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(CNBC)   Ultra High-Net-Worth Individuals would lose 50% of their wealth if the stock market crashed. That is why you see Congress bail them out any time it gets a little scary out there. Invest with confidence   (cnbc.com) divider line
    More: Obvious, Investment, Roth IRA, Mutual fund, Individual Retirement Account, high net worth, high-net-worth individual, retirement accounts, Traditional IRA  
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949 clicks; posted to Business » and Politics » on 27 May 2022 at 1:35 PM (5 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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2022-05-27 1:38:06 PM  
Let them lose it all. Stop protecting them from their own risky investments.
 
2022-05-27 1:39:06 PM  
so... that's a farking advertisement.
 
2022-05-27 1:39:19 PM  
Fark user imageView Full Size
 
2022-05-27 1:40:10 PM  

salvador.hardin: so... that's a farking advertisement.


That's all it is.
 
2022-05-27 1:40:25 PM  
Here we go......
 
2022-05-27 1:40:26 PM  
The article defines an UHNW individual as someone with over a million dollars in "liquid" assets and then says that half of the assets of such people are in IRAs and 401(k)s, which are retirement accounts which legally you can't take money out of without paying huge tax penalties.

Not exactly "liquid"...

/a million bucks in retirement accounts isn't much, tbh
//that's 10 years if you give yourself 100k to live on
///which at this rate will barely cover your petrol bill
 
2022-05-27 1:41:10 PM  
Did Fidelity write the article, too
 
2022-05-27 1:42:53 PM  
Select's editorial team works independently to review financial products and write articles we think our readers will find useful. We earn a commission from affiliate partners on many offers, but not all offers on Select are from affiliate partners.

Is Elizabeth Gravier (author) an admin or something?
 
2022-05-27 1:43:07 PM  
Oh noes.  Can't live on millions!

Diversify.  Some money in stocks. Some money in Beanie Babies.  If the stocks drop, you can cook the beans in the Beanie Baby and not starve.  Dear god, it's good.
 
2022-05-27 1:43:13 PM  
which 50%?
 
2022-05-27 1:43:37 PM  
"Yes but one day *I TOO* will become a UHNWI, so I must protecc them."
 
2022-05-27 1:44:20 PM  
My comment didn't post, will I still be charged against my swear jar?
 
2022-05-27 1:45:18 PM  
Best Congress money can buy ..
 
2022-05-27 1:45:36 PM  
You can't even find canned cat food in the grocery store.
 
2022-05-27 1:45:38 PM  
But we can't bail out students because they knew the risks when they took out those loans.
 
2022-05-27 1:46:34 PM  
Only if they pull the money out.
 
2022-05-27 1:47:31 PM  

Shaggy_C: The article defines an UHNW individual as someone with over a million dollars in "liquid" assets and then says that half of the assets of such people are in IRAs and 401(k)s, which are retirement accounts which legally you can't take money out of without paying huge tax penalties.

Not exactly "liquid"...

/a million bucks in retirement accounts isn't much, tbh
//that's 10 years if you give yourself 100k to live on
///which at this rate will barely cover your petrol bill


How to tell us all you failed your economics classes which talked about this concept of interest and what a declining balance is, without ever saying so.

While interest has been low recently, it is rising and even 1 year T-bills are running over 2% (not a great return, but your "10 year calculation is off by more then a bit)
 
2022-05-27 1:52:46 PM  

gameshowhost: "Yes but one day *I TOO* will become a UHNWI, so I must protecc them."


I would say first you have to be a HENRY(high earner, not rich yet) but this looks to be aimed at getting twenty year old kids to start investing their tips from their Starbucks job instead of spending them because if they put 5 dollars a day into an IRA they will totally be millionaires by the time they are able to retire and won't need social security
 
2022-05-27 1:53:11 PM  

TheCableGuy: Only if they pull the money out.


Exactly. The market can have a bad month, a bad year, a few bad years, but it always grows in the long run. The only way to lose (if you're properly diversified) is to sell when the market is down.
 
2022-05-27 2:00:40 PM  
Bail them out what?  How do 401ks get "bailed out"?  What's getting bailed out of the boat?

sdd2000: Shaggy_C: The article defines an UHNW individual as someone with over a million dollars in "liquid" assets and then says that half of the assets of such people are in IRAs and 401(k)s, which are retirement accounts which legally you can't take money out of without paying huge tax penalties.

Not exactly "liquid"...

/a million bucks in retirement accounts isn't much, tbh
//that's 10 years if you give yourself 100k to live on
///which at this rate will barely cover your petrol bill

How to tell us all you failed your economics classes which talked about this concept of interest and what a declining balance is, without ever saying so.

While interest has been low recently, it is rising and even 1 year T-bills are running over 2% (not a great return, but your "10 year calculation is off by more then a bit)


This wouldn't be covered in economics.  This is finance.

And he's off by about a year.  The money would last about 11 years.  Not 10.
PeriodBeginning BalanceTaxesWithdrawalInterestEnding Balance
1$1,000,000$4,229$-100,000$19,223$914,994
2$914,994$3,852$-100,000$17,511$828,652
3$828,652$3,470$-100,000$15,771$740,954
4$740,954$3,081$-100,000$14,005$651,878
5$651,878$2,686$-100,000$12,211$561,402
6$561,402$2,285$-100,000$10,388$469,505
7$469,505$1,878$-100,000$8,537$376,163
8$376,163$1,464$-100,000$6,657$281,355
9$281,355$1,044$-100,000$4,747$185,058
10$185,058$618$-100,000$2,807$87,248
11$87,248$185$-87,905$843$0

https://www.mutualofomaha.com/calculator/how-long-will-my-money-last

Based on the 3% rule, he can only withdraw $30,000 a year anyway.  Super rich guys living on $30,000 a year.  We should guillotine those rich guys and seize their Corollas.
 
2022-05-27 2:02:19 PM  

salvador.hardin: so... that's a farking advertisement.


Everything on CNBC is an advertisement.  That's why the content is all free.
 
2022-05-27 2:02:43 PM  
Again, as long as "the chips" are riding on the craps table, then YOU do not have the value, and it is not yet real, merely speculative that it may exist.
If the value of your stock is X, and you claim X worth, but then literally just  60 seconds later it can have lost a lot of ti's value....yeah not looking like such a good idea to act as if you have the value when that value is in fact quite VOLATILE.
 
2022-05-27 2:05:16 PM  

Marksrevenge: TheCableGuy: Only if they pull the money out.

Exactly. The market can have a bad month, a bad year, a few bad years, but it always grows in the long run. The only way to lose (if you're properly diversified) is to sell when the market is down.


and why might that be a huge farking deal for a whole lot of older people that have been paid crap wages for decades, and have been in a never-ending state of playing catch up, should the capital markets fall into a long-term slump?

/if you can't *afford* to hold, you can't hold
//this is exactly why we're supposed to have a three-legged stool for retirement
///one got kicked out, the other keeps getting beaten down. a 1.3-legged stool is crap. haha. poo joke.
 
2022-05-27 2:06:15 PM  

spongeboob: gameshowhost: "Yes but one day *I TOO* will become a UHNWI, so I must protecc them."

I would say first you have to be a HENRY(high earner, not rich yet) but this looks to be aimed at getting twenty year old kids to start investing their tips from their Starbucks job instead of spending them because if they put 5 dollars a day into an IRA they will totally be millionaires by the time they are able to retire and won't need social security


Don't underestimate the value of investing young. An extra 5 or 10 years can drastically increase your earnings. I opened my first IRA at 15.

Noodle around with a compound interest calculator and see how hard it is to catch up if you don't start investing young.
 
2022-05-27 2:09:05 PM  

gameshowhost: Marksrevenge: TheCableGuy: Only if they pull the money out.

Exactly. The market can have a bad month, a bad year, a few bad years, but it always grows in the long run. The only way to lose (if you're properly diversified) is to sell when the market is down.

and why might that be a huge farking deal for a whole lot of older people that have been paid crap wages for decades, and have been in a never-ending state of playing catch up, should the capital markets fall into a long-term slump?

/if you can't *afford* to hold, you can't hold
//this is exactly why we're supposed to have a three-legged stool for retirement
///one got kicked out, the other keeps getting beaten down. a 1.3-legged stool is crap. haha. poo joke.


As you approach retirement you shouldn't be invested in all stocks. More stable investments at that point gives you less potential for explosive growth but less potential for catastrophe if the market goes down.
 
2022-05-27 2:12:49 PM  

Marksrevenge: spongeboob: gameshowhost: "Yes but one day *I TOO* will become a UHNWI, so I must protecc them."

I would say first you have to be a HENRY(high earner, not rich yet) but this looks to be aimed at getting twenty year old kids to start investing their tips from their Starbucks job instead of spending them because if they put 5 dollars a day into an IRA they will totally be millionaires by the time they are able to retire and won't need social security

Don't underestimate the value of investing young. An extra 5 or 10 years can drastically increase your earnings. I opened my first IRA at 15.

Noodle around with a compound interest calculator and see how hard it is to catch up if you don't start investing young.


$5 a day compounded at 11.5% (average return of S&P 500 inclusive of dividends) is $2.219,993.

https://www.bankrate.com/banking/savings/simple-savings-calculator/
 
2022-05-27 2:17:26 PM  

Marksrevenge: Don't underestimate the value of investing young. An extra 5 or 10 years can drastically increase your earnings. I opened my first IRA at 15.


WHO opened your first IRA at 15?
 
2022-05-27 2:20:14 PM  

sdd2000: How to tell us all you failed your economics classes which talked about this concept of interest and what a declining balance is, without ever saying so.

While interest has been low recently, it is rising and even 1 year T-bills are running over 2% (not a great return, but your "10 year calculation is off by more then a bit)


Ugh, had to know some pedant would show up and make a stink about ignoring dividends and interest. Yes, with a million in the bank you should be able to earn around $30k a year in dividends which you would use up before dipping into your principle. So assuming you need 100k to live upon, your million a year would decrease by a net $70k a year and thus you would get more than 10 years out of it.

That doesn't change the basic point, however, that a million bucks isn't exactly "living large" money when you have to retire on it.
 
2022-05-27 2:20:25 PM  

mediaho: Let them lose it all. Stop protecting them from their own risky investments.


The 1% owns capital hill.

Silly
 
2022-05-27 2:21:25 PM  

Rapmaster2000: Bail them out what?  How do 401ks get "bailed out"?  What's getting bailed out of the boat?sdd2000: Shaggy_C: The article defines an UHNW individual as someone with over a million dollars in "liquid" assets and then says that half of the assets of such people are in IRAs and 401(k)s, which are retirement accounts which legally you can't take money out of without paying huge tax penalties.

Not exactly "liquid"...

/a million bucks in retirement accounts isn't much, tbh
//that's 10 years if you give yourself 100k to live on
///which at this rate will barely cover your petrol bill

How to tell us all you failed your economics classes which talked about this concept of interest and what a declining balance is, without ever saying so.

While interest has been low recently, it is rising and even 1 year T-bills are running over 2% (not a great return, but your "10 year calculation is off by more then a bit)

This wouldn't be covered in economics.  This is finance.

And he's off by about a year.  The money would last about 11 years.  Not 10.
PeriodBeginning BalanceTaxesWithdrawalInterestEnding Balance
1$1,000,000$4,229$-100,000$19,223$914,994
2$914,994$3,852$-100,000$17,511$828,652
3$828,652$3,470$-100,000$15,771$740,954
4$740,954$3,081$-100,000$14,005$651,878
5$651,878$2,686$-100,000$12,211$561,402
6$561,402$2,285$-100,000$10,388$469,505
7$469,505$1,878$-100,000$8,537$376,163
8$376,163$1,464$-100,000$6,657$281,355
9$281,355$1,044$-100,000$4,747$185,058
10$185,058$618$-100,000$2,807$87,248
11$87,248$185$-87,905$843$0

https://www.mutualofomaha.com/calculator/how-long-will-my-money-last

Based on the 3% rule, he can only withdraw $30,000 a year anyway.  Super rich guys living on $30,000 a year.  We should guillotine those rich guys and seize their Corollas.


And now do the same calculations using the current 5 year rate of 2.7+% and add in whatever social security payments that person would get. Is it living "the life of Riley"- not really but is no where as bleak as he made it out to be.
 
2022-05-27 2:21:53 PM  

PirateKing: You can't even find canned cat food in the grocery store.


Felines of the World, Unite!!
 
2022-05-27 2:22:51 PM  

Rapmaster2000: salvador.hardin: so... that's a farking advertisement.

Everything on CNBC is an advertisement.  That's why the content is all free.


Yep
 
2022-05-27 2:24:20 PM  

Marksrevenge: gameshowhost: Marksrevenge: TheCableGuy: Only if they pull the money out.

Exactly. The market can have a bad month, a bad year, a few bad years, but it always grows in the long run. The only way to lose (if you're properly diversified) is to sell when the market is down.

and why might that be a huge farking deal for a whole lot of older people that have been paid crap wages for decades, and have been in a never-ending state of playing catch up, should the capital markets fall into a long-term slump?

/if you can't *afford* to hold, you can't hold
//this is exactly why we're supposed to have a three-legged stool for retirement
///one got kicked out, the other keeps getting beaten down. a 1.3-legged stool is crap. haha. poo joke.

As you approach retirement you shouldn't be invested in all stocks. More stable investments at that point gives you less potential for explosive growth but less potential for catastrophe if the market goes down.


Wow. I'd never learned of such things. I should get my econ degree again. Maybe grad school finance again. This is all new to both fields of study. :-|

Now address my specific point. GIVEN that someone is stuck playing catch-up...
 
2022-05-27 2:27:09 PM  

PvtStash: Again, as long as "the chips" are riding on the craps table, then YOU do not have the value, and it is not yet real, merely speculative that it may exist.
If the value of your stock is X, and you claim X worth, but then literally just  60 seconds later it can have lost a lot of ti's value....yeah not looking like such a good idea to act as if you have the value when that value is in fact quite VOLATILE.


I have played craps with PvtStash. You should, too.
 
2022-05-27 2:30:35 PM  

Shaggy_C: sdd2000: How to tell us all you failed your economics classes which talked about this concept of interest and what a declining balance is, without ever saying so.

While interest has been low recently, it is rising and even 1 year T-bills are running over 2% (not a great return, but your "10 year calculation is off by more then a bit)

Ugh, had to know some pedant would show up and make a stink about ignoring dividends and interest. Yes, with a million in the bank you should be able to earn around $30k a year in dividends which you would use up before dipping into your principle. So assuming you need 100k to live upon, your million a year would decrease by a net $70k a year and thus you would get more than 10 years out of it.

That doesn't change the basic point, however, that a million bucks isn't exactly "living large" money when you have to retire on it.


You want more stability with that million you could look at an immediate annuity (although I do not recommend that as a retirement strategy for most people). Assume a 62 year old man with $1 million the "return" (which initially is somewhat tax advantaged based upon the exclusion ratio) would be over 68K per year for as long as they would live.
 
2022-05-27 2:32:15 PM  

sdd2000: And now do the same calculations using the current 5 year rate of 2.7+% and add in whatever social security payments that person would get. Is it living "the life of Riley"- not really but is no where as bleak as he made it out to be.


OK.

PeriodBeginning BalanceTaxesWithdrawalInterestEnding Balance
1$1,000,000$5,724$-100,000$26,017$920,294
2$920,294$5,246$-100,000$23,844$838,892
3$838,892$4,758$-100,000$21,625$755,760
4$755,760$4,259$-100,000$19,359$670,860
5$670,860$3,750$-100,000$17,044$584,154
6$584,154$3,230$-100,000$14,681$495,605
7$495,605$2,699$-100,000$12,266$405,173
8$405,173$2,156$-100,000$9,801$312,818
9$312,818$1,602$-100,000$7,283$218,499
10$218,499$1,037$-100,000$4,712$122,174
11$122,174$459$-100,000$2,086$23,801
12$23,801$23$-23,883$105$0

12 years, but you only get $23,888 the last year.  Here's the link again in case you missed it:  https://www.mutualofomaha.com/calculator/how-long-will-my-money-last

Perhaps I'm missing your point.  You said at 2% then economics says their money would last longer than 10 years.  It lasted 11.  Isn't that what we're discussing?
 
2022-05-27 2:40:21 PM  

Rapmaster2000: sdd2000: And now do the same calculations using the current 5 year rate of 2.7+% and add in whatever social security payments that person would get. Is it living "the life of Riley"- not really but is no where as bleak as he made it out to be.

OK.

PeriodBeginning BalanceTaxesWithdrawalInterestEnding Balance
1$1,000,000$5,724$-100,000$26,017$920,294
2$920,294$5,246$-100,000$23,844$838,892
3$838,892$4,758$-100,000$21,625$755,760
4$755,760$4,259$-100,000$19,359$670,860
5$670,860$3,750$-100,000$17,044$584,154
6$584,154$3,230$-100,000$14,681$495,605
7$495,605$2,699$-100,000$12,266$405,173
8$405,173$2,156$-100,000$9,801$312,818
9$312,818$1,602$-100,000$7,283$218,499
10$218,499$1,037$-100,000$4,712$122,174
11$122,174$459$-100,000$2,086$23,801
12$23,801$23$-23,883$105$0

12 years, but you only get $23,888 the last year.  Here's the link again in case you missed it:  https://www.mutualofomaha.com/calculator/how-long-will-my-money-last

Perhaps I'm missing your point.  You said at 2% then economics says their money would last longer than 10 years.  It lasted 11.  Isn't that what we're discussing?


Yes it was what was being discussed, but Shaggy feels that is just being pedant. As I also noted if shaggy feels it must be higher as I noted an immediate annuity for a 62 year old male (Texas) with a guaranteed 10 year certain payout is over 7% right now. https://www.immediateannuities.com/ Getting financial planning advice from shaggy or other random people on the internet is pretty much the height of foolishness.
 
2022-05-27 2:43:08 PM  

Yankees Team Gynecologist: Marksrevenge: Don't underestimate the value of investing young. An extra 5 or 10 years can drastically increase your earnings. I opened my first IRA at 15.

WHO opened your first IRA at 15?


My dad and I did, using my money from working at the golf course. The account was in my name but had his on it too. Said "marksrevenge a minor".
 
2022-05-27 2:45:07 PM  

sdd2000: I noted an immediate annuity for a 62 year old male (Texas) with a guaranteed 10 year certain payout is over 7% right now.


That sounds extremely unlikely.  If I was an insurer, there's no way I'd sell a policy so generous.  7% risk free return is a gold mine.  Everyone in the world would want that annuity.  I can't find anything better than 4.15%.
 
2022-05-27 2:46:48 PM  

Marksrevenge: Yankees Team Gynecologist: Marksrevenge: Don't underestimate the value of investing young. An extra 5 or 10 years can drastically increase your earnings. I opened my first IRA at 15.

WHO opened your first IRA at 15?

My dad and I did, using my money from working at the golf course. The account was in my name but had his on it too. Said "marksrevenge a minor".


Whose idea was it, and how did you get the job at the golf course?

I'm not even implying anything one way or the other, I'm genuinely curious. No matter your answer (and of course feel free to choose not to answer), it's a lesson about how to get started early since that's what you did.
 
2022-05-27 2:47:11 PM  

spongeboob: My comment didn't post, will I still be charged against my swear jar?


Oh please repost because I want to hear the thoughts on investing from someone that thinks they might lose money they paid so they can swear on a message board.

Got any hot stock tips for us chief?
 
2022-05-27 2:52:59 PM  

Rapmaster2000: sdd2000: I noted an immediate annuity for a 62 year old male (Texas) with a guaranteed 10 year certain payout is over 7% right now.

That sounds extremely unlikely.  If I was an insurer, there's no way I'd sell a policy so generous.  7% risk free return is a gold mine.  Everyone in the world would want that annuity.  I can't find anything better than 4.15%.


Plug the numbers into that web site with the assumptions I used. Also after 2008 I would not list an insurance company as "risk free" (although the risk is much lower then the "stonk" market).

BTW I am old enough that the course that covered declining balance calculations was called engineering economics not finance. Also for Subby ultra high net worth; very high net worth; and high net worth are two very different things to bankers., At a $1 Mill net worth you would be barely considered a high net worth investor.
 
2022-05-27 2:58:19 PM  
Remember, a thing can only be too big to fail until it's to expensive to save, the transition from one reality to another is always sudden and always claimed to be unexpected and impossible to foretell.
 
2022-05-27 3:04:57 PM  

Rapmaster2000: sdd2000: I noted an immediate annuity for a 62 year old male (Texas) with a guaranteed 10 year certain payout is over 7% right now.

That sounds extremely unlikely.  If I was an insurer, there's no way I'd sell a policy so generous.  7% risk free return is a gold mine.  Everyone in the world would want that annuity.  I can't find anything better than 4.15%.


BTW Schwab show similar results https://www.schwab.com/annuities/fixed-income-annuity-calculator

Fark user imageView Full Size
 
2022-05-27 3:06:57 PM  

sdd2000: Rapmaster2000: sdd2000: I noted an immediate annuity for a 62 year old male (Texas) with a guaranteed 10 year certain payout is over 7% right now.

That sounds extremely unlikely.  If I was an insurer, there's no way I'd sell a policy so generous.  7% risk free return is a gold mine.  Everyone in the world would want that annuity.  I can't find anything better than 4.15%.

BTW Schwab show similar results https://www.schwab.com/annuities/fixed-income-annuity-calculator

[Fark user image 794x528]


Interesting.  More than I thought.
 
2022-05-27 3:15:45 PM  
So what?
 
2022-05-27 3:15:54 PM  

Rapmaster2000: sdd2000: Rapmaster2000: sdd2000: I noted an immediate annuity for a 62 year old male (Texas) with a guaranteed 10 year certain payout is over 7% right now.

That sounds extremely unlikely.  If I was an insurer, there's no way I'd sell a policy so generous.  7% risk free return is a gold mine.  Everyone in the world would want that annuity.  I can't find anything better than 4.15%.

BTW Schwab show similar results https://www.schwab.com/annuities/fixed-income-annuity-calculator

[Fark user image 794x528]

Interesting.  More than I thought.


The calculations are very much age dependent, change the age to over 65 and the interest return jumps to 7.4%, change it to the current full social security retirement age of 67 and it goes to 7.73% (10 year payout percentage). While still not amazing, but with a CPI adjusted social security benefit as part of the income stream, it is not as dire as our resident shag would make it out to be.
 
2022-05-27 3:17:03 PM  
Almost all of them would still be billionaires.
 
2022-05-27 3:27:38 PM  
*tap tap tap*

this thing on?
 
2022-05-27 3:28:00 PM  
Ultra high net worth individuals could lose...

Fark user imageView Full Size
 
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