Upper Middle Class in New York?

Prospect in Other

How much money do you need to make to be able to live an upper-middle class lifestyle in New York? I know this varies from person to person and depends a lot on preference, but at what comp level could a single person without kids feel like they don't really have to worry about money?

I know this is vague, but curious to hear peoples thoughts.

Comments (106)

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  • Investment Manager in HF - Other
Jun 17, 2020

The "don't have to worry about money" part is going to cause all sorts of confusion and lead to wildly different answers. It also depends a lot on things like student loans, etc

When I made ~$120k I felt pretty free, had a nice apartment, had nice meals when I wanted, went out with friends to bars on the weekends, and travelled a bit, nothing extravagant and saved a bit. I really didn't worry much about money, but that's because I mostly had a forward looking view (on my comp) and had relatively simple "wants".

When I made $500k+ I felt similar, everything was just done a bit more (nicer apartment, nicer food, more travel, etc). Again didn't worry that much, but didn't feel much different.

And that has continued as my comp has continued to grow, I have to say maybe I worry a bit less financially, but the goalposts just move. I'm not terribly materialistic (maybe I'm kidding myself), but I am more concerned with greater financial freedom (go do whatever I want for 10 years, not worry about losing job, have 0 debts and property, etc), so that becomes a bit of the worry. So all of a sudden even though I have a fair bit saved I worry about it not being enough if I have kids, or if I end up wanting a lower paying job, etc, don't get me wrong, it isn't a real problem, it is ridiculous to worry about that with the world the way it is, but if I'm being completely honest I do worry about it. And lifestyle does creep a bit, more travel, a very nice place, high food bills, pay more for experiences, start flying first class, hotels get nice, etc.

So a long way of saying it really depends. I think at $200-300k as a single person you can be very happy in nyc and not have many worries. Just don't compare yourself to the person dropping $50k on bottle service, etc.

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Jun 17, 2020

Yup...I am in a similar boat, currently living in a 2 bedroom downtown.

As a side note though, it seems like many of the wealthiest people in New York come from other countries. For example, many of the newly constructed luxury condominiums are purchased by people who made their wealth elsewhere. And it is interesting, because a large number of them almost never live inside their multi-million dollar condos. They just visit twice per year or so.

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  • Investment Manager in HF - Other
Jun 17, 2020

Yes those are purchased as investments or to park cash. As nice as some of these towers are, most people living full time in nyc don't want to live in those areas ("billionaires row"), it is very touristy and pretty different than the "typical" nyc areas (tribeca, west/East village, soho or if you have a family UES/UWS). These are the "flashy" purchases, in that they are the new buildings with a lot of publicity. Those are also not upper middle class, those are straight up rich (very rich) people.

But there are plenty of $5mm places around nyc that are very nice but have less of the publicity of these towers (and are cheaper than most of those). New York City residents don't live in those towers or areas.

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Jun 18, 2020

This reminds me of the show million dollar listing where those agents find their clients some condo penthouse for $50k/month and they'll only stay for like 3 months out of the year. Crazy stuff, but I'd love to be able to do that.

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Jun 19, 2020

This is how some people overseas clean their cash. Hell, some people here in America like Paul Manafort use this method as well.

  • Intern in IB-M&A
Jun 17, 2020

Minimum 800k

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Funniest
  • Analyst 3+ in HF - EquityHedge
Jun 17, 2020
Intern in IB-M&A:

Minimum 800k

Certified Investment Manager who Makes $500k+ -

"$120k is nice, $200-300k is comfortable"

Intern -

"Minimum $800k"

WSO in two posts.

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Jun 17, 2020

haha

  • Intern in IB-M&A
Jun 19, 2020

lmaoooooooo gotem

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  • Business School in Other
Jun 17, 2020

You can be comfortable on any income, problem is dating lol. Everyone in NYC either comes from a trust fund or has a really high paying job. Its tough to stand out here!

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Jun 17, 2020

Yeah. But you are not missing out on anything. With some notable exceptions, the dating pool is nothing to write home about. However, it is so much better than the dating pool in other places.

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Jun 22, 2020

lol, the dating pool doesn't get any better than NYC if you're looking for cultured, beautiful, and smart people.

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Jun 18, 2020

If money is they way you plan on attracting your significant other you really need to reconsider your life

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  • Business School in Other
Jun 18, 2020

Sorry to burst your bubble IBD analyst, but girls at my age just care about two things: your money and your family's money.

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Jun 23, 2020

It's not JUST about the money, but let's not pretend that a man's earning power isn't the single biggest determining factor in his ability to attract a mate.

Jun 23, 2020
Business School in Other:

You can be comfortable on any income

no

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

Jul 15, 2020

Or just hit the gym man.... if you have to rely on your bank account you're in trouble man...

Jun 17, 2020

How much are you aiming to invest per year? This is the worst part about living in a high CoL place...

Jun 18, 2020

Are you defining UMC by the salary data point or by the standard of living?

I'll give you two examples.

I know a couple that is frugal as all fuck even though they make probably $700-800k together (big law lockstep salaries). They live in a 1 br walkup in west village and live like they are planning for a financial apocalypse. (If you have seen my worrisome posts about the costs of raising children, their fearmongering on the topic was my inspiration.) Granted, they don't really have the time or the energy to spend their money but I don't think they'd blow it anyway even if they did. To an outside observer, they would come off as living a very average lifestyle despite their high HHI that could definitely be classified as UMC

I know another couple who brings in somewhere in the ballpark of $200-300k together, although I'd wager it's right at that $250k mark. They are literally the first couple's worst nightmare but they definitely live an UMC (or maybe even upper class) lifestyle - big 1br in a nice doorman building in flatiron, eating out at $$$ places all the time, trips every few months to the fucking Maldives/ Telluride/ the Hamptons and shit, plus she's always carrying designer everything. Guarantee they do not save a single cent and probably have cc debt too.

The first couple will worry about money until they hit like $2 mil, I guarantee it. They are convinced that they are middle class based on their collective take home lol. The second couple thinks they've made it because their collective HHI is above average values and are technically the 1% when compared to, ya know, bumfuck Ohio.

The number at which you stop worrying will depend on you and your spending habits and personal financial goals/ outlook. But assuming that you aren't flashy or a spendthrift or partying like you're a celebrity, I'd say $500k is a somewhat comfortable point (1-2 kids, public school, modest housing)

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Jun 18, 2020

In NYC, a combined income husband and wife of 500k is the start of upper middle class.
500k *1-40% tax rate - 310,000 k per year or 20k a year on restaurants, 20k for groceries, 50k for nanny, 60,000 for rent, 40k for school for two kids private/cheap private. 80k for top tier private schools. 270k total with about 40k leftover a year for savings/whatever. This is barebones, Pretty comfortable life, school would be cheaper for catholic vs private.

  • Investment Manager in HF - Other
Jun 18, 2020

I agree with you, but OP is asking for a single person with no children. So you can remove the school/nanny costs, etc. So I think the number is much lower to live a happy life in nyc as a single person. Agree that all changes with kids and significant other.

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Jun 18, 2020

ah, so yeah about 250k if you want to live the good single life.

Jun 18, 2020

But who the fuck wants to have kids in the first place?

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Jun 19, 2020

about 85% of all women

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Jul 13, 2020

I can't for the life of me understand why people have them by choice, especially people living in NYC, but to each their own I guess.

Jun 18, 2020

500k seems a bit much for "upper middle class" unless your definition of upper middle class is "top 1%". My understanding is that most consider UMC (emphasis on the "middle") to be top 10-20%. Data shows this to be around $200k for NYC - and substantially lower for almost everywhere else in the country.

  • Analyst 1 in IB - Gen
Jun 18, 2020

UMC feels like ~90-99th percentile whilst MMC is more like from ~70-90th percentile and LMC is more ~50th to 70th.

Messing around with this in NYC those figures are:

Single:

UMC ~$160-500k

MMC ~$80-160k

LMC ~$50-80k

Household:

UMC ~$250-750k

MMC ~$125-250k

LMC ~$75-125k

Which seems to make intuitive sense range wise.

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Jun 18, 2020

If you're single at the senior associate/VP level, you feel rich even in NYC.

  • Analyst 1 in IB - Gen
Jun 18, 2020

probably feel like a loser too

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Jun 19, 2020

If your self-worth is tied directly to a spouse or significant other, then you've got much bigger problems than money.

Jul 13, 2020

As one of these, I do not.

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Jun 18, 2020

Why go for upper middle class bro? Why not go for the top 1 percent?

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  • Analyst 1 in IB - Gen
Jun 18, 2020

Top 1% threshold in NYC is ~$700k - https://www.bloomberg.com/news/articles/2018-10-16...
That's Director/ED in IB, Principal in PE, Sr Analyst or Jr PM in HF/AM money - not exactly happening for a while (if ever if you leave finance).

Jun 18, 2020

What do you mean by "if ever if you leave finance."
Majority of the richest people on Forbes are not even in finance.

Array

Jun 18, 2020

I legitimately think 90% of it depends on if you want to have kids and when.

Jun 18, 2020

Yup. No kids = best route

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  • Intern in IB-M&A
Jun 18, 2020

False

Jun 19, 2020

multiple studies show that in order to not be in poverty and to join the middle class all you need to do is get a GED or graduate high school, get a job, not have kids before being married, and not having kids before 21.

2% chance of being in poverty among those people. Kids are something that pushes you to grind the extra hours and be less well off at the same time. most people wouldn't have the drive to work as hard as they do if they didn't have kids and also would be more comfortable at the same time. wealth compounds and timing kids make a huge difference.

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Jun 19, 2020

I'm not necessarily disagreeing with you, but can you actually cite any of these studies Mr. Shapiro?

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Jun 19, 2020

But there are not many job choices for high school diploma holders.

Array

Jun 18, 2020

The question is a little bit backwards. Define / budget out an "upper middle class" lifestyle and that gives you your answer

  • Director in IB - DCM
Jun 18, 2020

director at a BB. The problem is the longer you stay in banking the more of your wealth is deferred comp you can't touch for awhile and locks you into the chair which makes it harder and harder to leave. at my firm the deferred compensation takes 4yrs to vest. And this past year it all got dished out pre-COVID before bank stocks got whacked...

can live comfortably obviously but so much of it is contingent on getting good bonuses and socking away the deferred comp so definitely not the type of lifestyle where you're dropping 50k on bottle service if you ever have plans of getting out

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Jun 19, 2020

I literally have no respect for a stupid guy dropping 50k for bottle service. That's kind of trashy.

Array

Jun 19, 2020

So you're not a fan of Johnny Depp?

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

Jun 19, 2020

Yeah, I've seen people in this industry making nominally high salaries but their lives look like they're running on a hamster wheel.

Jun 18, 2020

The issue with a question like this, and why it has so many answers, is that NYC has some incredibly 'steep' housing and other costs IF you choose to incur them.

I.e., you can live in cheaper parts of Brooklyn/Queens, or live in a suburb and take commuter rail (and you may actually have a shorter commute than parts of Brooklyn/Queens). This of course 'trades off' the city and all of its awesomeness (which looks pretty shitty these days with COVID).

If staying in NYC (closer in parts).... if you have kids and feel the need for them to have a room and even private school. Then that $500k min is prob legit, but really I'm sure you could do pretty fine at $250-300K sans some of the frills. Same family can go to the suburbs at $200-250k and feel about the same (albeit different types of consumption).

There is a lot of preference between city life and suburb life and it is really stark in the NYC metro due to commute times. If you want 'city' life you PAY for it, but you don't NEED to in order to have the same career for the most part. Live in NYC and pay the 3.8% tax, move out and don't, ever there you get hosed. Property taxes higher in suburbs, but you get good schools so a better trade if you factored private schools.

If you can get the NYC stamp and move to a cheaper city, then you can be really well off on a relative basis. Not all that hard to do in reality. But if you feel like you NEED to be in the city, just accept that it will cost you!!!

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Jun 19, 2020

Good point, but I will never leave the city

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  • Intern in IB - Gen
Jun 19, 2020

No one asked or cares. And that goes for 99% of your comments.

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Jun 19, 2020

I don't think income is the way to look at it. Income from salary is inherently short term as it speaks to a yearly basis. How much security do you get from that? Not much.

When you achieve a net worth and asset base that generates enough investment income or accrual yearly that covers all your expenses, then you are wealthy. for New York thats probably 75k a year really for a minimally comfortable life that covers decent basic expenses emergencies and discretionary spending. 100-180 for a really comfortable life. 200-300 for a very good life, and anything more allows for frivolous activity or things you don't need (if single).

I think it demonstrates the power between having 0mm, to 1mm, to 2-3mm, to say, 5 million where you don't need to work and your net worth grows even after covering basic expenses at a 3-4% return, maybe 6-7 to protect from inflation.

What would that translate to in income? because the taxes are higher on salary probably like 120-200k posttax is pretty comfortable and anything above that you can be 'free'. To really be free thougu requires not needing to work but choosing to do so. Which many successful people in finance do tbh

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Jun 19, 2020

I think as you earn more money in absoloute terms, you end up feeling less well off in relative terms

the upper/upper middle class is small, so as soon as you join it there's a bit of pressure to maintain an image, and be like the people who are richer than you. There's more pressure to have nice things, pay the bill when you go out, send thing #1 and thing #2 to private education etc. you might live well on 250k but if your finance friends are living a 400k lifestyle, then you're gonna need to make a lot more to feel on par

If you want to just live well in NYC, honestly you'd be fine clearing 150k, it's just what do you consider essential and who you hang out with what will determine a 'comfortable' income

Array

Jun 20, 2020

It's such a loaded question, with so many answers.

It depends on what kind of lifestyle you want to live. There's no fixed number, but rather a range. When I see "typical" upper middle-class families, I immediately think:

  1. Apartment that can facilitate a whole family - up to at least 3 kids and 2 parents. So maybe $5MM?
  2. Multiple cars, one for him and one for her - that probably get swapped out every so often. Obviously depends on exactly where you live, and how you're going to commute to work.
  3. Day-care for their kids
  4. School fund for all their kids. That is - private tutoring, prep school, college.
  5. Decent vacations and retreats
  6. Slush fund for hobbies and other activities
  7. Savings / investments.
  8. Regular expenses (food, clothing, health, etc.)

Let's say you're a couple, and plan to get 2 or 3 kids. And over a 20 year period, you'll have to spend approx $10MM on all of the above. Without accounting for inflation or other things, that would come to $500k / year, or $250k / year each, after taxes. So let's say $350k-$400k each, before all taxes?

But again, that's the family upper middle-class approximation. If you're single, or a childfree couple, you could push that number lower.

Jun 20, 2020

I mostly agree with your conclusion for a family of 5 but I think the way you got to it is a bit confusing and overstates what that lifestyle would look like.

Take the $5mm apartment, you are assuming that it is just a cost over 20 yrs with no maintenance, taxes, but more importantly 0% interest. Most people at this income will get a mortgage and put down a 20% down payment. Then the monthly mortgage + taxes + HOA will run you ~$22-23k a month. So right there that is close to $475-500k pre tax income.

Then if you throw in private school ($50k per child), depending on the timing, etc you are at another $250-300k of pre tax income.

As you can see, that + regular expenses + the other expenses you mentioned (nanny, vacations, etc) gets you up there in income.

So I think you are making some simplifying assumptions and that by looking at it over an aggregate period you are missing the point in time costs (as well as the career progression). Looking at averages over these long periods can be confusing ($800k average over 20yrs probably means you started reasonably lower, then you have to factor in when you have the kids, when you get the apartment, etc). So while on the backend (as kids graduate, no nanny care, etc) you would be saving and making up for the losses the question is can you afford it point in time and actually save?

But I do agree that $750-800k is upper middle class for a family, it just usually isn't the lifestyle you described.

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Jun 20, 2020

Yes, they were some quick back-of-the-napkin figures - so a lot of variance.

But main takeaway is that kids = expensive. Everything needs to be scaled up, so the same standard of living can be vastly different in price, depending on your life. I think that you're single or a couple that doesn't plan on getting any kids, then you can live a good and comfortable life for MUCH cheaper. Especially in larger cities like NYC.

(I'm guessing that a lot of WSO posters are on the younger side, and have probably planned out their lives ahead pretty well. Wouldn't surprise me if some posters have been making spreadsheets with budgets that go 10-15 years into the future, taking in account for their future / planned lifestyles. So for those, I think it's good reminder that life is dynamic, and unplanned / unforeseen expenses have a tendency to come out of the woodwork as life gets more complex and involved.)

Jun 21, 2020

THANK YOU.

And lol at everyone on this site who throws out "just move to the suburbs" as a fix all solution. Does anyone even know what living in the suburbs entails? It means either scheduling everything at the mercy of a train schedule or paying a small rent for your parking spot and dealing with hours of traffic. It means waking up at ungodly hours to get to the office for important early meetings and having to miss out on business dinners or functions that happen on the evenings to at least some degree. It means so much more bullshit from your kids' "free" schools and being stuck in, you know, the suburbs on the weekends. Worst nightmare imo

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Jun 20, 2020
tackytech:

It's such a loaded question, with so many answers.

It depends on what kind of lifestyle you want to live. There's no fixed number, but rather a range. When I see "typical" upper middle-class families, I immediately think:

  1. Apartment that can facilitate a whole family - up to at least 3 kids and 2 parents. So maybe $5MM?
  2. Multiple cars, one for him and one for her - that probably get swapped out every so often. Obviously depends on exactly where you live, and how you're going to commute to work.
  3. Day-care for their kids
  4. School fund for all their kids. That is - private tutoring, prep school, college.
  5. Decent vacations and retreats
  6. Slush fund for hobbies and other activities
  7. Savings / investments.
  8. Regular expenses (food, clothing, health, etc.)

Let's say you're a couple, and plan to get 2 or 3 kids. And over a 20 year period, you'll have to spend approx $10MM on all of the above. Without accounting for inflation or other things, that would come to $500k / year, or $250k / year each, after taxes. So let's say $350k-$400k each, before all taxes?

But again, that's the family upper middle-class approximation. If you're single, or a childfree couple, you could push that number lower.

This is upper middle class? This sounds rich, but not wealthy..which I guess I consider "lower upper" class.

Jun 21, 2020

gross air and a bunch of bozos all up in your face. everyone in nyc is broke. some of them just got a lot of cash

heister:

Look at all these wannabe richies hating on an expensive salad.

https://arthuxtable.com/

  • Business School in Other
Jun 21, 2020

Lot of inherited money as well. Pooled money by parents, grandparents, etc.

Jun 23, 2020

I'd say $250k if single and not going too crazy. Can get yourself a decent 1BR and still have ample funds for savings and discretionary spend each month.

As other noted, if you're doing Manhattan with a family you'll need to be pulling in $500k+ as a household and if private school comes into play you'll need to bump that up.

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Jul 13, 2020

How do you guys factor in bonus into these numbers. Making $500k might be UMC in Manhattan, but if half of your income is a bonus you're really living on $250k and then having a huge cash infusion on one random day of the year, so it makes it hard to really plan around that number, unless you live in the red until bonus or just live off your base and pocket the bonus (my strategy).

Jul 14, 2020
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Jul 14, 2020
Jul 14, 2020