Being a Millionaire

[Laszlo]

I think today that big milestone needs to have ‘multi-‘ in front of it.

[Formulansx]

I would think that all of us are going to need at least every bit of that to retire in the US. I'm 37 and well on my way but even a million doesn't seem like enough and that scares me a little.


Sent from my iPhone using Tapatalk

[j0oftheworld]

You don't have to be a millionaire according to the movie "The Gambler".
According to the bookie John Goodman plays you just have to be in "a position of f* you".
Anyone else seen that? Good lecture! Not able to post that language here. ;)

[Kyle13]

Originally Posted by rolex75216

Agreed...



Say you win a Talent Show or the Lottery ...



$1,000,000.00 in Winnings



-$400,000.00 40% in State & Federal Taxes

-$100,000.00 10% in Gifting to Family or Tithing to Church

-$350,000.00 for a Modest Home if you can even get one for that

-$50,000.00 for New Car



In 1 day you are down to $100K ... then you pay off some debt, take a couple vacations and your out of money already!

I have some ex friends that this happened to. They won an insurance settlement and had $1,000,000 in liquid assets after taxes. They went and bought a house a few months ago, which I think is stupid seeing how strong the market is right now here in socal. Then they went and bought a brand new Mercedes. Paid roughly 850k for the house and probably 50k to buy the car. I’m sure the remaining balance is dwindling away as I type this!


Sent from my iPhone using Tapatalk

[subtona]

Originally Posted by Formulansx

I would think that all of us are going to need at least every bit of that to retire in the US. I'm 37 and well on my way but even a million doesn't seem like enough and that scares me a little.


Sent from my iPhone using Tapatalk

Agree with you, there is much to be concerned with.

Many Jobs continue to become obsolete while rising costs to healthcare and soaring prescription drug prices are certain to impact a significant percentage of people's retirement savings plans into the future.

Consider the potential impact of A recent life saving drug that's been priced at $450,000, it treats child leukemia.

[68camaro]

As others stated a million ain't what it used to be. When 10 yr t-notes were paying 7% you could generate 70k per year in income and in those days live comfortably middle class (cost of living way less than today). The last time 10 yr treasuries saw 7% was in 1995 (22 yrs ago) when it was closing on 8%. Standard of living much cheaper then.

Todays 10 yr treasury pays 2.3% or $23,000. Just to generate the same amount of $70,000 interest you received in 1995 you need $3mm today. Obviously this assumes not touching principal. Artificially low interest rates are theft on savers but most people that should care about this are too ignorant or stupid to pay attention (savers, Baby boomers, retired, anyone of fixed income). Everyones fixed on scandal du jour and ignores Fed raping of the sheeple.
(Disclosure - I am 54 so tail end of boomers.)

As a side note, I have over 25 years in banking/lending and the thing that always surprises me is what people include in their personal financial statements. Anything you need and use in life should be excluded, furniture, cars, house equity (locked up), boats and other depreciable assets, crappy art work (unless truly valuable). Obviously exceptions exist for truly collectables and assets that hold value or increase but sorry folks your living room furniture is worth pennies on a quick sale.

True net worth that can generate income is simply cash and liquid investments, including RE investments (not primary home) and income producing assets.

[subtona]

Originally Posted by CamSLC

Most likely if you have that much in your account you're on additional insurance. Most commonly Lloyds of London. I was reading a brokerage account document that stated coverage of up to $1.9m between Llyod's, SIPC, and FDIC.

Of course if there was a financial collapse and you're insured by those financial companies collapsing......

FDIC. created to make people think it was safe to put their money back in the bank.

[superdog]

Some really great insights in this discussion.

Makes me realize one thing:

I need to save more.

[BLACKHORSE 6]

Originally Posted by Formulansx

I would think that all of us are going to need at least every bit of that to retire in the US. I'm 37 and well on my way but even a million doesn't seem like enough and that scares me a little.


Sent from my iPhone using Tapatalk

I’m in the same boat. It’s scary to look at how much the cost of healthcare, housing and education have gone up and then think about what the wife and I need to accumulate to be able to retire before we’re 70 and still at a trip every once and a while.

All you can do is make the best decisions that you can. Accumulate assets that go up in value and/or provide an income, pay off your mortgage asap, save $$$, avoid debt like the plague, and don’t spend it all on watches.

[KrismanX]

Originally Posted by pickettt

That's what I consider it to be.

According to that frugality book of yesteryears, The Millionaire Next Door, the author compiled data based on individuals at least a $1MM net worth; but I too could consider a modern definition of that to be $1MM liquid. The only issue with that would be that if someone had the capacity to accumulate that much cash; it would probably be due to a mixture of income and investments in securities and/or real estate. Someone who just fell into $1MM would be a severe minority.

[Passionata]

Originally Posted by superdog

In the past, it was a milestone.

I remember thinking with awe about aspiring to be a millionaire.

Now apparently it is pretty common. 1 out of every 20 Americans.

Wow.

http://time.com/money/5023038/millio.../?xid=homepage

inflation

[Passionata]

Originally Posted by Kyle13

I have some ex friends that this happened to. They won an insurance settlement and had $1,000,000 in liquid assets after taxes. They went and bought a house a few months ago, which I think is stupid seeing how strong the market is right now here in socal. Then they went and bought a brand new Mercedes. Paid roughly 850k for the house and probably 50k to buy the car. I’m sure the remaining balance is dwindling away as I type this!


Sent from my iPhone using Tapatalk

easy come easy go i think moving to real estate these days (especially in the US) isn t a smart move the next severe drop just overdue

[superdog]

Originally Posted by Kyle13

I have some ex friends that this happened to. They won an insurance settlement and had $1,000,000 in liquid assets after taxes. They went and bought a house a few months ago, which I think is stupid seeing how strong the market is right now here in socal. Then they went and bought a brand new Mercedes. Paid roughly 850k for the house and probably 50k to buy the car. I’m sure the remaining balance is dwindling away as I type this!


Sent from my iPhone using Tapatalk

I don’t know what your friends pull in regarding a salary, and what the taxes on the house are, but to me, this is a super smart move.

I’m biased though as I did something similar.

Sold a business a few years ago. Bought a house, paid for my wedding, picked up a nice weekender set of wheels.

Whereas most financial experts suggest to budget 50% of net income to home and car, my bills are next to nothing. Is it smart based on what I could have gotten out of the market over the last three years? No, probably not.

But it affords me a lot of security and flexibility. I put away a lot monthly and I’m able to spend when I want with minimal concern.

If things ever do go south, my biggest expenses are basically accounted for.

You hear all the time about people that come into money and go broke not long after. At least your friends have tangible assets and security. Better than putting some into the market and losing it all if shit happens.