Wall Street Bonus Withdrawal Drives Bankers to the Despair

[Phillip V]

Most high-earners save very little and live a highly-leveraged lifestyle (plenty of debt). Their net worth is usually smaller than we think and very susceptible to sudden life downturns.

[garbon]

Most high-earners save very little and live a highly-leveraged lifestyle (plenty of debt). Their net worth is usually smaller than we think and very susceptible to sudden life downturns.

Cite? After all, how is that different from most people?

[Phillip V]

Most high-earners save very little and live a highly-leveraged lifestyle (plenty of debt). Their net worth is usually smaller than we think and very susceptible to sudden life downturns.

Cite? After all, how is that different from most people?

Not that different at all.   Except the climb and fall are much steeper.

http://online.wsj.com/article/SB10001424052970204336104577096410776256928.html
http://www.amazon.com/Millionaire-Mind-Set-ebook/dp/B004EPYWM4/

[crazy canuck]

Most high-earners save very little and live a highly-leveraged lifestyle (plenty of debt). Their net worth is usually smaller than we think and very susceptible to sudden life downturns.

Cite? After all, how is that different from most people?

Not that different at all.   Except the climb and fall are much steeper.

http://online.wsj.com/article/SB10001424052970204336104577096410776256928.html
http://www.amazon.com/Millionaire-Mind-Set-ebook/dp/B004EPYWM4/

Yep,  people who make a lot of money didnt suddenly become smarter then the rest of us with how they spend it.  They just have more epic ways to screw up when things go bad.

[The Minsky Moment]

New York is pretty screwed up like that.  One of my good friends works for their city government and he pays a ridiculous amount of rent to share a Brooklyn brownstone with like four other professionals.  I fully understand making 350K a year will get you exactly jack and shit in that city.

And yet 95%+ of the people who don't make even that pittance somehow make it.  The problem is expectations, not income.

The problem is the cost of positional goods.

The population of Manhattan and prime Brooklyn at this point consists of:
+ residents of subsidized housing
+ recent college grads living 3 to an apartment
+ young single professionals and couples without kids
+ one child households making 200K +
+ Larger families earning 400-500K plus.

Of course, it is possible to stretch by moving to more "marginal" areas.  That has been happening since the 70s.  But the consequence is to drive out the people in the next income rung and eventually to bring up prices back to unaffordable level.  Gentrification has spread from the Upper West Side and the East Village in the 70s and 80s (both centrally located Manhattan neighborhoods) to neighborhoods deep in the outer boroughs in Brooklyn and Queens.  That may temporarily solve the problems of the second tier finance professionals but at the cost of driving out police, firefighters, teachers, middle manager types etc to the far outskirts of city and beyond.

[The Brain]

Tying your lifestyle to a bonus doesn't seem prudent.

Didn't AR already state for us that bonuses for bankers are really kind of like a piece of their salary?  Sort of the same way that commission comes into play for salespeople? American waitresses on tips?

So they only have themselves to blame for not getting the bonus?

[DGuller]

I don't argue that NYC isn't a basketcase.  It certainly is, and I find it to be a highly unpleasant city.  However, most of my family lives in Brooklyn, they don't make six figures, and yet they manage to somehow live decently in a safe neighborhood and save.  It's all about setting your expectations level, and what you consider to be a life necessities.

[CountDeMoney]

I find NYC totally fascinating, and would love to live there.  Only thing is, it's full of New Yorkers.

But Marti actually has a point for a change;  in certain professions and at certain levels, you need to look the part, and that costs money.

[derspiess]

I find NYC totally fascinating, and would love to live there.  Only thing is, it's full of New Yorkers.

But Marti actually has a point for a change;  in certain professions and at certain levels, you need to look the part, and that costs money.

Okay there, Hollywood   

[frunk]

I don't argue that NYC isn't a basketcase.  It certainly is, and I find it to be a highly unpleasant city.  However, most of my family lives in Brooklyn, they don't make six figures, and yet they manage to somehow live decently in a safe neighborhood and save.  It's all about setting your expectations level, and what you consider to be a life necessities.

I found living in NYC was a lot more pleasant than having to travel to or from it regularly.  I'd never call NYC unpleasant, but it does have its own set of inconveniences.

[KRonn]

Wow, I feel so bad for them! To paraphrase, they say others don't understand the problems of the wealthy? Wow, just wow... such problems, to earn hundreds of thousands a year and still be able to get themselves into financial problems. Too frigging bad.    What, do we now need welfare and food stamps for the wealthy?   

[DGuller]

I don't argue that NYC isn't a basketcase.  It certainly is, and I find it to be a highly unpleasant city.  However, most of my family lives in Brooklyn, they don't make six figures, and yet they manage to somehow live decently in a safe neighborhood and save.  It's all about setting your expectations level, and what you consider to be a life necessities.

I found living in NYC was a lot more pleasant than having to travel to or from it regularly.  I'd never call NYC unpleasant, but it does have its own set of inconveniences.

Well, I'm not a social person, so the one advantage it does have is lost on me.  If you're a socialite, then of course NYC is for you.

[CountDeMoney]

I find NYC totally fascinating, and would love to live there.  Only thing is, it's full of New Yorkers.

But Marti actually has a point for a change;  in certain professions and at certain levels, you need to look the part, and that costs money.

Okay there, Hollywood   

Remember, it's better to look good than to feel good.

[frunk]

Well, I'm not a social person, so the one advantage it does have is lost on me.  If you're a socialite, then of course NYC is for you.

At the point I was there I didn't have or need a car.  That's a huge bonus.  I also had hardly any stuff and a tiny apartment.  I'm not a social person either, but living in a tiny space and having a city full of museums, parks and scenic attractions meant I'd spend most evenings around town.  Activities were easy to find, and just about everything was within 15-20 minutes if you needed to hurry, depending on how you traveled.

[PJL]

Most high-earners save very little and live a highly-leveraged lifestyle (plenty of debt). Their net worth is usually smaller than we think and very susceptible to sudden life downturns.

Cite? After all, how is that different from most people?

Not that different at all.   Except the climb and fall are much steeper.

http://online.wsj.com/article/SB10001424052970204336104577096410776256928.html
http://www.amazon.com/Millionaire-Mind-Set-ebook/dp/B004EPYWM4/

Mind you most people on a normal wage who'd answer the questions on the first article would be classified as high beta. So basically they're saying most people are in potential trouble.