Do you consider a net worth of 2.5 million "rich?"

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
If you can stop working and live off your investment income and they draw 450K a year you are rich.

Anonymous wrote:
You'd have to have $11,250,000 in the bank to get this.

Anonymous wrote:
You can take $450k a year from $2.5M for about 5 years. You see that, right?

To help this person (and try to spread more financial literacy)... a "rule of thumb" safe withdrawal rate from your assets is 4% a year. A safe amount is an amount that you can safely withdraw and still be 99% certain that your money will last the rest of your life. Using that rate, you need $11.25 million "in the bank." In the bank means that you have it invested in a diversified portfolio. A diversified portfolio means that it is in a variety of stocks (equities), bonds, real estate (not the house you live in).

Yes, if you put $2.5 million in your mattress and spend $450k a year, it will last five years, assuming you don't have a house fire. And you would miss out on a lifetime of $450k a year of income.

Thank you for this analysis. we manage to spend through $300K yearly. So if we started spending our capital, yes, it would run out in 5 years. It took way longer than 5 years to earn that capital. So, no not rich, but comfortable if you are careful.

So because you spend 300k a year you aren't rich? What? How did you get to the point that you can have that much money if you are so simple? We live pretty well (700k home, nanny, etc) and the only way we could spend 300k is if we accidentally paid cash for a new ferrari.

700K house in this area is very middle class. no second home? we buy a "new Ferrair" every year in private school bills. Never did say we were simple, just middle class.

700k house is a 700k house. That it looks like crap doesn't make any difference and certainly doesn't make it "middle class".

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
If you can stop working and live off your investment income and they draw 450K a year you are rich.

Anonymous wrote:
You'd have to have $11,250,000 in the bank to get this.

Anonymous wrote:
You can take $450k a year from $2.5M for about 5 years. You see that, right?

To help this person (and try to spread more financial literacy)... a "rule of thumb" safe withdrawal rate from your assets is 4% a year. A safe amount is an amount that you can safely withdraw and still be 99% certain that your money will last the rest of your life. Using that rate, you need $11.25 million "in the bank." In the bank means that you have it invested in a diversified portfolio. A diversified portfolio means that it is in a variety of stocks (equities), bonds, real estate (not the house you live in).

Yes, if you put $2.5 million in your mattress and spend $450k a year, it will last five years, assuming you don't have a house fire. And you would miss out on a lifetime of $450k a year of income.

Thank you for this analysis. we manage to spend through $300K yearly. So if we started spending our capital, yes, it would run out in 5 years. It took way longer than 5 years to earn that capital. So, no not rich, but comfortable if you are careful.

So because you spend 300k a year you aren't rich? What? How did you get to the point that you can have that much money if you are so simple? We live pretty well (700k home, nanny, etc) and the only way we could spend 300k is if we accidentally paid cash for a new ferrari.

700K house in this area is very middle class. no second home? we buy a "new Ferrair" every year in private school bills. Never did say we were simple, just middle class.

700k house is a 700k house. That it looks like crap doesn't make any difference and certainly doesn't make it "middle class".

Google Middle class home and tell me what you find. It's definitely not the 700k houses around DC.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
If you can stop working and live off your investment income and they draw 450K a year you are rich.

Anonymous wrote:
You'd have to have $11,250,000 in the bank to get this.

Anonymous wrote:
You can take $450k a year from $2.5M for about 5 years. You see that, right?

To help this person (and try to spread more financial literacy)... a "rule of thumb" safe withdrawal rate from your assets is 4% a year. A safe amount is an amount that you can safely withdraw and still be 99% certain that your money will last the rest of your life. Using that rate, you need $11.25 million "in the bank." In the bank means that you have it invested in a diversified portfolio. A diversified portfolio means that it is in a variety of stocks (equities), bonds, real estate (not the house you live in).

Yes, if you put $2.5 million in your mattress and spend $450k a year, it will last five years, assuming you don't have a house fire. And you would miss out on a lifetime of $450k a year of income.

Thank you for this analysis. we manage to spend through $300K yearly. So if we started spending our capital, yes, it would run out in 5 years. It took way longer than 5 years to earn that capital. So, no not rich, but comfortable if you are careful.

So because you spend 300k a year you aren't rich? What? How did you get to the point that you can have that much money if you are so simple? We live pretty well (700k home, nanny, etc) and the only way we could spend 300k is if we accidentally paid cash for a new ferrari.

700K house in this area is very middle class. no second home? we buy a "new Ferrair" every year in private school bills. Never did say we were simple, just middle class.

Spending a Ferrari amount of money every year on education is no more middle class than buying an actual Ferrari every year. Money is money; how you spend it is irrelevant.

[Anonymous]

And a 700K house in DC is middle class, sorry.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
If you can stop working and live off your investment income and they draw 450K a year you are rich.

Anonymous wrote:
You'd have to have $11,250,000 in the bank to get this.

Anonymous wrote:
You can take $450k a year from $2.5M for about 5 years. You see that, right?

To help this person (and try to spread more financial literacy)... a "rule of thumb" safe withdrawal rate from your assets is 4% a year. A safe amount is an amount that you can safely withdraw and still be 99% certain that your money will last the rest of your life. Using that rate, you need $11.25 million "in the bank." In the bank means that you have it invested in a diversified portfolio. A diversified portfolio means that it is in a variety of stocks (equities), bonds, real estate (not the house you live in).

Yes, if you put $2.5 million in your mattress and spend $450k a year, it will last five years, assuming you don't have a house fire. And you would miss out on a lifetime of $450k a year of income.

Thank you for this analysis. we manage to spend through $300K yearly. So if we started spending our capital, yes, it would run out in 5 years. It took way longer than 5 years to earn that capital. So, no not rich, but comfortable if you are careful.

So because you spend 300k a year you aren't rich? What? How did you get to the point that you can have that much money if you are so simple? We live pretty well (700k home, nanny, etc) and the only way we could spend 300k is if we accidentally paid cash for a new ferrari.

700K house in this area is very middle class. no second home? we buy a "new Ferrair" every year in private school bills. Never did say we were simple, just middle class.

700k house is a 700k house. That it looks like crap doesn't make any difference and certainly doesn't make it "middle class".

Google Middle class home and tell me what you find. It's definitely not the 700k houses around DC.

Why would I google "middle class home"? I know very well how expensive properties are around here, but at doesn't make million dollar homes middle class even if they look like actual middle class homes (ie homes that can actually be purchased by middle class people) elsewhere. Ever heard of "location, location, location"? It's a part of house value, just like size and finishes. It's like saying a three bedroom condo in tribes a is middle class because you could buy a castle 50 miles further.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
If you can stop working and live off your investment income and they draw 450K a year you are rich.

Anonymous wrote:
You'd have to have $11,250,000 in the bank to get this.

Anonymous wrote:
You can take $450k a year from $2.5M for about 5 years. You see that, right?

To help this person (and try to spread more financial literacy)... a "rule of thumb" safe withdrawal rate from your assets is 4% a year. A safe amount is an amount that you can safely withdraw and still be 99% certain that your money will last the rest of your life. Using that rate, you need $11.25 million "in the bank." In the bank means that you have it invested in a diversified portfolio. A diversified portfolio means that it is in a variety of stocks (equities), bonds, real estate (not the house you live in).

Yes, if you put $2.5 million in your mattress and spend $450k a year, it will last five years, assuming you don't have a house fire. And you would miss out on a lifetime of $450k a year of income.

Thank you for this analysis. we manage to spend through $300K yearly. So if we started spending our capital, yes, it would run out in 5 years. It took way longer than 5 years to earn that capital. So, no not rich, but comfortable if you are careful.

So because you spend 300k a year you aren't rich? What? How did you get to the point that you can have that much money if you are so simple? We live pretty well (700k home, nanny, etc) and the only way we could spend 300k is if we accidentally paid cash for a new ferrari.

700K house in this area is very middle class. no second home? we buy a "new Ferrair" every year in private school bills. Never did say we were simple, just middle class.

700k house is a 700k house. That it looks like crap doesn't make any difference and certainly doesn't make it "middle class".

Google Middle class home and tell me what you find. It's definitely not the 700k houses around DC.

Why would I google "middle class home"? I know very well how expensive properties are around here, but at doesn't make million dollar homes middle class even if they look like actual middle class homes (ie homes that can actually be purchased by middle class people) elsewhere. Ever heard of "location, location, location"? It's a part of house value, just like size and finishes. It's like saying a three bedroom condo in tribes a is middle class because you could buy a castle 50 miles further.

^^ 3 bedroom condo in TriBeCa

[Anonymous]

Middle class is a lifestyle house size, commute, vacations, college savings, retirement) not an hhi. A middle class lifestyle costs much more in the dc area vs let's say Georgia. Also a middle class lifestyle in Georgetown will cost more than one in leesburg.

[Anonymous]

Anonymous wrote:Middle class is a lifestyle house size, commute, vacations, college savings, retirement) not an hhi. A middle class lifestyle costs much more in the dc area vs let's say Georgia. Also a middle class lifestyle in Georgetown will cost more than one in leesburg.

No, middle class is HHI ie. net worth, not lifestyle!! This is exactly the problem with your reasoning, you have this idea how "middle class" is supposed to live while in fact they don't live anything like that (either because they don't live in a highly desirable locations or because they can't afford most of the stuff on your list). A billionaire can live the lifestyle of the poors, but that doesn't change a thing. He has a choice, while the actual middle class doesnt. A "georgetown middle class" can sell their assets and live like kings somewhere else, but the opposite is not true.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Middle class is a lifestyle house size, commute, vacations, college savings, retirement) not an hhi. A middle class lifestyle costs much more in the dc area vs let's say Georgia. Also a middle class lifestyle in Georgetown will cost more than one in leesburg.

No, middle class is HHI ie. net worth, not lifestyle!! This is exactly the problem with your reasoning, you have this idea how "middle class" is supposed to live while in fact they don't live anything like that (either because they don't live in a highly desirable locations or because they can't afford most of the stuff on your list). A billionaire can live the lifestyle of the poors, but that doesn't change a thing. He has a choice, while the actual middle class doesnt. A "georgetown middle class" can sell their assets and live like kings somewhere else, but the opposite is not true.

http://money.msn.com/investing/c_galleryregular.aspx?cp-documentid=250284193

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Middle class is a lifestyle house size, commute, vacations, college savings, retirement) not an hhi. A middle class lifestyle costs much more in the dc area vs let's say Georgia. Also a middle class lifestyle in Georgetown will cost more than one in leesburg.

No, middle class is HHI ie. net worth, not lifestyle!! This is exactly the problem with your reasoning, you have this idea how "middle class" is supposed to live while in fact they don't live anything like that (either because they don't live in a highly desirable locations or because they can't afford most of the stuff on your list). A billionaire can live the lifestyle of the poors, but that doesn't change a thing. He has a choice, while the actual middle class doesnt. A "georgetown middle class" can sell their assets and live like kings somewhere else, but the opposite is not true.

http://money.msn.com/investing/c_galleryregular.aspx?cp-documentid=250284193

states that if you make between 40k to 100k you are middle class. doesn't say if you make 2.5 million you are middle class.

[Anonymous]

Um, yeah. I would definitely consider you rich. But, I'm a teacher so most people on DCUM seem rich to me. Even the ones who claim poverty.

[Anonymous]

2.5 in savings is not rich it will need to last 25 years for retirement

[Anonymous]

Warren Buffett lives in a middle class home. You morons are going to crash and burn. The stock market is going to crash. The entire monetary system is compromised. Unless you cash out and buy gold which almost nobody does. It's gonna be a show !!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Middle class is a lifestyle house size, commute, vacations, college savings, retirement) not an hhi. A middle class lifestyle costs much more in the dc area vs let's say Georgia. Also a middle class lifestyle in Georgetown will cost more than one in leesburg.

No, middle class is HHI ie. net worth, not lifestyle!! This is exactly the problem with your reasoning, you have this idea how "middle class" is supposed to live while in fact they don't live anything like that (either because they don't live in a highly desirable locations or because they can't afford most of the stuff on your list). A billionaire can live the lifestyle of the poors, but that doesn't change a thing. He has a choice, while the actual middle class doesnt. A "georgetown middle class" can sell their assets and live like kings somewhere else, but the opposite is not true.

http://money.msn.com/investing/c_galleryregular.aspx?cp-documentid=250284193

states that if you make between 40k to 100k you are middle class. doesn't say if you make 2.5 million you are middle class.

I think the posters are saying if you have $2.5M saved, not if you earn $2.5M in salary. Massive difference.

[Anonymous]

Seems like $2.5M is just enough to make the middle class mad, but not enough to be upper crust. LOL!