The New York Times recently published You Try to Live on 500K in This Town in an attempt to explain why half a million dollars a year may not be adequate to live on in New York City.
You: Why half a million?
That’s the new proposed salary limit from President Obama for executives working for companies that receive significant governmental assistance.
You: Why New York City?
Many potentially affected executives work in New York.
You: Half a million a year seems like a lot, even in New York.
It is. While it’s clear to me that half a million doesn’t go nearly as far in New York City or even the close exclusive suburbs of New Jersey, Long Island, Westchester, or New Jersey, as it does in the rest of the America, earning $500,000 a year is more than survivable.
Yet the article paints a very different picture:
A modest three-bedroom apartment . . . 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.
Hello? Who says you’re entitled to a second home valued at eight times your annual income? Does it matter if it isn’t “top of the market.” Are you implying this is frugal or even modest living? And who is defining “top of the market” in the first place? Of course you’re going to struggle on annual mortgage payments of $240,000. But this isn’t poverty. This isn’t even struggling. Let’s be clear: we’re talking about a second home in one of the world’s most exclusive neighborhoods, (even if their neighbor’s house (owned by Mr. and Mrs. Jones) is worth $6 million.)
It gets worse:
A chauffeur’s pay is between $75,000 and $125,000 a year.
Oh please. Take a taxi. At one point in your life, a taxi was a luxury over taking the subway (as most mortals do proudly.) A taxi is point to point transportation and (absent the rain), there’s little waiting.
Truth be known, in the early part of the article, the problem was well stated:
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,” . . .
So there you have it. Proof positive of what I’ve been telling everyone for many years: if you spend everything you make, you’re living paycheck to paycheck. With a slight hiccup, you’ll struggle to maintain your lifestyle – especially on a measly $500,000 a year.
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What do you think about this? See it differently? While we can even discuss whether the $500,000 limit will be remotely effective or is appropriate, I’m curious as to those New Yorkers and non New Yorkers agree or disagree with the premise of the NY Times article that we should feel the potential pain of others going from what I imagine is the top 0.1% of the world to merely the top 0.5%.
This doesn’t seem like the pain most of the rest of America is feeling.