U.S. millionaires say $7 million not enough to be rich

[MasterBlaster]

Is a million or two still rich ?

Quote:

More than four out of ten American millionaires say they do not feel rich. Indeed many would need to have at least $7.5 million in order to feel they were truly rich, according to a Fidelity Investments survey

U.S. millionaires say $7 million not enough to be rich - Yahoo! News-

Is a million or two still rich ?

[DFA]

Read this earlier today; I think that with the downturn in the markets people just don't feel to good about not having lots of money. I also believe that most that don't believe they are rich unless they have more than $7 million are not LBYM to start with.

Just my opinion

[MasterBlaster]

Well the quoted $7.5M portfolio would (using our standard 4% SWR) give an income of ~$300k/year.

That is certainly a very very nice income but perhaps not "rich".

I can see the logic of those quoted.

[FIREd]

When I had nothing I thought $100K was "rich". When I had $100K, I thought $1M was "rich". When I had $1M, I thought $10M was "rich"...

[Orchidflower]

I don't want those $7MM folks to feel deprived, so I'd be more than willing to take it off their hands for them.

[novaman]

Quote:

Originally Posted by FD When I had nothing I thought $100K was "rich". When I had $100K, I thought $1M was "rich". When I had $1M, I thought $10M was "rich"...

.....and ?

[Tadpole]

Actually people seem to be smarter than I would have thought when asked this question. I always consider the $1M (after tax) to be 1955 or so since it seems to have been what people then considered rich. So according to the westegg calculator: "What cost $1000000 in 1955 would cost $7922698.13 in 2009. " People's feeling that 7.5M was "rich" is not that far off for a feeling when compared to the same "feeling" in 1955.

For people too young to remember there was this TV show in the 50s where a billionaire gave $1M tax free to a person he chose. It was not a reality show, just entertainment. But people back then "felt" this was the definition of "rich".

[FIREd]

Quote:

Originally Posted by novaman .....and ?

Isn't it obvious?

[RunningBum]

You need to define "rich" before you debate a number. Is it debt-free, FI, vacation home, travel without worry, go first class, private jet, or what?

[sheehs1]

Quote:

Originally Posted by Tadpole Actually people seem to be smarter than I would have thought when asked this question. I always consider the $1M (after tax) to be 1955 or so since it seems to have been what people then considered rich. So according to the westegg calculator: "What cost $1000000 in 1955 would cost $7922698.13 in 2009. " People's feeling that 7.5M was "rich" is not that far off for a feeling when compared to the same "feeling" in 1955. For people too young to remember there was this TV show in the 50s where a billionaire gave $1M tax free to a person he chose. It was not a reality show, just entertainment. But people back then "felt" this was the definition of "rich".

We need deflation to bring things back in line. Then those with "just" 1 million will feel more rich.!

[aaronc879]

I think $7.5M is rich. I think what FD said makes a lot of sense. It's all relative. I have a net worth of barely six-figures so $1M seem rich to me let alone $7.5M. Even at age 31, if I took $1M at 2.5% SWR that would give me more spending money than i've ever had in my life so i'd feel rich. This reminds me of the Chris Rock sketch: Rich vs wealth

YouTube - CHRIS ROCK: RICH VS. WEALTH

[unclemick]

I have that mysterious amount called by Mr Bogle. Enough.

As for Chris Rock, wealth is when it's 1994 and you are sitting on the back deck over Lake Ponchartrain drinking coffee watching those folks crossing the I-10 bridge to go to work.

And you don't have to.

heh heh heh - and time to read this forum which taught me 'frugal' and LBYM were classier than 'cheap SOB.'

I felt 'rich' this morning when using two NEW dryer sheets with the laundry.

[LARS]

Just like to retire you need "50% more than you have", the same is true for feeling "rich": it is (for most people) 50% more than you have...

[haha]

Quote:

Originally Posted by LARS Just like to retire you need "50% more than you have", the same is true for feeling "rich": it is (for most people) 50% more than you have...

Obviously for an American a pre-tax income of 4% of $1mm, or $40,000 is not even remotely rich. It isn't even modestly sufficient in most places and under most circumstances, unless of course you have rich cola retirement streams from public funds in addition to your $1mm.

Ha

[aaronc879]

Quote:

Originally Posted by haha Obviously for an American a pre-tax income of 4% of $1mm, or $40,000 is not even remotely rich. It isn't even modestly sufficient in most places and under most circumstances, unless of course you have rich cola retirement streams from public funds in addition to your $1mm. Ha

It is modestly sufficient in most places and under most circumstances. A very large majority live on less and manage to get by. If you live in a coastal city then it may be difficult but that's not most places.

[LARS]

Quote:

Originally Posted by haha Obviously for an American a pre-tax income of 4% of $1mm, or $40,000 is not even remotely rich. It isn't even modestly sufficient in most places and under most circumstances, unless of course you have rich cola retirement streams from public funds in addition to your $1mm. Ha

Not at all clear how your point is relevant to mine...

Mine point was that for most people their idea of "rich" is conditioned upon always needing more, no matter how much you have. No doubt driven by comparing to the "Jones". Moreover, for most, the "rich" thing is not even an absolute value: if you have $10 million you want $20 million to feel rich. And when you get $20 million you need $40 million to feel rich, etc.

Larry Ellison considers himself poor compared to Bill Gates, etc. etc.

[Bestwifeever]

The article is based on a Fidelity survey of 1,000 people who have at least $1 million in investable assets, not including any real estate OR retirement accounts. Some of them could have mortgages of more than $1 million, so I can see why those people would think they need a lot more money. On the other hand, who knows what the upper limit on retirement accounts might be, but if one's nest egg is mostly tied up in those rather than the non-retirement investable assets, then I can see why that group would also think they need a lot more money to call themselves rich today.

It might be more interesting to see the Fidelity study on what this group would consider poor.

[youbet]

Quote:

Originally Posted by aaronc879 It is modestly sufficient in most places and under most circumstances. A very large majority live on less and manage to get by. If you live in a coastal city then it may be difficult but that's not most places.

"Modestly sufficient" does not equal "rich." At least not the way I use the word in my vocabulary.

[aaronc879]

Quote:

Originally Posted by youbet "Modestly sufficient" does not equal "rich." At least not the way I use the word in my vocabulary.

I agree. I was using "modestly sufficient" in response to a post by Haha.

[youbet]

Quote:

Originally Posted by haha Obviously for an American a pre-tax income of 4% of $1mm, or $40,000 is not even remotely rich. It isn't even modestly sufficient in most places and under most circumstances, unless of course you have rich cola retirement streams from public funds in addition to your $1mm. Ha

Exactly.

While DW and I could get by on $40k, there is no way I could consider myself "rich" in the way I define the term. At $40k we'd be living modestly with little/no travel or entertainment expense and with a 5% chance or so we'd run out of money before death. Hardly what I'd call "rich."

In Chicago, by the time you purchased health insurance or paid for your Medicare and paid your taxes, it would be a challenge to comfortably pay for food, clothing and shelter.

I know many will chime in and add other assets and income sources such as a paid-for house, a paid-for car, free medical insurance, SS or some other pension. But, if you have those things, then you have more than the mentioned one million bux.

I would have never RE'd on a FIRE portfolio of one million without other assets or income. Way, way too much risk that expenses will uncontrollably rise above $40k and you'll wind up living in a box under a bridge in your 80's.

Edit: Although we're arm wrestling over being "rich" with one million bux, the article referred to 7 mil. Now, that's a different story. With a net worth of 7 mil, I imagine I'd feel rich. On an annual budget of a quarter mil or so, we'd have a nice home, nice cars and could afford a significant amount of travel and entertainment without worry. For me, that would inch me over the line into "rich." Although Bill and Melinda certainly wouldn't be seeking us out as social chums I'm sure!