What Constitutes “Wealthy” to Urban Boomers

Living paycheck to paycheck while making a combined $500,000 a year is considered “normal.”

No Seriously.

Financial Samurai ran an article not long ago titled “Scraping by on $500,000 A Year.”

It was a good start in defining “wealth” against “expenses” in big cities.

Here’s the aforementioned article:

http://www.financialsamurai.com/scraping-by-on-500000-a-year-high-income-earners-struggling/

~~~

In any major metro area of the United States, a reasonably priced older home in a reasonably nice neighborhood [read: reasonably nice, not top of the line] starts at around $1,000,000.

Anything less is either a small condo or a tear-down.

I know, right.

In order to qualify to purchase one of these homes, you’ll need an income of approximately $300,000 no matter what anybody tells you to the contrary, including yourself.

It also warrants noting that 6000 ft. lots are priced somewhere in the $850,000 range, and with construction costs for a custom home on the same lot running about $1,200,000, you have to double your earnings.

You’ve now in over 2.1 million and haven’t forked over a single electricity bill, not to mention property taxes that will run in the $55,000 range…and I haven’t even started calculating the cost of a gold-digger.

This is why so many homes around here [and in places like, say, Beverly Hills] are held in family estates, and then gifted to offspring in the form of nest eggs.

All the kids have to do then is cover are property taxes and upkeep, which means they can get by on $250,000, as long as they don’t have kids, own $100,000 cars, or take vacations.

Hell, private school education alone rivals property taxes, so you can see where this is going.

No wonder people who earn $500,000 consider themselves upper middle class.

Of course, if they earned $500,000 in income and had 5 million in a diversified investment portfolio, then they’d most likely consider themselves upper, upper middle class.

Doing the math, they’d be looking at a yield around $400,000 on the 5 mil taxed as capital gains, and $500,000 taxed at 39%.

Now they could take three vacations and still save the $7300.00 at the end of the year.

As for Financial Samurai‘s breakdown…

Interesting breakdown, but that “$7300” left over wouldn’t have a shot in hell of making it to the savings account for most people I know.

Why?

Because 3 vacations a year for a total of “$18,000 a year” is a joke. It’s easily twice that amount.

Round trip business class tickets alone from Houston to Los Angeles are in the $1500 range per person.

Hotel rooms in the “One king bed, no sitting area” will run $685.00 per night, with small suites starting in the $1700.00/night range at places like the Beverly Wilshire in Los Angeles.

You also must accept the fact that miscellaneous expenses are going to fall in the $1500.00 range even if you don’t happen to wander into Barney’s.

You can see where this is going.

HOW THE “AFFLUENT” SEE REAL WEALTH

The following is a letter copied verbatim from the web from a very successful couple.

While some of it may shock you, it’s representative of how many in my general demographic see real wealth.

“I have no idea how anyone could live on $500,000 a year. I make $1.0 million a year as an equity partner in a large international law firm and through real estate investing. My wife makes $1.5 million as a cosmetic surgeon. We live in DC. We have 2 kids. After all of the taxes, childcare, mortgage payments, car payments, etc., we are literally living paycheck to paycheck. Our house is about 2.5 million, nice but not exorbitant. We each drive 911s and we have a farm in the country and a house at the Eastern Shore. Again- nice, but hardly movie-star living and there are many people who have much nicer farms and shore houses than we do. I think that to live comfortably in a high priced area like DC, you really need $4 million a year. This will allow you to save some money and live an extremely comfortable life style. Fortunately, we are relatively early in our careers– early 40’s. Within the next 3-5 years, we will be at $4 million. There really is not a moment to lose in this game if you want to live comfortably without worrying about money.”

You can’t make this shit up.

Now you know why $500,000 a year is chicken scratch.

LESSONS LEARNED

1] Be an equity partner in a large international law firm or investment house.

2] Be a successful plastic surgeon.

3] Be an a-list celebrity.

4] Be a world-class pro athlete.

5] Be a member of the lucky sperm bank.

Louis Vuitton Appeals to Upscale Baby Boomers With Music

Baby Boomers are the generation born between 1946 and 1964.

If you’re a member, you’re somewhere between the ages of 51 and 69.

So juveniles by today’s standards.

Many of us sit squarely in the middle, which means we’re either in – or fast approaching – our 60’s.

We’re in shape, financially independent, technologically savvy.

What better than to appeal to an affluent demographic that has become increasingly larger and more important as our population ages?

In an historical context, we’ve set new precedents, as people our age were, at one time, either dead or walking billboards for Mr. Rogers.

That was then.

Now, thanks to designers like Louis Vuitton [and others, like John Varvatos], we can finally buy clothing that feels the way clothing felt back in the days when we were young, rebellious and filled with hope and promise.

It was a brilliant move.

Louis Vuitton has strategically positioned itself as a classic, upscale choice for the affluent Baby Boomer generation.

No wonder my wardrobe collection looks a lot like it did back in 1978.

Brace yourself for an Aspen makeover, as people start looking a lot like they did back when when they couldn’t afford it – not to mention good concert tickets to see David Bowie.

Okay, so in addition to Vuitton, here are my top favorite designers for men [in no particular order]:

Vince

Alexander McQueen

Belstaff

Dolce & Gabbana

Armani

Prada

Gucci

James Perce

John Varvatos

Maison Margiela

Saint Laurent

Hudson Jeans

Ralph Lauren [Black label]

…and of course, Converse.

Why Wealthy Divorced Women Don’t Remarry, But Men Do

http://www.marketwatch.com/story/first-wives-say-i-dont-to-second-marriages-2013-10-24

Why are wealthy divorced women more likely to decide to remain single? “It’s much harder for divorced males to be alone than females,” says Fran Walfish, a psychotherapist in Beverly Hills, Calif. Unlike men, she says, “a woman’s ego cannot bear to tolerate a man using her for her money. She needs to know she is loved—rich or poor—flaws and all.”

~~~

Wait for it!

More than 83% of divorced men back on the dating market would consider marriage within the next five years, according to a survey of 5,000 millionaire members of the dating site MillionaireMatch.com.

Only 5% said “never again,” and 11% said they would consider remarrying after five years.

Divorced female millionaires were at the opposite end of the scale: A mere 32% said they would consider remarrying in the next 5 years, and 70% said they’d never marry again or would wait 10 years or more.

Shocked?

I’m not.

Here’s why:

1] Women bond, while men isolate.

2] Older men can date women any age, regardless of motive [both motives], while women require a specific motive.

3] An older man’s vitality is replenished through exposure to youth and beauty. For women, it’s the opposite. Youth and beauty remind them to check their wills.

4] Love is not at the top of an older man’s list of must-haves in a relationship. It is the opposite for women which is why they bond with other women and call it a day.

5] Men need challenges. Without them there is no purpose to live.

Without Savings Boomers Totally and Completely Screwed [with a few exceptions]

As everyone this age already knows, life is not exactly a joyride in the absence of cash.

You look down the road and there’s nothing to see but a tunnel and a light because there is nothing else.

http://www.fool.com/investing/general/2015/06/07/baby-boomers-face-it-if-youre-not-rich-now-youll-n.aspx

As everyone by now knows, the most important thing in the world is health followed closely by money.

The rest can wait.

According to Vanguard’s How America Saves 2014, which provides statistics about the more than 3 million people who have a defined contribution retirement plan managed by Vanguard, the median 401(k) balance for those over 55 was less than $75,000 in 2013:

How

Please explain to me how the hell you’re going to hang out in Cabo or Aspen without a large career income or passive income from investments?

You’re not.

You’re going to stay home with your cats and hope your death is swift and painless because the rest isn’t worth the journey.

TWO EXCEPTIONS

1] Yogis

2] Tenured University Professors

In the first case, the senior yogi may live in a tree, but women in his classes find his acetic existence and peaceful vibe an extraordinarily attractive alternative to the wolves of Wall Street.

So he can expect to get laid by beautiful women who don’t care what he doesn’t have until they do, at which time they go back to the wolves for another round.

Tenured university professors make a couple hundred grand a year, never lose their jobs, get Summers off, and hold the destinies of their students in their hands.

It kinda’ sells itself.

The only problem is that most women at ivy league schools envision large homes in nice neighborhoods, expensive cars, private schools for their kids, and at least 3 vacations a year.

Needless to say, his salary won’t cut that, nor will his eventual savings which are destined for social security support.

So we’re back to square one.

With this as a backdrop, how exactly do Baby Boomers acquire enough capital to retire comfortably without robbing the Federal Reserve or winning a slip and fall against Kroger?

First, they have to have something of value to sell that offers windfall potential.

What about their homes?

Yea, I’m laughing because homeowners between age 50 and 65 are most likely to carry a mortgage.

The percentage rose from 60% in 1992 to more than 70% by 2010.

What about saving more money?

For guys 50 and older looking at potentially 20 more years of putting whatever away, if you can invest an extra $5,000 per year for the next 15 years, you would have an extra $146,000 at age 65:

Returns

If you can leave it alone until 70, you could have approximately $220,000 in added net worth based on historical stock market averages.

But what kind of life are we looking at here?

Most people in better neighborhoods spend $200,000 in 6 months just maintaining their lifestyles.

You’ll be watching every single solitary bill, praying your roof doesn’t leak, and clipping coupons while annoying the people in line behind you at Whole Foods.

You’re better off dead.

The sad truth of the matter is that your priorities were ass-backwards back in your 20’s when you thought you were immortal because you could nail dates at the drop of a hat even if you couldn’t afford to take them to Jack-In-The-Box.

It didn’t take long to notice that no matter what you looked like all the wealthy older men were taking your girlfriends to the Bahamas for the weekend.

Then it dawned on you that youth and beauty only work for highly-precisioned gold-diggers of exceptional beauty; actors, models and entertainers with the wings of angels; and singers like Robert Plant.

And since you couldn’t find a niche for yourself in any of the above, you were screwed.

After all, what’s the point in getting old if you can’t afford to enjoy it?

People are always talking about people pursuing things they love.

But understand that love is always secondary to common sense.

If piano tuning does not pave the way for millions in an investment account by age 50, do something you hate.

You’ll love yourself in the end.

POSTSCRIPT

For you older men of average means who have daughters of exceptional beauty, please explain to them how to leverage what they do have in exchange for everything you don’t so you can piggy-back on their success.

You’re welcome.

~~~

A FEW TRUTHS ABOUT MONEY

1] Lots of money won’t make you happy, but not enough of it will make you miserable.

2] One million dollar homes in large cities are often tear downs situated in up and coming neighborhoods.

3] 250k/ year is considered upper middle class.

4] When politicians talk about raising taxes on “millionaires and billionaires” they’re including everyone who falls in #3.

5] The average 0ne bedroom suite at a luxury hotel property is $1000/night and everything else is a la carte.

6] Dining out in a big city usually costs $200 on up with wine and tip.

7] The average luxury automobile starts in the $80,000 range.

8] Whole Foods bills usually run 20k-30k/year with wine.

9] Luxury handbags usually run $2000, and women’s shoes, $500-1000 which you’ll need to keep in mind if you happen to live with a woman.

10] First Class airfare from Houston to Los Angeles is in the $1200 to $1400 range. Double it if you’re taking your girlfriend.

Elder Statesman, Rod Stewart, Enjoying Life, Love and Relevance at 70

The most successful homegrown solo star of all time, worth upwards of £350 million, Stewart has enjoyed 31 hit singles, a dozen of which, including Maggie May, You’re In My Heart, Sailing, Da Ya Think I’m Sexy?, Baby Jane and The First Cut Is The Deepest, are incontestable classics.

Yea, he missed the Baby Boom Gen by 1 year, but most of us “youngster” Boomers still consider him a member of the club.

http://www.mailonsunday.co.uk/home/event/article-3264865/Rod-Stewart-Viagra-money-music-Madonna-sex-70.html

Rod Stewart does not require introduction. You already know who he is, what he’s done, what he thinks about beautiful women, wine and song.

He is, for all intents and purposes, the very definition of relevance for a man who just turned 70.

How does he do it, keep going the way he does, feeling so alive?

1] He is fueled by a vast array of success that has paved the way for healthy self-esteem at his stage of life.

Note: There is a direct correlation between self esteem and perceived accomplishment.

2] He is happily married to a beautiful young woman who has had his back for over 2 decades.

Note: There is a direct correlation between a happy family life and longevity.

3] He continues to work, to produce to be engaged in life from every angle imaginable: Music, family, sports, car collecting, real estate…etc…

Note: The moment a man retires, his descent escalates.

4] He stay fit and healthy with help from a personal trainer, and watches his alcohol consumption, which at one time was plenty enough to sink a battleship.

Note: Maintaining physical health is one of life’s great challenges for older men, and also it’s most rewarding.

5] He appreciates where he is in life and maintains balance.

Note: Balance is key to a long, healthy life. Without it you’re just a rat on a wheel.

~~~

I know that many of you will say “Yea, I’m sure it is nice being a rich rock star with homes on several continents. No surprise he’s doing well!”

Points taken.

But many extraordinarily successful rock stars overdosed before their 30th birthdays.

How Success Changes Middle Aged Men

Male Grooming Arnold Ferrier Photo Bill Morton

http://www.dailymail.co.uk/femail/article-2893083/Would-let-husband-shave-chest-growing-trend-middle-aged-men-wives-say.html

As you will note in the article [above], chest shaving has become commonplace.

It’s also one of many manifestations of what many middle-aged men do once they have achieved a considerable measure of success.

Without that one element [success], there is no rationale for self-idolatry.

~~~

I know this guy in the restaurant business.

When he started out, it was all humility; dressing down, shaking hands, strung out in the quest for relevance.

Then over time and a lot of hard work, his efforts paid off.

He became the proud co-owner of a successful string of hip urban bistro’s with lots of national notice.

Eventually, like others of new-found success, he upgraded his car, his home…his lifestyle.

But something else happened as well: He changed his appearance. All of it.

His once thin frame now boasts long, lean muscle wrapped in a bronze glaze.

His chest, arms, back and legs are completely shaven.

His clothing went from $16 Haynes 100% cotton Tees to $180 John Varvatos V-Neck Jersey Knits.

His Timex “Ironman” was replaced with an assortment of bracelets of various materials and designs; the accouterments of celebrities, rock stars…and wealthy older men who don’t have to care what you think of them, which is how you know they’ve “arrived.”

Gone are the days of the obligatory handshake with a smile.

That’s also been upgraded to a certain vibe of self-righteous aloofness suggestive of someone who now resents how much ass they had to kiss to get to where they are, and now its payback time.

~~~

Without success, older men fade.

They don’t have the fuel to propel change.

In this sense, success is like a transfusion.

While average people adapt to circumstances and resign themselves to an average existence, successful tend to men stand out in crowds.

Even those who practice humility cannot hide the lining of confidence that follows them wherever they go.

In a way, they’re like beacons of hope in an otherwise paralyzing existential nightmare.

And people wonder why The Kardashians are America’s first family.

Why are Middle-Aged Men Committing Suicide in Record Numbers?

In 2013, 78 per cent of the 6,233 suicides registered in the UK were men. That’s a rate of 19 deaths per 100,000 population.

That more men take their own lives than women is not new. But in 1981 the men’s total was only about double, or just under, the women’s.

Now it’s nearly four times as many.

Since 2007, in fact, baby boomers have had the highest rate of suicide of any age group in the United States.

Historically, people between the ages of 40 and 64 have had one of the lowest rates.

To complicate matters, baby boomers are now sliding into the over-65 demographic, an age group that historically has had one of the highest suicide rates.

Making matters worse, suicides among middle-aged men with mental health issues have soared by 73% since 2006, which may be attributed to a combination of alcohol, job loss and debt, as compiled by the University of Manchester’s National Confidential Inquiry into Suicide and Homicide by People with Mental Illness.

Oh boy. Want more?

“Our findings show that within mental health care, middle-aged men are particularly at risk,” said Prof Louis Appleby, the director of NCISH who was formerly the government’s mental health tsar and leads the national suicide prevention strategy. “The problem is not simply that they don’t seek help – they are already under mental health care – so we have to understand better the stresses men in this age group face.”

How about this?

More men in the UK have died by suicide in the past year than all British soldiers fighting in all wars since 1945.

I’m neither a Sociologist or Psychiatrist. In fact, my only authority in this area is interpersonal exchange and an open heart, for which I have earned several Doctoral Degrees.

Men my age and socioeconomic niche are, generally speaking, over-achievers. They made their “piles” working hard, passionately over many years.

Many have been married and divorced a few times over.

The majority have children somewhere.

Now they’re smack in the middle of the Baby Boom generation, with nowhere to go and nothing to do that they haven’t already been done a thousand times before.

Only this time around, they’re older – a lot older – with far less time to enjoy life the way they did when the journey started.

It’s a small window of opportunity in which to reinvent oneself before everything becomes a hobble along a windswept beach on the edge of oblivion.

With this as a backdrop, here are my 5 top reasons middle-aged men off themselves:

1] Loneliness

Heterosexual men in mid-life are dependent primarily on female partners for emotional support.

One reason for this is that they’ve never explored anything beyond sports stats with their “friends.”

Women, on the other hand, maintain their independent relationships throughout life – divorce notwithstanding – which is one reason they outlive us.

To wit, suicidal thoughts and suicide attempts were three times higher among divorced men, and two times higher among separated men compared to married.

This is the quintessential dichotomy about men: While we love sex, we love relationships more.

2]Reluctance to seek help

Professor Shirley Reynolds, from Reading University, said one of the reasons for the rise in suicides is the fact only around ’15 per cent of men with depression and anxiety seek help’.

Most men my age practice intimacy-avoidance. They’d rather swallow a pack of Gillette straight razors than open up about clinical depression.

For one thing, depression is not manly. Men don’t suffer depression unless it’s tied to warfare, in which case it’s called PTSD, an acceptable acronym.

Anything else is an indication that you’re either gay and in denial, or didn’t get into enough fistfights when you were a kid.

In either case, you’re screwed in the eyes of middle-aged frat boys who are themselves gay, and in denial.

3] Money

Okay, I know a few people who put bullets in their heads when the market crashed in 2008.

Not having any money after have a shit-ton of it sucks more than just about anything else, excluding colon cancer, which is a close second.

You lose your house, your cars, your vacations…and usually, your wife.

So now you have nothing at age “60” and have no interest in starting over at Dairy Queen.

I get it. Use the gun. 30 years mopping floors or flipping burgers just isn’t worth it.

Plus you’ll never get laid again as long as you do happen to live.

4] Feminism

Many men bought into the notion that marrying super-achiever women – the ones who handle all of the traditionally male responsibilities – was a novel idea…until the women in question left them for real men who could buy and sell them a thousand times, which earned their respect.

It’s been my experience that women want men to be men in the traditional sense no matter what they say to the contrary. I’m not talking about some archaic master-servant relationship, but one where the man is clearly the head of the household everyone look up to.

But these days older men are caught in a cross-fire of conflicting expectations about what it means to be a man. This usually means that when things go South, they don’t have the coping skills to handle the downward spiral.

The bottom line here is that men should take care of themselves first – and everyone else – second.

5] Irrelevance

Okay, so your career is winding down, the kids are out of the house, and your ex-wife is a colossal bitch. What the hell are you going to do with yourself? You already proved to the world that you could become CEO of some star-up and make a pile of money.

Now what?

That job is done, but when people ask you what the hell you’re doing with yourself, you have nothing to say. This means you’re only as good as your last performance – which, by the way, was 10 years ago. Not good. Very bad, in fact. Particularly at society cocktail functions.

Men are inextricably tied to what they do professionally, so if you’re not doing what you were once doing, then what the hell are you doing?

Men need an answer.

If they don’t have one, they dwell on what to say to people.

This often leads to introspection, as in the meaning of life kind of crap and then hookers, drugs and a shotgun blast to silence the noise.

Believe me, older men need a good back story to survive. Otherwise, the only thing anyone will be interested in is conning them out of whatever money they happen to have left over from their glory days.

SUMMARY

Getting older sucks. The best you can hope for is money in the bank, good health, and a competent psychiatrist.

Note that money was the first on my list of must-haves because without it you’re probably better off dead.

How else are you going to afford the psychiatrist?

~~~

For more information, here’s a good article on depression in older men:

http://www.fiftyisthenewfifty.com/mid-life-crisis-depression-or-both/

How Much Boomers [REALLY] Need to Ditch Their Day Jobs and Follow Their Dreams?

Table #1

Starting out this discussion with lifespan projections is already a bummer, but don’t worry. It gets worse.

Table #2

If you’re a Baby Boomer [51-68 yrs of age] making 300k/yr, a 60-year-old will need approximately 11.7 times that amount properly invested in order to realize the same income – and that’s assuming market conditions are stable. They’re not.

So let’s get real.

As I state in my book, “Urban Dystrophy,” on Amazon, a starter portfolio starts at around $5,000,000.

The reason I say this is because most guys I know like to do things like date beautiful women [or men], travel, dine out, and buy cool shit – all of which cost money. Lots of it.

None of this is a problem if your day job is bringing in 300k and your retirement money is – for the most part – rolled back into your portfolio.

But what if there is no day job and you’re living off of passive income alone [investments]?

Now the numbers have to change drastically, because in order to earn 300k on a 3.5 mil portfolio, you’ll have to be either an investment genius or selling crack on the side.

In my world [i.e., urban, educated, worldly, sophisticated – probably entitled], you’ll need approximately $7.5 mil to live a very nice – but not extravagant – lifestyle without having to worry about spending it all.

~~~

$7.5 million dollars is a lot of money.

Most guys making $600k/year for 25 years don’t have anywhere close to that amount invested.

Hell, most guys making a 1 million a year for 25 years don’t have that amount in savings.

How is this possible?

Easy.

On a 1 million dollar a year salary, you walk home with approximately $600k, or $50k/month, net-net.

If you own a $2 million dollar home, which is considered normal in these circles, you’re paying $50-$60k in annual property taxes alone on a 30-year house note of $1.5 million [after a 500k down payment], which lands you in the $10k/month range – excluding everything that goes into running a house, like utilities, repairs, and so on.

Add a second home somewhere in the mountains [a small place], a wife, two kids in private schools, and a couple of exotic vacations a year and you have about 150k left to invest, if you’re disciplined.

At the end of 25 years, you will have saved approximately $3,750,000 plus whatever your portfolio has generated over that time period, which most people place at about 8% /year [on good years].

Weird, huh?

And you thought everyone had at least $20 mil in the bank.

~~~

With $7.5 million well invested, you can comfortably take out 500k/yr, enough to live a great life without worries.

This doesn’t mean you can run out an buy yachts, travel in private jets, or buy a big place in Aspen.

But you can own a $2 mil home, put two cars in the driveway, shop at Whole Foods, and stay in 5-star hotel properties suites accompanied by reasonably well-equipped gold-diggers who might also love you for who you are, though most gold-diggers with the capacity to feel actual human emotions usually start in the $10 mil range.

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