"$5 Million is a Nightmare... the Poorest Rich Person in America."

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m not debating there can’t be wide swings. I’m just saying at the end of the day, when you’ve worked your last day, sitting on $10M is meaningfully different than sitting on $5M. I’m utterly baffled that several posters are disagreeing. If we had $10M, we’re set, could quit tomorrow. Not true at $5M. I get that others want more and that’s fine. So would you also say that $20M isn’t that different from $10M? It’s literally twice as much money!

I don't think anyone is saying that.. Everyone knows that $10M is 2X $5M based on simple math. Folks are only saying that $5M is nothing to scoff at and for many it would be enough to retire with. And for those that peg their expenses to a $5M base (say $150K @3% withdrawal), the additional $5M is just extra moat and not something they need and would not make a subjective difference.

+1, and might not be worth the additional work and stress to make.

Something a lot of people in this thread don't seem to get is that there are many people who can make themselves happy with less (especially when it is more than the vast majority of people on the planet) in order to save themselves time, energy, and effort. There are many things people are willing to give up in order to retire earlier, or even just downgrade to a lower stress job.

I would never work for the second $5m. It isn't worth it to me. I want to relax. I don't need a big house. I only have one kid to worry about helping out. I want to be able to take a couple great trips a year. I don't have expensive hobbies. I'm just a pretty content person and $5m would allow me to live exactly the life I want to live and never worry about money, and still probably leave quite a bit to my kid.

I get that $10m is twice as much as $5m. I'm not an idiot. In fact, I think I'm actually smarter than some of the people on this thread who seem to think $5m isn't enough to live a good life. I think I've figured out some things they haven't. But they obviously think the same in reverse. Ah well, such is life.

You're a single mom with one kid, so you have no use for a big house. Some of us have spouses and three kids, so that larger home in a good school district, college savings for three kids, food, clothing, activities, etc. for three kids costs a lot more. We have a NW of just over $5M and no way DH could stop working now without downgrading our current lifestyle. If I was a single mom with one kids in MS or HS, then sure I could stop working and make $5M work too.

PP here. Not a single mom, I'm married. But yes, I chose to just have one kid, and that means I don't feel as much pressure regarding money. It was a choice, because I didn't want to be sitting around thinking that FIVE MILLION DOLLARS was not enough for me to relax about money.

Why not just have zero kids and live in your car to save money.

This. But smug one-kid-mom has it all figured out lol.

[Anonymous]

5 million is a lot, but you still have to work and get medical insurance. 3% a year is only $60k a year. So, you would like to live a FIRE lifestyle to live off of it. Or move to a foreign country.

[Anonymous]

Anonymous wrote:5 million is a lot, but you still have to work and get medical insurance. 3% a year is only $60k a year. So, you would like to live a FIRE lifestyle to live off of it. Or move to a foreign country.

Your math is wrong but the conclusion is valid.

[Anonymous]

Anonymous wrote:5 million is a lot, but you still have to work and get medical insurance. 3% a year is only $60k a year. So, you would like to live a FIRE lifestyle to live off of it. Or move to a foreign country.

I think this has been rehashed over and over on this thread.. Whether or not $5M is a good number depends on your age. If you are late 50s/early 60s or even mid-60s, it's a great number. At 3% it puts out $150K/yr. SS for a couple should be around $50-60K at 65-67. Medicare kicks in at 65. Life is good.

On the other hand, if you are a 40s couple, it's not enough to retire on in the US.

[Anonymous]

Anonymous wrote:

Anonymous wrote:5 million is a lot, but you still have to work and get medical insurance. 3% a year is only $60k a year. So, you would like to live a FIRE lifestyle to live off of it. Or move to a foreign country.

I think this has been rehashed over and over on this thread.. Whether or not $5M is a good number depends on your age. If you are late 50s/early 60s or even mid-60s, it's a great number. At 3% it puts out $150K/yr. SS for a couple should be around $50-60K at 65-67. Medicare kicks in at 65. Life is good.

On the other hand, if you are a 40s couple, it's not enough to retire on in the US.

+1 $5M is great if you're in your 60's, you're getting Medicare or will soon, and your kids have flown the nest. It's not great if you're in your 40's with 3 little kids, a hefty mortgage (for a nice home in a good school district), and need to pay a fortune for health insurance for 20+ years. Add in a special needs kid or two and the numbers look even worse. Sure, you could make it work, but most UMC people don't want to stop working and live like LMC people.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:5 million is a lot, but you still have to work and get medical insurance. 3% a year is only $60k a year. So, you would like to live a FIRE lifestyle to live off of it. Or move to a foreign country.

I think this has been rehashed over and over on this thread.. Whether or not $5M is a good number depends on your age. If you are late 50s/early 60s or even mid-60s, it's a great number. At 3% it puts out $150K/yr. SS for a couple should be around $50-60K at 65-67. Medicare kicks in at 65. Life is good.

On the other hand, if you are a 40s couple, it's not enough to retire on in the US.

+1 $5M is great if you're in your 60's, you're getting Medicare or will soon, and your kids have flown the nest. It's not great if you're in your 40's with 3 little kids, a hefty mortgage (for a nice home in a good school district), and need to pay a fortune for health insurance for 20+ years. Add in a special needs kid or two and the numbers look even worse. Sure, you could make it work, but most UMC people don't want to stop working and live like LMC people.

But of course if you have 5m in your 40s and keep working/contributing, it grows to even more. Then you have 10 million in your 50s.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:5 million is a lot, but you still have to work and get medical insurance. 3% a year is only $60k a year. So, you would like to live a FIRE lifestyle to live off of it. Or move to a foreign country.

I think this has been rehashed over and over on this thread.. Whether or not $5M is a good number depends on your age. If you are late 50s/early 60s or even mid-60s, it's a great number. At 3% it puts out $150K/yr. SS for a couple should be around $50-60K at 65-67. Medicare kicks in at 65. Life is good.

On the other hand, if you are a 40s couple, it's not enough to retire on in the US.

+1 $5M is great if you're in your 60's, you're getting Medicare or will soon, and your kids have flown the nest. It's not great if you're in your 40's with 3 little kids, a hefty mortgage (for a nice home in a good school district), and need to pay a fortune for health insurance for 20+ years. Add in a special needs kid or two and the numbers look even worse. Sure, you could make it work, but most UMC people don't want to stop working and live like LMC people.

But of course if you have 5m in your 40s and keep working/contributing, it grows to even more. Then you have 10 million in your 50s.

Right, either way it’s not a nightmare burden, which is the idea that was posed in the OP. $5m might not be enough for you, personally, to retire tomorrow, depending on your age, your kids ages, number of kids, and desired lifestyle. But regardless of your age, $5m is great. If you’re young, keep working, invest wisely, and you’re golden. If you’re old, assess your lifestyle, get rid of your mortgage and other debt, and you can be quite comfortable.

No one is arguing that you HAVE to retire on $5m, just that it’s a sum of money that should absolutely take the pressure off financially and make you confident in your finances, not be a burden you’d wish away. It’s only a nightmare if, like the people on succession, you think anything short of being a billionaire is poverty.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:5 million is a lot, but you still have to work and get medical insurance. 3% a year is only $60k a year. So, you would like to live a FIRE lifestyle to live off of it. Or move to a foreign country.

I think this has been rehashed over and over on this thread.. Whether or not $5M is a good number depends on your age. If you are late 50s/early 60s or even mid-60s, it's a great number. At 3% it puts out $150K/yr. SS for a couple should be around $50-60K at 65-67. Medicare kicks in at 65. Life is good.

On the other hand, if you are a 40s couple, it's not enough to retire on in the US.

+1 $5M is great if you're in your 60's, you're getting Medicare or will soon, and your kids have flown the nest. It's not great if you're in your 40's with 3 little kids, a hefty mortgage (for a nice home in a good school district), and need to pay a fortune for health insurance for 20+ years. Add in a special needs kid or two and the numbers look even worse. Sure, you could make it work, but most UMC people don't want to stop working and live like LMC people.

But of course if you have 5m in your 40s and keep working/contributing, it grows to even more. Then you have 10 million in your 50s.

Right, either way it’s not a nightmare burden, which is the idea that was posed in the OP. $5m might not be enough for you, personally, to retire tomorrow, depending on your age, your kids ages, number of kids, and desired lifestyle. But regardless of your age, $5m is great. If you’re young, keep working, invest wisely, and you’re golden. If you’re old, assess your lifestyle, get rid of your mortgage and other debt, and you can be quite comfortable.

No one is arguing that you HAVE to retire on $5m, just that it’s a sum of money that should absolutely take the pressure off financially and make you confident in your finances, not be a burden you’d wish away. It’s only a nightmare if, like the people on succession, you think anything short of being a billionaire is poverty.

Good lord how many times do you need people to explain to you that the "nightmare" line was a joke from a show? Not one poster on this thread actually said that $5M is a literal nightmare.

[Anonymous]

I would ask, if your monthly budget is $20k/month and you had to suddenly drop your monthly budget to $5k, your life would be upended. Could you do it? Yes, millions of people live on $5k/month, but you would have to move to cheaper housing, place your kids in a different school, drive a cheaper car, cancel all discretionary expenses, and there would be almost nothing left after paying your bills. It would be very painful and would scramble your entire way of living.

The scene in the tv show is one where Greg was going to inherit $250 million but walked away from his grandfather's inheritance to go work for his rival granduncle. He feels that walking away from $250 million is ok because if things don't work out with his granduncle his mom will leave him $5 million when she is gone so he feels that he'll be ok.

Connor and Tom who are billionaires scoff at the idea that one could live on $5 million NW because they live billionaire lifestyles. Greg was recently a mascot at a theme park making close to minimum wage and being abused by everyone around him. $5 million is a huge step up for him because he wasn't living the millionaire lifestyle, much less a billionaire's.

I think the lesson is one of perspective and a lot has to do with whether you are taking a big step up or down in the way that you have set up your life.

[Anonymous]

I also find it interesting that most posters here seem to feel invincible. They have charted out a trajectory for their financial lives and feel that they will always achieve it. For example: "But of course if you have 5m in your 40s and keep working/contributing, it grows to even more. Then you have 10 million in your 50s."

But there are risks in life. You can be hit by a bus, not die and incur millions in medical bills beyond your insurance coverage just in order to keep living. There are many other unknowns beyond your control that may make your plans moot. $5 million is a great safety net in those circumstances, but may not last in a number of scenarios. You can be sued, defrauded or lose your job and become unemployable at your current salary. You can be arrested rightfully or wrongfully and lose your place in society.

DCUM seems very little concerned about these types of setbacks and there seems to be an illusion of control when that's not really how the world works. History tells us that over and over again.

[Anonymous]

$5 million is enough to maintain a $250k/year draw, inflation-adjusted, for 40 years, assuming a 7% return, which is the long-term average of a 60/40, stock/bond portfolio. $4 million for $200k. $3 million for $150k. Of course, this doesn’t include pensions or social security, which have COLAs. In short, if you own your house and can’t get by on $5 million, you have a high-cost lifestyle: country clubs, golf multiple times/week, multiple luxury vacation/year, multiple luxury cars on lease, etc. In fact, you can do a lot of that on $250k with no mortgage payment, so you really need to be swinging it to need more. Of course, if your goal is to give lots of money to your kids, grandkids, and charities, you may need more.

[Anonymous]

Anonymous wrote:In short, if you own your house and can’t get by on $5 million, you have a high-cost lifestyle: country clubs, golf multiple times/week, multiple luxury vacation/year, multiple luxury cars on lease, etc.

That's not unusual in this area. There's also an army of people asking you for money all day long in addition to what you have listed.

[Anonymous]

Anonymous wrote:

Anonymous wrote:In short, if you own your house and can’t get by on $5 million, you have a high-cost lifestyle: country clubs, golf multiple times/week, multiple luxury vacation/year, multiple luxury cars on lease, etc.

That's not unusual in this area. There's also an army of people asking you for money all day long in addition to what you have listed.

Well, that’s a choice. I think that a lot of people who scoff at $5 million for early retirement fall into several camps: 1) they’re in their 40s and family costs are still mounting. 40-50 years of retirement can bring a lot of uncertainties. 2) they’re in their 50s and have a luxury lifestyle they don’t want to sacrifice. 3) they’re in their late 50s or early 60s and they want luxury and to leave large bequests to their children and grandchildren. 4) they love their job or the platform it gives them.

People who find $5 million totally adequate are people who don’t find deep meaning in their work, value peace and quiet over the frills of life, are not focused on leaving their children millions of dollars, and are happy to adjust their life to their monetary circumstances. Of course, at $5 million, they know there won’t be any adjustment for their type of lifestyle.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:In short, if you own your house and can’t get by on $5 million, you have a high-cost lifestyle: country clubs, golf multiple times/week, multiple luxury vacation/year, multiple luxury cars on lease, etc.

That's not unusual in this area. There's also an army of people asking you for money all day long in addition to what you have listed.

Well, that’s a choice. I think that a lot of people who scoff at $5 million for early retirement fall into several camps: 1) they’re in their 40s and family costs are still mounting. 40-50 years of retirement can bring a lot of uncertainties. 2) they’re in their 50s and have a luxury lifestyle they don’t want to sacrifice. 3) they’re in their late 50s or early 60s and they want luxury and to leave large bequests to their children and grandchildren. 4) they love their job or the platform it gives them.

People who find $5 million totally adequate are people who don’t find deep meaning in their work, value peace and quiet over the frills of life, are not focused on leaving their children millions of dollars, and are happy to adjust their life to their monetary circumstances. Of course, at $5 million, they know there won’t be any adjustment for their type of lifestyle.

If someone is mostly living off the dividends, wouldn’t they still be leaving millions to their kids?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:In short, if you own your house and can’t get by on $5 million, you have a high-cost lifestyle: country clubs, golf multiple times/week, multiple luxury vacation/year, multiple luxury cars on lease, etc.

That's not unusual in this area. There's also an army of people asking you for money all day long in addition to what you have listed.

Well, that’s a choice. I think that a lot of people who scoff at $5 million for early retirement fall into several camps: 1) they’re in their 40s and family costs are still mounting. 40-50 years of retirement can bring a lot of uncertainties. 2) they’re in their 50s and have a luxury lifestyle they don’t want to sacrifice. 3) they’re in their late 50s or early 60s and they want luxury and to leave large bequests to their children and grandchildren. 4) they love their job or the platform it gives them.

People who find $5 million totally adequate are people who don’t find deep meaning in their work, value peace and quiet over the frills of life, are not focused on leaving their children millions of dollars, and are happy to adjust their life to their monetary circumstances. Of course, at $5 million, they know there won’t be any adjustment for their type of lifestyle.

This!