Earn 400k, but pay 2.5m rent?

There is a discussion on Twitter about how earning 400k is small money or big money, depending on who you follow. A sub-discussion arose when someone mentioned that he has friends earning a similar amount but paying 2.5m as rent.

Now, while I believe it is plausible, but is it sensible?

A typical worker earning 400k doesn’t actually go home with 400k. There are taxes, dues, fees etc. These salary deductions can easily sum up to 50k. 350k left.

Rent of 2.5m is 210k monthly. This assumes the person didn’t take a loan to pay the rent. 350k – 210k = 140k.

PHCN at 60k monthly (his tweet, not my words). 140k – 60k = 80k.

Diesel at 500k annually. This is roughly 20k monthly. 80k – 20k = 60k.

I would love to continue but this already doesn’t make any sense. Other elements like savings, school fees, car maintenance, estate dues, parents upkeep, siblings maintenance, self gifts etc aren’t included.

Once again, while it is plausible that there are people earning 400k living in 2.5m naira apartments, it does not make sense.

Personally, I believe rent should not be more than 10% of your income. If you want to stretch it, maybe 15%. Never more.

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