Thursday, May 24, 2007

My Dream Salary

[note: I've been having some technical difficulties switching this blog over to www.myopenwallet.net. Stay tuned and hopefully I'll get it working soon!]

To follow up on yesterday's post, I've been trying to think about the question "How Much Is Enough?"
I am only human, and of course I can dream of untold riches and the many luxuries they could provide. But in other ways, I think my desires could be quite finite. I do believe it's possible to have too much money, or at least more money than you or your immediate heirs could possibly use. Money can never really buy happiness. But money can solve problems, and ease stress, and make life more pleasant. How much money would be enough for me?
My overall financial goal is to feel comfortable and secure and independent. To some degree, i already feel that way. I make a decent salary, I own a home, and, depending on what variables I plug into my retirement income calculator, it appears that I won't starve in my old age. But there is more to life than that. The reason people want to be rich is because it's FUN! What about the fun I'd like to have?
First of all, I'll start with something that is pretty basic, that other people take for granted.

  • A car: It's a pain in the ass to own a car in New York, which is why relatively few people do. The best way to do it is to have a private parking space, which is rare. The next best thing is to keep your car in a garage. You have to call and tell them when you'll want the car, so they can get it out from behind all the other cars that are crammed in like some kind of puzzle. And parking costs more than what many people in the mid-west probably pay in rent. So I'm figuring I'd like to lease a decent car and keep it in a garage or rent a parking space, and then there's insurance, all of which I'm guessing would set me back about $2,000 a month. As an alternative, I could probably just rent a car every single weekend and end up paying a similar amount.
  • A weekend house: I want a house on the beach. It doesn't have to be a big house. But all houses on the water anywhere near NYC are going to be expensive. For the house itself, I'm going to allow myself a very modest shack that might cost $500,000 and figure my monthly costs for the mortgage, etc. might be about $3,000. I also want to be able to get to that house without wasting many hours of my life stuck in traffic. So I want to be able to take a helicopter to my weekend house. I'm not sure how much that would cost, but I found a company that will take you from Manhattan to JFK airport in 8 minutes for as little as $159 one-way, so let's just figure my round trip to the Hamptons might be, oh, $1,000, every weekend of the year.
  • Clothes: I'd like some nicer ones, please. Let's take my monthly budget of $150 up to $1,000. Whoohoo!
  • Services: Since I'll be away on the weekends, someone will need to clean my apartment. And during the week, someone will have to sweep up all the sand I'll be tracking into my beach house. Let's budget that at $500 a month. I'd also like to have a personal trainer and frequent massages. Trainers run about $80 an hour at my gym, I think... times 4 days a week, so that's about $1400 a month, plus a few massages... let's say $2,000 a month.

What I've thought of so far gets me up to about $13,000 a month in extra expenses that I don't have now. If I figure what I'd have to earn to net that after taxes, I'd need to earn an extra $200,000 a year to pay for it, on top of the approximately $100,000 I'll earn this year. I am not really sure how many jobs there are in publishing that pay $300,000 a year, but I know there are some. I knew of at least one VP at a very small company who made about $150,000, and then went to another job at a bigger company where the pay was "MUCH better."

Of course some of the things I'm talking about here are a little pie-in-the-sky, almost literally, i.e. the helicopter. And I haven't factored in other things I would probably like to do, such as having cable TV for the rare times I would like to watch it, going to some plays and concerts, and travelling more. And sailing! But at least some of these things can be realistically within my reach in a few years if I make good career moves-- it's not like I'd need to become a hedge fund manager.
The trouble is that once you have that weekend home and that regular helicopter trip, you start rubbing elbows with those lawyers and bankers and hedge fund managers, and they start telling you about all the other things they're spending their crazy millions on... Writing this post right now is a stretch for me: I'm grasping at fantasy things to want, and I don't know their true costs. But I'm sure I'd find it much easier to want and need such things, and the money to pay for them, if I started to live in that world.

8 comments:

Anonymous said...

Perhaps you could save on the car by renting a helicopter instead? (It sounds silly, but based on your figures it might work.) Or, at least save a bit by keeping the car at your weekend home and driving it there, instead of having it in the city?

At any rate, I think it is supposed to be more sound, financially, to buy a car instead of leasing.

Madame X said...

It isn't financially sound to lease a car, but it's a nice way to always have a new car! And I wasn't trying to pinch any pennies here! :)

mOOm said...

I'd never get in a helicopter unless my life depended on it. They are very dangerous things...

Leasing a car can make sense economically depending on your discount rate, preferences etc. If I was in the market for a new car I think I would be more likely to lease than buy.

I don't want a second home, owning one would be bad enough. But to get a nice one in a nice place (say with a view of Sydney Harbor :)) would be a couple of million at least and probably much more. We can assume that the cashflow cost of a house per year is maybe 8-10% of the price. Factoring income taxes in I think I could use a few hundred thousand more a year without having too much money :)

And flying business class not that I fly that much so I probably don't need extra income even for that.

LeighAnn said...

I now want everything you just put on there.

And now, I want a helicopter too!!

And maybe a hanglider for those hard to park spots.

Anonymous said...

Bronx Chica...wow I want some of the things you want but no helicopter.

Anonymous said...

Hmmm... as someone who started earning at the 40+k level, then moved up to 100k, and am now well above 175k, one of the few things which have become clear is that enough is never enough.
There are of course the new wants which arise when one now rubs elbow with richer Joneses. On top of that, one gets used to a certain level of income, from which upwards is apparently the only non-painful way to move. Ask anyone who has given up buying produce at Safeway, favoring instead the beautiful fresh picked produce, the Kobe beef, the personalized service at high end specialty outlets; it is not going to be easy moving back. I think it takes a very centered person to say, this level of spending is truly enough for me, regardless of how high my level of income becomes.

ELE

Anonymous said...

ELE,

I'm OCD, make $150K, spend $20K.

I don't think being "centered" matters.

Anonymous said...

Q: "How much is enough"

A: "Just a little bit more"