Pity the bankers who can't live on $1 million
Wall Streeters earning this once-princely sum are complaining they're almost broke. Take a look at what their lifestyle costs.
It may seen unbelievable to most American workers, but Wall Street bankers who earn more than $1 million say they're barely making ends meet.
"It’s really not that unusual to find Wall Street bankers who are close to declaring themselves bankrupt,” Whitney Partners co-founder Gary Goldstein told eFinancial Careers. "Some people are really struggling.”
Many bankers are well and above what's considered "rich" in the U.S. As my colleague Jason Notte wrote in January, an individual earning at least $400,000 a year or a couple pulling in at least $450,000 qualifies for the highest tax bracket. The average salary and bonus at Wall Street firms such as JPMorgan Chase (JPM) last year was about $363,000.
But for some Wall Street workers, their $1 million incomes are barely covering the bills.
The reason is a lifestyle that requires a huge outlay of expenses. After Uncle Sam takes his portion of that income, a banker may be left with about $600,000 in after-tax income.
For starters, that amount probably needs to cover the mortgage on a New York City apartment. The median-price of a three-bedroom apartment in Manhattan was about $2.37 million last year, which would require a monthly mortgage payment of $8,382, assuming a 20% down payment. That adds up to about $100,000 in mortgage costs just for the apartment alone.
Then banker may also have a vacation home in the Hamptons, for example, adding to costs.
On top of that, he needs to shell out about $40,000 per child for elementary school tuition to top New York City schools. The median price for private schools has jumped by 48% during the past decade, outpacing the 25% tuition hike at Ivy League colleges, according to The New York Times.
"You just get trapped at a certain level of expenditure," Tony Greenham, a former investment banker at Barclays, told eFinancial Careers. "You’re in a peer group which aspires to and achieves a certain standard of house in a certain area, a certain type of holiday home, and certain schooling for your children."
The financial strangulation of America's top Wall Street earners may explain why the very rich are also claim unemployment insurance. Nearly 3,200 households with adjusted gross income of more than $1 million received jobless payments in 2010, as I reported last month for MSN moneyNOW.
After all, apparently anything helps when a millionaire's bank account runs low.
Follow Aimee Picchi on Twitter at @aimeepicchi.
I just can't stop crying after reading this story...from laughing so hard! Boo freaking hoo. Give me a break. You can't live within your means then to bad. Plenty of the rest of us have to live pay check to pay check or just scrape by. A lot of because of those very bankers greed and piss poor, me first, short term thinking based decisions. Until they change their ways I care not. They've been given to many chances and a pass for too long. I think its time that that changes.
How about $8.00 hr even better. Couldn't survive on it. Let THEM eat cake. Seems the 47% aren't the only ones hit.
More and more often, I think of the bumper sticker:
Eat the Rich.
As I age, it makes more and more sense...
Poor Babies can't even buy themselves a tiny fiddle to play on!
Bummer, NOT! YOU reap what you Sow and you Bankers are such greedy pigs that I guess you forgot how to save. Best to take the Kid's Credit Cards now , you cannot afford their playful bills anymore.
But at lleast you have a roof and Food in the Fridge, many remain without due to yours and Yours GREED!
1M huh, golly maybe it would be best if your bonus returned to normal/average wage such as $50,000 year plus interest!
Awww, poor bankers have to live like they're like the former middle class. boohoo.
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