Nov 15

In this past Sunday’s roundup I cited Bargaineering’s post which discussed a guy who had trouble on a million dollar income.

I missed the original article when it was posted a year ago, Getting By on $1,000,000 a Year, by James Altucher. In his article he discusses how his friend (Mike) just had a million dollar year, yet  sounded like he was in dire straights. Forget for a moment that half the world lives on less than $850/day. Or that half the families in the US “survive” on less than $50,000/yr. I was inclined to simply dismiss this as someone living beyond his means, and I’m still on the fence about that.

Here’s where things started to get pretty crazy. Half the income was in deferred compensation. So, $500K isn’t his until it vests over a five year period. Still, the remaining $500K should to enough to get by on, even in New York City. Now is when his (and his wife’s) lifestyle gets in the way. $50K to a summer rental? $60K for private school? $60K per year for his mortgage? Yes, it’s actually possible to blow through a half million dollars with no jet and no yachts. Living in Manhattan, he doesn’t even mention a car, and probably doesn’t have one. Still, he’s living beyond his means, obviously.

What did hit me was one final point he made. That he works 70 hours a week. I’d not want to work that many hours a week for the whole million. Really. Time with my family is too precious. My daughter is now 13 and five year from this summer she’ll be off to college. Income has a rapidly diminishing marginal return for me. By that I mean I don’t mind the occasional business trip or evening function, but I’d not want to give up my evenings on a regular basis for any price. When she’s off to college I might feel otherwise, but for now I’ll listen to her stories of classmates whose fathers never seem to be around. I’m not a big sport fan, but put my daughter on a basketball court and I’m there. As far as Mike is concerned – it’s for him, his wife, and their three shrinks to figure out what’s going to bring him happiness.

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Aug 06

I recently read that Leona Helmsley bequeathed $8 billion to a charitable trust dedicated to “the care and welfare of dogs.” I have nothing against dogs, or other pets, for that matter. When I read stories of people spending large sums of money on their pets, I think it’s their money, to spend as they wish. But enough is enough. $8 billion dollars? Some time ago, I posted about the Global Rich List, a web site that will tell you how well you’re doing compared to the rest of the world. This web site informs me that 1.3 billion people live on less than $1 per day. That $8 billion dollars could have been directed to a trust that could help to double the well being of one million people ($365M/yr is less than 5% of $8B) who are otherwise starving, not just for a year, but indefinitely. Queen of Mean, indeed.

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Apr 23

As a fan of Garrison Keillor’s “News from Lake Wobegone” where, “all of the children are above average,” I’m always intrigued to find some reference to an ‘average’ so off the mark it strikes me as comical. Citizens for Tax Justice (CTJ) helped me find a recent example. They quote Senators Hillary Clinton and Barrack Obama as referring to ‘wealthy’ as meaning those with incomes above $250,000. Now, according to the census bureau, the 2005 median family income was $44,389. So, maybe these two senators are a bit out of touch, but let’s see by how much. Only 15.7% of families made more than $100,000. They may not consider themselves wealthy, but the rest of the world does, and half the people back home probably do. Moving along, 5.84% make $150,000 or greater, and only 1.5% more than $250,000. Are these people so out of touch that they believe that wealthy only applies to the top 1.5%, or that a much higher number of families are making $200,000 or more?

To be fair, the same article from CTJ tells us that a Time Magazine poll found that 19 percent of those surveyed thought they were in the top 1%. Lake Wobegone, here I come.


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