A reader asks:
I need Ben's take on the viral NYT story about the “middle class” couple who make $500k living in NYC. As a fellow flyover state guy I'm not completely up to speed on what it's like living as a coastal elitist but these people can't be serious, right?
This is the story in The New York Times that made a lot of people angry online:
Typically, when you see a story like this you should assume it's rage bait. The news publications, blogs and newsletters have all learned that one of the best ways to get attention is to piss people off.
$400k/year is only enough to live paycheck-to-paycheck in San Francisco!
Here's how AI is going to cause a massive recession and 20% unemployment!
60% of the population can't come up with $400 for an emergency expense!
Stories like this get shared widely because they confirm priors for some people, enrage others and then get dunked on by people who love to debunk outlandish claims. Rage bait actually works.
However, The New York Times has been doing a series on what it's like to live in New York City on various levels of income:
I actually thought this piece on the family making $500,000/year living in NYC was interesting because people don't often talk about their budgets out in the open like this.
They spend $4,200/month on daycare. They rent a one-bedroom apartment for $3,900/month. They live right across from Cental Park but it's only 800 square feet, they share a bedroom with their son and have a cramped kitchen with no sunlight.
However, they enjoy living in the city and are happy to make these trade-offs:
“When we talk about the possibility of moving to the suburbs, we both really dread it,” Mr. O'Leary said. “I don't like to drive. Anala doesn't drive. I feel like we'd be stuck. We really value being able to walk everywhere.”
These kinds of decisions are fascinating to me.
Some people look at these numbers and think these people must be nuts. Others understand that if you want to live in a big city like New York, it costs a lot of money and you don't get a lot of space.
This is the part that had people up in arms:
They make half a million dollars a year and consider themselves middle class. When rich people describe themselves as middle class that's bound to set people off and for good reason. This family is not middle-class. They are rich.
Their income places them in the top 2% of earners in America. They are able to save $120,000 a year which is more than the median income in all of New York City (around $80k).1
So why don't they feel rich?
They do live in a high-cost-of-living area. But that's a choice. They don't want to live in the suburbs.
The biggest reason they feel middle-class is because they are surrounded by people who are as rich or richer than they are.
The Upper West Side has a median income that's much higher than the rest of the city:
Around one-third of the residents make $250k or more.
It's estimated there are now 400,000 millionaires in New York City, more than any city in the world. That number is up 45% in the past decade.
My favorite line from the show Fleishman is in Trouble is when Jesse Eisenberg tells Claire Danes, “Excuse me, I make almost $300,000 a year. I am a rich man in every single culture except the 40 stupid square blocks that you insist we live within [Manhattan].”
Almost no one thinks about wealth in absolute terms these days. Wealth is relative to your peers, your neighbors and the people you see living extravagantly on social media.
If you make a lot of money but choose to live in the same neighborhood as other wealthy people, that doesn't make you middle class.
Some people buy boats. Some people take expensive trips. Some people send their kids to private school. Some people get country club memberships. Some people want to live in walkable cities with lots to do.
Those are all luxury decisions.
This is why being rich is not a number; it's a mindset.
Article Link: https://awealthofcommonsense.com/2026/03/whats-middle-class-in-new-york-city/
Recent Event
A few days ago I co-hosted a webinar with CPA Carole Foos from Earned, and I want to be direct with you about something.
I learned things I should have known years ago.
Not complicated things. Not exotic tax shelters that require a law firm and a offshore account. Simple, repeating mistakes that physicians make every single year — quietly, expensively, without knowing it. The kind of mistakes that don't show up as a single catastrophic line item on your return. They show up as a number that's smaller than it should be, year after year, compounding in the wrong direction.
Here's what stayed with me.
First, the mega backdoor Roth. If your employer's 401(k) or 403(b) allows after-tax contributions with in-plan conversions, you may be sitting on an additional $37,500 in tax-free growth annually. One phone call to HR. Two questions. Most physicians never ask.
Second, donating cash to charity when you own appreciated stock is the financial equivalent of leaving money on the table and setting fire to the table. Donating the stock directly eliminates capital gains tax entirely. Same generosity. Meaningfully lower tax bill.
Third, and this one genuinely surprised me: your Medicare premiums in retirement are determined by your income from two years prior. IRMAA surcharges can cost a physician couple over $21,000 a year above the base rate. The planning window is now. Not at 65.
Carole covered all seven mistakes in detail, with real numbers and real strategies attached to each one.
If you missed the live session, the full recording is available now.
Watch it. Take notes. Put the stethoscope down for an hour and pay attention to the part of your financial life that nobody in medical school bothered to teach you.
Your future self will thank you.
To your financial health,
Jorge Sanchez, MD
Physician on Fire
