I just can't seem to get enough of Wall Street these days. I've been gorging on all the recent articles in the New York Times about the folks on Wall Street that are making adjustments to their lives due to the current economic turmoil. Just like Main Street. Well almost.
It's better than reality TV:
In Treatment: This article is one of many I've read, about the increase in mental health services being provided to executives and their spouses as they come to terms with the "drop in social status," "delusions of poverty," and the general "blow to the self-image of losing a job."
Sex and the City: In a similar article, a group of young women band together over cocktails, to form a support group, called "Dating a Banker Anonymous," as they "cope with the inevitable relationship fallout from, say . . . the Dow's shedding 777 points in a single day."
Who Wants to be a Millionaire? And from the most interesting one of the bunch, You Try to Live on 500K in This Town:
"As hard as it is to believe, bankers who are living on the Upper East Side making $2 or $3 million a year have set up a life for themselves in which they are at zero at the end of the year with credit cards and mortgage bills that are inescapable."
The lifestyle that goes along with such income is quite expensive. By the time these folks have paid their income taxes, mortgages (on the Manhattan apartment and the summer house in Southampton), property taxes, private school tuition and nannies for the kids, there's only so much left for the car and driver, personal trainer, and groceries. And we haven't even covered the charity parties, formal gowns, summer camps or eating out.
Now, someone that makes oodles of money is certainly entitled to spend every dime of it. It's an interesting reminder though, that living at or above one's income level happens at all income levels. Just as people that save significant portions of their incomes exist at all income levels.
What I am most fascinated by, as a person that was so focused on the dream of early retirement, isn't really that someone would spend such quantities of money, but the fact they aren't thinking, as I was always thinking, "It sure would be nice to have enough money amassed to just be able to walk away from my job if I wanted to."
During most of my working life, I entertained fantasies of early retirement. Whenever I was unhappy at work, or whenever I wished I had more time to just enjoy life, I fantasized about a life where I had saved enough money to not have to work. I thought about this pretty much all the time. I thought everyone did.
But reading this article, I realize everyone isn't planning their escape, and it's that fact I find so interesting. Whether it's because they are so happy with their jobs, they cannot imagine ever NOT working or whether they just love the lifestyle their jobs afford them when spending every dime, there seem to be plenty of people that made far more money than I ever did, that were obviously not socking away all those bonuses, planning for their own escape.
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I think many people don't plan their escape because they have been conditioned to think they have to have a job to have worth or value. Or, in the $500k couples case they like nice things more than they care for freedom, so they will take enslavement.
It's the first question (what do you do?) you get asked at a party. I can assure my identity is not tied to being a consultant.
Posted by: Chad @ Sentient Money | February 12, 2009 at 08:40 AM
It's very true that we place a lot of weight on what a person's job is here in the US. I remember several years ago, we were meeting a French friend of my parents and my husband asked what he did. The French friend said "why do you want to know that?" And then explained that no one ever asks that in France because no one cares how it is you make a living, it's just a job.
I'd love to hear some of the Canadian readers chime in here--is this more of a U.S. phenomenon or is it the Canadian ice-breaker at parties too?
Posted by: Retired Syd | February 12, 2009 at 09:31 AM
alas, it is the Canadian ice-breaker too! I am 38 and have been 'retired' (in quotes because I am still not fully committed to it as a long term play) for almost 2 years and I get asked that question constantly!!
Posted by: Leslie | February 12, 2009 at 06:20 PM
Aaah, I expected more from you guys. Oh well, at least you still have that everyone gets to go to the doctor thing going for you.
Posted by: Retired Syd | February 12, 2009 at 08:25 PM
This article reminded me of the book, "The Millionaire Next Door" only because the bankers are doing the exact opposite of what the book recommends—mainly living frugally and saving. The author's make the point that living in an expensive zip code (a la Manhattan) puts you at more risk of having to keep up with the Joneses and their lifestyles.
Posted by: Leslie2 | February 14, 2009 at 09:39 AM
I read that book many years ago, and it struck me the same here too. In the book, the research found that most millionaires (that had amassed wealth) were not the people you might think. Those that were living it up didn't really have wealth, just high incomes. And those that had wealth were more often the guy you would least expect. The guy next door, living just like you.
Posted by: Retired Syd | February 14, 2009 at 12:10 PM
Sorry, this should be on your Twitter Acct. - don't quite have the patience today to sign up. HSA acccount: Patelco Credit Unio- many branches in Northern California - I switched a few accounts from "normal" banks - fed up with the bail-out fiasco.
Posted by: jane | February 15, 2009 at 06:04 PM
I thought that having retired on a government pension that I wouldn't feel the impact of the financial crisis so much. What a mistake that was! With an elderly mother living on her investment income suddenly we're all realizing that we're all in this problem. All around me there's panic and I will admit that it's really quite contagious. How to keep our chin up (and no, even given my age I refuse to say "chins up").
Posted by: Sylvia | February 18, 2009 at 11:25 AM
I used to lament to my husband about our friends that lived a few blocks away. They had a larger, more luxurious house, both drove luxury vehicles, wore designer garb, and went on several expensive luxury vacations a year. It used to puzzle me because I was pretty sure that we had a higher net income than them, yet we lived in a small home, had one small car between us, and we go on one splurge vacation a year. but my husband said looks are deceiving and I think they are. Some measure financial success on the toys they can buy, and others on the dollar value in their investment account. Though with the market the way it is these days, I'm wondering if my money would have been better invested in that Prada handbag :(
Posted by: Mintycake | February 18, 2009 at 01:22 PM