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My favorite fantasy about $1 million was poste don another board years ago. Someone said they'd be set for life with $1 million because invested at 8% they could rake off $80K/year in perpetuity. Umm, no. Inflation would eat away at the purchasing power of $80K and you can't invest in anything yielding an average of 8% without massive volatility.
I really hate advertising for gambling schemes (casinos AND lotteries) that imply that you have it made in the shade with $1 million- especially when it's taxable. The ads cited by the OP just encourage squandering it. Those of us who accumulated it the hard way, a little at a time with some crashes making large chunks of it disappear, are more careful.
My favorite fantasy about $1 million was poste don another board years ago. Someone said they'd be set for life with $1 million because invested at 8% they could rake off $80K/year in perpetuity. Umm, no. Inflation would eat away at the purchasing power of $80K and you can't invest in anything yielding an average of 8% without massive volatility.
I really hate advertising for gambling schemes (casinos AND lotteries) that imply that you have it made in the shade with $1 million- especially when it's taxable. The ads cited by the OP just encourage squandering it. Those of us who accumulated it the hard way, a little at a time with some crashes making large chunks of it disappear, are more careful.
Even if we dismissed the fact that a safe withdrawal rate is based on what it would take for getting through the worst of times the best average draw historically would be about 6 1/2% ….
Nothing will spin off 8%with never a down year.
In our neighborhood it takes 3 million in retirement to match the median income from those working. We are just a higher end neighborhood in queens , not even Manhattan
My favorite fantasy about $1 million was poste don another board years ago. Someone said they'd be set for life with $1 million because invested at 8% they could rake off $80K/year in perpetuity. Umm, no. Inflation would eat away at the purchasing power of $80K and you can't invest in anything yielding an average of 8% without massive volatility.
I really hate advertising for gambling schemes (casinos AND lotteries) that imply that you have it made in the shade with $1 million- especially when it's taxable. The ads cited by the OP just encourage squandering it. Those of us who accumulated it the hard way, a little at a time with some crashes making large chunks of it disappear, are more careful.
Unless you were one of Bernie Madoff earliest customer, and pull your money out way before his downfall.
Locally there is an ad running for a casino.
It shows people telling what they would buy if they won the million dollar jackpot.
Not that I'd turn down a free million dollars,
but it just isn't all that much spending power any more.
15% buys a $150,000 home. In some places it could be a nice property.
85% can bring in a tight (~3%ish) of $30,000 -- more if/when the market makes more sense.
Actually EARN some money (or getting SS) should turn at least another $30,000
Pick the right property and it could produce some rent income as well ($5,000 net?)
No Lear Jets or Yachts.. but that $1M lump -used well- could do wonders for a LOT of people.
Your starting pay today be over $27/hr as an unskilled apprentice. The average salary for someone working in a burger restaurant is paid $11.
$27/hr. works out to $56,160 annually (plus any included benefits). I've been retired for few years, at this point, but I think that I can say, with a fair amount of certainty, that my former employer is not starting new hires at $56K. However, you also have to factor in where the job is. In NYC or LA, $56K may not be a lot of money, but in "middle America", it's a very good wage, and certainly isn't a starting wage, in a manufacturing facility.
Locally there is an ad running for a casino. It shows people telling what they would buy if they won the million dollar jackpot.
I've got to say, the general population has no idea what a million dollars is (or maybe it is just the gambling public?). Sorry, folks, a million dollars will not buy you your own private jet let alone afford to fly it anywhere, your own gigantic yacht, or your own huge private beach in a place with fantastic weather.
There are a lot of places in America where, after taxes, your million dollar jackpot won't even buy you a middle class 3 bedroom house.
Not that I'd turn down a free million dollars, but it just isn't all that much spending power any more.
Inflation! Haha...
But also, we look at things differently as we get older and more established (financially) in our careers. I've never had a million dollars, but that's a financial goal for me for no other reason than simply because it's a good figure to start from. I'm at about $925k in net worth, so I'm almost there. I'm 43... so some would say that's good, others would laugh at it. But the reality is, I never really took saving seriously until about 10 years ago, and even then I didn't start actually putting in my 401k/retirement maximum until just 2-3 years ago.
On what you were saying, I often hear on the radio... "We're giving away $1,000 every month!!!" or something to the effect. When I was 20, $1,000 was a big deal. That was basically my rent AND utilities (when I remembered to pay them). Now, I probably wouldn't think twice about spending $1,000 on a weekend vacation. So... it's all about perspective.
$1,000,000 is still a lot of money. In a small train town in the mid-west, it would basically buy up the entire town square of 20 homes. In Fort Lauderdale, it'll buy you a single 20+ year old 3/2, 2,300sq-ft home in a good school district.
The fun thing about retirement is you save money for 30 to 50 years but when you take it out, those early IN dollars are devalued over 10 fold. And the newly hired are making much higher salaries for the same jobs you did. This forces you to continually keep your savings invested and hope for the best. Lots of serendipity involved.
No, that shouldn't be correct. If you're just putting it into a standard-yield savings account then that would be true... but who does that? Most people invest their savings in everything from assets (homes) to the stock market, to other high-earning vessels.
There's the law of compounding interest / gains. If you give someone who's even remotely savvy $1,000,0000 in a good economy, they can double and triple that money in a few years. Home prices in most decent areas, even with the housing crash in 2007, have gained exponentially because of demand, an increasing population w/ shorter supply, and inflation.
Give me $1,000,000 I'll show you! hahah...
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