That is really astonishing. They spend $1,000 a month just on miscellaneous stuff.

I also note that they must not ever do any cooking, since "eating out" is listed but "groceries" is not.

Posted July 19, 2006 4:50 PM by Laurence

If she spends 15k per month that's still only 180k per year so what does she need 350k for? Who spends $1,000 per month on clothes anyway?

Still, I think staying at home and doing nothing would be boring, so I'd still find something to do anyway.

Posted July 19, 2006 4:56 PM by mintichen

I hate those people. "It's not enough," my asshole upside down!

Posted July 19, 2006 5:01 PM by Xopher

She spends more on rent than I make in two months.

Posted July 19, 2006 5:09 PM by JoXn S Costello

$1750/mo "eating out" is like $60/day. if you don't cook anything yourself, and only eat at fancy Manhattan bistros, that's probably pretty easy to do. but damn, just think of the kind of cash you'd save if you hit Taco Bell instead of the Four Seasons once or twice a week !

Posted July 19, 2006 5:12 PM by cleek

Interesting how "have" transmutes into "need".
"I've got all this, so now I need it, so anything less is not enough to live on."

Posted July 19, 2006 5:13 PM by John Stanning

John, it's an addiction. I'm kind of addicted to my (much more modest than THAT) lifestyle. Or I'd probably be a highschool English teacher by now.

Posted July 19, 2006 5:15 PM by Xopher

I have observed in myself that "enough" is a moving target. I used to think that "I have enough money to own a dog" meant "I can buy Jim Dandy at the feed store and pay for vaccinations once a year." Now it means "I can buy Natural Balance and Greenies and Fat Cat toys and Lupine collars and leashes at the dog boutique and pay for vaccinations, yearly well visits, flea and heartworm prevention, one or two sick visits per year, plus minor surgery if necessary." (Multiply this amount by number of dogs in household, currently 4.)

Some of my dog rescue colleagues regard "enough" in that context to mean "I can pay for a hemilaminectomy if Schatzi blows a disk." ($1800-2200 at U.Ga. Vet School if there are no complications)

Obviously what you're used to plays a big role, but the lifestyle equivalent of "mission creep" also happens.

Posted July 19, 2006 5:16 PM by Lila

I've seen studies that show that most people have a fixed percent (IIRC, it was between 132%-137%) of their current family income which was considered "enough money not to worry about money."

I know I'd be feeling flush with a 35% raise.

Posted July 19, 2006 5:23 PM by Michael

$7000 for monthly rent? Good lord, do they rent a mansion or something?

Posted July 19, 2006 5:23 PM by Elayne Riggs

From the information given in the link, it seems to me that "I like my current lifestyle, and would work to maintain it rather than live on less" is as reasonable an interpretation of the expense-lister's point of view as "$500,000/yr isn't enough to live on."

Posted July 19, 2006 5:24 PM by Tim Walters

I remember 22 years ago, when my younger brother, finishing his residency at GWU railed against rich doctors, saying anyone who made more than $70,000 was greedy and should go straight to hell. Same fellow is now making close to ten times that amount and not a peep from him far as I know.

Posted July 19, 2006 5:26 PM by moe99

Matthew Yglesias once observed that because of how our country's income distribution is skewed, people who are extremely rich by national standards hang out with families who are extremely, extremely rich, and with folks like that as a reference point, they don't feel rich.

There is also, I think, an aversion in American culture to describing one's self as "rich". We're all just plain middle-class folk here.

Posted July 19, 2006 5:30 PM by Seth Gordon

Once upon a time in the shtetl, there was a poor teacher who told his wife, "If I were as rich as Rothschild, I'd be richer than Rothschild."

"How would you do that?"

"I'd do a little teaching on the side."

Posted July 19, 2006 5:33 PM by Seth Gordon

That's just incomprehensible. You sure they're not joking?

Posted July 19, 2006 5:37 PM by Melissa Mead

When I first read that, I thought it was per YEAR. I've lived on $15k a year, or less, most of my adult life. I actually did a budget recently, and realized, to my horror, that I spend closer to $20k now, but I could still cut back to $15 if I had to. (Working on retirement planning, and needed to know.)

A 5 mil trust fund would mean I would be giving away tons of money. I couldn't read all the books that would buy, and I shouldn't eat that much chocolate, and what other true luxuries are there?

Posted July 19, 2006 5:38 PM by Magenta Griffith

Magenta: health care. If money were no object, I would have MRIs on both knees, one shoulder, and my neck, and probably get a good deal of physical therapy based on the findings.

Posted July 19, 2006 5:42 PM by Lila

Seconding what Lila said. Also I'd include the $5k of dental work that I need. Oh, and I'd buy that great wheel (spinning wheel) that I've been drooling over. Then after we got the house painted and the flooring replaced, we'd be golden. :)

Posted July 19, 2006 5:47 PM by Janice in GA

I was trying to think of a snarky comment and realized I feel exactly like Xopher. I bloody hate these people. As someone who manages to support elderly parents on MUCH LESS than $350,000 a year,and still manages a moderately (very moderately!) decent life, I just want to take their self-absorbed heads and bang them against something hard. So you can't make it on less than $15k a year? Too effin' bad, lady.

I ran into a similar thing last year when the head of the local St. Vincent's society, who is a friend, told me about the lady who went in for help. It seems she needed cash to meet the payments on her THIRD SUV because everyone NEEDED a car in the family. Was terribly upset then she was told she really did not meet the "needs" standards.

Posted July 19, 2006 5:49 PM by Emma

*groan* Don't get me started on all the work my house needs. Hint: 4 dogs.

Posted July 19, 2006 5:50 PM by Lila

So you can't make it on less than $15k a year?
I meant a month, of course.

Posted July 19, 2006 5:51 PM by Emma

I grew up in a farm town in the midwest, with a whole lot of nothing around. We lived in an old horse hair plaster house and you could occaisionally hear mice in the walls or have a bat flying around kitchen. The bank forclosed on my dad when I was in high school, and he had to sell all the livestock and machinery, but managed to keep the land. He got a job as a carpenter to pay the bills.

I got an engineering degree, moved to the big city and make way more than he does and spend a whole lot of that just on my mortgage.

I remember when I first realized I was making more than my father and the whole thing felt weird for a long time. Somewhere along the line I came to grips with it and got that money doesn't have anything to do with our relationship.

I worked with someone who was probably in the neighborhood of being a millionaire or more. You wouldn't know it to look at him. He was a hard worker and knew his stuff. He was also pretty low key about having money. It seemed that his work ethic and the kind of guy he was was the sort who wanted to work.

I also happen to have a passing acquaintance with someone who is a multimultimillionaire. They own a mansion, take lots of vacations, and seem to be quite friendly.

I suppose if I were to look at their bills, it would likely boggle my mind, probably the same way my bills would boggle my dad's mind.

Posted July 19, 2006 5:59 PM by Greg London

I made it through the first page of the article, but couldn't take any more. Silly, spoiled, stupid people.

Posted July 19, 2006 6:15 PM by Joy

I read an interesting article in the New Yorker a few months ago. Researchers were studying the link between happiness and money. They found that money can buy happiness, but only if you make less than around $17,000 a year. Anything above that and people register the same amount of happiness. Under that, and most folks are miserable.

It was a long article, and most of it went on about what happiness is and how do you survey it etc. But the salient point to me was that all of us on this reading this blog who make more than $17,000 wouldn't be made happier with any more money for more than a few months. We'd quickly adjust. If we think that we wouldn't suddenly 'need' the same money that the rich lady needs, then we're buying into the same BS that she is, the "if I had x amount of money, I'd be fine."

Posted July 19, 2006 6:25 PM by Sean Bosker

Who spends 2K a month eating out? What the heck are they eating - endangered species?

I hate how people waste money. Yes, I could live on the interest from a 5mil trust fund. Easily. We'd never work, but I'd still write. And we'd travel.

For 7K in rent, buy a freaking house and get something for the money!

Posted July 19, 2006 6:26 PM by Christine

I think people like that are their own reward.

Posted July 19, 2006 6:40 PM by Michael Weholt

That's at least 14 times my annual income, and I'm doing fine. Eventually I'll even get out of the debt I got myself into in my twenties. If I married a man with that much, I'd certainly stay home. All I really want in life is to write novels and adopt children. 50,000 a year would probably cut it. It would take a couple years to get out of debt and save up for a down payment on a house and adoption fees, but it would work. 350,000 would get me the house paid for in the first year, and after that it would be cake.

My standards are pretty simple though. If I had that much I'd definitely pay someone to clean, and have a nicer computer, and travel a lot more, but I can't imagine thinking it wasn't enough to live on. Maybe she's never skipped meals for lack of funds like I did right after college, so she doesn't realize what "not enough to live on" really means.

Posted July 19, 2006 6:42 PM by Sara G

What the fuck is wrong with those people?

You'll notice that while "groceries" are lacking in that list, so is "charity."

Posted July 19, 2006 6:58 PM by TexAnne

The husband and I are managing on $2,000 Cnd a month total if there is no overtime. Twerps like this make me want to beat them senseless.

Posted July 19, 2006 7:04 PM by T.W

I grew up in a town, Locust Valley, that was what amounted to the retail district of the remnants of the Gold Coast: We were surrounded by Brookville, Lattingtown, Mill Neck and other estate-heavy environs.

We lived in the relatively grubby part of town, on a teacher's (father) salary sometimes supplemented with a school nurse's (mother) salary. Not poor, far from opulent; my mom bought lots of stuff from thrift stores and day-old bakery outlets. Vacations were generally camping trips to state parks. (I didn't travel in a jet until I was in my late 20s and able to pay for it myself.)

By contrast, my school-mates went skiing, flew to exotic locales, and etc. The kicker was, they weren't the wealthy ones.

Occasionally, as working stiff kids (I worked in the public library; my sisters worked at restaurants and such; my brother was a volunteer fireman / EM guy) living in Locust Valley, you got exposed to the Struldbrugs. (sp?)

My.

Most of these shockingly rich folks were older, old money types. But occasionally you'd run into folks who I imagine might have conversations like those noted in the article.

*SIGH*. About ten years back, a jet crashed in . . . Lloyd's Neck, I think it was. An exclusive enclave just east of Oyster Bay. My brother was called in to help find survivors and locate . . . parts.

He recalls a very polite, well-spoken local woman asking the rescuers if they could please keep it down so her children wouldn't lose any sleep.

Posted July 19, 2006 7:05 PM by Stefan Jones

Oh yeah, I've seen these people. They're the ones who had signs out on the lawns of their lovely homes that said, "Prisoner of Clintonomics." The poor, suffering bstrds. How I wished I could have helped them, perhaps by exchanging residences.

(I, of course, wouldn't be able to deal with the problems of the rich -- I can't afford them.)

Posted July 19, 2006 7:07 PM by Kip W

You pepole are all nauseatingly well-adjusted and sensible. Is there no one else who, if they came into a huge amount of money, would buy a Maserati and a villa in Lombardy and spend the rest of their days giving a) scholarships to promising writers and historians, and/or b)Wodehousian parties, but actually probably c)both?

Posted July 19, 2006 7:09 PM by Vian

When I see people talking smugly about how much they hate this family that spends $15K a month, I wonder how much people in areas much less well off than the US and Europe hate those of us who are living on, say, $30K-$100K per year.

Posted July 19, 2006 7:12 PM by Stef

Another entry for the department of "Gee, I wish I had your problems."

Posted July 19, 2006 7:14 PM by Darkhawk

Well, someone just asked me in LJ how much I'd need to win before I gave up work completely, and I said £3m (a poll). Not because I'd not be able to live on less, but because if I came into a lot of money I wouldn't particularly want to live a life of relatively frugal leisure. I can think of lots of intermediate amounts of money where I'd aim to work rather less than I do now, but still some. And even with the 3m, although I would probably give up my current job, I'd surely still do something with my time.

These people are in NYC; I guess the issues are the same as in London. We have a nice house, in a pretty ropey area. If I was rich (for the values of rich defined halfway down the comments, ie 'substantially richer than I am at present') we would have a house of similar size, with rather fewer compromises, in a much nicer area. That, friends, is a million quid right there, and suddenly a £3m fund doesn't seem so much. And I'd want to ensure we'd manage the reasonable expenses of education and setting up home for our kids, and ensure we could manage our money through a long retirement.

Answers to this also depend on current earnings. Average London salary is around 40k, and nearly all couples both work. So if you've got 2 people aged 35, then that £3m probably only just about covers their likely future salaries and pensions, even not expecting any further increase in earnings. The question wasn't 'what's the least you could live on', it was 'what would it take to make you stay home'.

$1000 a month on 'just stuff' doesn't actually sound like all that much to me, either. Certainly when we have an anti-consumer month, we save substantially more than that.

Posted July 19, 2006 7:26 PM by Alison Scott

Vian, I might, but only if I could find a Jeeves equivalent.

Posted July 19, 2006 7:26 PM by Linkmeister

$7000 on RENT? Is that a sane price for a luxury place in NYC?

If I had $500,000 a year, I'd have a fricking house next to the Metro -- one large enough to have my friends live with me instead of the dubious condo they rent.

I think the worse that I would do is let the bibliophilia run mad (like it hasn't already) and maybe buy a dobby loom.

Posted July 19, 2006 7:33 PM by neotoma

Vian:

Kharman Ghia, London, mature and part time university students (there are PATHETICALLY few bursaries for non-traditional students), and a large enough donation to give me a lifetime pass at the RSC, but in essense, yes.

We'd increase our current giving level by a couple decimals, too, mind you, and one or two other bits of small scale social engineering.

Posted July 19, 2006 7:36 PM by Marna

Vian, I might, but only if I could find a Jeeves equivalent.

And an Anatole equivalent. Especially an Anatole equivalent. And Marna - couldn't agree more about the non-trad student thing. They occupy a very high place on the Vian Benevolent Fund Scholarship for the Deserving list.

Posted July 19, 2006 7:42 PM by Vian

Personally, I can't imagine where I'd put $1,000 per month of random stuff. Unless, of course, I got myself a $7,000 per month apartment. ;-)

Planning for the future, on a $5MM lump of cash, I'd probably keep working - for the benefits, not for the cash flow. Even with that amount of money, I wouldn't want to spin the healthcare wheel-of-fortune. (Unless there's some super-secret health care plan available only to the idle rich.)

Posted July 19, 2006 7:44 PM by Larry Brennan

Well, I don't know about all of this, but the 7K rent? What's a good rent for something in a good neighborhood in Manhattan? I have no idea, but I always figured I'd consider it insanely expensive.

The one thing I know about Manhattan real estate prices is that a friend and I bought our homes at roughly the same time. For close to the same amount of money, he has a studio in a co-op near Lincoln Center and I have a large fixer-upper house in West Seattle, but not in the Admiral district. Or, I could have bought a small hay ranch + large well-kept Victorian house in Eastern Washington.

P.S. Totally off topic, my cat has just complained about the lack of real estate on the top of my new-to-me flat screen monitor. She tried to jump up & it didn't work.

Posted July 19, 2006 7:55 PM by Margaret Organ-Kean

Daydreaming:

I don't think $1,000,000 wouldn't be enough for me to retire in comfort and security, for one reason:

Health insurance.

A thrifty person could live comfortably on $50,000 a year (5% interest on a million), but comprehensive health insurance would suck a lot of that away.

$2,000,000 though . . . figure half a million for a solid house, and the interest on the rest for income and insurance and property taxes. Principle left intact for posterity.

That'd do, not too much to ask, eh?

Posted July 19, 2006 7:57 PM by Stefan Jones

I haven't found any good references for Manhattan rents yet, but here is an article on how much Manhattan apartments cost to buy:

"A million dollars will buy you a decent, not spectacular one-bedroom apartment on the upper East Side," said Prudential Douglas Elliman managing director Daniela Kunen.

Posted July 19, 2006 8:06 PM by Dan Blum

Ah, found some rental information. While rents vary a lot by location, and I'm sure there are places even cheaper in neighborhoods not covered by the site I am looking at, it's not hard to spend $7000/month on rent if you are looking to do it. This 2-bedroom is $9000/month, for example (it's in a luxury building, to be sure). Others listed there run from $3000-$6000.

Posted July 19, 2006 8:12 PM by Dan Blum

Ok, now things are starting to make sense. That's a whole decimal place more than some rents around here. (Albany, NY)

I've got nothing against millionaires (I know some, very nice people), just ungrateful ones.

Posted July 19, 2006 8:33 PM by Melissa Mead

I'm kinda curious about the other premise, that a $5M trust fund is equivalent to a $350-500k annual income. Isn't that a higher rate of return than you can expect from completely safe investments?

Posted July 19, 2006 9:06 PM by Matt Austern

Ironically, I'm typing this while in Bangalore, India, on a business trip. You can't help but reflect on haves vs. have-nots here because glass-and-chrome high-rise office buildings are literally a block away from people living in tents made from blue tarps hung over ropes and cooking over fires in large tins.

As for this specific situation, the rent for Manhattan does not surprise me that much. However, much as the amounts per month for clothing, eating out, and traveling boggle me, the assumption that one could not get along on less and therefore needs to work to maintain that budget is the truly nauseating part.

Posted July 19, 2006 9:19 PM by JaniceG

Please, dear Lord, let me prove to you that being a millionaire won't spoil me...

Posted July 19, 2006 9:20 PM by Writerious

I should add that I live in Minneapolis, a relatively inexpensive place compared with either coast, and have been lucky enough to work for places that provide me with relatively good health insurance. Forgot to count in the health insurance. Damn.

I figure I can't retire until I am 65 or the politicians get off their asses and put through universal health care like the rest of the industrialized world has.

I bet the unemployment rate would plummet if they passed health care. There are a lot of people who could stop working if it weren't for the health insurance. A friend at a previous job was in that category. Her husband had had a stroke, couldn't work, couldn't get insurance, but wasn't quite bad enough to qualify as disabled for SS and Medicare.

Posted July 19, 2006 9:27 PM by Magenta Griffith

... and I've been a millionaire... on paper ... for a few short, exhillarating months, before everything went to hell in a handbasket. Oh well :)

Posted July 19, 2006 9:40 PM by xeger

Ehhh, most of us here *are* the privileged classes already. I certainly am, in fact I'm 'way above the threshold. I don't remember the last time I seriously had to worry where I was going to get my next meal or where I was going to sleep (excpt for a few instances purely due to bad planning); nobody threatens me with physical harm; I not only have a steady job, but I could afford to quit it and find another one if I had to. I have plenty of leisure time to sit here and post to Making Light on this sunny summer evening.

On the other hand, I'm an order of magnitude or so poorer than the woman described in the post. I guess I'm just echoing in ancdote what Sean Bosker said.

The quoted text doesn't sound like the woman is complaining, either. She's saying, "I have this cushy lifestyle, and I'm thinking I'm willing to keep working to maintain it, rather than retire and have a slightly less cushy lifestyle." I honestly don't see a problem with that.

Posted July 19, 2006 9:48 PM by Wim L

Being rich isn't earning lots of money. Being rich is managing your finances so your expenses are lower than your income. The bigger the margin, the richer you are.
Having said that, 'surviving' on 15k/month sounds a bit rich.

Posted July 19, 2006 9:50 PM by Simon Haynes

Vian, not the parties, but the scholarships? Heck, yes. Having been an impoverished graduate student at one point in my life, I'd like to give some poor bastard the chance NOT to live on powdered soup and Little Debbie oatmeal cookies...
And not a Ghia. This, perhaps.

Posted July 19, 2006 9:53 PM by Emma

What I find amusing about the rent--500,000 to 1.5 mil can buy a nice 5 acre private island in the carribean free and clear. In other words, temporarily down-size the apartment you live in, save for 6 years (For the lower of the prices I gave) and you can bloody well buy your own private island. I'd say that's a better arrangement than renting for the same period and in essence flushing your money.

I don't begrudge these people--I aspire to an even more opulent (but much less wasteful) lifestyle. It's nice they can live the way they can, and I'm happy for 'em--yeah, I think they're fools for throwing away the money they do but it's their money and only they can decide how it's right to spend it.

I personally have figured out that after a set-up period of putting in place the systems (cost of initial set-up would probably be around $150,000 dollars) I'd need I could easily live on $2-4K per year. It wouldn't be easy living, but it'd be comfortable enough for me--until of course I'd saved up enough money to upgrade to the next phase of my plan.

Posted July 19, 2006 9:58 PM by C A Ward

ah, the lovely insane world of new york magazine, where the reality of most people does not exist.

my first thought was: "rent? if they have so much money, why don't they own a place?"

Posted July 19, 2006 10:01 PM by sdn

Matt Austern: well, that's 7-10% APY. Not the sort of thing you'd get from an FDIC-insured savings account, obviously, but not unreasonably hard to reach. A quick check of bankrate.com shows 1 yr CDs at just over 5% APY, so it shouldn't take too much of a risk premium to get to 7%.

Besides, I think I could find a way to manage on $250K/year....

Posted July 19, 2006 10:08 PM by Christopher Davis

Folks, I hate to tell you, but the people in the article are comparitively mild. I know people who have two nannies for two kids, people who buy $1200 bottles of wine and wear $100 ties, and who commute to their job by jet on those times when they actually have to be in the office.

But at least a few of them are self-made. So for them, at least, they've socked away enough cash to make sure they're covered, and then tried to figure out what they're going to do next.

Sadly, there are some folks who go through money even faster than they have coming in, even with the amount of money they have at their disposal. And often, it points to a hole in themselves. Read The Next Next Thing for examples.

Of course, we can also talk about how much more it costs to be poor, too.

The economy at high levels between other folks is very strange, acting more like a gift economy than anything else. It also shows up when there are problems that come about that no amount of money can cure.

Posted July 19, 2006 10:18 PM by Glenn Hauman

That lady spends more in a month than I made in 2004 and 2005 combined. Before taxes.

Granted, 04 and 05 were slim years (05 being the better of them) and 06 is not shaping up much better, but... we get by, here in the real world.

I think $5M would be pretty useful, though. I could pay for my last car repairs, then give the car to my guyfriend's brother, who doesn't have one at all, and then get myself a decent used car, something less than five years old with less than 75K on it, 25mpg or better, and no rust. And I'd pay off the remaining $86K on our mortgage. And the $5K we need to borrow for a new roof this summer (nice t-storms we had this week found their way in.) And help out his folks, who also need a roof, and maybe put some by for my folks if there's another hurricane (they live in one of the drier suburbs of New Orleans, and got lucky last summer.) (Why has keeping roofs over our heads suddenly become so problematic? We have the roofs, it's just keeping them where we want them...)

And I'd send a fat check to my local Public Broadcasting because they ALWAYS manage to have their pledge drives the week I am beyond flat into concave broke, and I am a guilt tripping liberal who really cannot come up with $35 bucks this month and it's driving me effin' insane. :D

Posted July 19, 2006 10:43 PM by Thena (still in Maine)

Y'know, it's people like that who remind me why I staked out a place on the left (well, people like that and the people I see foraging through garbage for cast-away food).

Posted July 19, 2006 10:53 PM by Fragano Ledgister

One of the things that fascinated me about that paragraph is that her declared monthly expenses are $15K a month -- presumably $180,000 a year -- which is only one-half to one-third of the stipulated amount; and yet she's convinced it's not enough.

Dan Blum:

"This 2-bedroom is $9000/month, for example (it's in a luxury building, to be sure)."

Posted July 19, 2006 10:56 PM by Teresa Nielsen Hayden

A quick check of bankrate.com shows 1 yr CDs at just over 5% APY,

And inflation's a 3.5% leaving a juicy 1.5% to actually eat.

Not really obvious where. Certainly not stocks, seeing as S&P 500 is about flat over the last 5 years.

Posted July 19, 2006 11:02 PM by Rich McAllister

You don't need to poke around to figure out rent costs in NYC... It's right there on Craigslist. Real live housing ads! Looks like 7k buys you a smallish (2000 square feet) house in a luxury building, in what I assume is a nice area with good schools.

It doesn't really bother me that there are people who think 350K isn't enough. Like someone pointed out upthread, most people here don't have to work 10-hour days 7 days a week at dangerous jobs. Some of us realize every moment how blessed we are, some of us don't... That's humanity for you.

Of course, I'm still fully behind a tax structure that allows these folks to figure out how they can live on only, say, a measly 275K a year... Builds character. ;)

I don't buy the "money can't buy you happiness" thing, though. If I had unlimited funds, I'd be able to make businesses design things that maybe only I would want. Shoes with cushy athletic bottoms and fancy-looking leather tops. Mattresses longer than the junk sizes we have currently, but not necessarily wide. Airplanes that had ballrooms, and continuous parties... Hell, zeppelins! Subsidized respectfully-raised gently-killed meat. A space elevator. Neurology research.

But maybe that's because I'm a pretty happy person even with the 39K I make now. So I'd still be happy reshaping the world in my image. :D

Posted July 19, 2006 11:07 PM by Madeline F

People seem to be ignoring taxes. In NYC, if your gross income is $350K, you might have $180K left after taxes.

A large (for Manhattan) one-bedroom apartment in a postwar (urban renewal) building could rent for $3,000/month.

I used to work with a multi-millionaire. I once asked him if he thought he was rich, and he replied "No, rich has always been a few million more than I had."

Posted July 19, 2006 11:13 PM by Seth Breidbart

As a nontraditional student who just received an institutional scholarship (thank you very much, Athens Tech!) I would like to thank those who support such causes, and suggest they check out this organization, which does pretty damn cool work.

Posted July 19, 2006 11:24 PM by Lila

$1,000 a month for CLOTHING?

I don't pay that much for clothing in a YEAR. I'm still wearing clothes I bought fifteen years ago.

Posted July 19, 2006 11:28 PM by Christopher B. Wright

If I had $500,000 a year, I'd have a fricking house next to the Metro -- one large enough to have my friends live with me instead of the dubious condo they rent.

Neotoma, dear, it's not the condo that's dubious. Our housekeeping would be just as sketchy anywhere with the same cubic footage of storage space.

Posted July 19, 2006 11:30 PM by Ellen Fremedon

I would be very dubious about not working with $5 million in the bank, if I were relatively young.

The general rule of thumb for withdrawal from savings in retirement is 4% a year, and that's a number that's supposed to draw down your principal over your expected lifespan. A principal-preserving number is going to less than that.

If you figure 3%, you're looking at $150K a year, which is certainly a pretty nice household income (somewhere around the top 5% of US households), but is still in the range where you'll want to fly coach instead of first-class, never mind a private jet.

Plus, it's just risky -- if another Great Depression comes along, and your $5 million becomes $1 million, and you really don't want to try living on $30K a year (aside: Yes, I know it's very possible, and many people do -- but a wealthy person living a life of indolence would presumably not be pleased with it), you're scrod. You've got no recent work experience, no useful skills, and are besides completely unused to professional life.

But if you let that money sit, get a job, and live off your income for 15 years -- now you've got $12 million sitting around, 15 fewer years to spend it, and a lot more catastrophe buffer. You can be pulling out $400K or so a year, and be down around $75K a year if the Depressiony bit happens (not to mention with a better resume, if you do have to go back to work).

And yes, of COURSE this is all ridiculous money to basically everyone (myself included). All I'm saying is, it takes more-than-ridiculous money to really feel good about not working, if you ask me.

That said, if you really HATE your job, instead of finding it mostly satisfying but occasionally aggravating, thresholds are probably lower...

Posted July 19, 2006 11:43 PM by Mike Kozlowski

Gods and monsters. This woman spends more on rent than my annual salary. And my wife's. Her dining out budget is more than I make per paycheck.

And yet, I bet this woman bitches about paying $3 a gallon for gas. I bet we could cut our dependency on foreign oil if she just stayed home and cooked a meal every once in a while.

Posted July 19, 2006 11:43 PM by Keith Kisser

There is also, I think, an aversion in American culture to describing one's self as "rich". We're all just plain middle-class folk here.

Or not even middle-class, if it doesn't play with the voters; cf the Southern congresscritter who said he was "just folks" despite his $150K salary -- it would take $200-300K to make middle class.

Posted July 19, 2006 11:44 PM by CHip

This kind of thing helps me remember why I'm a Buddhist (at least some of the time.) It gives me a structure to understand why people think like this, and why I and almost everybody are at risk for thinking like this.

Desire (attachment) is endless. This woman "needs" (wants) $15K a month to cover her basic living expenses; my 4 year old son wants more Thomas the Tank Engine wooden engines, and now has the list up to about 10 more names he wants "for Christmas" and why is Christmas so far away anyway? The needy thinking, the sensation of need, is fundamentally the same. We are all hungry ghosts.

Posted July 19, 2006 11:55 PM by Clifton Royston

No. There are lots of merely luxurious buildings. That apartment is in the Apthorp Building. The Apthorp's not quite as swank and storied as the Dakota or the Ansonia Hotel, and it doesn't have the sheer Bohemian cachet of the Chelsea Hotel, but it's right up there.

Ah, well, beyond the Dakota I don't know the swank buildings in NYC (I don't spend nearly enough time there, clearly). So, $9000/month for a 2-bedroom is thus clearly near the upper end of the price range, and the $3000-$5000 apartments must be the sort I was thinking of.

Posted July 20, 2006 12:07 AM by Dan Blum

As a native silicon-valley (SVer? SVite?) person, I find tidbits like these helpful in understanding how SV real estate appears crazy relative to the rest-of-North America (minus NYC, Vancouver, and coastal CA).

roNA:SV :: SV:NYC

I'm used to the idea that $700,000 is a starter home. I understand why people around here can make $75,000 and yet aren't easily able to save up for a house. To me that's scary and sad, but not crazy. But a $6,000 rent? That's crazy.

That's just thinking about relative wealth, though. The culture of wealth- the signals and status symbols and assumptions showing up in that article - seems different than what I've seen in Silicon Valley. Maybe because the wealthy around here weren't born to it, nor did they have a society page to compare themselves to.

Posted July 20, 2006 12:08 AM by Kathryn from Sunnyvale

Money can't buy happiness . . . but it can buy security: Insurance, a full pantry, no worries about loan defaults or eviction or repossession or the electricity being cut off.

Avoiding misery and desperation always seemed more important to me than indulgence, even if I could afford the indulgence; one of the things that convinced me that Heinlein was a crank was the "Lazarus Long" quote about budgeting the luxuries first.

Posted July 20, 2006 12:20 AM by Stefan Jones

Very mixed feelings here. I make very little, have no retirement funds of any kind (which means I will never be able to stop working) and yet I own 3/4 of a house within driving distance of San Francisco (the bank owns the other 1/4) and I am very happy. I have learned what I don't need. I make enough to survive in the very expensive Bay Area. I drive a ten year old car. I buy books whenever I want to and I manage to pay my health insurance premium every month. I tithe, too.

On the other hand, if I had to stop working for say, 3 months, I would be so totally screwed.

I think I envy the rich not for their possessions, most of which I don't want, but for their security. If a rich person gets seriously ill she doesn't have be afraid that she will no longer be able to pay her mortgage and her health insurance -- to say nothing of paying for vet bills, food, etc.

And yes, these people sound very rich to me.

Posted July 20, 2006 12:40 AM by Lizzy L

First of all, I'll bet every single one of us is in the top 95% of the world's richest people. Yep, even those earning less than 12k a year.

Secondly, you've all missed the real tragedy of this. USA leads the world's consumerism and global warming by a mile - and is dragging the rest of the world in its wake to a disaster of unimaginable horror, probably within the lifetimes of anyone now under forty years old. The mega rich are to be despised for their consumerism and for their disinterest in the environment, not for being rich. But then, why should they be interested in environmental concerns? They, after all, can leave Manhattan when the island is underwater, and go and live in Vail.

Posted July 20, 2006 12:41 AM by glenda larke

Well, this is strangly fortuitous timing. Or, rather, my life is a snapshot example of almost every principle mentioned here.

Background: married young (18), a parent very soon after. After struggling through getting a two-year degree while working crap jobs (I should have put two year degree in sarcasm quotes), I finally was hired at a company that paid me quite a bit of money *and* had medical. Of course, 'quite a bit' at the time was about $16 p/hour. During all this time, we were living in my grandmother's house (she was travelling the world - married well the second time), mostly rent free (near the end we paid her $300 p/month for the 2400 sq. ft. house, fantastic even for our area).

While I was in that group, I got occasional minor raises. At some point I switched over to salary. I ended up in the mid to upper 30k p/year range. We also added three more kids at fairly short intervals. At no point during this time did we feel 'well off', and if we had over a thousand in savings we were doing good. Checking account was *always* paycheck-to-paycheck.

Well, Grandma wanted to sell her house. I had *just* got an unexpected (but well deserved, of course) 32% raise at work, so we found some first-time-buyer programs, and got a 1150sq. ft. house, with a mortage twice what we were paying in rent (that quite neatly took care of the raise). Oh, and it was farther from work as well. We lasted in that house just over two years, until my sister-in-law moved in. 7 people in 1150 was just 'too much', and we started house shopping again.

*After* signing on the dotted line to build a house (3200 sq/ft) with a split mortgage that worked out to exactly twice what we were previously paying, I got another 27% raise. This time, the raise covered not only the increase in housing costs, but a little bit extra as well. Which is good, because we "had" to buy new furniture for our new house, as my wife felt she had been sitting on goodwill furniture for long enough (note: I'm not necessarily disagreeing with her, our couches and bed are fantastic now). I was also able to afford a *new* computer (not a frankenmonster) for the first time in five years (an intel mac mini, if you're interested). I still drive a car my in-laws gave to us years ago, with a transmission that shakes the entire car when going from first to second (it's been doing that for three years now). My wife drives the minivan that we bought in '99 (used).

So, now we get to why I bring this up. Yesterday (literally), I recieved notice that I got an 11% raise (almost one year exactly since the 27%). I now make $76,000 a year. I also *literally* just closed another browser window where I was checking our bank account, and we are overdrawn by $220. Now, I get paid tomorrow, so we're just out a couple overdraft fees. Nothing bounced, our bank is covering our ass for us. But basically, we're in the same financial position we were in six years ago, when I first got this job. We might have softer couches, I'm putting in up to the company-match limit into my 401K, and we definetly have more room to put crap, but we still have jack in savings, we still live paycheck-to-paycheck, and this new raise isn't going to change a thing.

The point has been made, but bears repeating: once you're above poverty level, rich is a state of mind and a method of living. It is *not* a given level of income. I've *doubled* my income over the course of four years, and have - house aside - almost nothing to show for it.

P.S. To those who willl say "make a budget! save more, you moron!", I reply: "Of course! Why didn't we think of that?!" I mean, literally every single time I get a raise, we sit down, talk about how we were able to make it on my old salary so this is all gravy, and what wonderfully responsible things we can do to sock away money. And then, somehow, we have a new costco swingset in the back yard and $12.52 in savings. Sigh.

Posted July 20, 2006 12:53 AM by Not My Name

Not that I spend $1,000 a month on this, but when you have kids, buying clothing is suddenly a lot more pressing. You can certainly do it pretty cheaply (watching for sales, shopping at rummage sales and thrift stores, and best of all, making friends who have children just a little bit larger than yours, and hinting for hand-me-downs) but since kids grow, they really do need a whole new round of clothing every six months or so.

If I were filthy, stinking rich and could compress the shopping trips to a handful of expensive stores (which would be great, because I hate shopping!), I could easily imagine spending $1000 or more to outfit my children every time the seasons changed.

Posted July 20, 2006 1:08 AM by Naomi Kritzer

Rich McAllister: good points, both. Of course, as much of a Mr. Debt-Averse as I am (similar to "loompa" in this thread on Big Picture), I'd do okay with $5M even figuring on only 1% of "safe growth" after inflation.

(Because I'd keep working, pay off the mortgage, then build a mix of long-term investments and let it grow without touching it.)

Posted July 20, 2006 1:11 AM by Christopher Davis

Don't worry: once the revolution comes, they'll harvest strawberries and they'll like it!

Posted July 20, 2006 1:37 AM by Martin Wisse

I know I'm in the upper class for my group of people. I'm going into grad school in the fall. I'll be an engineering student, which means I'll make enough money from the university not to need a job.
As far as I can tell, I'll be able to survive. I'm living in a too-nice apartment (other options were eh with anxiety and ohonever) by myself unless I find someone I want to live with, I have a bike and a car that might not get driven except to writers' groups, and I like rice. I have a ridiculous amount of furniture-- I don't want to move because it's far more than I can handle without a truck-- but it's garage sale bounty. I'm pretty sure I will have good insurance. My parents have paid for just about everything, so instead of owing a bank, I owe them neverending devotion.
It's not much, but I'm not really working for it either. It's enough.

I kind of want to win the lottery so I can go on TV and say, "Well, the first thing I did was buy the hardcover books I couldn't afford before, and pay off my parents' debt, and I bought the Porsche Dad liked before a tree could hit it, and I can live on X, so it's all children's libraries, scholarships, and I guess I can buy name-brand organic fancy rice now." I'd feel guilty living on more-- I'm supposed to be an impoverished grad student, aren't I?

Posted July 20, 2006 1:53 AM by Cassie

Sara G wrote:

> All I really want in life is to write novels and adopt children. 50,000 a year would probably cut it.

That's a lot of kids.

Posted July 20, 2006 2:29 AM by Steve Taylor

$7000 for monthly rent? Good lord, do they rent a mansion or something?

A girlfriend's father paid twice that fifteen years ago in NYC. For that he got a large (took up one entire floor) two bedroom apartment in a luxury building, meaning the view wasn't ugly and the doorman was good at his job. He was living there while waiting for his more expensive apartment to become available. He ate out pretty much every meal. If you want to live that kind of life in NYC, it's easy to spend the money. (Personally, I thought my cheap neighborhood restaurants had better food and service than most of those I went to with him--the Russian Tea Room being a big exception--but there's no accounting for taste.) At the time, one month's rent for him would have covered all my bills for a year. I was bringing home more than twice that, and paying off school debt hand over fist.

Several years later and in another life, I sold a successful business, made good bank, and "retired." This was only possible because my wife and I aren't interested in leading extravagant lives, or even normal middle-class lives. Safe earnings on a million dollars won't last long when a typical year might see you dropping $10K-$12K on high-deductable health insurance and medical expenses.

What the money does allow us to do is live freer lives. Remaining debt free is a big part of that (not to mention being cheaper). Being able to pick and choose jobs, doing what we want to do instead of what we have to do. Being able to travel to family and friends on a moment's notice if they need us, without worrying about the consquences. Being generous to charities. These things won't make you happy, but they do make it a lot easier for you to live a happier life. That's what money can do for you. Most people who have it, of course, don't use it that way.

Posted July 20, 2006 2:46 AM by Jeff

I've always figured that to stop working, I'd need to start at about $2 mil, which would probably support me in perpetuity. (I might like an additional $1M for airable land + a good chunk of solar/wind/desalinization equipment. and a pony.)

I'm suspecting that number will resemble what the retirement investment advisors will put as a target for people my age, and that kind of saving volume is frightening.

As for the $15k/month, I would break that down a little differently. $1k rack space and bandwidth. $2-3k machine lease. $5k salary, $2k insurance/benefits. And then $4k for whatever else the startup of the year required. I'd love to have the freedom to do some serial entreprenurship type stuff, and $5 mil trust fund would go a long way towards doing that and being able to sleep at night.

But then again, if I had a trust fund, I'd probably be an insufferable ass. Money and a sense of entitlement have a way of doing that. So better make it a found lottery ticket.

Posted July 20, 2006 2:48 AM by eric

We tiptoe around the concept of F.U. money. This is the amount of money that it takes for you to be able to say F.U. to any proposal that offends your delicate sensibility at no particular cost to you. This number is changable, dependent on time and circumstance, and so we try to come up with a number that will cover most cases.

Alternately, it's the number that allows you to say, "Now what was it I wanted to do as a kid, before I was told I had to go out and earn a living?" The truly happy folks I know are those that have that level of cash and go on doing it anyway.

Posted July 20, 2006 3:02 AM by Glenn Hauman

I was just reading a link from somewhere upstream about how the poor pay more, and noticed a mention of check cashing businesses. These were almost unknown in Australia until recently - I'm not sure what triggered their invasion - but I'm very familiar with them from when I worked in Chicago for a while.

Could someone explain to me why they thrive, given that they offer pretty unfavourable terms - that is to say, why their customers don't just have a bank account? Is it just a matter of living such a hand to mouth existence that getting the paycheck cashed immediately is all important? Or are there barriers to having a bank account in the US if you're poor? Or is it some kind of cultural inertia?

I hope I don't sound like I'm sniping here - I'm genuinely curious.

Posted July 20, 2006 3:13 AM by Steve Taylor

Reading the article, all I could hear in my head was the refrain from an Oliver Wendell Holmes poem I had to read in high school, Contentment, in which the speaker keeps insisting that his needs are few and modest. He only wants the best, of course; anything else is false economy.

In regard to why check cashing places thrive, it's a combination of everything you mention. For people who are living off the grid, or close to, having a bank account is problematical. Further, many banks charge fees that would eat up low-balance account before you got around to paying your bills. Plus, in the past few decades, actually opening an account has gotten harder. Even twenty five years ago, when I moved back to New York and had a $5000 cashier's check in my hand, all ready to open a new bank account, I had to hunt for a bank that would take my money--there had been so much fraud (person comes in, deposits $5K, writes check for $15K while that one is clearing, decamps) that the rules were really rigid.

Posted July 20, 2006 3:25 AM by Madeleine Robins

Money can't buy happiness . . . but it can buy security: Insurance, a full pantry, no worries about loan defaults or eviction or repossession or the electricity being cut off.

Yes, exactly. And it's amazing how much misery just... evaporates when you've got a roof over your head, food, a bit of pad for emergencies, and enough to pay the bills with a little left over for frivolity. I've watched my partner go from his normally-cheerful self to totally depressed and grouchy during periods when the money was particularly tight. Worrying about money all the time throws a cloud over everything else.

Of course, some people don't understand how little they actually need because they've always had so much more; going thru a period of actual, serious POVERTY is frequently an enlightening experience. (And sometimes not -- I understand that Ken Lay grew up dirt-poor in the rural South, and all it did was make him greedy.) And then there are those who just aren't happy without something to whine about, but that's a different level of problem.

Posted July 20, 2006 4:33 AM by Lee

Is there anyone else here who wouldn't stop working for any money?

Earlier last year I found that unemployment - even in a situation where money wasn't a worry at all - did horrible things to my state of mind.

And if you've been there, there is no price tag that can be put on a month without a single panic attack.

Of course, those who are reading this have been educated to a reasonable level, and have the use of a computer which is connected to the internet. I agree with Wim L - ultimately we are the privileged ones.

Posted July 20, 2006 5:14 AM by Eve

I've discussed with my wife what we would do should one of us win the lottery (need to start playing to win, though). Once we used the money as a "get out of debt free card", and put away enough for retirement, etc, both of us decided we'd give big chunks of it away to friends and family. Why just keep it in the bank when there's no reason for it to just sit there, when it could be helping people out who really need it?

Posted July 20, 2006 5:31 AM by John

once the revolution comes, they'll harvest strawberries and they'll like it!

I'm sure I've heard something of the sort, three days ago, in The Archers (THE "perennial" radiodrama on BBC Radio4).

Posted July 20, 2006 5:38 AM by Giacomo

I'm partially disabled, and I work in publishing. I make less than most people would believe, buy clothes in thrift shops and on eBay, and have dental anxiety dreams at night. If I had a million dollars (if I had a million dollars), I'd get my teeth fixed. Then I'd buy the house I live in. When you always pay rent you never get ahead. Also, five out of five buildings I've lived in in NYC have been sold out from under me: forced moves, traumatic and very expensive.

Posted July 20, 2006 6:20 AM by Teresa Nielsen Hayden

Living paycheck-to-paycheck is dangerous. What one needs is for savings to be taken out from the current account as soon as the salary comes in. This way, you don't see that money and you are not tempted to spend it or procrastinate the movement.

My soon-to-be-wife demonstrated to me, more than once, why they say that the only way to eliminate poverty in Africa is by giving money to the women.

Posted July 20, 2006 6:25 AM by Giacomo

To answer your question Eve, I have to ask, "What is working?"

My job would be a lot of fun if I could do things on my own terms and not be constrained by other people's views of what is a priority and how good good enough is. If I won the zillion dollar power ball of popular fantasy, I'd probably be at home making replacement wooden windows for the Arts and Crafts house I'm trying to restore. The second would probably strike mose people as far more work than what I do on my hardest day here, but in my mind it would be just a step or two away from pure play.

Posted July 20, 2006 6:53 AM by Avery

I'm sure we can all think of things we'd like to be able to afford to do more often. Look at the cost of going to a Worldcon.

But the sort of idle rich stereotype of not doing anything, that's likely to be pretty rare. People seem to want to do something.

Posted July 20, 2006 7:02 AM by Dave Bell

Living paycheck-to-paycheck is dangerous. What one needs is for savings to be taken out from the current account as soon as the salary comes in. This way, you don't see that money and you are not tempted to spend it or procrastinate the movement.

Giacomo, no disrespect, but I hate comments like this. Being lectured about not saving and being told how best to do it is utterly infuriating when one, for example, doesn't get a paycheck (I am completely self-employed) and when one's income pays one's bills every month with very little left over. I am not going to go into the details of my personal finances any more than I have, but most people in my economic bracket are quite frugal. We have to be. My indulgence is books, and even there, I am careful. (I pay less for books each month than I would pay for cable tv, if I had cable tv, which I don't.)

As for winning the lottery -- no, I don't play it, but if I did -- if I won, I'd do as John suggested with the money: pay off the mortgage, buy a building to house my dojo (no more landlord, yeah!) sock a chunk away for "retirement," and then give it away. I don't have children, though. That would, I am sure, change the plan. But maybe not by much... I know some trust fund babies, and while not wishing to offend or to over-generalize, I have found their outlook on life to be pretty strange. That's not something I would want to leave to my kids.

Posted July 20, 2006 7:12 AM by Lizzy L

Yeah, I forgot; some of that fantasy lottery money winnings would go towards buying some land, building a house and a workshop so I would have space to --really-- do some serious woodworking projects. Currently my woodshop occupies half the garage, enough room to make toyboxes and the occasional table, but not much else.

But, considering that the current Powerball lottery amount is around $60 million, and taking the lump sum value typically gives you around 40% of that amount, I figure I'd still have about $5 million left over after taxes, retirement, house, travel, etc, to give out to friends. I'd get as big a kick out of handing $50,000 checks to people as they would getting them!

Posted July 20, 2006 8:09 AM by John

Giacomo: Revolution in The Archers? Never!

Oh, the fantasy lottery win. I think I'd need £3 million to stop working, £1 million to choose my job. With £3 million - my parents have massive debts so I'd pay those off for them. Then I'd buy a smallish house in France with an orchard and a stream, and room for a library. That's about £250 000, so far. I'd invest however much was necessary for a reasonable income, say £30 000 a year (my book collecting would come out of this), for the rest of my life. I suppose, taking interest at 5 or 6%, about £500 000. The rest I'd set up as a personal charity fund, and my job would be to administer the fund. Money would go to some kind of programme in Africa, the homeless here, and some kind of education support programme. I wouldn't necessarily be happy, but I wouldn't need to worry about money again. I've never been starving poor, but the sheer weight of debt is something I'd love to be free of. It really does colour everything.

On a side note, there seem to be lots of adverts in the UK at the moment for 'loan consolidation - pay less in interest and have more to spend'. Not 'consolidate your loans, and make your debts easier to pay off', note. I hate it that the very people who can't afford huge debts are being encouraged to stay in debt. It's insane.

Posted July 20, 2006 8:50 AM by Nikki Jewell

Vian:

Yes to scholarships and subsidized child-care. Really good subsidized child-care. University scholarships and a publishing internship or two that subsidize a living wage for someone who wants into the industry.

Tutoring scholarships, too, for school-aged kids who aren't quite keeping up, but don't meet the school board profile for needing extra assistance.

Parties: Balls once a month, with enough money for musicians to keep the music playing all night, paying each musician at least twice the usual fee. For this purpose, I'd have to build a ball room; might as well use it to provide rehearsal and class space for apartment-dwelling musicians and dancers the rest of the time.

No fancy cars—I'm a city dweller, I can't drive, and I hate cars anyway. But it'd be fun to travel first-class, by train.

Posted July 20, 2006 8:50 AM by jennie

Security, yes. For instance, the idea of going back to renting very nearly gives me hives. [*]

I am privileged and I know it. We both make good salaries, I live in a cheap area, the material wants of my lifestyle are met, and we have a decent cushion in savings. But I still have money anxiety--not for now, but when we have children and need daycare, want a bigger house, etc. etc.

So it doesn't surprise me that money anxiety is not necessarily correlated with the amount of money you have.

That said, I do rather feel that the person quoted might benefit from some perspective.

[*] Which is why I'm most boggled by the $7K/month in _rent_ in the quoted bit. In rent! If the housing market is so screwed in Manhattan that you can't get something decent for a mortgage payment in that amount, I really think it's time to think about moving somewhere cheaper, so you can save up to buy in Manhattan if that's what you really want.

Posted July 20, 2006 9:31 AM by Kate Nepveu

Also, five out of five buildings I've lived in in NYC have been sold out from under me: forced moves, traumatic and very expensive.

Been there, done that, got the amazing collection of cardboard boxes. Except that the sale fell through, so the same family still owns that house.

Posted July 20, 2006 9:35 AM by Eve

Reading the original scenario: If it was my husband's trust fund and he was staying home with the kids, no way I'd stay home. Now, if it was my trust fund, that would be different.

Posted July 20, 2006 9:37 AM by inge

Steve Taylor wrote:

Or are there barriers to having a bank account in the US if you're poor?

I think the attraction is that they're not picky about ID and such; handy if you're not a strictly legal resident.

Lila wrote:

*groan* Don't get me started on all the work my house needs. Hint: 4 dogs.

I'll see your 4 dogs & raise you an unusually fragrant cat.

True story: a couple years ago one of the dogs somehow locked herself in a dark bathroom. Wackiness ensued. Last night I finally got around to removing the few remaining scraps of bathtub. The wife and I are most curious as to whether my plumbing-fu is up to the task of replacing it.

In other news, a couple of good resources for finding out how the other half live:

Born Rich This is a documentary by a kid who is the heir to a substantial chunk of the Johnson & Johnson company. His personal holdings include (IIRC) Grand Central Station. It features interviews with other youngsters of his income bracket. It was interesting, but be sure to take your blood pressure meds before watching.

At the other end of the scale we have Nickel and Dimed, which is a nonfiction account of a professor/journalist who went undercover for a while and lived solely off of her income from unusually low-wage (for her) jobs. She came to the conclusion that it's tough to live off of 12,000ish /y.

Posted July 20, 2006 9:38 AM by Scott H

Someone earlier mentioned the analogy:

roNA:SV :: SV:NYC

I'd like to point out that this isn't quite accurate, as although "NYC" covers places where this is accurate (ritzier parts of Manhattan), it also the parts of Harlem that the north-marching gentrification hasn't hit yet, not to mention the other four burroughs. I doubt, for example, that you'll find a $7K/month rent in Brooklyn. From what I can tell at a distance about SV real estate, though, there isn't the same local variation. (East Palo Alto might have qualified five years ago, but since IKEA moved in, the only way one gets what I'd consider a reasonable price in SV is by getting a "manufactured home")

Re: money. I hate it. Don't get me wrong, I'd rather have more than less, but I absolutely hate thinking about it. That is what I view as the ultimate freedom that winning the lottery could afford me: the chance to stop thinking about money, possibly by paying someone else to think about it for me.

I make now a nominal salary that should be disgustingly large, and live in a neighborhood theoretically way less expensive than where most of my coworkers live (our house, albeit half a duplex, was only $125K), and yet our savings only exist at all because of some recent inheritance money. I don't know why this is. In theory, there are people in our neighborhood living adequately on half my salary. Every time I try to figure out where our money is going, I end up frustrated and mad and, because money is not a matter of immediate life and death, go do something else less unpleasant, like help my parents remove a dead skunk from their yard.

So I wouldn't even be able to participate in the quoted discussion because I have no idea how my money is split. I know only that I find myself constantly thinking "no, we can't afford that" for anything that isn't a staple item.

Posted July 20, 2006 9:40 AM by Daniel Martin

On living on and maintaining an income from your investments:

If you have a lump sum, say $5M and you want to live off the income (which, depending on your investments, could be interest, dividends, rent, etc.), figure that your income may be anywhere from around 4% to 10%, depending on your level of risk aversion.

So that gives you a figure of $200K to $500K. Of that sum, government gets first dibs. There are things you can do to make it better or worse, but figure your taxes are going to run about 35 - 40% (US income tax + state income tax + other taxes).

At this point you're looking at $120K to $395K. Figure that anywhere from 10% to 50% needs to go back into your capital. If you have rental property, you need a fund for upkeep (new roofs, painting, maintenance). If you have stock investments, some will lose money and not gain it back. Even if you have very safe, guaranteed income investments, there's this nuisance called inflation, which means that just maintaining a certain dollar income doesn't mean that you're maintaining the same actual income.

At this point you're somewhere between $60K and $355K (rounding off). Please note that either end is unlikely, but the $355K is much more unlikely to be a sustainable figure, assuming as it does, a continued best return in the highest risk investments with no loss of capital and the best possible taxes/inflation combination. This is unlikely to happen - Murphy's Law applies to investments as much as it does anything else.

Incidentally, maintaining this income can be a fair amount of work/expense, especially for the higher return investments, if you want to maintain your income. Not work that necessarily requires a 9 to 5 commitment, but definitely work. Rentals need maintenance, stocks need research, etc.

So, $5M does not usually equal $500K in annual disposable income. What you do with the actual income is left as an exercise for the student.

PS - I've noticed a lot of people who say "Pay off my mortgage!" I'd talk to a investments/tax person before I did that with a windfall. It's possible you'd be better off investing and paying your mortgage with the income from the investment - tax laws and all that. Or not. But talk to someone who knows about these things and your individual situation first.

Posted July 20, 2006 9:53 AM by Margaret Organ-Kean

In the last two weeks I've had to examine how much money I need to survive or live on with my three children so that i can find a job that pays enough. Our mortgage is less per month than the woman in the article spent on eating out and our car is paid off. Our utilities are very close to what she says she pays but our vacations and incidentals are much lower. Much, much lower.

With little in the way of extras I need to make at least 45k with benefits. LOL! Yesterday I was informed that I could continue our old health coverage through the old employer for $1640 a month. I guess there are people who can pay that amount but not if they are making what I am capable of making.

I remember the first time I ruined a meal and was able to toss it out and still feed the family that night. That night I reflected that we were not poor and must now be middle class.

If I won the mythical lottery, the first thing I would do is purchase a lifetime of housecleaning.

Posted July 20, 2006 10:10 AM by sara_k

Others have said this, but no, $7k/month in rent is nowhere near the high end in Manhattan these days. A couple of years ago, a relative of mine was paying about $4k, and that was probably for a one-bedroom apartment (I only saw the outside of the building; never went in). It was in a high-rise with concierge service and maybe a gym, though--not to mention closets and a view. So for almost twice that, you might be able to get two bedrooms.

My relative has since retrenched and is now in a less swank high-rise, still with a gym and a view, that probably costs only $3.5k/month.

So, . . . do we think the cocaine expenses are entered in the ledger under "eating out" or "cash"?

Posted July 20, 2006 10:16 AM by India

On NYC housing: My modest apt (where I have lived for about 17 years) is a smallish 1 bedroom in a decent building in a decent neighborhood in Queens (good elementary schools, not so good middle schools, good but extremely overcrowded high school that runs 3 shifts), with reasonable access to public transportation . . . . The identical unit was recently sold for over $225,000. The mind boggles.

I don't live an extravagant lifestyle, but by the time I've paid the afterschool fees and the camp fees and the synagogue membership and the religious school fees and the mortgage and the maintenance and the utilities and for food (and we don't have cable or internet service at home), there's really nothing left. And I make mid- five figures.

If I didn't have a kid, on my salary I could at least double my charitable contributions, take really cool vacations, and still put some aside for my future.

Not that I in any way regret the kid, she's a fantastic person, but boy, is she expensive! And we haven't even gotten to the orthodonture yet!

Posted July 20, 2006 10:23 AM by Melissa Singer

"rich" is a state of mind. And my experience has been that a lot of people I would consider rich don't consider themselves rich. It's one of those "is it enough?" conversations.

"wealthy" is when you have enough passive income to pay for all your expenses. You could be wealthy on 25k a year if your living expenses are low enough.

I keep telling my wife we could move back to farm country, get a high speed internet connection, I could telecomute, and we could live like royalty on my salary. In the city, we pretty much just get by paying our bills. ("mortgage" means "death debt" is always at the back of my mind)

If I came into a lot of money, I'd tithe to some worthy causes, buy my wife her dream car, buy myself a karman ghia and have it totally restored, buy a house with a garage and shop (whose location isn't based on where I can find work), and we'd take a long vacation seeing some of those places we've always wanted to see. If it was a lot, lot of money, I'd buy a twin engine jet, or at least something like a Glassair, so I could fly back to my family more often and not spend half a day flying and half a day driving. And I'd have to get my IFR.

Oh, and I'd buy that VBL armored car.

After that, whatever was left over would go into investments so I could live off the returns (tithing on the returns as well). Then I'd start an engineering company and hire some of the best people I've ever worked with, and some of the smartest people in the Open Source community, with the intent of making money creating useful open source works.

If it was a massive, massive amount of money, I'd probably take half and create something like a Nobel Prize where returns from investments are used to give out awards to people who have made the world a better place.

Oh and I'd get a tiltrotor for me.

Posted July 20, 2006 10:47 AM by Greg London

I have a pretty good grasp of what's enough money for me, because I had it for a while. Then Liam got fired, and now we're living off my salary and what he can make temping, because people don't seem to be willing to hire him for jobs he's "overqualified" for. It's like, yes, he'll be bored, but we have bills...

Anyway, a household income in the $40k range (more like 28, after taxes) is perfectly sufficient. With that, we can pay all the bills and still be able to afford books and the occasional movie. I have a 401k, too.

So yeah, $5mil would be fine; it'd me