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(Marketwatch)   Rich people problems #12 - $5 million is the new $1 million   (blogs.marketwatch.com ) divider line
    More: Strange, wealth management  
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1118 clicks; posted to Business » on 24 Jul 2013 at 10:25 AM (2 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-07-24 09:32:02 AM  
They're correct $1,000,000 in assets doesn't make you rich.  It is very comfortable, but it isn't the Country Club, jet setting lifestyle.
 
2013-07-24 09:51:55 AM  
Yeah I figured 3 million was the new 1 million. That gives you a million to buy a house/car/boat/cottage and a new pair of shoes, and 2 million to invest in something safe which will give you probably 80k/year in taxable income.

3 million...man it doesn't seem like it should be so hard to get but it is.
 
2013-07-24 10:29:23 AM  
To my way of thinking, being "rich" means that you don't need to work. You may still work, but it's by choice, not by necessity.

In that regard, one million dollars does not make one rich. That's not enough money to generate a sufficient income that precludes working.
 
2013-07-24 10:31:44 AM  

flaminio: To my way of thinking, being "rich" means that you don't need to work. You may still work, but it's by choice, not by necessity.

In that regard, one million dollars does not make one rich. That's not enough money to generate a sufficient income that precludes working.


I honestly don't know what the f*ck you blow your money on that you'd have a million dollars and still need to work.
 
2013-07-24 10:33:56 AM  

Barfmaker: Yeah I figured 3 million was the new 1 million. That gives you a million to buy a house/car/boat/cottage and a new pair of shoes, and 2 million to invest in something safe which will give you probably 80k/year in taxable income.

3 million...man it doesn't seem like it should be so hard to get but it is.


And at the historical average for inflation, when I retire in 28 years, I will need 6.8M to to be equivalent to 3M today.
 
2013-07-24 10:34:03 AM  
$1 million may not be enough to guarantee a life of luxury, but at least you can buy a nice house with it.
 
2013-07-24 10:35:10 AM  
If I had a million I would have a lot less to worry about it but I wouldnt think that I would be set for life with it.
 
2013-07-24 10:35:42 AM  

verbaltoxin: flaminio: To my way of thinking, being "rich" means that you don't need to work. You may still work, but it's by choice, not by necessity.

In that regard, one million dollars does not make one rich. That's not enough money to generate a sufficient income that precludes working.

I honestly don't know what the f*ck you blow your money on that you'd have a million dollars and still need to work.


Because at $1M you can only draw down 3% a year and still preserve your money.  3% is the general rule of thumb.  That gives you only $30k a year.
 
2013-07-24 10:41:50 AM  

verbaltoxin: I honestly don't know what the f*ck you blow your money on that you'd have a million dollars and still need to work.


Well let's see.. my 1,600 sqft home costs me $5k in property taxes per year, so over 50 years there goes more than 1/4 of my $1mm (assuming taxes are flat ha!)

Another $300k over 50 years for food/groceries (assuming no inflation ha!)

Another $300k for insurance and utilities, gas.

So I'm left with about $3k per year if I want to dine out or travel or do anything interesting with the rest of my life.
 
2013-07-24 10:43:13 AM  

Rapmaster2000: verbaltoxin: flaminio: To my way of thinking, being "rich" means that you don't need to work. You may still work, but it's by choice, not by necessity.

In that regard, one million dollars does not make one rich. That's not enough money to generate a sufficient income that precludes working.

I honestly don't know what the f*ck you blow your money on that you'd have a million dollars and still need to work.

Because at $1M you can only draw down 3% a year and still preserve your money.  3% is the general rule of thumb.  That gives you only $30k a year.


Exactly, and that's before taxes. I assume some of that $30K is going on Schedule B or D. For my family of four, that's right about at the poverty line. Few would consider that "rich".
 
2013-07-24 10:49:15 AM  
one million is only a lot of money if you are talking about spending it in a hurry
if you are planning to retire and live on your investments then it is an adequate amount for a modest life style
 
2013-07-24 10:49:41 AM  

Rapmaster2000: I honestly don't know what the f*ck you blow your money on that you'd have a million dollars and still need to work.

Because at $1M you can only draw down 3% a year and still preserve your money.  3% is the general rule of thumb.  That gives you only $30k a year.


$30k per year, post-tax (you'd be well in the 0% cap gains bracket), and I'm saying 'f*** island' to all y'all.  There are plenty of places I can live on way, way, less than that, and not dealing with my senile boss is completely worth the spartan lifestyle.
 
2013-07-24 10:58:49 AM  

Lawnchair: $30k per year, post-tax (you'd be well in the 0% cap gains bracket), and I'm saying 'f*** island' to all y'all. There are plenty of places I can live on way, way, less than that, and not dealing with my senile boss is completely worth the spartan lifestyle.


You understand that with inflation your $30k per year will be worth about $15k per year in the not so distant future.
 
2013-07-24 10:59:45 AM  

Lawnchair: $30k per year, post-tax (you'd be well in the 0% cap gains bracket), and I'm saying 'f*** island' to all y'all. There are plenty of places I can live on way, way, less than that, and not dealing with my senile boss is completely worth the spartan lifestyle.


How, no, WHY the hell is there a 0% capital gains tax bracket?
 
2013-07-24 11:04:51 AM  

ajgeek: Lawnchair: $30k per year, post-tax (you'd be well in the 0% cap gains bracket), and I'm saying 'f*** island' to all y'all. There are plenty of places I can live on way, way, less than that, and not dealing with my senile boss is completely worth the spartan lifestyle.

How, no, WHY the hell is there a 0% capital gains tax bracket?


Probably because if you're creative enough with your taxes you can slot yourself into that bracket and pay zero on your dividends and capital gains.

There could be a valid reason like grandma collecting dividends on her Georgia Power stock, but that feels somewhat like a corner case.  It sounds like lip service to helping out the poors with a tax cut.
 
2013-07-24 11:05:34 AM  

MugzyBrown: Lawnchair: $30k per year, post-tax (you'd be well in the 0% cap gains bracket), and I'm saying 'f*** island' to all y'all. There are plenty of places I can live on way, way, less than that, and not dealing with my senile boss is completely worth the spartan lifestyle.

You understand that with inflation your $30k per year will be worth about $15k per year in the not so distant future.


Sure... the traditional "3%" rule of thumb is expecting that you're investing and averaging a pedestrian (over recent history) 3-4% return over inflation.  I should say... $30k, plus inflation adjustments, moderate healthcare costs (Obamacare comes close enough for me) and I'm doing my own stuff full-time.  Sorry, working world.

ajgeek: How, no, WHY the hell is there a 0% capital gains tax bracket?


To encourage people in the under-6-figures realm to invest.  Not that 99% of people making under-6-figures are particularly 'incentivized' one way or the other by little tax code tweaks... but that's the theory anyway.
 
2013-07-24 11:07:24 AM  

ajgeek: Lawnchair: $30k per year, post-tax (you'd be well in the 0% cap gains bracket), and I'm saying 'f*** island' to all y'all. There are plenty of places I can live on way, way, less than that, and not dealing with my senile boss is completely worth the spartan lifestyle.

How, no, WHY the hell is there a 0% capital gains tax bracket?


Because it's not a lot of income money, ergo it's for the working class.
 
2013-07-24 11:43:58 AM  
One million dollars in 2013 is worth $16,678,857.14 in 1940
One million dollars in 2013 is worth $7,888,648.65  in 1960
One million dollars in 2013 is worth $2,833,786.41  4 in 1980
One million dollars in 2013 is worth $16,678,857.14 in 1990
One million dollars in 2013 is worth $1,356,004.65 in 2000

So yeah, millionaire doesn't mean what is used to. Not that rich people want more people to be millionaires in any case.
 
2013-07-24 12:33:01 PM  

EvilEgg: They're correct $1,000,000 in assets doesn't make you rich.  It is very comfortable, but it isn't the Country Club, jet setting lifestyle.


I wouldn't necessarily say very comfortable if massive chunks of it are sunk into real estate and restricted retirement accounts.

The way I've been seeing for it a few years is that a true millionaire can produce that million in cash in 72 business hours.
 
2013-07-24 12:36:38 PM  

Metaluna Mutant: One million dollars in 2013 is worth $16,678,857.14 in 1940
One million dollars in 2013 is worth $7,888,648.65  in 1960
One million dollars in 2013 is worth $2,833,786.41  4 in 1980
One million dollars in 2013 is worth $16,678,857.14 in 1990
One million dollars in 2013 is worth $1,356,004.65 in 2000


smuj.home.comcast.net
 
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