Don't you often feel like there is too much month at the end of your money? There are so many who feel likewise. Feeling that you never have enough money, aren't earning what you deserve, and that somehow everyone else is better off. It ain't fair, is it? But what if the reality is different from our perception.
It is part of human nature to under- or overestimate our own situation. It is difficult to grasp the world in its entity, thus leaving us to draw our own conclusions about reality. But reality is sometimes surprisingly different.
The Astonishing Reality of Median Income
According to some recent figures, the true nature of things is rather enlightening. Rue 89*, a French newspaper, ran an article on the median salary in France. I was surprised to read about the relatively low median: € 1,712 ($ 1,805 / £ 1,209) after social deductions but before tax. After tax: € 1,609 ($ 1,697 / £ 1,136).
The net median, that is, after taxes and all social deductions, is not much different for other countries. In the UK, the median salary is £ 1,466 ($ 2,380 / € 1,887), in the US $ 2,335 (€ 2,214 / £ 1,564), in Germany € 1,416 ($ 1,493 / £ 1,000), and across the EU as a whole € 1,218 ($ 1,285 / £ 860).
Unless you live in one of the high salary countries such as Switzerland with a median of € 3,020 ($ 3,186 / £ 2,133) or Luxembourg at €2,959 ($ 3,731 / £ 2,099), the median salary is somewhere around € 1,500 ($ 1,582 / £ 1,060) once taxes, pensions, basic health insurance, and so forth are paid.
€ 1,500 ($ 1,582 / £ 1,060) is maybe not an extraordinary sum after weeks of hard labor, but it is still enough to live quite comfortably if you know how to make your employees, i.e., your money, work for you. It is even enough to still save and add some sailors to your galleon of increasing wealth. Undoubtedly, this depends on where you live, but you’ll always be better off if you make your money do some of the work for you.
The Income Rich
If you are one of the lucky ones earning above the € 1,500 mark, you should start saving and investing right away.
But to get a better idea of when you are rich in terms of monthly income; at least in terms of statistical averages, below are some figures. For the sake of simplicity, let’s look at the figures used by Rue89.
According to their report, only 1% of the entire French nation earns more than € 7,817 ($ 8,244 / £ 5,521) per month after social deductions but before income tax. After income tax, a single person from that 1% group would take home € 5,273 ($ 5,561 / £ 3,724).
But because taxes differ depending on the number of children, being married or single, and other factors, the childless single brings home the least. So let’s see how much each group takes home given that person is single and has no children. For anyone else this figure would be even higher; especially given child benefits and other social benefits in many countries.
So after all deductions:
1% of the population earns € 5,273 ($ 5,561 / £ 3,724)
10% of the highest earners have € 2,610 ($ 2,752 / £ 1,843) at their disposal
10% of the lowest earning group only has € 1,053 ($ 1,110 / £ 744) at their disposal.
Here is the table* for different income groups:
|Percentage of Population
||Per month (€)
|10 % earn less than
|20 % earn less than
|30 % earn less than
|40 % earn less than
|50 % earn less than
|60 % earn less than
|70 % earn less than
|80 % earn less than
|90 % earn less than
|1 % earn more than
Rich in Pay, Poor in Wealth
But why are those with bigger salaries not necessarily richer? Rue89 interviewed a number of people and some high earners had little to no extra income from savings and investments. Some of those with salaries that are in the median range managed to put away big chunks of money, while others earning double that put away nothing. They essentially had no financial power to show for their months and years of hard labor.
One earner, Claire, a woman in her 30s and a salary of € 2,839 ($ 2,994 / £ 2,005), told the newspaper that she was constantly in debt. Another girl in her mid-twenties, Valentine, earning just a bit more than half of Claire’s income, € 1,560 ($ 1,645 / £ 1,102), managed to add € 200 to her savings each month. Both of them are single and live in Paris. It shows that even smaller salaries can go a long way and those with higher salaries have infinite possibilites at hand to quickly grow their wealth.
In spite of the big difference in salary, Valentine is in fact much richer than Claire, because her stash of money is constantly growing and her savings are doing the work for her. With every month she saves, she gets richer without having to work a single additional hour.
The difference between the two, as high-earner Claire points out, is that she earns to spend on whatever she urges to possess and do in the moment. Valentine, on the other hand, puts a lot of value on saving. The reasons for the different mentalities are not clear from their reports; however, while she is poorer in official salary terms, her wealth is much greater.
I hope these figures make you feel a bit better about your own situation. Because even if you are feeling that you are not earning enough, your monthly income might compare quite nicely to that of your neighbors. But if you really want more, grab that higher salary. Negotiate or change jobs.Your personal satisfaction and wealth will thank you multifold.