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Anyone comfortable with $10 million?
Old 04-11-2004, 04:10 PM   #1
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Anyone comfortable with $10 million?

No offense, amt, but you sure have a way of provoking thoughtful discussions.

Another poster says that if their net worth rose by 10x, they'd have no problem enjoying life by spending more money. I have no idea what our median net worth is here, but let's call it $10M (insert your life-changing figure here).

I know we all COULD enjoy life by spending more money (along with eating healthier & exercising more often) but WOULD we?

Most of us achieved ER by cutting expenses and by investing wisely. I don't think any of us achieved ER by freely spending our money. The habits that got us to ER are the same habits that can inhibit our distribution of our riches.

Spouse and I frequently debate SG's "windfall" question, but most of the answers just accelerate our "To Do" list. For example, our side "yard" is filled with weeds. Another retired family member has pointed out that we could fix the yard with a gallon of Roundup, a flat of zoysia plugs, and a couple ER years of patient gardening. But if we wuz rich, we'd have a contractor landscape the side yard. Then we'd put french doors in the livingroom, replace the kitchen counter's uneven ceramic tile with Corian, and add that barstool counter. Gazing on these projects would give us lasting pleasure and they actually possess some value.

But what about charity, hedonistic entertainment, and depreciating assets?

We haven't found a charity that appeals to us. Our efforts will probably be limited to buying the books for a college-bound homeschooler. But that's personal-- if this bright-eyed kid was an IPO then we'd be buying shares. Would a $1M foundation have the same personal touch? Should it be $5M or even the whole $10M? (As one survey participant said in Stanley's Millioniaire Next Door, "I am my favorite charity.")

Would we really derive pleasure from an around-the-world cruise, or would we fret over the number of starving children that could be fed for that money? Even worse, would our "entertainment standards" degrade to grousing about the quality of our stateroom's Courvoisier?

Would we really buy that custom longboard or a beach house next to Velzyland? Are we really responsible enough to care for more of George Carlin's "stuff"? While I'm pretty sure that I could handle it, I'd miss my current neighbors and I'd hate the responsibility of caring for & protecting more stuff. Yet as an overfunded INTJ engineer, I'd go crazy wild installing a 2 KW photovoltaic array on the livingroom roof with a high-end Trace inverter, net utility metering, and maybe even a submarine-style battery bank. I'd spend, gee, maybe $35K or even $40K. But there I go again confusing "big boy toys" with assets.

And finally, what kind of example would all of the above behavior set for our kids? I have trouble putting hard-earned cash in a vending machine when I have a water bottle in the car, yet my kid is extremely generous with my money and could turn affluenza into a lifelong affliction. We personally know a formerly hard-charging naval officer, on the cusp of command, who inherited the sole trusteeship of the parent's multi-million $$ foundation. All those impassioned talks about serving your country, taking care of your people, and making the Navy a better place went out the window in one weekend. In fact, BUPERS quietly accelerated the retirement approval just to get this morale-poisoning self-centered hypocrite out of the command as quickly as possible. The foundation does distribute money for good works, but now this "ER" spends a goodly chunk of the foundation's assets on first-class research junkets, wining & dining "co-sponsors", and planning self-aggrandizing charity affairs. Whether our offspring are chronologically still kids or "all grown up", would our example inspire them? Or would it turn them into whiny needy economic outpatients?

A couple years ago as I contemplated ER, I e-mailed an acquaintance who shares a lot of my background but is 30 years farther down the road. Retired military in the '70s, he and his wife started a successful realty business and rode Hawaii's boom up through the early '90s. Today they've turned most of the work over to their kids while they travel the convention circuit and give motivational sales training to new realtors. It's a bit different than the Terhorst's lifestyle but it's certainly a heckuva way to be a perpetual traveler. He's over 70 years old and he's probably worth eight figures, but they spend over half the year on the road and he cheerfully admits that he'll never retire.

I've read all the books & articles about "sudden wealth" and we might get there someday via our 100% stock retirement portfolio (or not). But right now that windfall seems to be more responsibility/burden than pleasure. While the money would wipe out the honey-do backlog, I don't think we'd substantially change our frugal value-driven lifestyle. I don't think we'd spend the rest, but I don't know what we'd do with it. "All of the above"?!

Except maybe for that custom longboard and the Velzyland house. I'll have to provoke those thoughts some more.
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Re: Anyone comfortable with $10 million?
Old 04-11-2004, 05:46 PM   #2
 
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Re: Anyone comfortable with $10 million?

Yeah, I agree with Cut-throat on this one. And that
"in the long run we are all dead" stuff. IMHO that
should be kept firmly embedded in your frontal lobe,
whatever your age and ER status.

John Galt
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Re: Anyone comfortable with $10 million?
Old 04-11-2004, 05:47 PM   #3
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Re: Anyone comfortable with $10 million?

Nords, If the average net worth of the actors on this
board is $10M, then I am a very small fish swimming
in a big pond. I don't envy anybody with that kind of
wealth and never aspired to the life-style it would
bring..... probably the reason I am not a bigger fish.

All I have ever wanted was to keep a reasonable
lead on the wolf and do it my way.

Right now am trying to figure out if I can afford to give my daughter about $500/mo to put her 2 young kids
in a private school. The girl (5) is precocious and
would be bored in public kindergarten. The boy (3)
shows promise also and needs a challenge.

The welfare of my family and the support of my church
are my priorities. All the rest is just gravy and I am
fat enough already. But a trip to Hawaii and .........
and ............ and ............ would be nice.

BTW, on the $500/mo PaPa will probably find a way.

Cheers,

Charlie
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Re: Anyone comfortable with $10 million?
Old 04-11-2004, 06:01 PM   #4
 
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Re: Anyone comfortable with $10 million?

Hey Charlie (best to your brother Upton

If you are a "small fish", then I am not even plankton.
In fact, I would venture to say 95+% of the population
wouldn't even have tried it (ER) in my circumstances.

I have been lucky. Truly though I did not have a choice.
I decided it was the only way for me to spend the remainder of my life. Some people have opined it
must have been a wrenching decision. In reality, there
was no decision (whether to ER) to be made once I
saw the writing on the wall.

John Galt
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Re: Anyone comfortable with $10 million?
Old 04-11-2004, 07:33 PM   #5
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Re: Anyone comfortable with $10 million?

Speaking of being lucky, all the planets were in
alignment for me in '89. If I had not been able
to consult for 4 years and if the market had dumped
in the 90's I would have been in big trouble. I
made a blind leap of faith after a few what if's
scratched out on the back of an envelope. So
far, so good!! My port has thrived enough that a
4.2% SWR for 30 years looks OK for the end game.

Cheers,

Charlie

P.S. Upton sends his regards from Levenworth.
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Re: Anyone comfortable with $10 million?
Old 04-11-2004, 09:06 PM   #6
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Re: Anyone comfortable with $10 million?

Nords, I'd bet that your current net worth is 10x what is was sometime in the past. * Did you have any trouble adjusting? * Why do you think it would be difficult adjusting going forward?

I used to think more money would mean fewer compromises, but now I think that you always make compromises -- just at different levels.

As an extreme example, consider Bill Gates. * He's making wise and generous charitable contributions with his money, but do you think he can even make a dent in solving the many problems of the world by spending every cent he's got? * He's got to compromise, just at a different level than you and me.

I don't think it's that hard to adjust upwards, but at some point thinking of ways to spend the money does become a distraction. I haven't reached that level
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Re: Anyone comfortable with $10 million?
Old 04-11-2004, 10:52 PM   #7
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Re: Anyone comfortable with $10 million?

Anyone comfortable with $10 million? . . .

I'm willing to give it a try.

I'm happy with who I am. I think I'm a good person and I try to be a better person everyday. I would like to think that I make a positive difference. I don't always do the right thing, but I try to learn from my failures and improve.

Give me $10M and I can be a good person with $10M. I will still try to be a better person everyday. I will still try to make a positive difference. I will still make mistakes and try to learn from them and improve.
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Re: Anyone comfortable with $10 million?
Old 04-12-2004, 05:11 AM   #8
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Re: Anyone comfortable with $10 million?

$ 10 Million Sucks.

1995 temp job - the environmental permit team - temps plus engineers from major depts - was given the old Meyer's Briggs. Ater the the test, she separated us into groups and asked us each to present what we each would do - quickly, verbally off the top of our head with a tax free 15 million. Me and Hugh(the smallest group) - I said I'd put it the stock market and keep doing what I'm doing now. Hugh said he'd upgrade his home computers, possibly retire, and attend more pow - wows(Cheyenne). The other groups detailed how they would spend the money - including our team leader - go back to youth and stock car racing. It turned out that me and Hugh were the only INTJ's(except for the Phd who gave the test) out of maybe twenty engineers.

Now looking back, same answer - we're in the comfort zone and underspending FIREcalc now by 40-50%. North of $10 million, I would become insufferable - with possibly my own mutual fund or foundation and hit the talk/lecture/TV circuit with my theories. I also come from a long line of poverty so hiding from friends and relatives would also be necessary - I get exposed to a small number of requests and hare brained business ideas yearly already. My sister is my favorite idea generator on how we should spend more on ourselves now. She plans to never have enough to retire - frugal is like a tennis ball against a brick wall, it just bounces off. Her kids- whom I'd converted to Bogleheads get it - she don't.

I don't think I'm ready for ten million - yet. I need to think about it some more.
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Re: Anyone comfortable with $10 million?
Old 04-12-2004, 12:48 PM   #9
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Re: Anyone comfortable with $10 million?

Oog...ten milllllllion dollars.

I sat and thought about this for a while. I honestly couldnt think of a whole lot that I'd do differently.

I might convince the wife to quit her job, even though she enjoys it. An impediment would be health care for her, her asthma would put us into the risk pool. But $10M would resolve that.

I might buy a larger piece of property for the dogs to romp on; while I could afford it with my current nestegg, it would tighten things up a little. Big property near to town isnt cheap. Or perhaps something on the ocean, which is well out of my price range right now. But $10M would resolve that.

We might eat out a little more often, but we're usually disappointed with the food and service, even moreso lately. Either we're getting pickier or job quality in the kitchen and on the floor in restaurants is hitting an all time low. I might buy my own restaurant and eat in it every meal, I guess $10M would be useful there.

I really wouldnt want a bigger house, a more expensive car, or more expensive "stuff". A boat might be nice but its a lot of trouble.

I might hire someone to drop by my folks place every day and do some cooking, cleaning and laundry just to ease up their day a little.

Anyone looking for a good charity might consider

www.heifer.org

They're a "feed the hungry" type outfit, but with a different spin. Instead of supplying food they supply livestock with care and handling lessons to needy areas worldwide - - including the US. Basically you donate money to buy livestock, trees, bee hives, etc... along with care and harvesting instructions. A couple of goats feeding off of indigenous grasses and plants can provide a steady milk supply for a family along with baby goats that can be sold. They also have an "ark" that supplies an entire range of animals. You can donate as little as $10 for a "share" of an animal or as much as you like.

The charity has received very high marks for what they do, how they do it, and the application of funds.
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Re: Anyone comfortable with $10 million?
Old 04-12-2004, 02:59 PM   #10
 
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Re: Anyone comfortable with $10 million?

Well, as an ex-hunter I still subscribe to the Ted Nugent
school of thought vis-a-vis animals in general, i.e.
"Kill it and Grill it!" I am quite serious about this. Even
my faithful Labrador has been checked out for steaks and
roasts. And those people demonstrating against
slaughtering horses? Give me a break! What makes
horses so special?

John Galt
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Re: Anyone comfortable with $10 million?
Old 04-12-2004, 03:18 PM   #11
 
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Re: Anyone comfortable with $10 million?

Quote:
And those people demonstrating against
slaughtering horses? Give me a break! What makes
horses so special?
I have no problem with folks eating horses. Although myself I prefer Cow. A nice huge Filet Mignon grilled to Medium Rare!

It's probably just my culture - But I don't eat Dogs, Cats, Rats, Horses, hamsters or Liver from any animal.

But I have tried most all the Wild Game - Bear, Elk, Moose, Seal, Whale, Cariboo, Wild Sheep, Goat, Antelope, Deer, Rabbit,
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Re: Anyone comfortable with $10 million?
Old 04-12-2004, 03:21 PM   #12
 
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Re: Anyone comfortable with $10 million?

Cut-throat, you are trying to finesse the fact that you
are a carnivore. Get comfortable with it. You are at the top
of the food chain. As Martha S. would have said,
"It's a good thing!"

John Galt
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Re: Anyone comfortable with $10 million?
Old 04-12-2004, 03:50 PM   #13
 
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Re: Anyone comfortable with $10 million?

Quote:
Cut-throat, you are trying to finesse the fact that you
are a carnivore. Get comfortable with it. You are at the top
of the food chain.
God John Galt ! - I just about named every animal on the planet ! - I think I am comfortable with it ! -- Hell, I even put Whales and Seals on the list!

Just becasue I'd rather have a Cow Filet Mignon over a Horse is matter of taste not finesse!
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Re:  Burdens & responsibilities
Old 04-12-2004, 06:10 PM   #14
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Re:  Burdens & responsibilities

Good point about our net worth already rising by 10x, Wab, but the lifestyle difference between $100K & (future) $1M is night & day. Spending back then was work-related & before-kid with much adult entertainment (dining out, neighbor-island vacations) and buying homes/furniture. Spending today is retirement-related with a lot more kid-raising (sports, school, & family vacations). Home improvement has stayed about the same but we get a lot more bang for the buck since we've dispensed with contractors for all but the biggest jobs. We actually expect our expenses to drop (especially groceries & sports) once the kid leaves the nest (six years & counting!). Presumably empty-nester expenses will stay flat through our 40s-60s (plus the occasional capital improvement) but we have no idea where our retirement will take us and the roadmaps aren't well marked.

I guess we're more in unclemick's situation-- the money is piling up faster than we're spending it because we still view expenses for their individual value, not as a diminishing percentage of a rising portfolio. We got here by watching the pennies and we still bend over to pick them up. Heck, I still go dumpster-diving.

I guess a better question, already indirectly addressed, is whether asset allocation & goals would be changed by a windfall. For some it might accelerate the transition from work to ER and their AA/goals wouldn't change.

But for ERs who are below SWR (whatever SWR is appropriate, don't go there!) then the windfall might lead to new goals. In my case I don't think it would include higher entertainment spending.

As I consider everyone's responses, I think I'd invest a windfall with the same low-cost long-term perspective that we'll eventually have in our retirement portfolio-- index ETFs. It's boring but it has the best track record. I certainly wouldn't hesitate to buy a huge chunk of a deep value investment (especially a post-Buffett Berkshire Hathaway) but I think I'd leave the vast majority of it alone and restrict the dabbling to 10% "play" money.

One "set & forget" goal would be self-insuring for personal long-term care. If I had $10M, I'd put $1M in a small-cap value index and let it grow. My trustee would be directed to draw down that fund to provide high-quality round-the-clock home care with the goal of keeping me in the world and out of the hospital. While we could quickly vaporize our current ER portfolio in that pursuit, I think a separate fund would ensure that we could preserve my spouse's estate & lifestyle while freeing family of the need to care for me. In my advanced debility I doubt that I'd be able to tell the difference but it'd certainly eliminate today's emotional imperative to "conserve" the retirement portfolio for long-term care.

Then we'd brainstorm the remaining $9M for how much we wanted to direct to charity-- $10K/year, $50K/year, whatever. I'd pick up my copy of Bernstein, design the AA from scratch, and start writing the checks at a 4-5% SWR. Perhaps I'd adopt a more liberal application of $$ to help people cut through the obstacles to a school opportunity or to recover from a catastrophe. OTOH the obstacles probably serve the useful (yet painful) purpose of testing the beneficiary's commitment and teaching them to plan for the unexpected. I am enamored of Habitat for Humanity and food banks. I rarely reach for my wallet to "solve" a problem now and I'd probably have a hard time doing it in the future.

Like Bill Gates, I'd hesitate to leave anything to my kid. I've been able to strive for & achieve a number of goals in my life and I'd hate to take that away from my kid with well-meaning donations.

Hunh, maybe I don't need to wait for a windfall... I could start working on those goals today! It certainly seems more rewarding than coming up with new ways to entertain myself. Maybe I'll need a new entertainment goal when I'm winning all the surf meets in my age group, but that's not happening anytime soon.
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Re: Anyone comfortable with $10 million?
Old 04-12-2004, 09:53 PM   #15
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Re: Anyone comfortable with $10 million?

Do people with >$10M still cut dryer sheets in quarters?
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Re: Anyone comfortable with $10 million?
Old 04-13-2004, 04:23 AM   #16
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Re: Anyone comfortable with $10 million?

Who was the lengendary spinster who ran $4000 to 22 million over 50 yrs after leaving civil service in the forties. Oft written about - but never mentioned dryer sheets - brown bag lunches at shareholder meetings - but not dryer sheets. Perhaps a retro clothes line person - BD(before dryersheet).
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Re: Anyone comfortable with $10 million?
Old 04-13-2004, 12:05 PM   #17
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Re: Anyone comfortable with $10 million?

Quote:
Do people with >$10M still cut dryer sheets in quarters?
I'd have my manservant do it for me.
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Re:  The only way to get to $10M...
Old 04-13-2004, 04:06 PM   #18
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Re:  The only way to get to $10M...

... is to cut dryer sheets in eighths!
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Re: Anyone comfortable with $10 million?
Old 04-13-2004, 05:07 PM   #19
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Re: Anyone comfortable with $10 million?

Hey, I havent used a dryer sheet in over a month.

Do these things obtain vintage value at some point?

I'm changing my sig soon:

TH
Reviled non-user of dryer sheets. Collector of wires and pieces of wood. Human entropy machine in the garage. Avoider of yard work.
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Re: Anyone comfortable with $10 million?
Old 04-15-2004, 08:22 AM   #20
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Re: Anyone comfortable with $10 million?

Quote:
I'd go crazy wild installing a 2 KW photovoltaic array on the livingroom roof with a high-end Trace inverter, net utility metering, and maybe even a submarine-style battery bank. *I'd spend, gee, maybe $35K or even $40K. *But there I go again confusing "big boy toys" with assets.
I've been thinking about a 1KW array myself (not very hard). It looks like they're well under $10K now, you get a tax break, and the thing does pay dividends via net metering. We've got a south-facing house that gets all-day sun (such as it is in the PacNW) and a section of almost-flat roof that would be a good spot for the panels.

We're also on the coast facing the prevailing winds, so a microturbine might be fun too.

And if there was a lot of surplus cash sitting around, I'd have to start shopping for a missle silo designed to withstand 9.0 earthquakes and direct nuclear attacks. A helicopter, yacht (with helicopter pad, of course) and a small submarine would also be on the list.

I think $10M would vaporize before I even got started....
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