When $300,000 Per Year Isn’t Enough

Libby Kane

When hard times come, some people cut their coffee habit.

Others … their Aspen habit.

At least that’s what happening this year, since Wall Street bonuses dropped an average of 13% to their lowest point in four years.

Take for instance real-estate investor and hedge-fund manager Richard Scheiner, who Bloomberg reports has a labradoodle named Zelda and a rescued bichon frise, Duke, both of whom cost him $17,000 a year.

Scheiner decided to sell two motorcycles he didn’t use. He call his car “the Volkswagen of supercars”: a Porsche 911 Carrera 4S Cabriolet.

Andrew Schiff, who, as director of marketing for broker-dealer Euro Pacific Capital Inc., makes $350,000 a year, rents a duplex in a brownstone in Brooklyn where his 10-year-old daughter and 7-year-old son share a room. “I can’t imagine what I’m going to do,” Schiff told Bloomberg. “I’m crammed into 1,200 square feet. I don’t have a dishwasher. We do all our dishes by hand.”

Is It Ridiculous?

Some of the Wall Street sufferers make it hard for others to identify with them. The woman who calls the decreased bonuses “a disaster” might be overstating it a little, and the claim that “people who don’t have money just don’t understand the stress,” is shockingly insensitive.

It reminds us of the UrbanBaby thread in which moms with household incomes well in the 1% complained that a $13 million income made them feel decidedly middle-class. Apparently, there’s just something about New York that makes it easy to be out of touch.

Or Sympathetic?

Of course, it’s easy to roll our eyes when you read that during flush times, one of these Wall Streeters once spent $3,000 on a three-day trip, but we all understand how hard it is when money you thought was coming in isn’t going to.

Some of these financiers enrolled their children in expensive private schools, banking on an expected income. Now they are having to pull their kids out of those schools and cancel or cut back their vacations.

Cue the Emergency Fund

To combat this kind of unwelcome surprise, we recommend everyone stockpile some money in an emergency fund—enough money to cover your living expenses for six to nine months at least, in case of surprises just like these. Saving isn’t always fun, but we’re sure glad to have a cushion when something goes wrong.

In that respect, we have to commend Scheiner (he of the $17,000 a year in dog upkeep) who isn’t feeling the pinch as much as his fellow financial titans … because when things were good, he saved.

More From LearnVest

Some people still feel poor and overspend, even those with over $75 million in the bank! What gives?
Wanting it all can make you unhappy. This is why.
Think you’re not part of the 1%? Think again

  • http://mischievouskitty.blogspot.com/ Stephanie

    What bothers me most about this is that these people aren’t even complaining about a reduction in their base salary, they’re complaining about lower BONUSES.  Regardless of your income level, if losing a bonus (in part or in whole) would cause significant financial distress, you’re budgeting wrong. 

    Also, most of the stuff they were complaining about not being able to afford were luxuries: a summer home rental, private school for their kids, vacations, etc.  They weren’t complaining about not being able to afford their mortgage, or food, or even retirement savings.  It’s really hard to have sympathy for them when there are people who have to choose between paying rent and buying food. :-

  • Andrea

    I agree w/Stephanie, it is very very hard to have sympathy for these people — I actually would have an easier time if they were interviewed and said, “I realize it’s crazy for me to complain about not being able to go to Aspen when we are so very fortunate, but damn I will miss my vacation” or something slightly more real. 

    As an aside, this kind of reminds me of this awesome book I read a while back, The Two Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke, which pretty much makes the argument not to count on always having two salaries. That may be like Stephanie’s point below, don’t count on that bonus, but if you get it, by all means go nuts, enjoy your ski vacations, etc. But live as if you won’t get it. Amazon.com link to that book btw, here: http://www.amazon.com/Two-Income-Trap-Middle-Class-Mothers/dp/0465090826

  • Rachel

    I think I can muster up some sympathy for just about anyone who has had a major financial blow, like collapsing income they were counting on, even if they make far more than I do and even if that income typically comes in bonus form. And, I can especially feel sympathy for any child of a parent going through tough financial times. It may seem to you, dear reader, that private school is a luxury, but try telling your 15-year old that she can no longer attend the school she has been in for years, the school where all of her friends will continue to go. If it is for the be 
    Growing up, I was on the receiving end of more than one financial downswing thanks to my parents’ less than frugal ways. For financial reasons, we moved 1200 miles away when I was half way through high school. Now, I survived this (and am a more cautious financial person because of it), as will the children who may now have to attend public school, but I never managed to make the kinds of friends I had in my original school. And, to this day (more than a decade later), I still have fewer close friends than I did before I moved and than most of the people I know do. I do not have a single childhood friend with whom I am still close.

    I think we should all work to be more understanding of others’ difficulties, even when they seem foreign or negligible compared to our own.

  • LP

    The only thing I feel sympathy for is children enrolled in private school that suddenly have to move schools. That would be tough for any kid. But I really can’t sympathize for anyone who spend on their DOG what I spent on MYSELF in a year.

    • ranavain

       Eh, I don’t really have that much sympathy for the kids either. Plenty of kids have to move schools plenty of times for various reasons, and don’t have the benefit of having taken Aspen vacations (or getting new cars when they turn 16, or having their college paid for by their parents, etc).

      This is just another example of parents being irresponsible and not having emergency savings to back up their lifestyle. If your kid would be crushed by moving to a new school, then make sure you have savings to cover hard times, or put them in public school in the first place.

  • Thatsnancy

    Anyone who depends too heavily on their money for happiness will eventually be miserable–no matter how much they have or lose. Ask the lottery winners who blow through their winnings trying to buy happiness…many of them say they wish they had never had the extra money and that it brought misery with it. Keeping money in perspective isn’t always easy, but I think it is worth trying to limit its power in your life.

  • Kate

    If you take away 50% in taxes from $350k, you’ve got $175k, figure about $7k per month (at least) for the Brownstone ($84k,1200 sq ft), maybe $14k or more for food (probably more cuz job requires eating out with clients?), childcare/preschool/tuition there runs $15k each ($30k or more), regular monthly bills, life insurance & phones maybe $15k or more, transportation/taxis $2k, good clothes for work plus cleaning/laundry $4-6k….well, we’re not even into retirement-type 401k’s/IRA’s, vacations, gifts, healthcare yet….