Me too
. I have NOT worked since having my second child 17 years ago, so I am hardly the stereotypical woman either .
What/who is a Millionaire?
- Thread starter skater
- Start date
Me too
. I have NOT worked since having my second child 17 years ago, so I am hardly the stereotypical woman either .Well it seems we have a clear winner - $1m in net equity = a millionaire!
This thread has been a good read. We were tantalisingly close to getting an answer to the ol' "how much is enough" question at one point... I know I would love an answer to that question but I know I'm the only one who can come up with an answer for myself.
Still interested in other's opinions though!
I guess the point is that being a millionaire doesn't bring you anywhere near what many perceive to be the "millionaire" lifestyle. Why is that? In fact, relying on having a million dollars in cash could be pretty bad, as in:
Income $1m x 5% return = $50k per year
Inflation effect $1m x 3% (assumed CPI) = $30k per year you need to save
So, if you want to preserve the real value of your capital and consequently the real value of your income stream going forward then you only end up with about $20k per year to live off in real terms - hardly worthwhile! Of course if your equity was in property it would be theoretically protected from inflation but still just as prone to going nowhere for extended periods of time... and getting the full 5% out of it pretty difficult anyway.
Make it $10m and you have a base that I would be more comfortable with... which would be closer to a "millionaire lifestyle" at $200k per year in spending money but it's still not like you can just go out and buy a Porsche and upmarket yacht is it? As well as put the kids through the best schools, travel etc etc
Personally, the costs associated with having a family and running a household are surprisingly high - I have no illusions about the scale of the task we face to go to the next step and exit the rat race while protecting our current position. This investing caper is a long and hard road - but (hopefully!) worthwhile in the end...
This thread has been a good read. We were tantalisingly close to getting an answer to the ol' "how much is enough" question at one point... I know I would love an answer to that question but I know I'm the only one who can come up with an answer for myself.
Still interested in other's opinions though!
I guess the point is that being a millionaire doesn't bring you anywhere near what many perceive to be the "millionaire" lifestyle. Why is that? In fact, relying on having a million dollars in cash could be pretty bad, as in:
Income $1m x 5% return = $50k per year
Inflation effect $1m x 3% (assumed CPI) = $30k per year you need to save
So, if you want to preserve the real value of your capital and consequently the real value of your income stream going forward then you only end up with about $20k per year to live off in real terms - hardly worthwhile! Of course if your equity was in property it would be theoretically protected from inflation but still just as prone to going nowhere for extended periods of time... and getting the full 5% out of it pretty difficult anyway.
Make it $10m and you have a base that I would be more comfortable with... which would be closer to a "millionaire lifestyle" at $200k per year in spending money but it's still not like you can just go out and buy a Porsche and upmarket yacht is it? As well as put the kids through the best schools, travel etc etc
Personally, the costs associated with having a family and running a household are surprisingly high - I have no illusions about the scale of the task we face to go to the next step and exit the rat race while protecting our current position. This investing caper is a long and hard road - but (hopefully!) worthwhile in the end...
If you had $10M at age 30, spent $1m on your yacht, Porsche, travel etc. Assuming 4% return and 3% inflation you could live on $200k PA tied to inflation till you were 88 years old before you run out of money. Sounds like a plan to me.
this is hillarious....
but in all seriousness, I understand the "allocation" of money, and it's a very sensible way to operate in my opinion. each to their own, i guess.
