The Depression Of Being A "Rich Prick"
Most New Zealanders think that earning $100,000 a year as a single person would solve their problems and make their fiscal life complete.
Here's why it doesn't anymore.
Asian Invasion will get out the calculator and do a practical little budget for you to 31 March 2008 (pre those huge tax cuts you are receiving).
Pay $100,000
| Income tax rate | Income | Tax | ||
|---|---|---|---|---|
| Income up to $38,000 taxed at 19.5% | $38,000.00 | $7,410.00 | ||
| Income over $38,000 up to $60,000 taxed at 33% | $22,000.00 | $7,260.00 | ||
| Remaining income taxed at 39% | $40,000.00 | $15,600.00 | ||
| Totals | $100,000.00 | $30,270.00 |
So after PAYE that leaves you with $69,730
Less ACC levy of $1,297.62
Less Kiwisaver contributions at 8% of $8,000
Gives you a net salary figure of $60,432.38 (ie. you have had 40% of it stolen or "compulsorily acquired" already)
The single largest cost you have of course is housing. Even if you own the house you live in freehold, you still face the opportunity cost of renting that house to someone else or worse, cashing up the house and sticking the money in the bank and earning interest.
Average rental according to Barfoots is $390 a week = $20,280
Median house price in Auckland is $450,000
In either instance you are possibly spending $400 a week on housing cost = $20,800
Gives you a net salary and rental/mortgage figure of $39,632
The second largest cost you have is a motor vehicle. New Zealand's public transport systems are so appalling that everyone needs a car.
The IRD prints allowances and running cost guides. Taking a 1600 cc car (yeah...I know....)
Fixed cost $4,507 pa plus 17.2 cents per km (200kms per week avg) plus fuel surcharge (every bastard has one of these nowadays so I have included one in my budget) of $30 per week = $7,855.80.
Gives you a net salary and rental/mortgage/transportation profit of $31,777
The most basic food/household goods) basket ($200 per week x 52) = $10,400
The most basic of electricity/gas per week ($200 per month x 12) = $2,400
Disposable Income (after tax and the most basic non-extravagant costs of living) = $18,977 per annum
Outrageous. So thats $364 a week disposable income to spend on clothes, private health insurance (the most basic policy being around $1,500 per annum), haircuts, travel, going out and saving for a deposit on that home or for a better car. I haven't even included the running costs of the cellphone or broadband that are easily $200 a month ($2,400 per annum). Or student loan repayments.
If you have children (add in your welfare for families that is stolen from the above single person example) and run these numbers that's $364 a week to spend on the kids clothes, private health insurance, student loan repayments, travel, cellphone, haircuts, going out, school fees, saving for that deposit on that home or a second car.
Or in my case.....one night's bar tab.
posted by Cactus Kate at 6:53 PM
17 Comments:
And you should be godamn thankful for supporting an extended family of long term sickness/unemployed/job seekers you f*cking rich b@stards.
A friend said I could go back to NZ and there was a job for NZ$150k, I simply said that really isn't enough.
In our case, I am a rich prick, and so is my wife. Our mortgage is actually $900 a week - fortunately the capital balance is now less than 200k. An interest rate of 9.6% does encourage you to make every effort to pay-back the capital as quickly as possible.
But our net disposable income between the two of us is probably less than the $364.
some depressing information there
I'm not convinced anything will change even if National clean up this election and the following one. Mediocrity seems to be becoming too ingrained in the culture here in NZ.
I am not earning anywhere near that ... but as an expat, I am saving a truckload and when I think about going back to nz ... I just think ... "nope ... I can't afford it, my job will be awful in terms of pay and conditions and I will lose all choices" ... much better to stay out o/seas ... my accommodation is free, my tax is paid by my employer as is medical insurance, a trip home every year ... money into retirement ... end of service allowance. I only earn $50,000 USD but I am saving at least $20,000 each year and investing it ... I travel an insane amount ... for fun!
Hmmm ... I had a fantastic trip home and played tourist with a friend a year ago. I said to her, the irony was, if I lived in NZ I could not have afforded to have the holiday we did (and that was staying in budget places as well!) ...
cellphone, prepaid $30 per month, broadband 15G $75.00 per month - hardly $200. Shopping - we feed our family of four on $160 and we eat very well.
Housing, we don't pay nearly $390 per week, including insurance, rates, mortgage, we have a $350k house
Your figures are crap. Unless you want to live like a rich prick.
Dave
My figures are extraordinarily conservative. Hardly living it up.
I don't know anyone under the age of 50 who spends just $30 a month on their cell.
4 people for $160, nice, but you are dreaming.... What do you eat precisely? And who stays at home to prepare these budget meals?
Housing - even if you own that $350K house freehold then you have a housing cost - what that money could be doing if it wasn't in the house = $350K @8.5% less tax.
I am an expat NZer now living in London. Everytime I have returned to NZ one thing always alarms me about friends of mine with decent jobs in NZ - they have very little discretionary income. And these people would be on 100 - 150k and perhaps double that for professional couples. The most concerning thing is that they just accept it and for some reason think it is normal to have such a poor lifestyle. Also the other thing which shocked me was what a high percentage of NZers were bludging with this working family tax credit thing. The rich pricks are really supporting such a high percentage of NZ. But you only realise how bizarre NZ is with its left wing policies when you leave. And ironically NZ needs as many rich pricks as possible....
$160 pw for a family of four? Doesn't spam (no: the alleged food, no the poster!) get a bit boring after a while?
Cactus, you forgot childcare: $400 per fortnight per child. Yes I know: snip snip. But they give us at least $1000 of pleasure each every fortnight!
$160 does well for our family of 5 (although one is baby). We eat well - no spam at all, we even eat cheese! We do ok but very simply on 50k. We don't travel or go out though - or have sky Tv. Of course we aren't saving anything - And I've just worked out that 3 kids in childcare will cost more than I can earn by going back to work
So the poor sod on $100k is not so much 'rich' as just a 'depressed prick'. It's a title for the truly poor to aim for, foreshore.
Auckland's public transport has actually improved over the past few years, and I know of folk who are happy to be a 'one car family' - but it isn't cheap, particularly if you need to catch more than one bus/train on your journey.
It would be interesting to see the cactus calculation applied to the equiv earnings in Australia and England.
Did I say interesting? I meant depressing. Saying this, I currently choose to stay (and love living) in NZ for reasons other than $.
Ahem, yes, I realise it has to be.
Welfare for Families - at $100k? Not unless you've got dozens of the little buggers... I won't qualify for a single cent until we get to four kids (and I earn just under the magic 6 figures, with a wife at home and a couple of days childcare a week to pay for).
I wonder what percentage of NZ's consume more tax than they contribute and therefore are dependent on rich pricks.
Lindsay Mitchell did a post on it here
http://lindsaymitchell.blogspot.com/2008/02/wff-tax-relief-or-welfare.html
I live quite comfortably on under 25,000, in fact I'm getting fat; and I'm debt free. How can you possibly spend 40,000 a year before getting to disposables? For me if I earned 100,000 the 70,000 it amounts to after tax would give me a disposable income of at least 45,000.
Oh and your links broken, should be: This
Actually, it is less than that.
After paying GST, you really have just $16868.44 to spend or 324.39 a week.
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