It now costs $350,000 a year to live a middle-class lifestyle in a big city

[HawkeyeNFO]

I disagree with the $350k figure in the headline of the article here, although I will say it ain't cheap to live near SF/NY/DC.

https://www.cnbc.com/2019/09/11/you...a-middle-class-lifestyle-today-heres-why.html

 

[NW-Bound]

My nephew is a pharmacist working in Manhattan. He lives in a small apartment in Brooklyn. I guess he's making more than $150k. His lifestyle is OK, and can be considered middle-class. He's by himself, with no family.

 

[Finance Dave]

I'm sorry but I just can't trust any article like that.

First off, they add in benefits. While this is "value", most people don't really know how much in benefits they receive today, so they cannot make a comparison. For example, a bank teller may make $40,000/year in W-2 income, but if you add in all the benefits it might be $56,000/year or more....and they would never know that. They read the article and say "wow, I only make $40k and I need to make $350k?"

Secondly, they set this up as people SHOULD live. Saving for kids college, retirement, etc....which many people don't do today.

And why focus on the most expensive cities? Why not use the LEAST expensive? Because they want headlines!!

Crazy journalists.

 

[daylatedollarshort]

This article has been posted before. It is by an early retirement blogger who writes click bait articles. The median household income in the Bay Area is not $350K, though it does take around $200K household income to buy a home in SF or one of the nicer suburbs at current prices. But many in SF and other expensive cities choose to rent instead of own. I don't think renting means you can't live a middle class lifestyle. Renting can provide more flexibility and be a smart move when housing prices are in bubble territory.

 

[kgtest]

never forget some dude at the basketball court when I was younger showed up in a BMW, I said, nice car, he responded "I can have anything I want, I'm single!"

LOL.

 

[NW-Bound]

Secondly, they set this up as people SHOULD live. Saving for kids college, retirement, etc....which many people don't do today.

And why focus on the most expensive cities? Why not use the LEAST expensive? Because they want headlines!!

I have not read the article. But if it scares away people from these expensive cities, it serves a purpose.

It did not scare away my nephew, however. He likes the hustle and bustle of a big city. He makes good money, else he would like it there.


PS. We have visited Manhattan a few times in the past. It's time we go back for a visit, and to see my nephew too. We will know a bit more about the local life, instead of just being a tourist going up to the Empire building and other landmarks.

 

[Lawrencewendall]

I live between Baltimore and D.C. My expenses have been consistently around 70k annually not including taxes. All depends on the chosen lifestyle. Doesn't cost much to garden and use scrap wood for my projects. Oh, yeah, Day 94. Still trying to find my groove. Sleeping in is GREAT!

 

[Vacation4us]

I read the entire article and don’t find it unreasonable. We currently live in the Bay Area rent 500sqft for $1775 but support 2 other homes in SoCal. So our housing costs are easily 6k a month. Combined we make less than 350k but not too far off.

Take out 90k in taxes and 50 k in retirement funds and a comfortable middle class lifestyle is all you get. Comfortable not rich no Tesla’s or Ferrari’s.

The author clearly stated HCOL areas.

 

[Housewife]

For a two-income family with two preschool aged children, the article is not that far off. Some items might be a bit over, but others might be a bit under. overall, I would say it is about right. The numbers will change once the children are old enough to go to school. Obviously the numbers will be very different for people who are single, married without kids, or even those married with one full time parent.

We at one point were raising two toddlers in NYC, while making substantially more than $350k combined. We did not feel poor, but never felt comfortable splurging on anything. We lived in a two bedroom apartment (and converted the dining room into a bedroom after DD was born), and we did not own a car.

It is definitely worth pointing out, that the table in the article is based purely on cash flow, not savings or wealth accumulation. A substantial part of mortgage payment is principal pay down, essentially building up house equity. Also, the 401k and 529 are both $’s going straight into investment account. Between these items (and whatever I have missed), there is indeed some buildup of savings.

 

[HillCountry]

I worked for 13 years in the Bay Area. It was fun. Though our budget was pretty low, we travelled to all the interesting places in California. I would think it the best place to work for a young person (couple). Yes, day care costed us $3000 per month for 2, even 10+ years ago. It is a low end public facility. We picked it only because it was close to DW’s work place.

We moved because we see how competitive the school was going to be. Today, we are so very glad as our kids can count the state flagship as safety.

 

[Midpack]

I can believe it for a family in SF or NYC proper, assuming a house not a small apartment. But what surprised me most was the first example below. I guess I chose the wrong career path...

• A Bay Area Rapid Transit janitor who makes $234,000 plus $36,000 in benefits marries a Bay Area Rapid Transit elevator technician who makes over $250,000 in salary and benefits. Together, they’d make well over $350,000.
• Starting total compensation packages for recent college graduate employees at Facebook, Google, Airbnb and Apple range from $120,000 to $150,000. By the time these employees turn 35, their total compensation alone can easily surpass $350,000.
• A 30-something first-year associate in investment banking earns, on average, a base salary of $150,000 plus a $20,000 to $100,000 bonus. After five years of experience, a total compensation of $350,000 should be achievable.
• A 20-something first-year big law associate makes a base salary of up to $190,000 plus a $20,000 signing bonus. By the end of their seventh year, many are making over $350,000.
• A 40-something tenured professor could make about $202,000 at the University of California, Berkeley, $260,000 at Columbia University and $218,000 at New York University.
• A specialist doctor finishing his or her fellowship at around the age of 32 could make about $300,000. After several years in the business, $350,000 isn’t unheard of.

 

[NW-Bound]

I could not have imagined a BART janitor and elevator technician making that much.

But they are state or city employees. How about chambermaids working for Best Western? Do they make $150k? McDonalds' workers?

How about street beggars? $100K? It could be, because the homeless congregate there. People go where they make money.

 

[Finance Dave]

I have not read the article. But if it scares away people from these expensive cities, it serves a purpose.

It did not scare away my nephew, however. He likes the hustle and bustle of a big city. He makes good money, else he would like it there.


PS. We have visited Manhattan a few times in the past. It's time we go back for a visit, and to see my nephew too. We will know a bit more about the local life, instead of just being a tourist going up to the Empire building and other landmarks.

We visited SF last year. We spent the first 2 days on public transport, then I walked .8 miles to the rental car place on the 3rd day. I walked past hundreds of homeless people and urine and feces on the sidewalks to get there. No way I'd live in that city...at least not the "downtown" area. Some of the suburban areas may be nice though. $9 for a beer (we pay about $5 here), parking costs are outrageous (our meters here took pennies until 5 years ago), and all the picketing we saw about insufficient wages while we were there....no thanks!

 

[Teacher Terry]

We used to love SF and go yearly because it’s driving distance. It has gotten disgusting and I have no desire to return.

 

[NW-Bound]

We used to visit SF all the time in the 70s and 80s by doing road trips. Back then, I could find a free street parking spot right in Chinatown if I drove around a bit.

We passed by SF a few years ago on an RV trip. I took the toad into the city, and could not find a place to park. And having been there many times, it lost the appeal. So, we did not spend much time there to see the homeless problem that is so well known.

 

[Vacation4us]

Not a fan of the Bay Area. Can’t wait to leave 15 months and counting then we are outta here!!

 

[Chuckanut]

I remember when you could 'get by' on a measly $100,000 in NYC.

Times have changed over the last 40 years.

Getting By On $100,000 a year (and other sad tales)


https://andrewtobias.com/getting-by-on-100000-a-year/

That was a preposterously large sum when this collection of magazine pieces appeared in the late Seventies, though even then there were more than a few who failed to see the humor in it. Today, it’s become less and less funny even to the middle class, who may, in a two-income family in a high-cost locale, be bumping up into just such straitened circumstances.

 

[rk911]

I disagree with the $350k figure in the headline of the article here, although I will say it ain't cheap to live near SF/NY/DC.

https://www.cnbc.com/2019/09/11/you...a-middle-class-lifestyle-today-heres-why.html

BS. didn't read the article, don't need to. sister and her hubby live in chicago, are absolutely middle class and while i don't KNOW i do KNOW what they do and there's no way they make anywhere near $350k.

 

[NW-Bound]

Chicago may be expensive, but not quite like SF or Manhattan. A 2-br apartment in the latter cities runs $6K/month or more.

 

[Maenad]

What bothers me about this article is how they conflate "middle class" with "spending everything I make". It's the pleasant little myth we in the top 5-10% tell ourselves so that we can assuage our puritanical guilt, or avoid the wrath of the plebes, or pretend that we have any clue what it's like trying to live on the actual median income. Or something, I have no idea why.

It's not just this specific blogger that does it, I see it all over. As the child and sibling of actual blue collar workers, it really grinds my gears. DH and I make almost the amount in this article, and my life is nowhere NEAR what my parents' was, or my brother's is. They're all responsible with their money just like I am, it's just not the same context. It's foolish to pretend otherwise.

That... got pretty ranty. The thoughts are still true, but I'm going to go get a cup of tea or coffee and mellow back out. I'm not sure if the caffeine hasn't kicked in yet, or if it hit too fast.

 

[Koolau]

So many of the potential expenses are at least somewhat controllable. In Honolulu (cheaper than SF, I'm sure but NOT cheap by most of mainland big cities) you can get into a decent condo for half a mil (plus HOA dues of $600/mo). Schools would be the big issue if you are young with kids. Private schools (the only way to go) are very expensive - and worth it. I just don't see $350K/year. We do it for a third of that and could spend much less. YMMV

 

[Music Lover]

I read the entire article and don’t find it unreasonable. We currently live in the Bay Area rent 500sqft for $1775 but support 2 other homes in SoCal. So our housing costs are easily 6k a month. Combined we make less than 350k but not too far off.

Take out 90k in taxes and 50 k in retirement funds and a comfortable middle class lifestyle is all you get. Comfortable not rich no Tesla’s or Ferrari’s.

The author clearly stated HCOL areas.

If I read your comment correctly, you support 3 homes on a little less than $350k. If you upgraded your $1775 a month to $3k and didn't support 2 other places you'd be very well off on your income.

Say $300k income less $90k taxes, $50k retirement, $36k rent leaves you $124k a year or over $10k a month AFTER taxes, housing, and retirement savings.

 

[tb001]

This is pretty close to what our budget was in a HCOL area with young kids. Some items a bit higher, some lower. You’re either paying up for housing or for private school (or both, if you want to live *in* the city). Sure you can raise a family in a HCOL area on less, but you’re likely not funding 529s and retirement accounts and/or you’re living in a less than desireable school district.

It’s interesting that they specified old navy/Toyota. When we lived there I kept asking DH how it seemed like everyone around us had a Tesla and more expensive stuff when we made what I considered to be very good money and lived much more modestly on the surface!

 

[tb001]

If I read your comment correctly, you support 3 homes on a little less than $350k. If you upgraded your $1775 a month to $3k and didn't support 2 other places you'd be very well off on your income.

Say $300k income less $90k taxes, $50k retirement, $36k rent leaves you $124k a year or over $10k a month AFTER taxes, housing, and retirement savings.

Take out childcare/school costs and you’re easily down to 75. Lower if you have a nanny but still want to send a child to some form of preschool a couple of days a week.

Eta, then another 20k for property taxes if that 36k is towards a mortgage.

 

[candrew]

A Bay Area Rapid Transit janitor who makes $234,000 plus $36,000 in benefits

I could not have imagined a BART janitor making that much.

I have to tip my hat to that janitor. According to the article, his base salary for a 40 hour week is about $56K. Dude picked up O.T. hours on an almost daily basis that other janitors turned down. He probably worked most holidays, as well.

Good on him!