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Old 06-21-2013, 11:49 PM   #61
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Some of this may depend on age. Yes, for a couple who is say 40 or 45 who had a million and no prospect of a pension and only SS far away, then, I would agree with you.

OTOH, if you assume a couple on SS, living in most areas in the US, I think it is a fine life. DH is already on SS. I'm not old enough yet, but if I took at 66 (FRA - haven't decided when I will take it yet), our combined income from SS alone would be $50k so adding portfolio withdrawals from a million would be a fine life and certainly wouldn't mean avoiding hobbies or travel.
I think there is widespread agreement on the board. That a 40 year old couple with a million dollar and no paid off house, has to make some significant life style sacrifices to retire early. The addition of a kid and/or living on the coasts make retirement really really challenging. On the other hand a 60 single person, with a paid off house, and million dollars primarily in taxable accounts and ROTHs, can retire easily while maintaining an upper middle class lifestyle in all but the most expensive places in the country. Both of these people are early retirees.

On the other hand the NYT reporter was talking about a 65 year old couple ( if they owned their own home was unclear.) with a million dollar portfolio. Once you add in Social security into the mix, they should have plenty of money even in an expensive place like NY. You really have to work hard to design scenarios (e.g. all money invested in muni bonds, Park Ave condo) before they have a serious chance of running out of money before dying.
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Old 06-21-2013, 11:55 PM   #62
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Thanks Bestwifeever, although I don't know if it is a matter of being smarter. Scared into paying attention is probably more like it I think that many in my generation are paying attention simply because we see the writing on the wall when it comes to financial security in our future. How many are in a position to do something about it at the moment in their careers is a different story.

Something I have noticed about the discussions I have had regarding reaching 1 million in liquid net worth is how the different generations perceive this. I think most of us on the younger end of things see it as a significant achievement that will put us in a position to have choice and a reasonable degree of safety in the case of a career or health shock. Rarely do I talk to a member of my generation on these forums who plans to hang up their pick axes and sip margaritas on the beach.

I hope to reach this number by 40 (I will be 33 in a month), but I would not stop working or stop investing. I would like to see this nest egg continue to grow as I live off of my salary doing something I enjoy and having the flexibility to pass on projects I might not like doing. I think the older members of forums like this see 1 million in liquid net worth as a time to stop working and truly retire. Either way, this shouldn't diminish the fact that the vast majority of people will not reach this point. I still think it is worth more respect than saying 'It's not that much anymore' or 'It's easy to reach a million'.
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Old 06-22-2013, 12:51 AM   #63
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Thanks Bestwifeever, although I don't know if it is a matter of being smarter. Scared into paying attention is probably more like it I think that many in my generation are paying attention simply because we see the writing on the wall when it comes to financial security in our future. How many are in a position to do something about it at the moment in their careers is a different story.

Something I have noticed about the discussions I have had regarding reaching 1 million in liquid net worth is how the different generations perceive this. I think most of us on the younger end of things see it as a significant achievement that will put us in a position to have choice and a reasonable degree of safety in the case of a career or health shock. Rarely do I talk to a member of my generation on these forums who plans to hang up their pick axes and sip margaritas on the beach.

I hope to reach this number by 40 (I will be 33 in a month), but I would not stop working or stop investing. I would like to see this nest egg continue to grow as I live off of my salary doing something I enjoy and having the flexibility to pass on projects I might not like doing. I think the older members of forums like this see 1 million in liquid net worth as a time to stop working and truly retire. Either way, this shouldn't diminish the fact that the vast majority of people will not reach this point. I still think it is worth more respect than saying 'It's not that much anymore' or 'It's easy to reach a million'.
I am 22 years older than you. The way you think about $1m now is how I felt about $1m 22 years ago (when $1m was worth more than it is now*). When I eventually got there at age 48, I began detailed planning for ER at 55. With several million.

* Up to $2.7m in today's dollars according to Measuring Worth - Measures of worth, inflation rates, relative value, worth of a dollar, purchase power
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Old 06-22-2013, 04:09 AM   #64
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.....because, as I like to say, "I'd rather have my money working for me than me working for my money!"
Full agreement on this. Additionally, for those who can't seem to amass this (due to spending excuses), go right a head keep paying into social security.
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Old 06-22-2013, 09:17 AM   #65
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Regardless of the fact that it's not what it once was, I'd still rather have a million dollars than not.
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Old 06-22-2013, 09:53 AM   #66
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Great thread... A bit difficult to relate to, as we get nearer to the four score in years, but helpful in keeping perspective.
.........................
In 1956, Junior year in college...first semester, I was looking forward to spending part of the summer due to an invite to participate in the Pan-Am Games in Mexico. Disaster struck!... My scholastic grade average was B- and below the Flat B average needed to continue my $800/yr scholarship. The school cut the scholarship in half... to $400. That meant I had to work the whole summer in order to go back to school in the fall. No student loans in those days. A very sad end to a dream.

The perspective? The current annual four year cost for a four year education at the same school, is $224,000.00.

Times change...
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Old 06-22-2013, 10:56 AM   #67
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In 1956, Junior year in college...first semester, I was looking forward to spending part of the summer due to an invite to participate in the Pan-Am Games in Mexico. Disaster struck!... My scholastic grade average was B- and below the Flat B average needed to continue my $800/yr scholarship. The school cut the scholarship in half... to $400. That meant I had to work the whole summer in order to go back to school in the fall. No student loans in those days. A very sad end to a dream.

The perspective? The current annual four year cost for a four year education at the same school, is $224,000.00.

Times change...
Yes indeed times change..........

My first year of undergrad school at a somewhat upscale private college was $1850 for room, board and tuition. That was 1965. When my class graduated in 1969, a good starting salary was $10k.

A million bux back then was really, really big bux! And as some are pointing out, one million is still not chump change. But from the perspective of those of us who'be been around a bit, the relative value has taken a significant hit.
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Old 06-22-2013, 12:31 PM   #68
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http://movieclips.com/8y9Wq-austin-p...llion-dollars/

One millllllion dollars!
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Old 06-22-2013, 12:32 PM   #69
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Nm
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Old 06-22-2013, 06:45 PM   #70
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Interesting thread.

If anyone wants to know if I think a million dollars is a lot of money...try to overcharge me by just $10 and see what happens.

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Old 06-22-2013, 06:55 PM   #71
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Does anyone else get sick of hearing that a million dollars isn't what it used to be or isn't that much money anymore?
For me yes . . . it is also one of those many useless rules of thumb about what is needed to retire.
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Old 06-23-2013, 09:47 AM   #72
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Interesting thread.

If anyone wants to know if I think a million dollars is a lot of money...try to overcharge me by just $10 and see what happens.

Amen. I'm amused by people that clip coupons yet pay their FA 2%. I squeeze the nickel until the Indian chases the buffalo.
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Old 06-23-2013, 10:43 AM   #73
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Amen. I'm amused by people that clip coupons yet pay their FA 2%. I squeeze the nickel until the Indian chases the buffalo.
I love that line!
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Old 06-23-2013, 10:49 AM   #74
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Interesting thread.

If anyone wants to know if I think a million dollars is a lot of money...try to overcharge me by just $10 and see what happens.

Just curious bbbamI....... What's "a lot of money?" Is it as much as it used to be? If you have "a lot of money," are you FI'd? Or does it take 1.5 X "lots of money" to be FI'd out there in the wild west?
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Old 06-23-2013, 11:12 AM   #75
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I think part of the problem is the current low interest rate environment. There was a time you could put the money from $1M in a CD ladder and have enough income to live off the interest. That is much harder to do these days. You'd have to have pretty low expenses to pull that off.
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Old 06-23-2013, 12:40 PM   #76
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And there in lies the rub. Fifteen years ago many commenting here would have agreed that a million dollars was a lot of money (or arguably more than it is now). But the reality is that the median household income in the US has not increased over those 15 years, and has probably decreased when adjusted for inflation. Prior to 2000 it would also have been fairly easy to put money into some safe bonds and beat inflation without breaking a sweat. I guess my point is that a million is still 20 times the medium household income in the US (as it was in 1999) but it has been arguably harder for the average 'Young Dreamer' to move towards this figure if they started in the last decade.

Don't get me wrong, I like a challenge I just wonder if some are letting their past experiences and perceptions color their view of our present reality.
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