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.