NYC Wealth Math

A breakdown of the true cost of living a wealthy lifestyle in NYC, focusing on expenses and income requirements.

Cost Analysis of Living in NYC

• $5M brownstone home requires:

  • $1.1M down payment
  • $20K monthly mortgage/interest
  • $2-3K monthly maintenance
  • $50-150K for furnishing

• Monthly Living Expenses:

  • $40-50K/year nanny
  • $30K/year food
  • Total monthly spending: ~$25K excluding housing

Income Requirements

• Need to earn 2x desired spending due to taxes

  • If spending $600K/year, must earn $1.2M to break even
  • 50% of income goes to taxes in NYC/Manhattan

• Saving Requirements:

  • Takes 15 years earning $1.5M annually to save $10M
  • Must maintain consistent high income while living expenses continue

How People Afford It

• Three main paths:

  1. Family wealth/inheritance

     • Many get $2M+ down payments from parents
     • Some receive fully paid homes

  2. High-earning careers

     • Finance, law, medicine, consulting
     • Need $1M+ annual income
     • Usually requires selling business or asset

  3. Entrepreneurial success

     • Selling company/asset
     • Creating high-cash flow business

• Reality check:

  • Most wealthy residents have help or inheritance
  • Very difficult to afford solely through earned income
  • Many properties bought when values were much lower

Key Takeaway

• Living wealthy in NYC requires:
  • Earning significantly more than planned spending
  • Long-term high income sustainability
  • Multiple income streams or major liquidity events
  • Understanding true costs including taxes and maintenance