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What I'm saying is that it seems odd you've arbitrarily decided one survey by an independent survey company is invalid because sponsored by Fed Reserve, while another done by an independent survey company using government data from Census Bureau must be good. Your reasoning doesn't appear to be based on anything concrete. It is a ridiculous way to try to make a point of dismissing someone's numbers.
I pointed out that the data is wrong and inflated ( that's just my belief ).I believe independent published numbers whose parent organizations are in no way related to the Wall street - Federal reserve Mafia.
Read this again. I never said my reasoning is based on "something scientific". It comes from my basic distrust of the Wall street-Federal reserve nexus. That's concrete enough for me. You can believe whatever you want to believe.
That being said , trying to figure out the 1 percent net worth entry point in a huge and complex economic entity like the U.S is a futile exercise. IRS once attempted this by using something known as an " estate multiplier technique ". Here's a link to an article talking about it - How Much Money Does It Take To Be In The Top 1% of Wealth and Net Worth in the United States
not for nothing but this thread is a lot of wasted space and reading . i keep hoping there will be something useful or of interest so i keep following it but discussing what others need is just useless .
I don't care where you are in the US, a $40K income stream is not Thurston Howell III-level existence. It is a very modest middle class existence. You're not driving a luxury car and taking elaborate trips around the world. You're going to live in very modest housing. Sure. Median wage is about $29K. The difference is less than $1K per month.
I'm not sure your point about Thurston Howell since I never claimed $40k was anything like that.
You said it was as best a lower middle class existence, whereas I content that a single person in many areas of the United States could live a lifestyle not considered "lower" middle class on $40k. You're the one suddenly implying every above lower middle class drives luxury cars. They might be able to afford a respectable place to live, buy a new car every 6-7 years, etc.
Quote:
Originally Posted by GeoffD
I do this math all the time because I'm less than 8 years from retirement.
I don't do this math anymore because I'm already retired, I know from personal experience how much different x amount in salary is from x amount in investment income regarding take home pay.
Read this again. I never said my reasoning is based on "something scientific". It comes from my basic distrust of the Wall street-Federal reserve nexus. That's concrete enough for me. You can believe whatever you want to believe.
My point exactly, your logic is based on "because I think so" which is just silly.
The reality is that $1 million in investable assets only reliably creates about $40K in passive income.
That's untrue as well. Kind of. It is based on a 4% swr and only that.
$1 million could produce a passive income of $1 million (minus whatever taxes) once. Or two $500k. 4 x $250k. Just simply by withdrawing it as cash.
$40k is only useful if you plan to live on it for 30+ years... it isn't the "cap" on how much passive income the investment can throw out. It's just how much you can "safely" take out without money running out before you do.
The 4% rule is also based on the investment gaining more than 4%, 4% is only the part you can use, not how much the investment grows. So essentially, you could live on 10% during the years when it went up 10%, and 0% during the years it didn't grow, and put more money during the years it went down.
the idea that an investment only produces 4% a year reliably doesn't really make sense. I can point to any year and show you that at this point, it made more than 4%, at this point in time, it made less than 4%...
That's untrue as well. Kind of. It is based on a 4% swr and only that.
$1 million could produce a passive income of $1 million (minus whatever taxes) once. Or two $500k. 4 x $250k. Just simply by withdrawing it as cash.
$40k is only useful if you plan to live on it for 30+ years... it isn't the "cap" on how much passive income the investment can throw out. It's just how much you can "safely" take out without money running out before you do.
The 4% rule is also based on the investment gaining more than 4%, 4% is only the part you can use, not how much the investment grows. So essentially, you could live on 10% during the years when it went up 10%, and 0% during the years it didn't grow, and put more money during the years it went down.
the idea that an investment only produces 4% a year reliably doesn't really make sense. I can point to any year and show you that at this point, it made more than 4%, at this point in time, it made less than 4%...
It is just a rule of thumb for mentally converting assets to income or income to assets. I don't know about you, but I have no idea when I am going to die so a 30 year planning horizon isn't long enough (I'm 61) so I am investing in deferred annuities to make the money last longer if I am still alive to enjoy it.
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