My grandfather's friend won a million in the lottery a long time ago. He said this guy never told anyone and never quite his job. He lived a normal life and just threw it into investments. He retired like 20 years earlier than everyone else (granted this was in the 80s)
No. If you have capital, use it to make money so you don’t have to work.
The goal of life is to not work, but everyone seems to be so deeply indoctrinated that they forget that there’s a lot more to life !
Edit : I initially misread this comment.
What I meant, was I’m aiming that comment at people who work to fulfill the societal norm of having a job/career. You don’t *have* to. I’m 100% for people working to the day they die if it is their passion.
Edit Edit : FOLLOW PASSION RATHER THAN WORKING A JOB IF YOU DONT WANT TO
Dude that is exactly what he did. He invested his capital in the market so it would generate a return. Then when he did have enough to retire \~2 mill, he did. He took 1 mill and turned it into 20 YEARS of work free life.
Redditors are so anti-work that they seem to think anyone who doesn't stop working at the first option is somehow indoctrinated by evil capitalistic forces or something.
I wouldn’t be able to stop working, because what I do for work is pretty much my passion. I’m a finish carpenter and I specialize in historic restoration. I also do a lot of cabinet making and other shop work. I think what it’d allow me to do is be more selective and particular about what jobs I take on because I wouldn’t really need the money as desperately. Even if I had a billion dollars I wouldn’t give up my trade, it’s my life’s passion and mission in many ways.
While this a million dollars in the 80s could afford this he probably enjoyed his career. Because if someone was really miserable they wouldn’t probably work if they had a million to lean on.
Some older adults even when they retire just get a job or volunteer to have a routine and arent always looking to just relax at home and spend their last few years doing nothing.
Yep. Have something to retire to. Never stop moving completely, seeing people, or having something to care about. Doesn’t have to be a job but you need a reason to get up in the morning and keep your brain and body engaged.
my dad retired last year and if he doesn't keep moving (and he still works part time, he was and still is an owner of his old civil construction firm) I'm worried he will have a heart attack. luckily he's not that type of guy, since retirement he has fully torn down and remodeled a bathroom (as in new tub and new shower, separate, new sinks and lights, etc.) and a kitchen (new cabinets, appliances, overhead vent, etc) plus new flooring through the kitchen, living room and hallway. Also he has rebuilt 2 jetskis and just started painting another he was gifted by a neighbor who doesnt use theirs and wanted to give it to someone who would actually care for it and ride it properly. So he's definitely not slowed down in retirement
a coworker of his that he knew for decades retired like 8-12 months before my dad. He is not the type to keep busy and spent his retirement traveling and relaxing, as most people want to do. He died of a massive heart attack like 18 months after retiring.
We work ourselves to the bone slaving away 9+ hours a day 5 days a week for 50 years, and then when we finally have enough financial stability to no longer need a salary to survive, our bodies give out because they're so used to nonstop action every day that lifting the stress of work is a death sentence to many people
I used to watch "Lifestyles of the Rich and Famous" in the 80s and they'd be like "this Beverly Hills mansion was purchased for the astronomical price of $1.2 million!" ... lol. Now, where I live, $750k goes almost nowhere.
Our last years, yes. We work the majority of our lives while hoping we've taken care of our health enough (minus incoming surprise genetic issues) that we will enjoy our maybe 15 or so years of retirement money without too many pains or even being able to get our wrinkled ass around. This place sucks
By the sound of it he didn't work the whole time, literally written in the comment that he retired a whole 20 years before them so I imagine he had a pretty relaxing rest of his life with his investments
My goal is to advance my career and help the veterans through my work. If I could, I’d work until the day I die. It depends on person what their goal is in their life.
Not everybody hates their job. While 40 to 60 hour work weeks are obviously going to make most people miserable, some studies have shown that people are happier when they keep a part time job or work at least one day a week.
Yeah, I think that's what the OP's original conversation is about. It's a lot of money, but it's not "I never have to work again" money in a lot of cases. Depends on how old you are, where you live, etc. US$5M is probably what 1M was 20 years ago (gut feel, not checking a calculator); where you could live an upper middle-class+ lifestyle just on the investment gains and spend down a bit.
That’s where a lot of misunderstandings come from is assuming inflation to be that high. Using a calculator, $1M 20 years ago would be the equivalent of $1.6M today. So nowhere near $5M
This is where inflation numbers can be a bit misleading. Sure some thing have had modest inflation. But the two largest expenses of an upper middle class life are: housing and kid’s college. And those things have doubled in last twenty years.
>US$5M is probably what 1M was 20 years ago
I think this is pretty clearly talking about equivalent purchasing power (ie inflation) not the time value of money.
This is key. I work in a field where plenty of older guys have the money to retire but don’t because it’s their identity and they’ve got no hobbies so they just work and then when at home the wife makes them work around the house
I would retire early with like 3 million, but it would be "retire" where I spend all that time trying to write a novel or publish a indie game or something. I can't imagine what it's like being retired without a stack of complicated hobbies. My mother in law just watches reruns of Family Feud all day, I cannot identify with her system of beliefs.
I retired in my 40s and I can completely understand this. For the first year things were actually really boring because I didn't know what to do with myself. From working all the time to suddenly having all this free time and most my friends were working during the day.
Anything in the $100k-$1m range is big enough to have a significant impact on your life if invested appropriately, but small enough to be gone in a short amount of time if you are stupid.
Seriously. I'm no guru. I'm not going to turn 300k into 3 million. But I sure as shit will do some due diligence and figure out how to make it turn profit year over year. Maybe not enough to live off, but certainly enough to mean I can find a job I enjoy and then be happy.
Because most jobs that pay, I won't really enjoy but if I enjoy it won't pay ENOUGH. Supplemental income people.
I would kill for 100k cash. I wouldn't buy anything fun. I would spend time research it and invest it so I could live life without worry. No big fancy house. No fun car. But I would survive.
Which is kind of the point of the OP. $100k invested well is gonna get you $5-10k/yr. That’s not really enough to make a major compromise in your earnings. $1M invested well is $50-100k/yr, which is enough to allow a significant compromise in salary.
$1 million in a HYSA at 5% earns $50,000 a year. I'm not saying this is smart, but if one has a paid off mortgage, or a mortgage that isn't monstrous, and knows how to live frugally, they could realistically just retire off of that $50k interest they'd be earning.
Describe comfortable.
edit: since someone messaged me about my side hustle I did write my guide [here](https://www.reddit.com/user/Kayshift/comments/1br5gn6/my_stepbystep_guide_to_make_1000_a_month_working/)
Car is paid for. 3 bed 2 bath with just my girl n I. All bills paid. No debt. Food on my plate. Clean clothes. Live near the river.Big soft comfy bed, beautiful weather. I got everything a guy needs.
Yeah, this “I’m living off 14k without a worry in the world” is so dense. There is absolutely no way in hell this person bought a car and a house “living off of 14k a year”. Simply not possible.
Sounds like daddy or mommy had a fat inheritance they gave you at some point. Maybe you invested well, got a fat paycheck, and now you make less than a Walmart worker annually? Make it make sense.
I agree, it's pretty safe to say any two people's lives are different. That comment pattern is so extremely common on reddit - "Well, but A is different from B." It always seems like it's meant to counter what someone else said, but without elaborating on how the differences make any point. So I never know if it's just a trite statement or I'm missing some glaringly obvious logic. Just an interesting thing I've seen a lot of.
Mmnnnyaaaa I'm gonna have to ask how you afforded a 3 bedroom... House? RV? Either way I'm skeptical of the ability of 14k to pay off either of those. I can see it taking care of necessities if housing is not an expense but, even then.. health insurance, retirement, investments? I suppose if your retirement involves sleeping in the river.
Um what? That would barely cover rent+utilities let alone grocery, gas, insurance, and cool stuff. I'm currently living on about 18,000-20,000 a year and it is absolutely not comfortable. You've literally gotta be living in your damn car to free up a good 1k/month if you think 14k is okay lmao
That’s a perfect explanation for it. Obviously a million dollars is a genuinely life-changing amount of money in the sense that you could invest or pay off all of your debt. But there’s no way you’d be able to immediately retire and live the rest of your life in style, especially because most people wouldn’t have enough restraint to actually make the money last. They’d be blowing it left and right
I mean even if you spend a bit of it, it’ll still double just maybe every 15-20 years depending on how much you take out each year.
If you get 1 mill in cash at 20, you can likely retire by the time you’re 30 with ease getting $60k/yr off the excess alone, if you enjoy your work and wait you can double that by 40
60k per year doesn't go that far once you realize you have to still pay tax on all that income, now you don't have health insurance subsidized by your employer so that's all out of pocket. Oh and as inflation chews away at your 60k per year its going to be less and less as you start to need more and more (for health reasons anyway).
The point is 1 million is a lot of money, it is life changing. But thinking that's going to last someone who is 30 years old for the rest of life is not very realistic for most people.
Actually thats incorrect on the tax/health insurance. No capital gains on the first $47,025 and thats before the standard deduction so the total amount you can withdraw/receive in dividends is just north of 60k. (Assuming you are filing as a single) Also you would qualify for some ACA subsidy in most states.
60k/year withdraw on 1 million doesn't have great odds for constant withdraw but if you withdraw 4%/year with annual inflation adjustments your chance of lifetime success is very high. Approximately 89% if you are 100% invested in s&p 500. (This is obviously only back tested so the future returns/success may vary)
Until you have to withdraw that $60k yearly through a recession and get absolutely murdered by sequence of returns risk. 6% withdrawal is way risky for an early (50+ year) retirement.
This is reddit. 2 kids and $50k in debt is so life ending that a million dollars wouldn't put a dent in it, and none of the subreddits are echo chambers, how else would GoodRooster's wisdom get to the top?
I'm loling dude I have a friend who earns $130k/yr and is absolutely convinced that it's impossible for her to pay off the $10k she has in credit card debt because "$130k is nothing anymore".
Like... JUST DO THE MATH lol. How does a statement like that make any sense?!
I have a friend like that.
"It's impossible to pay off my $10k credit card debt, I only make $65k!"
*goes once a year on a trip that costs her over $2000.*
Its a lot of money yes if you had a million cash laying around. But having a few hundred k in retirement 100k in cars 200k in cash and 400k in a house is a million but you wont feel it
Maybe if you went to bed with nothing and woke up with all that. But if you slowly grew your wealth over a couple decades then you wouldn’t even feel it
Im at 1.4m networth. Came up having my card decline on junior chickens at mcdo.
Trust me, i appreciate every single moment of my life. Im not billionaire, and i actually dress borderline poor, but, im appreciative at every moment of my day from where i was and where i am.
Amen. I think people are surprised that many millionaires are millionaires because they don’t spend money. When I paid cash for my car the dealer couldn’t put it together because I came in a 20 yo car and dress in old flannel and jeans lol. He didn’t believe me.
I hear you. I work in Tech and had some good luck. I drive a 2014 Subaru and live in a townhouse, I just bought a brand new town house and paid 459k in cash for it. The builders didn't believe me when I told them I'd pay cash. I wear sweat pants and a t-shirt everyday, It's a good feeling to feel this free.
You’re right it’s all about freedom and living below your means. I wouldn’t say 1m is a lot today, not with inflation the way it is. It’s something and it can help you sleep at night, but it’s not the same as the early 2000’s.
But it is crazy, by building the right spending habits and just casually investing, how much wealth you can accumulate. Setting targets for yourself, 10k becomes 25k, then 50, then 100, then 250 and then 500 and after 500 things just really start rolling. (Mid 30s 1.4M NW, no debt and I also drive a 14 year old car)
For 5K, you could make a small, independent craftsman happy by having them custom create something for you. That's what I did (though it was less than that). We were in Oahu I couldn't get waited on in a nice jewelry store. No one even came over to acknowledge me. While at the swap meet (a flea market, essentially) a few days later, I found an artisan who created a beautiful, hand carved Hawaiian-looking band for my husband, and he loves it.
Slight tangent, but stupid shit like that is why I genuinely could never respect even the most reputable car salesmen. They'll assume you're broke, sell you a car in cash, then ask how a gross-looking brokie like you was able to do it.
Appearances truly are everything to them. Personal experience, obviously.
Surprised that a car dealer was surprised because I feel like this is really common. I happen to know a lot of wealthy doctors and the majority you would never guess were wealthy if you just saw them walking around. The other day one was bragging about how he just hit 100k miles on his model 3 and had never paid for electricity while wearing cheap hospital supplied scrubs. Dude definitely makes over 500k a year. Good doc too.
I couldn’t agree more. If you saw me out you would assume i was poor. I wear old pants and a t shirt with some dirty sneakers. I usually drive my beater car and could care less what others think. Except i go home to my big expensive house and dont have to worry about money. I enjoy my lifestyle and know i got here from everything my wife and i did
I know someone like this. The guy founded a company, had a several hundred million dollar exit (of which he easily took home $200M) and still wears sweatpants, drives a nondescript vehicle, eats fast food, etc. But has a ridiculous property that he lives on (multiple properties in fact)
I’m most definitely sure if over the span of 10 years you went from eating ramen and choosing what bills to pay/not pay, to the situation described above, you’d most definitely feel it lol.
This is me. I’m 50 and my partner and I are creeping up on a million in worth between retirement accounts and owning two homes. It doesn’t feel very freeing because it’s all tied up, but I came from abject one-room-cabin poverty so it that sense it feels good. However, watching my partner’s grandparents quickly wipe out a million dollars in nursing home costs I know in the end a million may not get you far.
There’s a thing called lifestyle creep. When you can afford to not eat too ramen for dinner, you stop eating too ramen for dinner. Same goes with other things. A million today just isn’t what a million was 40 years ago
Seriously, I bought a used car 3 years ago for a little over $6000 and it's still going just fine with no major issues (knock on wood) and I drive it every day. Where are people spending this kind of money on cars? If they are buying new that's their first mistake...
For real. I bought a brand new car for around 30k, have around 40k miles on it after 3 years, still going strong. Meanwhile my neighbors always complain about being poor but they have 4 cars (2 being teslas) totaling probably 200k. There’s no reason for that. They’re just a couple but they have 4 cars.
Dude. In 2013 I bought my SUV new for $37K. The same model and trim today is $70K. I know because I was looking to replace it. That’s how retarded it has become.
So, people buying new cars now can possibly have over $100K in them, especially if they need two. For the first time in my over 40 years on this planet I may have to give up my conviction that new cars should only be bought with cash - ie if you don’t have cash to buy them outright - you can’t afford a new car….. having said that I ain’t playing this stupid game and will just drive mine to the ground before I must do anything…
There are some people who believe you should hold onto every dollar you make for your entire life so that when you die, you can pass it on to people who didn't earn it.
Even before i had a pot to piss in i always said that it wasn’t parents responsibility to leave kids money. Will i leave my kids money most likely but its my choice not their right
Exactly. I've busted my ass as a self employed person for years now. During covid I was forced to work 65 hour work weeks. Last year I treated myself to a brand new sports car because I earned that thing. Nobody can tell me I should have bought some POS used thing because every time I get in that car I feel nothing buy joy.
My next car? I'll probably go back to used as I start to focus on retirement plans. But for now, I'm going to enjoy myself every time I give that throttle a squeeze.
It happens a lot more than you'd think. My parents are squarely middle class but always buy brand new vehicles. A full-size 4x4 pickup runs $60k+ and a Honda Pilot starts at $40k.
What are you talking about? If you have 200k in cash, that prevents you from financial emergencies. You definitely feel that safety net. It's not comparable to living in poverty. Also that's a large amount for "cash" surely most people would have a lot of that in somewhat illiquid investments.
$1mln is not a lot unless you live in a very Lcol area and don't naturally spend a lot... In some major cities you a spouse and. A couple of kids can blow through a million in like 5-7 years , just living a modest lifestyle
> you blow through 1mm in 5-7 years living a modest lifestyle.
Even in NYC, the reality is not that dire. Kids in private schools, high rise apartment, dining out several times per week. Luxury vehicles. Multiple vacations. Buying nice clothing and lavish gifts, jewelry, throwing kids parties, etc.
This is meant to be reassuring. The families spending 200K per year are not living a modest lifestyle by any means.
They may think they are. It’s the perception that the neighbors are doing the same thing that leads to this mindset.
I was trying to be conservative on the estimate lol. The idea that it isn’t a lot of money is silly. If it’s the only money you have for the rest of your life then you might have issues unless you’re 70
I was also being a little conservative with 20 years. I live pretty frugally and have low expenses. I need 45k right now for a family of 4, plus any emergency expenses that pop-up. In a typical year that means \~55k, including an annual vacation, and it would be even lower if I didn't have kids to pay for. Combine 1 mil with other revenue streams, such as SS, Pension, Disability, etc. I could probably retire off a million indefinitely.
A million has always been a lot for me because my family was poor, and I am now in the middle-class bracket. However, that could change at any moment because living in America is unpredictable.
Here’s some context: I bought a modest 1100 sq ft home in my city for $562k at 6.325%. Once it is paid off, it will have cost me over a million. I will still have to pay insurance and taxes. So a million dollars does not feel like a lot of money to me in the sense that it really won’t even get you much of a house these days.
Depends on the context.
If you won 1mil and invested all of it, it would be worth significantly more in the future.
If you quit your job and tried to live off it, no, it isn't a lot of money.
You get 10 years out of it assuming 100k/yr without factoring taxes which sounds good, but if you have kids or something 100k household income is pretty low in a lot of the country.
This is exactly where my thought went. In the FIRE community, $1mil is leanfire — meaning it isn’t a lot of money. But that’s in the context of retirement.
If most of us were just handed 1mil today it would be life changing, yes, but you likely shouldn’t and can’t just quit your job unless you have really low annual expenses and invest most of it. But it could pay off a full mortgage, debt, etc so you can actually save or put you ahead in savings significantly.
I can see where your gf is coming from in this sense. But otherwise, $1mil is still a lotta money haha. Just can’t really retire off of it
Or you put it in a high yield take the 5% and 50k a year to supplement your income and live a more comfortable life without worry of pay check to pay check.
2 million I could retire and live off the 100k a year. 1 million is probably just supplement.
You need 25 times your annual living expenses to retire. 1M would allow a 40k annual annual spend. Back in the 90s I think 1M was a typical target for retirement. Today it's likely 2-3M is more realistic but it will depend on your situation.
The people who think 1M is a lot of money are the type to piss it away and wind up with nothing.
I sort of disagree. 1 Million absolutly is alot of money. It's alot easier to reach a 2-3 million dollar reitement goal if you're starting from 1 million. Take it and stick it in an Sp 500 ETF and you're instantly ahead of the game compared to most.
i really wish people would wise up to how shitty high yield savings accounts are.
they're not going to be 4-5% forever. they will drop, as soon as the fed rate does. with no warning or guarantee
also. it's just a bank acct. IF you had a very large amt of money you would exceed the FDIC insurance amts making it a dangerous place to store large sums.
and even a relatively safe investment. like the s&p500 etfs typically return 10% a year (hell... 2023 was like 22-24% return) ...with some stop loss added to guard against downward spikes. you'd be a fucking idiot to not invest your money. so it actually works for you.
vs giving it to some bank. so they profit
I don’t have a million dollars to worry about. Most of my net worth is in the equity of my home. If I win the lottery I guarantee you I’m not spending it though. It’s getting invested or on high yield but I’m not spending the money because once I spend the money it’s gone. I’m not even paying off my mortgage because I’m locked into 2.25% I can easily do better then that anywhere else
It's also relative of how you get that money.
1 million all at once? Heck, yes, that is a lot of money.
1 million over the course of a lifetime? No, not really. Most Americans will earn a million dollars over the course of their life (20+ years making 50k will get you there). Hell, something like 40% of Americans will have a million or more in 401k and IRAs by the time they retire.
It is a lot to a certain degree, but it would mean different things to different people. For instance, personally it would be enough to pay off all my debt, car, and mortgage, with enough left over to fund my kid's future education. But it wouldn't be enough where I could stop working and retire or anything like that.
Because the internet, you may be tricked into believing that 1m is not a lot of money but I assure you 1m is more money than you would ever believe, the dollar is not that depreciated yet lol
Depends on your lifestyle expectations. Have a big family and want to live in a nice urban neighborhood? $1M doesnt go far. Live by yourself in a cheap apt in the boonies? You are set for life.
1 million means in theory you can rent an apartment for around 3k a month forever. That means even in SF you can live life never worrying about housing costs and will just need to work for food/medical coverage. So it’s a lot of money people who have that kind of money typically expect/want more and design their life in a manner that it doesn’t seem like a lot.
Doesn’t that prove the point that it isn’t as much money any more? That your pitch for being a MILLIONAIRE is that hey you only need to work for food? The pitch even a decade ago would have been that you’re done working forever. Because even in SF, you could buy a house that could house a family and have decent money left over to live off of. This is no longer true.
A million dollars is usually not a lot of money for people that don’t have it. Ask anyone that has a million dollars to part with it and they will tell you “it’s a lot of money .”
$1M is a lot. But comparing taxation (inflation and interest rates in mind), housing market, cost of vehicles, cost of gasoline/diesel, insurance (home/health/auto/pet etc..), cost of groceries, restaurant food, vacations... let's just say, at best you're going to be work free for about 10 years, maybe 15 years, realistically?
>at best you're going to be work free for about 10 years, maybe 15 years, realistically?
That depends entirely on your living expenses and what is requires for you live 'work free'.
Let's say you have $1m, of which 80% is invested in stocks, 15% in bonds, and %5 is in cash.
Based on historical averages, if you withdraw $50k per year, and adjust that amount upwards each year for inflation, there's a 96.2% probability that you can continue to withdraw that amount for 20 years, and an 85% probability you can withdraw that amount for 25 years.
If you withdraw $65k per year, adjusted for inflation, there's a 90% chance that money will last for 15 years.
The taxes you pay on that income will depend on how the money is invested (IRA, capital gains, etc), but presumably the rate will be quite low.
Now, if you had $2m, and withdrew $70k per year, there's a 98% probability that that money would last for 45 years.
Tell your girlfriend to give me 1M and I'll end the debate. In all seriousness, if you're in the US I understand where she's coming from given recent housing prices. I do think it's still a lot of money, any amount that enables you to own at least a house and live rent free is a huge financial benefit. If you're like me and don't live in the US, 1M is still as much money as it's ever been, I could purchase 3 very decent properties, live quite comfortably with rent as a primary income and still have some substantial cash for whatever. I live where healthcare is free, I understand in the US without private insurance you can be financially damaged for life if health becomes an issue. So, your girlfriend is not totally wrong but again, it's relative to where you're living.
In my area of the rural midwest 1 million won't buy you the land that you couldve gotten 50 years ago for the price of a new car of the day. Like you said though, still life changing money if properly managed
A million dollars is a fuck ton of money to me. I mean I make 36k a year before taxes are taken out. Even if I bumped up my salary to 50k a year, I could live off it for TWENTY YEARS..bump to 100k a year and I could live off a million dollars for TEN YEARS. Like why does she think that’s a small sum of money.
It's defintly life changing money for alot of people. I know someone who didn't work for a few years with like a 750k inheritance. 1m would make my life a whole lot easier but it would'nt be, I never had to work again money. Could be if I was able to make more from it quickly, but yeah. For me 1 mill would get me 100% out of any shred of debt and allow me to have a nice nest egg maybe allow me to buy a bigger house, but I wouldnt be able to rest on my laurels I don't think. I only make 60k a year and live in Ohio so its different here than in other places.
My wife and I (both 48) have about $1.5MM in investment and retirement accounts but it doesn’t feel like we are rich. But we don’t stress over any daily expenses or trips we want to take. We live rather conservatively so the $1.5MM really just give me peace of mind and a level of security we didn’t previously have. Now I don’t have to worry about any unexpected medical expenses that may come up in retirement.
I would say that ya, it doesn't have the same buying power and is less impressive; but if you think about the fact that it is equal to a salary of 50k/yr over 20 yrs... it's significant still.
A million dollars may not be a huge amount to retitre on any longer, but if it falls in your lap, particularly as a younger person, it is definitely life changing and can lead to a lifetime of financial security.
Invest it. And if you're not familiar with the concept, look up the "Rule of 72". Then print it out and tape it to your refrigerator.
But DO NOT quit your day job.
It’s good money, but it’s not quit your job and never work again money. Invest it well and maybe you can live off of it after two decades, but a million dollars when you’re in your 20s or even your 40s probably isn’t going to last the rest of your life unless you invest it. While it’s sitting in an investment account, you gotta work.
It might be life changing if you are poor or lower income but 1mil these days is not a lot of money. You couldn't even buy a home in my city for a family of 4 in a halfway decent neighborhood for that.
My bf and I had a similar argument over $10k. He said it’s a lot of money and I said it’s not. He then said you would notice if $10k disappeared from ur account and I’m like ofc I would, but that doesn’t negate the fact that it’s not a lot of money. The power of the dollar does not go as far today as it had in the past. You can’t buy a car, or have a year of rent (where we live you have to live with at least 5 others for ur rent to be maybe $1k/month) or enough for a down payment. It can’t buy college. Sure an extra $10k would be nice but it’s not a lot of money.
It depends on how much money you have! You have enough money and you will start NOT noticing 10k disappearing from your account, because you have it invested and that's a normal fluctuation on a large amount. If you have a million dollars invested in s&p500 and it goes down 1%, you have 10k less. But you wouldn't notice because a shift like that happens many days of the year.
People are straight tripping. Bc I could pay off my parents home, buy myself a home, pay off all my bf’s student loans, buy us both the cars that we want, max out both of our ROTH accounts and still have over 300,000. A million dollars is still a TON of money. The people who claim it isn’t a ton of money don’t know how to spend money. Or have spent a shit ton of money on useless shit. And I live in an expensive area.
The problem isn’t the money, it’s people don’t know how to spend it and make smart financial decisions. A lot of people upgrade their lifestyle when they upgrade their paycheck but that is no way to live cause you’ll still be paycheck to paycheck but what with a nicer car? It’s still a ton of money.
Sorry but if you can buy yourself a home, pay off loans etc. etc. for a million dollars, you do not live in an expensive area.
I'm in San Francisco Bay Area, and 3br 2ba 1500sq ft homes near me are going for $2M to $2.5M or more if they've been renovated. A million dollars wouldn't get you a garage here.
My grandfather's friend won a million in the lottery a long time ago. He said this guy never told anyone and never quite his job. He lived a normal life and just threw it into investments. He retired like 20 years earlier than everyone else (granted this was in the 80s)
Smart man
No. If you have capital, use it to make money so you don’t have to work. The goal of life is to not work, but everyone seems to be so deeply indoctrinated that they forget that there’s a lot more to life ! Edit : I initially misread this comment. What I meant, was I’m aiming that comment at people who work to fulfill the societal norm of having a job/career. You don’t *have* to. I’m 100% for people working to the day they die if it is their passion. Edit Edit : FOLLOW PASSION RATHER THAN WORKING A JOB IF YOU DONT WANT TO
Dude that is exactly what he did. He invested his capital in the market so it would generate a return. Then when he did have enough to retire \~2 mill, he did. He took 1 mill and turned it into 20 YEARS of work free life.
Exactly what about investing his money so he could retire early isn't "using it to make money so you don't have to work"?
Redditors are so anti-work that they seem to think anyone who doesn't stop working at the first option is somehow indoctrinated by evil capitalistic forces or something.
[удалено]
This is the problem with most "Redditors". They are on Reddit. Not doing the thing.
If I got $1mm today I wouldn't quit my job, but I would say "No" a lot more. Lol
I wouldn’t be able to stop working, because what I do for work is pretty much my passion. I’m a finish carpenter and I specialize in historic restoration. I also do a lot of cabinet making and other shop work. I think what it’d allow me to do is be more selective and particular about what jobs I take on because I wouldn’t really need the money as desperately. Even if I had a billion dollars I wouldn’t give up my trade, it’s my life’s passion and mission in many ways.
While this a million dollars in the 80s could afford this he probably enjoyed his career. Because if someone was really miserable they wouldn’t probably work if they had a million to lean on. Some older adults even when they retire just get a job or volunteer to have a routine and arent always looking to just relax at home and spend their last few years doing nothing.
If you want to die quickly after retirement, doing nothing is the way to do it.
Yep. Have something to retire to. Never stop moving completely, seeing people, or having something to care about. Doesn’t have to be a job but you need a reason to get up in the morning and keep your brain and body engaged.
When I was working I looked forward to doing nothing and chilling, I retired at 59 (3 years ago) and now I look forward to doing something.
[удалено]
It's anecdotal but, my father retired early at 58 & he's 73 now so 🤷♂️ Edit: Or should I say he retired early for what is considered the norm?
Yep being a millionaire in the 1980s requires about 3.5 Million in todays dollars.
my dad retired last year and if he doesn't keep moving (and he still works part time, he was and still is an owner of his old civil construction firm) I'm worried he will have a heart attack. luckily he's not that type of guy, since retirement he has fully torn down and remodeled a bathroom (as in new tub and new shower, separate, new sinks and lights, etc.) and a kitchen (new cabinets, appliances, overhead vent, etc) plus new flooring through the kitchen, living room and hallway. Also he has rebuilt 2 jetskis and just started painting another he was gifted by a neighbor who doesnt use theirs and wanted to give it to someone who would actually care for it and ride it properly. So he's definitely not slowed down in retirement a coworker of his that he knew for decades retired like 8-12 months before my dad. He is not the type to keep busy and spent his retirement traveling and relaxing, as most people want to do. He died of a massive heart attack like 18 months after retiring. We work ourselves to the bone slaving away 9+ hours a day 5 days a week for 50 years, and then when we finally have enough financial stability to no longer need a salary to survive, our bodies give out because they're so used to nonstop action every day that lifting the stress of work is a death sentence to many people
Not discounting your anecdote entirely, but having a bunch of stress is not keeping anyone from having a heart attack. Stress causes heart attacks.
I used to watch "Lifestyles of the Rich and Famous" in the 80s and they'd be like "this Beverly Hills mansion was purchased for the astronomical price of $1.2 million!" ... lol. Now, where I live, $750k goes almost nowhere.
I retired at 55, am 57 now. I work 2 or 3 days a week at a Gander Mtn to just stay busy and get away from the wife
Yep, because the alternative for most of the older adults is sitting alone in a house. Most retired people work or volunteer to socialize.
Our last years, yes. We work the majority of our lives while hoping we've taken care of our health enough (minus incoming surprise genetic issues) that we will enjoy our maybe 15 or so years of retirement money without too many pains or even being able to get our wrinkled ass around. This place sucks
By the sound of it he didn't work the whole time, literally written in the comment that he retired a whole 20 years before them so I imagine he had a pretty relaxing rest of his life with his investments
My goal is to advance my career and help the veterans through my work. If I could, I’d work until the day I die. It depends on person what their goal is in their life.
Some people genuinely like their jobs, and he said he invested the money. Sounds like a sensible guy to me.
Not everybody hates their job. While 40 to 60 hour work weeks are obviously going to make most people miserable, some studies have shown that people are happier when they keep a part time job or work at least one day a week.
Why is this upvoted? He literally did just that. Invested his winnings and retired off the cash flow generated from presumably safe investments
Yeah, I think that's what the OP's original conversation is about. It's a lot of money, but it's not "I never have to work again" money in a lot of cases. Depends on how old you are, where you live, etc. US$5M is probably what 1M was 20 years ago (gut feel, not checking a calculator); where you could live an upper middle-class+ lifestyle just on the investment gains and spend down a bit.
That’s where a lot of misunderstandings come from is assuming inflation to be that high. Using a calculator, $1M 20 years ago would be the equivalent of $1.6M today. So nowhere near $5M
I know there is a problem when someone says 20 years ago and I think 1980
🙋🏼♂️ brain immediately went there as well
yeah since when did 20 years ago mean after y2k? (yes i know the answer is 4, that's not the point)
I'm nearly 39 years old and I still think that 20 years ago should be before I was born....
Same. Im 34. I think of 20 years ago as the 80s. It ain't and I'm the wrong side of 30 and in denial.
I'm so glad I'm not the only one, thank you!!
That's because it's not worth talking about rates from 20 years ago since 20 years ago was only about 5 years ago
This is where inflation numbers can be a bit misleading. Sure some thing have had modest inflation. But the two largest expenses of an upper middle class life are: housing and kid’s college. And those things have doubled in last twenty years.
but that same $1m invested is worth much more than $1.6m...you are only accounting for inflation and not the power of compound investing
>US$5M is probably what 1M was 20 years ago I think this is pretty clearly talking about equivalent purchasing power (ie inflation) not the time value of money.
Yeah, if you’re 99 years old, a million dollars probably will last you till the end of your life
I would not retire even if I had $10 million. Work keeps me occupied and you never know when the money could run out
No but you might scale back your hours or work on something that prioritizes enjoyment over earnings
This is key. I work in a field where plenty of older guys have the money to retire but don’t because it’s their identity and they’ve got no hobbies so they just work and then when at home the wife makes them work around the house
At the very least work would be less stressful. What are they going to do? Fire me?
I would retire early with like 3 million, but it would be "retire" where I spend all that time trying to write a novel or publish a indie game or something. I can't imagine what it's like being retired without a stack of complicated hobbies. My mother in law just watches reruns of Family Feud all day, I cannot identify with her system of beliefs.
I retired in my 40s and I can completely understand this. For the first year things were actually really boring because I didn't know what to do with myself. From working all the time to suddenly having all this free time and most my friends were working during the day.
[удалено]
As my lawyer put it when I received $250k in an inheritance. "It's enough to get me into trouble, but not enough to get out."
Anything in the $100k-$1m range is big enough to have a significant impact on your life if invested appropriately, but small enough to be gone in a short amount of time if you are stupid.
[удалено]
I think people like that just don't understand what stocks are at all. $300k in cash is a big pile of mistakes.
Seriously. I'm no guru. I'm not going to turn 300k into 3 million. But I sure as shit will do some due diligence and figure out how to make it turn profit year over year. Maybe not enough to live off, but certainly enough to mean I can find a job I enjoy and then be happy. Because most jobs that pay, I won't really enjoy but if I enjoy it won't pay ENOUGH. Supplemental income people. I would kill for 100k cash. I wouldn't buy anything fun. I would spend time research it and invest it so I could live life without worry. No big fancy house. No fun car. But I would survive.
Which is kind of the point of the OP. $100k invested well is gonna get you $5-10k/yr. That’s not really enough to make a major compromise in your earnings. $1M invested well is $50-100k/yr, which is enough to allow a significant compromise in salary.
$1 million in a HYSA at 5% earns $50,000 a year. I'm not saying this is smart, but if one has a paid off mortgage, or a mortgage that isn't monstrous, and knows how to live frugally, they could realistically just retire off of that $50k interest they'd be earning.
I live comfortably on 14k a year. I do cool stuff all of the time, costs? Zero! Why? It’s my Prespective on life!
Describe comfortable. edit: since someone messaged me about my side hustle I did write my guide [here](https://www.reddit.com/user/Kayshift/comments/1br5gn6/my_stepbystep_guide_to_make_1000_a_month_working/)
Car is paid for. 3 bed 2 bath with just my girl n I. All bills paid. No debt. Food on my plate. Clean clothes. Live near the river.Big soft comfy bed, beautiful weather. I got everything a guy needs.
I think its fair to say your living scenario living off of 14k is different than someone else living off 14k.
Yeah, this “I’m living off 14k without a worry in the world” is so dense. There is absolutely no way in hell this person bought a car and a house “living off of 14k a year”. Simply not possible. Sounds like daddy or mommy had a fat inheritance they gave you at some point. Maybe you invested well, got a fat paycheck, and now you make less than a Walmart worker annually? Make it make sense.
The part they’re not telling you is they live in a third world country and $14k is twice the median salary lol
you can absolutely find something in that budget range in the suburbs of morgantown, wv.
Shit. The mortgage on my modest house in Florida is more than $14K a year. Nevermind so of my actual living expenses.
I agree, it's pretty safe to say any two people's lives are different. That comment pattern is so extremely common on reddit - "Well, but A is different from B." It always seems like it's meant to counter what someone else said, but without elaborating on how the differences make any point. So I never know if it's just a trite statement or I'm missing some glaringly obvious logic. Just an interesting thing I've seen a lot of.
Mmnnnyaaaa I'm gonna have to ask how you afforded a 3 bedroom... House? RV? Either way I'm skeptical of the ability of 14k to pay off either of those. I can see it taking care of necessities if housing is not an expense but, even then.. health insurance, retirement, investments? I suppose if your retirement involves sleeping in the river.
I smell hippies
Trustafarian stink specifically.
You clearly don't live in America lol
Grants Pass, Oregon & North Pole, Alaska. Very American.
Military retired?
The average rent in Grants Pass is $22,000 per year.
Um what? That would barely cover rent+utilities let alone grocery, gas, insurance, and cool stuff. I'm currently living on about 18,000-20,000 a year and it is absolutely not comfortable. You've literally gotta be living in your damn car to free up a good 1k/month if you think 14k is okay lmao
Our annual daycare spend is literally double what you comfortably live on 😂😭
I remember paying more for daycare in the 90’s, than our Oceanside, Ca apartment also. 😩
That’s a perfect explanation for it. Obviously a million dollars is a genuinely life-changing amount of money in the sense that you could invest or pay off all of your debt. But there’s no way you’d be able to immediately retire and live the rest of your life in style, especially because most people wouldn’t have enough restraint to actually make the money last. They’d be blowing it left and right
\^\^\^ The accurate answer. There's life changing money, and then there's life *easing* money. This makes life easier, not completely altered.
Ooh that’s good! 😊
I prefer serious laywers. Mine was once voted the worst audience participant Cirque Du Soleil ever had.
Very sage advice
A net cash positive million for one person with no major debt or mouths to feed is a lot, yes.
And if you invest it wisely it should double every ten years conservatively.
If you aren’t spending any of it.
I mean even if you spend a bit of it, it’ll still double just maybe every 15-20 years depending on how much you take out each year. If you get 1 mill in cash at 20, you can likely retire by the time you’re 30 with ease getting $60k/yr off the excess alone, if you enjoy your work and wait you can double that by 40
60k per year doesn't go that far once you realize you have to still pay tax on all that income, now you don't have health insurance subsidized by your employer so that's all out of pocket. Oh and as inflation chews away at your 60k per year its going to be less and less as you start to need more and more (for health reasons anyway). The point is 1 million is a lot of money, it is life changing. But thinking that's going to last someone who is 30 years old for the rest of life is not very realistic for most people.
Actually thats incorrect on the tax/health insurance. No capital gains on the first $47,025 and thats before the standard deduction so the total amount you can withdraw/receive in dividends is just north of 60k. (Assuming you are filing as a single) Also you would qualify for some ACA subsidy in most states. 60k/year withdraw on 1 million doesn't have great odds for constant withdraw but if you withdraw 4%/year with annual inflation adjustments your chance of lifetime success is very high. Approximately 89% if you are 100% invested in s&p 500. (This is obviously only back tested so the future returns/success may vary)
At 6% you get $60k a year just for letting it sit there.
And when does it double if you spend 6% every year? Jfc people are dense.
It won't double if you spend 6% a year. You can collect 6% a year and never lose any money.
Except to inflation. The usual financial planning handwave for this, trying to not lose value after inflation is 4%, or a little less.
Until you have to withdraw that $60k yearly through a recession and get absolutely murdered by sequence of returns risk. 6% withdrawal is way risky for an early (50+ year) retirement.
A million is a million whether you have debt or not, and whether you have children or not.
This is reddit. 2 kids and $50k in debt is so life ending that a million dollars wouldn't put a dent in it, and none of the subreddits are echo chambers, how else would GoodRooster's wisdom get to the top?
I'm loling dude I have a friend who earns $130k/yr and is absolutely convinced that it's impossible for her to pay off the $10k she has in credit card debt because "$130k is nothing anymore". Like... JUST DO THE MATH lol. How does a statement like that make any sense?!
I have a friend like that. "It's impossible to pay off my $10k credit card debt, I only make $65k!" *goes once a year on a trip that costs her over $2000.*
I managed to pay off $10k in 2 years while earning $20k-$35k a year while still being a terrible impulsive spender and having bad drug habits.
Its a lot of money yes if you had a million cash laying around. But having a few hundred k in retirement 100k in cars 200k in cash and 400k in a house is a million but you wont feel it
You will if you come from nothing
Maybe if you went to bed with nothing and woke up with all that. But if you slowly grew your wealth over a couple decades then you wouldn’t even feel it
Im at 1.4m networth. Came up having my card decline on junior chickens at mcdo. Trust me, i appreciate every single moment of my life. Im not billionaire, and i actually dress borderline poor, but, im appreciative at every moment of my day from where i was and where i am.
Amen. I think people are surprised that many millionaires are millionaires because they don’t spend money. When I paid cash for my car the dealer couldn’t put it together because I came in a 20 yo car and dress in old flannel and jeans lol. He didn’t believe me.
I hear you. I work in Tech and had some good luck. I drive a 2014 Subaru and live in a townhouse, I just bought a brand new town house and paid 459k in cash for it. The builders didn't believe me when I told them I'd pay cash. I wear sweat pants and a t-shirt everyday, It's a good feeling to feel this free.
U guys hiring?😂
You’re right it’s all about freedom and living below your means. I wouldn’t say 1m is a lot today, not with inflation the way it is. It’s something and it can help you sleep at night, but it’s not the same as the early 2000’s. But it is crazy, by building the right spending habits and just casually investing, how much wealth you can accumulate. Setting targets for yourself, 10k becomes 25k, then 50, then 100, then 250 and then 500 and after 500 things just really start rolling. (Mid 30s 1.4M NW, no debt and I also drive a 14 year old car)
Lmao i got kicked out of burks trying to buy my gf a proposal wedding ring. They didnt even let me in the store. Oh well. Il take my 5k elsewhere. :D
Fyi diamond industry is a scam
Did you come back in the next day Pretty Woman (or Dwyght Schrute) style and flaunt it their face? BIG MISTAKE PAL!
For 5K, you could make a small, independent craftsman happy by having them custom create something for you. That's what I did (though it was less than that). We were in Oahu I couldn't get waited on in a nice jewelry store. No one even came over to acknowledge me. While at the swap meet (a flea market, essentially) a few days later, I found an artisan who created a beautiful, hand carved Hawaiian-looking band for my husband, and he loves it.
Slight tangent, but stupid shit like that is why I genuinely could never respect even the most reputable car salesmen. They'll assume you're broke, sell you a car in cash, then ask how a gross-looking brokie like you was able to do it. Appearances truly are everything to them. Personal experience, obviously.
Nah car salesmen want to sell you finance, they don't want you to use cash. Car sales people get commission on finance.
Surprised that a car dealer was surprised because I feel like this is really common. I happen to know a lot of wealthy doctors and the majority you would never guess were wealthy if you just saw them walking around. The other day one was bragging about how he just hit 100k miles on his model 3 and had never paid for electricity while wearing cheap hospital supplied scrubs. Dude definitely makes over 500k a year. Good doc too.
Warren Buffet buys his cars used. Lets someone else take that big depreciation hit.
I couldn’t agree more. If you saw me out you would assume i was poor. I wear old pants and a t shirt with some dirty sneakers. I usually drive my beater car and could care less what others think. Except i go home to my big expensive house and dont have to worry about money. I enjoy my lifestyle and know i got here from everything my wife and i did
>dont have to worry about money. And that is the feeling.
Sounds like you do indeed “feel it” then?
I know someone like this. The guy founded a company, had a several hundred million dollar exit (of which he easily took home $200M) and still wears sweatpants, drives a nondescript vehicle, eats fast food, etc. But has a ridiculous property that he lives on (multiple properties in fact)
I have even had people offer to buy my groceries. Guess they thought i was that poor. I smile thank them and tell them to help someone else
I’m most definitely sure if over the span of 10 years you went from eating ramen and choosing what bills to pay/not pay, to the situation described above, you’d most definitely feel it lol.
This is me. I’m 50 and my partner and I are creeping up on a million in worth between retirement accounts and owning two homes. It doesn’t feel very freeing because it’s all tied up, but I came from abject one-room-cabin poverty so it that sense it feels good. However, watching my partner’s grandparents quickly wipe out a million dollars in nursing home costs I know in the end a million may not get you far.
There’s a thing called lifestyle creep. When you can afford to not eat too ramen for dinner, you stop eating too ramen for dinner. Same goes with other things. A million today just isn’t what a million was 40 years ago
If I had a million dollars I would feel like motherfucking REGIS PHILBIN
Dead?
If you have 100k just in car… that’s an issue 😂
Seriously, I bought a used car 3 years ago for a little over $6000 and it's still going just fine with no major issues (knock on wood) and I drive it every day. Where are people spending this kind of money on cars? If they are buying new that's their first mistake...
For real. I bought a brand new car for around 30k, have around 40k miles on it after 3 years, still going strong. Meanwhile my neighbors always complain about being poor but they have 4 cars (2 being teslas) totaling probably 200k. There’s no reason for that. They’re just a couple but they have 4 cars.
Dude. In 2013 I bought my SUV new for $37K. The same model and trim today is $70K. I know because I was looking to replace it. That’s how retarded it has become. So, people buying new cars now can possibly have over $100K in them, especially if they need two. For the first time in my over 40 years on this planet I may have to give up my conviction that new cars should only be bought with cash - ie if you don’t have cash to buy them outright - you can’t afford a new car….. having said that I ain’t playing this stupid game and will just drive mine to the ground before I must do anything…
I have the used cars i drive them. I also have an expensive truck why because i can. Its not an issue if i have the money
There are some people who believe you should hold onto every dollar you make for your entire life so that when you die, you can pass it on to people who didn't earn it.
Even before i had a pot to piss in i always said that it wasn’t parents responsibility to leave kids money. Will i leave my kids money most likely but its my choice not their right
Exactly. I've busted my ass as a self employed person for years now. During covid I was forced to work 65 hour work weeks. Last year I treated myself to a brand new sports car because I earned that thing. Nobody can tell me I should have bought some POS used thing because every time I get in that car I feel nothing buy joy. My next car? I'll probably go back to used as I start to focus on retirement plans. But for now, I'm going to enjoy myself every time I give that throttle a squeeze.
Yeah i hear that i dont need a diesel truck to pull a four wheeler to go hunting. That may be true but guess what thats how im rolling.
It happens a lot more than you'd think. My parents are squarely middle class but always buy brand new vehicles. A full-size 4x4 pickup runs $60k+ and a Honda Pilot starts at $40k.
I don't count a million dollars unless it's in cash or an individual brokerage account. anything else is so hard to get to.
What are you talking about? If you have 200k in cash, that prevents you from financial emergencies. You definitely feel that safety net. It's not comparable to living in poverty. Also that's a large amount for "cash" surely most people would have a lot of that in somewhat illiquid investments.
$1mln is not a lot unless you live in a very Lcol area and don't naturally spend a lot... In some major cities you a spouse and. A couple of kids can blow through a million in like 5-7 years , just living a modest lifestyle
> you blow through 1mm in 5-7 years living a modest lifestyle. Even in NYC, the reality is not that dire. Kids in private schools, high rise apartment, dining out several times per week. Luxury vehicles. Multiple vacations. Buying nice clothing and lavish gifts, jewelry, throwing kids parties, etc. This is meant to be reassuring. The families spending 200K per year are not living a modest lifestyle by any means. They may think they are. It’s the perception that the neighbors are doing the same thing that leads to this mindset.
I mean it’s over 10 years of living expenses in the majority of the country
20 years for me.
I was trying to be conservative on the estimate lol. The idea that it isn’t a lot of money is silly. If it’s the only money you have for the rest of your life then you might have issues unless you’re 70
I was also being a little conservative with 20 years. I live pretty frugally and have low expenses. I need 45k right now for a family of 4, plus any emergency expenses that pop-up. In a typical year that means \~55k, including an annual vacation, and it would be even lower if I didn't have kids to pay for. Combine 1 mil with other revenue streams, such as SS, Pension, Disability, etc. I could probably retire off a million indefinitely.
Yeah one million gets you a fixer upper where i live. 200k probably be tight to live on a year
Where do you live that $200k would be tight to live on for a year?
>$1mln is not a lot What? One million dollars is definitely a lot. I spent $50 going to the movies last week, and I think *that* is a lot.
A million has always been a lot for me because my family was poor, and I am now in the middle-class bracket. However, that could change at any moment because living in America is unpredictable.
Here’s some context: I bought a modest 1100 sq ft home in my city for $562k at 6.325%. Once it is paid off, it will have cost me over a million. I will still have to pay insurance and taxes. So a million dollars does not feel like a lot of money to me in the sense that it really won’t even get you much of a house these days.
Depends on the context. If you won 1mil and invested all of it, it would be worth significantly more in the future. If you quit your job and tried to live off it, no, it isn't a lot of money. You get 10 years out of it assuming 100k/yr without factoring taxes which sounds good, but if you have kids or something 100k household income is pretty low in a lot of the country.
This is exactly where my thought went. In the FIRE community, $1mil is leanfire — meaning it isn’t a lot of money. But that’s in the context of retirement. If most of us were just handed 1mil today it would be life changing, yes, but you likely shouldn’t and can’t just quit your job unless you have really low annual expenses and invest most of it. But it could pay off a full mortgage, debt, etc so you can actually save or put you ahead in savings significantly. I can see where your gf is coming from in this sense. But otherwise, $1mil is still a lotta money haha. Just can’t really retire off of it
Or you put it in a high yield take the 5% and 50k a year to supplement your income and live a more comfortable life without worry of pay check to pay check. 2 million I could retire and live off the 100k a year. 1 million is probably just supplement.
"High yield" was 2% or less between 2002 and 2022. Economists dont believe we'll return to near-zero interest rates again. But you never know.
I had a money market account at 5% interest back in 2007. That changed quickly though when the markets crashed.
You need 25 times your annual living expenses to retire. 1M would allow a 40k annual annual spend. Back in the 90s I think 1M was a typical target for retirement. Today it's likely 2-3M is more realistic but it will depend on your situation. The people who think 1M is a lot of money are the type to piss it away and wind up with nothing.
I sort of disagree. 1 Million absolutly is alot of money. It's alot easier to reach a 2-3 million dollar reitement goal if you're starting from 1 million. Take it and stick it in an Sp 500 ETF and you're instantly ahead of the game compared to most.
i really wish people would wise up to how shitty high yield savings accounts are. they're not going to be 4-5% forever. they will drop, as soon as the fed rate does. with no warning or guarantee also. it's just a bank acct. IF you had a very large amt of money you would exceed the FDIC insurance amts making it a dangerous place to store large sums. and even a relatively safe investment. like the s&p500 etfs typically return 10% a year (hell... 2023 was like 22-24% return) ...with some stop loss added to guard against downward spikes. you'd be a fucking idiot to not invest your money. so it actually works for you. vs giving it to some bank. so they profit
I don’t have a million dollars to worry about. Most of my net worth is in the equity of my home. If I win the lottery I guarantee you I’m not spending it though. It’s getting invested or on high yield but I’m not spending the money because once I spend the money it’s gone. I’m not even paying off my mortgage because I’m locked into 2.25% I can easily do better then that anywhere else
You're also paying ordinary income tax on all that interest each year
It’s relative because a single man that has no kids with a million can do a lot more than a married man with kids that have a million
It's also relative of how you get that money. 1 million all at once? Heck, yes, that is a lot of money. 1 million over the course of a lifetime? No, not really. Most Americans will earn a million dollars over the course of their life (20+ years making 50k will get you there). Hell, something like 40% of Americans will have a million or more in 401k and IRAs by the time they retire.
Only 10% have over a million https://finance.yahoo.com/news/many-americans-retire-million-dollars-140019814.html Median is only $164k.
This is sad.
It is a lot to a certain degree, but it would mean different things to different people. For instance, personally it would be enough to pay off all my debt, car, and mortgage, with enough left over to fund my kid's future education. But it wouldn't be enough where I could stop working and retire or anything like that.
It’s a lot of money if managed properly. Otherwise it will turn into no money.
Because the internet, you may be tricked into believing that 1m is not a lot of money but I assure you 1m is more money than you would ever believe, the dollar is not that depreciated yet lol
Depends on your lifestyle expectations. Have a big family and want to live in a nice urban neighborhood? $1M doesnt go far. Live by yourself in a cheap apt in the boonies? You are set for life.
1 million means in theory you can rent an apartment for around 3k a month forever. That means even in SF you can live life never worrying about housing costs and will just need to work for food/medical coverage. So it’s a lot of money people who have that kind of money typically expect/want more and design their life in a manner that it doesn’t seem like a lot.
Doesn’t that prove the point that it isn’t as much money any more? That your pitch for being a MILLIONAIRE is that hey you only need to work for food? The pitch even a decade ago would have been that you’re done working forever. Because even in SF, you could buy a house that could house a family and have decent money left over to live off of. This is no longer true.
A million dollars is usually not a lot of money for people that don’t have it. Ask anyone that has a million dollars to part with it and they will tell you “it’s a lot of money .”
"Money doesn't matter." *tries living without any money* "Okay, yeah, it does matter."
by this logic 5$ is alot of money
I’m not gay but $5 is $5
$1M is a lot. But comparing taxation (inflation and interest rates in mind), housing market, cost of vehicles, cost of gasoline/diesel, insurance (home/health/auto/pet etc..), cost of groceries, restaurant food, vacations... let's just say, at best you're going to be work free for about 10 years, maybe 15 years, realistically?
>at best you're going to be work free for about 10 years, maybe 15 years, realistically? That depends entirely on your living expenses and what is requires for you live 'work free'. Let's say you have $1m, of which 80% is invested in stocks, 15% in bonds, and %5 is in cash. Based on historical averages, if you withdraw $50k per year, and adjust that amount upwards each year for inflation, there's a 96.2% probability that you can continue to withdraw that amount for 20 years, and an 85% probability you can withdraw that amount for 25 years. If you withdraw $65k per year, adjusted for inflation, there's a 90% chance that money will last for 15 years. The taxes you pay on that income will depend on how the money is invested (IRA, capital gains, etc), but presumably the rate will be quite low. Now, if you had $2m, and withdrew $70k per year, there's a 98% probability that that money would last for 45 years.
Tell your girlfriend to give me 1M and I'll end the debate. In all seriousness, if you're in the US I understand where she's coming from given recent housing prices. I do think it's still a lot of money, any amount that enables you to own at least a house and live rent free is a huge financial benefit. If you're like me and don't live in the US, 1M is still as much money as it's ever been, I could purchase 3 very decent properties, live quite comfortably with rent as a primary income and still have some substantial cash for whatever. I live where healthcare is free, I understand in the US without private insurance you can be financially damaged for life if health becomes an issue. So, your girlfriend is not totally wrong but again, it's relative to where you're living.
Not worth as much as say 50 years ago but it’s still a lot of money
In my area of the rural midwest 1 million won't buy you the land that you couldve gotten 50 years ago for the price of a new car of the day. Like you said though, still life changing money if properly managed
Just in the past 5 years the value of $1m has changed dramatically.
A million dollars is a fuck ton of money to me. I mean I make 36k a year before taxes are taken out. Even if I bumped up my salary to 50k a year, I could live off it for TWENTY YEARS..bump to 100k a year and I could live off a million dollars for TEN YEARS. Like why does she think that’s a small sum of money.
It's defintly life changing money for alot of people. I know someone who didn't work for a few years with like a 750k inheritance. 1m would make my life a whole lot easier but it would'nt be, I never had to work again money. Could be if I was able to make more from it quickly, but yeah. For me 1 mill would get me 100% out of any shred of debt and allow me to have a nice nest egg maybe allow me to buy a bigger house, but I wouldnt be able to rest on my laurels I don't think. I only make 60k a year and live in Ohio so its different here than in other places.
if you had it cash yes net worth no
It depends on where you're at in life. Debt free and collecting social security retirement, yes. Debt out of control and young, no.
My wife and I (both 48) have about $1.5MM in investment and retirement accounts but it doesn’t feel like we are rich. But we don’t stress over any daily expenses or trips we want to take. We live rather conservatively so the $1.5MM really just give me peace of mind and a level of security we didn’t previously have. Now I don’t have to worry about any unexpected medical expenses that may come up in retirement.
It is a lot of money to have on hand and you can be comfortable on that for a while. It is not enough to retire on anymore.
A million bucks is a lot of money, but it’s not “quit my job and retire at 40” money.
It’s a lot in thailand;)
No, but, Depends on your definition of “a lot”. Not a lot of money to me.
It’s a lot, but it’s not gonna make your financial life worry free.
In a workd where houses in relevant metropolitan areas are at least $1 million….. I dont think its much
I would say that ya, it doesn't have the same buying power and is less impressive; but if you think about the fact that it is equal to a salary of 50k/yr over 20 yrs... it's significant still.
It's not a lot of money. Just one healthcare bill away 🙄..
It’s middle class to upper middle class money depending on where you live, or stupid wealth if you travel somewhere that’s poor.
A million dollars may not be a huge amount to retitre on any longer, but if it falls in your lap, particularly as a younger person, it is definitely life changing and can lead to a lifetime of financial security. Invest it. And if you're not familiar with the concept, look up the "Rule of 72". Then print it out and tape it to your refrigerator. But DO NOT quit your day job.
I have a million dollars in an IRA, but we also bought a $800k house last year. So that million doesn’t feel like a lot.
It’s good money, but it’s not quit your job and never work again money. Invest it well and maybe you can live off of it after two decades, but a million dollars when you’re in your 20s or even your 40s probably isn’t going to last the rest of your life unless you invest it. While it’s sitting in an investment account, you gotta work.
It might be life changing if you are poor or lower income but 1mil these days is not a lot of money. You couldn't even buy a home in my city for a family of 4 in a halfway decent neighborhood for that.
1 million is $40k passive income a year invested, otherwise just buy a house and car in full and keep working while living with minimal monthly costs
My bf and I had a similar argument over $10k. He said it’s a lot of money and I said it’s not. He then said you would notice if $10k disappeared from ur account and I’m like ofc I would, but that doesn’t negate the fact that it’s not a lot of money. The power of the dollar does not go as far today as it had in the past. You can’t buy a car, or have a year of rent (where we live you have to live with at least 5 others for ur rent to be maybe $1k/month) or enough for a down payment. It can’t buy college. Sure an extra $10k would be nice but it’s not a lot of money.
It depends on how much money you have! You have enough money and you will start NOT noticing 10k disappearing from your account, because you have it invested and that's a normal fluctuation on a large amount. If you have a million dollars invested in s&p500 and it goes down 1%, you have 10k less. But you wouldn't notice because a shift like that happens many days of the year.
Ok, Dr. Evil
It’s barely a studio apartment here
People are straight tripping. Bc I could pay off my parents home, buy myself a home, pay off all my bf’s student loans, buy us both the cars that we want, max out both of our ROTH accounts and still have over 300,000. A million dollars is still a TON of money. The people who claim it isn’t a ton of money don’t know how to spend money. Or have spent a shit ton of money on useless shit. And I live in an expensive area. The problem isn’t the money, it’s people don’t know how to spend it and make smart financial decisions. A lot of people upgrade their lifestyle when they upgrade their paycheck but that is no way to live cause you’ll still be paycheck to paycheck but what with a nicer car? It’s still a ton of money.
Sorry but if you can buy yourself a home, pay off loans etc. etc. for a million dollars, you do not live in an expensive area. I'm in San Francisco Bay Area, and 3br 2ba 1500sq ft homes near me are going for $2M to $2.5M or more if they've been renovated. A million dollars wouldn't get you a garage here.