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Does anyone else get sick of hearing ...
Old 06-19-2013, 09:47 AM   #1
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Does anyone else get sick of hearing ...

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. Especially since most of my net worth has come through old fashion savings (thank you flat market )

I realize that a million saved is no longer a sure bet for a life of luxury (although those who subscribe to ERE would disagree), but it still seems like a heck of a lot to me! I highly doubt most of the people I hear saying this, or who post about it online are millionaires themselves.

I know it is hard to find truly accurate statistics, but if we trust Thomas Stanley's research and similar studies, only about 7-8% of all US households are millionaires, while nearly 70% are living pay check to pay check. I suspect that with such low returns in the markets, it will be even harder for the average person to accumulate the coveted million in the future, but I may be proven wrong.

What do you think? Is it just me, or do other 'Young Dreamers' here feel the same?
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Old 06-19-2013, 09:58 AM   #2
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If you can live on $40,000/yr pre-tax, a million is still a lot of money.

If you can't, it's not a lot of money.

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Old 06-19-2013, 10:17 AM   #3
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I'm not a young dreamer, but I have two comments:

1) One important step to FIRE, IMO, is to learn to ignore what 'everybody else is saying'. You will be trying to march to the beat of a different drummer, the others are just noise.

2) A 40,000 COLA'd pension is worth about a million, as is $40,000 in SS (which a couple might be receiving). Many of those studies don't factor in the 'phantom value' of pensions/SS.

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Old 06-19-2013, 10:19 AM   #4
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I think it is a lot of money, and almost enough to retire on (for me). But it isn't what it used to be!

To put it in perspective, in some places (SF, Silicon Valley, NYC, I'm looking at you!) you can barely buy a decent home in a good location for a million bucks.

Edit to add: A million bucks, plus a paid off house, plus some expectation of SS some day, is a lot of money/assets. And in a low cost of living area could be "enough" to live comfortably indefinitely.
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Old 06-19-2013, 10:21 AM   #5
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I get tired of it, too. I still view a person with a million as rich. Not capital R Rich, but rich nonetheless.

Too combat this I remind myself that:
A. Most of the people saying this don't have a million.
B. The median net worth for a 70 year old is $232000. I'm ahead of that, and I'm 41. I'm also well ahead of the median net worth for my age and income. Suddenly I don't feel so annoyed by others ignorant comments.
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Old 06-19-2013, 10:26 AM   #6
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It is tough being a secret millionaire these days. I just go along with the group think and say it sure is tough to get a million (legitimately true) and that yes, it isn't what it used to be.
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Old 06-19-2013, 10:32 AM   #7
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Originally Posted by BigBangWeary View Post
What do you think? Is it just me, or do other 'Young Dreamers' here feel the same?
I'm 36, dreaming of a nice early retirement in my 40s.

I think the people saying 1 million isn't what it used to be:

- Don't understand compounding interest.
- Don't understand inflation (the phrase no **** Sherlock comes
to mind).
- Are tweeting that thought from their $700 ($200 if subsidized) smartphone on their $200/month unlimited data plan.

It's amazing to me the things people "can't get by without" these days.
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Old 06-19-2013, 10:37 AM   #8
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I don't know about married couples these days, since I haven't been married for 15 years by now - - but with both working, and sharing a house, maybe money piles up faster than it used to? It never piled up at all in my marriage.

Anyway, in my opinion, if a single person cannot retire on a million dollars then it is by choice. Either they are insisting on living in a high cost area, or traveling a lot, or living like a rock star, or something like that I guess. I think that a million dollars is quite a fortune for a single retired person who is living a middle class lifestyle in fly-over country and doesn't want to travel extensively.

According to Wikipedia, less than 1% (3,068,000 in 2012) in the US have a million dollars.

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Originally Posted by Keim View Post
Most of the people saying this don't have a million.
Good point!
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Old 06-19-2013, 10:39 AM   #9
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Yes, I get tired of hearing it. A million bucks is not what it used to be, but it's still a whole lot of money - more people would be millionaires if it was such a trivial amount of money. Still, from a FIRE perspective, a million allows you to live on $30K-$40K a year, no exactly a millionaire's lifestyle. I guess that's why a million dollar does not feel like a lot of money to some people anymore.
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Old 06-19-2013, 10:39 AM   #10
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Well, here is Charlie Munger's take.

Quote:
“There's nothing as insignificant as an extra $2 billion to an old man.”
Ex-billionaire Charlie Munger on recent donations: 'I won't need it where I'm going' - Omaha.com
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Old 06-19-2013, 10:47 AM   #11
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Hey, a million is a lot of money no matter how you cut it. Also, if you stay conservative and flexible with your withdrawals and stick to a moderate asset allocation it could actually continue to grow.
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Old 06-19-2013, 10:48 AM   #12
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A million is still a nice round number and a marker of achievement. It can fund a modest retirement, and it can make a tremendous difference in a person's life. Inflation means that having a million in NW no longer means you are filthy rich. Nowadays it takes $3-5 million to be affluent and at least $10 million to be filthy rich IMHO.
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Old 06-19-2013, 10:49 AM   #13
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Originally Posted by nash031 View Post
I'm 36, dreaming of a nice early retirement in my 40s.

I think the people saying 1 million isn't what it used to be:

.........Are tweeting that thought from their $700 ($200 if subsidized) smartphone on their $200/month unlimited data plan.

It's amazing to me the things people "can't get by without" these days.
Yup. I work with a lot of those people. They will say (in all seriousness) that they just CAN'T save any money - ever.
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Old 06-19-2013, 11:15 AM   #14
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Anyway, in my opinion, if a single person cannot retire on a million dollars then it is by choice. Either they are insisting on living in a high cost area, or traveling a lot, or living like a rock star, or something like that I guess. I think that a million dollars is quite a fortune for a single retired person who is living a middle class lifestyle in fly-over country and doesn't want to travel extensively.
A single person with no kids (like me) can live pretty easily on less than $1M (in taxable accounts; I have about $800k in taxable, $400k in TIRA thanks to recent market gains) even in a high-cost area such as Long Island. I paid off my mortgage in 1998 so my housing costs are very low. I LBYM and have cheap, local hobbies. I can generate about $35k in interest and dividends from my taxable accounts without breaking a sweat.........because, as I like to say, "I'd rather have my money working for me than me working for my money!"
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Old 06-19-2013, 11:29 AM   #15
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We are at $1.5M but I'd feel more comfortable at $2.0. I'm sure this is not what you wanted to hear.
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Old 06-19-2013, 11:30 AM   #16
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One of the problems with being a young dreamer.... inflation takes a big hit to your savings..


When I was in my teens I had planned on being a millionaire in my 50s... it was easy.... I did the calculations on a piece of paper...


The problem I now have is that I am in my 50s... a million dollars back then would require over $4.3 million in today's dollars... I am not even close...

And nobody was saying back then..... I want to be a $230,000 aire....
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Old 06-19-2013, 11:32 AM   #17
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Originally Posted by ERD50 View Post
1) One important step to FIRE, IMO, is to learn to ignore what 'everybody else is saying'. You will be trying to march to the beat of a different drummer, the others are just noise.

2) A 40,000 COLA'd pension is worth about a million, as is $40,000 in SS (which a couple might be receiving). Many of those studies don't factor in the 'phantom value' of pensions/SS.
+1
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Old 06-19-2013, 11:48 AM   #18
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.....Especially since most of my net worth has come through old fashion savings (thank you flat market )

.......with such low returns in the markets, it will be even harder for the average person to accumulate the coveted million in the future, but I may be proven wrong.

What do you think? ....
I think the notion of a flat market and low returns are a popular misconception.

The fact is that $10,000 invested in the Vanguard Total Stock Market Index Admiral shares on June 1, 2003 was worth $21,784.71 on May 31, 2013, an average annual return of over 8%.

See the Growth of #10,000 for 10 years graph at https://personal.vanguard.com/us/fun...tExt=INT#tab=1
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Old 06-19-2013, 12:18 PM   #19
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Growing up in the 1960's, a millionaire was someone who lived a life of privilege, didn't have to work, and gave tons of money away (at least on TV). Heck, my starting salary as a new electrical engineer with a master's degree from a great university was $16,200/year in 1977. Today, a one million is almost enough to maintain a median income lifestyle if you're not going to work and earn SS. No, a million isn't what it used to be. But I suppose it depends on the age of who you ask.
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Old 06-19-2013, 12:24 PM   #20
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Growing up in the 1960's, a millionaire was someone who lived a life of privilege, didn't have to work, and gave tons of money away (at least on TV). Heck, my starting salary as a new electrical engineer with a master's degree from a great university was $16,200/year in 1977. Today, a one million is almost enough to maintain a median income lifestyle if you're not going to work and earn SS. No, a million isn't what it used to be. But I suppose it depends on the age of who you ask.
In TV series "Hart to Hart" (1979-1984), the "self-made millionaires" drive a Rolls Royce and fly private.
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