This Space for Rent

Slumming it at US$500,000/year

On the weblog Making Light, there's a discussion about scary monthly budgets, based on a discussion in a (presumably upper-class) NYC parenting mailing list where someone asked if someone would work if their MOTAS had a US$5,000,000 trust fund (probably US$250,000 yearly income after taxes (if any; the B*sh government has been very kind to people who don't have to work for a living, and states don't have nearly the sort of taxing authority that the Federal Government has.)) Not surprisingly, there are people who, with a straight face, claim that there is no way they can survive on only US$250,000 a year, and one of these people even nicely lists their monthly budget (US$7,000 rent, US$1,000 babysitter, US$2000 eating out, US$500 utilities, US$2,000 travel, US$1,000 clothes, US$1,000 walking around money. A skeptical person might add these items up and come up with a yearly budget of US$175,000, which leaves US$75,000 slop, but perhaps the ivy league schools have been tolerant of poor study habits from well-connected alumni admissions.)

Even accepting all of the monthly costs as gospel (US$7000 for a Manhattan apartment seems too distressingly possible if you haven't grandfathered your way into a rent-controlled flat, and I've watched my household expenses expand and contract (with very little change in my lifestyle, except for the source of my now-continuous stress illnesses.) to pretty neatly consume my entire income, whether it be the family high point of US$250,000 or low point of US$35,000 (unemployment plus pulls from Roth IRAs during the two and a half years I was on the dole thanks to the B*sh depression at the start of the century.) When someone claims that, oh, they "cahn't live on less than US$bignum", my mental reply is "oh, of course you can. Your pathetic whining is just because you've lived a sheltered life." The only thing I'd worry about in their situation is that they're paying US$7,000 rent and if they don't have wealthy family to fall back on they'd bottom out without being able to saw off their house and retrench.

Personally, my break-even point for a trust fund would be considerably lower than US$5,000,000. I suspect that I could continue to live at my current lifestyle with a trustfund that's 1/10th of that. My income would plunge, of course (US$25,000 to US$35,000/year), but I wouldn't have to tuck money away for retirement purposes and I could immediately roll my existing retirement fund into paying off the overvalued boatanchor that I currently reside in (or, better yet, selling it and moving to a country that has a functional health-care system. The USA is pretty much a suckers bet if you're getting old; the only hope I could have of leaving this mortal coil with trust fund intact would be if I fell over dead by age 50 and lowered the family health insurance premiums as a result. Now, if I keep working for a living it's pretty likely that I will fall over dead by age 50 -- my body is starting to give me a pretty disgruntled running commentary regarding stress, plumbing, and long-term tenancy for otherwise harmless upper respiratory tract diseases -- but if I did have the trustfund the "YOU MUST WORK OR YOU WILL DIE" stress would "poof" go away rather like a Mac turning off.) But certainly in the short term a "dinky little" US$25000-35000 income, as horribly tiny as it seems now, would seem like christmas and new years every time I opened up an envelope containing a dividend check, dropped it into the bank, and then went back to doing the {carpentry|computer case|pottery|painting|model railroad} project I was working on.

(Sure, if I dumped the house I could probably get that US$500,000, but (a) the house needs some work to appeal to modern tastes, (b) the housing bubble does not seem to be going as gangbusters as it was a few months ago, (c) we'd still need to find a place to live, which would make that US$500,000 evaporate just like magic, and (d) just like moving to Canada, selling Chateau Chaos requires a unanimous vote of the Chateau Chaos Governing Board.)