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View Poll Results: How much money would you need to feel rich ?
500,000 2 1.55%
1,000,000 16 12.40%
2,000,000 29 22.48%
5,000,000 48 37.21%
10,000,000 34 26.36%
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Re: Feeling rich ?
Old 02-08-2007, 01:20 PM   #41
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Re: Feeling rich ?

Quote:
Originally Posted by Nords
"Well, the budget says we have to spend $15 today on entertainment, dammit. Any ideas on how we can make quota?"

So, what are some of those ideas?
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Re: Feeling rich ?
Old 02-08-2007, 01:42 PM   #42
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Re: Feeling rich ?

Quote:
Originally Posted by Martha
So, what are some of those ideas?
I'm blushing.

Actually the comment is usually "Look how much Berkshire Hathaway went up today. You can't spend it fast enough!"

She took that as a challenge. Our tenants are vacating at the end of the month so we're getting rid of the 28-year-old popcorn ceilings (including the size 10 hole left by some clumsy handyman) at a price yet to be determined, replacing a 15-year-old vinyl floor with a $900 higher-end laminate, and spending another $6350 for 150 square yards of carpeting to replace the 14-year-old stuff. But we're jacking the rent way up so that stuff should pay for itself in the next year or two. And we're doing the shrubbery pruning (more like bushwhacking) ourselves.

In the last three months she bought a blue leather sofa off Craigslist ($575), a new refrigerator nicknamed Fridgezilla off Craigslist ($750 and a whole 'nother post), a front-loading washer/dryer set for $600 (Craigslist again), and $2500 on new master bedroom/staircase carpeting. As she says in her new Reserve pay billet "It's my big bucks."

Not to be outdone, I've been cruising eBay for used photovoltaic panels at $4/watt or less. Just a couple hundred more watts and I'll have all I need, and this time I really mean that.

Those of you who claim this is home improvement, not entertainment, haven't met the people we've met through Craigslist. And our home improvement projects tend to resemble the plot of "I Love Lucy" (they only ever had the one plot, right?), especially the "Shut it off!!!!" part.

Strictly "entertainment" would be the $15 we spent last week at the local Home Improvement show, or letting me carry her luggage on a trip later this month. She thinks nothing of spending $1-2 for CDs at garage sales. We also went to a guy's promotion party last month, and I've had to buy surf wax & tae kwon do supplies, too!

We'll have to see how much Al & I fritter away when he comes to Waikiki.
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Re: Feeling rich ?
Old 02-08-2007, 02:05 PM   #43
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Re: Feeling rich ?

Quote:
Originally Posted by bongo2
I also have never felt richer than I did when I first had $30k in the bank.

I would be very comfortable with $5M, but not really rich until I hit something more.
This is my thought, too. When we had no cc debt for the first time and 10k in the bank, making our networth 10k without having to sell anything, that's when I felt the wealthiest. Since then I now have about 300k in equity in the house and about 120k in investments, but I don't really feel any richer. I'm in that long middle grey zone before you reach possible FIRE scenarios.
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Re: Feeling rich ?
Old 02-08-2007, 02:46 PM   #44
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Re: Feeling rich ?

Here is the most recent census bureau report on net worth and asset ownership of households -- http://www.census.gov/prod/2003pubs/p70-88.pdf -- which is data from the 2000 census.

To boil it down, the median net worth of american households in the year 2000, including home equity, was $55,000. Home equity constituted 32% of that net worth. Even if you counted only those households in top 20% of income (earning more than $72,000 per year), the median net worth was only $185,000. Even for this top quintile, home equity constituted 25% of their net worth.

By these objective measures, I would have to say yes, the young wife and I are rich. But I sure don't feel like it, and I'm certain no one could tell by looking at the way we live.

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Re: Feeling rich ?
Old 02-08-2007, 02:50 PM   #45
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Re: Feeling rich ?

Yeah, I looked up those numbers last year and I remember laughing ruefully when I realized we were in the ~93% for NW. That's not good.

EDIT: This article says we are in better shape than that, my % is lower according to it, but I'll survive:

http://www.fee.org/publications/the-...e.asp?aid=5600

Interesting that the top 25% of U.S. households are actually pretty well off! Half a million or more NW.
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Re: Feeling rich ?
Old 02-08-2007, 02:52 PM   #46
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Re: Feeling rich ?

Quote:
Originally Posted by Gumby
Even if you counted only those households in top 20% of income (earning more than $72,000 per year), the median net worth was only $185,000. Even for this top quintile, home equity constituted 25% of their net worth.
Wahoo, I'm rich, rich, rich, I tell you, RICH!!!!
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Re: Feeling rich ?
Old 02-08-2007, 02:55 PM   #47
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Re: Feeling rich ?

Quote:
Originally Posted by Want2retire
Wahoo, I'm rich, rich, rich, I tell you, RICH!!!!
OK, OK, I believe you! Congratulations.

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Re: Feeling rich ?
Old 02-08-2007, 03:03 PM   #48
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Re: Feeling rich ?

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Originally Posted by REWahoo!
OK, OK, I believe you! Congratulations.
ROFL!!! I guess you figured out I didn't mean YOU, REWahoo! Guess that was just the Aggie in me shining through.
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Re: Feeling rich ?
Old 02-08-2007, 03:24 PM   #49
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Re: Feeling rich ?

Quote:
Originally Posted by Laurence

EDIT: This article says we are in better shape than that, my % is lower according to it, but I'll survive:

http://www.fee.org/publications/the-...e.asp?aid=5600

Interesting that the top 25% of U.S. households are actually pretty well off! Half a million or more NW.
The article uses mean versus median, which is somewhat misleading. If you look at the Federal Reserve Report linked to the article at footnote 1, you can see that the mean for all households exceeds the median by a factor of four. Even among the top 10% in net worth, the mean is double the median. This is caused by a very few, incredibly wealthy people (think Buffet, Gates and Ellison) skewing the curve to the high end.

But your conclusion remains valid -- the top 25% are not doing all that badly
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Re: Feeling rich ?
Old 02-08-2007, 03:34 PM   #50
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Re: Feeling rich ?

I was thinking about, gee.. why did NYC and London come into it?

I think it's because in those places there are lots and lots of nice expensive things and conveniences to spend $$ on.

From personal experience I know that living in a small town there are very few ways to spend $200k/year in a satisfying way. Between the feed store and the Denny's and the Wal*Mart.. whaddya gonna do, exactly? Plus it puts you completely out of synch with everyone else around you.

Whereas if I REALLY had a lotta dough, Manhattan would be extraordinarily tempting (with a place in Truro/Jamestown/Nantucket for the summer).

I dream of being able to get Thai food delivered.. even at 6 p.m., much less at 4 a.m.. but there's essentially no amount of money here where I live that could make that happen. So I guess for where I am, I'm rich enough.

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Re: Feeling rich ?
Old 02-08-2007, 03:53 PM   #51
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Re: Feeling rich ?

Feeling Rich?

I hope it's just Mrs. Rich!
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Re: Feeling rich ?
Old 02-08-2007, 04:10 PM   #52
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Re: Feeling rich ?

Quote:
Originally Posted by Gumby
The article uses mean versus median, which is somewhat misleading. If you look at the Federal Reserve Report linked to the article at footnote 1, you can see that the mean for all households exceeds the median by a factor of four. Even among the top 10% in net worth, the mean is double the median. This is caused by a very few, incredibly wealthy people (think Buffet, Gates and Ellison) skewing the curve to the high end.

But your conclusion remains valid -- the top 25% are not doing all that badly
Thanks for clearing that up, I was trying to figure out the conflicting numbers. Gee I've missed the mean/median thing before, duh! Yeah, that's pretty decieving of him to use mean, it makes the numbers and his arguement look so much better. Everybody has got an agenda.
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Re: Feeling rich ?
Old 02-08-2007, 07:47 PM   #53
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Re: Feeling rich ?

Do I feel rich? I go back and forth - if you told me I would have my current net worth when I was 25..I would have rung my hands and smiled profusely. But now that I am here.....I believe the "you never have enough" or the "if I had double dollars vs. now" mindset exists to feel truly RICH.

But, that said I feel very fortunate and glad to be where I am....free....and on budjet!
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Re: Feeling rich ?
Old 02-08-2007, 09:44 PM   #54
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Re: Feeling rich ?

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Originally Posted by kjpliny
I think $5M is the point where interest on safe investment (5-6%) lets you live easily without having to work or worrying too much about money. Having an annual income of $250-300k for doing nothing seems about right.
How do you figure you can safely pull 5-6% on $5M nest egg? You still have to worry about inflation and long-term portfolio survival.

And then you've gotta pay taxes out of that withdrawal - spending money shrinks some more.

Still plenty though....

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Re: Feeling rich ?
Old 02-09-2007, 08:34 PM   #55
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Re: Feeling rich ?

I feel rich now that I know I need less stuff, not more. Got enough of what I need and a lot of what I want. Don't need more than that. We have the stash necessary to support our modest lifestyle indefinitely and we will be able to retire in a few years. So we are rich!! Rich!! (manic laughter).

I wouldn't mind having a giant room full of gold dubloons to dive into, a la Scrooge McDuck, but, eh, I can live without it.
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Re: Feeling rich ?
Old 02-10-2007, 11:07 AM   #56
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Re: Feeling rich ?

Quote:
Originally Posted by audreyh1
How do you figure you can safely pull 5-6% on $5M nest egg? You still have to worry about inflation and long-term portfolio survival.

And then you've gotta pay taxes out of that withdrawal - spending money shrinks some more.

Still plenty though....

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Re: Feeling rich ?
Old 02-10-2007, 06:28 PM   #57
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Re: Feeling rich ?

Quote:
Originally Posted by audreyh1
How do you figure you can safely pull 5-6% on $5M nest egg? You still have to worry about inflation and long-term portfolio survival.

And then you've gotta pay taxes out of that withdrawal - spending money shrinks some more.

Still plenty though....

Audrey
I was thinking not touching the principle unless necessary. Laddered CDs should do it...just the inflation thing ya gotta worry about. Then again, even adjusting the withdrawal for inflation, it would still take some time to draw down $5M to zero. A sum that large leaves lots of wiggle room for adjusting the withdrawal amount as things change.
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Re: Feeling rich ?
Old 02-10-2007, 07:09 PM   #58
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Re: Feeling rich ?

$C4000/mo. net is good for us.

Mrs. Zipper is working 2 more years until she is 60.

5% of $C500 000 ~ $C25 000 from portfolio.

CPP for me $C8000 and OAS for me @ 65 $C6 000

Mrs. Zipper pension + CPP @ 60 ~ $C10 000 and OAS @65 $C6000.

Handyman $cash jobs for me ~ $C9000.

Canadian Health Care system cost! Priceless.

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Re: Feeling rich ?
Old 02-10-2007, 07:56 PM   #59
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Re: Feeling rich ?

Quote:
Originally Posted by FinanceDude
I guess you can "feel rich" without being rich, but that seems too "deep" for me...............
I guess one also can be rich without feeling rich - along the lines of
rich is always "something more than I've got now".

In my personal semantics, "fortunate circumstances "or "financial independence" are are very different conditions from "rich" - which has a couple of connotations

1) The "rich" have sufficient means that money needn't be taken into account for most lifestyle choices and related expenditures. Rich people can pretty much buy or do anything they want without thinking about cost. I'd call it something like a "sustained capacity for extravagance". I'm not saying that the capacity for extravagance need or should be exercised, just that it exist. But that's a shaky metric. Extravagance is relative. On one extreme is the pathological extragavance that couldn't be satisfied by any amount of wealth. Toward the other end are those with more limited means, but who have everything they want due to their more modest lifestyles and desires. They may indeed be rich in spirit, but I'm not sure I'd call that "rich", in the spirit of the original question.

2) Perhaps a better metric is that the "rich" have the resources to make things happen within their spheres of influence
- via investments in development, substantial charitable contirbutions, legacy gifts, etc. - along the lines of the "rich" give their names to medical clinics, museum wings, campus buildings, etc., while the rest of us collectively support the general scholarship and acquisitions funds.

If you had asked me 20 years ago would what we have now constitute being "rich", I might very well have said yes. Now I'd say fortunate in circumstance, not quite financially independent, probably rich in spirit, but not really "rich".

For the record, I checked $5M for when *I'd* feel rich, a number that can be qualified by our LBYM orientation, and I realize we won't be naming many buildings from that kitty.
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Re: Feeling rich ?
Old 02-11-2007, 01:09 AM   #60
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Re: Feeling rich ?

STY...

Your definition of rich would need a few zeros after the numbers listed... I would not think you would be there with less than $100 mill... and even then you would have to be careful if you owned your own jet and 100 ft or 150 ft yacht.. you can burn through money quickly

And as others have mentioned... if you were in NY or London, a $10 million penthouse might not seem very big to you... so there is 10% of your money just for a place to live...

I put $5 mill down.. that is a level where I would not have to worry about anything... less than that I could easily get by, but there could be a worry crop up if something strange happened...
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