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

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I have to admit that we are at $5M and related to the dark humor from this scene in Succession.

We know we're in good shape, especially in our 30s, but we don't feel like $5M is enough to retire on and are still ambitious to achieve more in our careers and financially.

[b]Part of this is because we are in a VHCOL where we hope to stay, and our current net worth and salary barely gets us an old condo that needs a lot of updates. We're also in a high achieving peer group from college and work, and we feel just average among (successful!) peers.[/b] Rich people problems, I know. [/quote]

This isn't part of it. It's all of it.

5-10 million is objectively enough tho set yourself up for life, set your kids up, never have to worry about money again. If my DH and I had 5 million, he'd quit his job (which he hates) and get a job working less than full time doing something he enjoys (he knows what it would be, it's a low paying but rewarding career). I would continue in my job, which I like. We'd invest thoughtfully to ensure income. We'd upgrade our home, but not to a mansion -- we'd buy one of the 1-1.2m homes in our desired neighborhood that we cannot quite afford now, or potentially buy something cheaper and renovate. We only have one kid and have no desire for a huge house.

We'd make some small lifestyle upgrades (regular house cleaners, slightly nicer vacations, buy some items we now deem too pricy for us like an electric vehicle) but would not vastly overhaul our lifestyle. We'd still cook at home a lot, because we like to (though it would be thrilling not to worry about budgeting for groceries and to have a nicer kitchen to cook in). We would not change our friends, who now vary from MC to UMC and where incomes probably top out around 500k (and most well below that).

Kid might go to private school -- we could afford it on that income but we are aware it could change our peer set and our kid's peer set, so we'd really think hard about it. I could see us sending her to a private that is more UMC crunchy liberal families than super rich. But I could also see us just staying in public, especially if we could afford to ensure we were in bound for high quality public schools.

If 5-10m is "a nightmare" to you, that's entirely because of your peer group, personal ambition, and values. It's objectively "enough" money for most things that matter to most people. But if you belong to the subset of people for whom "owning a private jet" matters, then I'm not really sure any amount of money will ever make you happy. Good luck.[/quote]

You can't even afford to do the lifestyle upgrades you want retiring with a net worth of $5M. $50K/per year/per kid for private is 10% of your entire NW. Are you sure you're not confusing NW with HHI?[/quote]

Ok, I’m starting to see the disconnect here.

If you read PP, they aren’t talking about returning— says they’d keep their job and spouse would downgrade to less demanding career. They’d use the $5m to buy or update a house (1-1.2m, presuming DC area, says they don’t want a big house to maintain).

So they are living in a nice but not expensive-to-maintain house with no mortgage and not some insane property tax bill, and still have an income. Even assuming spouse’s new career is a huge pay  cut (say, 200k to 50k), if the PP makes just 100-125k, they could cover most living expenses for a pretty nice life just out of income.

Some of the upgrades they talk about would have to come from the $5m, but even with reasonably conservative investing, they could cover things like some nicer vacations, an EV, and maybe even private for their one kid, at least for high school. Depending on age of kid, could probably pay for undergrad out of investment proceeds as well. They could also make some really smart investments to set their kid up, like buying an investment propert that could later be a home for their kid in grad school or post grad.

Sounds like PP has thought about this.

I think there are people in this thread who think 5-10m is a problem because it would not allow them to instantly retire and then find a very expensive lifestyle for them and their kids. I mean, yeah. But with thoughtful lifestyle choices (not living like a pauper or even a middle class person, but not overbuying on housing or indulging in hyper-consumerism) and even a relatively modest income, 5-10m could absolutely set you and your kids up for life. You won’t live like Elon Musk, but I’ll be honest, I have zero interest in that.

My DH and I often talk about how the lifestyles of many wealthy people are like large, failing businesses. Owning a huge and expensive house that requires multiple full time staff just to function, private jets and the accompanying staff, etc. they are just money pits. If you are a billionaire and make millions while sleeping, I guess it doesn’t matter. But it’s not even appealing to me. It sounds stressful and isolating and nothing like what I dream about as an ideal life for me and my family.[/quote]

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