"Trying to live on 500k in New York City"

**michaelchance** · February 8th, 2009, 09:55 PM

PRIVATE school: $32,000 a year per student.

Mortgage: $96,000 a year.

Co-op maintenance fee: $96,000 a year.

Nanny: $45,000 a year.

We are already at $269,000, and we haven’t even gotten to taxes yet.

Five hundred thousand dollars — the amount President Obama wants to set as the top pay for banking executives whose firms accept government bailout money — seems like a lot, and it is a lot. To many people in many places, it is a princely sum to live on. But in the neighborhoods of New York City and its suburban enclaves where successful bankers live, half a million a year can go very fast.

“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,” and the daughter of Peter G. Peterson, a founder of the equity firm the Blackstone Group. “Five hundred thousand dollars means taking their kids out of private school and selling their home in a fire sale.”
Sure, the solution may seem simple: move to Brooklyn or Hoboken, put the children in public schools and buy a MetroCard. But more than a few of the New York-based financial executives who would have their pay limited are men (and they are almost invariably men) whose identities are entwined with living a certain way in a certain neighborhood west of Third Avenue: a life of private schools, summer houses and charity galas that only a seven-figure income can stretch to cover.

Few are playing sad cellos over the fate of such folk, especially since the collapse of the institutions they run has yielded untold financial pain. But in New York, where a new study from the Center for an Urban Future, a nonprofit research group in Manhattan, estimates it takes $123,322 to enjoy the same middle-class life as someone earning $50,000 in Houston, extricating oneself from steep bills can be difficult.

Therefore, even if it is not for sympathy but for sport, consider the numbers.

The cold hard math can be cruel.

Like those taxes. If a person is married with two children, the weekly deductions on a $500,000 salary are: federal taxes, $2,645; Social Security, $596; Medicare, $139; state taxes, $682; and city, $372, bringing the weekly take-home to $5,180, or about $269,000 a year, said Martin Cohen, a Manhattan accountant.

Now move to living expenses.

Barbara Corcoran, a real estate executive, said that most well-to-do families take at least two vacations a year, a winter trip to the sun and a spring trip to the ski slopes.

Total minimum cost: $16,000.

A modest three-bedroom apartment, she said, 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.

Many top executives have cars and drivers. A chauffeur’s pay is between $75,000 and $125,000 a year, the higher end for former police officers who can double as bodyguards, said a limousine driver who spoke anonymously because he does not want to alienate his society customers.

“Some of them want their drivers to have guns,” the driver said. “You get a cop and you have a driver.” To garage that car is about $700 a month.

A personal trainer at $80 an hour three times a week comes to about $12,000 a year.

The work in the gym pays off when one must don a formal gown for a charity gala. “Going to those parties,” said David Patrick Columbia, who is the editor of the New York Social Diary (newyorksocialdiary.com), “a woman can spend $10,000 or $15,000 on a dress. If she goes to three or four of those a year, she’s not going to wear the same dress.”

Total cost for three gowns: about $35,000.

Not every bank executive has school-age children, but for those who do, offspring can be expensive. In addition to paying tuition, “You’re not going to get through private school without tutoring a kid,” said Sandy Bass, the editor of Private School Insider, a newsletter that covers private schools in the New York City area. One hour of tutoring once a week is $125. “That’s the low end,” she said. “The higher end is 150, 175.” SAT tutors are about $250 an hour. Total cost for 30 weeks of regular tutoring: $3,750.

Two children in private school: $64,000.

Nanny: $45,000.

Ms. Bass, whose husband is an accountant with many high-end clients, said she spends about $425 every 10 days on groceries for her family. Annual cost: about $15,000.

More? Restaurants. Dry cleaning. Each Brooks Brothers suit costs about $1,000. If you run a bank, you can’t look like a slob.
The total costs here, which do not include a lot of things, like kennels for the dog when the family is away, summer camp, spas and other grooming for the human members of the family, donations to charity, and frozen hot chocolates at Serendipity, are $790,750, which would require about a $1.6-million salary to compensate for taxes. Give or take a few score thousand of dollars.

Does this money buy a chief executive stockholders might prize, a well-to-do man with a certain sureness of stride, something that might be lost if the executive were crowding onto the PATH train every morning at Journal Square, his newspaper splayed against the back of a stranger’s head?

The man would certainly not feel like himself on that train, said Candace Bushnell, the author of “Sex and the City” and other books chronicling New York social mores.

“People inherently understand that if they are going to get ahead in whatever corporate culture they are involved in, they need to take on the appurtenances of what defines that culture,” she said. “So if you are in a culture where spending a lot of money is a sign of success, it’s like the same thing that goes back to high school peer pressure. It’s about fitting in.”

By the way, the frozen hot chocolate costs $8.50.

http://www.nytimes.com/2009/02/08/fa...8halfmill.html

**angelais** · February 8th, 2009, 10:22 PM

Don't even get me started....

**louiswinthorpe111** · February 8th, 2009, 10:25 PM

Gee, I guess, they'll have to cancel the nanny, and raise their own kids. And cancel vacations and the personal trainer and live like the rest of us.

**Tati** · February 8th, 2009, 10:34 PM

Since they're apparently not factoring in any income from the wife, what exactly do they need a nanny for?

**McJag** · February 8th, 2009, 11:56 PM

Wait! They pay the DRIVER almost double what they pay the Nanny?? The car means more than their children??

**western** · February 9th, 2009, 01:08 AM

I say give them all a choice. Cap their salary at $500,000 or lose their job like everyone else. I could care less where they live, that kind of salary could get 10 or even 20 families by for an entire year. Stop whining and count your blessings. Yeesh.

But more than a few of the New York-based financial executives who would have their pay limited are men (and they are almost invariably men) whose identities are entwined with living a certain way in a certain neighborhood

Huh. Interesting. And here I thought pretty much everyone's identity was entwined with living a certain way. Like with a roof over their head, food on the table, clothes on their back.

**A*O** · February 9th, 2009, 01:46 AM

spends about $425 every 10 days on groceries

ie $42.50 per day. I wouldn't say that was excessive to feed a family + nanny but then again the grown ups probably eat out at least 3 times a week.

**Jexxifer** · February 9th, 2009, 04:31 AM

Boo fucking hoo.

**Rondette** · February 9th, 2009, 05:22 AM

**BoogsBun** · February 9th, 2009, 06:01 AM

If they don't want a job that pays $500,000 a year..I'll take it.

**sputnik** · February 9th, 2009, 06:55 AM

i think what will happen is that a lot of them will leave and go work for banks that can still pay them the salaries they are accustomed to. and the banks getting bailout money will have to deal with the problem of replacing them. and the people they get probably won't be as good because the ones that are really good are being offered way more at other banks.

i'm not saying i feel sorry for them that they will 'only' get 500 000 a year, i'm just saying that by altering the way these banks work so radically, might hurt them more (and cost more people their jobs) in the long run.

**SVZ** · February 9th, 2009, 07:00 AM

They should make this a challenge.

I'll be the first contender!

Originally Posted by sputnik

i think what will happen is that a lot of them will leave and go work for banks that can still pay them the salaries they are accustomed to. and the banks getting bailout money will have to deal with the problem of replacing them. and the people they get probably won't be as good because the ones that are really good are being offered way more at other banks.

i'm not saying i feel sorry for them that they will 'only' get 500 000 a year, i'm just saying that by altering the way these banks work so radically, might hurt them more (and cost more people their jobs) in the long run.

How many banks are there left though? And how many of them are hiring right now?

**sputnik** · February 9th, 2009, 08:26 AM

^^^^
not necessarily in new york.
a lot of banks are setting up in places like singapore and trying to lure bankers from switzerland, new york, etc.
the husband of a good friend of mine just got offered a job there. better perks than his current job in geneva, where they've had to cut bonuses and stuff because of the economy.

i'm not saying all of them will go but those that are offered something better definitely will, and depending on how many that is, it might end up hurting the banks in the long run.

**Grimmlok** · February 9th, 2009, 08:34 AM

Gosh, how WILL they get by without trainers, nannies, and drivers?

*eyerolls*

I mean come on. Drive your kids to school or put them on a damn bus every morning. Work out yourself, you should have a handle on the basics by now. Oh, and find a fucking babysitter.