Reply to $7M vs $10M

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Reply to "$7M vs $10M"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]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.[/quote]

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.

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

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."

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You seem to have gotten lucky in the market, but don’t understand what you have. $10M should generate $500k to $1 million annually in return. Can you not live on that? Sounds like $250k or less would be fine for your lifestyle. Run some numbers bro; you’re overthinking it. [/quote]

Best practice for UHNW individuals is 2-3% annual withdrawal to not touch your principal and to continue allowing your money to grow to account for future inflation and higher spending down the road. Then you have to account dividend taxes and/or capital gains taxes. I agree with PP, when you have this much money and are still young, it's definitely not "free money! let's spend it!" unless you want to end up with nothing. People get into trouble thinking the market is going to return 5-10% every year and relying on that type of withdrawal, not to mention uncertainty with the future tax code. [/quote]

$10M at age 40 when you still have 40-50 years for you and your spouse to live is really not to continue living the lifestyle they want and to provide for family as they desire (ie college, assisted living/nursing care for parents, same care for themselves if needed, etc).  You'd be looking at $30K/year alone just for medical insurance premiums until you hit 65, add in another $5-10K for actual medical expenses per year.  Why do that when he likely has decent medical insurance for much cheaper thru work? Let the $10M grow and live off his salary/spouse's salary at least until the kids are out of college/launched.  If college costs are a part of that $10M, then they will likely need $400-500K minimum for 2 kids.  Sure kids could go to whatever state school gives them the best deal, but he has the money to afford $85K/year if he continues to work, so why wouldn't he want to offer that to his kids?    He wants to help elderly/aging parents and provide them excellent care---he has the money to do that, but it would drain quickly if he is not working.  Seems like a no-brainer to keep working until kids are at least on their own and no longer on your books :-) 
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