Reply to At what net worth are you considered wealthy ?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]People are confusing near-term liquid net worth with net worth. The most common DMV $5M net worth is:

* $2.5M home with $1.5M mortgage ($1M)
* $2M retirement funds
* $500K 529
$ $1.5M brokerage

Only the $1.5M is accessible. Risk-free that throws off $60K per year. The mortgage payment on the above is $110K per year. This means you need an income of $300K to live, minimum. That's not wealthy. At $10M, you're throwing off $260K / year. Now you're wealthy.[/quote]

I’m single and have nowhere near the net worths listed in this thread.  But I have always agreed with the point made in the above post, that the following two things make one feel poor, regardless of one’s net worth: having a big mortgage and having a lot of your money tied up in retirement accounts.

For these reasons, I’ve gone in the opposite direction: I paid off my mortgage and I don’t contribute to retirement accounts at all. My net worth is $1.2 million—a paid-off $550,000 condo and $650,000 in my brokerage account.

The $650,000 in brokerage can spin off $26,000 in income. And with no mortgage, I wouldn’t need to spend more than $50-$60,000 to have a great quality of life. That means I only need to plug a gap of $2-$3,000 per month, which is easy to do with any type of job.

Because of this, I don’t really fear job losses and such. I know people rave about the tax benefits of retirement accounts and the advantages of not paying off a mortgage, but I don’t know if they fully appreciate the quality-of-life advantages that come from my approach.[/quote]
You missed out on the tax breaks by  not contributing to your retirement account.  Most people don't need to tap into those accounts until they retire, which for the most part, is after 59.[/quote]

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