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Old 10-06-2015, 04:01 PM   #61
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The chart is a bit confusing to me. The figure of $1.9M is a "median", not a threshold. Half of the households in each group have less than that amount, and half more. So if I understand, it says "half of the households that are in the top 10% have more than $1.9M, and half have less". Am I reading this correctly?
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Old 10-06-2015, 04:26 PM   #62
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Yes, it's a median figure, not a threshold.

But, chances are that your 1-in-10 couple may also be in the 1-in-20 group. Now, the top 5% has a more respectable median figure of $3.8M.

The number goes up very quickly at the top, it's almost exponential.


What's more interesting is that older geezers start to lose their money after the age group of 60-69. What happens? They spent it all, lost it to the market, gave to their kids or what?
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Old 10-06-2015, 04:34 PM   #63
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I guess the desire to measure ourselves against others lasts well into retirement. Natural I guess?
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Old 10-06-2015, 04:34 PM   #64
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OK, households, not individuals. I feel much better now, thanks.

I was about to say that from now on whenever I go to Costco or Walmart I would not look at fellow geezers the same, because you never know the kind of money they have.



So, if 1 in 10 geezer couples has a $1M home and $3M stash, that's still a lot of multimillionaire geezers. No?

And based on the ones I know, you will never know what they have based on what they wear or buy. Most I know spend way less than me. They didn't accumulate it by high salary jobs and certainly not by spending any of it along the way. You will pry it from their cold dead hands. And no matter how low interest rates get they will never run out of money or be a burden to society....They will just figure out how to spend less!


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Old 10-06-2015, 04:41 PM   #65
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... no matter how low interest rates get they will never run out of money or be a burden to society....They will just figure out how to spend less!
Good. So, perhaps they do not need SS either. I think the gummint is watching them, and may be thinking the same.

I am a big spender, so maybe I will get some of their SS.
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Old 10-06-2015, 04:46 PM   #66
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Good. So, perhaps they do not need SS either. I think the gummint is watching them, and may be thinking the same.



I am a big spender, so maybe I will get some of their SS.

Ha! What do you think they live on? It sure isnt their accumulated wealth...They worked too hard saving that up to ever spend it!


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Old 10-06-2015, 04:50 PM   #67
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OK. Maybe a wealth tax will pry some of that cash loose.
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How Much Money Do You Need To Be In The Upper 25%
Old 10-06-2015, 04:55 PM   #68
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How Much Money Do You Need To Be In The Upper 25%

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OK. Maybe a wealth tax will pry some of that cash loose.

It is a shame I cant send about 8 people out your way to teach them how to spend some of it. None of them are related, but based on spending habits you would think they came out of the same litter. It is a shame they cant enjoy it.... The stories I can tell...sawing paper towels in half, closing bedrooms down and sleeping in living room to save heat, not buying beef anymore because of cost, ordering the cheapest coffin and complaining that is too high, creating a "flat scree tv hanging on a wall by nailing plywood to the wall and setting tube top tv on it.....I could go all day. And these are from all different people, not the same person!


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Old 10-06-2015, 04:56 PM   #69
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And based on the ones I know, you will never know what they have based on what they wear or buy.
I dunno, beater cars and shabby casual seem to be the preferred look.

It's pretty sad. One of my co-workers was evicted from his apartment and there was a time he lived in his car and took showers in the office (he's got a hoarding problem). He's also got a couple mil in AAPL.
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Old 10-06-2015, 05:09 PM   #70
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What's more interesting is that older geezers start to lose their money after the age group of 60-69. What happens? They spent it all, lost it to the market, gave to their kids or what?
For age 60-69 today, that means they were roughly 25 or so in 1980, or just starting their working careers. Not a bad time period to start investing in the (then) newfangled 401ks and IRAs, or stock market in general. Those who are older than 60-69 had been banged up by the late 60s/70s decade of investing malaise with stagflation/oil shock/etc. Perhaps you are seeing a perfect parallel example in-action of the effect of the "hapless retiree", who, instead of retiring in the worst FireCALC 30 year period starting in circa 1964, just started their careers and started saving in the worst FireCALC 30 year period?

I'm willing to bet that if you checked the FireCALC time periods, you'd find someone retiring in the early-mid 80s probably ended their 30 year period with one of the larger portfolio balances in FireCALC's inventory of results. Which might explain why those older than 60-69 have a smaller median net worth compared to those in the 60-69 bracket.

Also, many people still just start to retire in the early 60s age range. Meaning they will only be spending for a few years in their 60s. Once they are in their 70s, they keep on spending those retirement dollars living their dreams. Not to mention that some will undoubtedly start spending more on health care costs.

So combine the above factors, and it makes sense why there is a drop in average net worth by then.
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Old 10-06-2015, 06:57 PM   #71
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Yes, it's a median figure, not a threshold.

But, chances are that your 1-in-10 couple may also be in the 1-in-20 group. Now, the top 5% has a more respectable median figure of $3.8M.

The number goes up very quickly at the top, it's almost exponential.

What's more interesting is that older geezers start to lose their money after the age group of 60-69. What happens? They spent it all, lost it to the market, gave to their kids or what?
Thanks. If I'm reading this correctly, we can also get thresholds. For the 60-69 group:
The bottom border of the top 12.5% is $712,000
The bottom border of the top 5.0% is $ 1,955,000
The bottom border of the top 2.5% is $ 3,781,000
The bottom border of the top 0.5% is $11,683,000

I tried curve fitting in Excel. It gave me a 1/x form (7127/x^n where n=.855). That gets extremely steep.

Burns suggest that high wealth people are likely to give money away as they age (children and charities). I'll also point out there are more couples in the 60-69 group than in the 80+ group. So the per-person drop off isn't quite so strong, and the single survivor may well feel she can afford to give more away.
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Old 10-06-2015, 09:22 PM   #72
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I am not sure I would count on most people filling out financial surveys any more truthfully than they fill out online dating profiles. Plus many wealthy households are not going to tell anyone how much they have in any survey. Are pensions and SS included in the net worth figures? They can be worth millions. How about money in the Caymen Islands?

The estate multiplier technique based on IRS data usually comes out with lower thresholds for the various percentiles of wealth. Personally I view any survey data skeptically. The true numbers could be much higher or lower.
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