Forgive my utter ignorance here, because to this Midwesterner, the way New York City is portrayed may not square with reality.
Nevertheless, this article says that SNL performers generally make around $315k- $500k per year. Of course, most of them also have side gigs, such as standup comedy, writing for other comedians, the odd movie/TV credit, and so on. But let’s not worry about all that.
So if a young SNL performer like, say, Pete Davidson, was bringing in $500k annually, is that enough to allow him to live a lifestyle free of having to worry about pinching pennies?* Or is someone making half a million still going to have to cut corners in order to get by in The Big Apple?
Assume that he’s not trying to live above his means, like trying to rent a 2BR on Park Avenue and eating at Michelin-star restaurants every night.
~6K per month for nice apartment in Manhattan plus utilities (*12 = 72K per year)
1K per week for fancy dining and entertainment (~50K per year)
1K per month for taxi rides/transportation (~12K per year)
50K per year for leisure travel
10K per year miscellaneous
Even after taxes, and with a chunk for savings and investment, 500K would be more than enough for a young single entertainer to have a great lifestyle in Manhattan.
Just to clarify something, the median household income in Manhattan is $66,739. So making 500k means you are making 8x the median household income. Anytime you are making 8x the median household income you are doing fine.
At 500k a year, you are paying about 40% in taxes. So you are making about 25k a month net income.
Even a nice, but not amazing, apartment is probably under 10k in Manhattan.
If you can’t pay all your other bills on $15,000 a month, you need to get into therapy for your cocaine problem.
Yes, aside from the high cost of real estate, New York is not really any more expensive than any other major city. You don’t have to drive $25 martinis and eat steak at Del Frisco’s every night.
If you want to buy a $20 million condo overlooking Central Park with parking for your Lamborghini, send your kids to the fanciest of private schools, moor your yacht at 79th st Boat Basin and take a seaplane every weekend to your house in the Hamptons, $500k might be a bit tight.
One thing I’ve noticed as a frequent traveler to NYC is how surprisingly cheap it can be to eat great food. I found that in nearly every block in Manhattan I could get a good meal for under $10, and a great meal for under $20.
Fair enough. But even at 1.4 million, the monthly mortgage payments would be about $7000 a month. Very doable on 25k a month in net income.
But if you make your money in entertainment, you may not have a very long career. Signing a 30 year mortgage because you make 500k a year as an entertainer is not the same as if you make 500k a year as a specialty physician. Who knows if a bank will loan that kind of money to someone who could be back doing shitty stand up tours in 5 years.
This is an excellent point (though it’s tangential to the OP’s question). The specialty physician (or the investment banker, etc.) who makes $500K this year probably made something like $500K last year, and will likely make something like $500K next year. In this regard, entertainers are probably a lot like professional athletes: most of those who pull in a very large salary are likely to only make that kind of money for a relatively short period of time, and there’s a pretty high likelihood that they can go from $500K to zero in a very short period of time.
They probably have a pre nup, but if they don’t, a divorce to a pop star who likely makes ten times his income or more would probably boost rather than subtract from his income.
When my daughter lived in Manhattan in a fairly modest 2 BR apartment in Manhattan at $2500, she was told to expect the rent to triple within 5 years. That’s when she bailed to Brooklyn where she is renting a somewhat larger apartment at $3100. But she and her husband would love to buy an apartment, but anything at all is well over a million. With a combined income of about a quarter million, this is problematic. At a half million it becomes eminently doable. They don’t eat out a lot, although they do order in regularly. I have thought of moving to NY (Brooklyn, likely) but with an income of US$125K, this is really marginal (plus I would now be responsible for health costs). In Montreal that is quite a comfortable income. All retirement, so it wouldn’t change if I moved.
Yeah no kidding. If I were a performer on SNL, I’d rent a closet in Brooklyn, get around town on the subway, and cut every other corner imaginable, and invest every last penny that I could. Sure, I could be the next Adam Sandler. I could just as easily be the next Ellen Cleghorne.
And note that the OP’s article noted that Pete Davidson gets $15K for every episode he appears on. If, let’s say, he wants to take time off to do a movie, he doesn’t get paid for the shows he misses (of course, he’d be paid for the movie.) That becomes a big deal if you’re someone like a recurring character in a soap opera, where your character is very important for a two-week story arc, and then doesn’t appear for another three months.
The answer is obviously yes, that’s good money anywhere, as has been stated. I would just add that the question tends toward ‘how much is $500k in NY compared to somewhere else?’ There’s some assumption a person would insist on living pretty high on the hog at that income level, as in assuming they’d pay anything like 6-10k/mo for an apartment even here. IME many people don’t. They are looking at the relative ease of making that kind of money in NY compared to elsewhere as a way to get to financial security with a normal lifestyle, sooner.
As mentioned, decent apartments in perfectly fine neighborhoods (especially considering the whole City, question didn’t say Manhattan, and parts of Hudson Cty NJ are closer to Manhattan than a lot of the rest of the City) are more like $2.5k*. It’s a lot compared to cheap areas of the US for what you get, but not compared to $500k/yr. And the main eye-popper in NY is real estate, like other expensive cities, although also private education if you have kids and want to go that route. Otherwise depending what appeals to you in a vast city with all kinds of levels of everything, you don’t necessarily have to pay so much more than elsewhere. Some things are cheaper even, at eg. volume wholesalers of stuff which is a special item elsewhere, like that.
*the avg. non stabilized/non-public aka free market rent in NY is ~$3.5k but that’s like avg income, it’s skewed by very high figures at the top. It’s also not totally inconceivable for a person making $500k to have gotten into public/stabilized and never left. In theory a RS landlord can decontrol you if you make more than $200k for two years, but they have to find that out.
You don’t have to live in an extremely expensive rental or buy a multi-million dollar condo to live in NYC. Many of us have or or haved lived here for years doing just fine in co-ops. They cost quite a bit less than condos and have a stable resale value. It’s an affordable option.
Average or median housing costs can be a little misleading, because Manhattan is unusual in the way its real estate is stratified between high-income and low-income households, with comparatively little in the way of middle-income earners. Housing can be more restricted, too; Washington Heights is relatively affordable at a median rent of $2200, but 3/4 of its units are rent-controlled or rent-stabilized. Only 7% are at market rate, according to the linked article. Note that a high-income neighborhood in this context means a median income of over $137,500, though, so even there, $500,000 should be more than comfortable.
I wouldn’t discount the expensive nature of other elements of the cost of living. Groceries are reportedly double the national average, and restaurant costs are the highest in the US, according to Zagat. Child care is expensive, and taxes of course are high. On the other hand, you don’t have the expenses of a car, and there is a lot of cheap entertainment available. Overall, these are not going to eat up all of a $500K salary.
For a point of reference, first-year lawyers in the big NYC law firms make starting salaries of “only” $160-180,000, so even among white-collar professionals in Manhattan, $500,000 annual income is something that takes a lot of striving.