Millionaires?

[Marquette]

That withdrawal rate would be $220,000 a year, unless I am doing something wrong.

Which is why it's important to talk about expenses and not income. We're very lucky to be able to live on much, much less than we earn. Still, if I were spending at my income level, I don't think I'd feel as rich as a millionaire from yester year. I do own two very nice fedoras, though...

 

[haha]

One sister lives at home and does huge amount of work caring for parents. She's dependent on them for housing, while they are dependent on her for everything day to day. She's also very jealous of "rich" sister.
One sister doing okay but with ne'er do well husband and slew of super cute grandkids
One sister married to multi-multi-millionaire but very prickly about getting her "fair" share. Always has some new way of figuring how her share isn't fair enough.
Me doing fine on my own and hope my parents spend it all or find some creative solution instead of dropping this hot potato on us.

Your stay at home sister deserves a very large share. Your rich sister deserves to grow up; maybe getting nothing would help in this regard.

Ha

 

[growing_older]

Your stay at home sister deserves a very large share. Your rich sister deserves to grow up; maybe getting nothing would help in this regard.

Agree with that. I have to say I half hope they come up with a solution like leaving the house to the sister who has spent so much time taking care of them. There's some chance that such a solution would sit okay with "rich" sister, but nothing's for sure with her. As for growing up, she's early 50's and still showing no sign of that kind of maturity, so not much chance of learning that lesson anytime soon. Leaving her nothing is more apt to cause a breech I fear.

 

[Rambler]

Yes, more than once, but I don't use the house we intend to live in as a retirement asset. Without that being counted, we still make the grade for this poll more than once. But at the age I plan to retire and with the running costs we have I can't see retiring with less than 3-3.5. With any less, we would have to give up the McMansion, which we both really enjoy, is paid for, and was designed by us to be a long term retirement home.

On the topic of leaving an inheritance:

My folks are not so rich, but will likely leave behind a good chunk when they pass. Frankly I hope they use everything but enough for final expenses, but that's not likely to happen. They like to save for rainy days, but they really are happy with the way that they live, so I am happy for them.

My folks plan to leave each of the four of us siblings an equal share. Fine by me, although we won't need anything to be OK ourselves. My sis will need help, but she will also need to be fed the money in periodic payments, because she is totally irresponsible with money, and it would be gone before my folks caskets hit the bottom of the grave, figuratively speaking, and she would have nothing to show for it. Dad has asked me to be the executor and trustee for what he leaves for her, and I have agreed, so long as it is stipulated properly in his will, and that he and mom inform her of what their intent is. Sis is always complaining about how "unfair" it is that we have money and she doesn't, and cannot seem to take responsibility for her own decisions, financial or otherwise. My only worry about this is that she will feel like she is being cheated out of her money by me. Anyone have any ideas about how to handle it so she has no way to think she is being cheated?
R

 

[Hal3]

There's a huge difference between having a net worth of $1M (which includes one's home value), vs. having investable assets of $1M, excluding one's home.

As an interesting exercise, you might also want to research how much money one would have to have today to be at the same level of what was traditionally known as being a "millionaire," 20 or 30 years ago.

20 years ago = $1,831,208.79

30 years ago = $3,322,576.69

in 1965 = $6,877,206.35

CPI Inflation Calculator

 

[Trek]

Heres a post to hopefully cheer those of us that are early in this process and getting depressed seeing that > 75% of our fellow posters exceed a million dollars in net worth - ours just climbed over $0 this year .

DD

That's better than a million dollars! The best feeling I've ever had related to money was the day I paid off my last debt and got myself back to 0. No amount of money I've ever accumulated since has ever felt as good as that day did.

 

[CaseInPoint]

Believe me, if you are concerned and doing something for your future, you are way ahead of the spendthrifts out there.

Well said, NW-Bound.

 

[CaseInPoint]

20 years ago = $1,831,208.79

30 years ago = $3,322,576.69

in 1965 = $6,877,206.35

CPI Inflation Calculator

Definitely food for thought.

 

[calmloki]

...
The knee jerk reaction that the kids each get an equal amount of the entire estate never ceases to amaze me.

Ask yourself these questions next time you think of this issue:

-What is an appropriate inheritance for my kids? {how much gives them a boost but doesn't create sloth = ever worry about a family Paris Hilton?}
-Do I distribute to them equally or by perceived need {one kid a teacher, one a surgeon, who needs the money?}
-How and when do I want them to receive these dollars?
-Should I skip a generation? By the time a person normally dies, their kids have already made their way, maybe grandkids are a better fit.
-Are there areas of community for which you have a passion and should you leave a fund in the family name to distribute for those needs? Family members can even be involved in the decisions through a donor advised fund. A family philanthropic fund can be a terrific way to stay connected.

On some other thread i think Martha said that while fairness can be endlessly debated everyone understands equal share. Made sense to me. If parents use a fine balance to determine what is fair in what they leave they can end up creating hard feelings among the heirs - not what they want to do.
My gal has been going back and forth to SoCal for the last 2 years caring for her Mom, which is fine - she's a nice lady. Still, not a negligible expense and a lot of our lives not spent together. Hard on her, not much fun for me. Her sister says she would like to care for their Mom, but on her own Draconian terms. Frankly, little sister, while brilliant, is pretty tough to be around - lots of accusations arguments and acrimony - not to put a fine point on it, she's not like most people. Both sisters are well set for money, but the Momma worries about the little sis and wants to provide for her. Already gave her a house. Now i'm not really involved in this, but while an equal division would be fine with me, giving little sis a bigger share will rankle. Hopefully 'daMomma lives till her money runs out.

 

[Midpack]

My folks plan to leave each of the four of us siblings an equal share. Fine by me, although we won't need anything to be OK ourselves. My sis will need help, but she will also need to be fed the money in periodic payments, because she is totally irresponsible with money, and it would be gone before my folks caskets hit the bottom of the grave, figuratively speaking, and she would have nothing to show for it. Dad has asked me to be the executor and trustee for what he leaves for her, and I have agreed, so long as it is stipulated properly in his will, and that he and mom inform her of what their intent is. Sis is always complaining about how "unfair" it is that we have money and she doesn't, and cannot seem to take responsibility for her own decisions, financial or otherwise. My only worry about this is that she will feel like she is being cheated out of her money by me. Anyone have any ideas about how to handle it so she has no way to think she is being cheated?
R

I'd love to hear answers to this too, only I think my situation is worse. My parents drew up a will leaving my sister and I 50/50. I have been fortunate and saved/invested a lot. My sister has had some difficult life experiences, but she has always lived beyond her means and at age 59 she has nothing to show for a life of work. My parents have had to bail her out several times. They recently changed their will to 67/33 in favor of my sister. I met with my Dad and suggested he set my (twice divorced, IOW no one to turn to) sister up with an annuity or some periodic payout because I am convinced she will also blow through the money quickly. He refuses, says she has learned her lesson by now, I know otherwise and the last time he bailed her out (about $30K) was less than 5 years ago. So I'd love to hear answers on this issue too...

 

[JayOh]

Not yet, then again I'm only 28

Ask me again in a few decades...

 

[SecondCor521]

My friends are nearing the end of their lives. Worrying about money when they have 10 times more than they need at that point in their lives just seems like a waste of years that they could be enjoying themselves. They should be carefree.

Sincere question: Are they worried about money or are they just being very frugal? The two don't necessarily go hand in hand.

My mother is both frugal and worried about their money.

My father is not particularly frugal and not worried about their money.

I am frugal -- not quite as frugal as my mother -- and not worried about my money.

2Cor521

 

[Westernskies]

Yes, more than once, but I don't use the house we intend to live in as a retirement asset. Without that being counted, we still make the grade for this poll more than once. But at the age I plan to retire and with the running costs we have I can't see retiring with less than 3-3.5. With any less, we would have to give up the McMansion, which we both really enjoy, is paid for, and was designed by us to be a long term retirement home.

On the topic of leaving an inheritance:

My folks are not so rich, but will likely leave behind a good chunk when they pass. Frankly I hope they use everything but enough for final expenses, but that's not likely to happen. They like to save for rainy days, but they really are happy with the way that they live, so I am happy for them.

My folks plan to leave each of the four of us siblings an equal share. Fine by me, although we won't need anything to be OK ourselves. My sis will need help, but she will also need to be fed the money in periodic payments, because she is totally irresponsible with money, and it would be gone before my folks caskets hit the bottom of the grave, figuratively speaking, and she would have nothing to show for it. Dad has asked me to be the executor and trustee for what he leaves for her, and I have agreed, so long as it is stipulated properly in his will, and that he and mom inform her of what their intent is. Sis is always complaining about how "unfair" it is that we have money and she doesn't, and cannot seem to take responsibility for her own decisions, financial or otherwise. My only worry about this is that she will feel like she is being cheated out of her money by me. Anyone have any ideas about how to handle it so she has no way to think she is being cheated?
R

My recommendation (just went thru something similar- watched half my siblings liquidate their share of my folks hard-earned IRA's and brokerage accounts for new toys, granite countertops, etc....) is to make sure the terms of her "structured disbursement" is clearly stipuated in the will- and why- that way you will only be executing the will in accordance with your parents wishes; you will not need to make any financial judgements for her- nor will she have grounds (Legal or personal) to complain about how her undistributed share is being handled by you on her behalf. It might be worth having you folks talk to her candidly before they pass- so there are no surprises or reason for hard feelings afterwards.

Good luck.

 

[laurence]

Our NW has taken a serious hit between the housing market and the stock market. Down to about $270k. Was as high as 400k if I sold at the top of the San Diego housing bubble. I am vested in a pension at work that if I quit now would pay me about $400 a month at age 55 in future dollars - but not Cola'd after initial payment.

Still, I'm just 33 so I have time.

 

[lazygood4nothinbum]

My sis will need help, but she will also need to be fed the money in periodic payments, because she is totally irresponsible with money...Anyone have any ideas about how to handle it so she has no way to think she is being cheated?

buy her a non-refundable (or whatever the term might be) annuity which pays out monthly. that way she doesn't have the humiliation of coming to you for money, the money remains relatively safe for her lifetime & the entire amount of her inheritence will be in her name so she won't feel cheated.

Our NW has taken a serious hit between the housing market and the stock market. Down to about $270k. Was as high as 400k if I sold at the top of the San Diego housing bubble.

i'll see your san diego losses and raise you two south florida properties. oh well, nothing 10 years of adventurous travel in developing countries won't fix. i think i'm still a millionaire in chiang mai.

 

[Enuff2Eat]

Yesterday, I was a millionaire then I took my kids and wife out for dinner. After paying gasoline, tips, dinner I realized I now am back to non-millionaire status.... dang, back to maccorni and cheese for a while.

 

[free4now]

Just after reading this thread I came across a recipe for a "Millionaire mojito" in bon appetit magazine. It seems just like a regular mojito, except it's made with Tommy Bahama Ultra Premium White Sand rum. I looked on the web and this stuff retails for $40/bottle, which puts it out of my range as a middle class millionaire (I like that word, thanks!).

 

[NW-Bound]

Still, I'm just 33 so I have time.

I don't remember where I was at your age, but think it might not be as good. Time (read patience) is everything, my friend. Looking back, I never spent all what I made, so always had left-over at the end of the month. My only regret was that I did not know how to invest until several years after I entered the work force. For many years, I only stuffed it under the proverbial mattress. Dumb!

Just after reading this thread I came across a recipe for a "Millionaire mojito" in bon appetit magazine. It seems just like a regular mojito, except it's made with Tommy Bahama Ultra Premium White Sand rum. I looked on the web and this stuff retails for $40/bottle, which puts it out of my range as a middle class millionaire (I like that word, thanks!).

Not really! You can splurge, but don't make a habit of it. As a cognac drinker, even a cheapskate like me enjoyed an XO bottle once in a BIG while. A $100 XO bottle lasted much longer than an expensive wine bottle, which my defective palate simply could not tell from 2-buck chuck.

OK, I'll admit that I have never bought them myself. My DW bought it for me at duty free shops the few times she travelled without me, to ease her guilt. In recent years, I have noticed that I could no longer taste the difference between XO class and VS class, so she stopped buying. Gee, by the time I am 70, I could be sipping turpentine and be happy!

Though just past 50, I can see some advantages of getting old; your senses get dulled, and your taste becomes cheaper. I used to ogle $1000 XO bottles, promising myself that one of these days, I will try one just to see if they are worth it. But that's true no more, knowing it will make no difference to me. Of course, all that is already built into Bernicke's spending model of FIRECALC.

 

[huskerblue]

My recommendation (just went thru something similar- watched half my siblings liquidate their share of my folks hard-earned IRA's and brokerage accounts for new toys, granite countertops, etc....) is to make sure the terms of her "structured disbursement" is clearly stipuated in the will- and why- that way you will only be executing the will in accordance with your parents wishes; you will not need to make any financial judgements for her- nor will she have grounds (Legal or personal) to complain about how her undistributed share is being handled by you on her behalf. It might be worth having you folks talk to her candidly before they pass- so there are no surprises or reason for hard feelings afterwards.

Good luck.

My two cents, DO NOT get yourself in the middle of this. Interview area trust departments and get an objective third party in the middle and keep yourself out of the middle. You will never have a normal relationship with your family member if you are IN CHARGE of their money. The fees paid for the services are well worth the family harmony.

I speak from both a professional point of view and as someone placed in that familial position due to my vocation. Two words: It sucks.

I am also not real keen on set amounts. I once oversaw a trust that was drafted with a specific dollar amount set forth. Trouble is, by the time the trust was activated, $150 per month wasn't worth squat. If you DO place a number in there, have it CPI adjusted from the date of execution of the document. I prefer to allow for some leeway by making distributions discretionary to account for the unexpected in life. Again, a good reason to stay out of the middle of it.

 

[mickeyd]

Yes.

I am waiting until I qualify for lifetime medical.

The value of a cost effective lifetime medical plan is an extremely valuable asset. I have such a plan (Tricare) however I never gave it that much value~until I retired early and realized that I had no other options. I roughly calculate it to be as valuable to me as the retirement income that my Uncle Sam puts into my checking account (as if by magic!) each month.

Since ER I have had more medical issues than I have had in the prior 60 years and the sudden value of this benefit is extremely clear.

 

[theloneranger]

I know people who are millionaires because they live in a million dollar home, but they struggle to pay the real estate taxes because they are cash poor.

Then I know millionaires who live in a old crusty small house but have a million dollars in cash, stocks, and bonds.

There are different kinds of millionaires.

I am only comfortable with having sufficient assest other than my home for retirement income. Digging into the value of the homestead will be last resort.

 

[Moemg]

Our NW has taken a serious hit between the housing market and the stock market. Down to about $270k. Was as high as 400k if I sold at the top of the San Diego housing bubble. I am vested in a pension at work that if I quit now would pay me about $400 a month at age 55 in future dollars - but not Cola'd after initial payment.

Still, I'm just 33 so I have time.

At 33 my net worth was about $ 10,000 all in home equity . Luckily shortly after that I got serious about saving !

 

[Bestwifeever]

Originally Posted by retire@40
I know people who are millionaires because they live in a million dollar home, but they struggle to pay the real estate taxes because they are cash poor.

Then I know millionaires who live in a old crusty small house but have a million dollars in cash, stocks, and bonds.

There are different kinds of millionaires.

I am only comfortable with having sufficient assest other than my home for retirement income. Digging into the value of the homestead will be last resort.

DH and I are examples of people who live in an old crusty small house (I love that term!) but have seven figures outside of our home's value. We don't include the home's value because we can imagine the bank laughing in our face when we go to apply for that reverse mortgage in thirty years.... We like to pretend that the handful of people we know who live in million-dollar homes don't have any money in the bank and they're really not happy either, are they?

 

[Milton]

There's a huge difference between having a net worth of $1M (which includes one's home value), vs. having investable assets of $1M, excluding one's home.

And this perennial debate begins anew!

 

[NW-Bound]

There's a huge difference between having a net worth of $1M (which includes one's home value), vs. having investable assets of $1M, excluding one's home.

A quick scan convinced me that most forum members agreed that home values belong in the "feel good" asset class, not "live on it" asset classes that count for FIRE.

I thought that "before tax" and "after tax" may be more important. I have about the same in each class, and thought that I would rather have more "after tax", since it is more mine to keep. Since I do not trade much in my after tax acct, just recently I realized that all that after tax money isn't yours either. Sell some for AA rebalancing or to change investment strategy and the IRS wants its cuts for capital gains. It may also push you into the AMT trap. Oh the "pain", the "pain"....

Ask ladelfina.