Does anyone else get sick of hearing ...

[gauss]

Just remember the old adage.
"The First Million is the Hardest..."

-gauss

 

[youbet]

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?

I don't get tired of it. Although, I don't pay much attention to it.

I think many folks underestimate or completely fail to consider the impact of inflation on their retirement finances. The stories about a million bux not being such a big deal anymore is simply another way of saying that inflation has eroded the purchasing power of the dollar. Not a bad reminder.

 

[Midpack]

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? As someone in the early accumulation phase who has worked hard to save and has gone without a lot of the luxuries, I have to admit I get a bit tired of this.

It's just a simple fact, so it doesn't bother me hearing it...

 

[DJRR]

The vast majority will never achieve it, so I still think it is a worthwhile goal and will be glad when I get there

Mostly an issue of expectations. When you think about it, $1M and a paid off house will allow you to live a reasonable middle class lifestyle WITHOUT WORKING. That is pretty incredible. Most people need a paycheck just to eat for the next 2 weeks, forget living without employment.

One million will not buy a Mercedes for every day of the week, private jet, $30k vacations, $M beachhouse, etc. etc. but it never really was a sign of that kind of megawealth since I have been alive. If you sign an NBA or movie contract or launch an IPO for $100M then you can live that kind of lifestyle, but a comfortable lifestyle without working sounds pretty good to me and is achievable by high income people in 15-30 years and everyone in 40-50 years due to compounding if you make the investments.

 

[youbet]

Mostly an issue of expectations. When you think about it, $1M and a paid off house will allow you to live a reasonable middle class lifestyle WITHOUT WORKING.

That assumption gets debated here quite often. I think it would be a close call. Yes, it can be done. Live in an inexpensive area. Avoid any hobbies or travel that run up any significant expense. Find low cost health care. Avoid any unplanned expenses. Etc. Etc.

But if you're retiring young and have no other resources (than the paid for house), $35k/yr (3.5% WR on one million bux of portfolio) will require some careful management.

I know there is a current thread where some of the participants are living on even less, but things like "free clinics" and a bit of part time work are mentioned, so probably a bit of a stretch to call it "middle class - without working."

It's all terminology and outlook of course.

 

[scrabbler1]

Mostly an issue of expectations. When you think about it, $1M and a paid off house will allow you to live a reasonable middle class lifestyle WITHOUT WORKING. That is pretty incredible. Most people need a paycheck just to eat for the next 2 weeks, forget living without employment.

One requirement for me to be able to ER was that my day-to-day (read: middle-class) lifestyle would be unchanged. All of my bills would be paid from my investment income (replacing my last wage income which was not much because I was hardly working anyway) with a comfortable cushion, another requirement for my being able to ER.

But, as you pointed out DJRR, I can "live a reasonable middle class lifestyle WITHOUT WORKING" and that IS pretty incredible.

 

[Katsmeow]

That assumption gets debated here quite often. I think it would be a close call. Yes, it can be done. Live in an inexpensive area. Avoid any hobbies or travel that run up any significant expense. Find low cost health care. Avoid any unplanned expenses. Etc. Etc.

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.

 

[youbet]

Some of this may depend on age.

I guess you didn't read all of my post. I said "But if you're retiring young and have no other resources (than the paid for house), $35k/yr (3.5% WR on one million bux of portfolio) will require some careful management.

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.

Hearing about your personal situation is always facinating Kat, but my comments were in the context of the OP, a younger person, and not at related to older folks at or near SS.

You and I are just visitors here in the "Young Dreamers" section of the FIRE board.

 

[Bestwifeever]

.... my comments were in the context of the OP, a younger person, and not at related to older folks at or near SS.

You and I are just visitors here in the "Young Dreamers" section of the FIRE board.

The OP also says within this thread that he will not have SS anyway.

I love the Young Dreamers section and the different scenarios and plans presented by them, being not young myself but still dreaming. They are sooooo much smarter than I was then and now.

Also love the OP's name.

 

[Katsmeow]

I guess you didn't read all of my post. I said "But if you're retiring young and have no other resources (than the paid for house), $35k/yr (3.5% WR on one million bux of portfolio) will require some careful management.

Hearing about your personal situation is always facinating Kat, but my comments were in the context of the OP, a younger person, and not at related to older folks at or near SS.

You and I are just visitors here in the "Young Dreamers" section of the FIRE board.

Just to be clear - I was using the example of SS only for DH and I. I wasn't discussing my personal situation in terms of portfolio, expenses, or anything else.

 

[clifp]

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.

 

[BigBangWeary]

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'.

 

[Meadbh]

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

 

[Snowcat]

.....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.

 

[Gumby]

Regardless of the fact that it's not what it once was, I'd still rather have a million dollars than not.

 

[imoldernu]

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...

 

[youbet]

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.

 

[Bestwifeever]

http://movieclips.com/8y9Wq-austin-powers-international-man-of-mystery-movie-one-million-dollars/

One millllllion dollars!

 

[Bestwifeever]

Nm

 

[bbbamI]

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.

 

[martyp]

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.

 

[travelover]

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.

 

[Mulligan]

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!

 

[youbet]

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?

 

[daylatedollarshort]

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.