Why do people with millions of dollars still work?

[Anonymous]

Because men don’t retire early they are just unemployed in the eye of society.

I was home one year in Covid laid off then consulting then laid off was horrible. I was 58.

Now 61 back with my big office, parking lot, admin, doing board off sites. I feel alive again

[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.

You do realize the commissions on those are 10% + and most of your “dividend” is taxed favorably because it’s a return of capital.

I’m a professional advisor and while I would make way more money slinging these to my clients, I’ve seen thousands of these investments and maybe 5% (at best) are actually better than a boring S&P 500.

You’re getting sold crap. Sorry

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP, do you have kids? I think it's having very young kids that makes me feel it's not enough. I just don't know what life might bring.

This. It's different when you still have kids at home in your 40's or 50's vs. it's just the two of you in your 60's. Kids are very expensive. Plus you don't know what the stock market and economy might do. It's a better bet to work more now then retire permanently than retire early with the idea that you'll magically get a high-paying job at age 58 if the economy tanks and you need more money after leaving the workforce for 10 years.

But I hear you, OP. We couldn't wait to leave DC. DH's job went remote during the pandemic, so we moved to an area we really wanted to move to. We had a little over $3M in real estate assets, plus over $3M in other investments. Not enough for DH to stop working, but enough that we could comfortably survive on a lower salary if he ever loses his job. Kids are thriving in excellent public schools, we've made tons of friends, and the lifestyle is just so much more relaxed and fun.

If anyone is looking to do this, look at an area with a decent overall tax picture for your family, excellent public schools, and good, reasonably priced State universities. These things really impact your savings and lifestyle. After freaking out about saving for out of state/private college for our 3 kids (lived in DC), we realized we pretty much already met the 529 goals for in-state universities in the new location. I can't even begin to explain the relief and joy we felt. DC is really hard for families unless you have a high HHI.

Good luck to everyone and I hope you find the lifestyle that works well for your family, wherever that may be.

Where is this incredible place? I want to move there too.

She has over 6 mil NW, DC is a pretty incredible place with this money too, unless you have HIGH standards PP is a spin off on NYC post of needing a 7mil 4 bedr in Manhattan, only DC style. She probably could find a giant mcMansion for 2 mil there and that's a bargain for her vs. 4-6mil it costs here.

[Anonymous]

Anonymous wrote:You mean ... Bezos and the other idiots? Those people hoard money. It's an illness.

Everyone else that has enough money to retire but they don't can't stand being alone with themselves. They will say they love to work, but they mean they hate being alone with themselves.

they have high standards, which is usually the main reason. Or it's pride and trying to prove something by the time they are too frail. It's not about being stimulated and engaged, there are plenty of hobbies or non profit type of work, volunteering or even starting a business if you want this, you can also scale down if you are in some professions. Many many people toil in high stress jobs with long hours and/or travel to earn as much as they can for as long as they can withstand it because they are accustomed to a certain lifestyle they can't give up. This is also true for people who aren't as high earning. Nobody likes to live scrimping and counting pennies for the rest of their lives, it's a scary idea for people who are used to having disposable income for a long time.

[Anonymous]

Anonymous wrote:

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.

This is half true and half nonsense.

Yes you should have a very equity heavy portfolio your whole life. Yes a safe withdrawal rate above 2.5% can be done.

No there is not minimal risk for any equity investment. Hopefully you build a portfolio that counters this.

In terms of no one needs more than 140k a year. What are you talking about. I spend 25-35 a month. Income is seven figures. I save a lot also. But I want 35k a month in retirement spend. For that you need a lot more than 2 million. Everyone is different.

PP is right that you don't need it, you want it.

It’s just so hard to predict what your costs will be in 40 years. I’m sure my parents didn’t predict that they would have medication that costs 10/day. And most people didn’t anticipate how much the cost of decent assisted living is. I’m just not confident what our country/world will look like in 30-50 years. Things like food might be much more expensive with climate change impacts.

These things are out of your control, in the meanwhile you are risking not enjoying freedom and retirement while your body is still working and you are alive. Do you even compare the risk of cataclysmic events like huge increases in COL and climate change vs. a very real risk we might drop dead before retirement if we wait too long or get an illness vastly reducing our QOL? While you work to prepare for apocalypse you are multiplying the risk of not being able to enjoy your retirement at all. This is an important deciding factor for me. Should I enjoy more modest lifestyle while still reasonably fit and healthy or should I compromise my health by working long hours, not spending quality time with family, and experiencing chronic stress for many years to come in anticipation I will live till 90s (which is never guaranteed). I don't want to start living at 65

[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.

For these people work isn't "working" it's power. It's about power for the mega rich. They don't agonize about being able to afford UMC conveniences or fancier things in retirement and help out their kids. For the worker bees not working means freedom to not have your time owned by someone else, to not have someone else tell you how you should spend your day, expect you to do certain things for them by a certain deadline, etc. It's what OP craves and she is right about that. Your example is completely moot and off key.

[Anonymous]

I am 48 and have 6.5 million. No kids.

I stopped working during COVID - project was at a natural end point - and just….haven’t gone back. I’m not sure it’s a good idea or not. It makes me feel uneasy. But people in my family tend not to age well. They get cancer, they get dementia. They’re not the super healthy types hiking and camping at age seventy five. So part of me feels like I need to enjoy life now.

I do feel limited in where I can live because Obamacare sucks in many places. DC has good Obamacare so I am staying here for now.

If I went back to work it would be for:

-societal respect (stopping during COVID made this easier because I haven’t had to answer the “what do you do” question much)
-fear something’s going to happen to Obamacare
-fear I don’t have enough money (I am frugal - my concern is more about elder care costs)

[Anonymous]

Anonymous wrote:I am 48 and have 6.5 million. No kids.

I stopped working during COVID - project was at a natural end point - and just….haven’t gone back. I’m not sure it’s a good idea or not. It makes me feel uneasy. But people in my family tend not to age well. They get cancer, they get dementia. They’re not the super healthy types hiking and camping at age seventy five. So part of me feels like I need to enjoy life now.

I do feel limited in where I can live because Obamacare sucks in many places. DC has good Obamacare so I am staying here for now.

If I went back to work it would be for:

-societal respect (stopping during COVID made this easier because I haven’t had to answer the “what do you do” question much)
-fear something’s going to happen to Obamacare
-fear I don’t have enough money (I am frugal - my concern is more about elder care costs)

Oh. I also worry that my brain is going to decline faster because im not working

[Anonymous]

I don't have millions, but I don't need to work either to pay my bills.
But I want to work. I love to work. I hate certain aspects of my job (the commute in particular), but I'm so thrilled that I have a job and that I can work.
I'm going to work until I'm in my 90s if my body and brain are still sharp. Sitting around spending my money is not the way I want to live my life.

[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.

Sorry, are you trying to give investment and wealth management advice to those who are wealthier than you? Perhaps the people who are wealthier than you see things you don't see.

If we reversed the direction of the conversation and said "why don't homeless people get jobs" most folks with common decency would be appalled by such a statement.

So perhaps you know jack squat about the psychology, practicality, and planning of managing wealth at higher levels (even if personal consumption is low) Maybe it's just you, friend.

[Anonymous]

In order to save millions, it requires alot of hard work, intention, sacrifice, and some luck over a long period of time for most folks. It takes alot of drive to get to a few million saved up and than you just quit?

Are you saying if you were training to be a professional athlete your whole life, worked with all types of coaches your childhood, than get drafted in the first round of football, that you would quit after your first multi million dollar contract? Money typically isn't the primary driver of highly motivated people, the money is a by product of the blood, sweat, and tears, but rarely are successful people only do things for the money which is why they don't quit prematurely after having a little success.

I personally wouldn't be able to just quit, I could scale back some and enjoy more free time doing something stimulating and productive.

[Anonymous]

Anonymous wrote: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.

What do you do that you make a lot and don't have huge amount of stress? Flexible hours and remote and no unreasonable clients or tight deadlines? I need to switch fields, so I try to get as much info from those who figured things out as I can.

[Anonymous]

Anonymous wrote:In order to save millions, it requires alot of hard work, intention, sacrifice, and some luck over a long period of time for most folks. It takes alot of drive to get to a few million saved up and than you just quit?

Are you saying if you were training to be a professional athlete your whole life, worked with all types of coaches your childhood, than get drafted in the first round of football, that you would quit after your first multi million dollar contract? Money typically isn't the primary driver of highly motivated people, the money is a by product of the blood, sweat, and tears, but rarely are successful people only do things for the money which is why they don't quit prematurely after having a little success.

I personally wouldn't be able to just quit, I could scale back some and enjoy more free time doing something stimulating and productive.

You sound young. The reason why many people who earned millions want to retire is because they are burnt out way before they hit standard retirement age, and don't see themselves doing what they do forever.. I know very successful people who do dream about selling their companies and despite success and having employees do pretty much most of the work if not all, they just dream about hassle free life like everyone else. If you are one of the unicorn workaholics who thrives on being busy and feeling superior to others, that's understandable, this doesn't describe all the people for whom earning their way to financial freedom came with sacrifices.

Athlete comparison is just silly. You know athletic careers aren't long lasting, right? Because it's too intense and taxing on your body, many pro-athletes retire young, you just forget their names as they fade away. How many athletes play in their 40s, 50s? Duh. Those who are still in the spotlight in middle-old age usually capitalize on their fame and don't really play sports full time if at all.

[Anonymous]

We have over 10M and still work because we have one kid left at home. We're tied to the school year. When they go to college, we'll retire and travel.

[Anonymous]

Anonymous wrote:

Anonymous wrote:For me it’s not even my work that I dislike, it’s everything else about it - the waking up early getting out of your warm bed on a cold dark winter morning, crappy long commute, have to answer to other people, being compelled to to go work even when you’re not feeling it that day, 5 days week, not having enough time for hobbies, exercise, home cooking, travel, spending time with your family - at least not without feeling like your life is hectic. WFH was supposed to fix some of this but now it’s going away in most places. Also NEEDING to live in a HCOL area with terrible traffic and everyone around you is an obsessive overachiever sucks too.

I ONLY work for money at this point, as soon as I have a few mil I’m gone. I don’t get people with 7+ million dollars who still choose to grind away their young healthy years in the rat race in, to be honest, a crappy city like DC (or any other HCOL area for that matter).

Once you have 7 million, you would want 14.

This