income household when you have kids and have to pay for daycare
- Wondering whether it’s a good idea to move to a lower-cost area of the country
- Preparing one’s finances for the high cost of childcare
- Highlight how tax is the largest ongoing expense
- The importance of contributing to a 401(k) and 529 plan
- Fighting for more vacation days
- Asking whether it’s necessary to have an umbrella policy or what is an umbrella policy
- The high cost of healthcare, even if it is subsidized by an employer
If a picture is worth a thousand words, dare I say this tweet is worth a million words. The article, the graph, and the tweet got America talking about our finances, which is the #1 thing I hope for as a personal finance educator.
And let the record show that I never said this family of four was “struggling.” Marketwatch said so. My original post on CNBC discussed how quickly $350,000 can go if you’re trying to raise kids, save for retirement, and save for their education.
AOC’s Blindspot
As an unmarried, 30-year-old woman, what AOC might not realize is that she might very well turn into this family of four one day.
I fully expect AOC to be a rising star in the Democratic party for at least another decade, if not two. As a result, she should prepare for a financial life in the Washington, DC area. If not, the cost of living in the NYC area is equally as high, if not higher in some neighborhoods.
As a Congresswoman, AOC currently makes $174,000 a year. This salary puts her in the top 5% of all Americans. However, the salary has been capped since 2009 given objections by the American people who give Congress a low approval rating.
AOC has an estimated $20,000 in college loan debt. Meanwhile, I estimate AOC has a net worth of around zero due to her student loan debt and the fact she was working close to a minimum wage job in early 2018 as a bartender.
If AOC saves aggressively, invests wisely, and doesn’t have any kids, I believe she will grow her net worth to over $1 million by the time she’s 40.
But here are some of the challenges AOC and other members of Congress face if they want to get married and raise two kids in the Washington, DC area.
Median Home Price In Washington, DC
The median-priced detached home is around $820,000 as of October 2019. As any real estate buyer knows, you oddly don’t get very much if you pay the median price for a home. If you want to buy a move-in ready detached home in Washington, DC or the nearby suburbs, expect to pay closer to $1,000,000. The overall median price for property types in Washington, DC is roughly $620,000.
If the median-priced detached home grows by just 3% a year, by 2029, the median-priced detached home will be $1,102,000. If you have kids, your preference is to own a detached home with a backyard instead of a condo.
Private School Tuition In Washington, DC
Although it’s possible AOC and other members of Congress would send their children to public school in the DC area, it is rare. Those in the top 0.1% of power usually desire and require safety and more privacy for their children.
Let’s say AOC has two boys and is OK with public grade school up until high school. She then decides she wants to send her kids to Supreme Court Justice, Brett Kavanaugh’s high school alma mater, Georgetown Prep. Here’s the latest tuition.
Georgetown Prep 2020 Tuition
- Day Student Tuition: $38,330
Other Fees:
- Day Student Tuition Deposit: $2,000 reservation deposit for enrollment, credited towards tuition
- Tuition Refund Insurance Plan .09%
- Parents’ Club Dues: $105
- Estimated Book Cost: $800-1000
Let’s say AOC doesn’t want her two boys to ever go to public school. Instead, she wants to start them off in pre-K through 12th grade at Sidwell Friends, the private school where the Obamas’ daughters went. Below is the latest tuition.
Sidwell Friends Tuition 2020
| Lower School | $44,280 (includes hot lunch and textbooks) |
| Middle and Upper Schools | $44,280 (includes hot lunch) |
ADDITIONAL ANNUAL FEES
| Middle School textbooks and laptop fee (grades 5–8) | $560 |
| Upper School textbooks | $500–$700 |
| Daily shuttle bus transportation between DC and Bethesda campuses (optional) | $1,050 one way, $1,700 round trip |
| Lower School Early Risers (optional) | $235–$1,045 |
| Lower School After Care (optional) 1–5 days per week | $1,600–$5,995 |
| Middle School After Care (optional) | $2,900 |
Let’s say AOC keeps her kids in New York City and she commutes to Washington, DC three days a week. The annual tuition at Horace Mann is $53,200 a year once they hit pre-kindergarten. The total cost per year would, therefore, be $106,400, excluding any donations to the school. At a 25% effective tax rate, AOC would have to earn $142,000 in gross salary to pay for this tuition.
Tuition Schedule, 2019-2020 Academic Year
| Nursery Division | |
| Threes Program, Mornings or Afternoons | $38,200 |
| Threes Program Full Days | $53,200 |
| Pre-Kindergarten | $53,200 |
| Kindergarten | $53,200 |
| Lower Division | |
| Kindergarten to Fifth Grade | $53,200 |
| Middle Division | |
| Sixth to Eighth Grades | $53,200 |
| Upper Division | |
| Ninth to Twelfth Grades | $53,200 |
Finally, let’s say that AOC’s children decide to attend her alma mater, Boston University, instead of going to an amazing public school like The College of William & Mary for one third the price. Here’s how much Boston University costs.
How on earth are AOC and other members of Congress going to afford such expenses off their $174,000 a year salary? Let’s do the math!
How AOC Can Afford To Raise A Family In Washington, DC
It is virtually impossible for AOC alone to afford to send two kids to private school starting in kindergarten. The tuition at Sidwell Friends would amount to roughly $90,000 a year for two kids, after tax. Based on a 25% effective tax rate, AOC would have to spend $120,000 of her $174,000 salary on tuition.
With $52,000 remaining of her salary, AOC only has $4,333 a month gross left to spend on housing, food, entertainment, transportation, personal health products, vacation, outside kid activities, and charity. After paying a 25% effective tax rate, AOC actually only has $3,250 a month to spend on life.
Unfortunately, the average rent in Washington, DC is $2,232 a month according to RentCafe. While the average apartment size for the average rent is only 743 sq. ft.! Therefore, it would be reasonable to assume AOC would have to pay closer to $3,500 a month for a modest apartment or townhouse for her family of three as a single mother.
If she does, AOC would be left with no money left over for retirement savings, her children’s college education, vacations, food, entertainment, and charity.
The Solution Comes Full Circle
The obvious solution to AOC’s situation is to have a working spouse. Although no woman needs a man or a partner to provide for her, it certainly helps to have a working spouse when you have two children.
For the sake of equality, let us say AOC marries a man who makes a similar $174,000 salary. Maybe that man is her current boyfriend, who knows. Suddenly, their household income comes mighty close to my original $350,000 a year household family of four.
Let’s crunch some numbers to see how AOC and her husband can afford to raise two kids in expensive Washington, DC.
AOC Budget Analysis
The main killer in AOC’s budget is the $90,000 a year in tuition to Sidwell Friends plus the $20,000 a year in 529 plan contributions so they can help pay for private university tuition.
Even if AOC did send her kids to public grade school through 12th grade, she would still have to come up with $72,000/year X 2 if they want both kids to attend her alma mater, Boston University. $144,000 X 4 years = $576,000 in after-tax dollars.
Assuming the cost to attend Boston University doesn’t change for the next 18 years, and AOC miraculously has two children today, her household would need to still save $32,000 a year to pay for all college costs.
Unfortunately, the cost to attend Boston University has gone up by at least 5% a year. Therefore, in 18 years, the cost to attend Boston University may be a whopping $173,000 a year using a 5% compound annual growth rate. In other words, AOC and her husband would need to save $1,730,000 to pay for four years of college expenses for two children in 18 years.
To do so, AOC and her husband would need to save $96,111 a year for the next 18 years, which thoroughly replaces the $90,000 a year they have to spend sending their two kids to Sidwell Friends from K-12 or the $106,400 a year if they go the Horace Mann route in NYC. Their $20,000 a year contribution to their 529 plan is clearly not enough.
There’s really not much more in AOC’s budget we can cut. She’s already not building any home equity by renting. Sure, the media had a fit that she spends $300 to cut and dye her hair, but that’s her prerogative. As someone who cuts his own hair and doesn’t dye his hair, I can’t judge her because I don’t need to be presentable to anybody.
Sure, she could reduce her $8,000 a year vacation budget for a family of three. But when you have so much free time as a member of Congress, it would be a waste not to go to fantastic places with your family, especially during long summer vacation months. Congress is only in session 138 days a year or less, if there are mid-term elections. In August 2018, House members got the entire month off!
Finally, at least she and her husband are saving $38,000 a year in their retirement funds. Yes, I know politicians have pensions instead of 401(k)s. But I’m just using $38,000 as a combined annual retirement savings budget.
Here are some solutions for AOC’s $350,000 household to consider.
Solution #1: Be OK With Public Grade School And University
Forget private grade school and private university. Although AOC’s children might get scholarships as underrepresented minorities, if the system is working properly, they probably won’t given their parent’s combined incomes and their mom’s position of power.
If AOC and her husband can’t bear the thought of sending their children to public school like most of the U.S. population, including myself, then the only other way to afford such a luxury is by making outside income.
Solution #2: Do Some Side Hustling
Members of Congress are allowed to retain an amount of permissible “outside earned income” limited to no more than 15% of the annual rate of basic pay for level II of the Executive Schedule for federal employees, or $28,400.00 a year. However, there is currently no limit on the amount of non-salary income members can retain from their investments, corporate dividends or profits.
Therefore, AOC could theoretically boost her pay from $174,000 up to $202,400, which would give her household more breathing room to save for retirement or their children’s education. Here’s my step-by-step guide on how to create your own website to help you attract my clients and/or generate your own online revenue.
Solution #3: Lose Or Quit
Given AOC’s tremendous popularity, there is an unlikely chance she will lose when she’s up for re-election on November 3, 2020. But if she does, or decides to quit, I’m sure she could get a multi-million dollar book deal like every popular politician before her.
For example, I calculate Elizabeth Warren has an estimated net worth of at least $4 million, partly because she got a $525,000 advance for her book, “A Fighting Chance.” She also earned ~$60,400 in royalties for previously published books on bankruptcy and credit.
In another example, Joe Biden’s net worth was quite paltry in 2017, despite he and his wife earning over $300,000 a year for at least eight years. Then their fortunes turned when the Bidens signed a reported $8 million book deal with Flatiron Books once Joe left office. In June 2017, shortly after they inked the book deal, the Bidens purchased their vacation home in Rehoboth Beach, Del., for $2.7 million. The Bidens have reported they’ve earned more than $15 million on their tax returns since leaving office.
If AOC wants to go the book deal route, she should probably try and serve at least two terms to really make some big money. Although I’m sure she could get a $2 million book deal after only one term.
Solution #4: Find A Wealthier Spouse
Although I’m all for equality, there’s no reason why AOC couldn’t easily find a spouse who earns more than $174,000 a year. There are numerous positions across many industries that pay people with over 10 years of experience after college much more.
Given AOC is in the top 0.1% of power, she will naturally run in circles with other people of power and great wealth. Nobody would be surprised if she met someone who made millions a year.
The marriage combination of powerful politician plus wealthy business person is one of the most coveted status combinations in history.
Solution #5: Have Fewer Children
Having children is a blessing. But not everybody wants or should have children.
After doing the math, if the strains of having two children is too much for AOC and other Congressional members, then only have one. If raising one child is too much, then have none.
It should be a reasonable ask to not have children before first being able to take care of yourself. Our children deserve to be cared for in the best way possible.
Raising Children In A Big City Is Expensive
I understand that it’s easy to laugh at a family who is just getting by on $350,000 a year, especially if you don’t have kids or don’t live in an expensive city or both.
But 40% of Americans do live in an expensive coastal city and millions of these Americans plan to have children one day.
Before you decide to have kids, do the math. Please sit down with your partner and talk about the consequences of having kids before getting busy during the three most fertile days of the month.
If we can properly plan our careers and our finances well before having kids, I strongly believe we will raise better-adjusted kids who will grow up to be wonderful adults.
I’m sure AOC and other members of Congress will find a way to make things work if they want or have children. As the saying goes, “have children and the money will come.”
Readers, do you think AOC and other Congressional members will be able to raise two kids in expensive Washington, DC on their salaries? What are some other ways in which a member of Congress can afford to raise a family?
Related posts:
How To Retire Early With Kids: An Impossible Mission
Maxing Your Your 401(k) Is A Choice On An Average Income
The Best Age To Have Kids Based On Biology And Economics
Part of the problem is that people start a career making six figures and expect to be wealthy immediately despite having student loans, mortgage, car, and family expenses. The reality is you got to spend about a decade paying down debt and investing before you really see results. Even then you’ll probably need another decade or working to maintain benefits and build a bigger retirement cushion.
This post is so out-of-touch and unrelatable, it’s just a combination of absurdity and insanity. I typically enjoy Sam’s posts, but when there is the occasional “here’s a taste of reality” post from the perspective of a rich person who can’t wrap their head around all of the unnecessary money spent, he loses me.
It is definitely hard to relate if you are not one of the 40% of Americans living in an expensive coastal city who may want to have kids or have kids. I think that’s the whole point of the post. To help people understand, who are clueless.
It’s also interesting b/c you know AOC, as a Democratic Socialist, will be carefully watched. Will she act like the people she represents, and send her kids to public school? Or will she continue to do differently what she says, and go the private elitist route?
What is your family situation?
Tony,
You’ve mentioned you live in the MidSouth, are now 26, make $68K and don’t have kids. So I understand how you can’t relate to raising family yet, in a HCOLA. But hopefully, you can broaden your outlook. A person’s outlook pre kids is entirely different from a person’s outlook after having kids. You’ll just have to trust me on this, or not.
You also mentioned that your father-in-law paid for your $32,000 wedding and you spent $10K on a honeymoon and $6K on a wedding ring. $32K is 10X more than what we paid for our wedding and your honeymoon is $9.5K more than we spent on our honey moon. Even though we were frugal and didn’t want to have our parents pay for anything, I can relate to why you went your route. That’s what most Americans do.
The point is, everybody is different. And the more we can accept different situations, the more we will learn and grow.
Fair enough. I doubt I’ll ever be in a situation that I become the subject of this post or others like it (by choice or otherwise) and I’m certainly not now, so I can’t accurately chime in.
To your point, it’s definitely a change in perspective to see these posts and the resulting comments, seemingly split between agreeing with you and not.
I think it’s all about perspective.
I am currently living in a coastal city (Boston). The wife and I make approx. $375k/yr with bonuses. We have two young kids. We live in a massive (for the area) four bedroom 2,000 sq. ft. condo that’s walking distance to a subway station. Coincidentally, we both went to BU. I’m actually going to grad school right now, and Sam’s numbers are a little low – my tuition at BU right now is $80k/yr.
Other bills:
Daycare – $4750/mo (includes “discount” for the second kid)
Mortgage – $4400/mo
Groceries – $700/mo (from Trader Joe’s or Star Market, not Whole Foods)
HOA – $300/mo
Subway – $240/mo (two $120 passes)
MA Income Tax 6% (don’t know exactly what it comes out to off-hand)
School Savings – $500/mo (2x $250/mo 529c, one for each kid)
401(k) – $3166/mo (maxing out both of our 401(k)s)
No auto loans.
No student loans (I worked two full time jobs while going to public school for undergrad, we’ve since paid off the wife’s loans).
No annual vacations. My last time off was spent being daddy daycare to save money on daycare.
No date nights / dining out – in the three years we’ve had kids, we have had 1 entire night off. We did get Domino’s delivered the other day, so I guess that counts as dining out.
No consumer debt.
Our wedding was a cheap affair – a potluck BBQ in my back yard in t-shirt and jeans with a cooler full of beer.
We are by no means barely surviving. I can easily cover a surprise bill if needed. But, we certainly don’t feel like we have tons of cash left over at the end of the day, and we certainly aren’t spending it on seemingly frivolous things. It’s expensive to live in an expensive city.
For comparison, I used to live in a small town in Texas. The wife and I made around $65k/yr. No student loans, no kids, but a minor amount of consumer debt, two car loans, $900/mo mortgage, no savings of any sort and had a similar amount left over each month as we do today.
“Finally, let’s say that AOC’s children decide to attend her alma mater, Boston University, instead of going to an amazing public school like The College of William & Mary for one third the price.”
Let’s be real, unless she pulls a Katie Hill and gets derailed, and she does becomes one of the big Dem star everyone is predicting, her kids will more likely get “scholarships” for having a special mom, or AOC will be side hustling with a one book that will pay for BU.
Sam,
Don’t know what you are thinking. Rooting for a left wing socialist who has been totally wrong on so many issues on so many levels. You got be kidding me.
Sam – First time caller, long time listener.
I am an attorney, not a financial planner, but I think there is a glaring error in your calculations (may be addressed in the comments, and I apologize if it is).
AOC, like every other politician, unless from the DC or Maryland/Virginia area, have to maintain two residences: one in DC and one in their “congressional district.” Most politicians keep their families at home, as they generally only work in DC 3 days a week. A lot of politicians have “flop houses” in DC where they, along with some other politicians, all rent a DC house and basically rent a room. So the Sidwell Friends numbers are incorrect, as are the costs in DC. Assume only $1000 in DC for rent, and $2-3,000 back home (unless from a high rent/cost of living area, like New York (and AOC lives in the Bronx, which is far cheaper than Manhattan).
I also thing the 401k contribution is incorrect. Politicians earn a pension for their work – I think they need 10 years, to receive their money, so doubtful many are saving into a 401k.
A number of politicians take “fact finding missions” overseas, and at least bring their spouse. While they have to pay the cost of the ticket, the cost charged is not the same as the actual cost incurred.
Finally, their “campaigns” are allowed to pay for a lot of things, so some of the monies assumed to come out of pocket are actually paid by their contributors/constituents.
If you are really into this, politicians have to file annual reports on their incomes, etc. I suggest finding the annual report of Russ Feingold, a former Senator from my home state of Wisconsin. He was the “poorest member” in the Senate, as he only received his Senate salary. It is a good breakdown of some of the numbers.
Keep up the great work. Back to lurking in the background.
Great points. I used $38,000 as a combined annual retirement savings budget for the couple. I assume the husband contributes to his 401(k) and AOC pays something into her pension to receive her pension. But AOC might one day work in the private sector.
I highly doubt she would only spend $1,000 a month for rent. Maybe, but hard to picture. I see no reasonable 3-4 bedroom home for rent for less than $3K in NYC either. That would be a steal.
NYC private school is even more expensive. Horace Mann costs $53,400 a year. That’s more than Sidwell Friends.
I’m just looking forward to how things transpire.
Will AOC be a woman of the people by going to public school route? Or will she fence off her kids from the real world to only hobknob with the most privileged children in America?
Hope she does the former!
I live in DC and a studio room would cost at least $1500/mo. AOC and most politicians would get much better and more expensive room. My best friend is paying $3500 in a one bedroom apartment in a trendy neighborhood Logan Circle. Sharing a townhouse room/condo would cost 1000 each, Im sure AOC don’t wanna share bathroom.
Why do you think people who don’t have two kids who don’t live in a HCOLA judge so much about people’s budgets who do have two kids and live in a HCOLA?
Also, how come nobody is pointing out the hypocrisy of a Democratic Socialist needing to send her gets to private grade school and to $72,000 a year Boston University? I only know super rich people who send their kids to BU. If you were smart enough or could afford that tuition, you’d go to Harvard!
“AOC would have to spend $120,000 of her $174,000 salary on tuition” ….No? That’s not how taxes work. You could say she’s spending $90K of her $130K post tax income, but saying she’d be spending $120K on tuition is just a lie.
Also, why are these people paying for all 4 years of college, for both children, when their first kid turns 18? For each child, it’s really 22 years you have to save, and since in the budget they’re 2 years apart, it’s 24 years. Also, why are these 529 plans getting 0% returns? That seems truly incredible for a managed portfolio of mutual funds and ETFs over a 24 year period. After accounting for these 2 changes to make your fake budget a little more like reality, the per year contributions needed for would be significantly lower. The reaching and bending of reality being done to try to make it look like $350K a year is a struggle is really bananas.
Feel free to tell me how much gross income is needed to pay for $90,000 in annual tuition if you have a 25% effective tax rate. Taxes are complicated, and I’m always interested in learning more.
How many children do you have and where do you live that allows you to make it work in a HCOLA? thanks
Maybe he believes AOC won’t have to pay taxes because she will pass a low that forces everybody else to pay, but her family?
Socialism works until you run out of other peoples money.
I’m guessing PPAE doesn’t have kids or doesn’t have kids and lives in DC or NYC, which is more expensive.
AOC? Lol, she is barely old enough to have a kid. She IS a kid. You just had to fit her into the title huh?
I think another interesting question would be how she, or others in federal government, starts barely able to make 1st months rent ( she said she needed her first check to apt search) making 180k and becone worth mega millions! The math never computes.
Also, if the Green New Deal was theoretically to pass, how would any of afford rice and beans?
Cheers!
With your idiotic budget, since that’s not how I live, your make a lot of assumptions. I see close to $13k per month in what I would consider savings, which is the option you get when you make 6-7x’s the national average. 401k, education, $500 vacation savings, college savings, life insurance… Blow those off for only 2 months, as those are merely a choice and you got a $25k safety net.
Lol Sam, you made it to an article on The Atlantic too! theatlantic.com/ideas/archive/2019/10/why-financial-confessionals-viral/600358/
She (author, Ms. Lowrey) started off fairly negative but then leveled off and gave the sort of level, well-considered work you’d expect from The Atlantic.
“The internet, being the internet, responded with some combination of howling, baying, pitchfork-jostling, and scoffing. Representative Alexandria Ocasio-Cortez of New York quipped that the thing the family was struggling with was math. Gabriel Zucman, a leading scholar of wealth and inequality, described the budget as laughable, while noting that it showed how much money consumption taxes could raise.”
Haha.
She also gives a hat tip and links to Sam’s 2015 “2-lawyer $500K family budget” from 4 or 5 years ago.
Well, members of Congress have tended to do incredibly well in their investments. Nothing to do with the fact that they were frequently given insider information and were actually allowed to use it. Presumably, the STOCK Act in 2012 cracked down on this but we have no way to tell if it is being enforced or, perhaps worse, selectively enforced when it come to the President, the vice-President, and Congress. Congress deliberated less than 14 seconds before voting unanimously to exclude their own financial transactions from public review when, logically, they would be more visible, rather than less so, than those of the general public.
In many cases working as a bartender is not close to a minimum wage job. Especially for someone like AOC who is attractive, personable and also worked in NYC.
Funny Nate, this also stuck out for me in an otherwise interesting article. Sam needs to talk to some bartenders about their financial samurai skills. In a good club in Toronto a bartender with AOC’s looks, style and charm can pull in $10k/month in tips. The key is a busy downtown spot where she can get a lot of shifts. As Sam says, making big $$$ is all about the hustle!
Big bucks! And noted. If a Bay Area Janitor can make $235,000+ a year, why can’t bartenders too right?
Although I still estimate AOC has a $0 net worth at the moment due to her student debt. Should rise rapidly over the next 10 years though.
“If a Bay Area Janitor can make $235,000+ a year, why can’t bartenders too right?“
I do not know a single bartender on this planet that will make $235k as a bartender, unless you are Tom Cruise from Cocktail.
“Establishment survey, the sector that added the most jobs was the “food services and drinking places”, i.e. “waiters and barenders” category, which added 53,000 jobs, the highest monthly increase since March 2014. There have now been 89 consecutive months without a decline for waiter and bartender jobs, the strongest sector for US employment. Needless to say, these jobs fall within leisure and hospitality, that sector pays the worst wages, an average of $13.35 an hour, and $331.08 a week.“
I came to US as an au pair ( sort a nanny/student exchange type) living in Mclean, VA 22 years ago. I didn’t have much money. I knew how to save my earned money and was studying hard in my free time- studying English ( my English was good but not fluent). Got student visa and stayed with rich families in Northern Virginia ( had free rent/car/food). I guess I was very lucky. Now I am married, have one child, am US Citizen and work for US government. My house is worth $ 85000 and my remaining mortgage on it is $75 000 ( we plan to pay it off in 2 years). I have no student loan debt and no other debt besides mortgage. When I think back how simply I was raised back in Eastern Europe- we had no fancy activities, enrichment programs etc. and somehow we all grew up and ended up being normal people. If I can achieve so much within 20 years of being in US, then people – who have been here living all life long should really have no excuse how to navigate through life successfully. My child already has so much more opportunities just being born in this country and living in Northern Virginia that I don’t worry at all about the cost of education for her.
I’m happy for you. That is also such a cheap house, $85,000. You scored! I lived in McLean for four years from 1991 to 1995, and I was living in one of the cheapest houses, a townhouse for $200,000.
The advantage you have is knowing the difference between America and another country and appreciating how good it is here. Unfortunately, most people don’t know the difference and take American living for granted.
Amen to that. People are accustomed to having everything available. You walk into a grocery store you have fresh meat, fish, vegetables.
You can speak your mind about your government without fear of governmental retribution. Yet a meaningful percentage of citizens disparage our country and what we have.
If your are willing to leave below your means and consistently invest you can achieve independence.
A person can start a business and rely upon the rule of law to engage in free commerce, confident there are legal remedies if they are wronged.
I’m sorry I made a mistake- our house is worth $850000. I sometimes can’t believe what I have accomplished- considering I had literally nothing and yes, of course – having a spouse with additional income helps, too. When I was in my 20s, all my money was going to college, so I didn’t have student loans. I wasn’t running to Starbucks, almost no eating out, no designer clothes/bags/shoes. Americans truly don’t understand how good they have in this country.
I’m disgusted by the comments wishing ill upon AOC and future children. I expected better of the audience of this site. Anyone who has been through infertility would never wish that pain upon others.
I happen to agree with a lot of AOCs points even if I don’t agree with all her solutions. Why is it people are so offended at paying for social programs but don’t critique the endless wars of the last 20 years? My preference would be for all the new social programs to be paid for by cuts to the overseas military empire instead of taxes on the rich. Just the INCREASE to the war budget last year would have paid for free college for all.