Monday, February 9, 2009

It's Expensive Being Rich

$500K? They've Got to Be Kidding, Right?

There is an interesting and funny NY Times article here about today's costs of raising a family in Manhattan (which is where I shopped yesterday). Makes it sound like $5 million is a baseline figure for a salary and that this $500K limit just isn't going to happen.

In my view, as a mother, my common sense indicates that the article forgot to mention a few expenses and minimized others. University costs, summer camps and other expenses for multiple children barely got mentioned, and (country) club memberships at two residences didn't either, or unexpected country house maintenance and improvements, gift expenses and many different forms of transportation. What about setting some aside for the future?

What could Washington be thinking? Evidently it's cheaper to live in Georgetown than Manhattan.

Maureen Dowd, the Washington columnist, could have a field day with this one.

Robert Frank's new classic "Richistan" here at B-N details some of those expenses in greater depth. His current blog is here. Quite presciently he predicted in December '07, that in '08 the rich might come down to earth. And did they ever!

"...I expect prices in the art, wine, collectibles and high-end real-estate market to slow. I don’t expect a crash or a burst bubble, since there’s continued strong demand by the rich in China, Russia and the Middle East. But I don’t expect any $150 million paintings or $750,000 bottles of wine. And I think high-end real estate will plateau, if not decline.

In short: The rich will do better than the average consumer next year, since they are still getting the lion’s share of the economic gains. Yet their lives, and the prices they pay, may come back down to earth."

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