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Struggling to get by -- on $350,000?

Those at the lower end of the top 1% are having a hard time financially, just like the rest of us. Do you believe it?

By Giselle Smith Mar 2, 2012 7:09PM

Life is rough for Andrew Schiff. The marketing director for a global investment strategy firm, Schiff and his family of four are crammed into a rented 1,200-square-foot two-bedroom New York City duplex, wondering how they can get ahead and cover expenses -- including private school tuition and a summer rental in Connecticut -- on $350,000 a year.

 

Schiff was featured in a recent Bloomberg article about how decreased bonuses are causing economic hardships for many New Yorkers whose income puts them in the top 1% of American taxpayers.

 

You may recall Todd Henderson, a Chicago law school professor who shared a similar tale of woe on his blog (since taken down) about getting by on $250,000. While he may have elicited sympathy from some of his peers, the majority of responses from the 99% ranged from incredulous to skeptical to angry.

 

A new poster child

Though the Bloomberg story mentioned several people's hard-luck stories, it's Schiff's turn in the unwelcome spotlight. The trials of the marketing director for Euro Pacific Capital, as described by Bloomberg:

The family rents a three-bedroom summer house in Connecticut and will go there again this year for one month instead of four. Schiff said he brings home less than $200,000 after taxes, health-insurance and 401(k) contributions. The closing costs, renovation and down payment on one of the $1.5 million 17-foot-wide row houses nearby, what he called "the low rung on the brownstone ladder," would consume "every dime" of the family's savings, he said.

A day later, he was experiencing some of the backlash.

 

"I am (now) a posterchild for all that is venal and insidious in the world," Schiff wrote in an email to The Washington Post's Jonathan Capehart, explaining that his point in agreeing to be quoted in Bloomberg was not to rant about his income (which he acknowledges is high by U.S. standards) but rather to share some realities about living in a "high-tax, high-cost place like New York." (Post continues below.)

Schiff also clarified that his statement about washing dishes by hand -- pounced upon by many critics -- was not intended to emphasize his hardships but simply to illustrate that his home doesn't have every convenience that one might expect.

 

To put things in perspective, Capehart cites a 2009 study (.pdf file) by the Center for an Urban Future, detailed in the New York Daily News, which quantified the costs of living in New York City, especially Manhattan. There, a person needs to earn at least $123,322 a year to be considered "middle class," or to be on par with someone earning $50,000 in Houston.

 

Then again, Schiff's $350,000 is almost three times that middle-class income figure.

 

Cue the violins

For those of us making far less, it can be difficult to relate. As Bloomberg reported:

Most people can only dream of Wall Street's shrinking paychecks. Median household income in 2010 was $49,445, according to the U.S. Census Bureau, lower than the previous year and less than 1% of Goldman Sachs CEO Lloyd Blankfein's $7 million restricted-stock bonus for 2011. The percentage of Americans living in poverty climbed to 15.1%, the highest in almost two decades.

Some readers of the many articles and blog posts that followed were supportive of Schiff's plight, but many were not.

 

"Making $350,000 in Manhattan is just barely upper middle class," commented "living on 350" on Business Insider, where "Sniff!" countered, "Maybe we should all take up a collection for the poor guy."

 

The story made headlines all over the world, and one blogger in the United Kingdom posted on Joe ("The website for Irish men"):
"Maybe he should pay a visit to Ireland. We're all broke but it hasn't turned us into miserable, complaining sods like these businessmen."

Gawker compiled the "five best quotes in Bloomberg's outrageous banker bonuses story," including Schiff's statement about not having a dishwasher and this one from New York accountant Alan Dlugash: "People who don't have money don't understand the stress."

 

Cutting costs is tough no matter how much you earn, Dlugash also told Bloomberg: "If you're making $50,000 and your salary gets down to $40,000 and you have to cut, it's very severe to you," he said. "But it's no less severe to these other people with these big numbers."

 

What do you think? Does anyone earning $350,000 a year have a right to whine? Or are you just happy you don't have their problems?

 

More on MSN Money:

 

 

8Comments
Mar 2, 2012 9:13PM
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No sympathy for this guy.  I understand living expenses in NY are higher but I know people who would be thrilled to have 1200 sq feet of living space and do just fine without a dishwasher.  Many cannot even dream of a second home in Connecticut and contributing to a 401(k) is impossible.  Some can't even buy what they want at the grocery store.  If this guy thinks he's suffering he should get out and see how the rest of country is doing.
Mar 3, 2012 9:56AM
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Athletes have a saying - htfu, or harden the &*@ up. It's used to encourage those who are weak to ... toughen up and stop complaining.

On one hand, I understand that NYC is a high cost place. If you have two working spouses, you'll most likely need to hire cleaners. You might eat out more. Especially true if you're working long hours (we can debate whether the hedge fund people really need to be up at 5am to trade the same stocks back and forth to each other billions of times a day, but that's another story).

But on the other hand, he chose to live in NYC. You may have 'had' to, but you could have done something else, and you need to make do. Living in a 1200-sq ft duplex in NYC doesn't sound like squalor.

And private schools are frankly discretionary. No two ways about it. I understand you might get better education than in public schools, and that your kids might make connections they otherwise wouldn't. But you can easily live without it - I'm sure Mr. Schiff has many connections. And the summer rental in Connecticut? Surely you have friends in Greenwich you could crash with (just pay them some rent!)?

Mr. Schiff: htfu.
Mar 5, 2012 1:17PM
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Man, I wish I had his problem, I am lucky to survive on $11,210.40 a year, and I have a family of 3 to support counting myself.
Mar 5, 2012 2:05PM
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If this guy would simply move to a commuting suburb of NYC--say Maplewood, New Jersey--he could get a decent house, probably bigger than 1,200 square feet, and free public schools, which would save him tons. (Private schools in NYC that I know of cost between $20K and $40K per year.) I know he says he wasn't quoted so he could become the martyr of the upper middle class but just a few changes to his lifestyle would take away a lot of his financial stress.

@suddenlyfrugal
http://www.suddenlyfrugal.com

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MOVE TO BROOKLYN OR QUEENS!! PROBLEM SOLVED!
Mar 5, 2012 1:11PM
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NO,,,That's it...Deal like the people who lost jobs complete with no maybe in the end, an then lost there homes, to some who lost homes due to pay cuts, then those who had a business an lost those an then lost home an income, so that is my answer, sell what you have too, move if you have too, but stop feeling like you lost...your still alive...

 

Mar 8, 2012 12:59AM
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NYC is a high cost of living area. Move.
Mar 8, 2012 7:52PM
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Cry me a river... He can't afford private school for his kids? Can't afford a SUMMER HOME?!??!? WHAT A SPOILED PIECE OF GARBAGE!

Go find someone with REAL problems!
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