Most millionaires don't feel wealthy

except they defined it as having investable assets of 1mil, which would preclude the family home and cars etc.

Ive gotta say, my net wealth is somewhere close, but I feel way off wealthy. Not that that was the intention.
 
The source UBS report is here

Investors are telling us that wealth isn’t just about having a certain amount of money. The majority of investors
define wealth as having no financial constraints on what they do. But when asked to assign a dollar amount to
being wealthy, they say it takes $5 million. The security that comes with cash also plays a critical role, and we’ve
seen investors holding 20% in cash on average over the past three years. It appears that having a large cash
cushion allows investors to be more aggressive with their other investments. I
Click to expand...
 
If we take in SMSF and IP equity only - we're over the $1mil - doesn't mean we're even close to "feeling" wealthy ... especially when compulsory outgoings regularly still strips income
 
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I am making a bit under 1k/week after-tax (work income). I think I'll feel pretty comfortable with that once all my annoying personal loan and CC debts are paid off. Anything more is a big bonus :)
 
The more you get the more you want, seems to go like that.
I think a good benchmark for being wealthy would be 1 mil/annum passive income, but even that would not be much to many.
 
I’ll feel wealthy when my passive income matches my current work income, then it’ll be my choice whether to supplement my passive income with a work income or go fishin’
 
Ace in the Hole said:
The more you get the more you want, seems to go like that.
I think a good benchmark for being wealthy would be 1 mil/annum passive income, but even that would not be much to many.
Click to expand...

$1 million passive income is massive. On a 5% return you would need $20m invested to get this.

I suppose everyone's view of wealthy is different. $100k of passive income would be more than enough for me.
 
You only wealthy if the income you generate meet your life style without a job
no point having a mill and that mil ties up in some negative gear properties
or under performing asset that generate you bugger all cash flow if you out of a job
 
I agree entirely with the article posted by the OP. I speak from personal experience.

I have about 2mil investible assets outside PPOR and have never felt wealthy in the least. Still working a*se off.

My PPOR is worth about 700k and this contributes to feelings of working class mediocrity. Maybe when I get to Bayview style PPOR of 1.5mil, no make that 2mil then I may feel more financially secure.

I agree with ACE that 1 mil passive income is undoubtedly wealthy but suspect that I will never reach this.

100k passive income is reasonable for the average person but is far from wealthy. Personally I would be looking at semi-retirement around this level of passive income and feel that I need 2.5mil to 3 mil of investible assets outside ppor to securely achieve this for eternity.
 
china said:
I agree entirely with the article posted by the OP. I speak from personal experience.

I have about 2mil investible assets outside PPOR and have never felt wealthy in the least. Still working a*se off.

My PPOR is worth about 700k and this contributes to feelings of working class mediocrity. Maybe when I get to Bayview style PPOR of 1.5mil, no make that 2mil then I may feel more financially secure.

I agree with ACE that 1 mil passive income is undoubtedly wealthy but suspect that I will never reach this.

100k passive income is reasonable for the average person but is far from wealthy. Personally I would be looking at semi-retirement around this level of passive income and feel that I need 2.5mil to 3 mil of investible assets outside ppor to securely achieve this for eternity.
Click to expand...

Since your metric is 'investible assets', why does a bigger PPOR make you feel financially secure?
 
All depends on what kind of life style you enjoy and what your million is doing for you.

If you like expensive cars, staying in 5 star hotels, enjoy name brands and have other high cost habits, 1 million will not do much for you. On the other hand if you get a kick out of a simple life, don't need much money to be happy then you can easily feel wealthy with 1 million.

If your 1 mill is in heavily negatively geared property that you have to work like a dog to maintain, you will feel poor. On the other hand if your 1 mill is returning a net yield of say 10% or more, you can easily kick back, relax and feel wealthy.
 
china said:
I have about 2mil investible assets outside PPOR and have never felt wealthy in the least. Still working a*se off.

My PPOR is worth about 700k and this contributes to feelings of working class mediocrity. Maybe when I get to Bayview style PPOR of 1.5mil, no make that 2mil then I may feel more financially secure.
Click to expand...
No offense intended - some "hard love" advice - if you will....but I have to say it this way to have the necessary impact you require to (hopefully) listen up....

You are a fool.

Right now I feel the worst I have ever felt financially, living in the best house we have ever owned.

Had I gone back to my $40k per year hospital job and not bought my workshop, I would right now be the happiest bloke on earth - still working in a dead-end job, but own a paid-off really cool PPoR, and no financial worries.

All our friend and relos come over and go; "WOW! Look at this, and look at that view" and so on. It's not really a consolation, I can assure you; when you have no money for yourself after all the bills each month....in the USA they call it "house poor".

The PPoR level is not what makes you wealthy - it's part of it for sure - it's also partly for show to impress the neighbors and friends and make you think you feel better about yourself.

What makes you wealthy is excessive cashflow over and above expenses. Then you feel wealthy - no matter what the level of excess...more is better, obviously.

The person who can resist the temptation to fill up their income with PPoR and car loans, and live very low key, is the wealthy one really because they will have a load of expendable income for the fun stuff - the things we see the really wealthy on tv do and buy....that's what everyone really wants to be able to do to think they are wealthy, right?

Livin' the dream, right?

You already have the paid-off PPoR, loads of savings and well-paid job, so stop being a d*ck and enjoy it.

If you really believe your PPoR is the key to feeling wealthy, then cash out the $2mill of investments/savings and use them to purchase the new PPoR.
 
BayView said:
You already have the paid-off PPoR, loads of savings and well-paid job, so stop being a d*ck and enjoy it.

If you really believe your PPoR is the key to feeling wealthy, then cash out the $2mill of investments/savings and use them to purchase the new PPoR.
Click to expand...


I agree with you BV and this is going to sound illogical.

My 2mil investible assets / savings has been built on 15 years of hard work / frugal living. I see that as my financial independence fund / retirement fund / safety net should I become unable to work / unwilling to work / forced out of work. It is there for a dark and stormy day/month/year.

Once this fund gets to the 2.5 - 3 mil range, then I feel that I can ease off because I will have my 100-150k passive income flow per year meaning that I should be able to live frugally regardless of what is happening in terms of work.

So this fund is not to be touched for discretionary spending. I would be willing to put in offset for a loan on an investment related activity.

Once the fund gets to this stage, if I am still at work, then I would like to upgrade the PPOR - almost like excess, discretionary funds to spend on a luxury item which PPOR really is.
 
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china said:
I agree with you BV and this is going to sound illogical.

My 2mil investible assets / savings has been built on 15 years of hard work / frugal living. I see that as my financial independence fund / retirement fund / safety net should I become unable to work / unwilling to work / forced out of work. It is there for a dark and stormy day/month/year.

Once this fund gets to the 2.5 - 3 mil range, then I feel that I can ease off because I will have my 100-150k passive income flow per year meaning that I should be able to live frugally regardless of what is happening in terms of work.

So this fund is not to be touched for discretionary spending. I would be willing to put in offset for a loan on an investment related activity.

Once the fund gets to this stage, if I am still at work, then I would like to upgrade the PPOR - almost like excess, discretionary funds to spend on a luxury item which PPOR really is.
Click to expand...

You will rarely make much money when you are just starting out something new as you are on a learning curb. When you hit $3M in savings it is different than having made $3M through investing. If you still have an employee mindset it just means you now have $3M to blow on your education. Start investing already, no diff between $2M and $3M...
 
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