Barclay’s bailed out Lehman AND Me!

One of the three main pieces of the fallen Lehman empire that Barclay’s has swooped in and salvaged at a bargain-basement price is their headquarters on 7th Avenue in Manhattan – literally 3 blocks from me. Do you know how many of my clients and neighbors work there?? You should see all the real estate agents swarming this place, showing the bundle of apartments that went up for sale two weeks ago. But more important for my bottom line are the many traders who have found their way to my massage table over the years.

One of them came in last week, and I remarked that I was surprised to see him, thought he was out of a job, yet there he was in his nice charcoal suit. I expressed disgust at the news coverage that day, with its live feed of people leaving the building with their little boxes of personal effects. He informed me that they were all back at their desks within 48 hours, but the media didn’t find it interesting enough to mention it as anything more than a footnote to the week. Barclay’s saved 10,000 jobs, most of them right here in NYC.

While only ~5% of my income can be attributed to Lehman employees, half of my clientele works in finance/trading/investment banking. When Bear Sterns collapsed in February, they all avoided unnecessary spending on things like massages until they had a better idea how the dust would settle. It was the first month in my 5 years as a self-employed massage therapist that I finished in the red. So I girded my financial loins and prepared myself for the worst September ever. I stopped researching the exotic trip I wanted to take over Thanksgiving (the cheapest week of the year to travel internationally, in my experience)…

And then it didn’t happen. The media is going nuts over all this stuff, but the people on the inside of this industry are taking it in stride. So here’s hoping that they also able to take today’s 777-point drop in the Dow in stride as well. Guess I should still hold off buying that ticket to New Delhi. Or Kathmandu. Or Damascus. Or Cairo….remember, I stopped mid-research for this trip and only got as far as a shortlist.

#1 Expense: Manhattan-flavored Rent

From the New York Observer, 9/2/08

I live in a 500 sq-ft alcove studio in a really nice doorman building in midtown Manhattan, and I hemorrhage $2100 in rent every month for the privilege. If you’re not from NYC, you’re probably feeling really good about paying half as much for something 3x as big. But if you are from around here, you’re thinking “that’s not a bad deal at all”. This is, unfortunately, one expense that I can’t do much about, for a number of reasons…

1) I need to be in this very commercial, non-neighborhoody neighborhood for business reasons – I’m a massage therapist, and I work from home. Sure, I could save $300 and get a less central place, but I’d lose a LOT more than $300 worth of income each month. I’d probably lose at least that much per week!

2) As you can see from the table above, I’m actually paying about $500 below average for my deluxe apartment in the sky. In fact, it’s more like $560 because my utilities are included. I’d even take it quite a bit further than that in summer because I’m here all day every day, and that’s a lot of a/c.

3) Still not convinced? It would cost about half a mil to buy this place, so after a 10% down payment, the mortgage, condo fees and RE taxes would leave me with barely enough change from $4K to treat myself to a KitKat.

4) Living outside of NYC and renting massage space in Manhattan wouldn’t save me a darn thing. In fact, it would cost me significantly more because I’d have the added expenses of a monthly train pass and a car. I’ve priced it out a few times – I’m actually saving ~$1200/month by not doing this.

So as hideous as this whopping great expense is, it could be a whole lot worse. In about 2 months, I’ll find out how much worse it will be for 2009. The nightmares should be starting soon … I wish I were joking.

My First Budget

I’ve never really needed a budget. Sadly, that’s not because I’m independently wealthy – I just spent too many years with broke-ass parents, then working 2-4 jobs at once as a broke-ass student, then living for 7 years in Scotland where I never earned more than $10/hr. I just spent as little as possible so that I’d have enough left over to indulge my One True Love: travel.

These days I make 4x as much working less than half the hours, and I have no idea what to do with it. I know, it’s a GREAT problem to have, but I hate that moment at tax time when you see in black and white how much money has flowed into your coffers and you can’t think of one darn life-enhancing thing you did with it all. Except for my cool trips, which will no doubt feature frequently in this blog. Anyway, I’m trying to make sure I’m putting enough money where I should – you know, all that grown-up stuff like retirement savings and emergency funds. And since I descend from a family that I’ve nicknamed “The Moneytards”, I’m winging it armed with little more than a good head for numbers, a lifelong aversion to materialism, and a sometimes inappropriate degree of frugality.

My first step in figuring it all out is to monitor how much I spend on various things, so I’m tracking my spending on both Wesabe and Buxfer until one of them has all the features I want. I did something like this online with my food and exercise in order to lose weight with considerable success, so here’s hoping that it has a similar effect on my finances.