120K year Lifestyle

"Nothing is more admirable than the fortitude with which millionaires tolerate the disadvantages of their wealth" (Jean Rostand)

Having said that, this is one of the most mmmmm...... "interesting" posts so far this year. What a fascinating angle!

It may be expensive to be rich but it's equally expensive to be poor and having less money to deal with it.
One of my favorite quotes is: "I've been rich and I've been poor. Rich is better."
 
Not sure how accurate this Fat Fire calculator is, but it states I should reach it in 3 years by age 55. This is based on current NW and a healthy overall market. What this calculator does not take in are pensions. Not to shabby on NW alone. Agree, having money sure helps.

 
I'll give an example/analogy. Jenny is a waitress in a cocktail bar, earning very modest wages. She shares an apartment with her roommate, and does her best to contribute to her Roth IRA. One day, Jenny's rich uncle Rufus dies, and leaves to her $10M. Jenny puts the $10M into the Vanguard S&P 500 index fund. The calendar rolls over, and now it's tax-season in the following year. Vanguard sends to Jenny a 1099R, showing that hey, over the months that she's had that account, it has generated $100K in taxable dividends. Now she needs to scramble to pay her tax bill... take extra hours at the bar, maybe get a second job... except that those extra hours or job, also mean more income tax. By becoming richer, Jenny has become... poorer.

So Jenny makes perhaps $30-40k / year total income and has been saving some of that. Then she inherits and has distributions of 2.5-3.3x her job income. And. . . she's poorer. :facepalm:

OK. The solution is right under Jenny's nose, yes? She can withdraw some of that money from her account, using it to pay her taxes, yes? She can. But she wants to keep contributing to her retirement... or at very least, not withdrawing from her accounts. Now suddenly she has to! She never earned much, but she spent a lifetime trying to be frugal and diligent and set money aside. Now, she can't.

[Bold italics above are mine.] Exactly. She can. The entire 'problem' here is that Jenny doesn't acknowledge that she's now FI and can retire if she so chooses. Continuing to add to, or not withdraw from, her accounts is entirely her decision and creates this artificial situation.
 
Should Jenny resolve her problem by giving away most of her assets?
Jenny can resolve her problem by taking a little bit of that cash and buying a clue.

Like handing guns to children, you don't hand $10M to idiots.
 
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Jenny needs to find investments with better tax handling. Non-dividend paying stocks could be a start. She gets hit with taxes on those only if she decides to sell shares at a gain.
VTSAX yield is 1.23% in qualified dividends. That’s pretty darn tax efficient. I don’t see a problem there.

And I really don’t see why Jenny thinks she doesn’t have money to pay the taxes. Huh? What’s this scrambling to pay the taxes business? She’s got $100K in additional investment income. So some of that (maybe ~15% or less) goes to pay taxes. :facepalm:
 
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Jenny had a simple life, but she was happy. Taco Tuesdays at Senor Frog's, happy hours at Hooligan's pub on Thursdays, and her weekly Powerball X2 ticket where she could dream of that endless Caribbean "vacation." But then one fateful Wednesday, she hit for all the numbers except the Powerball. She sat stunned at the realization that the $2,00,000 prize had ruined her. She could not possibly come up with the roughly $760k federal tax, let alone the state tax. She was shattered. She could no longer think about paying for the next Taco Tuesday, let alone scraping up the money for Beth's birthday party, which was looming ominously close.
 
Jenny had a simple life, but she was happy. Taco Tuesdays at Senor Frog's, happy hours at Hooligan's pub on Thursdays, and her weekly Powerball X2 ticket where she could dream of that endless Caribbean "vacation." But then one fateful Wednesday, she hit for all the numbers except the Powerball. She sat stunned at the realization that the $2,00,000 prize had ruined her. She could not possibly come up with the roughly $760k federal tax, let alone the state tax. She was shattered. She could no longer think about paying for the next Taco Tuesday, let alone scraping up the money for Beth's birthday party, which was looming ominously close.
+1. This is exactly why I don't play Powerball. If I won, it would bankrupt me.
 
+1. This is exactly why I don't play Powerball. If I won, it would bankrupt me.
I don't play either for several reasons. Having said that, I always thought it would be cool to win enough to make a difference in life style but not enough to bring out all the crazies who want you to "help" them since you have "so much."

I heard one story where the USPS was delivering mail to a big winner addressed only to "LOTTO Winner in Podunk WV." Thanks a lot but I'll pass on that.
 
I don't play either for several reasons. Having said that, I always thought it would be cool to win enough to make a difference in life style but not enough to bring out all the crazies who want you to "help" them since you have "so much."

I heard one story where the USPS was delivering mail to a big winner addressed only to "LOTTO Winner in Podunk WV." Thanks a lot but I'll pass on that.
I do play on the really big ones, but sometimes "fantasize" about winning the 2nd largest prize and would it make a difference in spending. I think it would.
 
If I won the Powerball jackpot, I would still be the same person, but others would probably view and treat me differently. The young wife and I might need to, in effect, go into the witness protection program for our own safety. I envision that as living in a cage. A gilded one, to be sure, but still a cage.
 
I do play on the really big ones, but sometimes "fantasize" about winning the 2nd largest prize and would it make a difference in spending. I think it would.
Yeah, if I could win, say $200K, I might finally (either) fly 1st class or buy a C-8 Vette. Thing is, I could do either right now but I'd have to get into my stash to do so. I (at least) tell myself that, if I won $200K (or whatever decent sized chunk of money) I would do some things I hesitate to do now.

I'll let you know if I win and then, if I carry through on my fantasy.

Of course, hard to win if you don't play, so...
 
If I won the Powerball jackpot, I would still be the same person, but others would probably view and treat me differently. The young wife and I might need to, in effect, go into the witness protection program for our own safety. I envision that as living in a cage. A gilded one, to be sure, but still a cage.
My understanding is that in some states (don't ask me which) you can w*rk through an attorney to claim winnings and remain anonymous. Of course, I have never heard of that actually being done successfully, but if I ever won a big cash prize, I would definitely check it out.

I think I could remain stealthy enough that no one would know - if the rules didn't require the public announcement.

IOW I would build my own guided cage - the best of both worlds. BUT, again, I don't play so I'll have to let someone else try out this strategy.
 
My understanding is that in some states (don't ask me which) you can w*rk through an attorney to claim winnings and remain anonymous. Of course, I have never heard of that actually being done successfully, but if I ever won a big cash prize, I would definitely check it out.

I think I could remain stealthy enough that no one would know - if the rules didn't require the public announcement.

IOW I would build my own guided cage - the best of both worlds. BUT, again, I don't play so I'll have to let someone else try out this strategy.
Heh, heh, I think the fly in the ointment would be that IRS wouldn't be blind to the winner's name. I'm guessing some low-level staffer would gladly spill the beans for a price but maybe I'm too harsh.
 
When the Forbes 400 was the big thing, I fantasized about being 401st on that list. Reap the benefits of the 400 in front of you but no one knows who you are and so no one would bother you about it.
 
When the Forbes 400 was the big thing, I fantasized about being 401st on that list. Reap the benefits of the 400 in front of you but no one knows who you are and so no one would bother you about it.
Heh, heh, if you are 401 on the list of 400, someone will figure out that you are rich!
 
Yeah, if I could win, say $200K, I might finally (either) fly 1st class or buy a C-8 Vette. Thing is, I could do either right now but I'd have to get into my stash to do so. I (at least) tell myself that, if I won $200K (or whatever decent sized chunk of money) I would do some things I hesitate to do now.

I'll let you know if I win and then, if I carry through on my fantasy.

Of course, hard to win if you don't play, so...
What would you do with a C8 Vette living in a tower and only driving a few miles on a good day? And, can you still get in and out of it without help? :ROFLMAO: (Of course, I am jesting!)
 
I have t admit i have no idea what you guys are now talking about :smackhead :(
 
If I won the Powerball jackpot, I would still be the same person, but others would probably view and treat me differently. The young wife and I might need to, in effect, go into the witness protection program for our own safety. I envision that as living in a cage. A gilded one, to be sure, but still a cage.
I agree with you. I believe a person would have more people disliking me and actually hating me they knew I won a large jackpot.
 

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