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How Much Money Do You Actually Need To Be Filthy Rich?

 

“I don’t care that much for money, ‘cos money can’t buy me love…” We all know the song, right?

We’re all basically aware that money isn’t the be-all and end-all for happiness, and that – as countless lottery louts and retired athletes can attest – having loads of cash can only create problems. More money, sayeth the great prophet Biggie Smalls, results in more problems.

Now it appears that just being rich isn’t enough – according to Town & Country magazine, simply being a millionaire is insufficient to live like, well, a millionaire.

The piece, written by Norman Vanamee, consulted experts in wealth and luxury lifestyle in an attempt to assign a ‘happiness number’ to rich people, in an effort to work out just how much was needed to be content.

The assembled experts imagined a couple in their 40s, not working and with two teenage kids who attend an exclusive private school.

Living in Manhattan, this fictitious couple have two holiday homes and a few members of staff, they’re philanthropists and art collectors, and they have $25 million set away for each of their kids. If you’ve seen Gossip Girl, it’s basically the parents from that. By anyone’s standards, they’re filthy rich.

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“Let’s look at the data,” says Wendy Sarasohn, a real estate broker in Manhattan.

“If you narrow it down to eight-to-12-room apartments, which would probably be appropriate for a family with two teenage kids, there are 31 apartments currently listed, and they range from $4m to $30m, with an average asking of $10.8m.

“Now let’s break that down. On Fifth Avenue, if you’re going to live well, you’re going to want to face Central Park. So you’re going to be on the high side. So for $18m (£13.3m) you can get a nice apartment on Fifth facing the park. Then you need to put another $2m  into decorating.”

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We also mentioned that the hypothetical couple were art collectors, and the experts were asked to consider that they might spend anywhere from $1m to $100m on pieces of art.

“The issue with art versus, let’s say, real estate is that there are very different areas of collecting that require very different levels of funding,” says art expert Abigail Asher.

Meanwhile, their kids’ private school costs would fall just shy of $2m per child.

As for charity, a survey of almost 1500 super-rich people suggested that $25,000 per year was donated to charity, but in years of financial success, that could go up to over $50m – which is deductible against taxes.

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“You’re going to have to have help,” adds Sarasohn.

“In Manhattan you’ll need a chef, a driver, and someone who cleans. A driver who can multitask – help out at parties, for example – is around $100,000 a year. The salaries for the other two positions combined is probably another $90,000.”

What is the happiness number then? How much do you need?

“We inflation-adjusted by 2 percent, added the cost of education, plus $1 million per year for art, and set aside $25 million in cash for each of the children,” says Holly Swan, a wealth management expert. “They would need to have around $190m.”

 

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