Kids these days…

>>While renting a 1BR for $3500 and investing $1m would have been more my speed, I think buying such a right-sized place for (say) $850k would have been a worse decision for them. Not only would they have been less levered towards their foreseen untold wealth, but they would’ve taken a hit with transaction costs of a place they’d soon outgrow.

I am comparing it to a decision to buy a 1.1M / under $3k monthlies coop unit of the same size. Also, I am just not sure how to think about spending so much gifted funds, having never been in such a situation myself.

From consumption point of view this is a few years out of college couple that is consuming a 1.7M/ 5k monthlies 2 br luxury unit in Manhattan. Seems a little rich. Couldn't they get a few more roommates and live in a less posh place?

I recall a thread where we considered the “spend” of a purchase:

https://streeteasy.com/talk/discussion/45998-spend-of-purchase-price

While there were various viewpoints, many of them led to something like 3% of purchase price, plus monthlies. Adjusted for the rate environment, it was perhaps 30yr fixed mortgage rate rather than 3%.

You said “a few years ago”, so I’m not sure what year it was exactly and therefore the rates. But let’s call it 3.5% for the sake of argument. The $1.7m has a spend of $5k from the price, plus $5k from the monthlies. So a spend of $10k.

Is that rich for income at $350k, or a 35x multiplier? Yes, that’s spending every last penny and perhaps a few more. But I think the $1m of net worth contributed from mom & pops makes it better. Maybe we can think of it as another $50k of pre-tax income, putting them at the “saving nothing” level of 40x. But the real source of “not crazy”, IMO, is that they’ll average $600k of income over the lifespan of their purchase (~10 years), which with the extra $50k, would put their spend at 65x. This is not the type of multiplier that will leave you wealthy in the end, but it’s enough to retire and maintain one’s lifestyle.

Having said that, the $1.1m RE you suggested would (by the same math) have a “spend” of $6k/mo. That would be 66x current income of $400k (including value of $1m) and 108x average income of $650k. More prudent, IMO. You’re more likely to end up with a degree of wealth and comfortably expand your lifestyle should the occasion arise.

My speed (rent $3500) has you at 114x upfront and 185x on average. That sort of pace will leave you rich in the end.

Which pace is right? I dunno, depends on what matters to you. If I were a 24yo banker spending 10 non-sleeping hours a week at home with $1m of “found money”, I wouldn’t sweat having a fancy home at the cost of the opportunity to turn that $1m into $10m or even $100m in the upcoming decades. But that couple has other priorities.

>> Couldn't they get a few more roommates and live in a less posh place?

Therein lies the rub. Although I outlined why the purchase could be viewed as “not crazy”, there is always lifestyle creep. If you find yourself as a 24yo spending 40x on RE (effectively) when your income is (effectively) $400k, I doubt you will stop there on your RE spending as your income grows to $800k with a comfortable 80x multiplier. I am guessing another “prudent opportunity to build wealth” will show up in the form of a fancier apartment or second home, and you’ll be right back at 40x.

But such is the nature of people, and it’s what keeps the economy going.

>> I am comparing it to a decision to buy a 1.1M / under $3k monthlies coop unit of the same size. Also, I am just not sure how to think about spending so much gifted funds, having never been in such a situation myself.

No one ever threw me a $1M gift either, but you gotta imagine the mindset of:

- Parents who are able to gift it.
- Parents who think it’s a good idea to gift it.
- Kids who are willing to acccept it.

While a $1.1m coop with $3k monthlies is very reasonable to you, perhaps it is not up to status for them. Wealthy parents have different philosophies about their money and kids, so you’re only seeing one part of that dynamic.

I have heard of all of:

- I will spend my money freely, and the kids will get the money, and I want them to live priveleged lives

- I will hide my money from my kids so they can have a normal life

- I will slowly show them the money, all the while teaching them that it will fall on them over time to ensure the money is handled properly (sending money to family in the old country, taking care of the community, etc.)

> My speed (rent $3500) has you at 114x upfront and 185x on average. That sort of pace will leave you rich in the end.

This is the frugality at the extreme, 185X is like spending about 6.5% of your income on the rent. Housing cost for you is a not even a major expense, about the same as the social security tax, less than the city+state tax, and much less than Fed tax.

For myself, my housing cost (mortgage+ coop maintenance) is about 65X when I purchased my first home, then about 130X at the time I sold it, and the housing cost went back to 65X when I upgraded home. If I put all of the profit of the first home into the 2nd home, it would be 85X, but it's better to invest the profit somewhere else.

This also proved your point that I was using the same 65X to feel comfortable when I was upgrading my home.

When we bought our first place we were at like 60x income:monthlies ratio.

When we bought our second place our combined monthlies dipped to a 50x income:monthlies ratio, knowing we were accelerating the purchase by a couple years due to covid.

Now it is back to a healthy 90x. This feels a lot more comfortable so we can run up our retirement savings and not have to work forever.

The incremental increase in monthlies for me to move within the city to something bigger/more attractive/more desirable location just does not feel worth the brain damage. I don't want to go back to life in my 20s sweating every comp cycle, etc.

@nada not sure if you've ever heard of 'financial samurai', but you might find his journey interesting. He recently succumbed to lifestyle creep... But the overall story is pretty interesting, from saving every other paycheck that from his ibanker job while living with roommates at 45 Wall Street, to getting married and having two children. Essentially, he's one of the creators of the so-called fire movement.

https://www.businessinsider.com/buyers-remorse-bigger-house-family-necessary-2024-2

Woodside & Steve, thanks for sharing. I do think the “~60x at start” rule of thumb is prudent. If your income grows as you expect in all likelihood, great. Upgrade if/when the time & desire arrives. If not, you’ll still be fine and on a sustainable path to long-term wealth.

>> This is the frugality at the extreme, 185X is like spending about 6.5% of your income on the rent. Housing cost for you is a not even a major expense, about the same as the social security tax, less than the city+state tax, and much less than Fed tax.

For me, this is not really about extreme frugality. It’s more about not wasting. If I’m earning $400k as a family of 4 in my 40’s, I probably have a pretty strong use case for spending $7k/mo on housing rather than $3.5K/mo. But as an investment banker in my 20’s working 12 hours a day and weekends, what’s the point? Maybe somewhere around age 30 and $1m in HH income I start thinking “Well, this is getting silly… maybe I should find a $7k place because, well, why not?” Spending $7k at age 24 with $400k/yr is not even on my radar — to say nothing of $10k — just because I can. “I was living in a dorm 2 years ago, how bad can $3500/mo be?!?!”

Keith, I’ve certainly heard of FIRE. And of perhaps Financial Samurai through you. It never really connected for me. The people seem to come from a mindset of “I don’t particularly care to work, but I do rather enjoy a degree of spending”. I understand and appreciate how that ethos clicks for many people. But I’m more “I don’t particularly care to spend, but I do rather enjoy a degree of working”.

So when they write excitedly about how they ate ramen and retired at age 35 and plan to make all their lifetime spending work with a $3M nest egg, it’s all fun but I’m left thinking (for myself) “Meh, why?”

FIRE is pretty dumb to me as well. Working (assuming you reasonably like it) is very good for physical and mental health.

I was talking to friend whose father just retired from his business at 92. And my friend is retired at 55.

I'm about to turn 64 and currently don't imagine ever retiring.

>> I do wonder whether this is so crazy. Their income was $300k-$400k at the time of purchase and plausibly on its way to $600k-$1000k over the next 10 years.

Even if one manages to get the golden ticket consulting / banking job out of college, $600k-1m income down the line is not guaranteed. These jobs are pyramids and plenty of people, often by choice, do not make it to the top and leave for other, less highly compensated (and less stressful and intense) fields. Spending today like they will definitely make partner is silly.

By that logic, the tattoo artist might also be dreaming of opening her own studio, or working for celebrities, and making a million a year down the line. How much weight would you give to those half-baked plans?

I do think in the situation i described the parents were willing to give the cash only conditional on a real estate purchase. So this might have been a take it or leave it situation.

So there you have it, some young people spend because they are enabled by rich parents. Others are probably just trying to keep up with their friend group, maybe even not realizing the difference in their situations. And everyone is full of optimism about the future (increase in income, student loan forgiveness, etc)

>> I'm about to turn 64 and currently don't imagine ever retiring.

Good plan, if your health allows it. Not everyone’s situation and adverse health is often sudden and not foreseeable. I think most/all folks should plan for retirement.

FIRE fundamentally does not make much sense and does not scale to a meaningful part of the population. Earning enough in one decade to pay for all your life (8-9 decades of spending) is very difficult. How can one manage to deliver enough value to the world in such a short time? And if everyone tried to do that, products and services would become extremely expensive due to a shrinking labor pool.

@krolik already hit all of my thoughts on the posts above. I was one of those who got the golden ticket and understood all of it, but I knew pretty early on that sustaining that path was neither a physical possibility for me nor in line with what makes me happy on the day-to-day basis. I am not particularly a spender, but the FIRE mentality certainly resonated with me because I did want to assure a nest egg to not only fund my relatively modest needs indefinitely but also to spend on "work" that requires an outflow of cash that would not have any reciprocal inflow. I worked long enough in the golden ticket world to meet my personal FIRE goals, and will note that I was aided significantly in that respect by the dumb luck of being in San Francisco during the gold rush of the late 90's.

@krolik - re "Earning enough in one decade to pay for all your life (8-9 decades of spending) is very difficult. How can one manage to deliver enough value to the world in such a short time?" The only thing I will say that is that I feel that I received a financial windfall without delivering any value to the world whatsoever. My financial windfall was part of an irrational and high speculative period of time in the stock market/formation of the new technology economy where I just happened to be in the right place at the right time. There was zero planning or forethought on my part. When I chose SF as my destination for work, it was a sleepy town where those who chose it prioritized hiking, skiing and the slower life. Everything changed in 1995, and while I was the financial beneficiary, I feel like I was also harmed to the extent that SF was forever altered by the influx of those seeking gold.

>> By that logic, the tattoo artist might also be dreaming of opening her own studio, or working for celebrities, and making a million a year down the line. How much weight would you give to those half-baked plans?

I dunno, a couple where one is an investment banker and the other is whatever, making $600k-$1m after 10 years. I know it’s not a given, but not exactly a stretch either. “Aren’t these positions a dime a dozen?” I found myself thinking.

So I looked up the number of VPs and income at a major bank and quickly hit this article:

https://www.efinancialcareers.com/news/finance/banks-weird-hierarchies-analysts-associates-vps-mds-really

“Vice Presidents (VPs) are a dime a dozen at any decent size bank. Goldman Sachs has around 13,000 by our count (no, that isn’t a typo). It has around the same number of analysts and associates.”

That’s GS alone, maybe there’s 100K such jobs across all the banks and maybe more if you consider the finance industry more broadly. And with as many VPs as analysts & associates, it’s not exactly a very narrow funnel.

On the other hand, how many tattoo artists making $500k+ no matter their talent? I dunno, but I’ll go with something like 100.

Not that I’m making a judgment on them as human beings, their talent, what they deserve, etc., but the odds seem vastly in favor of the banker money-wise.

@nada - VP is a VERY broad title on Wall St, extended to departments outside IB/S&T that have no chance of making $1M, let alone at the VP level.

You can be a VP in the IT, compliance, and various other "support function" departments not even making half the bottom of your range. These support functions often are much larger than the trading desks or I Bankers they support.

What steve123 said is exactly right. And don’t forget HR where everyone seems to be a VP… they even seem to have VPs reporting to other VPs…
Also, in commercial banking, VP or SVP is typically the highest title for account managers (instead of “managing director”).
The fraction of entry level employees in i banking that reach MD level is small, around 10%. That said, the other 90% do get a great job elsewhere usually. But not necessarily one paying senior i banker money.

I'm definitely not a proponent of fire, I enjoy working and keeping busy in general with other things that interest me. I was randomly alluding to his decisions regarding housing, renting over buying and then winding up overspending on a purchase.

I retired mid-40’s. I love retirement. I have never looked back and will never get a full time job again. I have plenty of hobbies and interests that I can now really pursue which was not possible when I worked full time. I liked my job, I liked my coworkers but my work never defined me. The job was stressful, many now I have very, very little stress my life . If you whole life is your work, you will be miserable if you retire because you will be bored quickly. For people who want to work into their seventies, eighties and beyond, that’s great. But for me, my only regret is I didn’t retire earlier!

"Good plan, if your health allows it. Not everyone’s situation and adverse health is often sudden and not foreseeable. I think most/all folks should plan for retirement."

As per Billy Crystal in Forget Paris, I would have to be entirely de-healthed for me to have to retire.

Steve / Krolik, you tell me. How many positions are out there in banking / finance paying at least $500k to people with 10yrs experience? (The $600k-$1m range I was giving was for the couple.)

175k financial industry jobs, of which about 22% are “securities” plus 16% are “financial and risk analysts” jobs. But look at the average comp. It is under 200k. So assume about a quarter of these jobs pay 500k+. Thats 16k such jobs total.

This is probably completely wrong, but maybe at
least the order of magnitude is right?

https://dol.ny.gov/system/files/documents/2022/03/2021-significant-industries-new-york-city_0.pdf

Having a vp or above title is also not a guarantee of 500k income. Base salary is about half that and 100% bonus would be considered very generous these days, reserved for top performers only. Every year is also different depending on market dynamics.

@Krolik, yes.
Full disclosure - I was once called a "VP" at a big dumb bank a decade ago, making UNDER $150k. I know current VPs barely hitting $250k. There's even higher titles at banks like Exec Director / Director that don't even necessarily pay $500k.

My entire career on the sell side was watching floors of $500k+ "front office" jobs get automated away by floors of $250k- "back office" jobs, not to mention the ones that didn't just get regulated away.

So the ratio of $500k-1M VP+ to say, $250k VP+ is something like 1:5 or 1:10 and continuously getting more lopsided.

Even the great GS reported something like an average $360k/head in compensation costs for 2023.. which would be inclusive of severance/benefits/taxes/etc. Also this of course includes all the 7-8 figure compensation at the top, and many people with titles above VP.

Look at indeed.com or Glassdoor.com for comp stats.
Goldman VP comp stats look a lot closer to $350k than $500k+
https://www.indeed.com/cmp/Goldman-Sachs/salaries/Vice-President/New-York-NY
https://www.glassdoor.com/Salary/Goldman-Sachs-Salaries-E2800.htm

Looking at competitors like MS seems even worse. You can be in the $350k range at Exec Director.

And don't forget that the banks comp deferral is far more aggressive than pre-GFC days, so it can take 3-4 years for the full TC to hit your account, if ever if you leave to soon.

Regarding banking VPs: keep in mind that banking a skewed because in a lot of jurisdictions an officer of the company is needed to enter into a contract. In a bank, yeah, you want everyone with 7+ years of experience to be able to sign docs because they are being signed multiple times a day. Then these ranks leak into the back office and support who want the same titles as the front office.

Regarding spending these days: I think that social media has already been discussed. One factor which has not is recessions. The 2020 recession basically was canceled by the government because they wanted to react swiftly to COVID. There is a generation who weren't following the news during the dotcom and GFC periods. If you were born imid-1980s or earlier, your overton window of potential economic outcomes is much wider on the downside than young millennials and gen Z who really haven't had to experience widespread unemployment.

Also, in addition to housing being unaffordable, inflation also creates an incentive to spend up front as things just don't drop in price these days. There are several items which have had price hikes (trucks, Playstations, houses) which make savers feel like losers.

Yeesh, seems like end times for would-be masters of the universe if 10 years in the expected outlook is that you’re toiling away at 60-hour weeks for $250k as a “VP”, for basically $83/hr.

My understanding of the VP title inflation in finance was that it was supposed to be a title reflective of pay as a corporate VP. Doesn’t even seem to be that anymore.

Krolik, thanks for the link to the report.

The “less than $200k” page 14 in that report is for median wage. The “average wage” on page 8 is $438k.

Here’s what BLS had to say about what is included in “wage”:

https://www.bls.gov/news.release/ocwage.tn.htm#:~:text=Base%20rate%3B%20cost%2Dof%2D,supplementary%20benefits%2C%20and%20tuition%20reimbursements.

“Wages for the OEWS survey are straight-time, gross pay, exclusive of premium pay. Base rate; cost-of-living
allowances; guaranteed pay; hazardous-duty pay; incentive pay, including commissions and production bonuses; and tips are included. Excluded are overtime pay, severance pay, shift differentials, nonproduction bonuses, employer cost for supplementary benefits, and tuition reimbursements.”

So what the heck is a production vs nonproduction bonus?

https://www.bls.gov/ebs/factsheets/nonproduction-bonuses.htm

The National Compensation Survey (NCS) program publishes nonproduction bonuses, which are cash payments made to employees that are not directly related by any formula to individual employee productivity. The Employment Cost Index (ECI) includes nonproduction bonuses in total benefits, the Modeled Wage Estimates (MWE) doesn’t include nonproduction bonuses, the Employer Cost for Employee Compensation (ECEC) provides the dollar amount for nonproduction bonuses per hour worked and the NCS Benefits produces data on the percent of access to nonproduction bonuses.(1) Access to nonproduction bonuses includes the following bonus types: cash profit sharing, employee recognition, end-of-year, holiday, payment in lieu of benefits, longevity, referral, hiring, retention, management incentive, attendance, safety, suggestion, contract signing, lump sum and other (such as birthday and retirement bonuses).

I think that means Wall St bonuses are NOT included in the median wage data (not formulas typically) even though they are in the annual average data:

https://www.bls.gov/news.release/annpay.tn.htm

In addition to salaries, average annual pay data include bonuses, the cash value of meals and lodging when supplied, tips and other gratuities,
and, in some states, employer contributions to certain deferred compensation plans such as 401(k) plans, and stock options.

I’d guess your estimate of 16k jobs at $500k+ out of 176k NYC jobs with an average of $438k is an underestimate. Lotta private equity, asset management, etc. jobs out there. I’d guess it’s more like 30-50k in NYC alone and a small multiple of that once you expand globally.

@WoodsidePaul - lack of real recession in last 15 years is a good point re: GenZ spending behavior.

For those that worked through the GFC, Dotcom, Asian Currency/Russian Debt late 90s crisis, early 90s recession etc.. you understand that the economy and your income are not guaranteed to be a line that goes straight up. I lucked out in that GFC came early in my career and I learned that lesson when the stakes were lower.

@nada - I think your initial implication that there were 100K $500k-$1M/year jobs in finance in NYC was an overestimate. 30K feels closer.

I agree. I was making the comment more on a global level. Wouldn’t exactly be right to compare investment bankers to tattoo artisists solely based on numbers in the Mecca of finance. It’d be like comparing investment bankers to tattoo artists restricted solely to Vegas.

>> That’s GS alone, maybe there’s 100K such jobs across all the banks and maybe more if you consider the finance industry more broadly. And with as many VPs as analysts & associates, it’s not exactly a very narrow funnel.

>> On the other hand, how many tattoo artists making $500k+ no matter their talent? I dunno, but I’ll go with something like 100.

Thanks for reading all the fine print and definitions that i did not have time to go through this morning. So i think the NYC report is inclusive of asset mgmt and pe jobs, since they report jobs for “industry”, not just banks. Maybe the number of 500k+ jobs is more than 16k, but i think it is around 30k tops. Many (front office) i banking VPs don’t get 500k+ comp: good year, good group, good bank have to coincide with strong performance to get that at as a first year VP for example. To make it to VP level is also not a given as one needs to survive hours, office politics, etc. for many years.

>> And with as many VPs as analysts & associates, it’s not exactly a very narrow funnel

The funnel is narrower than you think.

As mentioned by other posters above, total number of VPs in a bank is large due to this being a popular title for mid and back office jobs. This is because these roles often top out at VP/SVP title. Compliance and HR have just a handful of partners/MDs and hundreds of employees under them (most of whom will have a VP title).

Front office though is a pyramid, and there are not as many VPs. For example, a front office department might have 30 new entry level employees joining each year (analyst/MBA associate), but only ~5 people being promoted to VP. So only one in 6 makes it to that level, and on top of it, staying at the VP and Executive Director level is also really hard, as these employees are very likely to be laid off (expensive employees/ firms need these slots to reward high performing juniors/there is no room at the partner/MD level). Such a department will typically have 1-3 partner/MD promotions per year. The number of entry level employees that will make it to MD is around 10-20% (some will exit to a job elsewhere that also leads to 500k+ though).

So i spoke to a friend yesterday who currently rents a 1br on UWS for 4.5k per month in a no frills building . The friend said there are now no 1brs in that area for less than 4k unless it’s a converted studio or a high floor walk up. Looking at the website of my old rental building, this is right.

This makes me wonder, how much have rents increased vs incomes? And how are people affording it? does a greater proportion of current young generation of new yorkers have spending-enabling parents?

Thanks for the insights, Krolik. Is it still the case that analysts are expected to leave after a couple of few years, or has there been a shift in how things work?

On 1BR rents, that sounds about right. They shot up a lot post-pandemic relative to pre-pandemic. It was as if the under-inflation of 15 years was made up for all of a sudden in a single year. At the high end, it was more muted, but at the low end it was quite severe. So $4k+ for an UWS 1BR sounds about right. (My $3500 was analyzing a decision made “a few years ago”).

>> This makes me wonder, how much have rents increased vs incomes? And how are people affording it? does a greater proportion of current young generation of new yorkers have spending-enabling parents?

I think it’s all of the above, but most of all, a greater willingness to spend. The factors you listed are long-term:

- nominal incomes doubled over the past 20 years, on average

- parental help became increasingly societally acceptable, like openly bringing up the subject that you/your children have a therapist

So on a long-run basis, is there capacity for the population to pay $4000-$4500 for that which went for $3000 circa ~15-20 years ago? Certainly. Incomes have outpaced inflation. But the willingness is sudden.

Honestly, I think the pandemic stimulus + post-pandemic spending spree flipped the switch for a lotta people. And once a spending habit starts, it can be hard to stop unless the money truly runs out. “Can I still afford X? Well, there’s still money in the bank.” is quite different than “Should I start spending my hard-earned money in the bank on X?”

So that you boomers here may understand the plight of our young adults.

https://www.wsj.com/tech/personal-tech/quitting-tiktok-less-swiping-more-sleeping-1e166a39

His TikTok habit became so ingrained that he couldn’t do anything without it. He took out the trash while watching TikTok, but could only carry one bag at a time because his phone was in the other hand. When he cooked, he would stop chopping ingredients to scroll to the next video.

His roommates “felt disrespected” when he would scroll TikTok during movie nights, causing him to rethink his attachment. He tried to delete it three times. His fourth attempt, this past December, has been successful so far.

Mengi has since brought up his grades and now carries two trash bags at a time.

It is unfortunately too real. One day - hopefully soon - society and laws will figure out how to reduce this issue. Perhaps by reducing the ability of these site to store consumer data.

I've never watched a tick tock, at least not knowingly. However, I find that the older boomers are just as addicted to tick tock, Facebook etc as the Gen z/ millennials are! My father-in-law is constantly sending me clips which I delete without opening. And when my in-laws are here, it's worse than my kids, they're constantly staring at phone screens even while we're at the beach.

I guess another good reason never to fully retire, or at least make sure you have some very healthy hobbies. Even my golf buddies (40-70ish) are always sharing memes, stories from tt, fb, insta etc.

>> Also, in addition to housing being unaffordable, inflation also creates an incentive to spend up front as things just don't drop in price these days. There are several items which have had price hikes (trucks, Playstations, houses) which make savers feel like losers.

That’s what the interest’s for! Risk-free rates that run 2% above inflation expectations these days is a lot better than the decade+ it ran 2% below inflarion. But I can understand how people may perceive it otherwise.

“I've never watched a tick tock, at least not knowingly. However, I find that the older boomers are just as addicted to tick tock, Facebook etc as the Gen z/ millennials are! My father-in-law is constantly sending me clips which I delete without opening. And when my in-laws are here, it's worse than my kids, they're constantly staring at phone screens even while we're at the beach.”

I hear you. Both my parents, in their 80’s, are constantly on FB and posting stuff. And my Dad spends way too much time on TikTok. I can see how it’s highly addictive. We have a pug and I started watching pug videos on FB and Ticktok. It was amusing until I realized how much time I had wasted, when I could have taken a walk outside in the beautiful weather. I think many people are just too addicted to their phones. But I guess that’s another discussion…

I'd better start coming here more often.
ionada, maybe you saw this but my point was one woman went through her entire fortune while the other became even wealthier (and literally got away with murder).
multi, try Rue LaLa if you haven't yet.

>> ionada, maybe you saw this but my point was one woman went through her entire fortune while the other became even wealthier (and literally got away with murder).

Yeah, I read that but didn’t see it the same way. They both seemed like miserable people, including the killing.

However, by my estimation they were both spendthrifts. The $100M Duke inherited in 1925 made her something like the second richest person in the world. The return on that in the stock market would have become $100B by 1993. After taxes on dividends, $65B. If she had limited her spending to (say) 1% of her net worth any given year, $33B. That’d have made her the richest person in the world by 1993 without ever having lifted a finger while spending like a queen.

Is 1% enough to get by on? In 1925, it’d have beeen $1m/yr — more than 1000x income per capita. And by 1993, it’d have ballooned to a spending budget of $330m/year — more than 10,000 income per capita.

This all is to say nothing of the additional $250m she inherited in 1962 when her mom died. If she had been giving vast sums to philanthropy, that’d be one thing. But at $1.2B, she didn’t even managed to beat inflation. So no, I am not impressed. At least she could have had the flair of dying broke, like her miserable frenemy. That’d have been more notable.

Those ladies were profoundly disoriented. Fascinating, yes, but so sad. Malcolm Gladwell talks about the inverted U curve...too much of a good thing will mess with you.

I should have such problems.

>>That’s what interest is for!

I get it, but most people are not investors and they can be driven by the psychology of inflation rather than the numbers.

My nieces and nephews, in their 20s, attend at least six destination bachelor/bachelorette parties a year along with weddings, many of which are also destination. Putting it all on plastic or spending every dime they have.

That's a time commitment too

And then they brag about it on instagram. It's endemic.