I’ve never lived in New York on $40,000/year, but I imagine that I would be constantly stressed and unable to think of other people’s needs. That might be more than what 95% of the human population earns, but expenses are also higher for people in New York than for 99% (a guess) of the human population.
Assuming no sort of family/support network, that would be really hard. What sort of housing/medicine/food/clothing/lifestyle can a person afford in New York on 40k per year?[1] $40,000/year in Oklahoma City might be fairly comfortable, and in Chengdu or Chennai or Cairo it might be a very comfortable lifestyle, but in New York it would be… quite a bit less comfortable. It might not even be a living wage.[2]
I’m guessing that many of the people who are able to donate 10% (or more) while having good salaries would find it really hard to keep doing that if they lived at that standard (the standard of living that a 40,000 USD pre-tax income in New York City allows). Is it possible, and would some do it? Yes, there are some paragons of virtue who would be able to make that work. But for most of us, I think that would be too challenging.
In this scenario, if we aren’t crashing on a friend’s/relative’s sofa, and we can’t afford university education or similar training, and we don’t know about the local networks (like Buy Nothing Facebook groups or Freecycle communities)
Although depending on the sacrifices you are willing to make, you would probably live on it. There are certainly people in New York City that survive on that amount or less per year.
New York might be too challenging on that salary, but I lived in Lyon (France’s 2nd biggest city) on less than that (36k a year) and donated a third of my earnings to animal welfare charities.
Now I don’t spend much, the situation would be different in the US (higher welfare expenses), and I dont have kids.
But I expect most people in France with this salary to be able to give 10% of their income without sacrificing their wellbeing.
A somewhat meandering follow-up: I have an idea that isn’t fully clear in my head, but I want to share the rough idea of it. I think that one of the difficulties is that when we use our own life examples there are often many hidden benefits that don’t get calculated clearly/directly into the income. Some things can be roughly calculated if we put some effort (health insurance, the quality of housing, how stably is the job, the length of commute), and some things are really really hard to put a price on (having a family support network, local knowledge of which shops sell cheap vegetables that are still good quality, speaking the local language well-enough to make friends).
Maybe an economist would think of these as “investments in human capital.” If a person has these things, it is really easy to forget how hard it is to exist without them. I think of the cliché of a millionaire pretending to slum around as a homeless person. But to be serious: if a person has a university education, and a strong professional network, healthy emotional relationships with family, and good physical health, and professional stability, and a well-funded retirement account, it can be really hard to imagine life without those things. If a person hasn’t had all these “investments in human capital” then it is really really challenging to make a good life situation for yourself. When I think about a person living in an expensive city on $15,000 or $20,000 per year, I wonder how much has been invested in these people so that they are able to live so frugally. How different does it look if a person lacks that investment?
Could I live on 40k in NYC if I had all of the above-listed “investments?” Probably, yeah. Could I do it if I had none of them? I bet that I wouldn’t be able to.
I’ve never lived in New York on $40,000/year, but I imagine that I would be constantly stressed and unable to think of other people’s needs. That might be more than what 95% of the human population earns, but expenses are also higher for people in New York than for 99% (a guess) of the human population.
Assuming no sort of family/support network, that would be really hard. What sort of housing/medicine/food/clothing/lifestyle can a person afford in New York on 40k per year?[1] $40,000/year in Oklahoma City might be fairly comfortable, and in Chengdu or Chennai or Cairo it might be a very comfortable lifestyle, but in New York it would be… quite a bit less comfortable. It might not even be a living wage.[2]
I’m guessing that many of the people who are able to donate 10% (or more) while having good salaries would find it really hard to keep doing that if they lived at that standard (the standard of living that a 40,000 USD pre-tax income in New York City allows). Is it possible, and would some do it? Yes, there are some paragons of virtue who would be able to make that work. But for most of us, I think that would be too challenging.
In this scenario, if we aren’t crashing on a friend’s/relative’s sofa, and we can’t afford university education or similar training, and we don’t know about the local networks (like Buy Nothing Facebook groups or Freecycle communities)
Although depending on the sacrifices you are willing to make, you would probably live on it. There are certainly people in New York City that survive on that amount or less per year.
New York might be too challenging on that salary, but I lived in Lyon (France’s 2nd biggest city) on less than that (36k a year) and donated a third of my earnings to animal welfare charities.
Now I don’t spend much, the situation would be different in the US (higher welfare expenses), and I dont have kids. But I expect most people in France with this salary to be able to give 10% of their income without sacrificing their wellbeing.
A somewhat meandering follow-up: I have an idea that isn’t fully clear in my head, but I want to share the rough idea of it. I think that one of the difficulties is that when we use our own life examples there are often many hidden benefits that don’t get calculated clearly/directly into the income. Some things can be roughly calculated if we put some effort (health insurance, the quality of housing, how stably is the job, the length of commute), and some things are really really hard to put a price on (having a family support network, local knowledge of which shops sell cheap vegetables that are still good quality, speaking the local language well-enough to make friends).
Maybe an economist would think of these as “investments in human capital.” If a person has these things, it is really easy to forget how hard it is to exist without them. I think of the cliché of a millionaire pretending to slum around as a homeless person. But to be serious: if a person has a university education, and a strong professional network, healthy emotional relationships with family, and good physical health, and professional stability, and a well-funded retirement account, it can be really hard to imagine life without those things. If a person hasn’t had all these “investments in human capital” then it is really really challenging to make a good life situation for yourself. When I think about a person living in an expensive city on $15,000 or $20,000 per year, I wonder how much has been invested in these people so that they are able to live so frugally. How different does it look if a person lacks that investment?
Could I live on 40k in NYC if I had all of the above-listed “investments?” Probably, yeah. Could I do it if I had none of them? I bet that I wouldn’t be able to.