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

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

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]$5 million is enough to maintain a $250k/year draw, inflation-adjusted, for 40 years, assuming a 7% return, which is the long-term average of a 60/40, stock/bond portfolio. $4 million for $200k. $3 million for $150k. Of course, this doesn’t include pensions or social security, which have COLAs. In short, if you own your house and can’t get by on $5 million, you have a high-cost lifestyle: country clubs, golf multiple times/week, multiple luxury vacation/year, multiple luxury cars on lease, etc. In fact, you can do a lot of that on $250k with no mortgage payment, so you really need to be swinging it to need more. Of course, if your goal is to give lots of money to your kids, grandkids, and charities, you may need more. [/quote]

Even if house is paid off, depending upon where you live, your house could have $20K+ in property taxes per year.  If you are under 65, medical insurance and medical costs could run you $20-30K/year.  The house has to be maintained, so add another $5K-10K/year.  Things add up quickly.  Yes, you could live on $250K/year, that is an obvious yes. But we would have to down grade our lifestyle and we dont' want to do so.

But [b]it's likely many would need to downward adjust their lifestyle to do so.[/b]  We want to travel the world and do things---so yes, golfing might be a part of that.  3-4 2 week luxury vacations are part of our plans.  Hence we continue to work (at jobs we enjoy) to keep building our nest egg.  [/quote]

Wut?  All depends on what you lived on most of your life as you built your wealth. We've lived on between $100 - $150K over the years (approx. we don't budget or track). This is in a great neighborhood, 2 kids, both at $80K college, etc.  A net worth of $5M will actually put out enough money to allow us to *upgrade* our lifestyle.

If you spend $500K/yr, then sure $5M is not enough and retiring at that point would be a downgrade.  But that's not the majority of people.   To me the choice is between everyday being an average vacation vs. working hard most of the year to enjoy a 3-4 luxury vacations.  Most would pick the former, some the latter.[/quote]

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