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There are various calculators online that will estimate when you hit $1MM or whatever number you put into it.
It's important to clarify for yourself, "$1MM what?" Investments only? Net worth including one's home? It makes a difference IMO.
Personally I only count cash and cash equivalents + investments - consumer debt in "hitting $1MM or more"
$1MM is a cool milestone and it feels good to reach it, but you can hit it one day and then the market shifts or you spend some of it and then that milestone is not reached anymore. It's arbitrary.
My focus is on the all-important FI number because that relates directly to my lifestyle and choices; it also happens to be a more aggressive number.
So is hitting 1M more exceptional for a single person or for a couple who has kids?
Does this mean the popular advice of needing a million to retire really mean for couples and that a single person 500K is the goal to strive for?
i would say that it depends. everyone has to figure out their own needs.
a couple where both work is going to be different than a couple where one works. im a "couple with kids" but my wife doesnt work (an income producing job).
Whether it's princely or not is relative. Not princely for someone who has $10M+ perhaps or has extravagant tastes or lives in the most expensive parts of the nation, but compared to the median standard of life in the entire country it is indeed a pretty huge amount. There are plenty of fine places in the United States where you can get a home for $150k and $1M at 5% annual returns is $50,000/yr which is nothing to scoff at and will buy a single person a fairly good life in a good part of the United States.
Ok but you’re going full other end of the spectrum here. $150K buys you a piece of crap house. There’s nowhere in the country where that’s a good house. The materials alone for a good house are way way more than that. If you mean “a place where there’s walls and a roof” sure maybe, but again it will SUCK. You’ll be stuck in some godforsaken flyover state in a suburb because even flyover states have nice cities and your house will be pathetically tiny so I hope you live alone and if you like any upgrades or top notch HVAC you won’t be getting them.
Even in markets like Vegas with a median house at $290,000, I don’t think the houses at $1M are anything extravagant or expansive whatsoever. Most are on small lots, 0.25 to 0.45 acres with neighbors very close to you, most are dated in design and construction, and are not very large either. The houses at $400K are flat out bad most of the time, so I’m not sure what’s bringing down the average home price to $290K but the average home wouldn’t be something I’d live in there. By contrast in my market an average home is $430K and my house is $575K, not much above the average cost but it’s a very solid, 3 story home. Our average homes are simply more livable while also being way more expensive. This $150K house you speak of will be so pathetic you’d be better off and happier renting a nice luxury apartment with quality sound proofing in a good area.
$1M gives you some peace of mind but it’s not enough to live it up and be content either, not without either income or an amazing investment opportunity. If you could put $1M into something and reliably get 12% ROI, now we’re talking about a decent living off your money. But if you’re like many people you wouldn’t risk it all in the market and you end up with some of it getting a poor rate of return.
I think $2-3M is the new $1M that was a lot 25 years ago when I was a kid. Houses alone now are too expensive to make $1M a lot of money. If you owned a nice house and had $1M, that’s different.
2-3m generates about 80-120k in retirement . that is the median income for our area . so it buys a rented apartment or co-op here , not even a house .a starter home is about 1 million at the low end and you would be pressed to even find one for that price..down south or out west you could be king of the hill with that kind of money .
A spin off from the other thread... at what age did your portfolio *first* hit $1M? What was your reaction - i.e. was this a highly anticipated event for you? A culmination of years of diligence or did you think nothing special of it? What does having $1M in investment assets mean to you?
If you have not reached that mark are you aiming for it? If so, when do you reasonable expect that to happen?
Personally I *just* hit the half-Mil mark a few days ago and it does feel interesting. At my current contribution rate and a 6% return I should hit that mark at exactly 50 years of age (6 yrs from now) which is my goal but the markets need to co-operate. I think hitting $1M at 50 would be significant for me.
55. About 3 years ago. What did it mean to me... Coming from a poor upbringing, without an advanced degree (or any degree for that matter), I wanted to shout and celebrate the occasion. Unfortunately I had no one to share the celebration with. I don't know of any co-workers, family, or friends who had also reached that mark so I felt like I would be seen as boasting - and nothing more. As I continue to meet marks that I set for myself, I still feel like partying. The best I can seem to muster is to take a road trip somewhere. But this Dec, I'm thinking I should start making plans for a cruise to the islands. I've never done that.
Unfortunately I had no one to share the celebration with. I don't know of any co-workers, family, or friends who had also reached that mark so I felt like I would be seen as boasting - and nothing more.
We have many friends that have likely met that mark, but we didn't share it with them either. When we hit it, I told my wife. Besides her, I think the only other people we explicitly shared it with were my parents. They made a lot of sacrifices for me and my siblings, and I think they took some comfort (and probably some pride) in knowing how much it all paid off. They knew we were doing well since we had already been helping with a lot of the finances, but that number was still a nice milestone to share with them.
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