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

[Anonymous]

Anonymous wrote:I relate to this. We’re at around $9mm net worth (not including our house, which is $5mm but only $2.5mm equity) and we don’t feel like it’s close to enough to retire, and we don’t live a super luxurious lifestyle. We’re mid-30s and live in a VHCOL city, which I think makes a difference. We plan to retire a little on the earlier side - maybe early 50s? - but when I hear about wealthy people buying fancy cars and designer clothes, I don’t consider myself “one of them.” I know I’ll get absolutely roasted for saying I don’t consider us rich, but there probably isn’t much of a difference between my lifestyle and most people who post here.

You could buy a lot of fancy car and designer clothes if you weren't living in a $5M house with $2.5M left to pay off. And you're only in your mid-30s?

You should get roasted.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I have to admit that we are at $5M and related to the dark humor from this scene in Succession.

We know we're in good shape, especially in our 30s, but we don't feel like $5M is enough to retire on and are still ambitious to achieve more in our careers and financially.

Part of this is because we are in a VHCOL where we hope to stay, and our current net worth and salary barely gets us an old condo that needs a lot of updates. We're also in a high achieving peer group from college and work, and we feel just average among (successful!) peers. Rich people problems, I know.

This isn't part of it. It's all of it.

5-10 million is objectively enough tho set yourself up for life, set your kids up, never have to worry about money again. If my DH and I had 5 million, he'd quit his job (which he hates) and get a job working less than full time doing something he enjoys (he knows what it would be, it's a low paying but rewarding career). I would continue in my job, which I like. We'd invest thoughtfully to ensure income. We'd upgrade our home, but not to a mansion -- we'd buy one of the 1-1.2m homes in our desired neighborhood that we cannot quite afford now, or potentially buy something cheaper and renovate. We only have one kid and have no desire for a huge house.

We'd make some small lifestyle upgrades (regular house cleaners, slightly nicer vacations, buy some items we now deem too pricy for us like an electric vehicle) but would not vastly overhaul our lifestyle. We'd still cook at home a lot, because we like to (though it would be thrilling not to worry about budgeting for groceries and to have a nicer kitchen to cook in). We would not change our friends, who now vary from MC to UMC and where incomes probably top out around 500k (and most well below that).

Kid might go to private school -- we could afford it on that income but we are aware it could change our peer set and our kid's peer set, so we'd really think hard about it. I could see us sending her to a private that is more UMC crunchy liberal families than super rich. But I could also see us just staying in public, especially if we could afford to ensure we were in bound for high quality public schools.

If 5-10m is "a nightmare" to you, that's entirely because of your peer group, personal ambition, and values. It's objectively "enough" money for most things that matter to most people. But if you belong to the subset of people for whom "owning a private jet" matters, then I'm not really sure any amount of money will ever make you happy. Good luck.

You can't even afford to do the lifestyle upgrades you want retiring with a net worth of $5M. $50K/per year/per kid for private is 10% of your entire NW. Are you sure you're not confusing NW with HHI?

[Anonymous]

I don't think that the people who just want to remain at $5m will be able to do it. Too much competition from those focused, intentional and ruthless about moving up above that number. The $5m line is like the starting line at a marathon. There are tons of people at the starting line but it stretches out as the race progresses. And there are many runners starting from way behind the starting line who run faster than you.

[Anonymous]

Anonymous wrote:5M is enough to retire and have a $200k a year lifestyle without working.
Its not enough to have a $1M a year HHI lifestyle.

And this is the key. If you spend 150-200 k a year then you are in good shape. If you spend 500-600k it is not enough. All depends on spend level. Could someone be fine on 150-200k -- of course. But if that is not what they have done cutting back does not make a lot of sense unless you are at the end of your earning potential.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I relate to this. We’re at around $9mm net worth (not including our house, which is $5mm but only $2.5mm equity) and we don’t feel like it’s close to enough to retire, and we don’t live a super luxurious lifestyle. We’re mid-30s and live in a VHCOL city, which I think makes a difference. We plan to retire a little on the earlier side - maybe early 50s? - but when I hear about wealthy people buying fancy cars and designer clothes, I don’t consider myself “one of them.” I know I’ll get absolutely roasted for saying I don’t consider us rich, but there probably isn’t much of a difference between my lifestyle and most people who post here.

You could buy a lot of fancy car and designer clothes if you weren't living in a $5M house with $2.5M left to pay off. And you're only in your mid-30s?

You should get roasted.

Our HHI is $4.2mm/year, so we could pay it off easily if we wanted to. We were able to lock in an absurdly low interest rate, so we’re keeping the mortgage because it’s basically free money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:5M is enough to retire and have a $200k a year lifestyle without working.
Its not enough to have a $1M a year HHI lifestyle.

And this is the key. If you spend 150-200 k a year then you are in good shape. If you spend 500-600k it is not enough. All depends on spend level. Could someone be fine on 150-200k -- of course. But if that is not what they have done cutting back does not make a lot of sense unless you are at the end of your earning potential.

To be fair, people have complicated financial lives and sometimes "living within your means" takes some effort to figure out. Many HNWI's income is highly variable and what reasonable spend is through the variance moves around with your circumstances.

[Anonymous]

I laughed when I saw that scene in succession because I have a trust fund with five million, plus about a million in personal assets I saved on my own.

It's sort of true.

I don't have kids (no college expenses) and I have poor genes for cancer risk (I've done the genetic testing and it's bad). I decided to retire at 50 and enjoy life.

[Anonymous]

Anonymous wrote:It all depends. DH and I are dual lifetime gs-15 feds and will retire around 60 with an annual pension of about 150,000 per year plus whatever social Security adds to that. We have a net worth of around 4.5 million now (7 million including equity in two houses) and we will inherit 5 million from one set of parents, putting us pretty squarely in this zone. We aren’t big spenders and my kids all understand that they don’t stand to inherit the way I will, but DH and I feel like we are in pretty good shape. The pension helps because we have no mortgage and our annual expenses outside of kids’ education and enrichment is less than $100,000 a year in primarily travel, entertainment, and home costs. But no, I don’t feel too badly for myself and I certainly wouldn’t want to have less money.

A 150k pension is the equivalent of 3.75m of net worth in income, you have 7m and will inherit 5 m. So you're looking more at how one will feel in the 10-15m range. Big difference.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I have to admit that we are at $5M and related to the dark humor from this scene in Succession.

We know we're in good shape, especially in our 30s, but we don't feel like $5M is enough to retire on and are still ambitious to achieve more in our careers and financially.

Part of this is because we are in a VHCOL where we hope to stay, and our current net worth and salary barely gets us an old condo that needs a lot of updates. We're also in a high achieving peer group from college and work, and we feel just average among (successful!) peers. Rich people problems, I know.

This isn't part of it. It's all of it.

5-10 million is objectively enough tho set yourself up for life, set your kids up, never have to worry about money again. If my DH and I had 5 million, he'd quit his job (which he hates) and get a job working less than full time doing something he enjoys (he knows what it would be, it's a low paying but rewarding career). I would continue in my job, which I like. We'd invest thoughtfully to ensure income. We'd upgrade our home, but not to a mansion -- we'd buy one of the 1-1.2m homes in our desired neighborhood that we cannot quite afford now, or potentially buy something cheaper and renovate. We only have one kid and have no desire for a huge house.

We'd make some small lifestyle upgrades (regular house cleaners, slightly nicer vacations, buy some items we now deem too pricy for us like an electric vehicle) but would not vastly overhaul our lifestyle. We'd still cook at home a lot, because we like to (though it would be thrilling not to worry about budgeting for groceries and to have a nicer kitchen to cook in). We would not change our friends, who now vary from MC to UMC and where incomes probably top out around 500k (and most well below that).

Kid might go to private school -- we could afford it on that income but we are aware it could change our peer set and our kid's peer set, so we'd really think hard about it. I could see us sending her to a private that is more UMC crunchy liberal families than super rich. But I could also see us just staying in public, especially if we could afford to ensure we were in bound for high quality public schools.

If 5-10m is "a nightmare" to you, that's entirely because of your peer group, personal ambition, and values. It's objectively "enough" money for most things that matter to most people. But if you belong to the subset of people for whom "owning a private jet" matters, then I'm not really sure any amount of money will ever make you happy. Good luck.

You can't even afford to do the lifestyle upgrades you want retiring with a net worth of $5M. $50K/per year/per kid for private is 10% of your entire NW. Are you sure you're not confusing NW with HHI?

Ok, I’m starting to see the disconnect here.

If you read PP, they aren’t talking about returning— says they’d keep their job and spouse would downgrade to less demanding career. They’d use the $5m to buy or update a house (1-1.2m, presuming DC area, says they don’t want a big house to maintain).

So they are living in a nice but not expensive-to-maintain house with no mortgage and not some insane property tax bill, and still have an income. Even assuming spouse’s new career is a huge pay cut (say, 200k to 50k), if the PP makes just 100-125k, they could cover most living expenses for a pretty nice life just out of income.

Some of the upgrades they talk about would have to come from the $5m, but even with reasonably conservative investing, they could cover things like some nicer vacations, an EV, and maybe even private for their one kid, at least for high school. Depending on age of kid, could probably pay for undergrad out of investment proceeds as well. They could also make some really smart investments to set their kid up, like buying an investment propert that could later be a home for their kid in grad school or post grad.

Sounds like PP has thought about this.

I think there are people in this thread who think 5-10m is a problem because it would not allow them to instantly retire and then find a very expensive lifestyle for them and their kids. I mean, yeah. But with thoughtful lifestyle choices (not living like a pauper or even a middle class person, but not overbuying on housing or indulging in hyper-consumerism) and even a relatively modest income, 5-10m could absolutely set you and your kids up for life. You won’t live like Elon Musk, but I’ll be honest, I have zero interest in that.

My DH and I often talk about how the lifestyles of many wealthy people are like large, failing businesses. Owning a huge and expensive house that requires multiple full time staff just to function, private jets and the accompanying staff, etc. they are just money pits. If you are a billionaire and make millions while sleeping, I guess it doesn’t matter. But it’s not even appealing to me. It sounds stressful and isolating and nothing like what I dream about as an ideal life for me and my family.

[Anonymous]

Anonymous wrote:No one at $5M-10M stays there. In ten years they will have 2x the amount. It’s plenty to enjoy life, travel first class if you want, eat well, enjoy experiences, etc. $30M just gets the super nice second home and some chartered private jets but it isn’t a remarkable difference in lifestyle, especially if focused on preserving the wealth for future generations as opposed to spending it. You won’t Own a Jet for example…

+1. Once you get to $10 million, the lifestyle doesn’t appreciably change until you get to “own your own jet” rich, which is much higher than $30 million. I mean, at $30 million, you may own the $5 million house in Telluride, but someone with $10 million can rent that house as much as they want.

[Anonymous]

Anything less than 10 is poor

[Anonymous]

We are 50 and at $6.5M including home equity of about $800k on a paid off townhome. One kid with separately funded 529 with enough for 4 years of $80k/year higher education.

Expenses are about $130k/year. HHI $250k. We do not feel rich but have no particular unmet wants and needs.

I am delighted to be where we are.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It is 100x tougher to have been rich and then become poor than to never have been rich at all.

Complete BS.

Yes Complete BS - try being poor for even one day

[Anonymous]

$5 million is plenty for most people. Even the richest people never say they have too much money. There is no end to money.

Millions is not enough if you are using private jets, spending thousands on a dress etc - in the end most people don't need that and most of the expensive clothes and jewelry are never worn - I guess people get a high with the ability to buy it. Having a nice house & car is what people need for a decent life.

Having money is very important to a certain extent like $5 million (nobody wants to be poor). But having good health, good relationships and peace of mind is real wealth!

[Anonymous]

$5M would be enough for us to retire. We are planning for $6-8M but 5 would be enough. We are at $3M right now but only age 40.