Author Topic: Definition of Millionaire  (Read 5867 times)

dougules

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Definition of Millionaire
« on: May 31, 2016, 10:50:22 AM »
Are you a millionaire when you and your spouse hit $1M net worth, or when you've got $1M each?  It's really kind of a silly little semantic nitpick, but I was just curious. 

Frankies Girl

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Re: Definition of Millionaire
« Reply #1 on: May 31, 2016, 11:46:23 AM »
Probably quite simplistic... but if you're married and share assets and expenses equally, then you're millionaires when you collectively hit that number. If you're single or keep all money/expenses separate from your spouse, then I would call it when you personally hit that number.

Yaeger

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Re: Definition of Millionaire
« Reply #2 on: May 31, 2016, 02:16:08 PM »
I think it's based upon individual net worth. So.. for married couples it's $2M.

- a person whose wealth amounts to a million or more in some unit of currency, as dollars.


This is coming from a single guy though, makes it easier to compare myself to you high rollers!

Choices

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Re: Definition of Millionaire
« Reply #3 on: June 03, 2016, 09:35:11 AM »
Interesting question. Since many things are shared (house, utilities, etc.) but other costs are higher (health insurance, food, etc.) when married, can we compromise on $1.5M?

Tyson

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Re: Definition of Millionaire
« Reply #4 on: June 03, 2016, 09:37:22 AM »
Should a house count in your net worth when calculating it?  If so, I imagine there are quite a few "house poor" millionaires out there....

chesebert

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Re: Definition of Millionaire
« Reply #5 on: June 03, 2016, 10:55:08 AM »
My thought is 1 million household networth excluding primary residence cars and anything with depreciating value (do not count that Timex watch but should include Patek Philippe at fair market value).

BudgetSlasher

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Re: Definition of Millionaire
« Reply #6 on: June 03, 2016, 09:46:51 PM »
Are you a millionaire when you and your spouse hit $1M net worth, or when you've got $1M each?  It's really kind of a silly little semantic nitpick, but I was just curious.

I'll kind of "silly little semantic nitpick" right back, you mention the options of a combined net worth of both spouses of $1 million (implying combined finances) or $1 million each (implying separate finances), but no mention of a net worth of $2 million for a couple; under the second scenario could you consider someone a millionaire if they had $1m+ alone, but their spouse did not have an additional $1m?

Interesting question. Since many things are shared (house, utilities, etc.) but other costs are higher (health insurance, food, etc.) when married, can we compromise on $1.5M?

For us, as you say, there are many things shared (housing, utilities and the like), but we do not see higher costs in the areas you mention; in our current arrangement it is cheaper to both be on one's insurance plan (and in my last job it was even cheaper if both spouses worked for the same employer) and I not sure how getting married increases food costs, our food and preparation costs have either remained constant or gone down (same food, maybe a discount for lager packages . . . and cooking more food at once).

In the end it depends on what our goal is for defining a millionaire . . . if purpose is to identify someone who has done an impressive task, and it is easier to save when combining expenses, then the number should be higher (2.5m+), but if it being used as a substitute for a big ball of money one can live off, then the shared expenses would argue for a lower point (like your 1.5m).

My thought is 1 million household networth excluding primary residence cars and anything with depreciating value (do not count that Timex watch but should include Patek Philippe at fair market value).

This comes back to my point above, what are we trying to get at when we define a millionaire? All of the items you call out by name are relatively easy to tell and relatively easy to determine the value of; so if we are aiming to define an impressive feat of accumulation why would we not include them, but if we were aiming to define a millionaire as someone with a pile of assets they can live off of without any major lie changes . . . then maybe those things should be excluded.

If you don't exclude those items where do you draw the line; is grandma's table that you could get $5-25 for in your net worth?

dougules

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Re: Definition of Millionaire
« Reply #7 on: June 04, 2016, 12:38:44 PM »
Sounds like everybody thinks about it differently.

Should a house count in your net worth when calculating it?  If so, I imagine there are quite a few "house poor" millionaires out there....

I would count house value, so yes there may be a lot of house poor millionaires on the coasts.  I would subtract out mortgage debt, though, so that would bring the number down a lot since not a lot of those people seem to have much equity. 

We live in a LCOL area so our house doesn't make a ton of difference.

Are you a millionaire when you and your spouse hit $1M net worth, or when you've got $1M each?  It's really kind of a silly little semantic nitpick, but I was just curious.

I'll kind of "silly little semantic nitpick" right back, you mention the options of a combined net worth of both spouses of $1 million (implying combined finances) or $1 million each (implying separate finances), but no mention of a net worth of $2 million for a couple; under the second scenario could you consider someone a millionaire if they had $1m+ alone, but their spouse did not have an additional $1m?

$2 million total for the couple was kind of what I was thinking, but I guess depending on state laws and how long you've been married, you could say that one spouse could technically hit it before the other.  And yes, it's all just semantic nitpicking. 

My thought is 1 million household networth excluding primary residence cars and anything with depreciating value (do not count that Timex watch but should include Patek Philippe at fair market value).

This comes back to my point above, what are we trying to get at when we define a millionaire? All of the items you call out by name are relatively easy to tell and relatively easy to determine the value of; so if we are aiming to define an impressive feat of accumulation why would we not include them, but if we were aiming to define a millionaire as someone with a pile of assets they can live off of without any major lie changes . . . then maybe those things should be excluded.

If you don't exclude those items where do you draw the line; is grandma's table that you could get $5-25 for in your net worth?

Honestly, even if you count the garage sale items, I think for most people everything but the house and car would be lost in the noise.  If you have a Picasso or a collection of Ming vases, though, I think anybody would count that.  I also would go with net, so subtract out any mortgages or car loans. 

ender

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Re: Definition of Millionaire
« Reply #8 on: June 04, 2016, 02:29:49 PM »
Set it to the hardest threshold to reach. I don't want to be known as a millionaire - if that means my wife and I both need $1M each to get there? Perfect!

If it's for personal satisfaction and curiosity? Who cares.

Choices

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Re: Definition of Millionaire
« Reply #9 on: June 04, 2016, 10:32:07 PM »
Are you a millionaire when you and your spouse hit $1M net worth, or when you've got $1M each?  It's really kind of a silly little semantic nitpick, but I was just curious.

I'll kind of "silly little semantic nitpick" right back, you mention the options of a combined net worth of both spouses of $1 million (implying combined finances) or $1 million each (implying separate finances), but no mention of a net worth of $2 million for a couple; under the second scenario could you consider someone a millionaire if they had $1m+ alone, but their spouse did not have an additional $1m?

Interesting question. Since many things are shared (house, utilities, etc.) but other costs are higher (health insurance, food, etc.) when married, can we compromise on $1.5M?

For us, as you say, there are many things shared (housing, utilities and the like), but we do not see higher costs in the areas you mention; in our current arrangement it is cheaper to both be on one's insurance plan (and in my last job it was even cheaper if both spouses worked for the same employer) and I not sure how getting married increases food costs, our food and preparation costs have either remained constant or gone down (same food, maybe a discount for lager packages . . . and cooking more food at once).

Yes, it's cheaper to cook for two than as two individuals and many insurance companies offer family discounts. Getting married increases food costs over a single person because there's an extra mouth to feed, and insurance for two costs more than insurance for one, though it doesn't necessarily cost double, hence my compromise of $1.5M.

Metric Mouse

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Re: Definition of Millionaire
« Reply #10 on: June 05, 2016, 12:25:31 AM »
Set it to the hardest threshold to reach. I don't want to be known as a millionaire - if that means my wife and I both need $1M each to get there? Perfect!

If it's for personal satisfaction and curiosity? Who cares.

Well said!  Alternatively one could set the bar lower and just call everyone millionaires; then it wouldn't be such a buzzword.

desk_jockey

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Re: Definition of Millionaire
« Reply #11 on: June 05, 2016, 07:37:09 AM »
Well said!  Alternatively one could set the bar lower and just call everyone millionaires; then it wouldn't be such a buzzword.

Pretty much all of us here are Millionaires... in Guarani or Dong.   I think we need to add another M to our cult's abbreviation.

maizefolk

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Re: Definition of Millionaire
« Reply #12 on: June 05, 2016, 08:06:07 AM »
If you look at google trends, the use of the word millionaire is trending downwards over time (although there was obviously a big spike when slumdog millionaire came out). I'm guessing that precisely because inflation has made being a millionaire a lot less unusual than it used to be.

Back when millionaires were tooling around in Duesenberg's, a million dollars was something like 500x the average annual wage and could support a lifestyle 20 times more expensive than the average american's. Today a million dollars is 20x the average annual wage and can support a lifestyle 80% as expensive as the average americans. Great for the average mustachian individual, not so much for the rest of society.

libertarian4321

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Re: Definition of Millionaire
« Reply #13 on: June 06, 2016, 10:13:27 AM »
Are you a millionaire when you and your spouse hit $1M net worth, or when you've got $1M each?  It's really kind of a silly little semantic nitpick, but I was just curious.

Seriously?

How about something rational, without twisting yourself into knots.  Like maybe a household net worth of $1 million.

God help you if you ever have kids or get a dog, will you not consider yourself a millionaire until Joey, Susie, and Fido also have a million dollars?

dougules

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Re: Definition of Millionaire
« Reply #14 on: June 06, 2016, 12:02:49 PM »
Are you a millionaire when you and your spouse hit $1M net worth, or when you've got $1M each?  It's really kind of a silly little semantic nitpick, but I was just curious.

Seriously?

How about something rational, without twisting yourself into knots.  Like maybe a household net worth of $1 million.

God help you if you ever have kids or get a dog, will you not consider yourself a millionaire until Joey, Susie, and Fido also have a million dollars?

I'm not planning my day around it.  It was more just an off-the-wall curiosity. 

GuitarStv

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Re: Definition of Millionaire
« Reply #15 on: June 06, 2016, 01:03:48 PM »
This seems like the kind of question best pondered once you've retired and have a million kicking around in the bank account.

Dicey

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Re: Definition of Millionaire
« Reply #16 on: June 07, 2016, 08:29:14 AM »
Newsflash, it doesn't change things as much as some people think it will. Unless you don't love what you do, and then it means you can stop. The rest is what is. The meals must still be prepared, laundry done, litter box emptied, whether you have was million each or a million together.

dougules

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Re: Definition of Millionaire
« Reply #17 on: June 07, 2016, 11:00:53 AM »
Newsflash, it doesn't change things as much as some people think it will. Unless you don't love what you do, and then it means you can stop. The rest is what is. The meals must still be prepared, laundry done, litter box emptied, whether you have was million each or a million together.

I know it doesn't really mean much except that we're getting close to FIRE.  It was more just a curiosity to see what people thought.  When we reach $1M for us as a couple we'll probably spend with reckless abandon on a few Target cupcakes, then we'll get back to doing laundry, emptying the litter box, cooking supper, and tending the garden. 

Dicey

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Re: Definition of Millionaire
« Reply #18 on: June 07, 2016, 11:36:26 AM »
Newsflash, it doesn't change things as much as some people think it will. Unless you don't love what you do, and then it means you can stop. The rest is what is. The meals must still be prepared, laundry done, litter box emptied, whether you have was million each or a million together.

I know it doesn't really mean much except that we're getting close to FIRE.  It was more just a curiosity to see what people thought.  When we reach $1M for us as a couple we'll probably spend with reckless abandon on a few Target cupcakes, then we'll get back to doing laundry, emptying the litter box, cooking supper, and tending the garden.
Love your post-FIRE spendthrift plans!
Not to be all Debbie Downer, but the people who expect rainbows and unicorns, or flashing casino lights when they retire or pay off their debt or retire the mortgage or whatever are the folks who tend to get the least satisfaction out of achieving their milestones. After the effort of achieving those goals, you will still be you with the same doubts, questions and insecurities you always had. Your life will only be as good as you let it be. There will still be things that are out of your control. Life will undoubtedly be better, but it is unlikely that it will be perfect. Realistic expectations are key to success. It sounds like you have those in spades, dougules

dougules

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Re: Definition of Millionaire
« Reply #19 on: June 07, 2016, 03:39:04 PM »
Newsflash, it doesn't change things as much as some people think it will. Unless you don't love what you do, and then it means you can stop. The rest is what is. The meals must still be prepared, laundry done, litter box emptied, whether you have was million each or a million together.

I know it doesn't really mean much except that we're getting close to FIRE.  It was more just a curiosity to see what people thought.  When we reach $1M for us as a couple we'll probably spend with reckless abandon on a few Target cupcakes, then we'll get back to doing laundry, emptying the litter box, cooking supper, and tending the garden.
Love your post-FIRE spendthrift plans!
Not to be all Debbie Downer, but the people who expect rainbows and unicorns, or flashing casino lights when they retire or pay off their debt or retire the mortgage or whatever are the folks who tend to get the least satisfaction out of achieving their milestones. After the effort of achieving those goals, you will still be you with the same doubts, questions and insecurities you always had. Your life will only be as good as you let it be. There will still be things that are out of your control. Life will undoubtedly be better, but it is unlikely that it will be perfect. Realistic expectations are key to success. It sounds like you have those in spades, dougules

Thanks.  I'm guessing you've been FIREd a while?  You sound like you've been through it. 

I don't really have big expectations.  I just want to burn my alarm clock and maybe have the time to spend a couple frugal months in Thailand or Mexico when the mood suites me.  I don't really know what my goals and purpose will be post-FIRE, but I feel like I'll be in a better position to figure that out once I decompress from work stress.  I expect the transition to be rough, but bring it on.  Right now my goal is just to get there. 
« Last Edit: June 07, 2016, 03:42:36 PM by dougules »

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Re: Definition of Millionaire
« Reply #20 on: June 07, 2016, 03:55:33 PM »
I'd be OK with saying, "We're millionaires" once achieving a family NW of $1 million

Dicey

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Re: Definition of Millionaire
« Reply #21 on: June 08, 2016, 09:37:17 PM »
Newsflash, it doesn't change things as much as some people think it will. Unless you don't love what you do, and then it means you can stop. The rest is what is. The meals must still be prepared, laundry done, litter box emptied, whether you have was million each or a million together.

I know it doesn't really mean much except that we're getting close to FIRE.  It was more just a curiosity to see what people thought.  When we reach $1M for us as a couple we'll probably spend with reckless abandon on a few Target cupcakes, then we'll get back to doing laundry, emptying the litter box, cooking supper, and tending the garden.
Love your post-FIRE spendthrift plans!
Not to be all Debbie Downer, but the people who expect rainbows and unicorns, or flashing casino lights when they retire or pay off their debt or retire the mortgage or whatever are the folks who tend to get the least satisfaction out of achieving their milestones. After the effort of achieving those goals, you will still be you with the same doubts, questions and insecurities you always had. Your life will only be as good as you let it be. There will still be things that are out of your control. Life will undoubtedly be better, but it is unlikely that it will be perfect. Realistic expectations are key to success. It sounds like you have those in spades, dougules

Thanks.  I'm guessing you've been FIREd a while?  You sound like you've been through it. 

I don't really have big expectations.  I just want to burn my alarm clock and maybe have the time to spend a couple frugal months in Thailand or Mexico when the mood suites me.  I don't really know what my goals and purpose will be post-FIRE, but I feel like I'll be in a better position to figure that out once I decompress from work stress.  I expect the transition to be rough, but bring it on.  Right now my goal is just to get there.
I haven't been through it, really. Since a very young age, I've been blessed with the ability to temper my expectations of life. I often experience moments of sheer bliss when something is unanticipatedly amazing. Plus, I am rarely disappointed.  Makes it easier to stay even-keeled and maintain a positive outlook.

I am always mildly alarmed when people think their life will be perfect (or better by a huge margin) when [fill in the blank] happens.  I think they are the ones who are most likely to backside when reality does not meet their lofty expectations. Choosing to be as happy as possible at every stage in life has served me well. Achieving FIRE is so much icing on the cake. Happy as I am, I am still my same old imperfect self. Hope that makes sense. Life post FIRE is awesome, but I'm still living in realityland. I do use an alarm clock, but it wakes me to do whatever is on the schedule of my own making.

libertarian4321

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Re: Definition of Millionaire
« Reply #22 on: June 08, 2016, 11:33:40 PM »
Newsflash, it doesn't change things as much as some people think it will. Unless you don't love what you do, and then it means you can stop. The rest is what is. The meals must still be prepared, laundry done, litter box emptied, whether you have was million each or a million together.

No way.

We millionaires live high.  We have people to do all that stuff while we tool around in our Bentley's searching for hookers and blow.  Once my net worth hit $2 million, I hired someone to wipe and powder my ass after I take a dump.  And the powder was cocaine...

Don't you watch TV?