Getting By on $1,000,000 a Year

Getting by on $1,000,000 if you only have a single bill. Very hard to break.

It was a big day for my friend. Mike had just been given his annual bonus at his Wall Street job (financial crisis be damned!) and in total he had made $1m.

We met for lunch. “Congratulations,” I told him, “you’re a millionaire now.”

“I know,” he said, “it’s my first million. Hopefully I make more, though, next year, because this is ridiculous.”

“What do you mean?” I replied. “It’s a million dollars. Doesn’t that put you in the top 0.001 percent of the entire human race in terms of salary? Particularly in the middle of a financial crisis like this? Anyone else would feel lucky!”

“Ugh. Whatever,” pouted Mike. “I’ll be lucky if I’m not broke by this time next year.”

“C’mon, you never made money like this before. Now you just made a million dollars during the worst economic crisis in 75 years. How can you spend it that quickly?”

“Well, first off, half of that million is in deferred stock compensation,” explained Mike, who is a vice-president at a top-tier bank. “So I vest into it over the next five years if I stay at the bank. So I sort of have that money but I can’t spend it, and who the hell stays at a job for five years? I’m going to have to figure out how to get someone to pay me a signing bonus eventually that matches what I’m giving up. And if the economy goes south again, what guarantees do I have?

“Second, out of the half a million that’s left, count off half to the IRS. That’s $250,000 left. My wife wants to upgrade our Hamptons rental. Throw out another $50,000 for next summer.

“I have one kid in kindergarten and another in second grade. When you count private-school tuition, ballet and fencing lessons, that’s at least another $60,000 out the window. So now I have $140,000.”

My friend, and I’m not exaggerating, loosened his tie. He was having trouble breathing.

“Okay, so now I have about $12,000 a month left here. Well my mortgage is $5,000 a month, and don’t think I can sell my 1200 sq. ft. apartment that I bought for $1.4m two years ago because where am I going to move? Brooklyn? Believe me, the prices don’t get any better there and all the partners live in Manhattan. No Manhattan, no partnership.

“So now I have $7,000 a month left. And I don’t mean to sound like a snob or anything but I do have a housekeeper, babysitters, gym memberships, therapists for me and my wife, plus our couples therapist.

“I don’t know where it goes every month, but I know my credit card is being used to pay for it. James, I don’t know how to do it.

“Meanwhile, the job is crazy right now. We’re pitching every deal out there and every private equity firm is right in there competing with us. We’re all using the same pitchbooks and the deals keep getting ratcheted up, but now nobody can get any loans to close a deal. Who knows what bonuses will be next year particularly with all this government pressure? It’s a nightmare out there.”

We sat there for a few minutes without saying anything. I had known Mike for 15 years. Back in the mid-1990s, we used to go every Monday to a comedy night at the Luna Lounge on Ludlow Street on the Lower East Side. Up-and-coming comedians would perform and every now and then some of those performers would eventually break out with their own slot on Comedy Central or a stand-up show on HBO. It was exciting to see, and after the shows we would always go to El Hat to eat Mexican food.

When Mike got married, he wanted to pay for the wedding himself, which meant he could only invite his parents, his bride’s parents and a select few friends, including me, although I was out of town that weekend and had to pass.

A few years later, when he was an associate at the first bank he worked for, he celebrated for a week when he got his first $50,000 cash bonus. It was during the dot-com days and everything was heady. He put it into a wireless highflyer and watched it double, which allowed him to buy his first apartment. Life was good and it seemed then like it would last forever.

“I just have to work harder this year,” he suddenly said. “I’ve gotta really break out of the grind somehow. Else the pressure is going to break my back, you know what I mean?”

“Well, listen,” I replied. “I mean, I wish you were happier with this. Can you quit the rat race somehow?” I asked my friend. “It sounds like it’s stressing you out.”

“Are you kidding? And do what? Make a measly $250,000 at some chop-shop? Sell toothpaste for Procter & Gamble? I work 70 hours a week, man. I deserve every penny of what I’ve got.”

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  • Bill Waddell

    Guy makes a million and kills himself? When I saw “I had known Mike 15 years” I was worried this story was going to end badly. I suppose technically it is grammatically correct because at the moment a story is printed/posted it is past tense. But the last line is almost as sad — How is it one can have what looks like a perfect life but he gets up in the middle of the night to play computer chess hoping to stop his mind from doing that thing which is not sleep?

  • James Altucher

    Sadly, it seems as if the more money you make, and the more you strive for, the more that keeps you up at 2 in the morning. The tricky thing is to know when to stop wanting more. Then happiness results.

    • This supports economic theory. The government wants to put more money in your hand to increase consumption. Here is a concrete example. His consumption now increases multi-fold with his salary+bonus. At the same time, he creates employment to other people in the economy,e..g., housekeepers, gym workers, therapists, etc. These people, in terms, spend their new income on other consumption, which creates income for other people. They all rely on him for their monthly paycheck. If his income continues to grow, the economy will also grow. 

  • Chuck

    Can’t he get a loan against the deferred stock compensation?

  • Jimbo

    I’m pretty sure you published this story last year big guy.

  • jonny

    green pieces of paper

  • Nicholas

    Please give this note to your friend, signed the rest of America:

    This is all of his own doing by way of consumption. It would be one thing if a medical emergency befell his financial situation, but it’s all done by his choices (it was your call to saddle yourself with a $5,000 mortgage, buddy) and discretionary spending.

    Here are some ideas: don’t “upgrade” your effing investment property! Bam, I just made you $4166/month, which most people would kill to make. Drop the housekeeper (learn how to work a mop), ditch the gym membership (or does the sun melt your skin?), drop the couples therapy (talk to your wife) and maybe the wife’s therapy (unless she’s batshit crazy like you) – but whatever you do, Mike, don’t drop your own therapy. It’s obvious you’re quite fucked up.

    The other thing this leaves out… Mike’s regular salary! (Oh, and he still does own a freakin investment property in the Hamptons for Pete’s sake!) Cry me a river. Fuck this. I’m an entrepreneur, trying to help the world and do innovative things, and along the way I haven’t paid myself since April trying to build my business. You make sacrifices (not that this guy is or needs to). That’s what adults do. Grow up and quit your fucking whining.

    • Joe

      Your fucked up you cunt. A 1.4 million dollar apartment in New York is small as shit 1200 sq ft. We work hard for our money 100 hour work weeks unlike you lazy ass dicks.

  • subzero

    Mike needs a spiritual counseling to make his life better and learn how to live an enjoy life. Become a hindu.

  • crabmeat

    While the figures sound about right for a Manhattan mortgage and Hamptons rental, the timing of this story makes it a crock of untruth. No banks have paid out year-end bonuses yet and while the story says he works for a bank, the language suggests he works for a private equity firm (references to other PE shops competing with him and inability to get financing for an LBO). $5k per month for the mortgage is cheaper than renting a 1200 sq ft 2 bedroom in Manhattan so either this article is outdated or it is just made up. Private education in the city and $50k Hamptons rental for the summer is true though, so as one of the other posts mentioned, this looks like it’s an article from a year or two ago.

    • Thomas Rippel

      If you would have googled it, you would have seen that it was first posted October 1st 2009 in the Huffington Post

  • sam

    do you reply to thesecomments are you too busy?

  • sam

    james can you shoot me an email b4 writing your next article about a stock? i noticed you make stocks explode like clsb and pip.

  • James Altucher

    I definitely reply. Been on a plane all day to las Vegas. Now looking for a biz center because the iPad keeps correcting me too much

  • Not much sympathy for the man, the Hamptons rental could be cut.

  • Doc

    Last 5 years I lived in an RV
    3 of those 5 years I was a Beach Lifeguard on an Island on the Gulf Coast
    I’m 55
    When I was 49 I went to War and took incoming twice a day reguardless if I needed it or not. I lived literally in a hole in the ground in the desert with 12 Marines all of whom could have been my kids

    All was better than the rat race I lived for years prior. You got only one life

  • 21stCentury Fenian

    @doc: respect

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  • Mac

    It’s kind of funny but he almost seems to have the entitlement mentality that a lot of people associate with folks on welfare. A million isn’t enough when you have your private trainers, private schools, million dollar house and so forth. I almost felt sorry for the guy for a split second.

  • This is pretty crazy. I’m still pretty young but it seems like an endless spiral that you can get into with higher amounts of spending, and then trying to justify all of it by the fact that you deserve it. Obviously more money doesn’t correlate to an easier course through life, especially if you let all the perceived stresses and obligations take over. Interesting.

  • MB

    Be grateful for what you have, because others are not so lucky!

  • Joan Quantum Peterson

    Slow down and smell the Roses. Enjoy your wonderful LIFE NOW>

  • Tingmakpuk

    The rest of America can find joy, peace and satisfaction on a fraction of that income, but even with all he has, he chooses to bitch and whine and be unhappy… Seriously, why would you want to associate with him? If you just can’t abandon him, then be a true friend. Your reply should have been a slap upside his gotdanged whiny face, followed by a detailed set of instructions for pulling his head out of his ass. If he can’t do so right now, he never will — and he’ll deserve the unhappiness he has created for himself, all the while paying a therapist thousands just to be able to talk about how unfair life is.

  • theonepercentgirl

    mo money, mo problems. biggie knew.

  • Wow, I just figured out why he’s a millionaire financier and I’m a dishwasher.

    I’m happy being a dishwasher.

  • Russ

    Mike is a douche.

  • Milliondollarbaby

    Holly Crap this is bullshit. Money is the way to god, heaven and ofcourse happiness.

  • Edithspencer

    I started watching Star Trek TNG a few weeks ago because it made it’s appearance on Netflix. It was great to revisit childhood! And so I start to check on what the actors were now. One of them did this really interesting interview, and part of that interview he talks about feeling a pressure to perform in a high paying series, instead of the alternative theatre and musical theatre he is so obviously suited for. He was asked “Well, why don’t cut down your expenses?” and the actor cites his family’s comfort as a reason.

    And it’s weird- he seems like a alternative character actor TRAPPED in a pop culture persona. It made him wealthy and very comfy, yet he still feels the need to do the game because of his beloved family. He could do any theatre, any alt film now, and be successful,

  • Human nature is a funny thing. It’s easy for any of us to criticize “Mike”, but there is something universal that drives all of us.

    What’s really rare is the person that can find balance and resist the need for “more, bigger and better.” People that trade in that kind of life and set of aspirations are rare and become newsworthy. People like “Mike” aren’t, because our DNA makes us all like Mike.

    On a positive note, Mike at least proves that the Trickle down theory of economics can work, as long as you spend every extra cent that you get. If everyone spent their “marginal” income like Mike there would actually be a rationale to extend tax cuts to the 1%, as long as the extra money just got pumped right back into nannies, gym memberships and Hamptons upgrades.

  • Anonymous

    First World problems. Smh…

  • Dbmacks

    “We can’t stop doing what we do. And what we do is killing us.” The pain of change is worse than the pain we are in. We know that pain, have bedded down with it, gotten used to it. It is killing us, but somehow we will rise above only to find we are alone and miserable. The story is a sad one and repeated over and over again. We live an illusion and the illusion is killing us. 

  • paul burns

    Or so he has himself convinced.  

  • drew

    How depressing is this guys life, he is basically living his life  to keep up  appearances. Tell him to watch the show named “Keeping up Appeareance” its on dvd now. I’ve seen lots of people like him,
    and when they get older and can’t keep up anymore, it gets real sad and real scary fast! He needs to break out of the mold he created for himself and his family. If he doesn’t change now
    and find a better way to live that creates happiness instead of stress, his stressed aging body will
    remind him of his sad life choices. likely not in a good way. Tell him to try meditating, holosync
    through centerpointe is a great place to start. Kindly forward this info to him.

  • Anonymous

    “Ain’t no rest for the wicked” – Cage the Elephant

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