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I mean of course its a big deal since it means you can live comfortably in most places in the world, but is it anywhere near the life changing benchmark that it used to be?
I'm about to cross that mark this year and I still feel pretty poor. Am in my 30s, no debt, no inheritance, no kids or wife. Still pinch pennies and clip coupons. I don't think I'll feel secure ever no matter how much I have socked away, which sounds terrible. Then again, I'm Asian and am expected to care for my parents, who have no retirement saved away whatsoever.
I mean of course its a big deal since it means you can live comfortably in most places in the world, but is it anywhere near the life changing benchmark that it used to be?
I'm about to cross that mark this year and I still feel pretty poor. Am in my 30s, no debt, no inheritance, no kids or wife. Still pinch pennies and clip coupons. I don't think I'll feel secure ever no matter how much I have socked away, which sounds terrible. Then again, I'm Asian and am expected to care for my parents, who have no retirement saved away whatsoever.
Classic screen name!
I have crossed that threshold in the past (mainly due to inflated stock market/real estate) but it isn't life changing. Still went to work everyday and honestly I wouldn't feel rich until I was worth 5-10mm. 1mm in 1970 was a big deal when NY apartments were 100K and a new Cadillac was 6K. Today it simply doesn't go that far.
Nope. Most people who make it are too busy working and understand the value of money. It's just a number.
I would bet that most of the people you think are rich have good cash flow and like to spend. The people with wealth are frugal. The super wealthy are an exception. But even they surprise you. They might make big purchases but still are cheap. One of my old coffee buddies was worth a bloody fortune. Dozens of millions from stock grants and options in the 90's. Lots of guys didn't have patience on the 15 year vesting. He held out.
He wouldn't buy a paper because if he waited ten minutes somebody would leave one. He wore the same 501's all the time. He liked Ecco boots but complained they were $250 so he would wait for a sale and buy a few pairs. Their house was just off the Camino and he complained about noise. He could have moved anywhere but spent some money on soundproofing walls and new windows. Different mindset.
Sorry, but "millionaire" is barely hanging on to middle class.
You could spend the money and have a good time and go back to being broke. Or you could invest your capital and live on the income. That income that you can generate on a million dollars, after taxes, puts you at a lower middle class lifestyle.
A mil in your 30s is a milestone. If you continue at this rate, you can get to a dozen mils by retirement age. I think one can live a good life with 5 mil today, which is roughly equivalent to the present value of what you will have by retirement. Keep it up!
Do you mind sharing with us which industry you are in? Health, finance, legal, tech, etc??
I mean of course its a big deal since it means you can live comfortably in most places in the world, but is it anywhere near the life changing benchmark that it used to be?
I'm about to cross that mark this year and I still feel pretty poor. Am in my 30s, no debt, no inheritance, no kids or wife. Still pinch pennies and clip coupons. I don't think I'll feel secure ever no matter how much I have socked away, which sounds terrible. Then again, I'm Asian and am expected to care for my parents, who have no retirement saved away whatsoever.
Well, of course the answer to your question is "it depends." A lot of people live very comfortably on less than a $1 million net worth.
But realize you can also do a lot with $1 million. For example, if you invested that money in the S&P 500 at the beginning of this year, then you would have an additional $168,000 right now. - Not a bad chunk of change for doing practically nothing.
Well, of course the answer to your question is "it depends." A lot of people live comfortably on less than a $1 million net worth.
But realize you can also do a lot with $1 million. For example, if you invested that money in the S&P 500 at the beginning of this year, then you would have an additional $168,000 right now. Not a bad chunk of change for doing practically nothing.
Off point remark: He could also lose a similar amount or even more if you look at year-over-year, but you are right the market has a positive return in the long-run.
One million dollars in 2013 isn't "wealth", but it's not exactly middle-class either, especially if by "million" we mean investible assets and not home equity.
Somebody raised the question of living off of one's assets, presumably via low-risk investment vehicles. That depends entirely on the expected rate of return. If you can get 6%, well, that's $60K/year before taxes... plenty for a single-guy without dependents. But if you can only get 1%, well, not so much. If the annual rate of return is low, one would need a huge amount of money to generate sufficient annual income. But that's an arbitrary number. If you park the money in a savings account with zero rate of return, you'd need an infinite amount of money - and that's a fairly large amount, so to speak.
As others have opined, the threshold for "rich" these days is something on the order of $5M... which of course depends on the rate of return.
One more thing: everybody says that the first million is the hardest, while subsequent millions become easier. I disagree. Often that first million comes from getting lucky on speculative investments. Once one amasses such money, one becomes more conservative, and rate of return drops. The jump from say $300K to $1M can be very fast, again depending on risk-tolerance and luck. With attenuated risk-tolerance, going from $1M to $2M can be a protracted crawl. This is one reason why we have many "middle class millionaires" - folks stuck with one or two million, who never rise higher.
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