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March 20, 2012

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I want to say this. I've lived and worked in New York practically all of my life. Not everyone makes money like these people. Not everyone lives in these million dollar homes. You can get a really decent home in a nice neighborhood for less than half the price.

You don't need to pay the $35K for an expensive day school, but schools in some areas, like everywhere are crappy and the good ones get filled fast or are on a lottery system. Many people do pay for private school and yes, it's about that much.

If you live in Manhattan and you park in garage, yes, it will cost you that much. But chances are, if you're living in Manhattan with 2 Audi's and all of the accoutrements, then you are making that $500K to $1M salary. You can well afford it.

I don't like idiots like this giving my city a bad reputation. There are 0plenty of very hard working, commuting from the edges of the city, working 10 hour day people making $35K per year (what that guy pays for school) and they manage to live well. It's all about perspective and living within your means.

I'm not going to argue that these people didn't make some questionable decisions but I always feel that these types of articles bring out some of the most judgmental comments (see "idiot" comment above) -- many appearing to come from a place of envy.

The fact of the matter is that these people are no different from poor people who are having trouble making ends meet. That doesn't make them "idiots."

A lot of these numbers seem about right for me for a NYC family of 4. It's an expensive city.

Shiff later said that he was misrepresented by the reporter :
http://finance.yahoo.com/blogs/daily-ticker/banker-bonuses-backlash-andrew-schiff-understands-why-people-210703011.html

If you read the direct quotes from Schiff he isn't really saying that he "can't make ends meet". The actual quotes from him seem mostly about his house and his desire to get a bigger one.

I am laughing to these guys. And I am speechless...

Sometimes you just have to shake your head and move on.

Part of me is starting to conclude that our problems in this country don't stem from the fact that we're in recession. Recessions have always happened periodically and eventually the economy comes out of it. Our problems stem from the fact that we can't separate our needs and our wants. Our priorities are so out-of-whack, especially in these coastal elite communities. Many hard-working Americans are more than happy when they can put a roof over their head and food on the table. And yet here we have a class of people that are discouraged by the sacrifice of spending only one month at the summer house instead of four.

Wow. Just wow.

I watched the video Jim linked to and I thought the guy represented himself quite well in explaining what he'd actually said (or meant to say), which is not what the article FMF quoted said. I also agree with MonkeyMonk that these sorts of articles bring out the worst in people. The fact is, most of us DO envy people making $350k a year for one reason or another, and most of us think we'd definitely handle such an income much more wisely and with never bank on the idea that such an income will continue in perpetuity. But in fact we all know plenty of people who make aren't the most prudent with their money, whether they make little of it or a lot of it. Making W-2 income is a totally separate skill than being a good with your personal finances.

Thank goodness for people like these. Imagine single handedly creating jobs in this desperate economic times? This is what they are doing with their upgrades, education bills, vacations, etc. Not to mention they are very productive at work and because of their lack of savings activity they will be forced to work for many more years to come!

Too bad crooks are waging a war on these generous, generous (100k charity) people!!

If you have your financial house in order you should be able to deal well with recessions, even very deep ones. Imagine that you live as if it's a recession all the time, then try and get ahead under those circumstances. If and when things do pick up you can just save the difference and re-invest. And only then you should have a look at what you're worth and what sort of lifestyle you might realistically afford.

It looks like Andrew should have listened to his brother Peter, the CEO of the same company he works for. Peter predicted this whole recession would happen back in 2008. Just like everyone else, they ignored him.

Now THAT is stimulis! LOL....Funny, when I made $350K~ (and more) my expemse sheet looked RADICALLY different. (like over $100K to investments/savings annually)

Sandy, I agree that there are so many people in our city who don't live or think like this. And what most people with families do when they can't afford a brownstone is move to the burbs! Free quality schools and much more space at a less Price/square foot! It's very expensive to raise a family in the city. It's basically a luxury.

Wow, I guess activist James McMillan was right when he said "The rent is too %@#! high" in NYC.

My wife and I somehow manage to survive living with our 5 kids in a house about the same size as the family mentioned in the first example. We too wash dishes by hand (but we have a lot more hands to help!) and we homeschool instead of sending our kids to private school.

If there's one money lesson we've learned that we want to pass down to our kids, it is this: Everything is a choice.

While these stories do "bring out bad comments", I think that there's a really good story behind the behavior and attitude of people like this. Like Brad says, the priorities are out of whack, and while people here in the comments shake our heads, others in America do the same thing at their level of income and see these people as a model. I would further criticize "the kids nowadays", and by that I mean people in their thirties like me. They look at people like this, or worse-- their parents who are now living a comfortable life, and they want everything the rich have or at LEAST what their parents have. It is ridiculous too-- our parents did not have expensive cars, houses, and European vacations when they were 32. They were poor, living paycheck to paycheck raising us and our siblings while grateful they could send us to decent public schools and take us on a road trip once a year to see the country's biggest ball of string or something. I see so many people that have "grown into their income" but it is not to raise kids or pay off ridiculous debt, it's just spend spend spend. Your 65 yr old parents went to Spain? Well you are going to go to Spain, Morocco, and Italy. Your parents bought a nice BMW after driving low-end Fords for 40 years? You have to buy an Audi now. Then you complain that the Montessori school your kid goes to is $20k/yr. It's pretty ridiculous.

George, While I agree that many peoples financial priorities are out of whack, I don't think people in their 30's are especially guilty of it. Theres lots of baby boomers and millenials who are financially negligent. Nobody I know in their 30's is expecting or buying luxury cars or frequent trips to Europe.
And isn't wanting at least what your parents had part of The American Dream? Ours is the first generation recently where that dream is dying. Its been a long standing expectation in America that every generation will have it better than the previous generation.

Dang...We started late in the savings game and have more putaway than the first example in NY. We are not hardly rich, but it sure feels good when you dont owe "Anyone Anything". I feel really blessed to have two good incomes. Tell everyone to move to Dallas. We have a nice home and split a lake house with another couple. And can still manage to save. Again, not rich..just dont owe anyone. By the way, my two boys are in Catholic school. HMMMM

Hi Jim-- definitely fine to call me out on my rant.

I admit a lot of my rant is anecdotal (I really do know a LOT of couples that are doing the things I said though)-- and of course baby boomers are guilty of being in debt or not being ready for retirement. I think wanting what your parents have is fine, and there is empirical evidence that salaries (for college graduates) is higher than our parents' at the same point with inflation accounted for-- so we should be able to live better. That's what our parents want for us too.

I guess I'm saying that the public life of celebrities and the rich (and aggressive marketing online and on TV) leads to spoiling that gift by people who aggressively grow into their income, instead of waiting to spread it out over their life. Heavy consumer debt was a real problem in this recession, and is part of the reason why we're climbing out of it so slowly-- people are trying to pay off immense debt and aren't consuming much now.

The American Dream is good, but at what cost do you get it at is the problem. Are people in their 30s especially guilty? I can only relate my experiences in the circles I travel in, which admittedly may be heavily based with professionals... but I do know a lot about how these people grew up, and the life they live is VERY luxurious compared to their parents at the same age.

George, minor comment but it seems a more appropriate phrase than your "grow into their income" would be to "outgrow their income."

Boo Hoo Hoo. I can't have my 4 months in the Hamptons, My BWM is in the shop and I have a domestic as a loaner, and my house is too small. Boo Hoo Hoo.

Like my wife says "We all make choices that we have to live with"

What are yours?

George, I don't doubt you see people like that. I think that a large % of Americans are not frugal with their money and basically spend all the money they make and save little. People of all ages and means do that.

How people spend money in relation to their parents varies. People may learn bad habits from their parents or they could learn good habits from their parents. Some people see their parents financial mistakes and handle money better themselves. Some successful parents end up spoiling their kids.

I don't think theres anything wrong with aspiring for a better life than your parents had and that doesn't have to cause overspending.

Hi FMF,

You did a great job analyzing this article.

Well done.

-Mike

This story should serve a BIG lesson for many people. For every money we earn, we should learn how to put a percentage of it in our savings. Personally, I don't see anything wrong if we send our children to good school but I think paying 32K per year is too much. There are other schools that offer quality education yet we don't have to spend that much.

I for one would rather put my money with firms that reinforce the values that I stand for. There are firms in finance in NYC and all over the country that do not maintain what amounts to a gluttonous passion for excess like some highlighted here. http://www.bloomberg.com/news/2012-03-05/milwaukee-s-home-grown-managers-shun-fads-to-post-top-returns.html

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