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Old 11-20-2020, 05:12 PM   #181
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Originally Posted by Andre1969 View Post
The difference between the 90th and the 99th percentile would be life-altering for me.
If I was at the 90th, ~$1.219M, I would have never had the guts to buy my house. I would be getting excited about the possibility of retiring "in the near future", if the stock market cooperated, but it wouldn't most likely be an extravagant retirement.

But at the 99th, ~$11.099M, I'd be calling my employer and telling them to get their computer out of my house, because I'm done with them. It would probably be a much nicer house than I ended up buying, as well. And I don't think I'd ever worry about anything financial again, as long as I lived. Unless I ran into some really horrible medical bills, or someone sued the hell out of me, I guess. Now I'm not the type to have aspirations of owning a private jet, a yacht, multiple vacation homes in expensive areas, buy expensive cars and trade every few months, etc. So to me, $11M would be a lot of money.

Right now, I'm around the entry point for the 94% threshold. If I was to lose my job, I wouldn't panic. Probably wouldn't look for another one. But, I wouldn't do anything extravagant, at least not at first. I'd still cut my own grass, rather than pay someone to do it. I'd keep driving the same car until something catastrophic happened on it, and then I'd probably go buy something a bit practical, and on a bit of a budget, rather than splurging.

But, put me to the 95% threshold, I'd definitely retire, and open the purse strings considerably. And at the 96%, $3.294M, I think I'd be pretty happy financially.

So in my case, even a 1-2% move in percentile (94 to 95 or 96%) could make what I'd call a life altering difference. It's the difference between "I'm close to retiring, but might have to budget here and there" to "I'm already gone, and not a financial care in the world!"
May I ask how did you calculate 94-96 percentile without having full dataset?
Would you mind share methodic and numbers? (92 - 98)?
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Old 11-20-2020, 05:28 PM   #182
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Here is the data set for the recent graphic.
https://dqydj.com/average-median-top...h-percentiles/
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Old 11-20-2020, 05:33 PM   #183
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Maybe picking nits but I think the average FIRE contributor here may be in the top 10%, but based on several polls over the years there’s a significant SIRE membership here too, along with tweeners. They’re probably all effectively top 10%...but they’re different worlds.
Yes nit picking, but do agree with the statement.
Unfortunately, the SIRE contribution to the top 10% will decrease over time due to the lack of pensions.
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Old 11-20-2020, 07:35 PM   #184
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I guess it's relative... True, for most it would be life altering, since most are well below the 90% mark on the chart. But certainly not for me.... Even an extra 5 or 10 million isn't going to change my lifestyle very much.... Now 50 to 100+.. But again, that's me...


I'm still thinking about the UHNWI thread which is well into the top 1%. https://www.early-retirement.org/for...do-106473.html
Yea. Everything is relative. How much money or NW needed is totally dependent on the life style that you seek and whatever it takes to make your life happy and fulfilled. Having a luxurious life of the very rich may not be very satisfying and leaving you to look for something better. The viscous cycles of searching for the better never ends unless we come to terms that excessive wealth and an extravagant way of life is a source of attachment, and create a fear of loss and of ceaseless craving.
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Old 11-20-2020, 07:57 PM   #185
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I can't tell you the number of times friends or relatives would say to me "why don't you buy X (a new Mercedes for example)? You can afford it." And I would always answer "the only reason I can afford things like X is because I haven't bought them." For me, happiness is the security that comes from having money in the bank, not having a bunch of stuff.

"Money is much more exciting than anything it buys" -- Mignon McLaughlin

Looking at the breakpoints in the OP post, I see that I am in the 2% without counting the values of my homes. Am I rich? I don't know. I do not feel it, but I know that I am comfortable financially without having to work.

If I suddenly have 10x what I have now, is it life-changing? Only to the extent that it would allow me to buy a waterfront home on Bainbridge Island as a 2nd home. But then, there's the chance that I may quickly find it a chore to take care of, and get over it after a few years.

Now, if I am suddenly diagnosed with a potentially terminal disease, that will be life-changing for sure. Well, more like life-ending in the worst case.

Oh wait! That happened to me 8 years ago.

And I am still posting here. They fixed me up. Good almost like I was, other than several surgery scars. Whew! What luck!

I could have been pushing daisies for a few years already. What's this silly talk about money now?
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Old 11-20-2020, 08:08 PM   #186
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Originally Posted by Spanky View Post
Yea. Everything is relative. How much money or NW needed is totally dependent on the life style that you seek and whatever it takes to make your life happy and fulfilled. Having a luxurious life of the very rich may not be very satisfying and leaving you to look for something better. The viscous cycles of searching for the better never ends unless we come to terms that excessive wealth and an extravagant way of life is a source of attachment, and create a fear of loss and of ceaseless craving.
I'm a risk taker... I'd be willing to take that chance and give it a try! But I'm afraid the only way that's ever going to happen is if someone like Gates, Buffett, Bezos or Musk is reading this and wants to make an example out of me....
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Old 11-21-2020, 12:24 AM   #187
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Another source...


I’m in the Top 10% .. 2.5 years to go to have a buffer
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Old 11-21-2020, 02:22 AM   #188
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Here is the data set for the recent graphic.
https://dqydj.com/average-median-top...h-percentiles/
According to this data set, DW and I just make the cut for the top .5%. When we first got married many years ago, we had a combined NW of $150k. Back then, we would have been ecstatic to make it to $1 million; never in our wildest dream did we imagine that one day we would blow past that number many times over.

A few years ago, our portfolio finally became large enough to achieve a sort of critical mass so that our annual portfolio returns alone were adding more than $1 million+ to our NW annually. This has happened the last 3 years running. While I FIRE'd 5 years ago, DW has continued to work as a senior exec at MegaCorp just below the C-suite, and her substantial compensation has helped make the pot even bigger still. Right now our NW is roughly 170x our annual expense, so there's no way we would ever be able to spend down our pot.

Years ago when we were still in the early part of our accumulation phase, DW and I often talked about how we would enjoy life, buy this big house or get that fancy car if we ever became "rich". But we found that as our NW grew, our desire for these material things just sort of faded away, and by and large we continue to live the same way, living in the same 2000-sqft house that we bought when we got married; driving the same cars (20- and 15- years old); eating at the same restaurants (with coupons) and wearing the same kinds of clothes. Our only "lifestyle inflation" has been on traveling (before Covid).

I'd be lying if I said that I don't enjoy seeing/updating our NW on our spreadsheet. But while we know that we can buy all sorts of fun toys with it, we just don't have any desire to do so. We're happy with the way we live and don't need anything else money might buy us to make us happier.

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Old 11-21-2020, 10:51 AM   #189
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[I]
waterfront home on Bainbridge Island
Awesome.
https://www.zillow.com/bainbridge-island-wa/waterfront/

https://www.zillow.com/homedetails/1...3403750_zpid/?

I could see myself sitting on the deck relaxing, watching the sunrise and sunset, and drinking my favorite beer. It is probably more fun to have friends and family to join you.
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Old 11-21-2020, 11:03 AM   #190
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A few years ago, our portfolio finally became large enough to achieve a sort of critical mass so that our annual portfolio returns alone were adding more than $1 million+ to our NW annually. This has happened the last 3 years running
A few years ago, our returns were in access of over $1M. We then lowered our AA to 40% equity and have not seen that kind of return.
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Old 11-21-2020, 01:35 PM   #191
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Awesome.
https://www.zillow.com/bainbridge-island-wa/waterfront/

https://www.zillow.com/homedetails/1...3403750_zpid/?

I could see myself sitting on the deck relaxing, watching the sunrise and sunset, and drinking my favorite beer. It is probably more fun to have friends and family to join you.

Yes. There's waterfront houses, and then waterfront houses on Rockaway Beach Rd, across the bay from Seattle.

In WA, or at least where I looked at, you own the beach all the way out to the low tide. You can see the lot lines on Zillow if you zoom all the way in.

Much time of the year, I would not be outside drinking beer, but inside with coffee laced with rum looking through large glass panes at the Seattle Space Needle across the bay, or sipping a double shot of Cognac.
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Old 11-21-2020, 03:38 PM   #192
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Much time of the year, I would not be outside drinking beer, but inside with coffee laced with rum looking through large glass panes at the Seattle Space Needle across the bay, or sipping a double shot of Cognac.
That's cool also!
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Old 11-21-2020, 07:29 PM   #193
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A few years ago, our returns were in access of over $1M. We then lowered our AA to 40% equity and have not seen that kind of return.
It's definitely a nice feeling to make $1 million a year without working for it

Equities have had a great run the last 10 years. (Un)fortunately DW and I made a decision a decade ago to focus on land investment with long-term potential (20-30 years out) and put about 70% of our AA in that asset class. So for the last decade, equities have made up only about 20-25% of our AA. As the result, we missed out on some substantial gains as equities have (thus far) outperformed our land investment. Hindsight is 20/20 of course, but we still like our RE play's long-term potential and will stay the course.

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Old 11-21-2020, 09:14 PM   #194
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It's definitely a nice feeling to make $1 million a year without working for it

Equities have had a great run the last 10 years. (Un)fortunately DW and I made a decision a decade ago to focus on land investment with long-term potential (20-30 years out) and put about 70% of our AA in that asset class. So for the last decade, equities have made up only about 20-25% of our AA. As the result, we missed out on some substantial gains as equities have (thus far) outperformed our land investment. Hindsight is 20/20 of course, but we still like our RE play's long-term potential and will stay the course.

Lucky Dude
Thanks for sharing. Real-estate investing is worth considering.
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Old 11-23-2020, 03:22 AM   #195
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Did this for 15 years. It’s not always the best way to travel, but it is a very rewarding hobby.

Some considerations:

When you land, you will need transportation to and from the airport. Some airports let you use their car for free, otherwise you need to rent a car, take a cab, call a friend.

Depending on where you are, the weather may prevent you from travel or making it to your destination, whereas if you drove a car it may not have been a problem.

I once traveled on Thanksgiving day. Landed at a co-located military base. When I was doing my preflight to depart I notice the front tire was nearly flat. Remove nail, replace tube cost me $500.

With my plane, travel up to 750 miles made sense, beyond that it was better to take a commercial flight. If you live in the mountains or a high density population area, a plane has more of an advantage over a car.

Then there is the COVID advantage...
Excellent points - flying is *not* a cheap hobby. Most of the GA airports are not 'centrally' located so getting to/from the airport is a logistical concern.

I remember flying into Bisbee and the FBO there would drive you to/from town...that was nice of him. Otherwise, you just added a taxi fare to your 'flight' bill for said trip. Back then they called it a '$100 hamburger', and that was when you stayed and ate at the airfield greasy spoon. My last flight to Brown in San Diego was just that, but probably more a $500-$1000 patty melt with some green chili and Monterey jack cheese....
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Old 11-23-2020, 05:51 AM   #196
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"Money is much more exciting than anything it buys" -- Mignon McLaughlin
Top 3% for us. I agree with most of what people are saying here, but not this quote specifically. DW and I are blowing plenty of dough on our house to make it just how we want, and also generally a lot on travel (most of the time). We would much rather have these things that $ buys than to just sit on the $.
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Old 11-23-2020, 05:51 AM   #197
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My net worth falls squarely in the average-10% range with 7 years to go until retirement, but growing nicely. We live frugally, in a LCOL area, so traveling is a big spend....we just had to reschedule our annual Jamaica trip because of Covid/work requirements.
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Old 11-23-2020, 08:18 AM   #198
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Here is the data set for the recent graphic.
https://dqydj.com/average-median-top...h-percentiles/
We're at 89% with a goal of 90% for next year. Moving up a percentile a year for the next few years looks like a good goal for us. Six years ago I was at 54%.
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Pension imapcts
Old 11-23-2020, 08:48 AM   #199
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Pension imapcts

What I'd like to see is the numbers including calculations of the NPV of pensions and other fixed income streams. The Fed does have an article that discusses how defined benefit plans may change the numbers:

https://www.federalreserve.gov/econr...f-20200928.htm

Quote:
Prior to allocating the DB pension assets, median family wealth in the SCF Bulletin is a bit more than $121,000 (table A). But DB pensions are a major component of household wealth, representing about 15 percent of the household balance sheet in the Financial Accounts. After allocating these DB reserves across families, median wealth increases to nearly $172,000.
Seventy percent of our planned budget which is ALL of our mandatory spending (housing costs, taxes, HI, food, utilities, other insurance, etc) is covered by pensions and other defined benefit payments The remaining 30% of our budget is designated for BTD items like expensive vacations and significant home improvements that will come from our investments. We will spend like we have a much higher NW than our assets alone indicate and we know people who have a lot more in investments than we do but will not have the spending levels we will have when we FIRE. Are there any studies showing the inclusion of DB income streams? I'm guessing there are not based on the Fed article I found.
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Old 11-23-2020, 09:47 AM   #200
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I think the term "pension millionaire" is pretty spot on. My Aunt retired at age 58 with almost no savings but a 80% Cola'd pension and healthcare. I never asked but I would guess her pension is somewhere around $75K now plus she gets maybe another $30K from SS. That lets her live a very comfortable life despite never saving any money before retirement. She has saved some now because she doesn't know what to do with so much income at her age. $75K/yr for 30 years is over $2M. That is a lot of money. More than most people can save in a career(this site does not represent most people). I think pension millionaire is a pretty accurate term
I know several couples both with govt COLA pensions ranging from a low of $35k to a high of $60k. Add to that a paid off house in a LCOL area and they're living very comfortably on $70k - $120k a year.

FYI...regarding the pension spiking people have commented on, those pension deductions are based on base salary only. No pension deductions are made on overtime and the overtime is also excluded from any pension calculation so it's hard to game the system. Sick time disappears when you retire with no payout, Unused vacation is paid as a lump sum (no pension benefit) or can be used at the end of your career to increase your time of service.
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