Part 2 - Allowance in Real Dollar Terms
Allowance is one of the most popular topics in the sugar world and there is no shortage of opinion about it. Instead of passing judgment on what's fair and reasonable for what's offered or expected, I'd like to examine what it means to have an allowance in real dollar terms. This will take into account real world factors such as taxes and discretionary income and compare that to established benchmarks.
For example, according to the US Census Bureau, annual median household income in the US is $49k, top 5% starts at $157k, and top 1.5% starts at $250k. Keep these numbers in mind as we look at allowance expectations in real dollars terms by taking into account taxes and SD's discretionary income.
On seekingarrangement.com a SB can indicate the amount of expected allowance in her profile. Let's look at what it means to have $1k, $3k, $5k, and $10k per month. And for illustration purpose let's assume a tax rate of 35% since SD's should be high income individuals.
$1k/month - $12k per year after tax or the equivalent of about $17k before tax.
$3k/month - $36k per year after tax or the equivalent of about $51k before tax. Note this is already higher than the median household income.
$5k/month - $60k per year after tax or the equivalent of about $86k before tax. Note this is more than one and a half times of the median, or more than half the amount of what the top 5% makes.
$10k/month - $120k per year after tax or the equivalent of about $171k before tax. Note this will put you in the top 5% of all US households.
Now that we have put those numbers in perspective, let's realistically think about what are the chances of finding SD's who can provide that kind of allowance as part of their discretionary income. For illustration purpose, let's assume a SD has 20% of his gross income available to spend on a SB. This means the SD should have an income of five times the amount he provides to the SB. Keep in mind this is his total spending on a SB, for which the allowance may only be a part of. This percentage may vary based on each SD's situation such as whether he's single or married.
$1k/month - The SD would need to have a gross income of $85k per year, this is already way above the median income.
$3k/month - The SD would need to have a gross income of $255k per year, this is already in the top 1.5%.
$5k/month - The SD would need to have a gross income of $430k per year.
$10k/month - The SD would need to have a gross income of $855k per year.
The analysis shown was for illustration purpose only. One can use different assumptions about tax rates and discretionary income to come up with different figures. But realistically, how many wealthy men can we expect from the top 1% to sign up on one of these web sites and are serious about being a SD and part with their money?? Think about what kind of work or business the SD should be in to make that kind of money, where they're located, their age and marital status, and what kind of SB they'd be looking for. Will the top 1% of SD's look for an "average" SB, or would they look for the top 1% in SB's as well? What kind of a "real" job would a SB have to get in order to make the equivalent of the allowance she is seeking?
I'm not passing judgment on what people are looking for or what they expect, and I know there are success stories across the spectrum. I'm just applying a straight forward analysis to help those in the sugar world to have a realistic view.
Coming up - Part 3, Escorts vs SB's