Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Is Everyone a Multi-Millionaire?
Old 07-18-2014, 09:19 AM   #1
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Eagan, MN
Posts: 3,050
Is Everyone a Multi-Millionaire?

I realize this board is very much a biased sample. We are all mostly looking towards retirement or are already retired; many are looking towards early retirement, which might bias it even more. We should be mostly in our prime earning years or at least close to our high point in our NW curve. A million is not what it used to be either. So more of us should be millionaires that the average population.

However, when I read some of the post here, it appears everyone is a millionaire, or even a multi-millionaire. Some people live in places where a megacorp $200K+ job, plus bonuses, are common, I can see someone being a millionaire with that salary. Yet, demographics say only ~7% of the US households has a net worth of over $1M. And average retirement assets, for someone near retirement age, is significantly less than even $400K.

From someone from Minnesota, who has never made much more than $100K, accumulating a million is a major accomplishment. Especially being single. There is a lot of sweat, saving, and long hours making the pile that large. I worked many different side gigs making an extra few bucks, and took a bunch of risks. And I got lucky in a few things. I can’t see too many people doing what I did, yet everyone seems to have not just one million, but five million.

So it makes me wonder… Are we all really the top 7% in wealth? Are the statistics wrong? Or is being a millionaire very common? Or maybe it’s this group that is almost all in the top 7% of wealth?
__________________

__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-18-2014, 09:28 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,619
Yep, almost everyone I meet is a multimillionaire and that's not counting the value of their homes. It just takes a little time. Anyways, it's not something to dwell on.
__________________

__________________
LOL! is offline   Reply With Quote
Old 07-18-2014, 09:30 AM   #3
Thinks s/he gets paid by the post
2B's Avatar
 
Join Date: Mar 2006
Location: Houston
Posts: 4,330
The simple answer is yes, many people here have net worths over $1MM. I doubt the over $5MM population is very large even here. $1MM net worth may be the top 7% but it's a long way from being "rich." Based on FireCalc, a millionaire can only withdrawl $40,000/yr over a 30 yr time frame. Some don't have serious pensions or retiree medical care.

A retired government worker with no savings frequently has more disposable income than a millionaire.

Read the Millionaire Next Door and you'll see that behavior and not income is the greatest factor in achieving wealth.

I work with lots of people making safely over $100K and some don't have anything saved. Some are millionaires several times over. Personally, I have enough (I hope).
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
2B is offline   Reply With Quote
Old 07-18-2014, 09:30 AM   #4
gone traveling
 
Join Date: Sep 2013
Posts: 1,248
If you had inflation adjusted pension of more then 50k at 55 or more then 40k at 40 you would also be millionaire.

So retired O4/O5 at age 44 with pension backed up by Federal Government is in a way millionaire even if he/she has empty bank account.
__________________
eta2020 is offline   Reply With Quote
Old 07-18-2014, 09:30 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,428
It would be a lot easier to tell if everyone just had a sign with their number like in those ING commercials.

__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is offline   Reply With Quote
Old 07-18-2014, 09:39 AM   #6
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,107
Senator, the answer is no: Early Retirement & Financial Independence Community - Net Worth Poll

Looks like ~50% have less than $2M, the minimum amount necessary to reach "multi" status.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 07-18-2014, 09:44 AM   #7
Thinks s/he gets paid by the post
 
Join Date: Aug 2005
Posts: 2,056
One statistic I read was that if you have at least $1M in investable assets (which does not include equity in your home(s), cars, yachts, private jets, etc), then you're in the top 8% of households in this country.

And, it would stand to reason, that people who are retired, or getting close to it, would be in that top 8%, 7%, or whatever, since they've focused on being able to retire. So you're probably going to run into more millionaires on this forum than in the general public, since this group isn't a representative sample of the masses. And, as 2B mentioned, don't forget people who have pensions. Most of the the older generations in my family ended up getting pensions, either from the government, the railroad, the aerospace industry, grocery store industry, etc. So there are a lot of people who are comfortably retired, but are nowhere near millionaires. Unless you were to count the future value of their pension, I guess.

I don't know anybody, personally, who has $1M in investable assets. I know a few people who might look rich, but they also have high paying jobs, and most of their money goes into maintaining that rich-looking lifestyle. Of course, there's always the chance that one of my friends/family members could have that much socked away and just not telling, but of the people who have told me what they have (I don't go asking, but we talk about investing, saving, retiring, and it just happens to come up), and none of them are anywhere near it.
__________________
Andre1969 is offline   Reply With Quote
Old 07-18-2014, 09:46 AM   #8
Recycles dryer sheets
 
Join Date: Aug 2012
Posts: 138
I noticed too that this board seems skewed towards those with a higher than average net worth as well as a lot of IT or engineering folks. I suppose the reason so many are "rich" (however you define that) is because most on the board have a goal to retire early, which requires serious saving.

If I include my home in my net worth calculation, I am close to $1M, but for sure far behind many of this board. And I'm not in IT or engineering and my salary is well below $100K.

All of that is A-OK. I've learned a lot so far from others here.
__________________
Live Free is offline   Reply With Quote
Old 07-18-2014, 09:46 AM   #9
Full time employment: Posting here.
 
Join Date: Jul 2007
Location: ST LOUIS
Posts: 993
Well I can say I am not. But I think forums like this attract people like that which is good we can learn something from them.
__________________
Proverbs 15:22 Designs are brought to nothing where there is no counsel: but where there are many counsellors, they are established.
rec7 is offline   Reply With Quote
Old 07-18-2014, 09:46 AM   #10
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,455
What about the value of pensions and Social Security?
__________________
MichaelB is offline   Reply With Quote
Old 07-18-2014, 09:53 AM   #11
gone traveling
 
Join Date: Sep 2013
Posts: 1,248
Quote:
Originally Posted by REWahoo View Post
Senator, the answer is no: Early Retirement & Financial Independence Community - Net Worth Poll

Looks like ~50% have less than $2M, the minimum amount necessary to reach "multi" status.

More interesting poll would ask "what are your INVESTABLE assets only".

Net worth while counting house, vacation house, cars etc etc is not very meaningful as far as FI goes.

maybe we need one
__________________
eta2020 is offline   Reply With Quote
Old 07-18-2014, 09:54 AM   #12
Thinks s/he gets paid by the post
 
Join Date: Aug 2005
Posts: 2,056
Quote:
Originally Posted by MichaelB View Post
What about the value of pensions and Social Security?
What is the proper way to calculate the value of SS or a pension, anyway? Take the annual amount and multiply by 25?

If I retire at 50, which is my realistic goal (my fantasy is much sooner), I'd stand to get around $15K per year in SS starting at 62. So multiplying that by 25 would give me $375K. So should I add $375k to my net worth?
__________________
Andre1969 is offline   Reply With Quote
Old 07-18-2014, 10:00 AM   #13
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Eagan, MN
Posts: 3,050
Quote:
Originally Posted by Andre1969 View Post
I know a few people who might look rich..
LOL, if you know me, you would not mistake me for anything other than someone that is homeless... Once I RE, I might start to look like one of the Duck Dynasty klan. At least going to work every day forces me to look (somewhat) respectable.


Quote:
What about the value of pensions and Social Security?
Pensions and Social Security definitely have a net prevent value, and it may well be over $1M. But I see so many posts with $1M+ in some retirement account, or home equity, etc.

The poll was interesting. Over 70% of the people have $1M+, and about 35% have $2M+

This group is definitley well above average, according to the research on financial status of retirement accounts.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is offline   Reply With Quote
Old 07-18-2014, 10:01 AM   #14
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,906
We are quitting the rat race at $1.4m to $1.5m because that level is enough to provide us with the income we need to retire in our 40s, but we are saving over $120,000 per year without counting market returns so easily could be in the multi status by age 50. Could also get the cancer at age 52.
__________________
Fermion is offline   Reply With Quote
Old 07-18-2014, 10:15 AM   #15
Thinks s/he gets paid by the post
martyb's Avatar
 
Join Date: Nov 2006
Location: Bossier City
Posts: 2,182
It would take more than 1.5 million in current assets to generate the yearly amount of my 2 COLA pensions, and they are COLA'd. However, I only have 400k in investable assets.
__________________
“Change is the law of life. And those who look only to the past or present are certain to miss the future.”
-John F. Kennedy

“Hard work never killed anybody, but why take a chance?” - Edgar Bergen
martyb is online now   Reply With Quote
Old 07-18-2014, 10:20 AM   #16
Thinks s/he gets paid by the post
 
Join Date: Aug 2005
Posts: 2,056
I think I read somewhere that the average household has something like $121,000 in net worth. So $1M+ in net worth, let alone investable assets, is quite an accomplishment, and not something you see every day.

My investable assets came close to $1M earlier in the month. I think i hit something like $985-990K around July 3. But the recent market blips have taken a bit of that away. But to look at me, you wouldn't notice it either. I live in a 98 year old house that needs a ton of work. The landscaping is nothing fancy. The dusty '79 Chrysler and rusting '85 Chevy truck in the driveway don't exactly ooze class. I cut my own hair, and don't always do the best job. And today I'm wearing jeans that were a Christmas gift, 8-year old cowboy boots, and a hand-me-down short-sleeve button up shirt. I either bring my own lunch to work, or go home, as it's only 2.5 miles.

So yeah, I don't exactly look or act the part...
__________________
Andre1969 is offline   Reply With Quote
Old 07-18-2014, 10:23 AM   #17
Thinks s/he gets paid by the post
 
Join Date: Feb 2014
Posts: 1,050
I went to a popular annuity calculator on the web and a male at 62yo today could buy a 15k/year annuity for about 235k today. Since you have many years to go to get to 62 this amount should be discounted for net present value from your age now to age 62.

I am puzzling about the 2 mil plus group, why they didn't retire sooner?? I guess they have a high expense life style or something. Since I am in the "frugal" category 2 mill plus seems gigantic.

A 50yo male with 2 million could buy an immediate annuity and get $108,720 a year until they die. Who needs 108k/year for a retirement?
__________________
jim584672 is offline   Reply With Quote
Old 07-18-2014, 10:27 AM   #18
gone traveling
 
Join Date: Sep 2013
Posts: 1,248
Quote:
Originally Posted by jim584672 View Post
I went to a popular annuity calculator on the web and a male at 62yo today could buy a 15k/year annuity for about 235k today. Since you have many years to go to get to 62 this amount should be discounted for net present value from your age now to age 62.

I am puzzling about the 2 mil plus group, why they didn't retire sooner?? I guess they have a high expense life style or something. Since I am in the "frugal" category 2 mill plus seems gigantic.

A 50yo male with 2 million could buy an immediate annuity and get $108,720 a year until they die. Who needs 108k/year for a retirement?
But try to buy that annuity at 40 and make it COLA. Such annuity would cost arm and leg. While if you buy it at 80 it will be a bargain.

That is why pension at age below 50 is extremely valuable thing.

BTW I don't count SSN in any kind of NW computation. But if I had a pension I would count it.
__________________
eta2020 is offline   Reply With Quote
Old 07-18-2014, 10:31 AM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,619
Quote:
Originally Posted by jim584672 View Post
I am puzzling about the 2 mil plus group, why they didn't retire sooner?? I guess they have a high expense life style or something. Since I am in the "frugal" category 2 mill plus seems gigantic.
Maybe they had cushy high-paying jobs that they enjoyed immensely? There are quite a lot of jobs that fit these categories.

This forum seems to attract folks who hate their jobs for some reason.

Furthermore, suppose someone is in a high-paying job that everyone else would hate to do. But the job needs to be done, so the employer has to keep raising compensation or that employee would retire. Did you ever wonder why CEOs or NBA coaches make the big bucks? It's because no one would do a good job at it without the high pay. They have enough, so they would simply walk away unless paid extremely well to keep working.
__________________
LOL! is offline   Reply With Quote
Old 07-18-2014, 10:42 AM   #20
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Eagan, MN
Posts: 3,050
Quote:
Originally Posted by LOL! View Post
This forum seems to attract folks who hate their jobs for some reason.
The folks who love their jobs post on "late-retirement.org"
__________________

__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Five Ways to Retire a Multi Millionaire Eyerishgold FIRE and Money 10 12-05-2010 09:09 AM
Cataract Surgery-Multi focal lens nwsteve Health and Early Retirement 15 10-07-2008 10:46 AM
Problem with Multi-MegaPixel Cameras TromboneAl Other topics 22 09-04-2007 07:32 AM
New guy & question on multi accounts Bimmerbill Hi, I am... 14 02-05-2006 08:22 PM

 

 
All times are GMT -6. The time now is 12:53 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.