?

Log in

it's not easy being rich - Rejects from the Junior Libertarian Squad [entries|archive|friends|userinfo]
Rejects from the Junior Libertarian Squad

[ userinfo | livejournal userinfo ]
[ archive | journal archive ]

it's not easy being rich [Mar. 11th, 2009|11:41 pm]
Rejects from the Junior Libertarian Squad

dot_class_snark

[rkt]
i understand it's not fun times to be facing reduced incomes, but seriously?

You Try to Live on 500K in This Town
By ALLEN SALKIN
PRIVATE school: $32,000 a year per student.

Mortgage: $96,000 a year.

Co-op maintenance fee: $96,000 a year.

Nanny: $45,000 a year.

We are already at $269,000, and we haven’t even gotten to taxes yet.

Five hundred thousand dollars — the amount President Obama wants to set as the top pay for banking executives whose firms accept government bailout money — seems like a lot, and it is a lot. To many people in many places, it is a princely sum to live on. But in the neighborhoods of New York City and its suburban enclaves where successful bankers live, half a million a year can go very fast.

“As hard as it is to believe, bankers who are living on the Upper East Side making $2 or $3 million a year have set up a life for themselves in which they are also at zero at the end of the year with credit cards and mortgage bills that are inescapable,” said Holly Peterson, the author of an Upper East Side novel of manners, “The Manny,” and the daughter of Peter G. Peterson, a founder of the equity firm the Blackstone Group. “Five hundred thousand dollars means taking their kids out of private school and selling their home in a fire sale.”


Sure, the solution may seem simple: move to Brooklyn or Hoboken, put the children in public schools and buy a MetroCard. But more than a few of the New York-based financial executives who would have their pay limited are men (and they are almost invariably men) whose identities are entwined with living a certain way in a certain neighborhood west of Third Avenue: a life of private schools, summer houses and charity galas that only a seven-figure income can stretch to cover.

Few are playing sad cellos over the fate of such folk, especially since the collapse of the institutions they run has yielded untold financial pain. But in New York, where a new study from the Center for an Urban Future, a nonprofit research group in Manhattan, estimates it takes $123,322 to enjoy the same middle-class life as someone earning $50,000 in Houston, extricating oneself from steep bills can be difficult.

Therefore, even if it is not for sympathy but for sport, consider the numbers.

The cold hard math can be cruel.

Like those taxes. If a person is married with two children, the weekly deductions on a $500,000 salary are: federal taxes, $2,645; Medicare, $139; state taxes, $682; and city, $372. With an annual Social Security tab of $6,621, the take-home pay is about $293,000 annually, said Martin Cohen, a Manhattan accountant.

Now move to living expenses.

Barbara Corcoran, a real estate executive, said that most well-to-do families take at least two vacations a year, a winter trip to the sun and a spring trip to the ski slopes.

Total minimum cost: $16,000.

A modest three-bedroom apartment, she said, which was purchased for $1.5 million, not the top of the market at all, carries a monthly mortgage of about $8,000 and a co-op maintenance fee of $8,000 a month. Total cost: $192,000. A summer house in Southampton that cost $4 million, again not the top of the market, carries annual mortgage payments of $240,000.

Many top executives have cars and drivers. A chauffeur’s pay is between $75,000 and $125,000 a year, the higher end for former police officers who can double as bodyguards, said a limousine driver who spoke anonymously because he does not want to alienate his society customers.

“Some of them want their drivers to have guns,” the driver said. “You get a cop and you have a driver.” To garage that car is about $700 a month.

A personal trainer at $80 an hour three times a week comes to about $12,000 a year.

The work in the gym pays off when one must don a formal gown for a charity gala. “Going to those parties,” said David Patrick Columbia, who is the editor of the New York Social Diary (newyorksocialdiary.com), “a woman can spend $10,000 or $15,000 on a dress. If she goes to three or four of those a year, she’s not going to wear the same dress.”

Total cost for three gowns: about $35,000.

Not every bank executive has school-age children, but for those who do, offspring can be expensive. In addition to paying tuition, “You’re not going to get through private school without tutoring a kid,” said Sandy Bass, the editor of Private School Insider, a newsletter that covers private schools in the New York City area. One hour of tutoring once a week is $125. “That’s the low end,” she said. “The higher end is 150, 175.” SAT tutors are about $250 an hour. Total cost for 30 weeks of regular tutoring: $3,750.

Two children in private school: $64,000.

Nanny: $45,000.

Ms. Bass, whose husband is an accountant with many high-end clients, said she spends about $425 every 10 days on groceries for her family. Annual cost: about $15,000.

More? Restaurants. Dry cleaning. Each Brooks Brothers suit costs about $1,000. If you run a bank, you can’t look like a slob.

The total costs here, which do not include a lot of things, like kennels for the dog when the family is away, summer camp, spas and other grooming for the human members of the family, donations to charity, and frozen hot chocolates at Serendipity, are $790,750, which would require about a $1.6-million salary to compensate for taxes. Give or take a few score thousand of dollars.

Does this money buy a chief executive stockholders might prize, a well-to-do man with a certain sureness of stride, something that might be lost if the executive were crowding onto the PATH train every morning at Journal Square, his newspaper splayed against the back of a stranger’s head?

The man would certainly not feel like himself on that train, said Candace Bushnell, the author of “Sex and the City” and other books chronicling New York social mores.

“People inherently understand that if they are going to get ahead in whatever corporate culture they are involved in, they need to take on the appurtenances of what defines that culture,” she said. “So if you are in a culture where spending a lot of money is a sign of success, it’s like the same thing that goes back to high school peer pressure. It’s about fitting in.”

By the way, the frozen hot chocolate costs $8.50.

This article has been revised to reflect the following correction:

Correction: February 15, 2009
An article last Sunday about living in Manhattan on a $500,000 salary misstated the Social Security deduction on those wages. This year, the maximum annual Social Security deduction for salaried employees is $6,621.60 — not $596 a week for 52 weeks, or a total of $30,992.

Because of this error, the article also miscalculated the net pay after the Social Security deduction (and all other tax liabilities) for a couple with two children. It would be about $293,000, not $269,000.


nytimes 2/8/09
http://www.nytimes.com/2009/02/08/fashion/08halfmill.html
linkReply

Comments:
[User Picture]From: daddysambiguity
2009-03-12 05:19 am (UTC)
All these articles about how very bad the rich have it having to, I dunno, sell off their 2nd beach house or whatever are getting no my nerves. I read a similar one recently in the NYT magazine.

Cry me a river!
(Reply) (Thread)
[User Picture]From: bluebuckeye
2009-03-13 03:26 pm (UTC)
Yeah this is the second or third one I've read and all I feel is "suck it up and deal". I have no sympathy for people making 10 times what I make.
(Reply) (Parent) (Thread)
[User Picture]From: furious_mold
2009-03-12 05:41 am (UTC)
I missed this one. Sometimes I read the NYT and scream...I wonder why I get so bent out of shape and angry...ha ha.
(Reply) (Thread)
[User Picture]From: mail_demon
2009-03-12 10:15 am (UTC)
I can't wrap my head around how people can be so removed from reality. Even a sniff of common sense would be nice.
(Reply) (Thread)
[User Picture]From: museclio
2009-03-12 01:16 pm (UTC)
Because god forbid they take only one vacation or drive their own damn car.
(Reply) (Thread)
[User Picture]From: rebootfromstart
2009-04-14 07:56 pm (UTC)
Exactly. Vacations are not a "living expense", they're a bloody luxury. So are charity galas and five-figure dresses. I wouldn't be able to wear a dress that cost that much, I'd be too worried about my sweat defiling it or something! These people have no sense of scale whatsoever.
(Reply) (Parent) (Thread)
(Deleted comment)
[User Picture]From: bestdaywelived
2009-03-12 02:47 pm (UTC)
Even 100-200k is a lot of money in my book, and I really don't have sympathy for people putting their kids through college. It's not a necessity.

I grew up with a family making significantly less - under 20k when I was really young, and at the very best 55k when I graduated high school. I have three siblings and two parents.
(Reply) (Parent) (Thread)
[User Picture]From: shemale
2009-03-12 02:39 pm (UTC)
okay everything else aside, i read this line:

"...a winter trip to the sun..."

and was like, uhh, they take a rocket and head for the sun every winter for vacation?

also, this shit is ridiculous, and while i'd like to be able to say "wow i thought that was an onion article" (although it totally could be), this is about the usual for NYT
(Reply) (Thread)
[User Picture]From: bestdaywelived
2009-03-12 02:47 pm (UTC)
My heart is bleeding for these people.

It makes me nauseous that they spend what I make in an entire year on fucking gowns to wear to ~special events.
(Reply) (Thread)
[User Picture]From: snoopdawg
2009-03-13 02:49 am (UTC)
I read this three times and found myself facepalming every time. I can't even be amused by this-- it just makes me seethingly angry.

Also, WTF is a frozen hot chocolate? Sounds like an oxymoron to me.
(Reply) (Thread)
[User Picture]From: aphephobia
2009-06-29 03:20 pm (UTC)
I can't even imagine that sort of money, let alone being in that sort of money and having debt and complaining about it.

I mean, wtf?


The man would certainly not feel like himself on that train, said Candace Bushnell, the author of “Sex and the City” and other books chronicling New York social mores.

And... boo-fucking-hoo. How do they think the rest of us get by?
(Reply) (Thread)