Back in 1980, Andrew Tobias (who also wrote “The Only Investment Guide You’ll Ever Need“) wrote a book called “Getting By on $100,000 a Year.” It’s a humorous look at what it was like to live in the financial industry at the beginning of what turned out to be a long stock market boom.
Things have changed since then, and $500,000 is the new $100,000 for bankers. The New York Times wrote a piece about getting by on $500k and what it might mean for some bankers, including enrolling children in public schools (rather than private ones).
The article can be found here.
The thing that stuck out to me was the co-op management fee on housing in NYC. When you buy an apartment in New York, there is a monthly fee that is similar to a Homeowner’s Association fee. The example they use for a $1.5 million apartment has a monthly payment of $8,000.
When you stop to think about what $8,000 per month could buy you, the list grows quickly. Most telling, though, is that a 30-year, $1,490,000 loan with an interest rate of 5% would have a monthly payment of $8,000. If a buyer had put 20% down on their home, the loan would actually cost less than the co-op fee.
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It’s amazing to think that people are paying $100k for their common expenses. No wonder freelancers are so expensive in NYC.