Marguerita Cheng, a certified financial planner and CEO of Blue Ocean Global Wealth, has a client in the Washington, DC area who makes $450,000 to $600,000 a year but lives paycheck to paycheck. He spends a lot of it on keeping peace with his ex-wife.
Close to half a million a year sounds like a lot, but he has to pay $8,000 per month to his ex-wife and both of their kids are in private high school. Four years of private high school cost $150,000.
“He basically uses his bonus to cover the private high school tuition,” Cheng said. “I understand that this is an extraordinary situation. I’ll share a saying that my dad taught me: ‘Money may not buy happiness, but it can buy peace.’ In this situation, sometimes you have to do what you have to do to keep an ex-spouse happy.”
Cheng’s client is not alone. Many Americans struggle to make ends meet on six-figure paychecks – which some would consider the salaries of the “upper income” or even rich.