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article: When Earning a Million a year is Not Enough
Old 11-03-2018, 08:33 AM   #1
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article: When Earning a Million a year is Not Enough

https://www.financialsamurai.com/whe...is-not-enough/

pulled this from reddit.
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Old 11-03-2018, 08:48 AM   #2
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What surprises me is the property tax rate. Mine is twice that and I'm in an ordinary home in flyover country. I guess I expected the rate in NYC to be much higher.
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Old 11-03-2018, 08:49 AM   #3
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Please give a summary or quote and not just the link.
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Old 11-03-2018, 08:53 AM   #4
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Quote:
Originally Posted by audreyh1 View Post
Please give a summary or quote and not just the link.

+1

A few relevant quotes from the article will give us an idea of what it is about and if it is worth reading
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Old 11-03-2018, 09:05 AM   #5
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Just living a life expected of someone making $1 mill...


There are plenty of expenses that can be cut out completely if needed...


AND, putting money away for retirement, health savings and kids college is NOT an expense...
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Old 11-03-2018, 09:32 AM   #6
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I don't understand the point. The family is living a life of luxury and still has $54K/yr left over for after tax savings. How is it not enough?
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Old 11-03-2018, 09:37 AM   #7
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Quote:
Originally Posted by audreyh1 View Post
Please give a summary or quote and not just the link.
+1


From the intro

Quote:
In this post, I’d like to explore the lifestyle of a typical $1 million income-earning household living in New York City. They’ve anonymously shared with me their expenses, and I’ve done my best to tell their story without sharing their exact details.
From the ending
Quote:
They recognize they are extremely fortunate, and for the most part, they are happy. The Chens just wonder whether the grind is worth it, especially when they see friends from high school leading happy lives on much less.

The only way to live a freer life is to drastically reduce expenses, change their lifestyle completely, or accumulate at least 20X their annual expenses in net worth. At their current $500,000 annual burn rate, Rachel will truly need to work another 15 years to finally experience the joys of financial freedom.
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Old 11-03-2018, 10:10 AM   #8
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What surprises me is the property tax rate. Mine is twice that and I'm in an ordinary home in flyover country. I guess I expected the rate in NYC to be much higher.
Property taxes in NYC are lower than you would expect because NYC has a pretty hefty resident income tax.
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Old 11-03-2018, 10:19 AM   #9
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I think it was an interesting article. There are many examples in NYC like them with earning even more money and much keeping up with the Joneses.
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Old 11-03-2018, 10:25 AM   #10
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Yes, apparently it is possible to spend $1M per year. Someone should buy this couple a copy of The Millionaire Next Door. Somehow I suspect they could find a way to spend $2M. They probably wish they had enough money to send their kids to the $200K per year private school.
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Old 11-03-2018, 11:10 AM   #11
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Two cars in Manhattan? That, and 2 kids in private school, 3 vacations a year, and their food+enterntainment expenses are what blow my mind. I guess the subway is beneath them (literally and figuratively!).
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Old 11-03-2018, 11:40 AM   #12
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I was floored by the 24,000/year spent on clothing. Frankly I don't believe it, even for this couple.
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Old 11-03-2018, 11:42 AM   #13
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Two cars in Manhattan? That, and 2 kids in private school, 3 vacations a year, and their food+enterntainment expenses are what blow my mind. I guess the subway is beneath them (literally and figuratively!).
+1

It ALL blows my mind. $18K fees for the country club PLUS $15K on sports, fitness, music lessons, etc?

$2167/month in car payments, plus $267/month for gas? I thought they lived in Manhattan where everything is nearby and nobody drives. I mean, from what I understand, that's the whole point of living in Manhattan. I just live in a suburb, and so far this year (driving everywhere I could possibly want to go), I have spend an average of $30/month on gas. It was about the same when I was still working.

And they spent $24K for clothes? Prada? Gucci? What are they trying to prove, why, and to whom? That screams of junior high school level insecurity to me.

They have taken "Blow that Dough" to a new level. I thought I'd look at their budget and maybe get some ideas (since I have some excess to spend), but I just don't see anything there for me.
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Old 11-03-2018, 12:37 PM   #14
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+1

And they spent $24K for clothes? Prada? Gucci? What are they trying to prove, why, and to whom? That screams of junior high school level insecurity to me.

.
Yeah, they're making me feel waayyyy better about our budget. I can take out a few of their big expenses (private school tuition, mortgage, etc...) that don't apply to us and get to our annual number pretty easily--I think I may be over padding things pretty significantly certainly don't have those entertainment/travel expenses in our number. The travel budget looks pretty nice--I'd love that! Though I'm surprised they're traveling economy. Seems like there are some things missing though. I don't see a line for incidentals/home goods, services, etc... Anything else people see that doesn't look covered? Healthcare obviously goes up...

In response to the bolded though, in her defense, I work in her industry and this is her 'work uniform.' At least that's how I think about it. She has to project a certain measure of financial success and this is an easy way to do it. It's more important than you think and has very little to do with insecurity. She's just in a very different workplace atmosphere.
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Old 11-03-2018, 01:06 PM   #15
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+1

It ALL blows my mind. $18K fees for the country club PLUS $15K on sports, fitness, music lessons, etc?

$2167/month in car payments, plus $267/month for gas? I thought they lived in Manhattan where everything is nearby and nobody drives. I mean, from what I understand, that's the whole point of living in Manhattan. I just live in a suburb, and so far this year (driving everywhere I could possibly want to go), I have spend an average of $30/month on gas. It was about the same when I was still working.

And they spent $24K for clothes? Prada? Gucci? What are they trying to prove, why, and to whom? That screams of junior high school level insecurity to me.

They have taken "Blow that Dough" to a new level. I thought I'd look at their budget and maybe get some ideas (since I have some excess to spend), but I just don't see anything there for me.
Yes, the total blows my mind; I was just picking out the really BIG ones LOL!

They spend $180k on their kids (first 4 lines in the linked article's chart) in ONE year! And that doesn't include kid expenses embedded in other expense items.

The only item I somewhat envy is their health insurance. They pay only $12k a year (subsidized) for 4 people. I paid $7k for one person.
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Old 11-03-2018, 01:11 PM   #16
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It's a whole different world that what I live in. Very interesting, but I am not envious of that lifestyle.
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Old 11-03-2018, 01:15 PM   #17
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There are many Wall Street folks who earn more than 1mm yearly and spend much more.
I do believe their numbers and have seen this type of spending.
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Old 11-03-2018, 01:40 PM   #18
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I am reminded of Tom Wolfe’s novel “Bonfire of the Vanities”.

In many professions the senior ranks exert (and suffer) extreme peer pressure to spend and consume. Partners and Senior VPs want peers that spend it faster than they make it, as these are people that must work hard to generate new business in order to maintain their lifestyle.

The professional that doesn’t need the money can’t be relied on to do whatever it takes to drum up new business or make the quarterly corporate targets, and has no place among the senior management of US business.
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Old 11-03-2018, 02:38 PM   #19
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The professional that doesn’t need the money can’t be relied on to do whatever it takes to drum up new business or make the quarterly corporate targets, and has no place among the senior management of US business.
That mindset goes beyond those who have a job!

(see another thread re: finding another job after age 50)
I was part of the 'redundant team' when my company was acquired and received a fairly public and obscenely generous severance.

During one of my very few interviews the guy told me "I just don't know how I'd be able to motivate a guy like you...everyone knows you don't need the money". The assumption was that all I wanted to do was play golf with clients and little else for the next 10 years.
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Old 11-03-2018, 04:37 PM   #20
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My budget is constructed differently than the Chen's budget ("income statement"):
• for the Chens, savings are what is left over after all expenses are subtracted from gross income. Not for me: savings are an expense item (currently 25% of gross income).
• the Chen's expenses fail to differentiate between discretionary and non-discretionary. Admittedly, for some expenses this classification is difficult; nevertheless, I think it's important.

My gross income is not (and has never been) anywhere near $1M/year, yet I consider my personal profit and loss statement and balance sheet to be in better condition than the Chen's. Who would have thought?
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