The American Scholar posted a fascinating (and a bit depressing) article by William J. Quirk called “Living on $500,000 a Year.” The article is about F. Scott Fitzgerald’s tax returns, and wow, doesn’t that sound enthralling.
But seriously, it’s an interesting read, covering how Fitzgerald made the equivalent of $500,000 a year, paid only about 5.5% in taxes, kept strict ledgers and budgets, but still managed to go broke. Quirk cites the problem of “leakage,” wherein money is spent that doesn’t fall into budgetary categories.
In a hilarious bit of anachronistic irony, Fitzgerald published two articles about money and savings in the Saturday Evening Post in 1924. The first was satirically titled “How to Live on $36,000 a Year,” which again, is the modern day equivalent of $500,000. In that article, Fitzgerald estimated that, due to leakage, a “mysterious third of our income had vanished into thin air.”
The second article came out six months later and was titled “How to Live on Practically Nothing A Year.” The irony of the articles is that, while not “practically nothing,” $36,000 a year is much lower than the current U.S. median yearly income. But—if you cut out the J.K. Rowlings and Stephanie Meyers (and let’s be honest, the F. Scott Fitzgeralds) of the world—the number sounds just about right for a working writer’s income. Depressing indeed.
