Saw this on ZeroHedge.com:
Being a millionaire is overrated, according to Visual Capitalist's Jeff Desjardins. The term itself has quite a few connotations, including many that have been ingrained in us since we were children. Becoming a “millionaire” meant being set for life, and not having to worry about things like personal finances again. After all, millionaires are supposed to be destined for early retirement, right?That was then, and this is now.
Time magazine recently estimated that for a millennial with 40 years until retirement, $1 million in savings is not likely sufficient. Taking into account 3% inflation over that time period, it would be worth just $306,000 in today’s dollars. That’s a pretty questionable nest egg for a “millionaire”.
HOW MUCH IS A MILLION DOLLARS?
The infographic from Carson Wealth shows that things have changed over time, and that a million dollars of wealth ain’t what it used to be.
Fun facts: the preferred car for millionaires is actually a Ford, and the majority of millionaires envision working all the way until their retirement.
In today’s world, reaching the magical “millionaire” mark of a $1 million net worth is less meaningful than it used to be. In fact, roughly 9% of households in the United States have “millionaires” living in them – this is a record amount, caused partially through the devaluation of currency over time.That said, there are many cities (San Francisco, Vancouver, New York, London, Melbourne, Tokyo, etc.) where even a million dollars isn’t even enough to purchase a home.
The “millionaire” case is a stark example of the erosion of a dollar’s purchasing power over time. To get a full sense, take a look at some historical numbers:
To have the purchasing power of a millionaire from the 1900s, you would need at have nearly $30 million in today’s dollars.
To have the same impact or influence on the economy as a millionaire from the 1900s, you’d need closer to $100 million in today’s dollars.
For more perspective on the topic, see how much money exists with this video from The Money Project:
So if a million dollars isn't enough, how much money do you need to live like you always wanted to?
You actually read ZeroHedge?
When I'm bored, I tend to, yes
It's a den of permabears and they intentionally ommit facts that undermine their assertions. Dangerous to the objective mind. I'm also not surprised they are crying about having a million dollars, typical.
I get all my news from WSO
Do you find you're behind most of the time?
don't target a specific asset level, shoot to save a high % of income, and you'll end up financially independent. I'm talking 20-50% of income. if you're not there yet, don't worry, most of my clients didn't get there until their 30s and 40s
The term 'millionaire' came out of the roaring 20s. No surprise that it isn't that meaningful today.
They are talking about the Ford GT or Ford Fiesta?
Prolly along the lines of GT and/or Mustang I'd guess
It is not.
You need at least $12mm in the bank to take out for 500,000 pre tax for 50 years until your principal value is 0. Assuming a 3% IR.
The whole purpose of millionaire is that you are set for life and don't have to work if you don't want to.
Why do you need 500k to live?
I assumed being a millionaire would mean being set for life and never having to worry about money again. 500,000 is arbitrary but for a major metropolitan city where an extravagant but not ludicrous apartment would run you 7,000-10,000 a month I feel like 500,000 would be the minimum amount(again pre-tax) to be able to live comfortably without having a budget.
How many of you are actually millionaires? No? Then be grateful once (if) you reach it.
I think $3 mil is good. Put it all into a REIT index fund and collect a 4.2% dividend yield. It's only $126k per yr but if I renounce my US citizenship then my effective tax rate becomes 0%. $126k after taxes is like $250k if you live in NYC. Plus I'd own a growing income stream.
First, this isn't ZeroHedge being a negative nancy. This is a bunch of sources used to write an article showing how inflation has crept up. Also, having a million dollars in the bank, liquid, is amazing and you are pretty damn set up.
Lets be real. If you save all your life and have one million in the bank, you also probably have your house paid off, kids graduated from college and are ready to retire. You'll be 60-65, eligible for Medicare, closing in on social security and have very low expenses.
Assuming a 3-5% return on this million, you'll be making $30-50K a year without touching principle. This, plus social security or any other pension you have, should be plenty to live off of and live comfortably. You could even start dipping into the principle amount as you get older.
Does this mean you are rolling around in a Bentley? No. Is that the most important thing and what determines a nice retirement? No. The vast, vast, vast number of people have no where near this amount saved for their retirement and manage to live a nice life.
Additionally, assuming you aren't grinding it out to save this million, and you are a rather well paid professional, why on earth would you retire at 65? You've worked your whole life, gained connections and experience. "Retirement" is when you should stop working for someone (assuming you've been doing so until this point) and hang out a shingle and cash in on all these connections and experience. Retirement is a created concept and industry that desperately needs a revamping. I have zero plans to ever retire (assuming my health remains). I do have an plan to retire from one industry and transfer to another. Every year you keep working is another year or savings you build up and/or don't need to tap into.
That was the dumbest infographic
thebrofessor curious if there is a dollar amount where most of your clients are essentially "retired". Maybe they work a few deals on the side (flipping a house or two, a few hours of contractor work, etc.). My guess would be around the 5-10 million mark?
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