Could the Annual Cost of Living the Dream in Manhattan Be $1,000,000?

It seems everyone wants to live in Manhattan. Ever since films like "Breakfast at Tiffany’s” came out in 1961, thousands, if not millions of people have dreamed of living in the Big Apple. Some people recall movies featuring Doris Day. Others look at the lifestyles on display in “Real Housewives of New York.” What does it cost to live the dream Manhattan lifestyle?

This is another financial planning story about how to help clients separate fantasy from reality. One lifestyle can be achieved if you are very, very rich.

What is the dream Manhattan lifestyle? You own an apartment in Midtown, and a summer house in the Hamptons. You own a luxury car and garage it. You dine out frequently, attend the opera and see new performances on Broadway. You take taxis everywhere, although the Real Housewives seem to always have a black SUV with driver standing by. How much do you need to earn to fuel this lifestyle?

Let us look at two couples with no children. Household A lives in Manhattan and does everything you see on TV and in films. Household B lives in Brooklyn and does many of the same activities, but a lot less often.

Let us assume “take home pay” of about 67% of before tax income. A couple earning $1,000,000 might see 670,000 net, which breaks down to $55,833 a month. The lifestyle for Household A might cost $58,619 a month. It would need about $1,050,000 to balance income vs. expenditure.

Household B earns about $192,000/year. After payroll deductions, their 67% looks like $128,640. On the monthly level, that is $ 10,720. The lifestyle for Household B might cost $10,693 per month. It is less grand, but they tend to do the same things, but less frequently.

The Dream Lifestyle Might Cost $1,000,000 But $192,000 Gets You Close

Now let us look at how expenses might compare, category by category.

Primary home:

Household A: They buy a three-bedroom Condo in Manhattan. The average size is 1,990 square feet and costs about $2,628,248.(1) Condos come with maintenance fees. The average monthly fee is $2.70/square foot per month. (2) This costs $5,372/month.

Household B: They live in Brooklyn, one of the other boroughs of New York. The median sale price is $815,000. (3) They own outright, it is not a co-op or condo. The approximate monthly carrying costs, excluding mortgage are $764.00

Mortgage on primary home:

Household A: Assuming an 80% mortgage and an interest rate of 6.56% the monthly payments are about $13,738.(4)

Household B: Assuming an 80% mortgage and the same interest rate above, monthly payments are $4,147.

Hamptons House:

Household A: Average house price in East Hampton 2.7 million. (5) at $940 per square foot. Carrying costs for property taxes, home insurance and utilities but excluding mortgage are $ 3,405 (6)

Household B: They joined with three other couples, renting a house on the North Fork for the month of July at the average price of $12,000. Divided among four couples, that is a $3,000 cost, breaking down to $250/month. (7)

Mortgage on Hamptons home:

Household A: The property has an 80% mortgage and an interest rate of 6.875%, the monthly mortgage runs $17,736. (8)

Household B: They don’t own a Hamptons home, because they went the house share route. They have no mortgage. Cost is zero.

Car rental

Household A: They lease a new model Porsche 911. This runs $ 1,709/month. (9)

Household B: Their car is ten years old and they own it outright. No rental cost. 0.00.

Manhattan parking:

Household A: They would not park their Porsche on the street. Indoor parking in Midtown $500/month.

Household B: They live in a single family, detached home in Brooklyn. They park in their driveway. Monthly cost is zero. 0.00


Household A: They are doing their weekly grocery shopping in Manhattan. They have terrific selection from excellent purveyors, but this comes ar a price. $486/month pp or $972/month. (10)

Household B: They eat as well as Household A and pay about the same for groceries. $972/month. (10)

Dining out:

Household A: They dine out with friends twice a week. Once is at a high-profile restaurant and the second is at a new trendy restaurant. Assume the high profile is $600/couple and the new, trendy restaurant is $300/couple. $900 per week or $3,600/month.

Household B: They dine out with friends twice a week. They dine in local places. They live in Brooklyn but “get into the city” every so often. Assume it runs $100 per person with drinks. That’s $200 per meal, $400 per week, $1,600 per month.

Out of Pocket Expenses:

Household A: Let us assume $500 a week for haircuts, dry cleaning, taxis and everyday expenses. Cost is $2,000/month.

Household B: They have the same out of pocket expenses. $2,000/month.

Monthly Subway pass:

Household A: People might take taxis in movies, but walking or taking the subway is the fastest way to get around. A Monthly subway pass costs $127. (10) The cost for two people per month is $252.

Household B: They use a subway pass too. $252/month.

Theater in NYC:

Household A: They go to see a show on Broadway once a month. The average ticket price is $189. (11) Let us assume they have a pre theater dinner beforehand @ $250/couple. Cost is $628 a month.

Household B: They go to the theater twice a year. They are paying $100/head on average at TKTS for same day tickets. They need to dine in the Theater District, so they are paying $250/couple, same as Household A. Each theater outing is $450, twice a year is $900. As a monthly expense, it is $75.

Season tickets to Opera:

Household A: Six opera Flex subscription at the Metropolitan opera, Dress Circle seating. $1,091 per person. $2,182 total. (12) Averages to $181/month.

Household B: They might not be opera fans, but they go anyway. They go five times a year. They see five performances $500/head x 2 = $1,000 a year. Average is $83/month


Household A: They take two luxury vacations they can tell their friends about. This might be a luxury cruise to Antarctica or an African safari. Assuming $10,000 per person on each vacation, that is $40,000 in total or $3,333 per month.

Household B: They take two vacations and shop for deals. They do a transatlantic crossing, catching an $800 fare when it’s on sale. Airfare back is about $250. They stay in London a couple of nights using hotel points. They do this twice. $1,050 per person is $2,100 total. Twice yearly is $4,200. On a monthly basis it costs $350.

Attending Charity Galas:

Household A: This couple lives a “see and be seen” lifestyle. Assume they attend one event per month (museum or hospital galas in winter, garden party events in the Hamptons in the summer. Average ticket price estimated at $2,000/person. Cost is $4,000 per month.

Household B: They go to the After Party at the Brooklyn Museum Artists Ball. Cost is $100/head for members. They go to another similar event at another institution. $200x2 = $400. Monthly cost is $33/month.

Season Tickets Yankees:

Household A: They are baseball fans and have season tickets to Yankee games. This runs about $5,000 each for the year or $833/month for their two seats. (13)

Household B: They are Yankee fans too. They attend ten games, buying general admission tickets. These cost about $100 each. Ten tickets are $1,000 x 2 = $2,000. Monthly cost averages $167.

The Costs Add Up

Your client might feel they have hit the big time. They have a great job. They have arrived. It’s time to “live the dream.” This is a cautionary financial planning story.

When you total the numbers above, you see Household A might be spending $58,619 a month or about $1,050,000 to live the “Manhattan lifestyle” they desire. They will spend themselves into debt and be at tremendous risk if their income ever declines. They could cut out some expenses, but the big ones would probably remain.

Household B gets the “flavor” of the “Manhattan lifestyle” at a much lower cost. They might be spending $10,720 a month, which is about $128,640 a year after payroll deductions on an income of approximately $192,000.

Like many things we see on TV, the idealized New York lifestyle is incredibly expensive and out of reach for most. Your client might be able to “hit the highlights” if they do not try to do everything, not live in Manhattan and keep their eyes open for good deals. Financial planning can help them see clearly.

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