Do you think someone that makes USD 900k a year is rich? What kind of lifestyle can this person afford?

It depends. Being rich is one of the most subjective things that exist.

I have a friend who is a lawyer in his late 40s and makes sensibly above the 900K USD yearly threshold (let’s say approximately 80k USD a month) and he surely does not believe to be poor but he pointed out to me the following details attached to that figure:

A. Slightly less than half of that sum goes away in taxes (40k USD). There is no way around it as he works in a big law firm which does not allow any room for tax avoidance schemes or under-reporting of revenues, which are quite common for solo practitioners and smaller firms;

B. 10% more of his gross revenues go in pension contribution (8K USD, which he is mandatorily required to pay and he cannot avoid);

C. 10K a month go in alimony to his non-employed ex-wife and teenager kids;

D. 10K a month go in various unavoidable monthly fixed payments (mortgages, rents, top of the line health insurance, BMW & Porsche installments, two parking spaces fee, gym and personal trainer fee);

The final available income is approximately 15k USD a month: which is not a small sum by any means but do not allow a particularly extravagant lifestyle (far from it). He changes cars every 5–7 years. Goes to holiday in expensive hotels. Flies business class in intercontinental flights. Occasionally buys some Italian modern art paintings. Eats only at restaurants as he doesn’t cook at home.

In fact, he works approximately 2,500 billable hours a year, so he only takes 10 days of holiday at the beach in Summer to stay with the kids and 1 week at Christmas and New Year’s Eve. He once told me that skiing is his favorite sport but has not had time to go skiing in the last 20 years.

All the rest of the year (50 weeks) he is buried in his office, commanding a team of approximately 20 associates and reporting to his boss almost on a daily basis.

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