Huge Milestone - $5M!!

[treeofpain]

Congratulations. That is a great milestone that few achieve.

Just remember that you can always make more money, but you can't make more time. Just retired 12/31/25 with a bit less and am very glad I did.

 

[Koolau]

Welcome to the $5 million club.

There was a movie that jokingly called $5 million the worst. The “broke rich”, or something along those lines.

You’ll find that at this level, you’re sort of between the ability to chuck it all and be done right now if you’re careful with spending and a few year from reaching a point where you can spend quite freely without the need to have a job.

Well done and good luck.

Heh, heh, that's the way I lived beginning 20 years ago - and I did it on a lot less than $5 million (at that time). YMMV

 

[Act2]

Kudos! Congratulations on the milestone!

 

[wannabefire]

Congratulations on a big milestone!

 

[Diogenes]

Equally important, my self worth wasn’t tied to my career. I didn’t define who I was by what I did. ...

While there is something noble or even transcendent in your approach, it does - with noted respect! - beg the question: if career or material wherewithal don't define one's self-worth, what does? For some, it's religion. While I won't presume to question anyone's faith, it seems to me, that religion is open to all.. there's no exclusivity or particular individual dignity to it. Family, perhaps? Surely, our family-relationships, if we have such, are of immense personal meaning... but most people have (or had) parents; most have children, and/or a spouse and so on. However immensely important is one's kin-group, here too, there is no exclusivity or particular achievement.

The OP is presumably modest and philosophical about his $5M achievement, so I don't mean to insert words into his mouth. But... $5M is something relatively special, yes? Few have achieved as much. Hence a desire, at least in some quarters, to define ourselves on the basis of such achievement. Call it puerile or vain... but again I ask, if we disavow such things, what's left?

 

[NW-Bound]

Market returns over the past 15 years have been good overall, and I think this is what has led some folks into thinking they have over saved. Few of the people on this board have experienced a very unfavorable sequence of returns since retiring. If we prepare for the worst case scenarios, and those scenarios do not occur, then it is inevitable that our portfolios will be much higher than expected.

My stash more than doubled from its value in Jan 2020. Who would have thought the market would go nuts during the Covid years?

None of us knew when we retired how our financial lives or market returns or inflation would play out. For me, having a portfolio that is likely larger than we need buys me more peace of mind - I would even say happiness - than anything else I could have bought with those funds. We have all the stuff we need or want and do not short change ourselves on experiences.

If our portfolio grows faster than we can spend it, I do not see this as a problem needing a solution. Nor do I regret the choices that lead to our likely being over funded.

A proverb tells us that money cannot buy happiness, but money can make being miserable a lot more comfortable. : )

When I stopped working 13 years ago, my WR was 3.5% or so. But I did not change my lifestyle significantly while the market god has been so generous, and that's why my WR is now 1.4% and I have yet to start my SS. I do not see that as a problem, or that I have to find ways to spend more to bring my WR to 4%. Actually, it could be much more than 4% because I already spent 13 years of the prototypical 30-year FIRECalc retirement period.

 

[Koolau]

My stash more than doubled from its value in Jan 2020. Who would have thought the market would go nuts during the Covid years?



When I stopped working 13 years ago, my WR was 3.5% or so. But I did not change my lifestyle significantly while the market god has been so generous, and that's why my WR is now 1.4% and I have yet to start my SS. I do not see that as a problem, or that I have to find ways to spend more to bring my WR to 4%. Actually, it could be much more than 4% because I already spent 13 years of the prototypical 30-year FIRECalc retirement period.

Heh, heh, 20 years into my 30-year FIRECalc retirement period - I've made the decision to extend the period to age 99 (another 20 years). I too have noticed my WR slowly receding as my stash increases. I'm wondering if I make it to age 99 if my WR will asymptotically approach zero.

 

[FIRO]

Congratulations for a hitting such a big milestone!!
Could you share with us what your target net worth is for you to feel comfortable quitting work and what your comfortable withdrawal rate would be?
Secondly, I saw a YouTube video recently ( Erin talks money) where she explains why a $5M can be your target NW and may not change your lifestyle ( in terms of annual expenses) with someone who has a NW between 5-10 M. This was quite interesting. Of course having 10 M will give you more options and cushion for lower withdrawal or increased safety net. However going from 5 -10 M can take another minimum 5-10 years of grinding. Would that be worthy of your time and sacrifices?
There was an interesting comment on that video where a guy with 5 M asks his financial advisor “can retire with his current lifestyle?” and the FA says “YES”. Then he asks, “If I work a few more years and reach $10 M, can I retire and start flying private?” To which the FA says “NO”. So he decides to retire the next day,

 

[Ronstar]

Heh, heh, 20 years into my 30-year FIRECalc retirement period - I've made the decision to extend the period to age 99 (another 20 years). I too have noticed my WR slowly receding as my stash increases. I'm wondering if I make it to age 99 if my WR will asymptotically approach zero.

I've been monitoring my soon to be 97 YO MIL's financials for a while. Her WR has slowly receded for decades - receding about 0.1% per year. She lives on SS and a little bit of withdrawals from her investment account.

My guess is that she could get to around a 0.3 WR at age 99 if she can get her investments to be a little more tax efficient.

 

[disneysteve]

While there is something noble or even transcendent in your approach, it does - with noted respect! - beg the question: if career or material wherewithal don't define one's self-worth, what does? For some, it's religion. While I won't presume to question anyone's faith, it seems to me, that religion is open to all.. there's no exclusivity or particular individual dignity to it. Family, perhaps? Surely, our family-relationships, if we have such, are of immense personal meaning... but most people have (or had) parents; most have children, and/or a spouse and so on. However immensely important is one's kin-group, here too, there is no exclusivity or particular achievement.

The OP is presumably modest and philosophical about his $5M achievement, so I don't mean to insert words into his mouth. But... $5M is something relatively special, yes? Few have achieved as much. Hence a desire, at least in some quarters, to define ourselves on the basis of such achievement. Call it puerile or vain... but again I ask, if we disavow such things, what's left?

Oh I absolutely didn’t mean to downplay the achievement of wealth. $5M is a huge milestone. We haven’t crossed it ourselves though we are over $4M.

But too many people define themselves by their material achievements or their professional status. I know many doctors who use their title everywhere. Dinner reservation for Dr. Jones. Hotel reservation for Dr. Smith. Magazine subscriptions for Dr. Johnson. They expect to be addressed as Dr. in all settings.

That was never me. I expected patients to call me doctor although I had a select few who called me Steve after we had established a relationship. I expected my staff to call me doctor in front of patients but always told them they could call me Steve otherwise. And I never used the title outside of work. I don’t think Dr. is any more deserving of special treatment than teacher or accountant or mail carrier.

What defines my self worth if not my degree or my portfolio balance? Being a good person I suppose. Doing the right thing simply because it’s the right thing. Treating everyone with respect. Being a good listener and a good friend. Being there for the people in my life in any way I can be. All of that matters more than wealth or professional status.

 

[disneysteve]

There was an interesting comment on that video where a guy with 5 M asks his financial advisor “can retire with his current lifestyle?” and the FA says “YES”. Then he asks, “If I work a few more years and reach $10 M, can I retire and start flying private?” To which the FA says “NO”. So he decides to retire the next day,

That makes sense. I don’t think folks realize that there is surprisingly little difference between having $5M and having $10M. Nick Maggiuli’s level 4 of the wealth ladder is $1M to $10M. He lumps that all into one group.

I do think there’s a bigger difference between $1M and $5M (a fivefold increase) but a much smaller difference between $5M and $10M (a twofold increase).

 

[NW-Bound]

My stash more than doubled from its value in Jan 2020. Who would have thought the market would go nuts during the Covid years?

When I stopped working 13 years ago, my WR was 3.5% or so. But I did not change my lifestyle significantly while the market god has been so generous, and that's why my WR is now 1.4% and I have yet to start my SS. I do not see that as a problem, or that I have to find ways to spend more to bring my WR to 4%. Actually, it could be much more than 4% because I already spent 13 years of the prototypical 30-year FIRECalc retirement period.

Hmm... I realized that I forgot something important.

When I started ER, I was still paying college tuition for my youngest one. He has since been out of graduate school, and making darn good money. I was also finishing up the mortgage payment on my high-country 2nd home.
Just the above two expense reductions gave me more discretionary spending. And my wife has since drawn her SS.

And in a moment of senility, I forgot how I can now splurge on "stuff" that made me cringe before. It all makes sense now. Even if my total spending stays the same, more of it now goes towards discretionary spending, but my spending did grow some (even if it is still very LBYM).

 

[Ronstar]

That makes sense. I don’t think folks realize that there is surprisingly little difference between having $5M and having $10M. Nick Maggiuli’s level 4 of the wealth ladder is $1M to $10M. He lumps that all into one group.

I do think there’s a bigger difference between $1M and $5M (a fivefold increase) but a much smaller difference between $5M and $10M (a twofold increase).

I like that some feel that there is little difference between having $5M and $10M. Gives me some incentive to BTD when I get to 5. Maybe the best way to go after getting to 5 is to just allow portfolio increases to approx match inflation - say allow portfolio gains of 3% a year and spend the rest.

 

[brokrken]

Congratulations for a hitting such a big milestone!!
Could you share with us what your target net worth is for you to feel comfortable quitting work and what your comfortable withdrawal rate would be?
Secondly, I saw a YouTube video recently ( Erin talks money) where she explains why a $5M can be your target NW and may not change your lifestyle ( in terms of annual expenses) with someone who has a NW between 5-10 M. This was quite interesting. Of course having 10 M will give you more options and cushion for lower withdrawal or increased safety net. However going from 5 -10 M can take another minimum 5-10 years of grinding. Would that be worthy of your time and sacrifices?
There was an interesting comment on that video where a guy with 5 M asks his financial advisor “can retire with his current lifestyle?” and the FA says “YES”. Then he asks, “If I work a few more years and reach $10 M, can I retire and start flying private?” To which the FA says “NO”. So he decides to retire the next day,

To answer your question, I am at the net worth now where I feel comfortable quitting. Aside from money, there are some other reasons that I've decided to stay on for a few more years, mainly a large acquisition and project that I committed to and wouldn't want to leave my teams in a lurch. As a result of that, as mentioned before there will be quite some long term incentives that will vest.

 

[Koolau]

Congratulations for a hitting such a big milestone!!
Could you share with us what your target net worth is for you to feel comfortable quitting work and what your comfortable withdrawal rate would be?
Secondly, I saw a YouTube video recently ( Erin talks money) where she explains why a $5M can be your target NW and may not change your lifestyle ( in terms of annual expenses) with someone who has a NW between 5-10 M. This was quite interesting. Of course having 10 M will give you more options and cushion for lower withdrawal or increased safety net. However going from 5 -10 M can take another minimum 5-10 years of grinding. Would that be worthy of your time and sacrifices?
There was an interesting comment on that video where a guy with 5 M asks his financial advisor “can retire with his current lifestyle?” and the FA says “YES”. Then he asks, “If I work a few more years and reach $10 M, can I retire and start flying private?” To which the FA says “NO”. So he decides to retire the next day,

If you can retire with 5M I'm guessing you COULD fly private if you had an extra 5Mil. You can buy a used jet for less than 5 Mil though I'd prefer to fly NetJets or similar jet-sharing.

 

[DreamingBig]

Congrats! We are in a very similar position as you, hit $5.7mil in NW excluding real estate. Ages are 50&59, and also have the issue of LTI/stock awards/bonus being the handcuffs that keep us working. We have set a date of December 2026 to walk away from the rat race and enjoy our time. Our expenses are appr. $125k a year, plus an additional $20k for a ACA plan once retired. Changing ones mindset from saving in 401k, brokerage, HSA and etc for the past several years to spending from those accounts is a work in progress.

Cheers to 2028 for you and your spouse, hope its everything you both wished for!!

 

[Diogenes]

But too many people define themselves by their material achievements or their professional status. I know many doctors who use their title everywhere. Dinner reservation for Dr. Jones. Hotel reservation for Dr. Smith. Magazine subscriptions for Dr. Johnson. They expect to be addressed as Dr. in all settings.

That was never me. I expected patients to call me doctor although I had a select few who called me Steve after we had established a relationship. ...

What defines my self worth if not my degree or my portfolio balance? Being a good person I suppose. Doing the right thing simply because it’s the right thing. Treating everyone with respect. Being a good listener and a good friend. Being there for the people in my life in any way I can be. All of that matters more than wealth or professional status.

These are all morally worthy things, but aren't they just fundamental attributes of being an upstanding member of Humanity? They don't define us. If I hold doors open for folks behind me, or relinquish my seat on the bus to an elderly person, I'm being a decent human being... but that doesn't define me.

Instead we might ask, "What defines you, Dr. Fleming"? "Oh, I discovered penicillin". "What defines you, Dr. Salk?" "I discovered the polio vaccine". "How about you, Dr. Jarvik?" "I invented the artificial heart".

But I'm not a medical man. In my field, one might ask, "What defines you, Prof. Prandtl?" "I discovered the boundary layer concept. Was the first to propose flow control. Developed lifting-line theory. And so on". "What defines you, Prof. Liepmann?" I wrote the seminal book on compressible flow. And supervised dozens of PhD students, who have been preeminent in their field".

So, what "defines one" is epochally-significant contributes to one's field. If one has made none such, then one struggles in assessing, as to what defines one. My ambition at one point was to enter such pantheon. I did not. I'm a very ordinary, quotidian and generic engineer. Degrees, yes. Publications, sure. But contribution? Minimal. In a roundabout way, my interest in early retirement is precisely because I was unable to attain lofty professional heights that would define me. So, might as well stop trying to play the game.

 

[disneysteve]

These are all morally worthy things, but aren't they just fundamental attributes of being an upstanding member of Humanity? They don't define us. If I hold doors open for folks behind me, or relinquish my seat on the bus to an elderly person, I'm being a decent human being... but that doesn't define me.

Instead we might ask, "What defines you, Dr. Fleming"? "Oh, I discovered penicillin". "What defines you, Dr. Salk?" "I discovered the polio vaccine". "How about you, Dr. Jarvik?" "I invented the artificial heart".

But I'm not a medical man. In my field, one might ask, "What defines you, Prof. Prandtl?" "I discovered the boundary layer concept. Was the first to propose flow control. Developed lifting-line theory. And so on". "What defines you, Prof. Liepmann?" I wrote the seminal book on compressible flow. And supervised dozens of PhD students, who have been preeminent in their field".

So, what "defines one" is epochally-significant contributes to one's field. If one has made none such, then one struggles in assessing, as to what defines one. My ambition at one point was to enter such pantheon. I did not. I'm a very ordinary, quotidian and generic engineer. Degrees, yes. Publications, sure. But contribution? Minimal. In a roundabout way, my interest in early retirement is precisely because I was unable to attain lofty professional heights that would define me. So, might as well stop trying to play the game.

Interesting perspective. By that definition, I suspect very, very few individuals have a defining achievement in their lives. That really speaks to my point about not being defined by my career. I think I was a very good doctor and took great care of thousands and thousands of people over the years, but I didn't do anything memorable on a grand scale. My contributions mattered greatly to individuals but not to society at large.

 

[NW-Bound]

If you can retire with 5M I'm guessing you COULD fly private if you had an extra 5Mil. You can buy a used jet for less than 5 Mil though I'd prefer to fly NetJets or similar jet-sharing.

A bare decamillionaire would be hard pressed to own a smallest jet. I am not knowledgeable about general aviation, but just searched really quickly on the Web, and found out the following.

One of the smallest jets is the Citation Mustang at the entry level. It seats 4-5 passengers, has a range of 1150 nm. A used one is $2M to $3M. The operating cost however will drive our decamillionaire to tears.

The Cessna Citation Mustang is a popular very light jet with total direct operating costs (DOC) ranging between $1,000 and $1,750 per hour, covering fuel, maintenance, and crew fees. Annual fixed costs, including insurance and hangar fees, average $200,000–$300,000+, with total annual budgets often exceeding $500,000 for 200–450 hours of operation.

Cessna Citation Mustang - Wikipedia

en.wikipedia.org

 

[Koolau]

Yeah, as I said, you COULD own one but then you have to deal with

A bare decamillionaire would be hard pressed to own a smallest jet. I am not knowledgeable about general aviation, but just searched really quickly on the Web, and found out the following.

One of the smallest jets is the Citation Mustang at the entry level. It seats 4-5 passengers, has a range of 1150 nm. A used one is $2M to $3M. The operating cost however will drive our decamillionaire to tears.

The Cessna Citation Mustang is a popular very light jet with total direct operating costs (DOC) ranging between $1,000 and $1,750 per hour, covering fuel, maintenance, and crew fees. Annual fixed costs, including insurance and hangar fees, average $200,000–$300,000+, with total annual budgets often exceeding $500,000 for 200–450 hours of operation.

Cessna Citation Mustang - Wikipedia

en.wikipedia.org

Yeah as I said, you COULD buy a used one. I wouldn't recommend it unless you're already a qualified pilot. Otherwise, you need to hire pilots when ever you fly. BUT for an extra 5Mil beyond your "normal" expenses, you could fly NetJets or equivalent.

Megacorp had a really nice Corp. Jet. Us w*rker bees had to go do some field w*rk (literally, in a field) and it was important enough to take the jet. We filled the plane. We spent 30 minutes calculating that our flight cost the company about the same as sending us all via 1st class air fare. The pilots looked the other way when several guys brought west of the Mississippi beer back by the case (Coors, Olympia).

 

[TickTock]

Megacorp had a really nice Corp. Jet. Us w*rker bees had to go do some field w*rk (literally, in a field) and it was important enough to take the jet. We filled the plane. We spent 30 minutes calculating that our flight cost the company about the same as sending us all via 1st class air fare. The pilots looked the other way when several guys brought west of the Mississippi beer back by the case (Coors, Olympia).

Eastbound, up not down! Flyin' over them Smokies... A'we gonna do what they say can't be done.

 

[Koolau]

Eastbound, up not down! Flyin' over them Smokies... A'we gonna do what they say can't be done.

Great song. Great movie. They just don't make 'em like that anymore.

 

[NW-Bound]

BUT for an extra 5Mil beyond your "normal" expenses, you could fly NetJets or equivalent.

I still dunno if a guy with a measly $10M can afford NetJets. Here's what I found out for the lowest 25-hour bracket, which is just enough to cover a single round trip from the US West Coast to Europe and back

Aircraft Categories and Approximate Costs for 25 Hours

• Light Jet: Embraer Phenom 300, approximately $205,000; ideal for short regional trips up to 3 hours. A 25-hour jet card for a light jet ranges from $150,000 to $200,000.
• Midsize Jet: Cessna Citation Latitude, approximately $250,000; suited for medium-range flights and small groups
• Super Midsize Jet: Challenger 350, around $330,000; perfect for cross-country trips with 7 to 8 passengers
• Large Cabin Jet: Gulfstream G450 , between $450,000 and $500,000; designed for long-haul international travel

 

[tutan]

Or with the extra $5 million, besides embarking on many more travels and flying exclusively 1st/business, one can also afford to hire a personal assistant to do the tedious stuff like packing.

 

[Koolau]

Or with the extra $5 million, besides embarking on many more travels and flying exclusively 1st/business, one can also afford to hire a personal assistant to do the tedious stuff like packing.

Packing, I can handle. How about carrying the bags, making reservations, arguing with check-in staff at airport and hotel, etc.?