From Barron's Penta (as in $5 mil net worth) blog:
How much does it cost to be Jay Gatsby today? Or simply the literary scribe F. Scott Fitzgerald?
A lot more and a lot less than you think. In his ledger for 1923,
Fitzgerald budgeted $100 a month for “wild parties” and another $80 a
month for “house liquor.” That year he and his family were living in
Great Neck on Long Island–the model for West Egg of The Great Gatsby–and he was just getting started on what would become his most famous book.
While it wasn’t exactly Gatsby money, $100 a month for wild parties
was no small sum. Adjusted for inflation, that’s $1,360 in 2013 dollars,
or more than $16,000 a year.
But Fitzgerald could afford it at the time.
According to his
accounts, he earned $28,758.79 from his writing in 1923, including a
$3,939 advance for Gatsby, enough to put him in the top 1% of
taxpayers. The same detailed ledger suggests his effective tax rate was
8.3%. (For more on Fitzgerald’s high life and tax returns, see “Living on $500,000 a Year” in The American Scholar, a study by University of South Carolina law professor William J. Quirk.)
Today, that $29k in annual earnings would equal $390,000, and Jeffrey
Pretsfelder, senior tax analyst at Thomson Reuters, calculates that the
tax rate, including payroll taxes and New York State taxes, would be
37.5%. So a dollar of earned income in 1923 went 20 times further than
it does today.
That income side of his ledger helps puts his outgoings in
perspective. Furthermore, the cost of being rich has gone up
considerably since then, which is why Gatsby’s over-the-top
extravagance, much on display in Baz Luhrmann’s compelling and
spectacular new film of the book, doesn’t seem implausible at all....MORE
