How Much Do You Need To Earn To Feel Rich??

Some very interesting and thoughtful ideas on being rich. I do not live in Manhattan but I do have a few rental properties there. $500,000, $750,000 is rich no matter what anyone says. Of course if you throw your money away or buy ridiculous priced items you could be "poor". I could buy a very nice boat at $150,000 or buy one at $150 million.

Read a true story years ago where a family made $45,000 a year, not in NYC, and lived comfortably. They had two cars, a mortgage, went out to eat a few times a month and took a nice vacation each year. The husband change jobs and was making $75,000 year. The family moved to a bigger house, bought more expensive cars, had to buy better more expensive clothes and entertained for the job. The family was miserable because they had no money for the extras and in fact were having trouble paying their bills. It all depends on the life you live and how you spend and save what you earn.

"in Netherlands parents consider that kids deserve their own room and privacy. so it's not a "luxury" necessarily as its population is not made up by "catching up with the jones" types at all, just reasonable people."

The average new home size in the Netherlands is 1240 square feet, so it looks like even by that standard 1700 feet is looking quite large.

Also, the Dutch are, on average, the tallest people on Earth.

"in Netherlands parents consider that kids deserve their own room and privacy."

They also don't consider oral hygiene a priority and don't use deodorant.

Still want to be like them?

Neither you nor Jason are tall enough for the Dutch.

notadmin,
"Kid's bedroom, if not shared, does not need to be any bigger than 8*9 (single bed and a desk is all you need).
even maid's rooms were designed to be bigger than this in older floor plans (less than 100 years ago)."

Maid is an adult and was not expected to use other parts of the house such as living room or dining room, while the kid is supposed to be spending most time in the living room unless studying or sleeping. That said, can you post a couple of floor plans with large maid rooms.

Also, have you ever lived in prime Amsterdam or are you extrapolating the space available in the villages to NYC (assuming you are Dutch not just fantasizing about like in Holland).

"people don't get "wealthy" by saving.

They get wealthy by investing and OWNING BUSINESSES.

That is really the only ticket to *wealth* -- which most of us equate with financial independence."

Another way is not having children based on the conversation above. LOL

w67, "Live on base, retire on bonus was what I was taught as a young banker. I guess when your bitchy wife/boyfriend isn't on the same page, and ya gotta live in cpw c8 one yr outta MBA program trying to emulate your senior banker=> ya getz the biggest fking real estate bubble in history. We ARE ALL rich!!!!!, if every one of us takes out a mortgage we can never pay back on our base salary. Flmaozzz"

That is certainly a good advice and a lot more doable than in the past as the base salaries have gone up significantly. MDs are now $450K+, Senior VPs are $300-$350K per year. Even if your wife does not work, you can pay your mortgage for a decent $2-2.3mm 1700+ sq ft 3b/r assuming you put a nice amount down (30-40%) from your previous year bonuses. Also, if your wife does not work, presumably you childcare expenses are limited to weekend dates, weekday workout etc.

I believe the question is, "How much do you need to borrow - without the thought of ever paying back the loan - to be rich? How much can you spend on a luxury car lease using cash from a home equity line of credit that you never intend to retire? How many college loans can you fail to repay? Wealth in America, peri-bubble, is based on how much you can borrow.

Just because this is an re web site..
1621: Manhattan was purchased by the Dutch for $24.
1654: Duke of York takes Dutch lands without a fight. (cost: gunships, transatlantic voyage, transactional costs)
1654: separates land, now known as New Jersey, from New York in an effort to increase the value of New York.
New Jersey becomes the first instituted penal colony.
2009: Snooki saves the value and international reputation of N.J.
Totally worth the wait.

Oh yeah....the point!

Dutch, tall tolerant paternal pussies.

"They also don't consider oral hygiene a priority and don't use deodorant."

Its amazing but there is thing called the Internet. Matt is too stupid to tell the Dutch and French apart.

"Soap Per capita consumption: U. S. 25 Ib.; The Netherlands 24 Ib.; United Kingdom 20 Ib.; Japan 7 Ib.; Brazil 6.8 Ib.; world average 6.6 Ib...."

Read more: http://www.time.com/time/magazine/article/0,9171,771018,00.html#ixzz1h6Mq7L6b

The dutch smoke less, are far less obese, apparently use the second most soap in the world per person after the US, and I bet if I spend five seconds looking I would find that they have far fewer cavities per person, and thus they also don't have poor oral hygiene. Matt as usual makes shit up out of his ass.

What do you know, the Netherlands DOES have less tooth decay per person than the US. Again, Matt is full of shit.

http://www.fluoridealert.org/health/teeth/caries/who-dmft.aspx

No, I think the issue is that cooperative apartments do not exist in the Netherlands. Coop board officers and members are even less significant there than they are here.

"bobf, car in the city is more of a stupidity rather than luxury"

One man's stupidity is another man's necessity.

Having a car made absolutely no sense when I was single. Once you have the first kid, the alternatives of Zipcar and rentals starts to look much less attractive. I think carrying around the baby seat was what tipped it over the edge. Once that second kid comes along, forget about it. You literally don't have enough arms to carry everything you need every time. Plus with a family you feel compelled to take day and weekend trips and it is cheaper with a car.

If you have the need to drive the car 12-13 times per month, the cost is roughly equivalent and you also get a nicer car. My family is driving it around 15-16 times per month so I am coming out ahead so far.

maklo, you mean driving you kids to various activities within the city or outside of the city. 10 trips outside the city every month would seem that you do not need to live in the city.

"bobf, car in the city is more of a stupidity rather than luxury (which I admit to in my younger years)"

You got it backwards IMO, mercer. When you are earning little, it is stupid financially to have a car for the reasons you mention. When you earn a lot, it can get stupid financially to not have a car even with infrequent usage. Compared to plopping into your car at the garage in your building, the cost of the 30-60 incremental minutes going to the rental location, getting the car, filling it up with gas, dropping it off, walking back, etc. can be quite high.

Our rule - the cheapskate (me) in the family gets to pick up, drop off the car, find parking, fill up with gas.

No carrying around carseats.

We go all over. Not just for kids, but for us to spend time with the kids and take them to different places. Say 6-7 day trips within the metro area to get groceries, explore, hang out etc. Once or twice a month we will go out farther e.g. visit parents, relatives in NJ/CT etc. That is during the winter. During the summer we are driving every weekend as you add golf, summer outings, the beach etc. And during the weekday evenings (after 8pm) it is very convenient to run errands.

I think I _do_ need to live in the city thank you very much. This is my main place of work and my friends are here.

The cost of having a car is about $1,200 per month, about 40% parking, 45-50% the car (mainly depreciation), insurance and other fixed costs with the remaining 10-15% for fuel.

If I were to not drive enough to justify having a car, you'd still have costs associated with the alternatives e.g. Zipcar or car rentals. So say I am spending $500 more per month on an automobile as a result of having one in the city. At $5/mo for rent, that is equivalent to having an extra 100 sf. To me the marginal benefit of having a car in the city is higher than the marginal benefit of an incremental 100 sf.

maklo, when you put this in additional sq footage cost per month, it makes a lot of sense. I did not think about it this way.

"Compared to plopping into your car at the garage in your building, the cost of the 30-60 incremental minutes going to the rental location, getting the car, filling it up with gas, dropping it off, walking back, etc. can be quite high."

You still have to do most of those things even if you own a car. Not all buildings have garages. And don't forget about all the other time consuming things that come with owning a car, such as:

1. State inspections
2. Oil changes
3. Repairs
4. Registeration
5. Regular maintenace

Oh, and I forgot to add waiting for AAA when you have a flat tire or dead battery. That is so much fun. Sometimes it could take 2 hours.

"If I were to not drive enough to justify having a car, you'd still have costs associated with the alternatives e.g. Zipcar or car rentals. So say I am spending $500 more per month on an automobile as a result of having one in the city."

You can't seriously think that this is really a necessity rather than a luxury, can you? Many, many people manage to get by without a car and without a significant investment into alternatives. We have an amazing public transportation network that's sufficient for the vast majority of purposes, especially in prime Manhattan. Sure, it might be more convenient to have a car. Paying extra for something that is nice to have but that you don't strictly need is basically the definition of a luxury.

Well, I have to support Maklo on this one as he is willing to trade a smaller apartment for his need to have a car rather than whining how he does not feel rich because he has to have a 2000+ sq ft apt and a car - any less is not rich. But I am sure he thinks that it is a sheer luxury to be able to go out of the city so often. Many rich people do not have this need even if they have children.

I am not arguing that it is not a luxury. I am arguing that it's not necessarily "stupidity".

"Its amazing but there is thing called the Internet. Matt is too stupid to tell the Dutch and French apart.

"Soap Per capita consumption: U. S. 25 Ib.; The Netherlands 24 Ib.; United Kingdom 20 Ib.; Japan 7 Ib.; Brazil 6.8 Ib.; world average 6.6 Ib...."

Read more: http://www.time.com/time/magazine/article/0,9171,771018,00.html#ixzz1h6Mq7L6b"

****

WOW.

An article from 1937.

Do you happen to have any figures that are less than 70 years old, please?

'I am not arguing that it is not a luxury. I am arguing that it's not necessarily "stupidity".'

I think that's fair. Especially if you can afford to garage your car in/near your building, it's probably reasonably convenient to have one.

I lean towards "stupidity" for people that deal with street parking shenanigans to avoid renting a car from time to time.

Once you have more than what you need for basic food and shelter, it's always a matter of debate as to what is necessity and what is luxury.

Paying more for owning your housing may be a justifiable luxury but the point many are making is that RE is a highly illiquid asset that is hard to get out of, unlike paying extra for owning a car in the city.

And not everyone is "paying more" to own rather than rent.

maklo, Fresh Direct will serve you well to save you time and frustration of hauling the kids to the grocery store. In this case, it doesn't make sense to be frugal when you tack on the car expense to your grocery bill.

I am very familiar with Freshdirect and a big user in the past. As the family and household size has grown, it has become less appealing. For example, while paying the premium was reasonable to swallow when you were single, the time/work involved in making the regular grocery trip is more appealing when you are "amortizing" it over buying for 4 to 5 and making it part of your regular routine. Probably doesn't sound like a very exciting way to spend Saturday if you are single, but everybody has a different situation.

Having a car is not just about doing one thing (e.g. grocery shopping) so you can't just tack that hefty cost on your grocery bill and compare it to Freshdirect. It's never going to make sense, just like it's never going to make sense if the sole purpose of having a car would be to visit your parents once a month.

Having a car only makes sense if you use it to enable you to do a great many different things - taking trips, running errands, buying bulky stuff, visiting relatives, playing golf, going skiing and you have to take all of that into account.

WTF -- are we still discussing a car for this hypothetical $750K earner? That's $450K after-tax, who cares about the minutia of a $1K expense? You guys need to learn how to live. Now if I had to make it on a "lower-middle class" Manhattan existence at $750K and wanted to live a little, here's what I'd do:

$125K: rent the 4000 sq ft loft at 130 W 3rd St in the Village
$25K: going out
$12K: groceries
$12K: a stinkin' CAR
$25K: clothes, cell phone bills, and all the other minutia that people love to talk about ad nauseum
$25K: vacations
$225K: save/invest/donate/whatever

Tough life, I tell you. Maybe I should get a 4400 sq ft loft and give up the car? Or maybe I should splurge and do both, but then my annual savings drops all the way down to $213K? Hmmmm....

That makes sense.

nada, people are talking about 2 kids and additional $100k cost. Without kids, almost every one in this discussion agreed that you will feel rich.

"nada, people are talking about 2 kids and additional $100k cost. Without kids, almost every one in this discussion agreed that you will feel rich."

Crazy people. Lots of people have 2 kids and don't even make $100k total in this city.

The world's smallest violin is playing for Jason.

this is an interesting discussion because people can speak anonymously. the discussion is impossible in a friendly setting because people would immediately go personal/political.
It leaves a crucial matter off: total income vs realized income. earned income vs passive income vs capital gain income vs retained interest income vs cash out at closing vs loaned (landlord)income. if that is not clarified the discussion is useless: we're talking 50% tax vs 0% (yes 0%).
NYC statistics include the poor boroughs (bk, queens,si,bronx). Manhattan statistics would be wayyyyy higher. below110th would be waaayyyyyy higher than 750k for the top 1%. In anycase the top that matters is the 0.1%. the top 1% includes professionals of a high income (law, medicine, employed finance people).the top 0.1% includes NONE.
disposable for a hedge fund manager is 85% of income. for a big landlord it's higher.for a large business owner all her expense can be passed thru the business (including housing car internet phone some travel accounting etc etc, all pre tax).
anyway 750K is nowhere near rich. confortable sure if the job is secure (an employed job never is).
wealth is health anyway.

nada - as a rich Manhattanite, you would choose to live above the Fat Black Pussycat and across from Blue Note?

>nada - as a rich Manhattanite, you would choose to live above the Fat Black Pussycat and across from Blue Note?

Yes, if you spent most of your 20s studying nonstop and then working your ass off day and night for a law firm, investment bank, consulting firm, hedge fund, etc., then in your late 20s / early 30s you try to recapture your early 20s by renting the 4000 sq ft loft at 130 W 3rd St in the Village.

Wealth is health.

Damn, that's why Steve jobs is so healthy.

Big tits leads to big brain.

lotz of squatz leadz to shrewd real estate investing

"NYC statistics include the poor boroughs (bk, queens,si,bronx). Manhattan statistics would be wayyyyy higher."

Manhattan is definitely the richest borough, but the disparity is not huge. There's a lot of poor people in Manhattan, too.

"below110th would be waaayyyyyy higher than 750k for the top 1%."

Actually, some of the poorest bits of Manhattan are below 110th Street. As this map shows, there's a large concentration of poor people in the Lower East Side/Chinatown:

http://envisioningdevelopment.net/map

I can't find any aggregate data. You're right that focusing on lower Manhattan would raise the numbers more, but I don't think as wildly as you might think. FWIW, it looks the income cutoff for the top 1% in NYC is $493K. It's possible lower Manhattan pushes above the $750K mark, but it's probably not above $1M. And that's the top 1% in the rich part of the richest county (with incredible internal income disparity) in the richest city in the world. Why do we even care what the top 1% of this population looks like? Many of the people in lower Manhattan are rich, not just 1% of them.

"In anycase the top that matters is the 0.1%. the top 1% includes professionals of a high income (law, medicine, employed finance people).the top 0.1% includes NONE. "

Huh? So you're saying only 1 in 1000 people is rich? That's an odd definition. And, as I pointed out previously, seems to completely lack perspective given the numbers from the article at the start of this thread.

"nada - as a rich Manhattanite, you would choose to live above the Fat Black Pussycat and across from Blue Note?"

Sure. Done it before (similar location), would do it again. If it's any consolation, I now live in a very "proper" place.

BTW, who exactly do you think has been renting this place the last several years? Some non-rich person?

jordin. thank u for the map. awesome. very interesting.
However I wouldn't count chinatown as accurate. because my significant other is chinese from china I have come to know how they do business. and if u think they will report income....well they do have a bridge to sell.
but the point was that 750k income doesn't mean anything. nothing really. especially in chinatown.what matters is what you keep not what you make.and yes I might have lost perspective here. it is becoming apparent. not a good sign.
and yes health is wealth, wealth is health. Steve jobs is the poorest of us all.
carpe diem.

>and yes I might have lost perspective here. it is becoming apparent. not a good sign.

... like maybe how you decided that all Chinese people are dishonest:

>my significant other is chinese from china I have come to know how they do business. and if u think they will report income....well they do have a bridge to sell.

Thanksgiving must be fun in your family with the in-laws.

>2009: Snooki saves the value and international reputation of N.J.

http://www.nydailynews.com/entertainment/gossip/watch-snooki-finally-meets-n-gov-chris-christie-article-1.1354227

I ran into this definition recently and I thought it might be of interest to the community.

http://www.wallstreetoasis.com/blog/who-is-rich

"It wasn't until recently that I found the answer to my question, and it came from someone eminently more qualified to answer it than I. I can't remember how I came to buy his book (because I normally wouldn't buy a book with a title as simplistic as How To Get Rich), but Maxim Magazine founder Felix Dennis answered the question of who is rich for me once and for all. According to Dennis (who says he's worth anywhere from $400 million to $900 million and that any legitimately rich person who can narrow their actual worth down more than that is lying), here is how it breaks down by overall net worth:

$2-4 million: The comfortable poor
$4-10 million: The comfortably off
$10-30 million: The comfortably wealthy
$30-80 million: The lesser rich
$80-150 million: The comfortably rich
$150-200 million: The rich
$200-400 million: The seriously rich
$400-800 million: The truly rich
$800 million - $1.998 billion: The filthy rich
$1.998 billion and Above: The super rich
So by his definition, one isn't "rich" until one is worth a minimum of $30 million. He also published a chart I would call "liquid" net worth (cash on hand or readily available), and the bare minimum liquid to be considered "rich" by Dennis was $2 million."

So hws90001, wealth

So hws90001, wealth < rich ?