Author Topic: Just in case you thought a million dollars was enough.  (Read 4633 times)

terrier56

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Just in case you thought a million dollars was enough.
« on: September 19, 2014, 03:57:42 PM »

http://business.financialpost.com/2014/09/18/millionaires-who-dont-have-any-money-face-having-to-work-to-70/

I don't know whats worst. The inability to adapt to anything (downsizing seems to solve all the problems) or the newly financed vehicle.

HairyUpperLip

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Re: Just in case you thought a million dollars was enough.
« Reply #1 on: September 19, 2014, 09:13:57 PM »
:-(.

Elderwood17

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Re: Just in case you thought a million dollars was enough.
« Reply #2 on: September 19, 2014, 09:37:34 PM »
There is always the comment about the couple will be "hard pressed to maintain their present level of spending in retirement" - their present level of spending is the problem!  And why do the experts always think people need their same level of spending?  House and car payments should be long gone by retirement.  Children are out of the house.  Commuting expenses are gone.  If you have done it right and those investments let you spend that is fine, but other than health care required spending should be at a low point.

MgoSam

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Re: Just in case you thought a million dollars was enough.
« Reply #3 on: September 20, 2014, 06:48:39 AM »
I personally hate that the tone of these articles make it seem as if the retirees are the victims, and aren't responsible for their own finances.

ender

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Re: Just in case you thought a million dollars was enough.
« Reply #4 on: September 20, 2014, 07:06:54 AM »
There is always the comment about the couple will be "hard pressed to maintain their present level of spending in retirement" - their present level of spending is the problem!  And why do the experts always think people need their same level of spending? House and car payments should be long gone by retirement.  Children are out of the house.  Commuting expenses are gone.  If you have done it right and those investments let you spend that is fine, but other than health care required spending should be at a low point.

Because you deserve it.

Beric01

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Re: Just in case you thought a million dollars was enough.
« Reply #5 on: September 21, 2014, 02:27:21 AM »
These people are the definition of "house-poor". If they sold their house, they could rent and retire immediately. Their problem is a $750K house doesn't generate any revenue.

Travis

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Re: Just in case you thought a million dollars was enough.
« Reply #6 on: September 21, 2014, 05:11:24 AM »
Honestly I zipped through the second half of the article after reading the "$750k house and financed $38k truck with 7 years left."  The author seriously wants us to feel some sympathy for this couple? 

After my initial head smack, I went back and read the rest.  Their mortgage was initially $133k (paid off) and the house is now worth $750k and they prefer not to be landlords renting their basement apartment.  Their truck is pretty close to what their mortgage used to be and because they're financing over 7 years the author implies it'll quit by the time it's paid off.  On top of that they've been paying at least 2% fees on their mutual funds! 

The biggest question of this whole article comes to mind: how much does the author know about personal finance and investing?  He advocates selling the house as a backup plan, but only so they can move into a slightly less expensive house.  He clearly has no problem with them having a $500/month car payment for the rest of their lives, and doesn't blink that they've pissed away their investment returns on fees.  The author also states by doing nothing they'll already meet their current income rate, but this is precarious because it'll mean a modest retirement.

zolotiyeruki

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Re: Just in case you thought a million dollars was enough.
« Reply #7 on: September 21, 2014, 05:57:01 PM »
Sheesh, a million bucks would see me retired in a flash.

Reddleman

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Re: Just in case you thought a million dollars was enough.
« Reply #8 on: September 27, 2014, 06:34:13 AM »
Wow, this is actually the most balanced "we can't live on gobs of money" article I've ever seen!

Whole the projections are pretty conservative, the financial advisor actually runs through real calculations on how to realistically free up cash for investment.  They go through downsizing, income streams until 90, and much of what they recommend is pretty sensible and mustachian- selling the house, rationalizing investment with low cost funds, etc.  they don't administer the proper face punch, but a stern warning and slap.

Overall much more balanced and practical than the "woe is me" articles you see in the U.S. media. Maybe I'll have to move north when I retire.