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Old 03-09-2015, 11:49 AM   #21
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Originally Posted by Andre1969 View Post
I always get confused by what constitutes a "household". For instance, in my case, I'm single, but have two unrelated house mates who rent from me. Would we be considered one household, or three?

If I have a NW of $1M, and the two of them have nothing, it doesn't seem right that either one of them could say "I'm in the top 8%".
Statistically, you're a rare case.

As far as I can tell, the three of you are one "household", specifically a "nonfamily household",
you are not a "family", and no one individual is a "family",
you are three "consumer units".

https://www.census.gov/cps/about/cpsdef.html
Consumer Expenditure Survey (CEX)

Statistically speaking, the biggest difference between households and families is that there are a lot of one person "households", but there are no one person "families".

"A household consists of all the people who occupy a housing unit. A house, an apartment or other group of rooms, or a single room, is regarded as a housing unit when it is occupied or intended for occupancy as separate living quarters; that is, when the occupants do not live with any other persons in the structure and there is direct access from the outside or through a common hall.

A household includes the related family members and all the unrelated people, if any, such as lodgers, foster children, wards, or employees who share the housing unit. A person living alone in a housing unit, or a group of unrelated people sharing a housing unit such as partners or roomers, is also counted as a household. The count of households excludes group quarters. There are two major categories of households, "family" and "nonfamily". (See definitions of Family household and Nonfamily household)."

A family is a group of two people or more (one of whom is the householder) related by birth, marriage, or adoption and residing together; all such people (including related subfamily members) are considered as members of one family. Beginning with the 1980 Current Population Survey, unrelated subfamilies (referred to in the past as secondary families) are no longer included in the count of families, nor are the members of unrelated subfamilies included in the count of family members. The number of families is equal to the number of family households, however, the count of family members differs from the count of family household members because family household members include any non-relatives living in the household.

A consumer unit consists of any of the following: (1) All members of a particular household who are related by blood, marriage, adoption, or other legal arrangements; (2) a person living alone or sharing a household with others or living as a roomer in a private home or lodging house or in permanent living quarters in a hotel or motel, but who is financially independent; or (3) two or more persons living together who use their incomes to make joint expenditure decisions. Financial independence is determined by spending behavior with regard to the three major expense categories: Housing, food, and other living expenses. To be considered financially independent, the respondent must provide at least two of the three major expenditure categories, either entirely or in part.
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Old 03-09-2015, 12:01 PM   #22
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Originally Posted by mpeirce View Post
Because of inflation, millionaire means something quite different as time goes on. I know we all pretty much know that, but the numbers are kind of interesting:
.
I'm old enough to remember 1958, but not old enough to remember 1900.

So my frame of reference is John Beresford Tipton, Jr. and his drive to give away $1 million every week (always "tax free").

I can remember calculating that at only 2.5% interest, that would produce an incredible annual income of $25,000.

Using the CPI series, I would need $8.4 million today to match that $1 million, and $210,000 to match the $25,000.
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Old 03-09-2015, 12:23 PM   #23
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I'm old enough to remember the early 70's. That timeframe doesn't seem all that long ago. Yet, in 1974, my Granddad retired after something like 35 years of railroad work, with a nice pension, and in his final year he was making $6/hour. Adjusting for inflation, that would be around $28.44/hr today, or about $59K per year at a 40 hour work week. Doing railroad work though, I imagine he had a pretty strong union, and probably got a lot of overtime. I know he was important enough, that during WWII, when telephones were a rare luxury, he had one, so that his employer could get ahold of him on a whim.

I started getting serious about buckling down and focusing on retirement back in 1998, once I finally cleared out some debt from a bad divorce, and was able to get serious about investing and saving again. At the time, I figured that if I had $1M, and was mortgage-free, I'd be all set. However, adjusting for inflation, even in that short timeframe (seems short to me at least), the equivalent of that in 2015 would be $1.434M and no mortgage.
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Old 03-09-2015, 01:20 PM   #24
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Net worth Percentile Rank Calculator | Shnugi

This is an interesting calculator to see where you are Includes house I believe.
So according to this at a typical ER age of 55-60 one needs to have assets of over $3M just to get into the top 5%. Ouch.
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Old 03-09-2015, 01:23 PM   #25
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10 million! Wow there are a lot is us out there aren't there, and we thought we were in the top 1%. That is a good thing though right?
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Old 03-09-2015, 01:58 PM   #26
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So according to this at a typical ER age of 55-60 one needs to have assets of over $3M just to get into the top 5%. Ouch.
Don't worry, that'll change with the next big market correction.
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Old 03-09-2015, 02:05 PM   #27
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Don't worry, that'll change with the next big market correction.
Yea but after recovery from that correction they will need 4 million

I look at charts and long term they seem to be going up.
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Old 03-09-2015, 03:35 PM   #28
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So according to this at a typical ER age of 55-60 one needs to have assets of over $3M just to get into the top 5%. Ouch.
Well, you could work longer to get there, if that's important to you. My goal is to be safely FI. I don't really care what percentile I'm in.
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Old 03-09-2015, 04:25 PM   #29
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So according to this at a typical ER age of 55-60 one needs to have assets of over $3M just to get into the top 5%. Ouch.

Competitive bunch here! Really, why does it matter where you stack up as long as you have enough?
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Old 03-09-2015, 04:31 PM   #30
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Well, you could work longer to get there, if that's important to you. My goal is to be safely FI. I don't really care what percentile I'm in.
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Competitive bunch here! Really, why does it matter where you stack up as long as you have enough?
Because you can never know if you have enough. "Safely FI" is a personal judgement based on probabilities, not a guarantee.
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