The median income for NYC is $57,000. Surely 10X what a typical person makes is enough for a family to get by, it's just not enough for the lifestyle they want.
You are correct, but if this guy's an HBS alum pulling in 7 figures on the buy side, then he and his family are living the Upper East Side lifestyle which means:
Private school tuition - $50k/kid/year
Additional activities such as tutoring, sports, etc - $10-20k/kid/year
Mortgages+fees or rent for a 1,500 square foot apartment in a doorman building in East 80's - $75,000-150,000/year
Mortgage or rent for country home in Hamptons or Litchfield County - $40,000-100,000/year
Literally half of his income is going to be taxed as an NYC resident. So he's got $600k of cash flow and if he has 2 or 3 kids, the very basic fixed costs of housing and schooling are likely taking up about half of that. With the remaining half he has to pay for food, vacations, cars, clothing, etc, and anything left after that will get saved.
To be clear, nobody is making this guy do this. Nobody's forcing him to "summer" anywhere, nobody's forcing him to enroll his daughters at Spence when PS 6 is free. But at the same time, this is a guy who came up through a system in which preppy affluence was the chosen lifestyle of his "me 10 years from now" role models. As easy as it is to mock the concept of anyone being "trapped" when they make 1.2mm a year, the truth is that stopping his current job would be profoundly disruptive and stressful for this guy, his wife and their kids. So I get where his wife is coming from when she laughs at his mention of the startup.
Avoiding lifestyle inflation in the first place is definitely part of the puzzle, but it’s not clear that it can dig you out of the hole once you’re in it. Is giving up the lifestyle they want and have really going to make them happier?
Source: https://www.census.gov/quickfacts/fact/table/newyorkcitynewy...