Millionaire stuff

[mickeyd]

Getting back to the thrust of the main article, every one of us that is ERd or planning to ER, or just saving for a rainy day will benefit from simply watching their expenses constantly. No matter what your balance sheet indicates, if you do not limit your outflow, you will eventually find yourself at the bottom of a well with no visible escape route (Gates, Buffett, and Trump families excluded if they are on this forum.)

Millionaires are rarely created by constantly seeking out the highest returns on investments, or constantly moving money from one investment to another to chase higher returns.

Millionaires educate themselves about investing and seek professional advice, choose high-quality blue chip stocks or mutual funds with good long-term performance records, invest consistently, and hold onto these quality investments over a long period of time.

As you can see, this proven method of becoming a millionaire is not rocket science, and it really is attainable for many Americans.

Back in the day it was really some feat to exclaim that you were a millionaire. We Americans seem to like goals and being a millionaire has been the secret goal of more folks than will now admit it. But $1,000,000 is really no big deal today as real estate and 401K(k) balances have eased many folks over the million dollar hump.

I would venture to guess that there are many of my fellow citizens who are millionaires and don't even realize it, or even know how to calculate it.

Millionaire or not, affluent (Half-millionaire) or not, scrimper or saver, keeping a close eye on personal expenditures is always a requirement.

 

[Patrick]

Back in the day it was really some feat to exclaim that you were a millionaire. We Americans seem to like goals and being a millionaire has been the secret goal of more folks than will now admit it. But $1,000,000 is really no big deal today . . .

Due to inflation, being a millionaire today is just about meaningless.

"A Dollar in 1950 will buy only 13 cents worth of goods today, 87% less than before."


http://www.financialsense.com/editorials/hodges/2006/0106.html

 

[MasterBlaster]

"A Dollar in 1950 will buy only 13 cents worth of goods today, 87% less than before."

- Just to be picky

Shouldn't this quote actually be...

A dollar today will only buy 13 cents worth of goods as it did in 1950, 87% less than before.

 

[kcowan]

Always remember to enjoy the journey. Those that love things should not defer their enjoyment. Similarly those that love travel should do it.

My mother deferred her Hawaiian vacation until my dad was retired. She died of breast cancer one month before his retirement. The Dad never went because it would be no fun without her.

Never put off until tomorrow anything that is really important to you.

Just don't dribble away your wealth on a dozen meaningless things.

 

[mickeyd]

Those that love things should not defer their enjoyment. Similarly those that love travel should do it.

You're helping me make my point. We have a friend who is a school teacher with about 25 years on the job. She has been divorced for 20 years. Just last weekend we were at a social gathering and the subject of retirement came up and she informed me that even with the DB plan that she has with the school district that she can not retire for 15-20 more years! She has been to Europe 7 times in the last 10 years and has never gotten around to starting "one of those mutual fund things" (as she calls the 403b). So she has a had a fine time trapsing around Europe, but now looks for my sympathy that she does not have enough saved/invested to retire. I'm sorry that she decided to spend her savings on travel instead of saving for retirement. Most of us can not have it both ways.

 

[shiny]

I know that "Your Money or Your Life" sometimes gets a bad rap here for its investment plans, but after reading it in my 20s I started analyzing things based on whether I felt it was "worth it." That changed everything for me.

Most travel is worth it, eating out mostly isn't (at least when it costs over $25) it helped me prioritize and quit spending money on things that meant nothing to me and save that money for ER.

 

[LRS]

A bigger house can be worth it. We bought our first house for $49,000 and sold it in 7 years for $94000; we moved up to a 2000 sq foot house (twice the size) for (gulp)$160,000 in 1996. Taking out a $110,000 mortgage kept me up nights for a couple years. Then we paid off the mortgage with some windfall money three years ago. Now the house is worth $300,000, so I got a pretty good return for my windfall money (I remember agonizing over "pay off the mortgage or invest the money?" I definitely made the right decision.)

Sometimes it's true--you have to spend money to make money. Luck helps, too.

 

[azanon]

Due to inflation, being a millionaire today is just about meaningless.

"A Dollar in 1950 will buy only 13 cents worth of goods today, 87% less than before."


http://www.financialsense.com/editorials/hodges/2006/0106.html

I realize you had good intentions, but a million dollars is 40K/year for life. That's anything but meaningless.

 

[mountaintosea]

MTS, if you have a portfolio of $846k PLUS a pension, unless the pension is worth $20 bucks a month, you are already well beyond the "Big M status" in portfolio equivalents.

I' m aware of that fact, but I guess it is the journey. My pension will be good. However having gone through the effort of saving and investing makes it seem more so. Besides pensions are always being attacked these days. Nothing is guaranteed. So I personally don't count my house nor my pension.
I also know that pensions these days are like gold and I know that I am lucky to have one. Am I being overly cautious? Probably!

 

[Mr._johngalt]

Most travel is worth it, eating out mostly isn't (at least when it costs over $25) it helped me prioritize and quit spending money on things that meant nothing to me and save that money for ER.

Saving for ER is good, but as far as "prioritizing"..........................
I am sure you realize this but just in case...............a lot of folks couldn't care less about traveling but would get a lot of pleasure out of
"eating out", even if it cost $50.00. It's called different strokes.
Remember, the money has no value unless it's spent. OTOH, you don't want to run out.
Right Cut-Throat?

JG

 

[Cut-Throat]

Remember, the money has no value unless it's spent. OTOH, you don't want to run out.
Right Cut-Throat?

JG

You would run out only if you are math challenged.

 

[scrinch]

Remember, the money has no value unless it's spent.

Do you think having money in the bank has any stress-relieving value? Said another way....how many couples with $1 million in the bank argue about money? I for one find most of the value of the money that I have comes from the security it imparts, not from the stuff that I buy with it. I get this value every day without necessarily spending a penny.

 

[FinanceDude]

Do you think having money in the bank has any stress-relieving value? Said another way....how many couples with $1 million in the bank argue about money? I for one find most of the value of the money that I have comes from the security it imparts, not from the stuff that I buy with it. I get this value every day without necessarily spending a penny.

I know a couple folks who have $1 million or more in the bank, and have never heard them fight about money.........

 

[kcowan]

I realize you had good intentions, but a million dollars is 40K/year for life. That's anything but meaningless.

The point was that in 50 years it would only have the buying power of $5200 if the past is repeated again. This means that the cost of ER living has to be much less by them (less travel, simpler living, low health care costs). It is a sobering comparison.

Of course the million would grow larger than SWR in a number of those high inflation years and that would build the equity base beyond $1 million.

 

[gwix98]

I don't think many people lying on their deathbeds are glad they skipped that once in a Lifetime dream trip to New Zealand because they have an extra $25-$50k in their portfoilo.

Luckily I am not on my deathbed yet, but my wife and I sure enjoyed our trip to New Zealand earlier
this year. And we came in well under $5K so that was a bonus.

gwix

 

[donheff]

The point was that in 50 years it would only have the buying power of $5200 if the past is repeated again. This means that the cost of ER living has to be much less by them (less travel, simpler living, low health care costs). It is a sobering comparison.

Of course the million would grow larger than SWR in a number of those high inflation years and that would build the equity base beyond $1 million.

The above quote was in response to Az's point that $1M will buy you a $40K SWR. The whole purpose of an SWR is to allow the principle and the nest egg to grow along with inflation. If you select an infinite SWR (possibly/probably a bit less than an initial 4%) both the withdrawal and the nest egg will hold their buying power in today's dollars so 50 years from now the healthy SOBs would still be smiling.

 

[scrinch]

Luckily I am not on my deathbed yet, but my wife and I sure enjoyed our trip to New Zealand earlier
this year. And we came in well under $5K so that was a bonus.

I was in New Zealand last week and I made $5K while I was there. But I had to w*rk while I was there.

 

[scrinch]

I had been away for 4 weeks, and I, DW (who works full time), and the two kids still at home were all ready for me to be back home. That's the problem for me with international travel these days. I spend months in Asia each year, so it's more of a treat for me to be at home than in Bali or New Zealand. Something's wrong with this picture, isn't it?

 

[OkieTexan]

Your post is certainly on target.

My father died at 52 from cancer. I am 54 now and that fact still affects decisions I make and my views on life. A million bucks would not have saved him.

 

[Mr._johngalt]

Moderation is the key. You can have the big tv and cable. Or the boat and slip rental. Or the macmansion. Or the pair of new german autos. Or the luxury vacations. Or ER. But not all of those at the same time.

I like to say that I can do anything I really want. I just can't do everything.

JG

 

[FinanceDude]

Your post is certainly on target.

My father died at 52 from cancer. I am 54 now and that fact still affects decisions I make and my views on life. A million bucks would not have saved him.

"INVEST as if you'll live forever, LIVE as if you'll die tomorrow"

My sister, who died at 47 August 30th, lived by that motto her last 6 and a half years, and I think she died with few regrets, other than wishing she had more time.........

 

[Dawg52]

"INVEST as if you'll live forever, LIVE as if you'll die tomorrow"

My sister, who died at 47 August 30th, lived by that motto her last 6 and a half years, and I think she died with few regrets, other than wishing she had more time.........

Sorry about your sis. Cancer?

 

[FinanceDude]

Sorry about your sis. Cancer?

Breast cancer in 93, went into remission 98, mesthatized to the liver in 2000, died this year............

 

[astromeria]

So young. I'm very sorry, FinanceDude.

 

[FinanceDude]

So young. I'm very sorry, FinanceDude.

I think I joined the forum after she died, so I doubt I posted on here about it. She never did estate planning (why listen to a YOUNGER brother, even if he is an FA), so the estate is a mess, I hate TIAA-CREF, and the holidays won't feel the same this year..........

Other than that, things are normal...........