With all the talk about income inequality, I’ve become curious. Just how much does life at the top of American society cost? I know there are stupid excesses, like houses so big the owner drives a car from room to room and other such nonsense. But, let’s say living in a penthouse with a couple of servants and someone to tend to and drive you around in your car all while wearing tailored clothes and eating the finest foods. Less than $20,000 a month is my guess.
Title edited to make subject clearer.
Colibri
General Questions Moderator
*Less than $20,000 a month is my guess. *
Ridiculously low. You can easily spend 20K a month on a Manhattan penthouse apartment without even trying.
A full time chauffeur is going to be a minimum of 5K a month, so figure another 20K for servants.
I’m thinking 100K a month is a more reasonable starting point…
Here’s a couple of penthouses in Manhattan for $18,000-21,000/month.
I also think servants will set you back a similar amount per month. Dinner in a fine restaurant may set you back $100-300. If you eat out every meal in the finest places you’re easily looking at $100,000+ a year.
You could easily be spending $1,000,000 a year without trying very hard.
for a real world example—
my brother and his wife who I’d call the bottom 1% of the top 1%.
- new home, $1.5 million with 20% down.
- a new BMW 3-series + a new Honda Pilot in the garage
- a full-time, 9 to 5 nanny for my 2 y.o. nephew
- country club fees
- everything is middle-class “normal.” stuff that you’d find at Nordstrom, Costco. they don’t live extravagantly unless it involves dining out or travel.
my sister-in-law (the main bread winner is at a brand name bank) travels a lot. my brother is a pediatrician and brings up the rear. Both 36.
the killers are the mortgage and property taxes. you’d probably need a pre-tax annual household income of $300,000 to live comfortably in their neighborhood. $250,000 and you’d be scraping by.
Of course if you’re in NYC or Malibu, multiply these numbers by at least 3—again mostly due to housing costs.
I don’t know. It seems to me you could have all that at a lower price by living in a 4 star hotel penthouse and renting a limo when you wanted to go out.
$240K a year is a lot of money but it is not rich rich money. At that level of money depending on where you live you can take nice trips but you probably don’t upgrade to business/first class unless you find a good deal. You probably have a maid who comes in once a week or once every other week and a buy to do yard work. You don’t have a driver or other full time servants.
Tailored clothes are not much more expensive than nice stuff from Macy’s. I have a custom suit that I don’t wear much from when I got married. It cost about $500 with two pairs of pants. You can get cheaper in Macy’s but you can also spend a lot more. You can get custom shirts for about $90 each. As with every thing you can spend a lot more for slightly better custom clothes.
I think this is entirely dependent on where you live. $1 M in DC will buy you a small condo in a mostly-OKK neighborhood in DC. In a smaller city, $1 M can buy a genuine mansion. Likewise, qualified household help in larger cities may go for well above minimum wage, and housing them can be expensive. In a small city, you may find plenty of qualified people happy to work for minimum wage.
You could, but Rich people don’t like to live full time in a hotel. Plus, I’m betting the penthouse suite at a real nice hotel would be close to $1000 per night. That’s $30,000 a month right there.
I know people who easily spend $10,000 to $15,000 per month with no servants and nothing too “rich” about their lifestyle. Once you have a yacht, you’re got a lot more expenses.
You aren’t even remotely close on your $20K a month figure to even begin to get into the truly rich category. As other people have noted, even upper middle class people spend that much in some cities without even trying. One thing you may not take into account is that you have to pay full price for most big ticket items and that gets really expensive especially if you have kids and don’t try to cut corners. If you have two or three kids, you will be paying full price for their (likely) incredibly expensive college and possibly graduate tuition just to keep them at the same income level the have growing up. That can easily cost in the many hundreds of thousands of dollars or more on its own. You also have to invest a significant percentage of your income so that you don’t go broke when you can’t make as much anymore otherwise you will lose everything very quickly.
That is just upper-middle class stuff though. To be truly rich, you have to go a couple of steps beyond that and both the laws of diminishing returns and the cost-benefit analysis start to become big factors. Sort of rich people buy their own 1st class plane tickets, medium level rich people by time-shares in jets on demand and really rich people have their own private jets. Even first-class plane tickets are usually exorbitant compared to cattle class and can easily cost 10x more but some people think it is worth it. However, the next class up buys fractional shares from a thriving company like NetJets that will just come and pick them up and take them wherever they want to go 24/7/365.
Here is the cost for an entry level NetJets membership (and they have been around for a long time):
“An entry level prepaid fractional jet card providing 25 hours of flight time on a light jet will cost between US $125,000 to $135,000”
That sounds pretty expensive but it is nothing compared to owning your own jet with a flight crew like truly wealthy people sometimes do. You can buy very small jets in the low millions but that isn’t what people like that usually want. They go for customized mid-sized jets that cost in the tens of millions of dollars at the least and have operating costs in the many thousands of dollars an hour. A single engine overall costs more than most nice houses on those.
Combine that with a very expensive house, some type of nice boat, a vacation property or two, fancy meals (that you usually pay for no matter who is there), parties, expensive cars, private schools and everything else that is the hallmark of the truly rich and you are looking at some serious money.
Sure, you can live a nice upper-middle class life on much less than $20K a month in most places but that isn’t what you asked about. It takes a lot more than that to put you into the truly rich category even in the poorest areas of the U.S.
I’ve wondered how much it costs to actually get within 95% or so of the utility enjoyed by the rich people.
What I mean is, some of the nicer business class seats are probably 95% as good as the experience in first class or private. Living in a McMansion in a cheaper city with a housekeeper who only comes by to clean a couple times a week might be almost as good as a live in maid. Driving a luxury mass market car, and “only” having a closet full of $1000 tailored suits might be almost as good as the excessive wardrobes of the rich.
We might not be able to afford to marry Ivanka Trump, but a paid mistress who shows up 2-3 times a week might be almost as good.
And so on and so forth.
Also can be written off on Expenses.
The private jet is not just about comfortable seats. It is about not going to the public airport terminals at all. No security, no waiting for your luggage, not rushing to make the airport on time. The flight will not leave without you. This is why supersonic jets don’t make sense the people that can afford to pay for seats on concord can afford some kind of private jet flight. The flying time may take longer but the rest takes less time and you are more comfortable.
If you are very, very rich you send your children to private K-12 schools that cost nearly as much as a private college. There are a couple of schools in St. Louis (not known as a haven for the super-rich) where tuition exceeds $25K per year.
In the early part of the twentieth century when cars were still a new invention, they were a pain in the ass to maintain and to drive. Tires went flat all the time, various parts had to be lubricated, the radiator had to be filled with water and bolts needed to be checked and tightened. For that reason, it made sense to employ a full-time person to maintain your cars. Today, cars are vastly more reliable and my sense is that many rich people drive themselves around most of the time. If I were rich, I wouldn’t bother with a full-time chauffeur but instead would just keep a car service on speed dial.
Tom Wolff wrote about this lifestyle in Bonfire of the Vanities. It was back in the 1980’s , and Wolff was describing the new phenomon that we now all recognize as “the one percent”.
And one major issue that he emphasizes is not just the cost of living at the top, but the importance of showing off how much you spend.
He describes hosting a dinner party , and the importance of the flowers on each table. In order to maintain your social status, it was a requirement to hire a special professional floral designer, to fill each vase with an arrangement of flowers–at $1000 each.
I think chappachula captures it well. When you get to the super-rich category it ceases to be about the quality of the experience and instead it becomes a point-scoring exercise (with someone always willing to go just that bit further).
If you don’t care about what other people think and aren’t materialistic you can easily live a life of relative luxury for far less than $20000 a month.
Same thing among the poor, the goods and brands just differ(obviously the cost does too).
Or if you are an ordinary Joe with young kids. Daycare in DC for an infant is about $2,000 a month, and that’s at a “nothing special” center. I don’t know how people do it-- I don’t know how I do it.
Remember a few years ago about Richard Branson, the owner of Virgin Airlines? Well he owns his own island where his parents live and a few years ago there was a fire on the island which caused alot of damage because the island didnt have any, or not much of, a real fire department.
So say YOU want to own your own island. Better factor in the cost of fire and rescue service because you cant just pick up as phone and call 911.