The promo intrigued me – a story about a having trouble making ends meet on $100,000 income – so I found it online. Bear in mind that the median household income is $59,000 – we should be able to make it on $100,000, right? NPR’s Lulu Garcia-Navarro reported on four conversations with just such individuals:

  • A married couple “live in Gaithersburg, Md., on $100,000 a year, but still struggle to make ends meet after years of mounting debt.”
  • A family living outside Kansas City “where people are working overtime. They’re working second jobs and even third jobs to try to put together the money just to stay in the middle class where they’ve been in the past.”
  • A young adult living in high-cost Seattle finding out that living on $100,000 “doesn’t feel like a fortune.”
  • A family of five choosing between “having two incomes, one essentially dedicated to daycare, or having one income and a stay-at-home parent” and still having to cash out an IRA to make a roof repair.

It’s scary. We don’t know the back story of these individuals but we get glimpses of debt (medical debt is a leading cause of bankruptcy), aspiring to a particular lifestyle, and making costly choices.

We also hear stories about people who saved millions on similar incomes:

  • A couple who both worked for Delta Airlines making a combined $115,000 when they retired with a net worth of $3 million. “As soon as our companies offered a 401(k), we started contributing. We started at 6 percent to maximize the company match, and worked our way up to 15 percent.” The wife also maxed out an IRA every year, and, after paying off their mortgage, they began maxing out their 401(k) accounts.
  • The Lynches highest earning years were a combined $120,000. They retired with a net worth of more than $1.5 million. “We achieved this through aggressive investing in our retirement accounts, keeping our debt low and not living extravagantly,” Lynch explains. “By ‘aggressive investing,’ I don’t mean risky—most of our investments were in indexed mutual funds—but by allocating more than 25 percent of our salaries to our retirement accounts.” While the Lynches, who have two children, didn’t drive fancy cars, splurge on clothes and jewelry or purchase the latest electronic gadgets, they lived comfortably. “We never felt that we were underprivileged; we just didn’t feel a need to keep up with the Joneses,” Lynch says.
  • The last couple are first generation immigrants from India. They worked their way through college to graduate debt free. He took a job in sales, she as a CPA. He says “I began putting away a percentage of my paycheck to savings and retirement. I started out at probably around 10 percent, and have continued to increase that to over 30 percent. Every time we paid off a debt or received a raise, we added to our savings.” They go on to say, “We could buy a much larger home, but choose not to. We buy clothes and other products off-season for significant discounts. We negotiate and will wait for the right time to make a large purchase, or do without if we feel it’s not worth the costs.”

These successful savers have made good choices that have resulted in accumulating wealth. We have a choice with every dollar that passes through our hands. It may not feel like we have a choice – but maybe that’s because of a poor choice we made previously. The silver lining is that we can learn from our mistakes.