What do you consider to be a "good" salary? - Page 7

[ChristyMarie]

I'm confused about how the COL index number is calculated and what (if anything) it really means.  Looking at these three examples:
 

Originally Posted by sunnysandiegan 

.....

Our COL is 134.6 and the estimated median house/condo value in 2009 was $479,289 and the estimated median household income in 2009 was $73,956.

....

Originally Posted by amma_mama 

We live in an area where the COL is 120 so quite high and the median income is $95k which sounds about right for a small family owning a townhouse......

Originally Posted by barefootbabies 

The COL index here is 126 and the average income is $45K. .....

 ...has me confused.  My town's stats are:

COL index:  118.2 (lower than the above examples)

Median household income:  $148K (higher than above examples)

Median house or condo value: $829K

So...?  I'm surprised my COL is lower when the income and housing appear to be higher.  What gives?

I was going to say that in my area $150K would be good.  Not great, good.  Apparently I was right on target if you look at the median household income stats. 

ETA: DH and I have actually discussed this before because we have theorized that the reported average income is on the low side.  I believe this only takes into account salary/business based annual income and not investment/portfolio/capital gaines based?  Am I right on that?

I think that doing well is probably $250K+

I think *rich* is not having to have an income.  If you are relying on annual income (from work, not investments), you aren't rich.

[MiniMum]

In some studies researchers have shown that there actually is a point where the fulfillment curve from extra money actually goes down, meaning people are LESS happy and satisfied after they get more money. It appears that beyond the point where one has "enough", having more of anything has a negative impact. It totally makes sense to me.

Originally Posted by mnnice 

From what I've read it doesn't sound like a higher household income produces a negative impact it just that once your basic needs and a few of your wants are met more money will not further reduce your stress or improve outcome. 

[Drummer's Wife]

My understanding is, that after a certain point (maybe it's 50K or more, dependent on your particular needs/COL), that it's not that money doesn't have the power to improve happiness, but that people tend to seek other means to achieve that same satisfaction.

it's like the difference in working extra hours because you need the income vs. volunteering because all of your basic needs have been met but you still crave that satisfaction of feeling fulfilled and contributing to society.  I dunno, just my thoughts. 

More money can certainly = more happiness, at any income level, but it's not exactly comparable if we are talking having enough food vs. being able to buy a luxury vehicle. 

ChristyMarie - I don't think that COL always reflects average household income of each area.  I know when I've looked at charts before, there are certain pockets of places where the average income is much, much higher than the COL number indicates one would need.  Some very wealthy people, for example, may choose a certain small town where housing and food is still dirt cheap, yet their particular income is really high and the more of them who reside there, the higher that pulls the average up, yk? 

[ItsBasilThyme]

 

...has me confused.  My town's stats are:

COL index:  118.2 (lower than the above examples)

Median household income:  $148K (higher than above examples)

Median house or condo value: $829K

So...?  I'm surprised my COL is lower when the income and housing appear to be higher.  What gives?

Just a guess, but I think COL is based on equivalent housing, even if that type of housing is not available in an area. So, I have no idea what type of area you live in, but say it's an area with very large homes (2000+ square feet) and large yards (1/3 acres +). And that's 90% of what's available, so you have a very high median home value and income, because there aren't many/any low income options. But your COL isn't that high because the equivalent house in say, my area, would be in the millions. If there's not a wide variety of housing in your zip code, then the median income and house value will be high, even though the COL index is low. In my high COL index area, we still have Section 8 apartments, studio apartments, duplexes, etc, which lowers the median income, and the median house/condo value. But if I had $829,000 in my hands, I could buy a 5 bedroom pool home there, and a 1/1 apartment here.

Again, just a guess - I have no idea where you live or what the area is like. That's just one reason I could see for a huge discrepancy. High COL areas tend to be cities, which are very economically diverse. 

[ChristyMarie]

Originally Posted by ItsBasilThyme 

Just a guess, but I think COL is based on equivalent housing, even if that type of housing is not available in an area. So, I have no idea what type of area you live in, but say it's an area with very large homes (2000+ square feet) and large yards (1/3 acres +). And that's 90% of what's available, so you have a very high median home value and income, because there aren't many/any low income options. But your COL isn't that high because the equivalent house in say, my area, would be in the millions. If there's not a wide variety of housing in your zip code, then the median income and house value will be high, even though the COL index is low. In my high COL index area, we still have Section 8 apartments, studio apartments, duplexes, etc, which lowers the median income, and the median house/condo value. But if I had $829,000 in my hands, I could buy a 5 bedroom pool home there, and a 1/1 apartment here.

Again, just a guess - I have no idea where you live or what the area is like. That's just one reason I could see for a huge discrepancy. High COL areas tend to be cities, which are very economically diverse. 

Interesting thoughts.  I live in a small town within the suburbs so things are not cheap here (going towards what Drummer's Wife said).  I'd say houses are about 4000+ sq ft (I think they top out about 20K sq ft) and lots are usually 1-5 acres.  I am not aware of any condos or apartments here.  We do have one development with some townhomes but that is in another gated community so they are still rather pricey.  There certainly isn't much diversity in what is offered.

I do see what you are saying in regards to values for the same house in different areas.  I know that in LA or NYC there's no way I could buy my house for what I paid.