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Posted: 3/3/2023 12:55:05 PM EST
[#1]
Quote HistoryQuoted: The million is the new hundred thousand. It will be by the time FJB leaves office. |
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Posted: 3/3/2023 12:56:34 PM EST
[#2]
Spent some time this week with some very wealthy people in Vero Beech, FL.
Very rich, very unhappy, and most of the time drunk. Alcoholics that only feel good when under the influence. |
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Posted: 3/3/2023 12:56:35 PM EST
[#3]
Everyone is different, and God knows life is too short, and IMO it's sad it can sometimes take a while to figure out what's most important in life, but for me - for us actually - we are so thankful we never got into the "keeping up with the Joneses" thing. I can't imagine the anguish of having wealth, while simultaneously being worried sick over keeping it and staying at "the current level", which might include meeting an enormous mortgage each month for a huge roof over your head and stuff.
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Posted: 3/3/2023 12:59:24 PM EST
[#4]
Quote HistoryQuoted: You change your allocation and chances are you get further and further away from either of those numbers. 7.64% CAGR is a reasonable rate of return. 6% every year is not reasonable. Quote HistoryQuoted: Quoted: Yep. Which is why when you get CLOSER to drawing your funds you change up your allocation. Hell right now you can even get 4% on a 10 year treasury. It all just boils down the when do you need it. If you don't need for 25 years your worst return was 7.64% You change your allocation and chances are you get further and further away from either of those numbers. 7.64% CAGR is a reasonable rate of return. 6% every year is not reasonable. Sequence of returns really only becomes crucially important if you are cutting everything close. For example, if you and your financial advisor estimate that you will NEED(not want) an income of X and therefore you will need a nest egg of Y at the date of your retirement to achieve X income. If you decide to retire right when you hit Y, you could easily get screwed by the sequence of returns. But if you plan to hit Y five years before your retirement date, not only do you have five years of returns stockpiled beyond Y since it’s been sitting there untouched for five years, technically you would be five years into your retirement on paper so you would almost eliminate the risk of having a massive market downturn right after retirement starts that would knock the teeth out of your retirement plan at the very beginning, and put everything out of whack |
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Posted: 3/3/2023 1:01:45 PM EST
[#5]
Quote HistoryQuoted: Explain to me where that $50k income comes from if all you own is a $million house. ETA; OK, my fault, you were actually talking about a $2million worth. Still, it is hard to make a $1million portfolio reliably generate $50k year after year. Especially when inflation is considered. Correct. $50K is mil retirement. I start collecting $1,553 a month in Social Security in April that's excess to requirements. Haven't tapped our retirement portfolio yet, and I retired seven years ago. At some point I guess we will, I'm not leaving it all to the dogs  When you own everything (and I mean all of it), and it's what you want, all you're really paying is maintenance, taxes, food, and gas. All the rest is discretionary. Oh, and the Tricare $4K catastrophic cap for "treatable" cancer, which looks to be with me forever...but is budgeted also. |
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Posted: 3/3/2023 1:06:44 PM EST
[#6]
Quote HistoryQuoted: The million is the new hundred thousand. THIS You need around 10 of 'em to equal what it was in the old days (1970's). :max_bytes(150000):strip_icc()/dotdash_Final_What_Impact_Does_Inflation_Have_on_the_Dollar_Value_Today_Nov_2020-02-21a20b1953694d5b841cab9f87da2b10.jpg) You need about 20 million to equal what a millionaire was for most of American history (i.e. peacetime on the gold standard) F*ck the Federal Reserve:  The Creature From Jekyll Island (by G. Edward Griffin) |
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Posted: 3/3/2023 1:09:45 PM EST
[#7]
Quote HistoryQuoted: Because time is way more valuable than money. No amount of money has value when I'm dead, nor when I'm so old and decrepit that I cannot enjoy it. You might not live another 20 years, or you may become a cripple. It really boils down to your priorities and values, and it's stupid to shit on people whose priorities are different (in either direction). I'd rather spend less money and spend more time doing things that I value than slaving away for a system that hates me (and progressively punishes me the more I earn). Quote HistoryQuoted: Quoted: Quoted: 30 is EXTREMELY young. Having a million already would give you some options most don’t have at 30 though. Less than 1% retire before 50. Mostly because we don’t want to. I could sell out and retire tomorrow. But, I don’t want to. Why live on 100k a year? In 10 years my investments will make me ~500k a year. In 20 years, they’ll make me over 1m a year. My income potential with my company is nearly unlimited. Because time is way more valuable than money. No amount of money has value when I'm dead, nor when I'm so old and decrepit that I cannot enjoy it. You might not live another 20 years, or you may become a cripple. It really boils down to your priorities and values, and it's stupid to shit on people whose priorities are different (in either direction). I'd rather spend less money and spend more time doing things that I value than slaving away for a system that hates me (and progressively punishes me the more I earn). I like flying on private planes. I like being able to walk into a dealership and buy a raptor / mustang (my next purchase) / f350 / whatever in cash. I like being able to go where ever I want. Essentially whenever I want to. I also don’t hate my business. I like most of what I do. Yeah I hate the government and taxes. But I’m going to hate that sitting on my ass too. |
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Posted: 3/3/2023 1:13:12 PM EST
[#8]
Quote HistoryQuoted: Sequence of returns really only becomes crucially important if you are cutting everything close. People who think they can withdraw 5 to 6% annually inflation adjusted are already cutting everything very close. |
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Posted: 3/3/2023 1:15:15 PM EST
[#9]
Quote HistoryQuoted: People who think they can withdraw 5 to 6% annually inflation adjusted are already cutting everything very close. Quote HistoryQuoted: Quoted: Sequence of returns really only becomes crucially important if you are cutting everything close. People who think they can withdraw 5 to 6% annually inflation adjusted are already cutting everything very close. Yeah. If you do that you’re going to run out of money quick. |
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Posted: 3/3/2023 1:16:27 PM EST
[#10]
The reality is,
As much as the media and politicians try to paint different- Rich is like the top 0.1 to o.o1 % of the population. Everyone wants to confuse the masses regarding the “1 percent”. Your individual making 350K a year or family income of 500K a year gross is not rich/wealthy. They are affluent. It typically took a lot of time and effort to get there. If they stop working the income stops coming in. They are essentially like working / middle class people, Except they buy an LX instead of a 4Runner, they have a 700K home instead of 300K home, they buy their kid a nice bike at a local shop instead of a 150 dollar one at Walmart, they get bitched at by their wife for buying a new DD AR or CZ shadow instead of a PSA build or Canik. It’s the same lifestyle, only with nicer stuff. Not the same at all as being “some rich millionaire.” |
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Posted: 3/3/2023 1:19:17 PM EST
[#11]
Quote HistoryQuoted: Everyone is different, and God knows life is too short, and IMO it's sad it can sometimes take a while to figure out what's most important in life, but for me - for us actually - we are so thankful we never got into the "keeping up with the Joneses" thing. I can't imagine the anguish of having wealth, while simultaneously being worried sick over keeping it and staying at "the current level", which might include meeting an enormous mortgage each month for a huge roof over your head and stuff. Agreed. When I thought due to the v** mandate I'd be retiring a couple of years ago with much less than a million at a very young age it was liberating to think about how little I actually NEED. Food, water, shelter, protection, basic tools . . . Everything else is pure luxury. Now that I have over a million in investments I know that I can meet those needs in perpetuity, even if they don't meet someone else's standards. Makes life a lot less stressful. Sure, everything could collapse and my portfolio becomes worthless or nationalized. Then I've got my preps, which should still help me meet all needs until and unless I catch a bullet fighting communists. 
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Posted: 3/3/2023 1:23:15 PM EST
[#12]
it would be worth a SHIT ton more if the FED hadn't spent the last 50 years fucking up the money supply..
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Posted: 3/3/2023 1:27:20 PM EST
[#13]
Quote HistoryQuoted: I like flying on private planes. I like being able to walk into a dealership and buy a raptor / mustang (my next purchase) / f350 / whatever in cash. I like being able to go where ever I want. Essentially whenever I want to. I also don’t hate my business. I like most of what I do. Yeah I hate the government and taxes. But I’m going to hate that sitting on my ass too. Quote HistoryQuoted: Quoted: Quoted: Quoted: 30 is EXTREMELY young. Having a million already would give you some options most don’t have at 30 though. Less than 1% retire before 50. Mostly because we don’t want to. I could sell out and retire tomorrow. But, I don’t want to. Why live on 100k a year? In 10 years my investments will make me ~500k a year. In 20 years, they’ll make me over 1m a year. My income potential with my company is nearly unlimited. Because time is way more valuable than money. No amount of money has value when I'm dead, nor when I'm so old and decrepit that I cannot enjoy it. You might not live another 20 years, or you may become a cripple. It really boils down to your priorities and values, and it's stupid to shit on people whose priorities are different (in either direction). I'd rather spend less money and spend more time doing things that I value than slaving away for a system that hates me (and progressively punishes me the more I earn). I like flying on private planes. I like being able to walk into a dealership and buy a raptor / mustang (my next purchase) / f350 / whatever in cash. I like being able to go where ever I want. Essentially whenever I want to. I also don’t hate my business. I like most of what I do. Yeah I hate the government and taxes. But I’m going to hate that sitting on my ass too. Cool. I'm glad you enjoy what you enjoy. It sounds like you're doing the right thing for you. You do realize that if others are content with road trips and an older F-150, they may make different choices, right? And it doesn't necessarily mean they're "sitting on" their asses. |
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Posted: 3/3/2023 1:29:55 PM EST
[#14]
It’s kind of a dramatic video title but I get that he has to do the click bait thing. I fall into the category he’s talking about and yes I still need to work. My house is a small percentage of my net worth. Im genuinely sorry for the humble brag (and trust me it’s humble) but I’m making a point.
If I stay at my current income I don’t need to be worried. Honestly, if I found myself unemployed for a bit I might be worried but I’d also be a long way from homeless. It’s almost like we don’t need to go all autistic with extreme examples like you’re either filthy rich or poor. We should still be encouraging people to invest instead of doom and glooming about how everything’s fucked. A lot of this YouTube crap is counterproductive, from an encouragement perspective. |
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Posted: 3/3/2023 1:31:33 PM EST
[#15]
Quote HistoryQuoted: People who think they can withdraw 5 to 6% annually inflation adjusted are already cutting everything very close. Well we already have had a couple people post up on page 1 how the 4% withdrawals guideline means “never touching your principal”. Except it does not mean that at all. 4% withdrawals as a guideline means you can adjust yearly for inflation, and you should not run out of money before you die. It absolutely anticipates spending down principal, because there will be plenty of years where your return is zero or negative. That is why is it called a Safe Withdrawal Rate- assumption is 30 years of withdrawals, never going flat broke. That is it. So I am not sure that 4% starting tomorrow would be a real smart strategy if you wanted to keep your nest egg intact (adjusted for inflation). And if you plan to pull 5-6% every year, you better also be really flexible on those down years and adjust. A better plan to maintain the principal (or grow it) is historically more like 3-3.5% or something like that (perpetual withdrawal rates). |
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Posted: 3/3/2023 1:34:41 PM EST
[#16]
Quote HistoryQuoted: Cool. I'm glad you enjoy what you enjoy. It sounds like you're doing the right thing for you. You do realize that if others are content with road trips and an older F-150, they may make different choices, right? And it doesn't necessarily mean they're "sitting on" their asses. Quote HistoryQuoted: Quoted: Quoted: Quoted: Quoted: 30 is EXTREMELY young. Having a million already would give you some options most don’t have at 30 though. Less than 1% retire before 50. Mostly because we don’t want to. I could sell out and retire tomorrow. But, I don’t want to. Why live on 100k a year? In 10 years my investments will make me ~500k a year. In 20 years, they’ll make me over 1m a year. My income potential with my company is nearly unlimited. Because time is way more valuable than money. No amount of money has value when I'm dead, nor when I'm so old and decrepit that I cannot enjoy it. You might not live another 20 years, or you may become a cripple. It really boils down to your priorities and values, and it's stupid to shit on people whose priorities are different (in either direction). I'd rather spend less money and spend more time doing things that I value than slaving away for a system that hates me (and progressively punishes me the more I earn). I like flying on private planes. I like being able to walk into a dealership and buy a raptor / mustang (my next purchase) / f350 / whatever in cash. I like being able to go where ever I want. Essentially whenever I want to. I also don’t hate my business. I like most of what I do. Yeah I hate the government and taxes. But I’m going to hate that sitting on my ass too. Cool. I'm glad you enjoy what you enjoy. It sounds like you're doing the right thing for you. You do realize that if others are content with road trips and an older F-150, they may make different choices, right? And it doesn't necessarily mean they're "sitting on" their asses. That’s why I said sitting on my ass. I.e. the one that is attached to me, exclusively. Direction, not intention, determines destination. If you’re in the right direction in life, and 100k a year makes you happy, great. You met your destination. My direction is keep going until I’ve had enough. That will be my destination. |
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Posted: 3/3/2023 2:44:55 PM EST
[#17]
The above average middle class 30-40 year old needs 3 million by the time they retire
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Posted: 3/3/2023 3:35:30 PM EST
[#18]
Quote HistoryQuoted: You can arguably make ~10%. S&P500 has averaged 11.5% since 1980. And ~8.5% since inception. So you should be able to make ~10%. Minus taxes, leave you around 70k a year. Problem is after health care costs, inflation, etc. 70k isn’t enough long term. As in 10 years, at our rate, 70k will be worth 30k. (Or such.) So you have to make enough, to subtract your life expenses out, while adding to your investment at an approximate rate of ~5% a year too, so that you can hedge against inflation. So a grand total of around ~13.5% growth. (5% your cash + s&p 500 8.5% average.) This is abit, a minimum. Realistically, to beat current inflation you need to be growing your assets at 10% a year. Growing your investment at approximately ~18.5% a year to hedge against inflation and down turn. This, will always make you safe. So a more realistic number is around 2-3m retirement, depending on your cost of living / life style / health. Pie in the sky numbers. Let’s do a thought exercise. $1,000,000 portfolio invested in stocks as you suggest. 10% distribution rate as you suggest = $100,000 before taxes Let’s say you started last year. 2022 in review: $1,000,000 starting balance Minus $100,000 Minus 20% market decline of $200,000 —————————— 2022 ending balance: $700,000 2023 forecast: $700,000 starting balance Minus $100,000 (14% of remaining portfolio) Flat year, no gain/loss ——————————- 2023 projected ending balance: $600,000 And that’s just 2 years. You’d be pulling out 17% the 3rd year and it will just continue to accelerate. 20% market declines are routine. 1 in 5 years historically. Last year wasn’t unusual at all. Expecting 10% returns and a 10% distribution rate is financial suicide. Your distribution rate has to be lower than your average expected return because half the years will be below average. |
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Posted: 3/3/2023 3:40:49 PM EST
[#19]
Quote HistoryQuoted: The above average middle class 30-40 year old needs 3 million by the time they retire I’d argue they need that in todays dollars. So double to 6-8 fir when they retire. |
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Posted: 3/3/2023 3:50:15 PM EST
[#20]
Quote HistoryQuoted: Pie in the sky numbers. Let’s do a thought exercise. $1,000,000 portfolio invested in stocks as you suggest. 10% distribution rate as you suggest = $100,000 before taxes Let’s say you started last year. 2022 in review: $1,000,000 starting balance Minus $100,000 Minus 20% market decline of $200,000 —————————— 2022 ending balance: $700,000 2023 forecast: $700,000 starting balance Minus $100,000 (14% of remaining portfolio) Flat year, no gain/loss ——————————- 2023 projected ending balance: $600,000 And that’s just 2 years. You’d be pulling out 17% the 3rd year and it will just continue to accelerate. 20% market declines are routine. 1 in 5 years historically. Last year wasn’t unusual at all. Expecting 10% returns and a 10% distribution rate is financial suicide. Your distribution rate has to be lower than your average expected return because half the years will be below average. Quote HistoryQuoted: Quoted: You can arguably make ~10%. S&P500 has averaged 11.5% since 1980. And ~8.5% since inception. So you should be able to make ~10%. Minus taxes, leave you around 70k a year. Problem is after health care costs, inflation, etc. 70k isn’t enough long term. As in 10 years, at our rate, 70k will be worth 30k. (Or such.) So you have to make enough, to subtract your life expenses out, while adding to your investment at an approximate rate of ~5% a year too, so that you can hedge against inflation. So a grand total of around ~13.5% growth. (5% your cash + s&p 500 8.5% average.) This is abit, a minimum. Realistically, to beat current inflation you need to be growing your assets at 10% a year. Growing your investment at approximately ~18.5% a year to hedge against inflation and down turn. This, will always make you safe. So a more realistic number is around 2-3m retirement, depending on your cost of living / life style / health. Pie in the sky numbers. Let’s do a thought exercise. $1,000,000 portfolio invested in stocks as you suggest. 10% distribution rate as you suggest = $100,000 before taxes Let’s say you started last year. 2022 in review: $1,000,000 starting balance Minus $100,000 Minus 20% market decline of $200,000 —————————— 2022 ending balance: $700,000 2023 forecast: $700,000 starting balance Minus $100,000 (14% of remaining portfolio) Flat year, no gain/loss ——————————- 2023 projected ending balance: $600,000 And that’s just 2 years. You’d be pulling out 17% the 3rd year and it will just continue to accelerate. 20% market declines are routine. 1 in 5 years historically. Last year wasn’t unusual at all. Expecting 10% returns and a 10% distribution rate is financial suicide. Your distribution rate has to be lower than your average expected return because half the years will be below average. We’re agreeing. I’m saying to expect ~8.5% returns. Then add in 10% of your portfolio’s value each year in other income. To keep up with expenses, inflation, etc. You’re not getting consistent ~17-18% returns. |
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Posted: 3/3/2023 3:54:50 PM EST
[#21]
Strange. I am not a millionaire - not even close - and I do not worry about money.
Maybe it has more to do with how you use what you have? |
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Posted: 3/3/2023 4:02:07 PM EST
[#22]
Quote HistoryQuoted: Correct. $50K is mil retirement. I start collecting $1,553 a month in Social Security in April that's excess to requirements. Haven't tapped our retirement portfolio yet, and I retired seven years ago. At some point I guess we will, I'm not leaving it all to the dogs When you own everything (and I mean all of it), and it's what you want, all you're really paying is maintenance, taxes, food, and gas. All the rest is discretionary. Oh, and the Tricare $4K catastrophic cap for "treatable" cancer, which looks to be with me forever...but is budgeted also. @Osprey61 |
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Posted: 3/3/2023 4:04:27 PM EST
[#23]
Quote HistoryQuoted: Sequence of returns really only becomes crucially important if you are cutting everything close. For example, if you and your financial advisor estimate that you will NEED(not want) an income of X and therefore you will need a nest egg of Y at the date of your retirement to achieve X income. If you decide to retire right when you hit Y, you could easily get screwed by the sequence of returns. But if you plan to hit Y five years before your retirement date, not only do you have five years of returns stockpiled beyond Y since it’s been sitting there untouched for five years, technically you would be five years into your retirement on paper so you would almost eliminate the risk of having a massive market downturn right after retirement starts that would knock the teeth out of your retirement plan at the very beginning, and put everything out of whack Yep this guy nails it. Sequence of returns is an easy problem to fix and even the most green of annuity shills should be able to get around it. |
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Posted: 3/3/2023 4:16:52 PM EST
[#24]
Yeah, a million at 30 is not enough to retire on.
But one thing I've learned watching my parents and in-laws in retirement is how much you spend is drastically different at 65 vs 75 vs 85. And yet that is rarely even mentioned, much less discussed. |
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Posted: 3/3/2023 4:31:18 PM EST
[#25]
Quote HistoryQuoted: Yeah, a million at 30 is not enough to retire on. But one thing I've learned watching my parents and in-laws in retirement is how much you spend is drastically different at 65 vs 75 vs 85. And yet that is rarely even mentioned, much less discussed. You actually spend MORE in retirement than you did working. Doing shit costs money not to mention healthcare expenses. I’m not talking insurance premiums, actual expense for care. Don’t forget about inflation. Retiring on 1 million? You’ll be dirt poor. |
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Posted: 3/3/2023 5:13:41 PM EST
[#26]
Quote HistoryQuoted: If you know you're gonna hit that, is it too late for a Tricare supplement insurance policy? It might save you a couple of thousand every year. @Osprey61 We looked into it a couple of years before I was diagnosed, and didn't do it. I'm not sure how it works now, because they've really come down on a lot of policies that prohibit enrollment for pre-existing conditions. It's not a bad idea, depending on premiums and the deductible. We're going to have a look, thanks! |
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Posted: 3/4/2023 10:53:43 AM EST
[#27]
Also-
For those with TriCare retired as a plan, Keep in mind a couple of things. It’s not completely free. The vision and dental coverage are not very good. Your area may not have a lot of in network. You will still need to pay for Medicare part B at 65. |
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Posted: 3/4/2023 5:39:10 PM EST
[#28]
Quote HistoryQuoted: Also- For those with TriCare retired as a plan, Keep in mind a couple of things. It’s not completely free. The vision and dental coverage are not very good. Your area may not have a lot of in network. You will still need to pay for Medicare part B at 65. For my financial plan 1k/mo is budgeted for healthcare. In todays dollars. So for anybody thinking about retiring with a million? That’s 40k a year. Add 1k/mo for healthcare. And now youre at 28k income. Good luck! |
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