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Old 05-31-2018, 06:51 PM
 
6,308 posts, read 4,767,382 times
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Quote:
Originally Posted by SportyandMisty View Post
$25M may make you rich, but you're still pretty far from private jet wealthy, which the article implies starts at about $1 Billion.
A friend of mine has a private jet and I'd be surprised if he's worth more than $50 million. It all depends on your priorities.
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Old 05-31-2018, 06:53 PM
 
6,308 posts, read 4,767,382 times
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Quote:
Originally Posted by Lowexpectations View Post
I think this quote from the article makes more sense and puts the headline a little misleading territory


“Fast-forward almost 25 years, and $25 million is how we define ultra-high net worth.”
Thank you. Now I don't have to say this :-)
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Old 05-31-2018, 07:38 PM
 
4,718 posts, read 2,251,841 times
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Quote:
Originally Posted by tnff View Post
Why would I have a few hundred thousand in their bank?
My kneejerk response would be so that you could come on CD and whine about how the Fed is screwing savers, but upon consideration it is likely most who engage in said whining have very little savings anywhere and are just scapegoating about it.
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Old 05-31-2018, 07:54 PM
 
6,817 posts, read 4,408,035 times
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Quote:
Originally Posted by LifeIsGood01 View Post
According to these standards even doctors and lawyers are not rich.
They're not. Neither is the $400/hour attorney. Or the software-guy who sold his company to Microsoft for a $25M payout.

Quote:
Originally Posted by Jim1921 View Post
Several banks have a wealth management businesses that have much lower minimums.
Yes. And Vanguard's "Flagship" status begins at only $1M of Vanguard funds (non-Vanguard funds, or individual stocks, don't count). There's a hierarchy of gradations of affluence. Fine. But by my reckoning, "wealth" means not merely good treatment the brokerage firm or at the bank, but private banking. Instead of having a financial advisor, one has a servant, schooled in the art of investment, whose only job is to invest the master's money. And that servant probably makes around $200K/year. Instead of being a customer of a tax-preparation firm, one has a CPA - yup, another servant - whose only job is to manage the taxes of the person in question. And again, this servant is generously compensated. To what level of wealth do these circumstances comport? Probably well into the 9-figures.
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Old 05-31-2018, 11:54 PM
 
6,308 posts, read 4,767,382 times
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Quote:
Originally Posted by ohio_peasant View Post
They're not. Neither is the $400/hour attorney. Or the software-guy who sold his company to Microsoft for a $25M payout.



Yes. And Vanguard's "Flagship" status begins at only $1M of Vanguard funds (non-Vanguard funds, or individual stocks, don't count). There's a hierarchy of gradations of affluence. Fine. But by my reckoning, "wealth" means not merely good treatment the brokerage firm or at the bank, but private banking. Instead of having a financial advisor, one has a servant, schooled in the art of investment, whose only job is to invest the master's money. And that servant probably makes around $200K/year. Instead of being a customer of a tax-preparation firm, one has a CPA - yup, another servant - whose only job is to manage the taxes of the person in question. And again, this servant is generously compensated. To what level of wealth do these circumstances comport? Probably well into the 9-figures.
It's nice to have high standards, but if you can generate an income of around $500K a year without working, I'd say you're rich. Not superrich, but rich. It takes around $10 million to do that.

Having a family office, a chief investment officer, and a full-time accountant is a billionaire's game. People with just a couple hundred million may invest with a multi-family office, or they may manage their own affairs with the help of a private bank or investment management firm. The only reason to strive for that kind of money is because you are on a mission (to build a company, invent a new medical device, start a foundation, etc.); you'll never spend it.

Professional investment managers (I am one), accountants, etc. are not servants. They/we are among the luckiest people in the world, getting paid very well for doing something that is actually rather easy.
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Old 06-01-2018, 08:53 AM
 
Location: Loudon, TN
4,893 posts, read 4,211,785 times
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Quote:
Originally Posted by eliza61nyc View Post


lol, and I drive to kingdom come to avoid atm fees until my son pointed out that I was probably burning it up in gas. lol, darn it, it's the principle of the thing.
Just get cash back at the store. No charge.
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Old 06-01-2018, 09:00 AM
 
Location: Loudon, TN
4,893 posts, read 4,211,785 times
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Quote:
Originally Posted by oldtrader View Post
Your local banker, is not considering how much your total net worth is, as to give your very preferred treatment.

It is how much money you keep in their branch of the banking system.

I have found if you keep a few hundred thousand cash in their bank, they will treat you like royalty.

My bank president, sees me in the bank, and comes out to personally greet me and visit a little to make sure I am a happy camper as they say.

Go to the woman that does the notary work, sit down to wait for her to finish another party, and the bank president comes out and takes you to his office, and uses his notary stamp to assist you.

And what are all those charges some are talking about. I never see them.

Have enough in the bank, and you are royalty and treated as such. Have an account with occasional over drafts, and you are looked down on and treated as dirt.

Your banker does not really care about how much you have in net worth, near as much as how much you have in his/her bank.
Why in the world would anyone keep hundreds of thousands in a bank, where it gets less than 1 percent interest? It should be invested earning money for them. Our bank manager always greets us, and handles our minor issues, and we have nothing even remotely resembling that amount in our savings account. You just need to have a local bank and be a customer with a reason to go in once in a while. We've had great relationships with the past and current managers and their mortgage officer too.
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Old 06-01-2018, 10:38 AM
 
17,613 posts, read 12,197,156 times
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Quote:
Originally Posted by TheShadow View Post
Why in the world would anyone keep hundreds of thousands in a bank, where it gets less than 1 percent interest? It should be invested earning money for them. Our bank manager always greets us, and handles our minor issues, and we have nothing even remotely resembling that amount in our savings account. You just need to have a local bank and be a customer with a reason to go in once in a while. We've had great relationships with the past and current managers and their mortgage officer too.
Why would anyone keep hundreds of thousands in cash? People who have hundreds of thousands in expenses
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Old 06-01-2018, 11:22 AM
 
56 posts, read 20,311 times
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One thing is to have an ultra-high net worth, and another is being rich, that is having independent wealth that will guarantee that you’ll be able to afford first-class service and goods for the rest of your days, regardless of price fluctuations of your investments. Today’s rich people are the equivalent of those English dukes of the 18th century who led extravagant lifestyles without wrecking their finances.

With $10M you’re already an ultra-high net worth person, because statistically you accumulated more wealth than almost anybody else. Financially, you are in the top 0.02% of all people in the world.

But even with $25M you don’t seem very rich to me. You can spend some of the principal, if you want, but that would mean that your children won’t inherit much and probably will have to work to make a living. That’s a miserable prospect for truly rich folks!!! So you decide to live on investment income only and preserve the capital for future generations. A conservative investor will make 3% a year: $750,000 before tax and probably about $450,000 after tax, since you aren’t going to live in South Dakota just to avoid state income tax. That’s nothing more than what a successful professional makes. The difference is that you have plenty of free time to spend more money. With $37,500 a month you can pay a mortgage for a home valued $3M, hire a full-time cleaner for your household, and send your children to excellent private schools. But when you go to another city a suite in an elegant hotel will cost you more than $1,000 a day. First-class airfare from New York to Paris starts at $7,500 per person. A bespoke suit will set you back $5,000. You’d better watch every penny, buster! You are no English duke!
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Old 06-01-2018, 11:37 AM
 
6,817 posts, read 4,408,035 times
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To the above, don't forget the ravages of inflation. True stewardship of a portfolio not only eschews dipping into the principal, but seeks a rate of return that exceeds inflation. One's spending-money is therefore the excess annual return, after taxes and after inflation. Depending on how the portfolio is invested, this excess may actually be zero. By this reckoning, even a multi-billionaire may have no license to spend from his/her portfolio.
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