Being a Millionarie vs living like one

I occasionally listen to self-help finance guys/read their books (think Dave Ramsey). They always talk about how to get to a net worth o $1mn. My thought is, the glamour for most people of being considered a "millionaire" is living a luxury lifestyle. There are people like Buffet who don't care about the money, but I feel that is few and far between.

If you follow golf history, Walter Hagen was quoted as saying, "I don't want to be a millionaire, I just want to live like one." I feel like that describes most people. Thoughts?

 

Certainly Buffett doesn't have a Leno car collection or race horses but he has stated many times how much he enjoys is private jet travel (as he should).

Get your facts first, then you can distort them as you please.
 

If you haven't yet, read "Millionaire Next Door" -- highlights this very issue.

Most Americans, at least, want to lead the Millionaire Lifestyle and become such a slave (my words) to achieving that wherein they never actually become a true Millionaire by net worth.

Director of Finance and Corporate Development: 2020 - Present Manager of FP&A and Corporate Development: 2019 - 2020 Corporate Finance, Strategy and Development: 2011 - 2019 "An investment in knowledge pays the best interest." - Benjamin Franklin
 

I don't understand the people with tons of money and no lifestyle. Just enjoy it within reason.

What drives most people to work hard and become wealthy is not the money itself, its what you can buy with the money. I am a believer that material goals help people become even more successful.

I suspect many of those who are totally frugal either got that from their upbringing or developed an emotional attachment to their money.

 

Dave Ramsey doesn't believe half the shit he says. It's dumb-down garbage for the masses who are disciplined enough to pay their shit off but not smart enough to understand how to use leverage to build actual wealth. Nobody got wealthy fucking saving sheckels.

heister: Look at all these wannabe richies hating on an expensive salad. https://arthuxtable.com/
 
GoldenCinderblock:
Dave Ramsey doesn't believe half the shit he says. It's dumb-down garbage for the masses who are disciplined enough to pay their shit off but not smart enough to understand how to use leverage to build actual wealth. Nobody got wealthy fucking saving sheckels.

You can definitely get wealthy saving... definitely a far better method than blowing all your cash. Agree that his advice is only really helpful for "dummies" & other beginners. His investment advice is laughable (fees, etc.)

 

I have to kindly disagree with you on that. Someone saving $100k annually for 20 years winds up with $2mm. One big suburban house and they're back to zero. Someone with good financial sense, or with good advisement, obviously wouldn't buy that house cash, but if a $200k down payment could buy the house, he'd have bought it in year 2 of this theoretical 20-year timeline.

My point is that wealth is about cash flow, access to credit, and financial know-how more than it is about any lump sum. In that sense, sure, those financial "gurus" help. It isn't advanced knowledge, but most people are halfway retarded as it is. If he has viewership, it's because people want to hear what he has to say.

in it 2 win it
 
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I don't think I follow your logic about the house.

If you bought a $2mn house, you have a $2mn asset, so not really back to zero. That asset should also be appreciating. I get that financing the house leaves free cash flow, but you're also paying interest.

I agree you can get wealthy saving, but you can also get wealthy using cash/credit and knowing what you're doing. Getting wealth by saving is all about the amount you are putting away, the rate you are getting. It's probably the better way for most people, as most will never have a net worth close to $1mn. As stated above, most people are morons, and can't properly handle a credit card. They shouldn't be trying to use leverage to achieve alpha.

Back to my original point, I feel that there is a glamor to "living like a millionaire" vs "I have a million dollars in assets/cash, but live off $50k a year." Not saying the second scenario is wrong.

At the end of they day, I feel that most people have a very little understanding of money, and most times they heard the word "millionaire" they think the lifestyle is similar to some billionaire they saw on TV or movie.

 
GoldenCinderblock:
Dave Ramsey doesn't believe half the shit he says. It's dumb-down garbage for the masses who are disciplined enough to pay their shit off but not smart enough to understand how to use leverage to build actual wealth. Nobody got wealthy fucking saving sheckels.

I love this comment. SB'd.

"Now you's can't leave." -Sonny LoSpecchio
 

The issue lies in liquidity, you can technically be a millionaire if you have a networth of $1,000,000.01 or more. If 80% of that is tied up in illliquid assests or worse negative cash flow assets (primary residence) you essentially just have a bunch of imaginary money until you relinquish control of said assets and replace them with substitute products (apartment). Its really not until your assets are throwing off enough free cash that you can replace your work that you really have the ability to "live like a millionaire".

Follow the shit your fellow monkeys say @shitWSOsays Life is hard, it's even harder when you're stupid - John Wayne
 

Just as there are hierachies based on income.. there are hierachies based on wealth. Being a "low-end millionaire" today means you're still middle class but instead of working you can have enough passive income to provide the same middle class lifestyle. You're still a far cry from being "rich, rich" enough to blow money on luxury trappings.

The word might have been useful as a barometer in the 80s but probably not anymore.

 

It's all relative, though. A new pair of shoes is a status symbol for most of the world. On this site it's all about the Rollies&Rari's, but waiting till you're worth $10m to buy a new jacket is just craziness.

 

I think being a minimalist in life can give you great satisfaction too. Self-evaluate your relations, your finances, your possesions and how you can align these to be more efficient and consume less time and energy. Your energy and time is currency too, please also pay head to being a minimalist and having maybe one to two pleasure, it maybe having a good car or starting a business. And try to could down on what you have don't enjoy and have just for a status symbol. When you do become a miniamlist digitally, socially and finacial, you experience a new kind of freedom.

 

I never really understood why people spend thousands of dollars for luxury goods when they barely make minimum wage (or a little above the line). Food, space to live in, and car/insurance alone eats away a lot of money earned which gives you very little to save. Status symbol is meaningless to me when you are trying to build net worth. I'd rather save the money and purchase/open a small business.

I met and know a quite a few ($5m+ net worth) people throughout my life so far, and have been grateful. These people worked regular jobs, saved up, and started their own business with their money saved up. I know the potential of starting a company can do for a family. These folks actually shop around Goodwill, Big Lots!, Walmart, Target, etc (you get the point) and buy a few good pieces here and there.

@HFT" - I completely agree, and it is something I am experiencing myself. I am not too fond of luxury items, I do love cars (but, they are a huge depreciating asset), but ultimately I want to go down the entrepreneurial route...just a matter of purchasing an existing or building my own.

ironman32 - What is your understanding of money, good sir?

No pain no game.
 

I feel that I have a pretty good understanding of money. My understanding of it is based mostly in simplified terms. I think that I tend to follow more of a blocking and tackling type strategy, and feel that most would benefit from this style as well.

It's funny in a way, I feel that I have bootstrapped this knowledge as I have grown. As child, I knew I tend to think that people with money had things. I came to realize that owning things is actually the benefit of money. Broadly, you can spend money, save it or give it away.

 

Well it brings up an interesting question. People on this site are pretty focused on maximizing wealth and investing intelligently (as we should be), and spending money on luxury goods you can't really afford is obviously the opposite of that.

But if you don't aspire to have 8 figures in the bank when you retire, or have that million dollar cash flow, why not spend it? This comes with the massive caveat that you should be saving for retirement, which of course few people do. But the money is worthless if it isn't making you happy or saving you stress, and for some people buying new shoes or leasing nice cars is what makes them happy.

And I think there are far more people like Buffet, if on a lesser scale of course, than you realize. The number of NYC families alone that must be sitting on 9 figures worth of real estate, and yet you wouldn't know them from any other person on the street, is probably startling.

 
Ozymandia:
Well it brings up an interesting question. People on this site are pretty focused on maximizing wealth and investing intelligently (as we should be), and spending money on luxury goods you can't really afford is obviously the opposite of that.

But if you don't aspire to have 8 figures in the bank when you retire, or have that million dollar cash flow, why not spend it? This comes with the massive caveat that you should be saving for retirement, which of course few people do. But the money is worthless if it isn't making you happy or saving you stress, and for some people buying new shoes or leasing nice cars is what makes them happy.

And I think there are far more people like Buffet, if on a lesser scale of course, than you realize. The number of NYC families alone that must be sitting on 9 figures worth of real estate, and yet you wouldn't know them from any other person on the street, is probably startling.

I agree with your last paragraph (your whole statement as well). I think that compounding investing/owning a home can get most people to a $1mn net worth. However, getting and staying there requires discipline, which is what most people lack.

I think it's kinda like how people want to play professional sports because they think it's glamorous, but most bulk when they see how much time/effort it requires.

 

Met and seen plenty of people blow their salaries on luxury goods (bmw, benz, high-end fashion, constant dining and clubs) on social media on a weekly/monthly basis. My friends and I wonder how people can afford such luxury goods (at a young age and knowing their ballpark salaries). They do get attention from others, but it is seemingly short-lived.

I really think it takes a lot of discipline to acquire and build wealth/retirement over the long run. Having money to invest is important too.

I played for the Men's tennis team in my earlier college years. The hours we put in for training were brutal. However, we were one of the top 5 teams in our division/state at the end of the season. I agree with ironman32 as well.

No pain no game.
 

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