Sunday, February 8, 2009

How much does a poor investment banker need to just get by?

I asked this question yesterday, and - lo and behold - today's New York Times has an answer! I am generally not a big fan of long quotes, but this is so surreal, that I see no way around.

The whole story is here:

So these are the basic 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 (, “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."

See how much it takes in living expenses just to gamble your money away? I think I start to understand how it came to be that so many heads were chopped off during French Revolution...

1 comment:

BadTux said...

Yeah, I just read that and shook my head. These people just don't have a clue as to how real people live. They've been living in their high-and-mighty castle in the sky, and the notion that one might manage to make it without a nanny and a personal driver for your limousine simply doesn't occur to them, because, well, they're entitled to those things because, well, because.

But hey, if they can't live on $500K/year, the Indian dude who lives next door to me can probably do their job better, and he would be overjoyed to make $500K/year. If that doesn't work, the Chinese lady who lives above me *certainly* could do their job better, and she'd be overjoyed to do it for $500K/year too. And if all else fails, the Mexican lady downstairs from me doesn't read and write English too well and her math is a bit shaky too, but that makes her different from the current batch running our banking system... how? But oops, I forget, they didn't go to the right school or have the right daddy, so that disqualifies them. And our current oligarchs are different from the French nobility of 1789... how?