It was more of a rhetorical device. It's not that I can't imagine how to blow through tens of thousands of dollars a month. It's that that lifestyle just isn't appealing to me.
Spending 10's of thousands a month is getting up there, but "blowing through" more than $4k per month isn't necessarily an extravagant lifestyle. My guess would be that you don't live an as expensive a metro area as the author is basing his calculations on.
In a place like San Francisco, a few non-frivolous expenses can add up quickly:
- Your residence. A decent 2 bedroom place in a desirable part of San Francisco will run $3,000 per month in rent, a mortgage will be much higher. We're not talking anything extravagant here, just 600-900 sq ft.
- Travel. Paying for more than one person to travel to visit family/friends a few times a year can easily add up to $1,000 or more per month. We're not talking luxury vacations here, either -- just basic airfare (coach) and accommodations.
- Health expenses. As you earn more, you'll probably be more likely to spend more on optional health items. Things like LASIK for example. Also, as you get older, these expenses will get much larger.
- Kids. It doesn't even have to be private school we're talking about, but I imagine that clothing/feeding/entertaining more than one person adds up quickly.
- Any time/money trade-off. You have a limited amount of time and, similar to health expenses, you will be more likely to spend money to save time as you earn more. Each person's choices will be different here, but again, we're not talking luxury. Maybe paying for parking instead of a time intensive bus trip? Or arranging for laundry service? Or paying an unjust $40 bill that would otherwise take you 5 hours to fight?
Notice there's no talk of fancy cars, big screen TVs, luxury trips, large mansions, or extravagant dinners. I think this is the definition of "upper-middle class" that Tony is talking about. Nothing fancy, but a few things to make your life more convenient.
> Your residence. A decent 2 bedroom place in a desirable part of San Francisco will run $3,000 per month in rent, a mortgage will be much higher. We're not talking anything extravagant here, just 600-900 sq ft.
As I said, "I'm also assuming that the first thing I would do is to pay off my mortgage, so what remains is basically entirely discretionary spending." Now, I've chosen not to live in one of those 3 or 4 ridiculously expensive cities. You might not consider spending $3K for < 1000sqft extravagant, but let me assure you that most people do. (Also, FWIW, I have friends with a 2 bdrm apartment, across the street from golden gate park, surrounded by good restaurants, which they only pay $1600 for.)
> Kids. It doesn't even have to be private school we're talking about, but I imagine that clothing/feeding/entertaining more than one person adds up quickly.
You imagine, but I actually live it. Kids don't actually eat that much, and amuse themselves much more easily than people seem to give them credit for. Their clothing is fairly cheap, and since they usually grow out of things faster than they wear them out, you can pick up a lot of stuff even cheaper at second-hand shops.
I certainly enjoy travel, and it's a non-trivial portion of my discretionary spending. My point is not that you need to live live a pauper, just that you don't need as much money as you think to have an enjoyable life. There was a time in my life when I blew through twice what I spend today. And I use that phrase because I literally couldn't tell you how I did it. An attitude of "we've got money; might as well spend it" caused money to seemingly evaporate with nothing to show for it. I don't feel any less well off today. Honestly I feel better and richer knowing that I'm not spending every cent I make.
Tom Wolfe's "Bonfire of the Vanities" (Going broke on a million a year), p.137
"One breath of scandal, and not only would the Giscard scheme collapse but his very career would be finished! And what would he do then? I’m already going broke on a million a year!
The appalling figures came popping up into his brain. Last year his income had been $980,000. But he had to pay out $21,000 a month for the $1.8 million loan he had to take out to buy the apartment...
Of the $560,000 remaining of his income last year, $44,400 was required for the apartment’s monthly maintenance fee… $18,000 for heat, utilities, insurance and repairs, $6,000 for lawn and hedge cutting, $8,000 for taxes. Entertaining at home and in restaurants had come to $37,000. This was a modest sum compared to what other people spent."
Exactly! It is surprisingly easy to buy something in a store instead of ordering from Amazon and waiting, for +20%, or taking a cab home instead of the subway/bus, or hiring a weekly cleaning service, or buying nicer ingredients and eating out at nicer places because it's convenient, or, ...
Its all the little things in life that really make your experience better and allow you to do the things you want to be doing, not the big ticket items that people traditionally associate with wealth. I think that that is what FYM is all about, really
> Spending 10's of thousands a month is getting up there, but "blowing through" more than $4k per month isn't necessarily an extravagant lifestyle
I don't believe I ever said it was. In fact, I called $4K/mo a "restrained budget". Meaning I would need to pay attention to my spending and not indulge in all the discretionary activities I might like.
