Why do people with millions of dollars still work?

[Anonymous]

Anonymous wrote:No one takes the time to study investing, so they have to slave away for decades. Most people don't know there are stocks yielding 10%+ dividends with minimal risk. If you can get a 7% overall withdrawal rate for the rest of your life, which is very doable, you check out at $2M - no one needs more than $140K income in retirement.

But since people are told to buy bonds and other nonsense, they can only safely withdraw 2.5% or 3% of their portfolio and so must slave away until they're 65.

So, how come professional money managers don't know about those high yielding minimal risk stocks either? Because there have been tons of studies - very, very few investors are able to consistently beat the market indices.

[Anonymous]

Anonymous wrote:

Anonymous wrote:No one takes the time to study investing, so they have to slave away for decades. Most people don't know there are stocks yielding 10%+ dividends with minimal risk. If you can get a 7% overall withdrawal rate for the rest of your life, which is very doable, you check out at $2M - no one needs more than $140K income in retirement.

But since people are told to buy bonds and other nonsense, they can only safely withdraw 2.5% or 3% of their portfolio and so must slave away until they're 65.

Can you list a few? I'd be interested in investing in them.

I don’t want to list the particular names of companies since I’m continuing to buy them, but I’ll point you in the general direction. BDCs (business development companies), REITs, closed-end funds, and covered call ETFs all have companies paying 8-11% yields.

And they’re not risky (well, many covered call ETFs are risky and I personally don’t buy them). But for example, BDCs lend money to, and invest in, other companies. To get favorable tax treatment, they have to pay out 90% of their earnings. So you get a high dividend (many times 10%+) because they pay out almost all their earnings. The flipside of this is that the stock price doesn’t go up much because they’re paying out all their earnings.

But the companies themselves are not risky – you can look at their portfolio and see that less than one percent of the loans they make are being defaulted on. (Actually, I just read articles on Seeking Alpha from other people that have done the research.)

Similarly, a closed-end fund focused on utilities can pay you 9%. Utility companies pay out a very large majority of their earnings because they’re not going to have great ways to reinvest profits - they can’t suddenly find a way to make you use five times more electricity. But they’re solid and steady – even in a recession, most people don’t want their lights to be turned off so they continue to pay the bills.

Just two examples there, but it’s a game changer once you realize these types of stocks exist.

[Anonymous]

Anonymous wrote:

Anonymous wrote:No one takes the time to study investing, so they have to slave away for decades. Most people don't know there are stocks yielding 10%+ dividends with minimal risk. If you can get a 7% overall withdrawal rate for the rest of your life, which is very doable, you check out at $2M - no one needs more than $140K income in retirement.

But since people are told to buy bonds and other nonsense, they can only safely withdraw 2.5% or 3% of their portfolio and so must slave away until they're 65.

Except that the stock can stop paying dividends and the companies could go out of business.

That's why you sell that company. If one out of 20 goes out of business, why do you care? Buy a dividend etf and they will do it for you.

[Anonymous]

OP, I'm with you and I don't really work. When I do go in, it's for exercise, for food and drinks. And while at work, I can always give away half the workload.
There is no traffic on my way to work (8 min drive), free parking, I get there by 10 am maybe, I leave when I feel like I've worked enough for the day. I enjoy it while I'm there. It's the getting there that is a bigger issue for me.
If it rains, I stay home and enjoy the rain through the window. If it snows, I snuggle up in a blanket and enjoy the view. I did all that without hitting the million in my early 40s.
There are too many things going right for me that allow me not to work. It's not all money, and there's no inheritance coming.
Few of you would consider not working if the have no retirement (never offered at any jobs) and less than million in net worth. It's not a problem for me at all because of all the back wind, experience, backups, family help.
Family help does not come in form of money.
OP, I'm with you. I'm going to work from my warm bed if I don't have to. I have done it and didn't enjoy it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:No one takes the time to study investing, so they have to slave away for decades. Most people don't know there are stocks yielding 10%+ dividends with minimal risk. If you can get a 7% overall withdrawal rate for the rest of your life, which is very doable, you check out at $2M - no one needs more than $140K income in retirement.

But since people are told to buy bonds and other nonsense, they can only safely withdraw 2.5% or 3% of their portfolio and so must slave away until they're 65.

Can you list a few? I'd be interested in investing in them.

Mo is really close if you get it on down day, and it just raised the dividend. I'm not OP.
I have no patience for dividends when I know there are stocks that move 6% a day and are volatile stocks. But I like OP. I'm just doing something different to make living. I can also not buy and sell and be ok. I just greatly enjoy it.

[Anonymous]

Anonymous wrote:No one takes the time to study investing, so they have to slave away for decades. Most people don't know there are stocks yielding 10%+ dividends with minimal risk. If you can get a 7% overall withdrawal rate for the rest of your life, which is very doable, you check out at $2M - no one needs more than $140K income in retirement.

But since people are told to buy bonds and other nonsense, they can only safely withdraw 2.5% or 3% of their portfolio and so must slave away until they're 65.

BS. Name them.

[Anonymous]

Millions like 1-2 million you can't live off that. It's not enough.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No one takes the time to study investing, so they have to slave away for decades. Most people don't know there are stocks yielding 10%+ dividends with minimal risk. If you can get a 7% overall withdrawal rate for the rest of your life, which is very doable, you check out at $2M - no one needs more than $140K income in retirement.

But since people are told to buy bonds and other nonsense, they can only safely withdraw 2.5% or 3% of their portfolio and so must slave away until they're 65.

Can you list a few? I'd be interested in investing in them.

I don’t want to list the particular names of companies since I’m continuing to buy them, but I’ll point you in the general direction. BDCs (business development companies), REITs, closed-end funds, and covered call ETFs all have companies paying 8-11% yields.

And they’re not risky (well, many covered call ETFs are risky and I personally don’t buy them). But for example, BDCs lend money to, and invest in, other companies. To get favorable tax treatment, they have to pay out 90% of their earnings. So you get a high dividend (many times 10%+) because they pay out almost all their earnings. The flipside of this is that the stock price doesn’t go up much because they’re paying out all their earnings.

But the companies themselves are not risky – you can look at their portfolio and see that less than one percent of the loans they make are being defaulted on. (Actually, I just read articles on Seeking Alpha from other people that have done the research.)

Similarly, a closed-end fund focused on utilities can pay you 9%. Utility companies pay out a very large majority of their earnings because they’re not going to have great ways to reinvest profits - they can’t suddenly find a way to make you use five times more electricity. But they’re solid and steady – even in a recession, most people don’t want their lights to be turned off so they continue to pay the bills.

Just two examples there, but it’s a game changer once you realize these types of stocks exist.

That's not a stock. Your initial claim of low risk multi-digit dividend was a bit misleading.

[Anonymous]

I love Succession but this is the thought that runs through my head when I watch it. Why not just quit and live a life of leisure, live off of investments? I guess I'm just not a killer.

[Anonymous]

Because most people who are rich that work don't do what you do. There's no brutal commute. There's no waking up and dragging out of bed on a cold morning. There is a lazy wake up to get to working whenever they want or managing folks who do all of the hard work. I say this as someone who probably doesn't need to work but puts in a solid 30 hours a week for a very large sum of money, no commute, and not a huge amount of stress.

[Anonymous]

Anonymous wrote:I love Succession but this is the thought that runs through my head when I watch it. Why not just quit and live a life of leisure, live off of investments? I guess I'm just not a killer.

That's kind what the very rich do.. Say you have $50-100 mil. you can buy a nice house, chill, travel and relax or buy multiple houses, some too big for your needs, employ a ton of labor, remodel a lot, etc. because you love all the busyness. You think you can stop anytime (and can) but seldom do. Either way, you are not 'working'. Scenario 2 is what most rich people that own businesses or at the higher echelons of a business do. They don't have to work but do and justify it with a variety of reasons. Everyone with a job are just peons that work to increase the value rich people's equity. Of course, they all ascribe higher meaning to that.

We have about $7m and I was laid off a couple of years ago. Was already losing interest in working anyways. DW still continues to work at an hectic pace. She wants to get to $10m and no amount of explaining will convince her that we'll never get there by her just working (we are mid-50s) for a few more years. But she won't listen. Oh well! Less nagging, I suppose. Her income does help with us not touching retirement principal, so that's a good thing. But even otherwise, I don't want a second home. Don't want to upgrade my primary home. Don't want a new/fancy car (my car is 20 years old). All the clothes I routinely use can be replaced with a Costco trip for about $400. ALL OF THEM. I don't really like fancy food. I'd rather eat a good burger than some french or Italian crap and tip 35%. I don't bore easily. So why the F would I work?!?

[Anonymous]

Anonymous wrote:Millions like 1-2 million you can't live off that. It's not enough.

Agree. Plus if it's $1-2m total for your household, it's not going to yield the lifestyle that most people want, especially if you account for the risk of divorce (50% of $1m or even $2m is not enough to live off). We've decided we need $10m not including college savings to completely retire.

[Anonymous]

We have $3M excluding home equity in our early 40’s but if we had $7M we’d be done. At least anything that’s not a hobby job. But at $3M that’s only $90k at a 3% withdrawal and that’s not enough with the kids still home. We need at least double.

[Anonymous]

I am far from wealthy, but for me it would be

- regular interactions with people I like whose values I share
- purpose driven work (which I do already) and focus outside mYself
- structure to day
- being part of a team

I was a trailing spouse for years and so many women were depressed because they didn't/couldn't work in a new country.

[Anonymous]

Anonymous wrote:I am far from wealthy, but for me it would be

- regular interactions with people I like whose values I share
- purpose driven work (which I do already) and focus outside mYself
- structure to day
- being part of a team

I was a trailing spouse for years and so many women were depressed because they didn't/couldn't work in a new country.

PS= for me the real question is, why do people work for non non-cause oriented jobs when they don't have to (e.g., making more widgits). I get there's a challenge in it and intellectual engagmenet and some of the above, but I can't imagine working to... say, produce something random and make money off it. But I think that about people who chose non cause oriented jobs who culdn't retire, too.