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Old 08-15-2020, 07:38 AM   #61
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It is a little humbling to think that there are over a million households with more than $11 million net worth. 11 trillion dollars there.
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Old 08-15-2020, 07:44 AM   #62
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The net worth doesn't include the income side with pensions and Social Security, so perhaps it is a reasonable number at 2.4m.

And these articles about "pension millionaires" throws another angle:

https://www.illinoispolicy.org/the-1...-millionaires/

https://www.illinoispolicy.org/press...-millionaires/
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Old 08-15-2020, 07:48 AM   #63
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It is a little humbling to think that there are over a million households with more than $11 million net worth. 11 trillion dollars there.
According to the US FRB, the top 1% owns $32.5T in assets, and the next 9% owns another $39.2T

Not a surprise, the top 1% close to 1/3 of their total wealth is private business and another 1/3 in public equities.
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Old 08-15-2020, 08:17 AM   #64
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And these articles about "pension millionaires" throws another angle:



https://www.illinoispolicy.org/the-1...-millionaires/



https://www.illinoispolicy.org/press...-millionaires/


There are legitimate issues with public pensions in IL and many places, but the term “pension millionaire” seems a bit dramatic....intended to build public animosity towards the pensioners perhaps. A million dollars is 40k/ yr @4% WR or 33k / yr for 30 yrs if you stuffed it under a mattress. These are very early retirees in many cases so the million dollar pile gets spread even thinner.
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Old 08-15-2020, 08:24 AM   #65
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There are legitimate issues with public pensions in IL and many places, but the term “pension millionaire” seems a bit dramatic....intended to build public animosity towards the pensioners perhaps. A million dollars is 40k/ yr @4% WR or 33k / yr for 30 yrs if you stuffed it under a mattress. These are very early retirees in many cases so the million dollar pile gets spread even thinner.
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
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Old 08-15-2020, 08:43 AM   #66
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Having zero pension and close to zero social security I'm real aware of what I see as the "pension millionaire" life. It takes a fair chunk to feel secure about retirement maintenance income.

still - "as I move from here to ghost, what's gonna matter most?"

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Old 08-15-2020, 09:31 AM   #67
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LOL, who are they trying to patronize? I hardly consider us Wealthy! No private jets for us. Can we afford a Bentley or a McLaren Car, yes, but that does not make us wealthy.

I wonder if this mindset, which DH and I share 100%, is a critical reason as to why we are in the financial bracket considered wealthy, and in the 1.5% or so overall? We have learned that life is much, much, much less stressful when we underspend a bit and allow ample room for the unexpected, 'just in case.'

This week is a good example- an unexpected $700 auto repair and an unexpected pest remediation at $500. No stress about paying them, however, and that goes a long way in generating our piece of mind. It doesn't lead me to think of us as 'wealthy' though.
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Old 08-15-2020, 09:34 AM   #68
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I'm always amazed by the numbers that will put you in the top 5%, but having a top 5% networth will only generate an income that is near the median US income.
Most people would say you are rich, but you can only live a middleclass lifestyle.
But you don't have to work to survive.
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Old 08-15-2020, 10:03 AM   #69
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There is another calculator for net worth percentile but age on the site.

https://www.thekickassentrepreneur.c...lator-for-usa/

From article:


If you want to increase your net worth, there are some levers you can pull. You can:
  • increase your salary, or, if you’re running a business, increase your profits
  • save more of your salary, or business’s profits, on a monthly basis
  • improve your earning rate. If your investments are earning a 4% yearly return, for example, then you can increase your return by becoming a better investor.
Our pension + SS is @ $15K more than we spend/year. That kicks in 2-3 years depending when we decide to take SS. Thus leaves the NW fairly secure, unless market takes a deep dive. Either way, we're OK but never consider ourselves "rich", not even sure about "well off". We're just average IMO.
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Old 08-15-2020, 10:47 AM   #70
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For fun, here's a networth/percentile calculator by age. (The article also contains the average and Median Net Worth by Age Range, 2016. According to that, the *average* networth for people over 60 is more than a million (although the median number is much, much lower.)) And out of those people over 60, if you're a pension millionaire, you won't show up as a millionaire, so I have a feeling there are a whole lot more people who have over a million bucks in the older age bracket that the said 5%.

https://dqydj.com/net-worth-by-age-c...united-states/
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Old 08-15-2020, 11:00 AM   #71
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It is a little humbling to think that there are over a million households with more than $11 million net worth. 11 trillion dollars there.
There is generational-wealth getting pass-downed/distributed too. Many reached the top 1% the moment they are born.
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Old 08-15-2020, 11:03 AM   #72
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There are legitimate issues with public pensions in IL and many places, but the term “pension millionaire” seems a bit dramatic....intended to build public animosity towards the pensioners perhaps.
Whenever I see a "pensions are bankrupting us" article that singles out teachers and conveniently leaves out public safety employees I suspect a political agenda. Both groups typically have generous pension benefits (and both deserve what they earned), but they each usually represent opposite sides of the political spectrum. I guess it's harder to rabble rouse when one of your targets is revered by your audience.
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Old 08-15-2020, 11:39 AM   #73
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It is a little humbling to think that there are over a million households with more than $11 million net worth. 11 trillion dollars there.
Doesn't it seem like that $11 million figure is being inflated by the inclusion of households of Bill Gates, Warren Buffet, Jeff Bezos, and other multi-billionaires? IOW, the NW of the poorest household in the top 1% isn't really $11MM... is it?

Based on my own observations and interactions with people—in real life and on this board—that $11 million figure just seems wrong to me. Here at E-R.org, where we are pretty much all in the top echelon of savers and NW accumulators, I can think of only a very few members who've posted about having a NW in excess of $10MM. At most, I have to think it's only maybe 3-4% of us. If that's true, then how could 1% of ALL households have such a large NW?
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Old 08-15-2020, 11:46 AM   #74
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I wonder if this mindset, which DH and I share 100%, is a critical reason as to why we are in the financial bracket considered wealthy, .... We have learned that life is much, much, much less stressful when we underspend a bit and allow ample room for the unexpected, 'just in case.'

.....
+1
When younger I always stressed if I had less than $1,000 in the bank to me the $1,000 was like having zero. Friends thought I was silly for not spending it.

I find life less stressful, since I saved a bunch.

My example is , need a new roof, cost is $9K , my only concern is the quality and when can they start.
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Old 08-15-2020, 12:07 PM   #75
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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.
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Old 08-15-2020, 12:51 PM   #76
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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.
Right, it is harder for someone to understand if you are not used to valuing long term financial freedom and security over short term gratification with spending on something you want now. Many in this forum got to FI by embracing this concept. My sister and I learned the lesson vicariously from watching our parents' life long financial struggles. If not for them, I'd could still be W*rking and driving the latest Tesla and rolling with a Rolex
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Old 08-15-2020, 02:29 PM   #77
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"According to the latest figures from the Bureau of Labor Statistics, the typical U.S. household spent $60,060 in 2017 and had an average income of $73,573 before taxes."

$1m at 3% $30,000 annually
Avereage SS $1,500 a month. $18,000 rounded annually (your state may vary)
Couple $36,000 + $30,000 = $66,000

I am not sure how taxes plays into the the $60,000 annual expense needed, but while many feel $2.4m is needed, It appears the average american can retire on $1m.

As posters on this board are far from average, the $2.4m or higher may be necessary for our friends on here.

Sources:
https://www.cheatsheet.com/money-car...0fell%201.5%25.

https://finance.yahoo.com/news/heres...onal%20average.

OK, this is statistics and I am not so naive as to think many can find fault with this simplistic approach.
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Old 08-15-2020, 03:07 PM   #78
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Doesn't it seem like that $11 million figure is being inflated by the inclusion of households of Bill Gates, Warren Buffet, Jeff Bezos, and other multi-billionaires? IOW, the NW of the poorest household in the top 1% isn't really $11MM... is it?

...
Yes it is. That is exactly what 99th percentile means. Bill, Warren, and Jeff have nothing to do with it other then setting the UPPER boundary. Percentile is not an average, it is a ranking. About 1.25 million households are between ~$11M and those guys.
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Old 08-15-2020, 03:48 PM   #79
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Covid or not, the net worth chart of the US shows pretty bad net worth inequality. Dont get me wrong, I am sure many frequent this forum are in good financial standing and should be proud of yourselves. I do believe the social and financial problems of this country will get worse with the worsen wealth inequality.

I was reading the Android phone reviews earlier on Wired and Google Pixel 4A, priced at $350, is reviewed as the "Best Cheap Phone". And less an hour later, I listened to one of the WoPo podcast about a young man who has no phone, no job, and couldn't get the unemployment benefit. He couldn't even take the public transportation to go home to live with his 68yr old father in a one bedroom apartment.

I am in no way an expert on the social economic field but I am going to hold onto everything I own longer (reduce spending) and give more to charities.
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Old 08-15-2020, 05:24 PM   #80
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Some pundit....

https://www.thekickassentrepreneur.c...alculator-usa/

But it compares favourably with others I have seen.
From https://dqydj.com/net-worth-percenti...united-states/

USA household net worth deciles 2016 Fed SCF in USD
-962 10%
4798 20%
18753 30%
49132 40%
97225 50%
169550 60%
279594 70%
499263 80%
1182390 90%

The ratio of the top 10% threshold to the median based on your numbers is 830,000/507,000 or ~1.6x. By comparison this ratio using the numbers above is significantly different: 1182390/97225 = ~12x. IMO these two sets of numbers tell very different stories about the degree of wealth inequality that exists within the US.
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