[talleywho]

in the words of John McCain, during his campaign against Obama, when asked what he considered "rich"?

Five million!

... a year ... he didn't even blink his beady little eyes.

.

 

[Young Spade]

I honestly think it comes from where YOU are personally. A lot of people call me rich (which I am not, just well off in my opinion) because of where I live. A small town in north Florida where the average income of families is under 40K; it's a small hick town called Palatka if anyone knows (and if you do, hit me up with a PM or something cause I'm pretty sure I"M the only one here who's interested in Hi-Fi audio lol).

But I mean my uncle/aunt live in Atlanta and make well over 100K a year and have a much nicer house than mine and whatnot. I don't think they are rich either; it just depends on your perspective in relation to others.

Rich, being an adjective; means you have to have something to compare it to for it to be of any worth.

 

[momomo6789]

top .53% normal wear for me is sweat pants in the winter with sandals and shorts all summer with sandals. sometimes looking almost homeless i don't remember the last time i shaved.

 

[arnesto]

1 million in net assets excluding your primary residency.

Assuming your primary residency is paid off.

Or

If you still owe on your primary residency, for example you have a 500k loan on your primary residency,

(1 million + 500k) in net assets + primary residency.

To be technically a true millionaire.

 

[fordgtlover]

I read a quote somewhere the other days which said "$500 Million is plenty. Beyond that, it's just keeping score".

Actually, I think rich is when you can afford whatever you want without having to think too hard about where the money is coming from.

 

[skyline889]

Quote:

Originally Posted by arnesto /img/forum/go_quote.gif 1 million in net assets excluding your primary residency. Assuming your primary residency is paid off. Or If you still owe on your primary residency, for example you have a 500k loan on your primary residency, (1 million + 500k) in net assets + primary residency. To be technically a true millionaire.

The average amount needed to retire comfortably has gone up from $1 million to between $2-3 million for Gen X and Gen Y'ers. $1 million in net assets just isn't enough to keep up with post-retirement living/medical expenses anymore.

__________

If the interest from your investments totals over $5 million a year post taxes, it's probably safe to say you're "rich rich."

 

[pcf]

Quote:

Originally Posted by arnesto /img/forum/go_quote.gif 1 million in net assets excluding your primary residency. Assuming your primary residency is paid off. Or If you still owe on your primary residency, for example you have a 500k loan on your primary residency, (1 million + 500k) in net assets + primary residency. To be technically a true millionaire.

There are lots of people in the bay area (LA as well no doubt) who fit your criteria above. Some of them can hardly be considered rich though. I am surrounded by old people who own their 1-2million homes with no mortgage but have very little disposable income. (Even in this market, one million can sometime only buy you a three bedroom house in a good school district in N Cal). They live very modestly and it is hard for me to think of them as rich people. There are also a lot of people who have high income and expensive homes which I would not consider rich. Why? They can only keep their life style as long as they are employed. Lay offs happen all the time.
To me, the baseline for a rich person is someone who doesn't need to do another day of work for the rest of his/her life and can still maintain a high spending life style. It is hard to put a figure on it. In a lot of cases, a millionaire is not rich enough anymore.

 

[arnesto]

Quote:

Originally Posted by skyline889 /img/forum/go_quote.gif The average amount needed to retire comfortably has gone up from $1 million to between $2-3 million for Gen X and Gen Y'ers. $1 million in net assets just isn't enough to keep up with post-retirement living/medical expenses anymore. __________ If the interest from your investments totals over $5 million a year post taxes, it's probably safe to say you're "rich rich."

Let's say you are out of debt and you have 1 million sitting in the bank.
Assuming you can make 3% on that one million a year, that gives you $80,000 a year to spend on living expenses. That post tax money. That give you about $220 dollars a day to spend on food and entertainment.

or about $6,666 dollars a month.

All with the assumption that you will only live 20 more years.

 

[Pepsi]

When you can retire before the age 25.

 

[dongringo]

When I was in Nicaragua everyone I met thought I was rich because I could afford the plane ticket to get there. Nicas, as they are called there, are flocking across the border in droves into Costa Rica in order to get a piece of the Tico Sueno (Costa Rican Dream) because to most Nicas, Ticos are rich, when to most of us here on head-fi, Ticos are poor.

It's all relative.

 

[skyline889]

Quote:

Originally Posted by arnesto /img/forum/go_quote.gif Let's say you are out of debt and you have 1 million sitting in the bank. Assuming you can make 3% on that one million a year, that gives you $80,000 a year to spend on living expenses. That post tax money. That give you about $220 dollars a day to spend on food and entertainment. or about $6,666 dollars a month. All with the assumption that you will only live 20 more years.

Assuming you only live 20 years past retirement, $1,000,000 would still not be enough. If one were to have $1 million in the bank at retirement and were to earn 3% post taxes annually, he/she would actually only have $70,000 a year to spend for 20 years, with about $7,000 left over at the 20th year. For a married couple, that comes out to $35,000 a year per person. Medical expenses aside, unless you live in a low cost of living area, $35,000 a year is not enough to support yourself without cutbacks in lifestyle. If a spouse needs to move in to a Skilled Nursing Facility (i.e. a nursing home) you're looking at $50-200k a year easy just in care home expenses.

That being said, many retirees are living past 20 years after retirement. If one were to retire at age 60 and pass away at age 90, 30 years, annual income would come out out to around $50,000 a year, $25,000 per person for a married couple. Excluding unforeseen medical expenses, this figure again would be unsustainable in a high cost of living area like LA, NY, Boston, Hawai'i, etc, without serious cutbacks in lifestyle.

 

[chesebert]

Quote:

Originally Posted by skyline889 /img/forum/go_quote.gif Assuming you only live 20 years past retirement, $1,000,000 would still not be enough. If one were to have $1 million in the bank at retirement and were to earn 3% post taxes annually, he/she would actually only have $70,000 a year to spend for 20 years, with about $7,000 left over at the 20th year. For a married couple, that comes out to $35,000 a year per person. Medical expenses aside, unless you live in a low cost of living area, $35,000 a year is not enough to support yourself without cutbacks in lifestyle. If a spouse needs to move in to a Skilled Nursing Facility (i.e. a nursing home) you're looking at $50-200k a year easy just in care home expenses. That being said, many retirees are living past 20 years after retirement. If one were to retire at age 60 and pass away at age 90, 30 years, annual income would come out out to around $50,000 a year, $25,000 per person for a married couple. Excluding unforeseen medical expenses, this figure again would be unsustainable in a high cost of living area like LA, NY, Boston, Hawai'i, etc, without serious cutbacks in lifestyle.

Medicare + social security + 1mil in the bank = decent retirement.

Assuming you made enough money during your lifetime to save 1mil, your household SS (remember spouse can take his/hers or 1/2 of his/her spouse's, whichever is higher) would probably be in the range between 3-4k/month.

If you can live on 85k/yr (poor you), again assuming you have paid off your primary residence, you would only need to take out 37k/yr or just right about the interest from your fund. I don't care where you are (other than NYC, HK, and Tokyo), you can live fine on 85k/yr when you have 0 house payment Also remember SS is indexed for inflation.

Isn't a socialist country great!!?? (please don't answer that question)

 

[skyline889]

With social security yes, even with modest principal withdrawals one could live pretty comfortably. Not "rich" as the OP was talking about, but very comfortably. Will generation X and Gen Y see any social security by the time retirement rolls around? That's questionable. I'll leave it at that and keep politics out of it.

IMO, realistically, the only people who can live on the $1 million nest egg would be seniors and most likely boomers. With inflation (Social Security may be adjusted for inflation, other income is not), the rest of us should be expecting to save much more to live comfortably after retirement, as even assuming a modest inflation rate of 3%, the purchasing power of a $1 million today will only be around $400,000 in 30 years. Also, while serious medical expenses are always out of sight/out of mind for many, I have a grandmother in a nursing home and I know the costs associated with that. Yes, Medicare will cover nursing home care in theory however, the choices are very limited and if you want to live somewhere where you'll actually be taken care of in Hawai'i, expenses will set you back around $70-130k annually.

Here's what the actual financial advisors have to say about expected retirement amounts: 1-million-doesnt-cut-it-for-retirement

 

[augustwest]

Seven million is entry level rich, anything less than that and your just a "wanta be".

- augustwest

 

[dongringo]

Quote:

Originally Posted by augustwest /img/forum/go_quote.gif Seven million is entry level rich, anything less than that and your just a "wanta be". - augustwest

That's the most ridiculous thing I've ever heard, no offense.