$2.27 million to feel wealthy - 3% withdrawal rate

[foxfirev5]

That number is way too high!

I guess it's all in how you define "wealthy". To me, it's being able to afford everything you want, and also every experience that you want.

In my world there are plenty of people who are perfectly content despite having far, far less than $2.27 million in their investment portfolio.

Exactly. As long as I have enough I'm good. I feel very fortunate on the NW side. However the health and happiness side can be fleeting. I know a very wealthy man who has discovered in his late sixties that his health is declining. All that money doesn't mean much.


I've also noticed an inverse relationship between the size and cost of one's boat and their apparent happiness.

 

[HadEnuff]

I don't feel wealthy, but I feel very fortunate. With a 3% WR, and my and DW's SS, I can pretty much do anything I want to do. But there is a lot of expensive stuff I neither want, nor need, so I don't feel "wealthy"... Although I really wanted that Honus Wagner baseball card that just sold for a cool $1.2 Million...I wanted it badly.

Here you go! Buy this on Amazon for $12.99, and save $1,199,987.01.

The big advantage of doing this is that you can frame it and put it in your living room to stare at to your heart's content, for hours every day if desired. The expensive one you'd have to keep in a safety deposit box or something and you'd never get to see it. You'd need separate insurance for it too. What a hassle.

I figured if I was wealthy I could just stick it in the spokes of my bike to make it sound like a motorcycle. That's probably what my granddad did with HIS Honus Wagner card in 1910.

 

[joeea]

Nobody should "feel guilty" except criminals... and CNN, for their relentless blame-mongering.

Blame-mongering?

 

[marko]

THey appear to be quite wealthy, but with the cost of all that, I find it just as likely that they're up to their eyeballs in debt. Guess I can't fathom the annual cash flow required for that lifestyle. Taking care of the yacht alone must consume a couple mil per year!

We winter in Fort Lauderdale, land of the $20M homes and $50M yachts. I always point out to our guests that --by my guess-- a third of what you'll see is true wealth, a third are people scrambling like mad to keep their heads above water and a third are outright thieves with no intention of paying for any of it.

I do visit my old CEO from time to time and he has all those toys. I know that his NW is somewhere in the $200MM range so he is quite capable to handle the cash flow.

 

[marko]

If that family spent a conservative 3% of their assets each year, they would have $68,100 a year to live on. That's more than the median household income in the United States of $61,000 -- without even having to work."

I'm not sure one should define wealthy by being slightly above the median income unless 'not having to work for it' is your criteria.

Even then, $68,100 a year here just north of Boston isn't bad but doesn't get you much wealthy livin'.

 

[24601NoMore]

Finally had a chance to read the whole article..here's something that sums things up pretty well..

"I know people who make $250,000 to $500,000 and feel poor, and other people who make $70,000 and feel rich," says Tara Unverzagt, a certified financial planner.She points to research showing an income of about $70,000 is optimal for emotional well-being, and $95,000 is ideal to feel positive about your life, including meeting long-term goals and the inevitable comparisons with everyone you know."

So, as one would expect..it all comes down to your own situation and prior life experiences, where you live, and what you personally value out of life.

For us, we buy our clothes at Kohls, don't drive fancy cars, clip coupons (even the .50 ones) and by no means would feel "wealthy" at $68K/yr income..that's basically paying the bills in our area and wouldn't even leave any real $ available for one reasonably nice vacation a year, let alone any of the fancy toys that people have to feel "wealthy"..thankfully, I married a girl who doesn't want all the material things..some of our friends wive's or neighbors wouldn't think twice about buying a $1,000 pair of shoes or a fancy handbag. (A former co-worker's wife recently did just that, buying TWO pairs of $1,200 shoes while he was away on a business trip. He was NOT happy!) Us, that's money we can put into life experiences - or even simple things like paying for our insanely expensive healthcare..

 

[Dreamer]

It's all a matter of perspective I guess. I feel wealthy when I think about it at all. I'm wealthy because I don't have to work anymore if I don't want to. There isn't much that I want that I don't have. And if I really wanted it I could. My life is very full.

I totally agree with this.

There is a Swedish word, lagom, that means, just the right amount. I feel very fortunate that we have reached this and feel sorry for people who have much more than us, but will never reach it.

 

[Andre1969]

As others have said, how you arrive at that $2.27M net worth figure means a lot. For instance, I was probably close to that figure towards the peak of the market, last year. And, I'm probably not too far from it, right now.

However, this time last year, I felt more "free", for lack of a better word. Never did feel wealthy, although I did get to the point that about $1.9M was investible assets, the rest in home equity. But, the kicker was that I had just paid off the mortgage in January of last year, so my monthly expenses were low.

Today, maybe $1.74M of my net worth is in investible assets. The rest is home equity. And on top of that, I have a mortgage that's around $2600 per month, which helps me feel a bit less wealthy!

I've also learned, over the years, that I tend to fall victim to hedonic creep, or whatever they call it. Basically, as I become better off, instead of being grateful for it and feeling like I've hit the big time, instead I get used to it, and it suddenly feels like it's no great shakes. For instance, my new house is much nicer than the old one. Larger, more luxurious, more bathrooms, more efficient, larger yard, and it has a swimming pool. But, I've gotten used to it, so it feels like the norm, I guess, rather than something special.

 

[Nature Lover]

I like the term comfortable. Agree with others above that time/freedom is very valuable; and while I could've worked longer to have more $$, having enough to meet all my basic needs, with some extra for wants, without working, is just that: comfortable.

 

[FreeBear]

There is a Swedish word, lagom, that means, just the right amount. I feel very fortunate that we have reached this and feel sorry for people who have much more than us, but will never reach it.

+1

I FIRE'd when I had enough. This has been so freeing practically, mentally, even spirtually that I feel "wealth" and "rich" indeed. No, I can't buy literally anything I want, but I'm learning to want what I do have. To me this has been a big secret to successful FIRE.

I've also learned, over the years, that I tend to fall victim to hedonic creep, or whatever they call it. Basically, as I become better off, instead of being grateful for it and feeling like I've hit the big time, instead I get used to it, and it suddenly feels like it's no great shakes. For instance, my new house is much nicer than the old one. Larger, more luxurious, more bathrooms, more efficient, larger yard, and it has a swimming pool. But, I've gotten used to it, so it feels like the norm, I guess, rather than something special.

Hedonistic adaptation, often discussed on MMM. I find that it's real for me. Years ago, I lived with an amazing lake view. Visiting friends immediately walked to the windows and stared. After a few weeks, I got used to the amazing view. Often, the curtains were pulled due to the sun glare off the water!

Sometimes, just doing something different helps me appeciate what I have. We just returned from a month-long road trip, staying in middle-of-road accomodations. It was a great trip, but I'm glad to be back. I missed sleeping in my own bed, and missed the convience and flavors of cooking in my kitchen. In a way, it's good that we can't afford true luxury travel. It makes it easier to enjoy our house when we return.

I grew bored of my old Mac computer. Instead of picking up something new for 2 grand just to surf the web, I put linux on an ancient museum-piece Mac and it has been blast to fool around. It took awhile to get it w*rking, but it has been fun and surprisingly rewarding. It's nice to take a break from the "daily driver", no matter how nice.

 

[RobbieB]

I'm enjoying my hedontic creep, I want my Jacuzzi soak before bed so I book Hotels with this in mind.

 

[foxfirev5]

I'm enjoying my hedontic creep, I want my Jacuzzi soak before bed so I book Hotels with this in mind.

Generally I'm all in with your views. But not this one. I'll spend $500 a night on hotels but won't touch a Jacuzzi. After thousands of nights and flights I'm confident in my immune system but not in the tub.

 

[NW-Bound]

We once got a timeshare unit in Las Vegas through RCI (timeshare exchange company). They gave us 2 adjacent units with connecting doors as we traveled then with our children. Each unit got a Jacuzzi, and a full kitchen. Neither Jacuzzi got used. Didn't want to get all wrinkled.

 

[jkern]

My definition of Rich/Wealthy is having enough money to buy virtually anything you want within reason. It means you can live anywhere including places like San Francisco if you so desired. You can travel first class, buy expensive items, basically almost anything you like. No, it doses not include choosing which NFL team you want to buy. To me that would be a NW around $20M to $25M.

For me personally, I have no motivation or desire to be rich and wealthy. I'm perfectly fine being very comfortable. Depending on where you live and your personal situation, I would define very comfortable as a NW from $2.5M to $10M.

 

[ncbill]

For early retirement the way I see it, you need $1,000 a month to live a spartan, but still comfortable, life in most of the world (expat in Latin America, South East Asia, Eastern Europe, etc)...

There's a recent Bogleheads thread from a doctor just out of residency who calculated he could retire to his home country (SE Asia) in as little as 5-7 years and live very well...nice house/maid/cook/gardener/etc. or go for a U.S.-based retirement...after 15-20 years.

 

[NW-Bound]

... Depending on where you live and your personal situation, I would define very comfortable as a NW from $2.5M to $10M.

+1

It costs more to be comfortable in SF or NYC.

Good thing I do not like crowded places, because I do not have $10M.

 

[HI Bill]

Generally I'm all in with your views. But not this one. I'll spend $500 a night on hotels but won't touch a Jacuzzi. After thousands of nights and flights I'm confident in my immune system but not in the tub.

I agree...I've picked up several sinus infections from my association's jacuzzi...I'd trust my own, but not one at every hotel I visit...well, maybe if it were very high end. I also picked up a really bad case of athlete's foot in Japan. Took me the better part of a year to be rid of it, and cost me several new pairs of shoes and dive booties.

 

[Car-Guy]

My definition of Rich/Wealthy is having enough money to buy virtually anything you want within reason. It means you can live anywhere including places like San Francisco if you so desired.

If I were wealthy and lived in San Fransisco, I'd move!

 

[Housewife]

It really depends on what stage of life one is in. For a retired couple with pension+SS and Medicare, $4.5mm ($2.27x2?) seems quite comfortable. For a relatively young couple still raising school-aged kids, retiring early on NW of $4.5mm seems quite precarious. I would say, $20mm probably gets most people under most circumstances to feel comfortable. But even at that level, not everyone can afford to go first class whenever they fly, stay in five star hotels wherever they travel to, send kids to private schools without thinking twice, etc. 24/7 comfort, but not 24/7 luxury.

 

[aja8888]

My definition of Rich/Wealthy is having enough money to buy virtually anything you want ....... No, it doses not include choosing which NFL team you want to buy. To me that would be a NW around $20M to $25M.

F

That kind of wealth won't get you the down payment on an NFL team.

 

[daylatedollarshort]

If I were wealthy and lived in San Fransisco, I'd move!

Apparently not all of the .1% agree with you. San Francisco has the highest density of billionaires of any city in the world.

 

[daylatedollarshort]

It really depends on what stage of life one is in. For a retired couple with pension+SS and Medicare, $4.5mm ($2.27x2?) seems quite comfortable. For a relatively young couple still raising school-aged kids, retiring early on NW of $4.5mm seems quite precarious

The median household income in the U.S.is around $60K. $4.5M at just 2% withdrawal rate would be $90K a year, so I'm curious why you think that amount would be precarious for a young couple?

 

[RobbieB]

In addition to the Jacuzzi, an in house spa is nice for a good 1 hour Swedish massage.

 

[Car-Guy]

Apparently not all of the .1% agree with you. San Francisco has the highest density of billionaires of any city in the world.

Fine with me. I been there many times (mostly for business trips) but the last time I was there I called it the "Sewer by the Sea". Absolutely nasty.

Now, I will say, once you get out of San Fransisco "proper" there are some really nice areas. Still, not a place for me at any price or NW.

 

[Housewife]

The median household income in the U.S.is around $60K. $4.5M at just 2% withdrawal rate would be $90K a year, so I'm curious why you think that amount would be precarious for a young couple?

Well, at least around this area, the health insurance alone costs $25k a year. Real estate tax for a small house starts at $10k. There are a lot of other necessities that easily add up. Not much left for food, transportation, utilities, kids related expenses, travel, etc. I am sure there are lower cost of living areas. But I would imagine $90k/yr income does not get a family of four or five to feel wealthy in most part of US.