#116: Earning $100K but still feeling like you're drowning?

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Hey all, it’s MMV.

When was the last time you looked at your salary and felt proud of it?

At some point, you did the math of what your monthly income is and you think “that should be enough”.

Even the stats tell you that $100,000 puts you in the 77th percentile of U.S. income earners!

You’re budgeting correctly and yet every month, it feels like the costs keep coming - housing, groceries, insurance, and just normal life things. The rest of your money becomes savings but it doesn’t feel like it’s enough with all the expenses you have.

How is it that $100,000 doesn’t feel like it’s enough to get ahead?

The answer is that the system is lying to you. The data tells you that you’re doing great and you’re ahead of most Americans, but your experience doesn’t align with the data.

I read an interesting piece written by Michael Green, a U.S. strategist and portfolio manager, who identified the root cause of this - the U.S. federal poverty line. Basically, the poverty line is a 60-year-old lie like the federal minimum wage or the food pyramid.

I’ll explain..

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Have you ever wondered how the poverty line is calculated?

The U.S. federal poverty line (the magic number used to determine who's struggling and who's "fine") is calculated as three times the cost of a minimum food diet in 1963, adjusted for inflation.

Read that again. Three times the minimum food budget.. from 1963.

In the early 1960s, American families spent roughly a third of their income on food. So if you could price out the cheapest adequate diet, multiply by three, you had the poverty line or the threshold below which a family clearly couldn't survive. It was imperfect, but it worked as a measure of severe deprivation for that era.

So what's changed since 1963?

Housing costs have exploded. Employer-sponsored healthcare was cheap or free. Now, it's a massive line item in your paystub with a required deductible before insurance pays out. Childcare wasn't a thing then since most mothers stayed at home, but now it's the single largest expense many young families carry. College was affordable on a summer job; now it's a six-figure debt sentence. And most families need two incomes just to hit what one income used to cover back then and that second income goes straight to childcare.

And what about food, the foundation of the poverty line? Food got MUCH cheaper. We are an agricultural superpower. As a share of household budgets, food has dropped from roughly 33% to about 5–7%.

And the official poverty line we're still using? $33,000 for a family of four. We are measuring starvation and calling it poverty. Everyone above it, we're calling fine.

That’s absurd.

So what’s the REAL number of getting by today?

Michael Green used “conservative”, national average numbers to calculate it to be $136,500 - just to break even on the basics.

Here’s how he got to this number:

Notice the biggest expense? It’s childcare - not food like in 1963.

While using national averages works to come to a concrete, non-abstract number, there are some numbers I’d argue are inflated, but everyone’s experience is different.

I think we can all agree that the poverty line is outdated based on the cost of food multiplier of 3. I know there are some cheap areas in the U.S. but it’s hard to imagine a family of four surviving on $33,000.

This is the psychological trap we’re living in.

We’re told we’re earning “good money” but still struggling.

You’re surrounded by the optics of success - the job title, the income number that sounds good on paper, but your lived experience doesn’t match the narrative you’re supposed to be living.

It’s narratives like this that are confusing us:

Per Bloomberg, the percentage of US households with a total income greater than $150,00 has increased as the middle class has been shrinking. In my eyes, $150,000 IS MIDDLE CLASS!

I wish there was, but here’s what I want you to take away from this:

First: Stop internalizing a structural problem as a personal failure. The math checks out and your financial pressure you’re feeling is valid. It’s not all on you and you’re not alone.

Second: Know your actual number. Sit down and build your real cost-of-living budget of what it actually costs to run your life. That number is your bottom. Focus your efforts on earning more than that.

Third: Build income over expense optimization. If the problem is structural, the real solution isn’t cutting back. It’s earning more to overcome the systemic error. It could be a side hustle that can be a second stream of income or ownership of something that generates cash without your direct time. You can’t optimize your way out of this forever.

Fourth: Stop waiting for the system to fix itself. It’s not. Build the life you can control. The only way we’ll get some sort of reset is a REAL long recession.

The financial benchmarks we’ve been handed (the poverty line, the definition of middle class, and the promise that six figures means comfortable) are flat out wrong and need to be revised.

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If you want to read the full article from the author, Michael Green, you can read it here.

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