Crossing into 7 figures

[tednvon]

Hi...very interesting question...actually the last two weeks saw the old "Yes, Yes......NO!!! for the 7 figures...I think the investing god's did this just to me personally, but that is my paranoia!!!

I guess one of my first thoughts after being raised in a very modest income home and watching my father die with a $3000.00 life insurance policy and nothing else was WOW!, who would have ever thunk it (a mil in my name) 30 years ago...

At this point I am working 60% time in phased retirement and will be done totally in 09 at age 63...great job with lots of flexibility and no stress...even take 3 months off for Florida in the winter.

Every FireCalc I run says OK...And no matter how I pad our budget projections I cannot get over 4300/month. this even includes paying 700/month for health insurance until from age 63 to 65 until Medicare...

So the 1 mil (give or take this month) looks pretty good to me plus SS benefits from spouse and I in 09...
Thanks to this board, I am always 5 years in cash or CD to let the market do it's thing...
So 1 mil to me looks mighty good...I just refuse to worry about horrible what ifs and go with the flow and good ol FireCalc...60K/ including SS before tax in todays dollars will let us live a pretty good life...We consider ourselves very very fortunate to be in this position....so many in our age group are not...

All the best...Ted,  lover of this board!!

 

[wabmester]

what made you finally say, "enough is enough"?

Heh.   There's nothing wrong with raising the bar once you hit a milestone.   That's what life is all about.    But eventually, you'll hit the tipping point, and you'll know when enough is enough.

I'm not a purist when it comes to ER.    Earned income isn't anything to be ashamed of.   But I guess the milestone that felt "safe" to me was when my portfolio had the ability to throw off income at the risk-free rate that was >= my salary at the time.

Of course, even that quickly became much less safe in my mind.    Right around the time I was thinking about getting off the treadmill, the risk-free rate started dropping.   And I realized that I forgot to consider inflation.

A salary is a pretty amazing thing.    All you need to do is show up for work, and they pay you a nice consistent amount that generally grows faster than inflation.    Getting that kind of feeling of security from the markets ain't easy.

 

[grumpy]

I guess I assumed GMueller, in his original post, when referring to a 7 figure "portfolio" was talking about financial assets (not including home equity). The 7 figure portfolio I referred to consists solely of stocks, bonds, mutual funds and cash (equivalents).

Grumpy

 

[lazygood4nothinbum]

the 7 figures mark will tear my heart and tear my eyes and i will have lost all the security that i have ever known.

 

[Rich_by_the_Bay]

the 7 figures mark will tear my heart and tear my eyes and i will have lost all the security that i have ever known.

Happy to be of service: when you get to $999,999 have any additional savings forwarded to my account.

 

[wabmester]

the 7 figures mark will tear my heart and tear my eyes and i will have lost all the security that i have ever known.

Does that mean you're at 8-figures now?

 

[lazygood4nothinbum]

Happy to be of service: when you get to $999,999 have any additional savings forwarded to my account.

haven't you guys ever read a short story before i don't think you'll want what's left to send. i thought you were a doctor, not an undertaker.

Does that mean you're at 8-figures now?

no, it means i made it to 6 figures on my own. putting mom under the ground puts me over the top.

i swear, poetry is lost on you financial types. no wonder the artist starves.

 

[justin]

here's a little haiku for you:

maybe we do not
understand your artistry
as much as you do

 

[MasterBlaster]

Here's a little Poem handed down from generation to generation by the Masters...

Roses are Red
Violets are blue
I have just enough money
that's too bad about you

 

[justin]

You're a poet,
you just don't know it
and can't show it

 

[Martha]

The stock market's a risky affair,
You can be rich if you have the flair.
This life is not for me
One must surely agree
That I don't know a bull from a bear.

 

[lazygood4nothinbum]

here's a little haiku for you:

maybe we do not
understand your artistry
as much as you do

failed to express self
in a vernacular voice
thank god i have cash

 

[cute fuzzy bunny]

A weird creepy little feeling that someone would call me up at some point and say that some sort of mistake must have been made and they needed to get all that money back. Slipped decimal point or something.

Doesnt help that twice in my life a clerical error has resulted in several hundred million dollars being deposited into my account. Still have both statements in my file for amusement value.

When Digital Equipment Corp first started doing automatic payroll deposit, I was on the forefront of this much distrusted newfangled thing. I really enjoyed it when they deposited the entire company payroll into my bank account.

About 7 years ago I owned some Janus funds with american express, and decided I'd had enough of AMEX screwing up every single transaction I ever did. AMEX continued their fine tradition by transferring all of their janus holdings for every customer into my account.

The fun part is that they both had to ask my permission to get their money back. It was fun for a couple of hours to be a hundredmillionaire.

When AMEX made their screwup, I took the transaction report with me when "the gang" went out for drinks after work. Slapped it on the bar and said "So...you guys think i have enough money to retire?".

I've never seen peoples eyes bug out that far.

 

[SteveR]

I'm not a poet and I know it.

So, back to the original thread.........

I started out after college at zero.  I was even..no loans no income.  

Next was the car loan....followed by getting married...followed by a house and a mortgage and then the kids and the credit card debt.  

At the time of my divorce we were well over 6 figures in the "hole".  Three years later I was even again and single.  

Ten years later we (new wife and I) hit our 7 figures.

We have been back and forth the 7 figure threshold several times.  The first was total net worth (I know, that is redundant).  The next time was in our combined 401k accounts.  Then it was just in one account alone...then it was in our after tax...then it was in RE values.  It is still moving around but I don't have to worry too much about falling below it anymore.  I am just trying to make it to the next 7 figure threshold.  Long term projections show several of these over the next 30 years.    

 

[Yipee-Ki-O]

. . . I remember and recorded the 1st time I became a millionaire in Feb 00. My excitement later died when my tech stocks began plummeting. It took me over 5 more years of frugal saving to return to that number. For a single guy, it is a nice goal to achieve. 

Vagabond, that's just about my story too. Except  75% of my portfolio was in the stock of a single company, my blue chip drug company employer. (Is a portfolio really a portfolio with 75% in one company?) I remember thinking at the time that I was pretty smart, invested as I was in a blue chip company as the dot.com meltdown snared many of my friends. If I'd known how much money I was destined to lose I'd be living in a much nicer house! Oh well, just this year have I surpassed my net worth total for the year 2000 prior to the flood. Just as you say, 5+ years of frugal living plus (finally) some well diversified investing. I always heard making the second million was much easier than the first. I found that losing half of the first million was way too easy!
yko

 

[Lancelot]

I crossed over to eight figures...

(When I price my portfolio in Vietnamese Dong)

 

[BunsGettingFirm]

I crossed over to eight figures...

(When I price my portfolio in Vietnamese Dong)

It's easy when you start pricing stuff in dong. Too bad store owners don't like it when you hand them a big steaming pile.

 

[boont]

Don't know when I crossed over but I think I noticed it when I started adding things up to apply for a new mortage a number of years ago.

I will say if I had not sold out of the market in 2000 I don't think I would have stayed there.

My view was to get out before the end of the Clinton administration. I felt strongly that things were going to go to hell after him.

I was sure right about that. Clinton made me a lot of money and I have been lucky enough to hang on to it.

boont

 

[GMueller]

I sincerely appreciate all the responses. Some good food for thought. However, I'm still curious about the second part of my original question: when you finally reached some predetermined goal/amount, whether it was $1M or some other figure, did you have the temptation to raise the bar. I'm asking for an obvious reason. I'm closing in on a figure I set a long time ago as my goal. Now that I have nearly reached that goal, I'm finding it difficult to resist the temptation to "add a little cushion." I can't really say that a cushion is actually necessary, but I still hear the siren call to "add a little more." Adding "a litttle more" would not entail an inordinate sacrifice, but I wonder whether if, after reaching the new goal, I'd feel compelled to bump up the bar another increment. My question is whether that is a common phenomena. And, if so, how have others dealt with it?

 

[boont]

I am willing to raise the damn bar as high as it will go.

But the point is, that when I reached 55 years of age that was as far as I was willing to go as an employee.

I am on this site because it is one of the few places where other people understand this.

And further, baring major setbacks, I am no longer primarily interested in building the pile. I am interested in living my life.

I must agree with a lottery winner I once heard speak. Someone asked him what he was going to do with the money and he replied, "I am going to buy my life back."

That is my goal now. Not to build the pile further but to "buy my life back".

boont

 

[jimhcom]

I think the pressure to raise the bar is just part of the battle to try to stay ahead of inflation. 7 figures is really not the point of relaxation any more, In So. Cal. thats just the cost of 2- 30/40 yr old track houses in a neighborhood you probably don't want to live in. Thats not exacly well off. To live comfortably and feel secure, for me the number is more like 2 x 7 figures. As far as the milestones. you are usualy too buisy to notice. and its kind of anti-climatic as you really don't feel different, its not what you expected.

 

[Andre1969]

I have a feeling that once I hit the $1M milestone, it probably WILL be pretty anti-climatic. For one thing, it'll probably be one of those things that will seem just within reach for so long, as I struggle around in the $900K range, that it'll become more of a nuissance than anything.

And once you're dealing with that type of money, the way markets can fluctuate, chances are I'd break that milestone, then drop below, then break it again, and have that cycle repeat itself.

For instance, just counting my pile for stocks/mutual funds/Roth/401k, I broke the $100K barrier in January '04. It went on to peak at around $103K, but by March it was down to $98K. By April I was up to $106K, then back town to $100K in May. In late June I was up to almost $110K, but then in August was down to $99K again.

However, factoring in savings bonds, checking account, MMA, etc, I broke $100K in August 2003 and never looked back.

I'm sure a similar thing will happen around the $1M threshold.

 

[Leonidas]

I must agree with a lottery winner I once heard speak. Someone asked him what he was going to do with the money and he replied, "I am going to buy my life back."

That is my goal now. Not to build the pile further but to "buy my life back".

My sentiments exactly. Living a long happy life in retirement is my goal now. In the distant future I want some yet to be born future auditor at the pension system to look at my account and suspect fraud, "No way this guy is still alive - somebody has created a bogus account and is ripping us off!" When they show up at my door to verify that I’m real I want them to be told “You just missed him, he and the grandkids went sailing.”

If you’re lucky enough to have amassed enough money to be reasonably sure that you can provide for a secure retirement free of deprivation, then it all becomes a question of how much more do you need to buy the things you want versus how much quality time you have to enjoy it all. If you’re making money hand over fist and figure you have plenty of time left, then go ahead and keep stacking gold bricks.

I’m with boont – I could always find a use for more money – but I’ve only got so much time and energy available and I intend to make my first concern enjoying what I got.

I hit 7 figures in the 80’s and then saw a big piece of it disappear on Black Tuesday. It came back fine, but the lesson I learned was that until you derive the benefit of actually spending your profits, it’s just a number on a piece of paper.

 

[d]

to raise the bar

serves to reduce uncertainty/risk (i expect for most that risk tolerance decreases with age) and might also simply reflect a reassessment from when the goal was first set.

 

[MJ]

I hit 7 figures in the 80’s and then saw a big piece of it disappear on Black Tuesday. It came back fine, but the lesson I learned was that until you derive the benefit of actually spending your profits, it’s just a number on a piece of paper.

That's why I never included my house in my net worth until I finally sold it recently. Now my portfolio is golden (at least for right now)