Allen Salkin's ridiculous challenge to the common folk: Live in NYC with 500k/yr

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NOT HOUSTON. NOT EVEN HOBOKEN From left, golden touchstones in New York City’s good life: 740 Park Avenue; for summer, pond-side homes in the Hamptons; and the Dalton School.By ALLEN SALKIN
Published: February 6, 2009PRIVATE school: $32,000 a year per student.
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In Curbing Pay, Obama Seeks to Alter Corporate Culture (February 5, 2009)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.

For those outside of the United States, this article pertains to the matter in which President Obama set a paycap of $500k per year for all executives and CEOs of companies receiving the bailout money from taxpayers.Going back to the article, Mr. Salkin gives a brief overview of the extravagant lifestyle of a typical banker who makes around $1 million per year in which, GET THIS, ends up pocketing ABSOLUTELY NOTHING by the end of the year mainly due to stupid expenses incurred in his/her own financial budget. I mean, $45k per year on a nanny? $12k per year on vacations? And $16k per year on a trainer? This is absolute nonsense!The paycap limit basically has all banking executives and CEOs crying crocodile tears over this matter as the paycap will surely destroy their lifestyle (as it will put them in $500k debt by the end of the year due to ~$1 million/yr in expenses.)Mr. Salkin now challenges the common people to try living the "hard" lifestyle in New York City with just $500k per year salary (assuming that doesn't include taxes yet.)Well Mr. Salkin, I make ~$50k/year (before taxes) at my job, and I have been able to live comfortably with that along with building my nest egg. I'll gladly accept your challenge if I may amend one change to your so-called rules.My amendment to your challenge is basically common-sense for anyone if they want to keep their financial status in the blue, which is, I am free to cut any expenses that I see fit. I'll be glad to show those idiotic banking executives of how a typical conservative common person can actually live AND build a handsome nest egg with just $500k per year.To those executives and CEOs, I don't care about your stupid plight; your companies have been partly responsible for the economic mess we are currently in. For that, I have absolutely no sympathy for you.

I could live anywhere on $500k a year.

i find that the article is somewhat discriminatory. the reference of from going to the east side and possibly ending up in brooklyn suggests that the people in brooklyn are poor.i can't believe this shit got published. and it's by the ny times too! wtf!what ever happened to the wife/mother of the child that a nanny was needed?they buy all that food and go to restaurants, so who exactly cooks and eat the food?tutoring for the sat?i believe the article is saying that there is a certain prestige look that the wealthy must conceive. it is a similar concept during the renaissance with the courtiers and courtesans, which had to follow a certain class acts. so a poor person must act like a poor person and a middle class person must act middle class. the king and queen of england does the same thing, where they must uphold a certain image of the royal family, even though they screw-up at times. i find it weird that this type of thinking still exists after so many years. and wtf to the ny times for publishing this article. my god.

$12,000 per year on vacations is actually what I'd expect to spend, more than half of that would quickly disappear on a skiing vacation.I understand why people in the US are so against people who make money at the moment, but I hope it won't become the rule that it's forbidden to make a lot of money, it's like that in Denmark, and has been so for years. If you make money here you're basically expected to give it all back to the government "because you can afford it, of course". Negates the whole damn point of making money, and if there's no point in making money then no one is going to want to make money, which means work rate will lower and the economy will stall.Hard work should be rewarded, if you fuck up then you get fired, but it shouldn't affect the next guy who comes in, if he does a good job keeping a bank running with a profit then I don't mind that bank paying him a lot of money.

Replying to #4

i also though 12,000 for a vacation is about right. we spent about 5,000 sending my parents back home on a round trip for a month. they didn't stayed at a hotel but rather visited and stayed with relatives, so that it was cheaper. but knowing that it cost about 5,000 dollars for two tickets round trip is more then enough to say that 12,000 is fair if it accommodates world travel and hotel accommodations.the idea of hard work is justifiable and ideal but we live in an imperfect world and therefore ideally it sucks. if you think about hard work, it does not necessarily means that the person who works the hardest gets rewarded. it can go that the person who is most favored, most kiss ass, most .... gets rewarded. for instance, my sister works at a place where the head of the department is clueless on things when she questions him about the work. additionally, she get's dumped with other peoples work. not only is she working hard on her own work and other peoples work, she isn't promoted. so ideally the idea of better performance means more reward is good, but it fails. just like communism, the idea is great but fails because of corruption and it also goes for democracy as well.

Seph · #4$12,000 per year on vacations is actually what I'd expect to spend, more than half of that would quickly disappear on a skiing vacation.

Spending money on vacations is fine, but when your income flow shrinks or gets cut off, especially during bad economy conditions, vacations should have the least priority when it comes to tallying up your book of expenses. To put this current situation in perspective, forget spending money on vacations, period. Just spend time with your loved ones at home.

Seph · #4I understand why people in the US are so against people who make money at the moment, but I hope it won't become the rule that it's forbidden to make a lot of money, it's like that in Denmark, and has been so for years. If you make money here you're basically expected to give it all back to the government "because you can afford it, of course". Negates the whole damn point of making money, and if there's no point in making money then no one is going to want to make money, which means work rate will lower and the economy will stall.Hard work should be rewarded, if you fuck up then you get fired, but it shouldn't affect the next guy who comes in, if he does a good job keeping a bank running with a profit then I don't mind that bank paying him a lot of money.

Actually, the American people are not angry about other people making lots of money at all. The American people are angry about companies and industries that receive the bailout money (which comes from taxpayers) going into the pockets of CEOs and executives via bonuses which was not the intended purpose of those funds in the first place.

Holy fuck. At my current living conditions, which is fairly comfortable for Indonesia, 500k would last me 5 years. I'm all for hard work being rewarded, but this is plain bitching and complaining from the "financial executives".
Fix the economy, then bitch.

HOLY CRAP.500k/year is fucking luxurious, all he's complaining about that he doesn't get his Nanny and that the women can't afford 10,000$ dresses and unneeded and disgusting luxuries that only belong the rich and the famous. It even seems like these exec and CEO don't do much good anyways because all we hear from them are that they take and steal money (as Hypr pointed out the bailout money goes into their pockets). I'm happy that Obama did this, hell I applaud him and I wish Canada's PM would take a lot of hints from him because Stephen Harper is a damn tool who seems to suck off Bush.I live in this small town which for unknown reasons costs just as much as any Canadian city (weird) and Patty and I have the luxuries of any other family. I consider ourselves pretty wealthy considering we have a huge house (five bedrooms, 5 bathrooms I don't know how many square footage) , 4 kids, a car, large televisions in the house, a fairly good computer and tons of video games, and a nice healthy sum of money to help us out in a financial situation, and we give a certain percentage to charity. Along with the necessities of food and air we have tons of money to spare for the luxuries we already have. Not to bloat or anything, and we don't even get close to the amount of 500k/year, our income is a bit higher than Hypr's (I wouldn't know much, being the woman of the house I don't control the money, I'm too lazy).It's good that this is happening so then these huge CEO's and execs buckle down and faces the 'harsh' reality of 500k/year and then realize that it's the easiest thing in the world with still 500k/year as opposed to any higher than 500k/year. Icky.Although I'm biased, I usually hate most CEO's since most of them are money grubbers who don't deserve it and I hate most politicians.

considering I live in the most expensive country in europe, living here costs a lot more than in the US (notwithstanding our nationalised health system), and I just about manage to live off about $10k a year, he can shut the fuck up.