$7M vs $10M

[Anonymous]

Anonymous wrote:Is there a significant lifestyle change between having a net worth of say, $7M and $10M? What would you do at $10M nw that you wouldn't with $7M?

yes $3m

[Anonymous]

Anonymous wrote:

Anonymous wrote:Do you all shop at Walmart ?

Dollar tree.

I go to dollar tree, fill up the cart, then empty half of it because I realize I don't need half the crap and I'm content with me, my family, and my millions.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I have NW of $10+m although $3.5m is tied up in 2 houses which have increased substantially in value in recent years. And no plans to sell either of them, so our non house NW is closer to $7m. I expect to get about $1.5m in inheritance at some point, but not relying on that. And we are still saving a lot. The only thing that really changes is that I am more willing to spend current income since I am pretty comfortable with our financial position from a future retirement perspective. So I don't sweat travel expenses or home improvement investments the way I once did.

I am the poster who the other guy hates.

I’d still consider one of those two houses as part of your portfolio even if you never plan on selling, because the fact is that if you had to or wanted to you could. You only need one house to live in, not two.

Obviously, since I stated my NW with the houses. And my kids will inherit the value of the houses. But until I am incapacitated I don't expect to live in one house. I will for sure downsize in DC at some point in the not too distant future but that doesn't make that much difference give the cost of condos. And it isn't practical to live year round in our second home. I will get to $10m in non house assets before I retire so I feel like I will be able to get by without selling a house.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

I retired at 53 with a 4.5 million net worth. Nine years later my net worth is 7.5 million and I’m living large. But hey you all keep telling yourselves that ain’t enough money. It’s cool - you’ll live forever I’m sure. Have fun with all your money sitting around in diapers in your 80s and 90s!

You post this in SO. MANY.THREADS. You sound insufferable, no matter your nw.

You’d only know how often I posted if you were on all of those same threads. So without posters like me, what would you be reading? You should be grateful, not scornful.

DP but there's a difference between reading threads and dominating them. You definitely like to share your testimony but it's not really something for the rest of us to be grateful for to see the same guy make the same point with the same numbers down to the decimal point in every subforum.

And it's a little funny that you've included a dig here about how people are wasting their lives working when they could be smart like you and retire to . . . post 8 hours a day on DCUM. We're here because we're wasting time at work. Why aren't you out traveling or gardening or sailing a boat or something?

For every post like yours I get another thanking me for my perspective.

I can post anywhere and everywhere and as much or as little as I like. You, in turn, are equally free to ignore everything I write.

Bottom line: I don’t have to explain or justify myself to you.

You go back to stealing from your employer now.

NP. I definitely recognize your threads and certainly don't complain about them. I'm not sure, though, if your intent is to encourage others to think retiring with $4.5 M is feasible or to suggest that your own lifestyle is enviable. In particular, you often talk about how your NW has actually increased - and it's unclear whether you're chalking that up to extreme good fortune, routine financial management for a HNW individual, or exceptional financial acumen on your part.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I have NW of $10+m although $3.5m is tied up in 2 houses which have increased substantially in value in recent years. And no plans to sell either of them, so our non house NW is closer to $7m. I expect to get about $1.5m in inheritance at some point, but not relying on that. And we are still saving a lot. The only thing that really changes is that I am more willing to spend current income since I am pretty comfortable with our financial position from a future retirement perspective. So I don't sweat travel expenses or home improvement investments the way I once did.

I am the poster who the other guy hates.

I’d still consider one of those two houses as part of your portfolio even if you never plan on selling, because the fact is that if you had to or wanted to you could. You only need one house to live in, not two.

Obviously, since I stated my NW with the houses. And my kids will inherit the value of the houses. But until I am incapacitated I don't expect to live in one house. I will for sure downsize in DC at some point in the not too distant future but that doesn't make that much difference give the cost of condos. And it isn't practical to live year round in our second home. I will get to $10m in non house assets before I retire so I feel like I will be able to get by without selling a house.

How old are you, how old are your kids, and do you have mortgages on either of the houses?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

I retired at 53 with a 4.5 million net worth. Nine years later my net worth is 7.5 million and I’m living large. But hey you all keep telling yourselves that ain’t enough money. It’s cool - you’ll live forever I’m sure. Have fun with all your money sitting around in diapers in your 80s and 90s!

You post this in SO. MANY.THREADS. You sound insufferable, no matter your nw.

You’d only know how often I posted if you were on all of those same threads. So without posters like me, what would you be reading? You should be grateful, not scornful.

DP but there's a difference between reading threads and dominating them. You definitely like to share your testimony but it's not really something for the rest of us to be grateful for to see the same guy make the same point with the same numbers down to the decimal point in every subforum.

And it's a little funny that you've included a dig here about how people are wasting their lives working when they could be smart like you and retire to . . . post 8 hours a day on DCUM. We're here because we're wasting time at work. Why aren't you out traveling or gardening or sailing a boat or something?

For every post like yours I get another thanking me for my perspective.

I can post anywhere and everywhere and as much or as little as I like. You, in turn, are equally free to ignore everything I write.

Bottom line: I don’t have to explain or justify myself to you.

You go back to stealing from your employer now.

NP. I definitely recognize your threads and certainly don't complain about them. I'm not sure, though, if your intent is to encourage others to think retiring with $4.5 M is feasible or to suggest that your own lifestyle is enviable. In particular, you often talk about how your NW has actually increased - and it's unclear whether you're chalking that up to extreme good fortune, routine financial management for a HNW individual, or exceptional financial acumen on your part.

Thanks for your questions / observations.

I retired close nearly a decade ago with that number. I just calculated that accounting for inflation what I retired on would be 5.8 million today. So, no, I guess I can’t necessarily advocate retiring on 4.5 million today. But I do think it’s probably still doable.

My net worth has increased to what it is now because of three things in the following order: the stock market, the real estate market, and an inheritance on my spouse’s side in the low six figures. I haven’t had any extraordinary luck and certainty don’t have extraordinary financial acumen. Just keep in mind that having $2.5 million invested in the S&P 500 fund starting in 2015, with dividends reinvested, would be worth nearly $6.4 million today. If anything I’m probably behind where I should be.

[Anonymous]

Anonymous wrote:

Anonymous wrote:$10m liquid sound be 350-500k in annual cash flow if invested properly

7M would be 250 -350k

And extra 10k+ a month is a huge lifestyle difference.

It’s the difference of a 2M beach house

It's generally unwise to liquidate your capital. You want to keep it invested for future generations (or a catastrophic life event) and receive the dividends. And 10M does NOT give you anywhere near that much dividends.

+1

[Anonymous]

Anonymous wrote:

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Anonymous wrote:I don't think I'd have any lifestyle change between those two numbers. At $25M I think I'd start incorporating a few stupid-rich things, like chartering planes for travel. But at those numbers I'd be retired, relaxed, and still focusing on preservation.

Really? I'm going to reach that net worth in a few years, the way my portfolio is going, and there's no way I'd charter a plane, unless to get somewhere a commercial route can't go. I just want a normal middle class life, and preserve wealth for my descendants.

If you are close to $25 million, the words normal middle class do not describe you

They do, and this what a lot of people don't understand. I have a middle class income. Income and assets can be VERY different things. I happen to have lucked out in my stock portfolio, but that doesn't make my job high-earning. And since I'm still quite young, there is no way I'm quitting my life to gobble up my capital. I have kids to put through college, parents to look out for and spending on luxury just isn't my thing. Maybe I will re-evaluate when my kids are finished with college. But certainly not now.

I think you some of you, who probably all out-earn me, just don't quite understand what it's like to actually have 10M+ in a stock portfolio in your early 40s. It's not "Woohoo! Free money! Let's spend it". It's "Hmm, OK. My oldest's college is 85K a year. My father has dementia. Let's wait and see."

This, exactly.

+1

$10M in the bank when you are 60 is very different than when you are 40, still have kids at home and college to consider, aging parents who might need assistance, etc. $500K of that could easily go to the kid's college.

MOST people with 10m in their 40s won't have to support their parents and no one is telling you to send you kid to Georgetown. Send them to Maryland if you're worried about college costs.

If you need to drop 500k as a one-off, who cares, that is 5% of your liquid portfolio, which will be a drop in the bucket long term assuming you invest the money.

How the hell do you know that "MOST people with 10m in their 40s wont have to support their parents"? Are you implying that most people only have the $10M from family wealth? If so, you are sorely mistaken. Everyone I know with that much in their 40s is self made, and I know over 10 people like that.

Sure you can send them to state school for $40K per year, but this person would prefer to use their money to send them to whatever school the kids wants to attend and that includes those costing $85K+/year. Obviously he is an excellent money manager, and has managed to save and amass $10M in early 40s, so he knows what he is doing.

Your attitude that dropping 5% of your portfolio (he never said it is liquid---most likely it's not, it's in the market or he wouldn't have it at $10M if it was sitting in a bank earning 1-2% the past decade until interest rates just soared) is exactly why so many don't have money---you would blow thru it without a care.

This family is set for life, but will be even better off if they manage it well and continue working for another decade/until kids are out of college.

Your attitude does explain why so many have so little, the second you would get any money you'd blow thru it, thinking it's just 10% I can spend it.

stocks are liquid... i can have any amount of money in my checking account in 2 business days.

who ever said it was in cash?

I am a professional money manager with a similar net worth in my 40s. and YES, MOST people in their 40s with a 10M net worth had a leg up from mom and dad -- usually through college and grad school paid for. If your parents could afford to pay your way through college, odds are they will be just fine in retirement. Again...most. I see this in practice, you read about this on DCUM.

Taking a measly 5% withdrawal to fund college is not a huge deal with proper planning. Additionally, MOST (if you can grasp that word) with $10M have college costs covered and do NOT include those funds in their net worth or retirement planning.

Some people need Xanax when it comes to money management.

+1. And for the record, the poster that started this chain of discussion claimed to have $25M and one of the responded said that if you have $10M+, it's time to step back and the argument began.

Regardless of the parental situation, $25M is plenty of money to call it quits, especially if one leads a middle class life and has associated expectations, regardless of age.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think I'd have any lifestyle change between those two numbers. At $25M I think I'd start incorporating a few stupid-rich things, like chartering planes for travel. But at those numbers I'd be retired, relaxed, and still focusing on preservation.

Really? I'm going to reach that net worth in a few years, the way my portfolio is going, and there's no way I'd charter a plane, unless to get somewhere a commercial route can't go. I just want a normal middle class life, and preserve wealth for my descendants.

If you are close to $25 million, the words normal middle class do not describe you

They do, and this what a lot of people don't understand. I have a middle class income. Income and assets can be VERY different things. I happen to have lucked out in my stock portfolio, but that doesn't make my job high-earning. And since I'm still quite young, there is no way I'm quitting my life to gobble up my capital. I have kids to put through college, parents to look out for and spending on luxury just isn't my thing. Maybe I will re-evaluate when my kids are finished with college. But certainly not now.

I think you some of you, who probably all out-earn me, just don't quite understand what it's like to actually have 10M+ in a stock portfolio in your early 40s. It's not "Woohoo! Free money! Let's spend it". It's "Hmm, OK. My oldest's college is 85K a year. My father has dementia. Let's wait and see."

This, exactly.

+1

$10M in the bank when you are 60 is very different than when you are 40, still have kids at home and college to consider, aging parents who might need assistance, etc. $500K of that could easily go to the kid's college.

MOST people with 10m in their 40s won't have to support their parents and no one is telling you to send you kid to Georgetown. Send them to Maryland if you're worried about college costs.

If you need to drop 500k as a one-off, who cares, that is 5% of your liquid portfolio, which will be a drop in the bucket long term assuming you invest the money.

How the hell do you know that "MOST people with 10m in their 40s wont have to support their parents"? Are you implying that most people only have the $10M from family wealth? If so, you are sorely mistaken. Everyone I know with that much in their 40s is self made, and I know over 10 people like that.

Sure you can send them to state school for $40K per year, but this person would prefer to use their money to send them to whatever school the kids wants to attend and that includes those costing $85K+/year. Obviously he is an excellent money manager, and has managed to save and amass $10M in early 40s, so he knows what he is doing.

Your attitude that dropping 5% of your portfolio (he never said it is liquid---most likely it's not, it's in the market or he wouldn't have it at $10M if it was sitting in a bank earning 1-2% the past decade until interest rates just soared) is exactly why so many don't have money---you would blow thru it without a care.

This family is set for life, but will be even better off if they manage it well and continue working for another decade/until kids are out of college.

Your attitude does explain why so many have so little, the second you would get any money you'd blow thru it, thinking it's just 10% I can spend it.

stocks are liquid... i can have any amount of money in my checking account in 2 business days.

who ever said it was in cash?

I am a professional money manager with a similar net worth in my 40s. and YES, MOST people in their 40s with a 10M net worth had a leg up from mom and dad -- usually through college and grad school paid for. If your parents could afford to pay your way through college, odds are they will be just fine in retirement. Again...most. I see this in practice, you read about this on DCUM.

Taking a measly 5% withdrawal to fund college is not a huge deal with proper planning. Additionally, MOST (if you can grasp that word) with $10M have college costs covered and do NOT include those funds in their net worth or retirement planning.

Some people need Xanax when it comes to money management.

+1. And for the record, the poster that started this chain of discussion claimed to have $25M and one of the responded said that if you have $10M+, it's time to step back and the argument began.

Regardless of the parental situation, $25M is plenty of money to call it quits, especially if one leads a middle class life and has associated expectations, regardless of age.

Not MC lifestyle, not family money, self made, paid our own way thru college and paid off student loans ourselves
Sure we could call it quits at $25M, but there is the strong potential for a lot more in 3-5 years so that keeps us working. After that we will retire and happily spend our money, while leaving plenty for future generations to be well established. For now, we travel as we much as we can (you can work from nearly anywhere for a few weeks at a time fairly easily) and enjoy life between our 3 homes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think I'd have any lifestyle change between those two numbers. At $25M I think I'd start incorporating a few stupid-rich things, like chartering planes for travel. But at those numbers I'd be retired, relaxed, and still focusing on preservation.

Really? I'm going to reach that net worth in a few years, the way my portfolio is going, and there's no way I'd charter a plane, unless to get somewhere a commercial route can't go. I just want a normal middle class life, and preserve wealth for my descendants.

If you are close to $25 million, the words normal middle class do not describe you

They do, and this what a lot of people don't understand. I have a middle class income. Income and assets can be VERY different things. I happen to have lucked out in my stock portfolio, but that doesn't make my job high-earning. And since I'm still quite young, there is no way I'm quitting my life to gobble up my capital. I have kids to put through college, parents to look out for and spending on luxury just isn't my thing. Maybe I will re-evaluate when my kids are finished with college. But certainly not now.

I think you some of you, who probably all out-earn me, just don't quite understand what it's like to actually have 10M+ in a stock portfolio in your early 40s. It's not "Woohoo! Free money! Let's spend it". It's "Hmm, OK. My oldest's college is 85K a year. My father has dementia. Let's wait and see."

I get what you are saying, but normal middle class can’t fund $85000 a year for their child’s college.

Because normal people in the USA don't really save. He's just told you he got here thru average income and saving and some luck with stocks---so unless he means stock options (a totally different story), then he got here thru savings, living within a budget and more savings and a little luck with picking the right stocks.
There are middle class people who have saved for their kids education and pay for the elite schools. They chose to make college savings a priority.

They didn’t get to $7m at their age on HHI of $250K through saving.

[Anonymous]

Anonymous wrote:For me, 10M and I retire and 7M I keep working for a few more years.

7M invested properly would allow you to live off the dividends very comfortably.

4% return on that yields $280,000 pre-tax income per year.

[Anonymous]

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.

[Anonymous]

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.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't think I'd have any lifestyle change between those two numbers. At $25M I think I'd start incorporating a few stupid-rich things, like chartering planes for travel. But at those numbers I'd be retired, relaxed, and still focusing on preservation.

Really? I'm going to reach that net worth in a few years, the way my portfolio is going, and there's no way I'd charter a plane, unless to get somewhere a commercial route can't go. I just want a normal middle class life, and preserve wealth for my descendants.

If you are close to $25 million, the words normal middle class do not describe you

They do, and this what a lot of people don't understand. I have a middle class income. Income and assets can be VERY different things. I happen to have lucked out in my stock portfolio, but that doesn't make my job high-earning. And since I'm still quite young, there is no way I'm quitting my life to gobble up my capital. I have kids to put through college, parents to look out for and spending on luxury just isn't my thing. Maybe I will re-evaluate when my kids are finished with college. But certainly not now.

I think you some of you, who probably all out-earn me, just don't quite understand what it's like to actually have 10M+ in a stock portfolio in your early 40s. It's not "Woohoo! Free money! Let's spend it". It's "Hmm, OK. My oldest's college is 85K a year. My father has dementia. Let's wait and see."

I get what you are saying, but normal middle class can’t fund $85000 a year for their child’s college.

Because normal people in the USA don't really save. He's just told you he got here thru average income and saving and some luck with stocks---so unless he means stock options (a totally different story), then he got here thru savings, living within a budget and more savings and a little luck with picking the right stocks.
There are middle class people who have saved for their kids education and pay for the elite schools. They chose to make college savings a priority.

They didn’t get to $7m at their age on HHI of $250K through saving.

My parents got to ~$1M through savings. Never made more than $45K per year combined. So savings could get them close to that. The rest was luck with some stock(s) it seems from the posts. And that seems entirely possible.

[Anonymous]

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