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Wealthy is being able to live comfortably off the income from your assets.
So if you require 80k/ year then you need 25 times that, or $2MM in assets, given a 4% rate of return.
Rich is being able to live off the income from the income from your assets to maintain your lifestyle.
Yes, agreed. Although we bought our house for $280K 10 years ago, so not nearly in the same mortgage debt. But people see $200K and think you actually have $200K a year to spend. Not really - well, not if you are responsible. We have taxes of about $40K a year, health insurance, $18K a year for 401K...and that's just what comes out of the actual checks. So Our take-home is about $9000 a month when it's all said and done. Then we also contribute the max to our IRAs, contribute to the 529, and sock away some for emergency savings. Yes, I realize that we are very fortunate to be able to do these things, but it also means that we don't have buckets of disposable income just lying around.
200k is not much at all if it is a dual income couple. It is middle class at best
SWS is a totally non-clinical and also not very successful journalistic attempt at a Grand Unified Theory of Everything related to what are rare, diverse, and highly individualized events to begin with. It is only a mass demand for and addiction to hyper-sensationalized tabloid-level journalism that creates a niche for such noxious weeds to sprout and prosper in to begin with. If it bleeds, it leads in the modern world, and if it doesn't bleed, you can often forget about seeing it at all. Eyeballs are not drawn to Newly Wealthy Person Still Doing Well These Days stories, so they simply don't appear. Such deliberate editorial selection-bias taints how the world perceives reality.
Bottom Line: People who by whatever means come into more money than what they have been accustomed to dealing with need to seek out and retain qualified advisers. Most in fact do exactly that.
Where are your stats? You say people who suddenly come into money should seek help and I agree. To say most do seek it and retain the money is not something I agree with. Where are your studies or stats to back up your assertion ?
Yes, I realize that we are very fortunate to be able to do these things, but it also means that we don't have buckets of disposable income just lying around.
What you are describing is the process of "budgeting" income. Once you have income, there is a high tendency to pledge it to some cause or purpose on a regular basis. Then you feel that this pledge has somehow cut off the "disposable " label that was originally attached to it. The extreme example would be deciding to have a baby because you got a nice raise. That's budgeting a long-term commitment over what may turn out to be a much shorter-term windfall. The hidden assumptions that underlie the make-up of a monthly budget need to be identified, pulled forward, and actually thought about as part of financial planning and self-asessment.
At that level, my wife and I could afford a $1,300,000+ home. Max out our retirements, have two new cars, either leased or bought. And take awesome trips 2 times a year. That amount of money would give us the freedom to do literally whatever we wanted.
It would also, if we kept our current lifestyle let us retire very comfortably in a lot less time.
At that level, my wife and I could afford a $1,300,000+ home. Max out our retirements, have two new cars, either leased or bought. And take awesome trips 2 times a year. That amount of money would give us the freedom to do literally whatever we wanted.
It would also, if we kept our current lifestyle let us retire very comfortably in a lot less time.
So it's all relative.
225-350k you could afford a 1.3 million + home? That's 4-6x your annual income.
I don't even think I would feel comfortable going over 2.5x my annual income for a home.
Last edited by mizzourah2006; 06-24-2015 at 11:37 AM..
Takes at least a $750K income minimun for a family to live in a dumpy part of Manhattan
Adapting what passes for definitions of "middle class" in various other US cities to the special conditions and circumatances that exist in Manhattan suggests that the upper bound of middle class income there would fall in the $150K to $200K range. $750K would be well into the the upper "very well-to-do" ranges by any reasonable definition or measure.
Where are your stats? You say people who suddenly come into money should seek help and I agree. To say most do seek it and retain the money is not something I agree with. Where are your studies or stats to back up your assertion ?
Google is your friend. Give him a call. But keep in mind that the biased nature of the sensationalized document set he has to work with will need to be corrected for. Filters for source-reliability will need to be developed lest you become a victim of the very disease you are trying to investigate.
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