Cost of Owning

"Every stroller we ever owned has been 'recraigycled'.

That's just gross.

***

"If you make 50k/year, you shouldn't have stuff worth six-figures. "

And who the hell are YOU to decide what people "should" and "shouldn't" have??

Seriously, it's not that hard to accumulate stuff over the course of ten years making $50K.

I just did my annual closet-purging and gave away clothes to Goodwill that at retail would cost $4,000 to replace. And that's stuff I wouldn't even miss!

Go through your home -- every square inch. Every pair of socks (at $4.50/pair). Every last panty (at roughly $10.00/pair). Every pair of shoes (at roughly $200 per pair, if you're a working professional). Every last piece of silverware. Every dish. Every pot. Every pot HOLDER. Every dish towel. Every bath towel. Every wash cloth. Bedding. Blankets. Quilts. Pillows. Every book. Every pen. Your computer. Every piece of software. Every CD. Every last Christmas tree ornament.

And we haven't even started on furniture, drapes, rugs, and lamps.

It is not hard at all, even for a single person making $50K, to have to spend $100,000 to replace *everything* they own.

Tallisman and Matt are spot on. You simply won't believe how much it costs to replace everything in an apartment unless and until you have to do it or its part of what you do (I've been involved with numerious contents claims under insurance policies in connection with my work). Contents coverage is cheap so make sure that you have enough to cover replacement in the event of a complete loss. And a complete loss on contents is more likely than for your property (due to smoke, fire, water to extinguish a fire, etc.); that's why your contents coverage is so important.

gator - another thing re: insurance that people forget is to have insurance for REPLACEMENT cost (which is also adjusted up each year), otherwise the insurance is for depreciated cost (and sofas, etc. depreciate even faster than cars).

Just along one wall of my living room -- on an 11-foot long floor to ceiling wall unit, I have the following:

-- Approximately 300 books -- most of them hardback. Quite a few of them were review copies that I got for free over the years in my capacity as a reporter and producer. Many more were gifts. If I had to replace every single one of them today, at roughly $25.00 per book, it would be $7500.00

-- Approximately 200 vinyl LPs. Even if I were lucky enough to find replacements at retail, we're talking at least $10.00 per album. $2,000.00

-- Approximately 400 CDs. At a very conservative cost of $12.00 per CD, that's $4800.00

-- Antique mantle clock (Art Deco era). Appraised at $6500.00

-- 25 inch color television set. A comparable set today would be at least $500.00

-- Two vintage Advent loudspeakers. $500 for the pair.

-- Vintage Kenwood amplifier and tuner. If I'm lucky enough to find a pair on eBay, they'd probably price in the $650 range for both.

-- Vintage Garrard turntable -- the nearly impossible to find 40 MKII transcription model. Priceless, but a similar one would cost around $350.00

-- Yamaha multi-disk CD player. $350.00

-- Vintage Kenwood tape deck. $350.00

-- Panasonic DVD player. $150.00

-- Toshiba VCR. $100.00

-- Time Warner Cable Box and modem. $200 to replace.

-- 150 movies on VHS and DVD. About half of them were free review copies, but again, if I had to replace them, at the generous figure of only $15.00 each: $2250.00

-- IBM Selectric III typewriter, in perfect working condition: $1000.00

-- Art Deco lamp: $225.00

-- Various bric-a-brac: $200.00

-- Two big Yankee Candles: $32.00

-- The wall unit itself: $3500.00

Grand total: $31,157.00

And that's just ONE WALL of ONE ROOM. Even throwing out the wild card of the antique clock, it's still over $25,000!

Rounding out the rest of the room (with arguably expensive furnishings -- most of it Stickley) ... with sofa, lamps, chandelier, rugs, dining set, etc. would bring just the living room to over $60,000. And we haven't even gone into my fully-stocked kitchen yet, or touched a single thread of my wardrobe.

I can't speak for women (whose costs are probably much higher than men's), but the average professional man has at least five suits (conservatively $5000), twelve dress shirts ($900), twelve pairs of underwear ($120.00), about 30 pairs of socks ($140), eight undershirts ($184.00), 25 ties ($1250), two blazers ($1600) five pairs of slacks ($500), five pairs of shoes ($1000), another dozen or so "sport shirts" ($1020), leather jacket ($500), topcoat ($400), raincoat ($250), two light jackets ($250), five pairs of jeans ($650), six pairs of shorts ($360), about a dozen or so summer t-shirts or polo shirts ($900), and five sweatshirts ($400).

Grand total in the average man's closet: $15,424.00.

And we haven't even factored in his bedroom furniture, bedding, or linens.

eight undershirts ($184.00),

---------------

how on earth do you remember matt that you paid $23 per undershirt? i'm gonna have to call you Funes the Memorious from now on.

Tallisman (or others):

For those of us who are new to condo/coop insurance, would you mind reviewing the most common causes of loss under which a policy holder could collect on a claim. Sounds like most of these are catastrophic:

- Gas explosion (you mentioned)
- Flood?
- Fire?
- Theft of personal property?
- Any other important ones that are typically included or excluded?

Also, what is a competitive rate for insuring, say, a 1,000 square foot apartment?

Thanks in advance.

seg, most policies are written to cover all causes of loss that are not specfically excluded, i.e., the are "all risk" policies. The only one that you listed that would be excluded is flood (covered under a separate flood policy), but that needs to be differientiated from water damage which is covered, i.e., cause of loss is fire, but your contents are damaged by water used to extinguish the fire. I will have to leave rates to someone else, but rates depend on a number of factors including the location of the apartment and the building itself.

The most common loss we see is water damage. Either you damaged your unit but having a interior water leak or your upstairs neighbor damaged your unit from the same. This usually involves plaster/ sheet rock work,painting, spackeling, warped floor boards, sub flooring that needs replacement and then furniture and rugs that get damaged. Another big item is mysterious disappearance of jewelry, you weren't held up an gun point, or some one burglarized your unit, you just had a nice $6K Rolex and now it's gone. We certainly recommend a jewelry and fine art rider for every policy. Another claim we see often is damage when moving, you can buy the moving isurance, however, if you want the best settlement, it will probably come from your persoal insurance carrier. Fire happens, but it's actually more common to get smoke damage, a unit 5 floors below you could catch fire and all the smoke coming through the ventillation system could cause extensive damage to your unit and furniture/clothes.

Flood is not that common in Manhattan. Flood is basically a rising body of water like the Hudson, or an accumulation of surface water, i.e. 5 inches a rain in 3 hours. It usually isn't brought up in discussion unless I'm talking to someone with a brownstone, sometimes a mortgage lender is requiring someone on a high floor to get flood, which is a whole different story.

I only deal with high net worth insurance carriers, like Chubb, ACE, Fireman's Fund and Chartis (formerly AIG) They have a different contract and it's very different on how they settle a claim. You get what you pay for. A quote from one of these carriers for a 1,000 square foot unit would be about $1800 to $2,200, which would be about $300,000 to rebuild the interior and $150,000 for your contents. A major carrier that advertises on TV with a warm glowing jingle would be $600 to $900, just got to be careful they are giving you enough insurance, best price is only good until you have a claim.

Exactly matt, one day one credit card.... I can replicate all four of your walls for less than what I have in my checking Acct.

5prs of jeans for $650? R u kidding me, $200 jeans on a fat azz is still a fat azz.

Input - output. Very simple math here.

Short of accumulating things that inflate/appreciate like Matt or inheriting/acquiring valuable objects for free,, 50k household income over 10 years should not lead to 6figs worth of household goods. It doesn't surprise me that people accumulate that much, that is precisely what is wrong with the U.S. consumer.

50k - say 40k net (very generous). Spend 1k on rent (conservative). Spend 500/month on food, maybe another 500 on utilities, transportation. 16k left. Assuming no retirement savings or savings of any kind or kids or medical expenses or vacations.
If you spend 16k annually on a 50k gross income on objects for your house, clothing, etc. for a 160k total over 10 years, you are a huge FOOL. If you spend 2/3rds of that for goods, again, you are a FOOL.

gatornyc, Tallisman: Thanks, very helpful.

In your $6K Rolex example, would that loss be covered in the $150K of coverage for your contents? If so, why is there still a need for a special jewelry rider, or are you saying that's relevant for people with hundreds of thousands of $'s of jewelry. Do I understand this correctly?

Seg,

Insurance policies typically have sub-limits, items like coins, jewelry, gold, valuable papers, etc. Many "standard" policies may have a $2,500 sub limit for jewelry and then they apply your deductible, which could be $1,000. (Hence you get $1,500 in jewelry coverage) In addition, they may be very stringent on what they will cover, and they may not cover mysterious disappearance i.e (you lost the piece) When you schedule jewelry or fine arts with a rider, no deductible applies and they pay your from the first dollar. In addition, with a top notch carrier, they'll give you market value appreciation, you bought the diamond ring for $20,000, 5 years ago, and now it's worth $28,000. A really good insurance carrier will have market value appreciation and they give you up to 50% more than the value of the item at the time of the loss, if it's appreciated. Jewelry in Manhattan runs about $180 to $230 for every $10,000 in coverage.

> -- Approximately 400 CDs. At a very conservative cost of $12.00 per CD, that's $4800.00

Two words. Columbia House.

I averaged $3-4 per CD including CH or BMG, but also with all those old buy.com sales and stuff like that. I actually averaged $4-5 per DVD. And sold most of them for $10 (CDs probably closer to $5). Not sure why anybody still has any more than a couple.

Of course, its the same acumen I used to not be an owner in 2008.
;-)

> how on earth do you remember matt that you paid $23 per undershirt?

rotfl.

"I can replicate all four of your walls for less than what I have in my checking Acct."

Good for you.

So could I.

But that's not the point.

Most people CAN'T.

THAT is the point.

"Short of accumulating things that inflate/appreciate like Matt or inheriting/acquiring valuable objects for free,, 50k household income over 10 years should not lead to 6figs worth of household goods. It doesn't surprise me that people accumulate that much, that is precisely what is wrong with the U.S. consumer.

50k - say 40k net (very generous). Spend 1k on rent (conservative). Spend 500/month on food, maybe another 500 on utilities, transportation. 16k left. Assuming no retirement savings or savings of any kind or kids or medical expenses or vacations.
If you spend 16k annually on a 50k gross income on objects for your house, clothing, etc. for a 160k total over 10 years, you are a huge FOOL. If you spend 2/3rds of that for goods, again, you are a FOOL."

***

It's called LIVING, fool.

Refer back to my earlier post. Wardrobe alone for a working couple could easily top $30,000 -- and that's already one-third of the way to the six-figure mark that you assert people "shouldn't have".

50k - say 40k net (very generous). Spend 1k on rent (conservative).

-----

is that the case of a doorman living in jamaica queens? 1k on rent in manhattan? sure, on section 8 or rent controlled. i know that many households in nyc manage to have kids with incomes of 50k... i just wonder how there's any discretionary income left.

any discretionary income left.

------

the households i know earning about 50k with kids in manhattan include those of my friends from the playground (the Latin nannies). they are still making fun of me for buying 40+ sunscreen for my toddler. $10 down the toilet according to them. it seemed for them a total splurge, as if i had bought a 60 inch flat screen tv.

I agree with Matt on this even though we don't spend the same amount on underwear. Keep in mind that we're talking about "replacement cost", not the market value of the items lost. My old sofa might not worth much if I put it on craigslist, but it'll cost me quite a bit to get a new one. Many people also a lot items in the form of gifts, especially when they first get married for example.

sunday, how many households in manhattan do you know that live on $50k/year?

"they are still making fun of me for buying 40+ sunscreen for my toddler. $10 down the toilet according to them. it seemed for them a total splurge, as if i had bought a 60 inch flat screen tv."

Actually, slathering all those chemicals on your toddler's skin is more toxic than anything the sun could ever do to their skin.

admin, I disagree with Matt on the salary range for household income definition for middle class. $50K would be below middle class in my opinion.

Now, back to your question. Growing up I knew many household with $50k household income or less. Some even managed to buy a house in the boroughs. The ones that stayed usually live in rent control or government housing where they spend less than $1k a month, even as low as a couple of hundred. Their apartments were very well furnished. It would not surprise me a bit that it would take more than 100K to replace everything.

"$50K would be below middle class in my opinion."

Well, it's not a matter of opinion.

According to the U.S. Census Bureau and the U.S. Department of Labor, "middle class" in America (ALL of America, including New York City) is $30K-77,500K. Upper Middle Class is $77,500K-92K. Above $92K you're in the top 20% of all earners in the U.S., and therefore "upper class". The top 20% is not "middle", no matter how you "feel" on that income or what you feel you can afford -- that is TOP.

of course, just as it would be ludicrous to judge an American based on a world standard, it makes no sense to look at the national standard for New Yorkers.

Its plain wrong, because its a SOCIO-economic term....

$100k is actually average (not even median, which is lower) for Manhattan.

"$100k is actually average (not even median, which is lower) for Manhattan."

That only proves that Manhattan is an island of rich people.

rich and creamy

Alan, I'm SO not in the mood today.

Try me tomorrow.

> That only proves that Manhattan is an island of rich people

Only if you don't quite understand what "rich" means.

Yes I do.

"Rich" = upper class.

Upper class = HHI greater than $92K.

http://www.nydailynews.com/money/2009/02/05/2009-02-05_nyc_so_costly_you_need_to_earn_six_figur.html

Calculator for comparing cost of living:
http://cgi.money.cnn.com/tools/costofliving/costofliving.html

So only rich people can afford to live in Manhattan.

Kind of like how only rich people can live in Beverly Hills.

POINT please?

matt, i thought you said there were tons of people living in manhattan with two, three kids in a one or two bedroom? you've lost this argument more times than i can recall, but good on you for the perserverance.

Matt, perhaps you still don't understand the concept of cost of living adjustment.

Read this statement again:

"A New Yorker would have to make $123,322 a year to have the same standard of living as someone making $50,000 in Houston."

sunday, silly, matt doesn't CARE about colas. only national HHI quintiles. he's been given links numerous times that show that the US gov't doesn't have a definition for middle class (although it does for poverty) and that the vast majority of economists and sociologists do not define middle class by income alone. i actually have yet to find one that does. but that's not good enough for our matt.

Irrelevant what YOU find in your living room, Matt. Still haven't proven that my hypothetical #s are wrong. Short of inheriting expensive chattels or collecting antiques, first editions, etc. - someone making 50k in the NY metropolitan area would be a FOOL for buying 6-figs of stuff over 10 years assuming they paid "normal" rent and didn't eat at the soup kitchen.

nyc10023, please stop stalking Matt. He's SO not in the mood today. Try him tomorrow.

well, i must say, ah, i do kind of commiserate with the wish to be in the mood for being stalked. some days it's simply enchanting. others, not so much. although as in other areas of experience, i believe matt lacks some perspective.

"A New Yorker would have to make $123,322 a year to have the same standard of living as someone making $50,000 in Houston."

Sweet! Now, what part of Houston do I need to live in to be able to walk to a show with world-class actors? How about if I want to go to a museum w/ some big-name art? How about if I want to get drunk at any of a dozen neighborhood bars and stumble home? How about if I don't want to live with a 30-minute commute to work? Quote from friend who lives in Houston: "I wish we had something like Central Park".

As much as it pains me to say, I'm w/ Matt on this one. If you don't think your quality-of-life is improved by living in NYC, justifying the higher cost, then why would you stay?

inonada: "If you don't think your quality-of-life is improved by living in NYC, justifying the higher cost, then why would you stay?"

Many people do decide to move out of NYC and not everyone want to live in NYC. For most people who don't live withing walking distance to Central Park, how often do you think they visit the park? How many "shows with world-class actors" do you think an average New Yorker go see a year? How many of these people can 'walk' to the show? I love NYC, but some people might prefer a house in a lower cost location over everything that you mentioned.

I'm guessing that "same standard of living" refers to what you can afford in terms of food, housing, utilities, transportation and health care in the cities with corresponding income.

No doubt that many people prefer other things or aren't willing to pay the NYC premium, but it's worth it to 2 million people for a reason. If you leave out all the benefits of one place from your living standard metric, well sure you're going to end up with a metric that says that place is expensive.

Speaking of food, suppose my metric were the cost of 5 pork & chive dumplings. In Chinatown, it costs $5. I was asking my friend who moved to Beijing a few years ago, "so you got these 5-for-a-dollar dumpling places in China, right?" He looks at me as if I were an alien: "What the hell are you talking about?" Cheapest he'd ever seen were $3-4. Sure, you can pay $6 in NYC, but you can also pay $1.

A very surprising fact about food is how it costs pretty much the same everywhere: bread in the third world (unsubsidies) costs the same as bread here. The existence of the $500-a-person sushi dinner in NYC does not preclude the plethora of ultra-cheap options. The difference is that living in Manhattan making $122K, you're too rich to give a crap between the cost of a $1 slice of pizza and a $4 slice, between the $0.50 swill coffee they sell at the bodega vs. the $2 less-swill coffee they serve at Starbucks, etc.

the gov't has a "middle class task force." who knew? and guess what, matt, the gov't disagrees with you.

http://latimesblogs.latimes.com/money_co/2010/01/middle-class-a-difficult-american-dream-says-commerce-dept-study.html

"The report noted that middle-class families are defined only in part by their incomes. Instead, money is a single element in a mix that includes values, expectations and aspirations.

Most families in the category seek economic stability, including a home, a car for each adult, medical care, college savings funds for their children and retirement and the occasional family vacation."

Ok inonada and Matt, let me give it one LAST try...

- you are currently making $50K in Houston
- your boss offer you the same job in Manhattan with a 10% raise (new salary $55K)
- company will pay all relocation cost (find you an apartment and pay all fees), you just pay the rent
- you have to pay back the relocation cost and fees if you quit within a year
- you intend to stick with the same career / company (i.e. no crazy dream of becoming a model)

If you take that offer, your standard of living will change significantly and not in a good way.

If you still don't get it, try reading this:
http://en.wikipedia.org/wiki/Cost_of_living

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well, i must say, ah, i do kind of commiserate with the wish to be in the mood for being stalked. some days it's simply enchanting. others, not so much. although as in other areas of experience, i believe matt lacks some perspective.

No one has ever stalked you. If someone actually stalked you, I'm sure you'd be bragging about it as you brag about your toilet, your entitlements, your daughter's sexual history, your mother's medical history, your failure to be a productive member of society, the free education you received, your disdain for New York State and Supreme Court justices based on your Bachelors degree in Psychology ...

I don't stalk you. I merely comment. On you. As you like to do to others.

right. yes. really.

actually, you made my evening.

funny, beyond belief.

"- you are currently making $50K in Houston
- your boss offer you the same job in Manhattan with a 10% raise (new salary $55K)
- company will pay all relocation cost (find you an apartment and pay all fees), you just pay the rent
- you have to pay back the relocation cost and fees if you quit within a year
- you intend to stick with the same career / company (i.e. no crazy dream of becoming a model)

If you take that offer, your standard of living will change significantly and not in a good way."

***

So you don't take the offer.

It's all about choices.

The $50K/year Houston guy could also stretch his finances and purchase a $200K Bentley, forcing him to live in a studio apartment and "feel" like he's barely living a Middle Class "lifestyle".