When do you know your a millionaire?
- Thread starter exstatic
- Start date
-
- Tags
- millionaire
If you have an IP portfolio with networth of says 1M .
Would the banks treat you differently/take into account if you have a 5M PPOR no debt ? I bet they would. You hand the title to them and gee you could do a lot of things an make a lot of money with the equity. How could you not count it ?
Would the banks treat you differently/take into account if you have a 5M PPOR no debt ? I bet they would. You hand the title to them and gee you could do a lot of things an make a lot of money with the equity. How could you not count it ?
It's a good question. Extend it even further, say you have a $20M PPOR, but other than that don't have a dollar to your name and are working at the local Bunnings (fantasy question I know, although I guess inheritance in theory could result in this
). Are you a millionaire? Are you only a millionaire if you sell the property?Our PPOR has always been the most expensive out of our property portfolio due to subburb, location (moving to a walkable distance to kinder then close to primary then highschool...but will stop here not for Uni)
We count it because our plan is to move into 1 of our IP after retiring from work, Kids getting into Uni.. (low maintenance and smaller) and then have options with PPOR...
Cheers, Tracey
We count it because our plan is to move into 1 of our IP after retiring from work, Kids getting into Uni.. (low maintenance and smaller) and then have options with PPOR...
Cheers, Tracey
Just about everyone who works will make a million dollars by the time they retire: Ave wages, say $60K P/A x 40 yrs working (say aged from 20 to 60) = $2.4m, less tax (assume 45% + Mediscare levy) leaves you with $1.11m.
So yes Rob, $1m ain't that much these days, particularly if you live in Zimbabwe. Double
The important part of the equation (as most of you will know) is what you do with that money. So for me the true litmus test of determining when you are a millionaire is your Net Worth. In a worst case scenario, if I had to sell up everything, what do I have left? And no I don't count my Super yet. That's the bonus when I retire. Unless of course the Govt continues to change the rules as they have done for the past 30 years, then it may be worthless.
Project 1080.
The project: 10 IPs in 80 mths.
So yes Rob, $1m ain't that much these days, particularly if you live in Zimbabwe. Double
The important part of the equation (as most of you will know) is what you do with that money. So for me the true litmus test of determining when you are a millionaire is your Net Worth. In a worst case scenario, if I had to sell up everything, what do I have left? And no I don't count my Super yet. That's the bonus when I retire. Unless of course the Govt continues to change the rules as they have done for the past 30 years, then it may be worthless.
Project 1080.
The project: 10 IPs in 80 mths.
Actually much more. Assume 3% inflation you'd earn 195k at 60 if you earn 60k at 20 (assuming you didnt get any promotions!!)
Tax brackets would go up too. I reckon the average punter would be taking home circa 150k or so after tax in 40 years if not more!
Oh ok! Point taken. I'm a believer in the KISS method. The point is, just about everyone will make a $million in their working lives, so it really is small change by comparison.
Project 1080.
The project: 10 IPs in 80 mths.
Being a "multi" is the new black
Stanley and Danko who authored "The Millionaire Next Door" consider it to include net assets excluding your PPOR and expressed in US dollars. In this clime, the latter currency may need to be taken with tongue in cheek.
Perhaps we should express our asset value in terms of the amount of gold or silver they can purchase.
Agree with those above that a million is not that much today.
Being a "multi" is the new black
Stanley and Danko who authored "The Millionaire Next Door" consider it to include net assets excluding your PPOR and expressed in US dollars. In this clime, the latter currency may need to be taken with tongue in cheek.
Perhaps we should express our asset value in terms of the amount of gold or silver they can purchase.
Agree with those above that a million is not that much today.
Being a "multi" is the new black
Technically, this is correct, but you can't live like a millionaire off a $5 mill PPoR. In fact, it would cost you a fortune to maintain it.
To me; being a true millionaire is your nett worth from assets that provide the millionaire income that provide you the millionaire lifestyle.
Forget the PPoR.
BV, but with the 5 M PPOR no debt, you can leverage it (to buy fully managed business
) and have the income for the millionaire lifestyle. How could you not count it ?
Well, I think you should include your PPOR.
There is a world of difference in assets of people who have a freehold PPOR of say $1 million and nothing else, compared with someone who rents but also has no other assets.
And Super funds - if those are included then many people become instant millionaires.
There is a world of difference in assets of people who have a freehold PPOR of say $1 million and nothing else, compared with someone who rents but also has no other assets.
And Super funds - if those are included then many people become instant millionaires.
What I mean is, you could be on a 750k salary.
Put 1/2 of that to continually upgrade your own PPOR and spend the rest.
Still leaves enough for a millionaires lifesyle, which wouldn't be too extravagant.
What's a milionaires lifestyle anyway?
And at the end, you may end up with a 20 mil mansion, and sell it CGT fee on retirement, (not my chosen strategy).
Don't agree with that one. What if next week James Packer doesn't have $1M cash in a bank account somewhere (fantasy I know). Does this mean he's not a millionaire? Assets have to come into play, not just cash.
Wealthy people don't become wealthy by having cash on hand. They certainly don't start doing that when they have reached the magic $1m level of the game, either. To them, cash loses value on a daily basis. They don't invest in things that lose value.
The average person likes to have a lot of cash on hand to give them SANF, but wealthy people get their SANF from within. I believe, from my own observations, this to be the case.
One million in assets only is actually quite poor.
Do the calcs and you'll see.
Do the calcs and you'll see.
Rob
I was having that conversation a couple years back and, from memory (i will email my mate OS to be sure) but the cars in the US have the belts done at 60000miles.
BT
Similar threads
