What would you do if your assets grew to 8 figures?

[Koogie]

Might want to check your math. It’s $10,000/yr.

You might want to check out post #97 in this thread...

 

[aja8888]

If I came into the eight digit club, one of the first things I would do is change my phone number to a 900 one and charge people $8.95 per minute when they call me to expound on the reasons why i should give them a handout.

 

[rodi]

If I came into the eight digit club, one of the first things I would do is change my phone number to a 900 one and charge people $8.95 per minute when they call me to expound on the reasons why i should give them a handout.

I'm totally stealing this idea if I ever hit the 8 digit club.

 

[RobbieB]

I bet that would stop robo callers.

 

[Scuba]

I like the idea of philanthropy for education. Also would increase the travel budget and would also consider modest second homes in a couple of favorite destinations.

 

[hesperus]

Yes, your thread was my inspiration. I wanted to see what folks here think they would do differently.

Now, if it keeps creeping up you'll let us know of any new inspirations/aspirations, right?

absolutely, and without a whee!

 

[Spanky]

What would you do if (or did you do when) your assets grew to 8 figures?

Not a thing! It's only a number. As long as you have enough, more is NOT necessary better. The more that you have, the more that you have to worry losing it.

 

[RunningBum]

Not a thing! It's only a number. As long as you have enough, more is NOT necessary better. The more that you have, the more that you have to worry losing it.

I don't think I follow that. I mean, I agree it's not necessarily better, but I don't see what I'd worry more about losing it. If I have $2M and am counting on all of that to fund the life I want, if I lose 10% I'm not happy and I have to make some cuts. If I've got $10M, and it's a lot more than I need, if I lose 10% it probably wouldn't faze me, at least not as much.

As long as I don't do something stupid like invest $9M in a can't-miss scheme and put all that at risk, I'm not worrying about losing it.

I also hear people talking about having to worry about managing all that money. What worry? I just invest 5x as much in each thing I'm in with $2M. How is that any harder? You could make a very small case that I'd have to worry more about taxes, but I'm most likely paying 15% for divs and LTCGs either way, and even if I'm not, I can live with a little higher tax rate.

What am I missing? The only other thing I can think of is more people coming after me with their hand out. I like that 1-900-number idea. Or I live pretty much like I do now, and people don't know if I have 8 figures or 7.

 

[audreyh1]

I don't think I follow that. I mean, I agree it's not necessarily better, but I don't see what I'd worry more about losing it. If I have $2M and am counting on all of that to fund the life I want, if I lose 10% I'm not happy and I have to make some cuts. If I've got $10M, and it's a lot more than I need, if I lose 10% it probably wouldn't faze me, at least not as much.

As long as I don't do something stupid like invest $9M in a can't-miss scheme and put all that at risk, I'm not worrying about losing it.

I also hear people talking about having to worry about managing all that money. What worry? I just invest 5x as much in each thing I'm in with $2M. How is that any harder? You could make a very small case that I'd have to worry more about taxes, but I'm most likely paying 15% for divs and LTCGs either way, and even if I'm not, I can live with a little higher tax rate.

What am I missing? The only other thing I can think of is more people coming after me with their hand out. I like that 1-900-number idea. Or I live pretty much like I do now, and people don't know if I have 8 figures or 7.

I agree. I don't understand how a higher number would mean more worry about losing it assuming you have the usual investments. Say your portfolio takes a 40% hit. You'll still have a higher number remaining. And that might make a huge difference in terms of how tight the belt gets and what you can afford.

 

[Spanky]

I don't think I follow that. I mean, I agree it's not necessarily better, but I don't see what I'd worry more about losing it. If I have $2M and am counting on all of that to fund the life I want, if I lose 10% I'm not happy and I have to make some cuts. If I've got $10M, and it's a lot more than I need, if I lose 10% it probably wouldn't faze me, at least not as much.

As long as you spend at the same amount regardless of how much that you make, that's fine. People tend to spend what they make, however. The more stuff or money, the more that you worry about - a part of human nature even though it may not be rationale.

 

[audreyh1]

As long as spend at the same amount regardless of how much that you make, that's fine. People tend to spend what they make, however.

I haven't noticed that on this forum. People appear to way underspend their assets here.

Probably one major thing that separates the ERs from the rest of the population.

I noticed many folks here immediately thought of gifting in various ways, creating foundations/scholarship funds, providing financial support for family members, etc., not simply ramping up personal spending. Although there were a few interested in upgrading the home and/or buying a second home or boat or plane.

 

[RobbieB]

What's the point of spending the same amount no matter how much you have?

Where's the fun, where's the drive, why bother?

So, say you find yourself with say 10X the dough you used to have and all you do is worry about it?

Yeah, I guess there's a lot of that thinking here now that I think about it.

 

[audreyh1]

What's the point of spending the same amount no matter how much you have?

Where's the fun, where's the drive, why bother?

So, say you find yourself with say 10X the dough you used to have and all you do is worry about it?

Yeah, I guess there's a lot of that thinking here now that I think about it.

LOL! I suspect there is the phenomenon of the shrinking withdrawal rate.....

Spending might not stay exactly the same, but maybe it doesn't grow nearly as fast as the assets.

Then again, we know big chunks of assets can disappear in what seems like the blink of an eye.

 

[Danmar]

I agree. I don't understand how a higher number would mean more worry about losing it assuming you have the usual investments. Say your portfolio takes a 40% hit. You'll still have a higher number remaining. And that might make a huge difference in terms of how tight the belt gets and what you can afford.

Agree. Let’s go the other way. Say you lose 80% of your $10million, are you suddenly less worried? Doubt it.

 

[petershk]

Actually a helpful discussion for me . I'm around 60% of the way to that but the journey has been uneven. I THOUGHT that 2m would be more money than I would ever need and then because of lucky stock options that number about doubled. Over the past few years it went up about another 50% (mostly market returns and high savings rate)

As far as investments go, it makes very little difference. I have learned the hard way to create an asset allocation and basically just rebalance to meet it. I change the asset allocation based on what I think the general investment climate is (i.e. more expensive market, low interest, so less exposure to stocks... more bonds). The other difference is more "cash" in the sense that I probably have 4-5 years of cash in a CD ladder. It's a bit excessive, but it's just more of a safety blanket and wealth accumulation is not a goal anymore.

On the lifestyle side it's harder.
DW and I really want to prevent lifestyle creep to keep the SWR post retirement below 3% (around 2.5% now, but that includes a mortgage for our retirement house (880k) that we can easily pay off and probably will post retirement if it makes sense tax wise). We don't fly business or first class (with some exceptions.. international flights with kids), we have never really had expensive food or clothing tastes. I did buy DW a really nice Tiffany ring last xmas because when we got married I proposed with a pretty cheap ring (expensive would have been rejected ) so that was nice to do.

Our current house is pretty modest for CA standards (about 550k) and that was after moving to a cheaper area and selling our primary house which had a gain of about 500k... so the house was kind of "free." We thought about buying a much bigger house, but it's actually worse IMO. More stuff to buy, more stuff to clean, bigger yard to maintain, kids are harder to find, more distance to walk to the bathroom, etc. People talk about hiring help, but managing help is kind of a job too. I'm not convinced managing a housekeeper and gardener and pool person who come a few times a week is easier than just living in a smaller place.

We're 4 people... I have friends at work with 6,000-10,000 sqft houses with pools, saunas, hot tubs, tennis courts, etc and I don't understand what they do with that space? They don't play tennis and rarely go in the pool . At 2800 sqft I don't even set foot into my "formal dining room" and we almost never use the 4th bedroom. So I don't really get it other than "because we can."

I did buy a 120k Tesla because... well... I think they are awesome.

Our monthly costs are around 8k or so (no mortgage) which seems high to me (don't track lots of detail, just general spending level) but is easily below my current income (work part time) and below passive income and way below long term capital gains in this raging bull market.

Now I don't think we'll ever get to 10m more or less on purpose. What we do is just give more away to prevent lifestyle creep. Some of this is charities we like, but most of it is family related. We gave my brother about 50k so he could fix up his house. We gave my Mom 15k for her birthday so she could travel with her husband for the next year or so (she doesn't need the money, still works, but she also doesn't spend much on fun stuff for herself - it's been hard to give her money). We bought my wife's sister a car because hers was getting old, we pay tuition for our nieces and nephews, we pay real estate taxes for my wife's mom, and stuff like that. Over the last year it was about 200k or so, which is more than we spend on our living expenses and reduces the increase in net worth due to market returns. That's the part that has gone up substantially.

BTW I don't mean to sound like some kind of self-righteous jerk... we like spending money that way. If people like giant houses and Ferraris... that's fine by me... money should be enjoyed . I get huge peace of mind knowing that most of what I spend is totally optional and can be easily scaled down without having an impact on my normal life. It seems way easier to tell people "sorry the market crashed last month and I lost my job so I can't pay as much tuition this year" than "family, we have to sell our house, our boat and stop flying private because the market crashed and I lost my job." Scaling down other people's lifestyles seems way easier than scaling down mine .

The goal is to kind of keep the wealth growth from being "excessive" while avoiding lifestyle creep. So if the market dumps 50% and I lose my job we can still live just fine... we just can't buy people cars and pay for the kids' school as easily.

 

[RunningBum]

Agree. Let’s go the other way. Say you lose 80% of your $10million, are you suddenly less worried? Doubt it.

Am I less worried still having $2M than I am with $400K (80% loss on $2M)? You bet I am! Not happy with either, but with the latter I'm back to looking for work, while I can still live on the former.

And to Robbie's point, sure, I'll spend more if I have 10x the money, but I won't spend 10x more. And it would be on stuff that would be very easy to back off of. I enjoy your posts for the most part Robbie, but your "gotta blow that dough" mantra sounds really misguided to me. My goal would be to enjoy life as much as I could, using my money to enable that, but the goal would not be focused on spending money. Experiences, "stuff", and helping others can bring enjoyment and satisfaction to me. The act of spending money for spending sake does nothing. I suspect you don't really do that either, but it sounds stupid when you repeat it so often. Sorry, I searched for a less offensive word but that one captures it, and I made sure I'm attacking the posts and not the poster.

 

[audreyh1]

LOL! I enjoy Robbie's mantra. It's a refreshing break from all the very careful spenders in this forum. It's just for fun, I expect.

 

[Live And Learn]

I would hire staff.

Yep, that was my first thought ! I'd get a weekly housekeeper and a weekly lawn service.

I'd also hire a vet tech to housesit 24x7 with my pooch so DH and I could travel a bit more (actually, we don't travel at all now). There are only a few places I really want to visit, but I'd complete the travel bucket list within 2 years.

I would change my allocation to 40/60 and donate more to help the environment and wildlife. I'd probably also give enough money to my Church to add a new building and refurbish the current Church building.

I love my currently lifestyle and really don't need to change anything at all. I just hate cleaning and DH deserves a break from taking care of the landscape.

 

[RunningBum]

LOL! I enjoy Robbie's mantra. It's a refreshing break from all the very careful spenders in this forum. It's just for fun, I expect.

Oh, it doesn't bother me that much, and I enjoy hearing about the stuff he is spending money on. And between my posts, I just booked a first class flight for holiday travel, but only because I can afford it and get value out of separating myself from the holiday crush rather than because I feel the need to blow money. I still can't tell if he gets more fun out of what he spends it on, or just that he is spending it (and bragging about it).

 

[GrayHare]

The more you have the more you become a scam target. For example, "Richard Branson: A scammer came after my millions" http://money.cnn.com/2017/10/17/news/richard-branson-scam/index.html

 

[audreyh1]

The more you have the more you become a scam target. For example, "Richard Branson: A scammer came after my millions" Richard Branson: A scammer came after my millions - Oct. 17, 2017

Yeah - just read that and thought it deserved its own thread which I am about to do.

 

[RenoJay]

I have friends at work with 6,000-10,000 sqft houses with pools, saunas, hot tubs, tennis courts, etc and I don't understand what they do with that space? They don't play tennis and rarely go in the pool . At 2800 sqft I don't even set foot into my "formal dining room" and we almost never use the 4th bedroom. So I don't really get it other than "because we can."

I think this poster is exactly right. I never lived in a place that big, but when I was married my exDW talked me into a new 4,100 sq ft place with high ceilings, fancy everything. I later realized it was mostly a form of "humble bragging" since I really didn't enjoy the house itself. Tons of cleaning, headaches, finding the kiddos, etc. And even when we hired help, the cleaners were rarely consistent, the lawn guy didn't always show up, etc. Now I live in an older, smaller place and feel much happier. (Although I still pay for the fancy one where the ex lives via alimony. )

 

[audreyh1]

Dealing with hired help seems like it often turns out to be a royal pain.

 

[Sojourner]

As I've watched this thread progress, the many cogent responses got me thinking: Is 10 million really a lot any more? It doesn't even make you a one percenter these days, does it?

[...]

It's curious how modest our ambitions are when we contemplate adding that extra digit. I notice that the posters here who already are well into 8 figure territory don't talk about building Biltmore House-style palaces. They may snowbird very comfortably. They may fly first class, or perhaps charter the odd flight. But celebrity-scale, massively conspicuous consumption doesn't appear on anybody's radar here. Maybe that tells us that 10 million just isn't that much.

Ehh... not sure I'd say that $10 million "just isn't that much." It's a lot. It could easily support a $300K per year SWR. $25K/month. That's a very, very comfortable, luxurious level of spending. So much so that I have trouble actually thinking of myself ever spending that lavishly. I'd have to get quite creative and really push myself to get there, probably tripling (or even quadrupling) my spending in nearly every budget category. Sure, it's not mega-celebrity-scale spending, but from my perspective, that doesn't equate to "not that much."

 

[Mdlerth]

So much wagyu, so little time

What's the point of spending the same amount no matter how much you have?

Dear Rob,

As an eager devourer of all your "blow that dough" posts, I have to wonder. You appear more than fully tasked with pursuing epicurean experiences I had never heard of. If you had 10X the dough, would you even have time to spend more?