$7M vs $10M

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There is no difference between a net worth of $7M vs, a $10M net worth. Unless you are looking to buy some big expenditure like a $1.7M Beach house. Better off to do the beach rental for 2 weeks and let someone else deal with maintenance and upkeep. A diversified portfolio would easily generate about $250k off the $7M. For most people that would be enough. You need more cash flow............you are a spender. Maybe that should be the focus and not the nest egg. Curb your spending. This is coming from a 63 yo man with a net worth of $4M. No worries at all.

The 2 week beach rental is so true. We have researched and concluded that a "vacation home" is not worth the purchase unless you plan to actually be there for 4-5 months of the year. If you plan to rent it out, that means you have to plan your scheduled times a year in advance and if you can do that, you can plan and find a rental just as easily. When you add maintenance and all costs you likely come out ahead just renting when needed

Except that if you keep the second home long enough, there’s a good chance the asset appreciation will cover the carrying costs or even net you a profit. We’ve had our vacation home 12 years and in that time it has tripled in value. I would have been happy breaking even, but if we sold it right now we’d come out have doubled our investment after expenses.

That's recency bias. I don't think RE has returned more than the stock market over the long-term.

And I'm the PP. We already have two homes within a 90 min drive from each other. So I have plenty in real estate to get any appreciation. We've looked at purchasing a condo in Hawaii. But we have even had a RE agent tell us it is not worth it unless you plan to use it 4-5 months of the year. Look at what happened to all the condo owners in Hawaii for almost 2 years with covid---they had to sell because they couldn't afford it without renters. And condos in Hawaii appreciate, but not that rapidly. Then you have the risk of hurricane hitting it, you have to pay someone to manage the renters, the cleaners, the repairs, boarding it up if a storm is going to hit, etc. If you need the rental income to afford it, then count out going over thanksgiving or xmas because that is when you get extra high rental rates and pay for much of your costs. But if you want to go then, you loose that chance. Also, to rent it out successfully, you have to plan when you go a full year in advance. If I'm going to do that I will just pay for the 2-3 weeks I want to go and not worry about the costs and hassle. Also, In Jan I want to go to Maui, in July I want to go to Kauai next year I want to visit the Big Island and Europe. So I'm not really using it as a vacation home for more than 2-3 weeks per year at most. If it sits vacant for more than X days per month, then I'm not breaking even. And I've tracked condos on all 4 major islands in Hawaii for over a decade----most of them have not appreciated as much as DCUM/SF/LA/Seattle/Boston area. I've had two real estate agents in Hawaii tell me not to buy unless we plan to actually live in it or it will cost us

Totally agree, far away and expensive vacation homes may not be worth it, having something driving distance away is more practical and usable. On another note, all this travel you describe staying for 2-3 weeks somewhere expensive and going to Europe isn't out of reach of people with a lot more modest NW, and is something people do while working, don't need to wait to retire.

We are doing it now, just had to wait for the kids to get out of the house/off to college. I join my spouse on work trips and then they continue to work from wherever remotely part of the day for the next week or so. More challenging to be gone for 2-3 weeks when you still have children at home

[Anonymous]

Anonymous wrote:

Anonymous wrote:How do you make 7M? My HHI is not much so I have invested and saved but still only at 2M

Should I invest that more aggressively for the next 15 years of working

If you make an average of 7% over the next 15 years and don’t save another dime you’re at almost 6,000,000. Relax.

5.5M and ignoring real inflation

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It really depends on your level of spending and comfort with uncertainty. For me, the difference between those numbers is the security of being able to cover my mother’s elder care and potentially my own if I live as long as she has. I’m 58 and could easily live another 40 years. The $250,000 the $7M generates is before taxes and inflation. Yes, I will certainly tap principal at some point, but still, $250,000 30-some years from now will not be a fortune. It’s crazy and cruel what decent elder care costs.

I understand. The $7M is not static, its invested in a diversified portfolio, probably yield about 3.3% plus capital appreciation in the market near S&P 500 returns. Back to my point $7M or $10M today is really immaterial. If you don't have the skill set or a financial manager to tend to this sum it is pointless. As far as elder care, my plan is to stay at home and bring in hourly workers. Much cheaper than going into a specialized care facility. You can make it complicated if you wish.

bringing in hourly workers for elder care is not cheaper than a facility. Get yourself into a CCRC by early to mid 70s, then you are covered for much less

I would rather blow my head off than go into a CCRC in my mid 70s - particularly if i have $10M liquid. I'll pay for in-home care, if/when I need it.

If your 58 today and have $10M and don't touch it, that 10M will be easily 25M + by the time you're in your late 70s. That would throw off safely $1M of cash flow, and you could spend more if needed considering at that point in time (if you need care) your life expectancy won't be too long.

+1. One of my aha moments was when I went to visit my colleague's grandfather who was at an elder care facility back in the mid '90s. We were traveling on work and the grandpa happened to be in the city we were traveling to. My colleague praised his grandpa and how he sponsors an annual cruise vacation for the extended family (20+ people), etc. When I asked why one of the kids or grandkids were not taking care or grandpa, he just laughed and said 'no f'ing way!'. The facility itself was nice, high-end but depressing. Where I come from, there are no eldercare facilities. Your family is it. Yep.. No way, I want my end of days to be in one of those places.

CcRC are not your typical elder care facility. These are ones you pay 400k+ to even enter into a regular condo/house. The memory care, assisted living and healthcare facilities an are typically 1000x better than what you are imagining. Hence why some pay close to a million entry fee.
But for that you are never charged more for the higher levels of care

But why? When you are elderly to require care you are either disabled to take care of yourself but sharp of mind or you are mentally not there with various levels of dementia. In the former case you would always prefer to have some worker come in to do cleaning, cooking, maybe light nursing assistance and live at home unless you are severely disabled. In the latter case.. depending on how "not there" you will be: would you even notice if you are in 400K a year facility or in a less expensive one or a government subsidized one? You are brain dead. I would just request to be euthanized...

Is it really worth it having to grind for the rest of your still healthy younger years to wait to live until your body starts giving out in hopes of being taking care of when you are a vegetable and have zero QOL anyway?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How do you make 7M? My HHI is not much so I have invested and saved but still only at 2M

Should I invest that more aggressively for the next 15 years of working

If you make an average of 7% over the next 15 years and don’t save another dime you’re at almost 6,000,000. Relax.

5.5M and ignoring real inflation

RE keeps up with inflation. Rental RE can return profits that can outperform conservative "safe" guaranteed type of market investments. I am surprised none of you have rental RE in your portfolio, is market really this much better?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:There is no difference between a net worth of $7M vs, a $10M net worth. Unless you are looking to buy some big expenditure like a $1.7M Beach house. Better off to do the beach rental for 2 weeks and let someone else deal with maintenance and upkeep. A diversified portfolio would easily generate about $250k off the $7M. For most people that would be enough. You need more cash flow............you are a spender. Maybe that should be the focus and not the nest egg. Curb your spending. This is coming from a 63 yo man with a net worth of $4M. No worries at all.

The 2 week beach rental is so true. We have researched and concluded that a "vacation home" is not worth the purchase unless you plan to actually be there for 4-5 months of the year. If you plan to rent it out, that means you have to plan your scheduled times a year in advance and if you can do that, you can plan and find a rental just as easily. When you add maintenance and all costs you likely come out ahead just renting when needed

Except that if you keep the second home long enough, there’s a good chance the asset appreciation will cover the carrying costs or even net you a profit. We’ve had our vacation home 12 years and in that time it has tripled in value. I would have been happy breaking even, but if we sold it right now we’d come out have doubled our investment after expenses.

That's recency bias. I don't think RE has returned more than the stock market over the long-term.

And I'm the PP. We already have two homes within a 90 min drive from each other. So I have plenty in real estate to get any appreciation. We've looked at purchasing a condo in Hawaii. But we have even had a RE agent tell us it is not worth it unless you plan to use it 4-5 months of the year. Look at what happened to all the condo owners in Hawaii for almost 2 years with covid---they had to sell because they couldn't afford it without renters. And condos in Hawaii appreciate, but not that rapidly. Then you have the risk of hurricane hitting it, you have to pay someone to manage the renters, the cleaners, the repairs, boarding it up if a storm is going to hit, etc. If you need the rental income to afford it, then count out going over thanksgiving or xmas because that is when you get extra high rental rates and pay for much of your costs. But if you want to go then, you loose that chance. Also, to rent it out successfully, you have to plan when you go a full year in advance. If I'm going to do that I will just pay for the 2-3 weeks I want to go and not worry about the costs and hassle. Also, In Jan I want to go to Maui, in July I want to go to Kauai next year I want to visit the Big Island and Europe. So I'm not really using it as a vacation home for more than 2-3 weeks per year at most. If it sits vacant for more than X days per month, then I'm not breaking even. And I've tracked condos on all 4 major islands in Hawaii for over a decade----most of them have not appreciated as much as DCUM/SF/LA/Seattle/Boston area. I've had two real estate agents in Hawaii tell me not to buy unless we plan to actually live in it or it will cost us

Totally agree, far away and expensive vacation homes may not be worth it, having something driving distance away is more practical and usable. On another note, all this travel you describe staying for 2-3 weeks somewhere expensive and going to Europe isn't out of reach of people with a lot more modest NW, and is something people do while working, don't need to wait to retire.

We are doing it now, just had to wait for the kids to get out of the house/off to college. I join my spouse on work trips and then they continue to work from wherever remotely part of the day for the next week or so. More challenging to be gone for 2-3 weeks when you still have children at home

Yeah, but not impossible, a lot of people do this. If you have family overseas you probably go for a month with kids, it's not uncommon, I have friends who do this every summer. For a 2 week vacation? You can do this during winter break or summer break. The only thing that sucks is higher prices to go and more crowded places of interest. We find deals and generally travel on the budget. We aren't waiting to be empty nesters. We took kids to Europe (on the budget, which is exhausting, but fun) a few years in the row. We go to beach vacations, visit family in diff cities, theme parks, etc. We are poor by the standards of some of the posters here, though objectively, not poor. We just try to balance enjoying some of your life while you still have to work, but when you still have energy and health and not feel like life has to be only grind and waiting to live till you are frail.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How do you make 7M? My HHI is not much so I have invested and saved but still only at 2M

Should I invest that more aggressively for the next 15 years of working

If you make an average of 7% over the next 15 years and don’t save another dime you’re at almost 6,000,000. Relax.

5.5M and ignoring real inflation

RE keeps up with inflation. Rental RE can return profits that can outperform conservative "safe" guaranteed type of market investments. I am surprised none of you have rental RE in your portfolio, is market really this much better?

Not really. Actually majority of my NW is in RE. I'm trying to diversify into equity market.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It really depends on your level of spending and comfort with uncertainty. For me, the difference between those numbers is the security of being able to cover my mother’s elder care and potentially my own if I live as long as she has. I’m 58 and could easily live another 40 years. The $250,000 the $7M generates is before taxes and inflation. Yes, I will certainly tap principal at some point, but still, $250,000 30-some years from now will not be a fortune. It’s crazy and cruel what decent elder care costs.

I understand. The $7M is not static, its invested in a diversified portfolio, probably yield about 3.3% plus capital appreciation in the market near S&P 500 returns. Back to my point $7M or $10M today is really immaterial. If you don't have the skill set or a financial manager to tend to this sum it is pointless. As far as elder care, my plan is to stay at home and bring in hourly workers. Much cheaper than going into a specialized care facility. You can make it complicated if you wish.

bringing in hourly workers for elder care is not cheaper than a facility. Get yourself into a CCRC by early to mid 70s, then you are covered for much less

I would rather blow my head off than go into a CCRC in my mid 70s - particularly if i have $10M liquid. I'll pay for in-home care, if/when I need it.

If your 58 today and have $10M and don't touch it, that 10M will be easily 25M + by the time you're in your late 70s. That would throw off safely $1M of cash flow, and you could spend more if needed considering at that point in time (if you need care) your life expectancy won't be too long.

+1. One of my aha moments was when I went to visit my colleague's grandfather who was at an elder care facility back in the mid '90s. We were traveling on work and the grandpa happened to be in the city we were traveling to. My colleague praised his grandpa and how he sponsors an annual cruise vacation for the extended family (20+ people), etc. When I asked why one of the kids or grandkids were not taking care or grandpa, he just laughed and said 'no f'ing way!'. The facility itself was nice, high-end but depressing. Where I come from, there are no eldercare facilities. Your family is it. Yep.. No way, I want my end of days to be in one of those places.

CcRC are not your typical elder care facility. These are ones you pay 400k+ to even enter into a regular condo/house. The memory care, assisted living and healthcare facilities an are typically 1000x better than what you are imagining. Hence why some pay close to a million entry fee.
But for that you are never charged more for the higher levels of care

But why? When you are elderly to require care you are either disabled to take care of yourself but sharp of mind or you are mentally not there with various levels of dementia. In the former case you would always prefer to have some worker come in to do cleaning, cooking, maybe light nursing assistance and live at home unless you are severely disabled. In the latter case.. depending on how "not there" you will be: would you even notice if you are in 400K a year facility or in a less expensive one or a government subsidized one? You are brain dead. I would just request to be euthanized...

Is it really worth it having to grind for the rest of your still healthy younger years to wait to live until your body starts giving out in hopes of being taking care of when you are a vegetable and have zero QOL anyway?

You are not "brain dead" just because you require assisted living or memory care. I have a relative who has been in "memory care" for over 2 years now and I still have meaningful Facetimes/phone calls weekly with them, 95% of the time. As long as their meds are well managed they are still doing well. This person reads books, does puzzles and plays games all the time. Yes there are people with more advanced issues in the memory care, but my relative is still definately in a position of "life is worth living" and aware of their surroundings and family. And this is after 2 years there. If anything, they are doing better in the full time care as they know there is 24 hour excellent care and they get to interact with more people which is good for them. But they did not feel "safe" at home with their memory issues, so for them it's actually better to be under the full time care and much more cost effective than care at home.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How do you make 7M? My HHI is not much so I have invested and saved but still only at 2M

Should I invest that more aggressively for the next 15 years of working

If you make an average of 7% over the next 15 years and don’t save another dime you’re at almost 6,000,000. Relax.

5.5M and ignoring real inflation

RE keeps up with inflation. Rental RE can return profits that can outperform conservative "safe" guaranteed type of market investments. I am surprised none of you have rental RE in your portfolio, is market really this much better?

Not really. Actually majority of my NW is in RE. I'm trying to diversify into equity market.

Early Retired Biglaw Partner here. I also have a rental property as well as an English basement apartment that I rent out. Combined they generate $6k a month.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How do you make 7M? My HHI is not much so I have invested and saved but still only at 2M

Should I invest that more aggressively for the next 15 years of working

If you make an average of 7% over the next 15 years and don’t save another dime you’re at almost 6,000,000. Relax.

5.5M and ignoring real inflation

RE keeps up with inflation. Rental RE can return profits that can outperform conservative "safe" guaranteed type of market investments. I am surprised none of you have rental RE in your portfolio, is market really this much better?

Not really. Actually majority of my NW is in RE. I'm trying to diversify into equity market.

Early Retired Biglaw Partner here. I also have a rental property as well as an English basement apartment that I rent out. Combined they generate $6k a month.

Have you all had anything major go wrong yet? Rental properties are great until.... they aren't, even if you go the property manager route.

[Anonymous]

Most landlords are tough with rent increases and rarely make great improvements. Being a good landlord who cares about people and still makes a lot of money at scale is tough and rare in my experience. Most of the people I know making large amounts of money through real estate rentals just are not compassionate people or basically don't know what their property managers are doing. They really are more like the guys convincing you to get rich in real estate online. There are other threads on strivers on DCUM and I'd put a fair number of them in that category that has negative connotations.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How do you make 7M? My HHI is not much so I have invested and saved but still only at 2M

Should I invest that more aggressively for the next 15 years of working

If you make an average of 7% over the next 15 years and don’t save another dime you’re at almost 6,000,000. Relax.

5.5M and ignoring real inflation

RE keeps up with inflation. Rental RE can return profits that can outperform conservative "safe" guaranteed type of market investments. I am surprised none of you have rental RE in your portfolio, is market really this much better?

Not really. Actually majority of my NW is in RE. I'm trying to diversify into equity market.

Early Retired Biglaw Partner here. I also have a rental property as well as an English basement apartment that I rent out. Combined they generate $6k a month.

Have you all had anything major go wrong yet? Rental properties are great until.... they aren't, even if you go the property manager route.

+1

Personally don't have the guts to be a landlord. Too much can go wrong and end up costing you. Fact is tenants rarely take care of home as well as you would.
We did rent our condo for 5 years, but it was to good friends. So we knew they would take excellent care of it, and we also planned to gut it and renovate before we moved in at the end of the lease. But no way do I want to rent to someone I don't know. In our condo building, there was a renter who got pissed at multiple noise complaints and fines against them, so they turned on several faucets and closed the drains and left....they were on the 20th floor and caused major damages to at least 6 units. This is in a luxury building, one of the top 5 buildings in our city--rent for that was over $5K, so typically you'd think someone paying that would be less likely to be destructive. Oh and the tenant was a doctor, so someone that you would vet and never think twice about them going crazy and doing something as destructive as this. Yet, the owner had to along with their insurance and the HOA insurance sue the tenant for the $100k's+++++ in damages---I think it was well over $600K in damages and that was 10 years ago.

I'd rather just invest in real estate passively

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How do you make 7M? My HHI is not much so I have invested and saved but still only at 2M

Should I invest that more aggressively for the next 15 years of working

If you make an average of 7% over the next 15 years and don’t save another dime you’re at almost 6,000,000. Relax.

5.5M and ignoring real inflation

RE keeps up with inflation. Rental RE can return profits that can outperform conservative "safe" guaranteed type of market investments. I am surprised none of you have rental RE in your portfolio, is market really this much better?

Not really. Actually majority of my NW is in RE. I'm trying to diversify into equity market.

Early Retired Biglaw Partner here. I also have a rental property as well as an English basement apartment that I rent out. Combined they generate $6k a month.

Have you all had anything major go wrong yet? Rental properties are great until.... they aren't, even if you go the property manager route.

+1

Personally don't have the guts to be a landlord. Too much can go wrong and end up costing you. Fact is tenants rarely take care of home as well as you would.
We did rent our condo for 5 years, but it was to good friends. So we knew they would take excellent care of it, and we also planned to gut it and renovate before we moved in at the end of the lease. But no way do I want to rent to someone I don't know. In our condo building, there was a renter who got pissed at multiple noise complaints and fines against them, so they turned on several faucets and closed the drains and left....they were on the 20th floor and caused major damages to at least 6 units. This is in a luxury building, one of the top 5 buildings in our city--rent for that was over $5K, so typically you'd think someone paying that would be less likely to be destructive. Oh and the tenant was a doctor, so someone that you would vet and never think twice about them going crazy and doing something as destructive as this. Yet, the owner had to along with their insurance and the HOA insurance sue the tenant for the $100k's+++++ in damages---I think it was well over $600K in damages and that was 10 years ago.

I'd rather just invest in real estate passively

+1

My parents did well with rental houses when I was growing up but the headaches were crazy and when there were problems, they were often big, expensive, and untimely. If you are already comfortable, it just doesn't seem worth it unless you have a really good property manager. My parents had a property manager and it was still tough since major escalations and expenses still got to them.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How do you make 7M? My HHI is not much so I have invested and saved but still only at 2M

Should I invest that more aggressively for the next 15 years of working

If you make an average of 7% over the next 15 years and don’t save another dime you’re at almost 6,000,000. Relax.

5.5M and ignoring real inflation

RE keeps up with inflation. Rental RE can return profits that can outperform conservative "safe" guaranteed type of market investments. I am surprised none of you have rental RE in your portfolio, is market really this much better?

Not really. Actually majority of my NW is in RE. I'm trying to diversify into equity market.

Early Retired Biglaw Partner here. I also have a rental property as well as an English basement apartment that I rent out. Combined they generate $6k a month.

Have you all had anything major go wrong yet? Rental properties are great until.... they aren't, even if you go the property manager route.

+1

Personally don't have the guts to be a landlord. Too much can go wrong and end up costing you. Fact is tenants rarely take care of home as well as you would.
We did rent our condo for 5 years, but it was to good friends. So we knew they would take excellent care of it, and we also planned to gut it and renovate before we moved in at the end of the lease. But no way do I want to rent to someone I don't know. In our condo building, there was a renter who got pissed at multiple noise complaints and fines against them, so they turned on several faucets and closed the drains and left....they were on the 20th floor and caused major damages to at least 6 units. This is in a luxury building, one of the top 5 buildings in our city--rent for that was over $5K, so typically you'd think someone paying that would be less likely to be destructive. Oh and the tenant was a doctor, so someone that you would vet and never think twice about them going crazy and doing something as destructive as this. Yet, the owner had to along with their insurance and the HOA insurance sue the tenant for the $100k's+++++ in damages---I think it was well over $600K in damages and that was 10 years ago.

I'd rather just invest in real estate passively

+1

My parents did well with rental houses when I was growing up but the headaches were crazy and when there were problems, they were often big, expensive, and untimely. If you are already comfortable, it just doesn't seem worth it unless you have a really good property manager. My parents had a property manager and it was still tough since major escalations and expenses still got to them.

Well, yeah, there is no easy ride investing if you want to make profit. Neither is investing in the markets. Some people got wiped out even investing conservatively or lost their earnings instead of growing them. Nothing is easy. I guess people just do what they feel most comfortable with. What you describe is common, repairs are annoying and issues can happen anytime when you are on vacation, day off, etc. But they aren't the norm and major expenses are usually every handful of years relating to having to replace pricier things. Routine issues like clogged toilet or sink or a minor repair many landlords learn to fix themselves, which works if you are handy and saves a lot. If you have a professional management company then no headaches and just costs. Like with everything.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It really depends on your level of spending and comfort with uncertainty. For me, the difference between those numbers is the security of being able to cover my mother’s elder care and potentially my own if I live as long as she has. I’m 58 and could easily live another 40 years. The $250,000 the $7M generates is before taxes and inflation. Yes, I will certainly tap principal at some point, but still, $250,000 30-some years from now will not be a fortune. It’s crazy and cruel what decent elder care costs.

I understand. The $7M is not static, its invested in a diversified portfolio, probably yield about 3.3% plus capital appreciation in the market near S&P 500 returns. Back to my point $7M or $10M today is really immaterial. If you don't have the skill set or a financial manager to tend to this sum it is pointless. As far as elder care, my plan is to stay at home and bring in hourly workers. Much cheaper than going into a specialized care facility. You can make it complicated if you wish.

bringing in hourly workers for elder care is not cheaper than a facility. Get yourself into a CCRC by early to mid 70s, then you are covered for much less

I would rather blow my head off than go into a CCRC in my mid 70s - particularly if i have $10M liquid. I'll pay for in-home care, if/when I need it.

If your 58 today and have $10M and don't touch it, that 10M will be easily 25M + by the time you're in your late 70s. That would throw off safely $1M of cash flow, and you could spend more if needed considering at that point in time (if you need care) your life expectancy won't be too long.

+1. One of my aha moments was when I went to visit my colleague's grandfather who was at an elder care facility back in the mid '90s. We were traveling on work and the grandpa happened to be in the city we were traveling to. My colleague praised his grandpa and how he sponsors an annual cruise vacation for the extended family (20+ people), etc. When I asked why one of the kids or grandkids were not taking care or grandpa, he just laughed and said 'no f'ing way!'. The facility itself was nice, high-end but depressing. Where I come from, there are no eldercare facilities. Your family is it. Yep.. No way, I want my end of days to be in one of those places.

CcRC are not your typical elder care facility. These are ones you pay 400k+ to even enter into a regular condo/house. The memory care, assisted living and healthcare facilities an are typically 1000x better than what you are imagining. Hence why some pay close to a million entry fee.
But for that you are never charged more for the higher levels of care

But why? When you are elderly to require care you are either disabled to take care of yourself but sharp of mind or you are mentally not there with various levels of dementia. In the former case you would always prefer to have some worker come in to do cleaning, cooking, maybe light nursing assistance and live at home unless you are severely disabled. In the latter case.. depending on how "not there" you will be: would you even notice if you are in 400K a year facility or in a less expensive one or a government subsidized one? You are brain dead. I would just request to be euthanized...

Is it really worth it having to grind for the rest of your still healthy younger years to wait to live until your body starts giving out in hopes of being taking care of when you are a vegetable and have zero QOL anyway?

You are not "brain dead" just because you require assisted living or memory care. I have a relative who has been in "memory care" for over 2 years now and I still have meaningful Facetimes/phone calls weekly with them, 95% of the time. As long as their meds are well managed they are still doing well. This person reads books, does puzzles and plays games all the time. Yes there are people with more advanced issues in the memory care, but my relative is still definately in a position of "life is worth living" and aware of their surroundings and family. And this is after 2 years there. If anything, they are doing better in the full time care as they know there is 24 hour excellent care and they get to interact with more people which is good for them. But they did not feel "safe" at home with their memory issues, so for them it's actually better to be under the full time care and much more cost effective than care at home.

What happens to poor people who require memory care? I don't see them dying on the streets, wandering around or burning their apartments down en masse.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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Anonymous wrote:How do you make 7M? My HHI is not much so I have invested and saved but still only at 2M

Should I invest that more aggressively for the next 15 years of working

If you make an average of 7% over the next 15 years and don’t save another dime you’re at almost 6,000,000. Relax.

5.5M and ignoring real inflation

RE keeps up with inflation. Rental RE can return profits that can outperform conservative "safe" guaranteed type of market investments. I am surprised none of you have rental RE in your portfolio, is market really this much better?

Not really. Actually majority of my NW is in RE. I'm trying to diversify into equity market.

Early Retired Biglaw Partner here. I also have a rental property as well as an English basement apartment that I rent out. Combined they generate $6k a month.

Have you all had anything major go wrong yet? Rental properties are great until.... they aren't, even if you go the property manager route.

Not really, no. The one rental is my basement so it’s not hard to keep maintained. The other is half of a side-by-side duplex. Not super high end but in a highly desirable location in the DMV.

We’re pretty good about keeping the places up because tenants pay good rent and deserve it. We will probably sell the duplex when the current tenants vacate, which won’t be for a while.