Scrambling to get by on $400K/Yr in NYC

[NW-Bound]

We have had a few threads or posts about how people in NYC need huge salaries just to survive there, due to the high cost of living. People like me who have spent the entire life in backward places like AZ just couldn't understand it. However, I just ran across an article that sheds more light on this.

The subject of this Web article is a highly-educated married couple perhaps in their late 30s. With the husband having a doctorate from MIT, and the wife a dentist with her own practice, they make $400K/yr. Yet, they are scrambling to get by with their 3-yr old and a 9-mo old in a 800-sqft one bedroom apartment. This apartment, being on 5th Avenue, still has a price tag of $1M, and costs them 1/2 of the take-home salary. But more on this later.

Instead of going to the movies, they rent videos. Restaurants are reserved for once-a-quarter special occasions, rather than their monthly date nights. They now buy necessities at Wal-Mart and spend more time surfing the Web for sales than ever before.

Despite their income, Fou says he and his wife have little in savings and certainly not enough to support the family for any length of time should one of them lose a job. Nearly every dollar they earn is spoken for.

So, how do they spend their $400K yearly income? Here's what I got from the article

Gross = $400K
Taxes = $200K
Housing = $100K+
Child care = $40K+
Preschool = $15k

This leaves them with $45K for all other expenses -- medical, food, transportation, etc... -- which, even an ignoramus like myself knows, does not get them far in NYC.

Fou still plans to take the family on a winter vacation this year. He wants his son to get on his first pair of skis. But instead of flying to Colorado, they'll probably rent a car and drive up to Vermont for a long weekend. It's unlikely they will visit their families in Texas anytime soon, given the cost of airfares. So Fou purchased a webcam to ensure the grandparents can still see the kids regularly, albeit virtually.

So, why do they choose to live there? "We grew up in Dallas and Houston, respectively, and we just couldn't see ourselves living in the suburbs."

For a view of the 800-sqft $1M one-bedroom apartment for a family of 4, see video below.

See inside a 5th Avenue apartment - MSN Video

The full article is here.

Getting by on $400K

[REWahoo]

Quote:

Originally Posted by NW-Bound We have had a few threads or posts about how people in NYC need huge salaries just to survive there, due to the high cost of loving.

High-priced hookers?

[Darryl]

Don't have the patience to open the links. If these guys aren't addicted to crack it's hard to fathom why intelligent educated people would choose this lifestyle.

[NW-Bound]

Heh heh heh... I caught it and tried to fix it, but was too late.

Yeah, that could be a cause, if the guy were single.

[CuppaJoe]

Which subway goes from Fifth Avenue to Walmart?

[haha]

Quote:

Originally Posted by CuppaJoe Which subway goes from Fifth Avenue to Walmart?

The O-Line.

[NW-Bound]

Yes, the O Line!

I was surprised to see that there appears to be no Walmarts in the Bronx, or in Queens even. However, the nearest one is in NJ, and just a few miles away.

Either our Manhattan dwellers have to take expensive cabs to go to Walmart, which explains their further financial shortcoming, or it could be that they have to walk from their apartment to Walmart and back, struggling uphill both ways.

[CuppaJoe]

Quote:

Originally Posted by NW-Bound Yes, the O Line! ....

I knew someone would know! Leave it to Ha Ha

Yes, Walmarts are usually located in the boonies, I think.

Edit: wait-a-minute, no "O" line comes up on the subway map! Got me? With an "East Coast Bias"? LOL

[. . . Yrs to Go]

Quote:

Originally Posted by NW-Bound However, the nearest one is in NJ, and just a few miles away.

Silly suburbanite.

Did the article mention whether they even have a car? For the privilege of driving "a couple of miles" to Wal-Mart you can expect to pay $400 / month on a parking spot.

[CuppaJoe]

Quote:

Originally Posted by . . . Yrs to Go ... you can expect to pay $400 / month on a parking spot.

and those $400/month spots are passed down like inheritances, people watch to see who's moving, try to get on the wait list....

[mews]

Well, as a long-time New Yorker, I have to say they made choices they can't support.

There are areas in Brooklyn where they could have gotten a lot more housing for their money - and some good public elementary schools, too.

I make about 10% of their gross, own my own apartment, and am ok. (To be fair, no kids to support, either.)

ta,
mews

[NW-Bound]

You don't have to pay the monthly fee, if you own the spot.

For that, you may need a mortgage!

From a Web site:

If you live in one of the condos at 246 West 17th Street, New York NY and you need a parking space in the basement best would be to have $225,000.00 at your disposal and to get your name on the waiting list as the world's most expensive parking spaces are sold out.

However, if you are really desperate you may want to up the anti and buy out one of the parking spot owners who doesn't live there, but just bought the spot as an investment.

[LOL!]

I'm laughing at the Fou article and have absolutely no sympathy for them. I lived on Long Island for many years near NYC. I learned that almost everyone in NYC has some kind of angle that makes things easy for them there.

The Fou's just haven't figured it out. If everyone in Manhattan were like the Fou's, the City would have long ago collapsed. The fact that it hasn't suggests that the reporter really gave these folks a delightful sucker punch. Since reporters usually make much less annual income than a dentist and a PhD from MIT, I'm sure there was a little bit of tension when doing this article. The reporter had some fun with these hapless city dwellers.

[donheff]

Quote:

Originally Posted by LOL! I'm laughing at the Fou article and have absolutely no sympathy for them. I lived on Long Island for many years near NYC. I learned that almost everyone in NYC has some kind of angle that makes things easy for them there. The Fou's just haven't figured it out. If everyone in Manhattan were like the Fou's, the City would have long ago collapsed. The fact that it hasn't suggests that the reporter really gave these folks a delightful sucker punch. Since reporters usually make much less annual income than a dentist and a PhD from MIT, I'm sure there was a little bit of tension when doing this article. The reporter had some fun with these hapless city dwellers.

+1 I love NY but everyone I have known who lives there has something going - a great rent controlled place, a good deal across the bridge in Brooklyn, something - that let's them survive on a lot less than the Foouls. But I understand the desire to live in the city. DW and I plan to stay on Capitol Hill in DC. It cost us a lot to live here the last 25 years but it won't be bad in retirement. The house is paid for, we get a homesteader break on real property tax, and our income taxes are way lower now. And, like in NY, the house is a valuable asset in an area that never seems to get hit like other areas of the country. We don't see the house as an investment but the kids do

[NW-Bound]

Quote:

Originally Posted by . . . Yrs to Go Silly suburbanite. Did the article mention whether they even have a car? For the privilege of driving "a couple of miles" to Wal-Mart you can expect to pay $400 / month on a parking spot.

Quote:

Originally Posted by NW-Bound Either our Manhattan dwellers have to take expensive cabs to go to Walmart, which explains their further financial shortcoming, or it could be that they have to walk from their apartment to Walmart and back, struggling uphill both ways.

The article says that they are going to rent a car to drive to Vermont for a simple vacation.

[FIREdreamer]

Life is full of choices.

They chose to live in a state with high taxes...
They chose to live on one of the most exclusive avenues in one of the expensive cities in the world...
They chose to have kids and send them to private schools...

Personally I think this is way beyond their pay grade.

But what can I say? We all have to live with our choices.

[Independent]

Quote:

Originally Posted by FIREdreamer Life is full of choices. They chose to live in a state with high taxes... They chose to live on one of the most exclusive avenues in one of the expensive cities in the world... They chose to have kids and send them to private schools... Personally I think this is way beyond their pay grade. But what can I say? We all have to live with our choices.

This pretty well sums it up. Mr. Fou said "we couldn't see ourselves living in the suburbs". Apparantly, he can't accept living anywhere off Fifth Avenue, either.

I guess that this story is a nice illustration of the fact that it takes a lot more than $400k to buy "everything you want".

[Moscyn]

This is like living beyond your means. If you stay in an exclusive area, you have to be able to handle the expenses. With 2 kids, even if you can afford the expenses now, you have to afford more savings. Otherwise, it's a no brainer - not a smart choice.

[RonBoyd]

Quote:

Originally Posted by NW-Bound The subject of this Web article is a highly-educated married couple perhaps in their late 30s. With the husband having a doctorate from MIT, and the wife a dentist with her own practice, they make $400K/yr.

I have often wondered... What skill set(s) does it take to live comfortably in such a place (the whole New York City area)? Are the majority of the inhabitants Wall Street Wunderkinds? Or crooked CEOs? Just how many Madoffs does it take to produce such a place? What exactly supports this environment?

Or is it that this couple is young and simply going through that struggle with life -- investing in the future -- that we all do at that age? Will they eventually become comfortable and settle in as "natives" earning a "good" living?

Life is full of choices... Indeed.

[Tadpole]

Being young is the problem. When I was young, I considered taking a job at Hunter College. I didn't even ask them how much they paid or how much it costs to live in or near Manhattan. I just thought it would be neat to live there. I am glad I decided on another position.

My brother in law lived in Manhattan for years. Then he decided to have children. A few years and two boys later he moved to a small city in the Pacific NW.