[Marxism] You Try to Live on 500K in This Town

[Anthony Boynton <anthony.boynton@xxxxxxxxx>]

You Try to Live on 500K in This Town

The New York Times,

By ALLEN SALKIN

Published: February 6, 2009



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.
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