$10m dollars--more than enough?

[kanga1622]

Even if 50% of that amount went to taxes it would still cover about 66 years of our current household salary so I think we could live with that influx assuming it wasn't due to some large medical crisit that needed significant treatment. Especially because we put a good chunk of our current income away already.

I am certanly not at the level of many on this site but I am a pretty serious saver so I'd be likely to put the entire amount in some sort of safe-ish investment and keep plugging along for a year. Then start living on the investment income. But I would indulge DH in his desire for a hot tub!

[Metalcat]

Noooope. We learn the hard way that competence isn't consistent.

You can't trust anyone to consistently take their pills or consistently pay their bills. The most reasonable-seeming people will do the most astoundingly irresponsible things out of fucking nowhere.

Nothing opened my eyes to the idiocy of the general populace more than my season working as a ski lift operator.  The frequency, and inventiveness, of the ways people would totally botch the simple task of:

1. Wait at the clearly marked line for the previous chair to pass by
2. Shuffle forward to the other clearly marked line
3. Sit down on chair when it approaches

I get that beginners will have trouble with it, and that snowboarders can't shuffle as easily as skiers.  This went so far beyond that, day after day, chair after chair.  Just inability to pay the slightest bit of attention, or to follow the most simple directions.  I suppose that dealing with the Keystone Cops all day broke up the monotony of the job.

Anyone who works substantially with people learns this.

Everyone walks around thinking they're reasonable, logical creatures, but they really aren't.

It's not that people are stupid, they really aren't, they're just governed by systems that aren't nearly as rational as they think they are, so they do weird, dumb shit CONSTANTLY in almost every arena of life.

Once you fully grasp that humans are NOT rational creatures but rationalizing creatures, it's a lot easier to understand why we do seemingly idiotic shit all the time in just about every context.

[reeshau]

*Yeah, I admit, I play it myself once in a while.  My logical brain seems to be locked in eternal combat with the pull of magical thinking.  But I can also afford a few bucks here and there -- I call it my stupidity tax, roll my eyes at myself, and buy a ticket.

I enjoy numbers enough that I find it fun to see what I match, and how far the odds were for that.  The big ones are $2 now, but I rationalize it as enough fun to see what happens with a thoroughly-policed random number generator, and perhaps the end of the rainbow as a kicker.

There was a large Powerball winner that bought their ticket at a convenience store I often passed by.  We were 4 years from that area, though.  But it's just as relevant a "closeness" as watching numbers.

[wenchsenior]

I wonder if there is some 'lottery' trigger in peoples' brains that I don't have... I've never once been tempted to buy ticket, even though I personally know several people who have won rather substantial amounts (I actually know one person who won TWICE, which really must have been beating extraordinary odds).

I'm not tempted by gambling in any form either, so maybe it's the same neurological thing.

[Morning Glory]

I wonder if there is some 'lottery' trigger in peoples' brains that I don't have... I've never once been tempted to buy ticket, even though I personally know several people who have won rather substantial amounts (I actually know one person who won TWICE, which really must have been beating extraordinary odds).

I'm not tempted by gambling in any form either, so maybe it's the same neurological thing.

Me neither. I've been to casinos a couple of times but didn't stay very long. They were sort of depressing,  not at all exciting like they are portrayed in the movies.

[partgypsy]

I can't tell you the number of times I've mentioned something like "so if I want to know whether I can afford something forever, I just multiply by 25, and that's how much extra I need to saved," and people look like I just dropped E=MC² on them.

I was low-key amazed when a professor from the Department of Applied Mathematics mentioned in passing that if they raised $25K in a named scholarship, that meant they'd be able to give out $1000/year.  I was sitting in the audience and nodding, but the other students and grads around me looked mildly confused. Seriously, folks? Never heard of the 4% rule, or you just can't calculate it backwards?

I’m confused.

A) When did the Trinity 4% rule morph from 30 years to forever?

Due to the way exponential growth works, 30 years is close enough to "forever" that the amount of money you need for the two time horizons is practically identical. The number of historical 30-year periods where the person withdrawing 4% would have ended up with less than they started with is relatively small. Bump it down to 3% and it's practically nil.

Also in terms of a university endowment they don't have to worry too much about whether a particular donor is contributing in one of the very small number of years where a 4% withdrawal would draw down to zero in 30 years. They can promise a perpetual scholarship in exchange for a given donation, knowing that most of the time the donation will return much more than the amount of the annual scholarship over the long run. They can use this surplus to more than make up for any shortfall from donations made in years with a worse immediate sequence of returns.

Yeah, I kinda glossed over the non-profit/university game here and agree it does make sense. Plus, they’re not really betting the house on it like a retiree is.

I’m not a believer however in the market being able to fund these distributions over long periods of time, 30-years for example. Too many variables.

yes and they could always skip a year, etc if the fund gets too low. Its not a need in the sense it's an obligatory inelastic  payment

[NorthernIkigai]

I think casinos are fundamentally different from the lottery. Casinos are all about entertainment and spending money and hopefully doing it together with friends and having a day out or a vacation. Playing the lottery is very boring but still gives that tiny little excitement once a week, without any sense of entertainment.

My investments are very boring and sensible, so it’s fun to allow myself to be silly with about 50 € / year.

[partgypsy]

I do play the lottery on an extremely occasional basis, and also buy a about $20 scratch offs at Xmas. So maybe 50 a year to be generous. I put it mentally in my entertainment category of spending. My nonscientific calculus is the odds of winning (which doesn't really change x the amount of money(which does goes up). I heard the best strategy, is to play the same numbers every single week. Bc eventually those numbers will hit (monkeys typing on typewriters). But I'm not that disciplined, interested enough to do that and should have started when I was 21.

[Catbert]

I wonder if there is some 'lottery' trigger in peoples' brains that I don't have... I've never once been tempted to buy ticket, even though I personally know several people who have won rather substantial amounts (I actually know one person who won TWICE, which really must have been beating extraordinary odds).

I'm not tempted by gambling in any form either, so maybe it's the same neurological thing.

Me neither. I've been to casinos a couple of times but didn't stay very long. They were sort of depressing,  not at all exciting like they are portrayed in the movies.

I also must have missed that gene/brain chemical.  No form of gambling appeals to me.  Casinos are even worse than the lotto.  Casinos have bright lights, noise and smoking all of which are repellent to me.  I've spent my entire life in So Cal and have never been to Vegas although I did go to Laughlin once for someone's wedding.

[bananas]

In the same theme, winning the lottery doesn't change people's projected financial outcomes. If they were on the path to bankruptcy before winning, that outcome just gets delayed.

This is fascinating and makes complete sense to me.

[Metalcat]

I think casinos are fundamentally different from the lottery. Casinos are all about entertainment and spending money and hopefully doing it together with friends and having a day out or a vacation. Playing the lottery is very boring but still gives that tiny little excitement once a week, without any sense of entertainment.

My investments are very boring and sensible, so it’s fun to allow myself to be silly with about 50 € / year.

I'm not sure what kind of casinos you've been to, but the ones I've seen are a lot of sad, solo people sitting endlessly at slot machines hoping to win money, not dissimilar to the sad, solo folks playing video gambling machines at dive bars and motels.

[NorthernIkigai]

I think casinos are fundamentally different from the lottery. Casinos are all about entertainment and spending money and hopefully doing it together with friends and having a day out or a vacation. Playing the lottery is very boring but still gives that tiny little excitement once a week, without any sense of entertainment.

My investments are very boring and sensible, so it’s fun to allow myself to be silly with about 50 € / year.

I'm not sure what kind of casinos you've been to, but the ones I've seen are a lot of sad, solo people sitting endlessly at slot machines hoping to win money, not dissimilar to the sad, solo folks playing video gambling machines at dive bars and motels.

Yeah, I'm aware of the reality but was referring more to the image they are trying to project (and thus why people go there).

[PhilB]

I do play the lottery on an extremely occasional basis, and also buy a about $20 scratch offs at Xmas. So maybe 50 a year to be generous. I put it mentally in my entertainment category of spending. My nonscientific calculus is the odds of winning (which doesn't really change x the amount of money(which does goes up). I heard the best strategy, is to play the same numbers every single week. Bc eventually those numbers will hit (monkeys typing on typewriters). But I'm not that disciplined, interested enough to do that and should have started when I was 21.

Playing the same numbers every week is probably the worst strategy you can have.  It makes no difference at all to the odds of winning, but greatly increases the chance that you will feel that you have to keep playing, because what if you stopped and those numbers came up?

[Metalcat]

I think casinos are fundamentally different from the lottery. Casinos are all about entertainment and spending money and hopefully doing it together with friends and having a day out or a vacation. Playing the lottery is very boring but still gives that tiny little excitement once a week, without any sense of entertainment.

My investments are very boring and sensible, so it’s fun to allow myself to be silly with about 50 € / year.

I'm not sure what kind of casinos you've been to, but the ones I've seen are a lot of sad, solo people sitting endlessly at slot machines hoping to win money, not dissimilar to the sad, solo folks playing video gambling machines at dive bars and motels.

Yeah, I'm aware of the reality but was referring more to the image they are trying to project (and thus why people go there).

Ah, I interpreted your statement as stating a *fact* that casinos are fundamentally different. Not that they're marketed differently. Because from what I've seen of sad slot machine/video machine zombies at both flashy casinos and back rooms of dank rural bars, it definitely doesn't look like fun and excitement.

[GilesMM]

I do play the lottery on an extremely occasional basis, and also buy a about $20 scratch offs at Xmas. So maybe 50 a year to be generous. I put it mentally in my entertainment category of spending. My nonscientific calculus is the odds of winning (which doesn't really change x the amount of money(which does goes up). I heard the best strategy, is to play the same numbers every single week. Bc eventually those numbers will hit (monkeys typing on typewriters). But I'm not that disciplined, interested enough to do that and should have started when I was 21.

Powerball payouts start at around $4 with odd around 1:25, so if you play weekly you could win a couple times per year. 

[glacio09]

This is the sort of thing that I think about for far too long on my runs. My conclusion is that up to $2mil, the money would go into my account just like any other large paycheck. Between $2-25 mil, there would be some combination of me, family, and charity. Over 25 mil (the conversation was originally about 1bil), I would keep $10 mil, $2 mil would go to each of my extended family pods, and the rest would go a charity of some sort. The running 1bil dream right now is making the social worker department at my local university tuition free.

I think the fact that my max and others' mins are the same amount is the anecdata evidence that whatever financial trajectory you're on is just exacerbated by windfalls.

[Arbitrage]

Often those who fall are newer to skiing, less confident, less proficient with skis/board/poles and unsure about the lift.  Once they ride a few times most get the hang of it.

Nope.  That's what I would've said before I worked the lift.  This happened even at 'expert-only' lifts, and even with people who clearly knew how to get around on skis.  The more experienced people have the hang of it, sure, but they just do stupid things or aren't paying attention. 

[Morning Glory]

Often those who fall are newer to skiing, less confident, less proficient with skis/board/poles and unsure about the lift.  Once they ride a few times most get the hang of it.

Nope.  That's what I would've said before I worked the lift.  This happened even at 'expert-only' lifts, and even with people who clearly knew how to get around on skis.  The more experienced people have the hang of it, sure, but they just do stupid things or aren't paying attention.

Here you go. I think I read about this effect relative to something else but it seems to apply here.
https://www.healthline.com/health/yerkes-dodson-law#stress-performance-bell-curve
https://www.healthline.com/health/yerkes-dodson-law#stress-performance-bell-curve

[Ron Scott]

I do play the lottery on an extremely occasional basis, and also buy a about $20 scratch offs at Xmas. So maybe 50 a year to be generous. I put it mentally in my entertainment category of spending. My nonscientific calculus is the odds of winning (which doesn't really change x the amount of money(which does goes up). I heard the best strategy, is to play the same numbers every single week. Bc eventually those numbers will hit (monkeys typing on typewriters). But I'm not that disciplined, interested enough to do that and should have started when I was 21.

Playing the same numbers every week is probably the worst strategy you can have.  It makes no difference at all to the odds of winning, but greatly increases the chance that you will feel that you have to keep playing, because what if you stopped and those numbers came up?

When I was a kid my grandmother played the lottery every week and asked my for the numbers. I told her to always play 1, 2, 3, 4, 5, and 6. Drove my mother crazy but she played those numbers for many many years. Never won.

[By the River]

When I was a kid my grandmother played the lottery every week and asked my for the numbers. I told her to always play 1, 2, 3, 4, 5, and 6. Drove my mother crazy but she played those numbers for many many years. Never won.

The lottery website has the mega-million winning numbers from December 2011.  Assuming grandmother played 1,2,3,4,5 and megaball 6 each drawing from then through current day; it would be 1288 drawings for an out of pocket cost of $1,962...and she would have won $155.   (The cost was $1 each drawing until October 2017 when it went to $2)

[Morning Glory]

I do play the lottery on an extremely occasional basis, and also buy a about $20 scratch offs at Xmas. So maybe 50 a year to be generous. I put it mentally in my entertainment category of spending. My nonscientific calculus is the odds of winning (which doesn't really change x the amount of money(which does goes up). I heard the best strategy, is to play the same numbers every single week. Bc eventually those numbers will hit (monkeys typing on typewriters). But I'm not that disciplined, interested enough to do that and should have started when I was 21.

Playing the same numbers every week is probably the worst strategy you can have.  It makes no difference at all to the odds of winning, but greatly increases the chance that you will feel that you have to keep playing, because what if you stopped and those numbers came up?

When I was a kid my grandmother played the lottery every week and asked my for the numbers. I told her to always play 1, 2, 3, 4, 5, and 6. Drove my mother crazy but she played those numbers for many many years. Never won.

Cute story!
My mom buys scratch tickets for our Christmas stockings every year.  Sometimes someone wins $5 or $10 but it's never more than the total amount she spent across 5 kids plus spouses.

[elaine amj]

One of my binge shows is My Lottery Dream Home - where the host takes a lottery winner to househunt for their dream home.

The most interesting takeaway was that almost all the winners buy a home close to family/hometown.

It’s my escapist fun as everyone is excited and happy and it’s fun to see whether their dreams are modest or fancy.

The best is episode 1 of season 1 as the couple won a crazy amount of money and ended up buying a gigantic mansion and a massive plot of land. I looked them up and they are still doing well although I think they moved to another home. They eventually purchased even more adjacent land and I believe provided housing to a lot of their relatives.

I don’t play the lottery myself though. Can’t dream when I know the chances are next to nil lol. And then to spend good money for a slip of paper seems rather pointless.

When I dutifully buy those raffle tickets at a charity fundraiser or whatever, I check the bags to find the ones with the fewest number of tickets and then dump all my tickets in there lol. If there’s too many tickets for all the prizes, I stop caring and just stick tickets in haphazardly. Lotteries are so not my thing

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[elaine amj]

Back to the original question, I think inflation has hit hard. Most people really don’t see $1 million as “never have to think about money again” type of money. Even here in Mustache land. The chatter in the forum used to be $750k was a good FIRE number. Nowadays, it sounds more like $2 million from the chatter around the boards.

Even for myself, I felt wayyyyyy better once I crossed the million mark and then better yet when I passed $1.5million.

So if $2+ million is the number for frugal Mustachians, it’s not surprising that people feel they need $10 million dollars.


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[rocketpj]

No idea what other people would settle on, but if I had 10 million in investments my career would be over at the next shitty work day.

Here in Canada lottery winnings are non-taxable, which would be nice.  OTOH there is no way we could win a lottery prize and not share it among family.  Honestly I dread the notion, because inevitably people would have feelings about it.  Ye gods, my SIL and Sister would complete their ongoing transformations into grasping evil monsters.

As it is we just keep our finances quiet and carry on.

[Tasse]

So if $2+ million is the number for frugal Mustachians, it’s not surprising that people feel they need $10 million dollars.

At least in the recent thread on the topic, the median FIRE number was $1.6M, and the median leanFIRE number was $1.2M.

[elaine amj]

So if $2+ million is the number for frugal Mustachians, it’s not surprising that people feel they need $10 million dollars.

At least in the recent thread on the topic, the median FIRE number was $1.6M, and the median leanFIRE number was $1.2M.

That’s a whole lot more scientific than my general impressions from browsing the forum, not paying a lot of attention Still blows my mind that people now think of $1.2 million as leanFIRE!


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[Telecaster]

For years I had to take a drug with the very simple equation 'without this wonder drug you will die.'  I was gobsmacked by the research showing that most of the treatment failures were from people failing to take the drug regularly.  Facepalm.

One of the biggest bang for the buck success stories of the ACA was having someone follow up a patient and ask "do you understand how to take your medicine?"

[ROF Expat]

It seems to me that there are a lot of people who couldn't retire successfully after a $10 million windfall.  It should be more than possible for anybody who currently lives successfully with an income of under $400,000 per year (the vast majority of Americans).  It might well not be possible for people who earn a living wage but don't have the self discipline to live within their means (a lot of Americans).  A household that doesn't have the financial literacy to manage life on $65,000 might well not manage $10 million well enough to make it last a lifetime.  Certainly plenty of lottery winners and sports figures manage to go through huge amounts of money during their lifetimes. 

I went to casinos a few times when I was young, but as I got older I lost all interest.  Years later, a close friend explained why he no longer gambled.  He pointed out that his investment portfolio was over a million dollars, so normal market fluctuations of one percent meant he would easily "gain" or "lose" $10,000 on any given day without giving it a thought.  For gambling to have any point, he'd have to win or lose more than $10,000 and there was no way he was going to risk thousands of dollars in a casino rather than just invest. 

The most positive thing I can say about lottery is that buying a ticket is buying a dream (that is highly unlikely to come true) for a few bucks.  More realistically, lottery is a tax on people who can't do math.  My lottery ticket involved saving and investing a good chunk of my earnings over a few decades.  The odds of winning are a lot better than powerball. 

[ixtap]

Doesn't the lottery in the US still fund education? There is something to be said for that!

My brother used the "buying a dream" excuse. He also owes our parents the money they lent him about 20 years ago. Mom was starting to grumble a bit about that one, but now she is more concerned about him volunteering for a layoff because the new company's benefits aren't as good. I have no doubt he would figure out how to blow through $10M or any inheritance he may be due.

[reeshau]

Doesn't the lottery in the US still fund education? There is something to be said for that!

That varies by state.  In Minnesota, it funds wildlife conservation.

[Metalcat]

Doesn't the lottery in the US still fund education? There is something to be said for that!

My brother used the "buying a dream" excuse. He also owes our parents the money they lent him about 20 years ago. Mom was starting to grumble a bit about that one, but now she is more concerned about him volunteering for a layoff because the new company's benefits aren't as good. I have no doubt he would figure out how to blow through $10M or any inheritance he may be due.

Yep, that's why it's often referred to as a "tax" on folks who can't do math. It's essentially lower income people voluntarily paying more taxes for the fun of dreaming about financial freedom.

[nereo]

Doesn't the lottery in the US still fund education? There is something to be said for that!

My brother used the "buying a dream" excuse. He also owes our parents the money they lent him about 20 years ago. Mom was starting to grumble a bit about that one, but now she is more concerned about him volunteering for a layoff because the new company's benefits aren't as good. I have no doubt he would figure out how to blow through $10M or any inheritance he may be due.

Yep, that's why it's often referred to as a "tax" on folks who can't do math. It's essentially lower income people voluntarily paying more taxes for the fun of dreaming about financial freedom.

This may be a superpower of mine, but I can dream about becoming absurdly wealthy without paying any money.

[Morning Glory]

Doesn't the lottery in the US still fund education? There is something to be said for that!

My brother used the "buying a dream" excuse. He also owes our parents the money they lent him about 20 years ago. Mom was starting to grumble a bit about that one, but now she is more concerned about him volunteering for a layoff because the new company's benefits aren't as good. I have no doubt he would figure out how to blow through $10M or any inheritance he may be due.

Yep, that's why it's often referred to as a "tax" on folks who can't do math. It's essentially lower income people voluntarily paying more taxes for the fun of dreaming about financial freedom.

This may be a superpower of mine, but I can dream about becoming absurdly wealthy without paying any money.

And mine is to dream about policies that make life better for everyone,  not just the super rich.  Nobody would feel they needed $10 milliion just to be safe if there wasn't the risk of going bankrupt from shitty health insurance, and if good schools and other amenities were everywhere,  not just expensive neighborhoods. But no, we throw it away  on lower taxes for the wealthy because we want to dream about being rich one day.

[Metalcat]

Doesn't the lottery in the US still fund education? There is something to be said for that!

My brother used the "buying a dream" excuse. He also owes our parents the money they lent him about 20 years ago. Mom was starting to grumble a bit about that one, but now she is more concerned about him volunteering for a layoff because the new company's benefits aren't as good. I have no doubt he would figure out how to blow through $10M or any inheritance he may be due.

Yep, that's why it's often referred to as a "tax" on folks who can't do math. It's essentially lower income people voluntarily paying more taxes for the fun of dreaming about financial freedom.

This may be a superpower of mine, but I can dream about becoming absurdly wealthy without paying any money.

Well aren't you fucking special Captain Fancy


[Mods: this isn't a personal attack, it's affection]

[Arbitrage]

Back to the original question, I think inflation has hit hard. Most people really don’t see $1 million as “never have to think about money again” type of money. Even here in Mustache land. The chatter in the forum used to be $750k was a good FIRE number. Nowadays, it sounds more like $2 million from the chatter around the boards.

Even for myself, I felt wayyyyyy better once I crossed the million mark and then better yet when I passed $1.5million.

So if $2+ million is the number for frugal Mustachians, it’s not surprising that people feel they need $10 million dollars.


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Inflation has definitely affected our numbers.  There was a long thread on combating inflation when the rate was peaking, but a lot of that was just things people were doing to be even more frugal.  Sure, there are certain choices you can make to combat personal/household inflation, but at some point you're affecting your quality of life, whether or not you want to attribute that to inflation.  Over the past 2.5 years, our property taxes have risen 40%.  Our house insurance has risen 40%.  Electricity/natural gas/water service cost has gone up at least 20-25%.  Grocery costs have gone up substantially.  Eating at restaurants feels like it's up 40-50%. 

While we can (and do) choose not to do the final item there, the other four really aren't optional...or at least without major lifestyle changes.  We already are pretty thrifty about grocery spending and energy use.  That doesn't even get into the crazy cost increases of buying a house now versus a few years ago. 

Our budget can't just absorb all of these cost increases.  Our annual spending has gone up by at least 20% over this time period despite a similar level of thriftiness. 

[NorthernIkigai]

So if $2+ million is the number for frugal Mustachians, it’s not surprising that people feel they need $10 million dollars.

At least in the recent thread on the topic, the median FIRE number was $1.6M, and the median leanFIRE number was $1.2M.

That’s a whole lot more scientific than my general impressions from browsing the forum, not paying a lot of attention Still blows my mind that people now think of $1.2 million as leanFIRE!

Like you wrote above: inflation. If Wikipedia is correct and MMM retired with 600k and a 200k house back in 2005, that's about 1,15M considering the inflation we've had where I live.

I glanced at that thread but didn't take part in it since we're too far away from FIRE to really know yet. But funnily enough, my working numbers in my own spreadsheets have been 1.2M€ for lean FIRE and 1.6M€ for FIRE for years!

Because most people pick birthdays and anniversaries for the lottery numbers, I have at least one digit (can't actually remember, it all renews automatically) above 31. Obviously the chance of winning is the same, but the chance of having to share your winnings is lower...

[Metalcat]

So if $2+ million is the number for frugal Mustachians, it’s not surprising that people feel they need $10 million dollars.

At least in the recent thread on the topic, the median FIRE number was $1.6M, and the median leanFIRE number was $1.2M.

That’s a whole lot more scientific than my general impressions from browsing the forum, not paying a lot of attention Still blows my mind that people now think of $1.2 million as leanFIRE!


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With a lot of folks here aiming for WR closer to 3% than 4%, 1.2M is around 36K/yr, which is pretty darn lean IMO, especially for multiple people.

[Laura33]

Doesn't the lottery in the US still fund education? There is something to be said for that!

Welcome to the law of unintended consequences.  Experience has shown that the net $$$ going to education is largely unchanged -- it's just that the increase in lottery revenues has allowed the states to decrease educational funding from other sources.  So, yeah, it's a highly-regressive tax no matter what you put the money toward. 

IMO, at a minimum, any university that is funded in part through lottery money should not be allowed to give merit scholarships.  Merit scholarships are largely how schools attract the "best" candidates to make their numbers look better, which usually means the kids with high test scores/GPAs, which is usually rich white kids from the 'burbs.*  So lottery funding + merit scholarships = poor people subsidizing rich people's college educations.


*Like, say, mine.  DS got what is basically a half-tuition scholarship to our local public literally without even asking or filing the FAFSA.  The privates do even more, but they're not the ones using public money, so IMO they can do whatever the fuck they want. 

[Ron Scott]

With a lot of folks here aiming for WR closer to 3% than 4%, 1.2M is around 36K/yr, which is pretty darn lean IMO, especially for multiple people.

3% is better than 4% IMO and I certainly agree that an annual budget of $36k is LEAN. And as you say, when multiple people are involved, it’s LEAN. Add budgeting for unexpected stuff, cars, college(s), weddings, you name it, that $36 can morph under $30 fast.

[RedmondStash]

I think most folks have only the haziest understanding of how to fund retirement, and how much they'll need. So if $2 million is a rule-of-thumb number they've heard for most people, then surely $10 million would feel safe.

But that's based on gut feelings, comparisons with things some guy said in a pub, and fear of being old, vulnerable, broke, and homeless. I know because that was me a decade ago. It's not rocket science to look at how much you've spent over the last few years and estimate your future spending needs, nor to read some FIRE articles about asset allocation, investment options, and typical historical market performance, but that's all really scary stuff when you're starting out. I've seen smart friends' eyes glaze over with fear and avoidance when I bring it up.

So I do think $10 million is more than enough to live well indefinitely, but I understand why so many people aren't convinced. It's emotion, not logic. And it's a bet you can't afford to get wrong, so might as well err on the generous side.

[partgypsy]

Doesn't the lottery in the US still fund education? There is something to be said for that!

Welcome to the law of unintended consequences.  Experience has shown that the net $$$ going to education is largely unchanged -- it's just that the increase in lottery revenues has allowed the states to decrease educational funding from other sources.  So, yeah, it's a highly-regressive tax no matter what you put the money toward. 

IMO, at a minimum, any university that is funded in part through lottery money should not be allowed to give merit scholarships.  Merit scholarships are largely how schools attract the "best" candidates to make their numbers look better, which usually means the kids with high test scores/GPAs, which is usually rich white kids from the 'burbs.*  So lottery funding + merit scholarships = poor people subsidizing rich people's college educations.


*Like, say, mine.  DS got what is basically a half-tuition scholarship to our local public literally without even asking or filing the FAFSA.  The privates do even more, but they're not the ones using public money, so IMO they can do whatever the fuck they want.

I am not against merit scholarships. My parents looked wealthy on paper, but had very little to fund for my college. Me getting a scholarship meant I could stay in all 4 years. In the same way my daughters achievements are her own. She worked hard to get into colleges, and every year applied for what she could. My salary puts me in the donut. Just miss out on her qualifying for much need based (she does get some) but I don't make enough to fund her costs. merit aid isn't just for rich entitled kids. I think money going to help educate bright kids who will contribute back to society, let's say there are lots of worse things to spend money on.

[Laura33]

Doesn't the lottery in the US still fund education? There is something to be said for that!

Welcome to the law of unintended consequences.  Experience has shown that the net $$$ going to education is largely unchanged -- it's just that the increase in lottery revenues has allowed the states to decrease educational funding from other sources.  So, yeah, it's a highly-regressive tax no matter what you put the money toward. 

IMO, at a minimum, any university that is funded in part through lottery money should not be allowed to give merit scholarships.  Merit scholarships are largely how schools attract the "best" candidates to make their numbers look better, which usually means the kids with high test scores/GPAs, which is usually rich white kids from the 'burbs.*  So lottery funding + merit scholarships = poor people subsidizing rich people's college educations.


*Like, say, mine.  DS got what is basically a half-tuition scholarship to our local public literally without even asking or filing the FAFSA.  The privates do even more, but they're not the ones using public money, so IMO they can do whatever the fuck they want.

I am not against merit scholarships. My parents looked wealthy on paper, but had very little to fund for my college. Me getting a scholarship meant I could stay in all 4 years. In the same way my daughters achievements are her own. She worked hard to get into colleges, and every year applied for what she could. My salary puts me in the donut. Just miss out on her qualifying for much need based (she does get some) but I don't make enough to fund her costs. merit aid isn't just for rich entitled kids. I think money going to help educate bright kids who will contribute back to society, let's say there are lots of worse things to spend money on.

I agree in theory; I was a scholarship kid myself, I know the deal.  I was not claiming that all merit scholarships go to wealthy white suburban kids, or that FAFSA numbers accurately portray ability to pay, or that any of those kids are unworthy of merit scholarships -- and I certainly didn't say that anyone in any of this is at all entitled.  If I had my druthers, we'd go back to the world where state governments saw educating the next generation as a benefit to the state and society as a whole and threw a lot more money at making it affordable for everyone who wants to go and has the ability to get in and succeed.

My problem is specifically using money from lottery proceeds to fund schools that offer merit scholarships.  Because the universe of people buying lottery tickets is, on average, much poorer than the universe of people getting merit scholarships.  Because the things most schools use to identify scholarship targets (test scores/GPAs) are directly correlated with wealth.*

So when people say the lottery has its benefits because the proceeds are used for good things like funding education, that's where I disagree.  Because, again, the lottery proceeds are not adding new money to the college budgets, they are simply substituting for money that the states used to get from somewhere else.  Which means instead of funding those merit scholarships from a relatively progressive taxation scheme (like income taxes), you're funding them with the very regressive lottery proceeds.  And that's a terrible policy choice. 


*I was originally annoyed that DD's top college choice didn't offer merit aid.  But I learned that that was because they don't offer any merit aid, outside of a few very specifically-targeted scholarship -- it's something like 3% of the class that gets merit aid.  I had to respect that choice, because it meant that every dollar I paid went to either funding her education or subsizing other kids who didn't have the same resources we did.

[LD_TAndK]

One of my guilty pleasures is heading over to the bogleheads "Personal Finance" section and reading the "can I retire" post of the day. Usually someone approaching an eight figure net worth who can't wrap their heads around having "enough".

[obstinate]

I have recently attained these lofty heights and by my calculations it is enough. You spend $1M buying a good house in a decent place that isn't LA, SF, or NYC (many such places exist). The rest yields probably 250-300k take-home after federal taxes. At this point in our lives we are not very conservative with spending and we still don't spend $200k on non-housing expenses. And that's with living in NYC where things are pricier than most places.

The only way $10M is not enough is if you have very expensive hobbies (nice cars, planes, boats), and want a big house in a Tier 0 city.

[GilesMM]

I have recently attained these lofty heights and by my calculations it is enough. You spend $1M buying a good house in a decent place that isn't LA, SF, or NYC (many such places exist). The rest yields probably 250-300k take-home after federal taxes. At this point in our lives we are not very conservative with spending and we still don't spend $200k on non-housing expenses. And that's with living in NYC where things are pricier than most places.

The only way $10M is not enough is if you have very expensive hobbies (nice cars, planes, boats), and want a big house in a Tier 0 city.

What is Tier 0?  Big or expensive?

[obstinate]

Well, it would be the tier above tier 1. So, ultra premium. NYC, SF, good parts of LA, or the most expensive neighborhood in one of the many tier 2 cities in the country.

[GilesMM]

Well, it would be the tier above tier 1. So, ultra premium. NYC, SF, good parts of LA, or the most expensive neighborhood in one of the many tier 2 cities in the country.

So above $2000/sq ft?

[obstinate]

I don't have a particular $/sqft in mind. I'm speaking in generalities.

[partgypsy]

damn yall making me feel poor

[sonofsven]

A recent winning ticket for the big national lottery (Powerball?) for 1.3 billion was sold at a Plaid Pantry on 60th and NE Columbia Blvd in Portland, Oregon.
If any of you don't know Portland, that is definitely not a ritzy part of town. I have friends that live in this neighborhood (Cully), it's real working class.
So it's fun to imagine a working poor person who suddenly won 1.3 billion.
I had a distant cousin who won about 1.5 million in the early 80's, when he was 21. He was broke in five years.

If I won, I'd call Trump and ask if he wanted to borrow money, then come up with increasingly humiliating conditions, then tell him to f off.