Does everyone here have millions saved?

[nash031]

Not yet! But getting there...

[mickeyd]

Who said "The first million is the hardest to make."? It's true.

[Car-Guy]

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Originally Posted by mickeyd Who said "The first million is the hardest to make."? It's true.

It sure was for me. It took me ~50 years to accumulate my first million. The rest was easy by comparison.

[Hermit]

Quote:

Originally Posted by mickeyd Who said "The first million is the hardest to make."? It's true.

It took me 'till ~ 60. But at 30 we spent our last $200 for a set of very small diamond earrings my beautiful new bride right after we returned from our honeymoon. At 36 I spent what was in savings for a really nice (used) Yamaha Venture Royale. DW was not too happy at the moment, but we had some great memories including a trip across the country on Highway 50. At age 40 we had our first kidlet and I decided it was time to get serious about savings. Maxed out the 401K. After a while it just added up.

[mathjak107]

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Originally Posted by Car-Guy It sure was for me. It took me ~50 years to accumulate my first million. The rest was easy by comparison.

same here ,50 years for the first and tripled in the next 12 years. the deals i entered into got bigger annd bigger and so did the payoff. i was lucky enough to have partnered up with one of the countries most succesful real estate mogals.

he passed away last month but we sold off what was left in our partnership last march in a landmark deal here in nyc. i was very lucky to have such a brilliant investor as a partner..

[H2ODude]

Quote:

Originally Posted by Senator Here in the USA, anyone can be a millionaire.

Anyone can be but we ALL can't be! If everyone tried, the economy would crash! We need all the fools spending there money on the silly things that drive the market.

[almost there]

My neighbor might not have a dime in the bank, but retired with a city Gov. pension of $150k per yr. Another may have 2 yrs. living expense in the bank but rentals that provide a livable income. Just a note that everyone does not live on dividends, a rising stock market or CD interest to live. But it does seem to be what the modern world / media wants you to think. You need X million in your IRA to retire. There is more than one way to skin a cat. I have about a 4 prong approach, not one is all that huge, but combined I have a feeling it will work.


I may have got the question wrong. Does everyone here have millions saved?
What does that mean? Net worth or in a Savings account? )

[bingybear]

Quote:

Originally Posted by almost there I may have got the question wrong. Does everyone here have millions saved? What does that mean? Net worth or in a Savings account? )

I'm sure different people have differing answers to your question.

I would think for the purpose of these boards it would be net worth minus your retirement house (assuming you're not going to sell it), minus day to day assets that your not going to sell (day use cars, clothes, etc). I would add in an equivalent factor for pensions and the like.

That should kind of give even footing.

I think it is easier to just count your investible assets. But that would include rental property and the like. When it comes to assets for retirement, it does seem right to see what one can leverage (use) to produce the money one needs to live on.

[eta2020]

Quote:

Originally Posted by almost there My neighbor might not have a dime in the bank, but retired with a city Gov. pension of $150k per yr. Another may have 2 yrs. living expense in the bank but rentals that provide a livable income. Just a note that everyone does not live on dividends, a rising stock market or CD interest to live. But it does seem to be what the modern world / media wants you to think. You need X million in your IRA to retire. There is more than one way to skin a cat. I have about a 4 prong approach, not one is all that huge, but combined I have a feeling it will work. I may have got the question wrong. Does everyone here have millions saved? What does that mean? Net worth or in a Savings account? )

150k a year? He must had been a mayor of some big city. Not many people get this kind of the pension. I think having Government pension of 150k is much much rarer then having 3-5 Million in investments.

But I would prefer 3-5 million, because one can not inherit pension.

[almost there]

City mgr. med sized city of 70k. Welcome to the coast of So Cal.
Public records are public. 250k / yr. Am guessing on the CalPERS pension.
Just an example. I am now happy living on a 3rd of that. It was fun to cut back. No problem.

[2B]

Quote:

Originally Posted by almost there City mgr. med sized city of 70k. Welcome to the coast of So Cal. Public records are public. 250k / yr. Am guessing on the CalPERS pension. Just an example. I am now happy living on a 3rd of that. It was fun to cut back. No problem.

Calpers isn't as poorly funded as some plans but it is still underfunded.

[Independent]

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Originally Posted by daylatedollarshort In terms of the book, the authors define the group they are referring to: "We have an average household net worth of $3.7 million. Of course, some of our cohorts have accumulated much more. Nearly 6 percent have a net worth of over $10 million. Again, these people skew our average upward. The typical (median, or 50th percentile) millionaire household has a net worth of $1.6 million." (1996 copyright edition) The Millionaire Next Door

Okay, we can use $1 million net worth as the threshold. At a 4% SWR, that generates a retirement income of $40,000.
(Prices have gone up about 50% since that book was written, so maybe we should say $1.5 million and $60,000 today.)

According to the book,

Quote:

Interestingly, self-employed people make up less than 20 percent of the workers in America but account for two-thirds of the millionaires. Also, three out of four of us who are self-employed consider ourselves to be entrepreneurs. Most of the others are self-employed professionals, such as doctors and accountants.

Also, 80% of the millionaires have college degrees, and 38% have a master's or higher.

The words that describe the affluent aren't just "frugal, frugal", but also "successful entrepreneurs" or "high income workers".

Yes, they also have to decide to LBYM. I'm sure that plenty of their peers spent everything they earned. But I'm thinking most of them have higher gross incomes than typical Americans.

[daylatedollarshort]

Quote:

Originally Posted by Independent But I'm thinking most of them have higher gross incomes than typical Americans.

From the first chapter -

"Our household's total annual realized (taxable) income is $131,000 (median, or 50th percentile), while our average income is $247,000. Note that those of us who have incomes in the $500,000 to $999,999 category (8 percent) and the $1 million or more category (5 percent) skew the average upward. " (1997 copyright year/dollars excerpt). "

There is a long list of traits in the chapter:
washingtonpost.com: The Millionaire Next Door

[daylatedollarshort]

Quote:

Originally Posted by Independent The words that describe the affluent aren't just "frugal, frugal", but also "successful entrepreneurs" or "high income workers".

Obviously the whole books is on the various MND traits, but from the book itself:
"What are three words that profile the affluent? Frugal, frugal, frugal." Frugal, Frugal, Frugal is the title of chapter 2.
http://davidbeitler.com/temp/The%20M...ANTESH.PDF.pdf

They also tend to love their jobs and tend to have a lower percent of NW in the stock market than it seems is generally popular on this forum:
http://www.thomasjstanley.com/blog-a...lionaires.html

[Independent]

Quote:

Originally Posted by daylatedollarshort From the first chapter - "Our household's total annual realized (taxable) income is $131,000 (median, or 50th percentile), while our average income is $247,000. Note that those of us who have incomes in the $500,000 to $999,999 category (8 percent) and the $1 million or more category (5 percent) skew the average upward. " (1997 copyright year/dollars excerpt). " There is a long list of traits in the chapter: washingtonpost.com: The Millionaire Next Door

Yes. Did you notice that the statement I quoted is one of the traits on that list? See the second bullet point.

I think the authors did a good job of pointing out that working people who build assets generally live below their means. They did a service by writing the book. But, I think the "frugal, frugal, frugal" statement can be an overstatement, it ignores some of their data.

The median millionaire household had an income of $131,000 in 1997. In that same year, the median US household income was $37,000. The millionaires were operating with 3.5 times the aggregate median.

Now, the difference probably wasn't that great. The millionaires may have had more people per household, they may not have had as much income in their earlier years, and we might be more interested in the threshold (the lowest tier of millionaires) rather than the median millionaire. But, I think their data shows that it's a combination of two things, not just one.

https://www.census.gov/hhes/www/inco...ighlights.html

[Texconsin]

Quote:

Originally Posted by almost there My neighbor might not have a dime in the bank, but retired with a city Gov. pension of $150k per yr.

The downside of a city pension is that cities can't print money. If the city gets into trouble, all bets (and promises) are off.

[LeavingOhio]

I definitely don't have millions, but I'm not retired yet...just 48 and planning to retire at 60. I will not have millions then either.

I agree with those who say there's really no set amount you need to have. US News and World Report annually puts out a list of the best places to live on just Social Security alone. They use the average amount a married couple would get at age 65 and then list desirable places where the cost of living is at or below that level. So, you COULD do it on MUCH less than "millions".

For 2013, median household income in the US was $51,939. If you were retired, could you live on that? I say yes.

According to US News and World Report, the average annual amount a married couple got from Social Security is $31,056. Could you live on THAT? Perhaps. They suggest you could in these fine towns - 10 Best Places to Retire on Social Security Alone - US News

Let's say you want to almost double your retirement income. Well, $750,000 at 4% is $30,000. Add that to $31,056 and now you're up to $61,056. IF you retire with zero debt and own your home outright and you don't have children still living with you and have no other extreme circumstances, you could easily live a decent life on that. You couldn't go crazy with spending, but that's true even if you have $10 million.

[Tadpole]

Each person here is different with one possible exception - they are trying to achieve that magic financial situation permitting them to sustain their own chosen lifestyle for the remainder of their life (with a cushion for the unexpected).


A person with kids still at home might use different assumptions to base an estimate than someone without dependent children. The same is true of a mortgage, a long term care policy, a COLAed or non-COLAed pension, an inheritance, a frugal or expensive lifestyle, etc.


Even though it is fun to talk about multi-millionaires, there are many ways to plan for and achieve financial goals in retirement. The younger you factor retirement into your decisions, the better.

[Options]

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Originally Posted by 2B Calpers isn't as poorly funded as some plans but it is still underfunded.

Edit: I realize this does not pertain to Calpers or other public pension plans...at this time.

Did anyone else catch Michelle Singletary's latest Washington Post column regarding the law just passed granting some multi-employer pension plans permission to cut benefits for retirees (sorry can't post the link on this IPAD, but google and you'll find it)? According to this law, retirees as old as age 75 can have their benefits cut.

Her column includes a link to Pension Rights Center which has a calculator where you can estimate how much your benefits might be cut. AS an exercise, I entered $3K/mo for an individual with 35 years of sservice and the calculator showed the benefits could be cut to $1376 monthly, or about 60%. As Singletary points out, this law is significant because it "signals a crack in the door that so many people felt couldn't be opened".

More significantly, if Congress can pass a law that reneges on pension benefits for those under 75, I brelieve it has significance for what might be possible in future social security reforms.

[braumeister]

Quote:

Originally Posted by Options Did anyone else catch Michelle Singletary's latest Washington Post column regarding the law just passed granting some multi-employer pension plans permission to cut benefits for retirees.

Yes, there was a recent thread here about that.