Race to $5 million

[jengod]

I can't remember where I found this list of net-worth labels (somewhere on the Internet no doubt!), but I keep it around as a motivation.

I thought I would open this thread in hopes of creating an affinity group of Mustachians who are trying to hit $5 million net worth.

Over $5 million: you are rich, you can live quite well without worrying too much.

About $2 million to $5 million: you are affluent, well-off, but you still have to watch your spending and try to grow your wealth.

About $500K to $2 million: you are middle class, you can have a decent retirement but you'll have to work to make your money last.

Under $500K: don't quit your day job.


Anybody else over $2 million (which is obviously FI territory) but still aiming for a (much) higher net worth before RE ("rest easy"/"retire early")?

[Manchester]

I can't remember where I found this list of net-worth labels (somewhere on the Internet no doubt!), but I keep it around as a motivation.

I thought I would open this thread in hopes of creating an affinity group of Mustachians who are trying to hit $5 million net worth.

Over $5 million: you are rich, you can live quite well without worrying too much.

About $2 million to $5 million: you are affluent, well-off, but you still have to watch your spending and try to grow your wealth.

About $500K to $2 million: you are middle class, you can have a decent retirement but you'll have to work to make your money last.

Under $500K: don't quit your day job.


Anybody else over $2 million (which is obviously FI territory) but still aiming for a (much) higher net worth before RE ("rest easy"/"retire early")?

Anyone else's financial ambition is up to them, but my view is that the different brackets you've listed are WAY out!  It's all about your life-style.  If you want to live a life of luxury, you'll need over $2m, but surely $1m would be enough for most Americans to retire and be quite comfortable - especially if they don't give in to consumerism?

I can't fathom how someone could have over $4m dollars and feel as though they can't retire (for financial reasons).  Unless you're not mustachian/frugal in any way and you want brand new cars/phones/expensive holidays etc?

I'm not judging anyone by the way - I'm genuinely curious as to why you'd keep going to $5m?  Credit to you guys though - it's significantly more money then I'll ever have!! :P

[jengod]

>I'm genuinely curious as to why you'd keep going to $5m?

My husband is a workaholic. He's not going to stop accumulating LOL. (Don't worry, we do travel and enjoy our lives very much)

 :D

[MasterStache]

>I'm genuinely curious as to why you'd keep going to $5m?

My husband is a workaholic. He's not going to stop accumulating LOL. (Don't worry, we do travel and enjoy our lives very much)

 :D

I assume by "workaholic" you mean he devotes a good portion of time to something he has absolute passion for and if given the choice would choose to do the work for free?

[jengod]

>I'm genuinely curious as to why you'd keep going to $5m?

My husband is a workaholic. He's not going to stop accumulating LOL. (Don't worry, we do travel and enjoy our lives very much)

 :D

I assume by "workaholic" you mean he devotes a good portion of time to something he has absolute passion for and if given the choice would choose to do the work for free?

Yep. He's in tech and Startup Crazytown is his happy place. :D

[soccerluvof4]

Not to be to harsh but I find it stupid. If a person needs 5 Million to retire then chances are they need to watch there money just as much as the person that needs 2 Million.  But people like labels

[MasterStache]

>I'm genuinely curious as to why you'd keep going to $5m?

My husband is a workaholic. He's not going to stop accumulating LOL. (Don't worry, we do travel and enjoy our lives very much)

 :D

I assume by "workaholic" you mean he devotes a good portion of time to something he has absolute passion for and if given the choice would choose to do the work for free?

Yep. He's in tech and Startup Crazytown is his happy place. :D

Good for him!. That's pretty rare these days that you can find your passion in life AND make good money doing it. I doubt you'll find many folks trying to get to 5 mil on this blog. It isn't just about FIRE, but about living a meaningful, happy and fulfilling life. Finding the top of the "happiness curve" in terms of finances generally happens well under 5 mil.

[DS]

:D

[Dicey]

Interesting. We are FI. I am RE, and DH still works. His mother has Alzheimer's and lives with us. He is the kind of guy who stays busy. He would go bonkers if he was "cooped up" at home with her. He loves his 9/80 job which is about to become 4/10s, woot! He walks to work and is four years shy of a sweet, stable, Defined Benefit Pension, complete with annual COLA. His job provides amazing healthcare. We have no monthly premiums, no deductibles, and minuscule co-pays. When he hits his target number, we will get a lifetime healthcare allowance and be allowed to stay on the company program, which is worth a lot.

In short, we aren't aiming for five million, but it could easily happen. In which case, we plan on donating a shitload of money to charity. We do a good amount now (about 10%), but as the 'stache grows, we look forward to doing more.

It is most definitely not a race. More of a slow, easy slide into home. Pinch me, I must be dreaming.

[gutts]

Under $500K: don't quit your day job

Lol wut. If I had 499K which is under 500, I would be able to retire right now at 27. Actually, I have a target FIRE sum of 400K in my taxable account + whatever 401k balance will be by that moment.
Ofc, if you are gonna live in Beverli Hills then, yeah, even 5M might not be enough.

Anyway, good luck with the race!

[YHD]

That痴 my number.  Stupid cancer.  Working for phenomenal health insurance benny and the opportunity to buy into the same plan after I知 eligible for retirement in 2024. If I get to 5 first, I値l consider going to 50% which is the minimum for insurance eligibility.

ETA my happiness curve is defined by being able to get any treatment without delay at an affordable cost.  5m allows me to afford a lot of care.

[nick663]

>I'm genuinely curious as to why you'd keep going to $5m?

My husband is a workaholic. He's not going to stop accumulating LOL. (Don't worry, we do travel and enjoy our lives very much)

 :D

Good for him that he enjoys what his work but it sounds like you're accumulating just to accumulate.  I think most will take offense to the brackets in your original post as the representation does not mesh well with the data of an average MMM reader.

We probably could accumulate 5 million if we work much later (frankly have never run the numbers that high but I'd guess we'd hit it close to a "normal" retirement age) but that's much much more than we will ever need.  Even with an very conservative approach of a 3% withdrawal rate and no supplementary income from SS and side hustles, 5 million gives you 150k/annual to live on.  I don't see trading a decade or more of work for that lifestyle to be a worthwhile transaction.

[Bateaux]

If we kept working for 10 more years and earned 5% return on our investments we'd hit 5 million.   I'd be 59 1/2 and eligible to draw all my savings penalty free.  It's temping but hopefully we'll be able to quit within 2 years.  House shopping in Florida now for the retirement home of our dreams.

[Car Jack]

Probably not going to ever hit $5M, but $3M might work.  Paying tuition to a school for a kid with learning issues isn't all that fun.  Well, it's over $50k worth of fun which is extra fun because the other kid is in college, which is $65k.  So I'm sort of starting at the point where my withdrawal of $115k means I get zero to spend and have to pay taxes on some part of the withdrawal......

For Ozzy and Hariat who have perfect kids in public school who go on to get scholarships for half their public college and stafford loans and work study to pay the rest........you don't need $5M, I guess.

[Megs193]

We will likely reach 5 million because husband has no desire to retire. He is 38 and gets annoyed if I talk about him retiring at 55. He loves his job and I think he would have a hard time giving up that part of his life.  We love to travel so I don't think we would be accumulating just to accumulate. I think we would use the extra money to vacation more frequently and to bring our kids and future grandkids along too.

[Bicycle_B]

Left my day job several years ago on less than 500k.  Following with interest.

[Dicey]

Left my day job several years ago on less than 500k.  Following with interest.

So jealous! If I lived in a lower cost area, I'd have pulled the trigger at about 500k too. But this stinkin' HCOLA is my home and I felt I couldn't be too far from my aging parents (seven hours is close, right?). Now they're gone, but I got married at 54 and we're taking care of his mom. (The bedroom down the hall is definitely too close, but we're managing. At least there isn't acommon wall, snirt.) Happily, DH's assets matched mine very closely.  The stock market's exuberance, along with a smokin' hot real estate market, have made us wealthy beyond our wildest imagination. Oh, well. Just another shitty MPP.

[LessIsLess]

We will likely reach 5 million because husband has no desire to retire. He is 38 and gets annoyed if I talk about him retiring at 55. He loves his job and I think he would have a hard time giving up that part of his life.

The $5m number sounds large, but it's not.  It's still just a 7-figure number.  There are so many people out there earning 8 figures each year.  If someone wants to accumulate $5m, they need to shoot for $10m or higher.  Otherwise you will start to lose motivation and momentum around $2m and may never reach $5m.  Your husband has the right mindset, so your family will hit the big number and likely cruise right past it, effortlessly.

[moonella]

How large is your stash is constitutes just one side of the equation. The other side of the equation is represented by your personal cost of living. A $5MM stash for someone who only spends $40K/year is overkill. A $5MM stash for someone spending $200K is adequate. It is all subjective. For me, personally, having $5MM would be totally unnecessary. As I get older, I find myself valuing time more and more, and material possessions less and less. No one can buy more time on this earth, whether they have $50K, or $5MM in their bank account. My advice is live your life to the fullest and get out of the rat race as soon as financially feasible to truly enjoy your time on the things that enrich you as an individual.

[OurTown]

That's over $16,000 per month using the 4% rule.   What are we spending it on?

[MaybeBabyMustache]

We're over $3M, but most a chunk of that is tied up in real estate, and another large chunk in our 401Ks. ($1.2M & $1.3M, respectively). We want to stay where we are, location wise, until the kids are out of school. We live in the bay area, so extremely HCOL.

We definitely track all of our expenses, stick to a budget, make a menu plan, cut costs, have a side hustle, etc. My goal is to retire early, but my husband would like to keep working. We will very likely end up with too much at the end when we sell this house, but are fine with that & not working now is too risky of a proposition, given overall cost of housing. We'll donate, treat friends/family to trips, etc. 

[Megs193]

That's over $16,000 per month using the 4% rule.   What are we spending it on?

I rarely go shopping and buy things but I could easily spend 100k per year on travel. A few first class trips to Europe staying in luxury hotels and paying for some unique experiences and I知 sure it would add up fast.

[TheAnonOne]

That's over $16,000 per month using the 4% rule.   What are we spending it on?

I rarely go shopping and buy things but I could easily spend 100k per year on travel. A few first class trips to Europe staying in luxury hotels and paying for some unique experiences and I知 sure it would add up fast.

Yeah, travel can certainly be expensive when you start going for 'luxury'.

Also, someone on 5m is probably not spending the whole 200k per year (4%). Chances are they are just lowering their SWR.

The whole MMM world of 4% really only matters when we are talking about these 1m FIRE numbers, simply because we NEED to use the whole 4% to survive. There is no reason to assume people who have 2m+ are also blowing the absolute maximum. (though it is obviously up to the individual)

[Dicey]

^^Which is why the rich get richer.^^ They have it, but they don't spend it.

[nick663]

That's over $16,000 per month using the 4% rule.   What are we spending it on?

I rarely go shopping and buy things but I could easily spend 100k per year on travel. A few first class trips to Europe staying in luxury hotels and paying for some unique experiences and I知 sure it would add up fast.

You should read Vagabonding by Rolf Potts.  It might take decades off of your working life. :)