New York City is undoubtedly the greatest city in North America that everyone dreams of living in – unfortunately, it is the also one of the most expensive ones. Where an annual income of $100,000 is more than enough to sustain a fulfilling lifestyle anywhere else in the country, it is barely enough to get by in the city of dreams.
Being a Millionaire will not Cut It Anymore
High rents and cost of living in the city of New York has made it tough even for the rich millionaires to survive in the suburbs. A decent two-bedroom condo in one of the wealthier neighborhoods in Manhattan can have a hefty price tag of $1.5 million – and if you’re planning to buy a bigger house for your family, you may have to put away significantly more money.
According to a study, almost 5 per cent of the Americans are millionaires with an average net worth between $1 million to $3 million, and most of them live in rich states of New York and California. But even the wealthy think that their vast riches are illusive and it’s only a matter of time before New York City’s high cost of living and exorbitant tax rates completely deplete their bank accounts.
The Happiness Number of New York Residents
New York City may be one of the most luxurious cities to live in the United States but that doesn’t mean that the residents of the city are content with the quality of life. Even though most New Yorkers have a net worth in millions, they claim that the 6-digit number is simply not enough to lead a happy life.
This ‘happiness number’ can vary from person to person depending on their needs – but more importantly, it depends on where you live and how much you spend on the basic necessities including rent, bills and food.
Considering the 30 per cent income tax rate and high rent, it’s understandable that even the city’s millionaires are struggling to make ends meet. Most residents complain that after paying for all the necessities, there is hardly any wiggle room left to spend on other things or save up for a rainy day.
Since the wealthier folks often live in more expensive neighborhoods, send their children to expensive schools, hire staff to help around the house and take lavish vacations, their happiness number is much higher than an average American. Moreover, if they decide to splurge more on buying vacation homes, taking private jets and saving millions for their children to inherit, the number goes up even more.
Families may Need $190 Million to Live in the Expensive City
So, how much money is enough to buy happiness for a wealthy family of working parents and two children in their teens? A trust analyst calculated this hypothetical number based on how comfortably they could afford their extravagant lifestyle while saving for their children’s trust fund without having to worry about the finances.
According to the expert’s calculation, this fictional couple needs to accumulate $190 million in net worth to live a life free of any financial troubles. This number is unsettling since out of the 5 per cent Americans who are millionaires, only 0.45 per cent have a net worth of $100 million or more. The statistics make it easier for us to understand why these millionaire residents of Manhattan’s poshest neighborhoods aren’t happy with the amount of money they have.
$190 Million for what Exactly?
But what exactly is it that New York families need a whopping $190 million to spend on? The trust analyst broke down the cost of living to explain the colossal number. Real estate took away the biggest chunk of the money since a fully furnished and decorated home on Fifth Avenue can cost $20 million – but the wealthy aren’t happy with just home. Two additional homes for weekend getaways in the Hamptons or an occasional vacation in the Caribbean could cost another $20 million.
Education for the two children is another big expense which could cost almost $1.7 million per head including private schools, extracurricular lessons, and four years at an expensive college. The family would also need staff including a driver, chef and housekeepers to help around the house which could cost another $190,000. Annual charity events and other fashion and beauty expenses account for $200,000 whereas an expensive art collection of seven unique pieces would take away the remaining $2 million.