If 1M is good, is 10M better?

[bluecollarmusician]

This a question that I have rolled around in my head for a long time, and seems to me that it goes unquestioned, and I am curious on thoughts folks might have.


There seems to be an implicit assumption on the forums here that more money is always "better."

What do you think?  Is it? If so, why?  If not, why not?
At what point is more money a liability rather than a benefit?

[bacchi]

Is that an implicit assumption? I understood one of the goals, so to speak, was knowing when enough is enough. Most anyone who retires before full retirement age (65/67 in the states) can continue working but chooses not to do so -- they've decided that more money isn't better.

Or are you talking about situations like an inheritance or a lottery, like the guy who won $300M and things went seriously downhill (https://www.nbcnews.com/id/wbna6738776)?

[deborah]

I think that the forum is, to some extent, made up of two distinct groups - those who believe that the more money you have, the better, and those who believe that the more time you have in retirement (and thus, the smaller your stash and your withdrawal rate), the better. A lot of threads are a discussion between these groups.

The concept of enough is central.

I am personally more impressed by the person who has successfully retired with a small stash. They show us all what’s achievable.

[bluecollarmusician]

I think that most people here consider that ultimately time traded for more money is increasingly not worth it.  But the question I am getting at is: if 1 million is good is 10 million better?   I think that people make a decision they have enough due to time/constraints of employment, etc.  But I sense an undertone that there is a general belief for any specific situation the majority of the folks on the forum believe that more money is always better.  So I am trying to.question that assumption... or determine if it is an assumption.
Sorry for.any typos... on my phone and can't see what I am typing.... :-p

[Metalcat]

Not sure where you're seeing this assumption??

I've been here for years and that hasn't been the general consensus. We recently had a thread asking what people's FatFIRE numbers were and many were in and around 2.5M, which is a good chunk of money, but nowhere near close to 10M.

We are neither an extreme frugality community nor a Bogleheads-style wealth-porn community.

This community is largely characterized by a focus on quality of life, which makes sense since that's what MMM has always primarily written about.

[oldladystache]

I like 2 million. Whenever I get much above that I make a large charitable donation.

What would I do with 10 million? I have annuitized enough to survive on, some set aside for assisted living/nursing home, and enough left over to do whatever I feel like doing. I don't like spending money frivolously.

[lhamo]

I'm in a similar boat to @oldladytoyota, though because I have kids I want to make sure are fully launched into relatively stable economic circumstances I am holding off on my major charitable giving until they are a bit older/settled.  I'm also in that awkward period leading up to age 59.5.  I should have enough in non-retirement assets to fund everything I want to do in the next 4-ish years (including both ongoing renovations to my home and some modest travel), but I do worry a bit about market volatility.  I've been cashing out some LTCG during the rising market, so I've currently got enough in cash-like assets for the main renovations I need to complete + 2-3ish years of modest living expenses. 

Because my Inner Bag Lady can be extremely annoying in ways that create a lot of (admittedly unwarranted) financial anxiety, I am also keeping a bunch of my retirement investments in money market funds at the moment.  I am trading potentially higher returns for less anxiety/stress during a time that feels somewhat vulnerable to me.  If/when I do need to start tapping retirement accounts, I've got a big chunk there in more liquid form, so if the market happens to be down I don't need to worry.  Once I am through this phase of renovations and have a better picture of what typical living expenses are, I'll probably start DCA-ing those money market funds back into index funds/target retirement funds.  For now I'm happy with the 5%ish return they are providing, since the rest of the portfolio continues to grow.  I don't NEED to get to 10mill, so I am taking on less risk than many would, even if that means leaving some money on the table. 

[jeroly]

Somebody did a Reddit post about what different levels of wealth open up, going up to $1 billion and up.  Once you start getting upwards of $10 million, though, you have most bases covered ;-)

I'd say that more money = more options at any given level.  For example, I got stuck in the Crowdstrike/Microsoft morass and had multiple flights cancelled on me and was looking at another 3 days before getting a seat on a flight home, but I was able to come up with $400 to pay for a second ticket on a different airline, not knowing if I'd ever be reimbursed for it by the original airline.  If I had saved $1 million and was FIREd with no additional income, I might not have felt like I had the room in the budget for the extra expense and might still be sitting in the airport.  If I had $100 million, I might have been tempted to get a charter instead of that Spirit Air seat!

[Metalcat]

Somebody did a Reddit post about what different levels of wealth open up, going up to $1 billion and up.  Once you start getting upwards of $10 million, though, you have most bases covered ;-)

I'd say that more money = more options at any given level.  For example, I got stuck in the Crowdstrike/Microsoft morass and had multiple flights cancelled on me and was looking at another 3 days before getting a seat on a flight home, but I was able to come up with $400 to pay for a second ticket on a different airline, not knowing if I'd ever be reimbursed for it by the original airline.  If I had saved $1 million and was FIREd with no additional income, I might not have felt like I had the room in the budget for the extra expense and might still be sitting in the airport.  If I had $100 million, I might have been tempted to get a charter instead of that Spirit Air seat!

More money means more options of the purchasable kind, but if it means more time working, that can also limit a lot of options.

A lot of great things in life are cheap or free, but can require a lot in the way of time and energy resources. I have a lot of things that I value deeply more available to me now that I'm not tethered to a job in a brick and mortar clinic.

The question is always if the additional things you can purchase are more valuable than the time and energy it takes to be able to purchase them.

I'm currently planning out my new career now that I'm going back to work after 4 years of retirement, and because I can set my hours exactly as I choose, I'm having to very carefully calculate precisely how much time and energy dedicated to work makes for optimal use of my resources.

And I can guarantee that that equation doesn't favour maximizing my income.

DH and I very, very seriously contemplated what inflating our lifestyle substantially would do for us a few years ago. I had the opportunity to own part of a very successful business, which would have made us very, very wealthy, but eaten up the bulk of my time, energy, and emotional resources.

We couldn't come up with enough lifestyle inflations to be worth the trade offs.

Really good quality of sleep, plenty of exercise, quality time with my partner and other loved ones, leisure time spent doing casual activities, hobbies, time and energy to cook and eat together, etc, etc. All of these basics of a good life would have been sacrificed in the name of being able to buy shit that would never make up for those losses.

Time, energy, and emotional well being are all extremely high value resources, and exchanging them for more money is only a good trade up to a certain point.

Being able to buy things when it's convenient is definitely nice, but so is having incredible amounts of quality time with great friends.

I'm quite happy to go back to work part time, as long as it fits into the hours where I don't have anything else I would rather be doing. But if it impacted my self care, time with my friends, family, pets, etc, then it would be a bad trade for me.

[GilesMM]

$10 million doesn’t go as far as it used to, especially in NYC, SF or SJ.

[Missy B]

I don't see any benefit to 10M unless you have 3 or 4 children that you want to live near you in a high cost area, and you want to be able to give them a large down payment so they can each own a 2 bedroom condo.

The thing about increasingly expensive and fancy things is that the extra cost doesn't give you extra proportional enjoyment. Buying something that costs you 5X as much doesn't make you 5X happier.

I think most everyone here understands that. Most of the conversations around 'do I need more money' are not 'is 10M better' but more around planning/anxiety of having enough for different eventualities.
And I think sometimes there's a bit of ego about having a large stash, but I don't believe that's the primary color.

[Log]

$10 million doesn’t go as far as it used to, especially in NYC, SF or SJ.

4% withdrawal from $10M is $400k/year.

I know plenty of people living very good lives in both NYC and SF who will never make $400k/year in their entire careers.

The Joneses in these cities are richer, and trying to keep up with them is potentially more ruinous than in a place where especially high incomes are rarer. But the fundamental cost of living is not even remotely close to 10x that of a modest locale where Mustachians happily live on $40k/year.

(ETA: 2024 is going to be my first full calendar year of life in SF, and if I extrapolate out my spending from the first 6 months of the year, I'm on track for $22k of spending. I'd like to not live with roommates and partake in some other lifestyle inflation as I build wealth, and I'm currently benefiting from near-$0 healthcare spending which will not be sustainable as I age, but I just have to push back against the notion that HCOL cities are unfathomably expensive, because living previously in NYC and now here has fundamentally altered the trajectory of my life for the better.)

[Tasse]

Despite having recently argued in another thread that more money was obviously better, I'm going to argue (seemingly) the opposite here.

I believe in a "this is just stupid" number. It's the number where you can already afford every really desirable thing money can buy you, and there is no respectable reason to accumulate more instead of giving it away. I would say $10M is above this threshold; at that level, you can afford an extremely comfortable lifestyle AND a very low/safe withdrawal rate AND a plan to leave a lot of money to your heirs. If that's not enough money, nothing ever will be.

Of course, what counts as a "really desirable thing" and a "respectable reason" are very subjective, and lots of non-FIRE folks would probably say exactly the same thing about $1M! It's easy to say that people richer than you are being greedy if they want more, and harder to say that about a level of wealth that is actually attainable for you.

It's important to be able to say "$X is enough." I also think it's important to be able to say "$Y is too much, actually," and to have a plan for the excess.

Somebody did a Reddit post about what different levels of wealth open up, going up to $1 billion and up.  Once you start getting upwards of $10 million, though, you have most bases covered ;-)

I'd be curious to see this post, if you can find it.

[dividendman]

$10 million doesn’t go as far as it used to, especially in NYC, SF or SJ.

$1 billion doesn't go as far as it used to.... come to think of it, $1 trillion doesn't go as far as it used to! Oh wait, no amount goes as far as it used to due to inflation...

[twinstudy]

It's all about money per unit of time, but this has to be viewed through the lens of (1) tax and (2) stress. For example, both with income and wealth, taxes rise much faster than income/wealth does; so as your money goes up, it becomes harder to get proper returns on savings. In my state my land tax bill with about $1m in investable land is a modest $3500, but if I had $3m in investable land it would be a ridiculous $30,000 per year. You can modify that to an extent by having land in different jurisdictions but sooner or later it catches up.

Secondly, higher income usually means more stress - your decisions actually have a consequence. If I was still working my basic, low-skill, first job that I had at age 20, I could easily put in 80 hours a week (not that I'd want to) and feel nothing more than slight annoyance that my time was being taken up. Now with a hard job, I can put in 4-5 hours of genuine work in a day and be completely exhausted. So you have to remember that it's not just about money per unit of time, but also about discomfort/stress and taxes.

People always say that money brings opportunities - that may be true - but progressive taxation also caps the utility of money. I pay close to 50% of my income in total local/state/Commonwealth taxes.

[Dicey]

I'm going to go off on a bit of a tangent here. I'll come back, I promise.

So many POYM folks talk about how good they're going to feel when they pay off the mortgage. Alas, some of them strive to do that before they take advantage of every retirement vehicle available to them, or even at the expense of some of those opportunities. Every damn time, I want to say, "You're not going to believe how good it feels to get into the "...and Beyond" club!"

I used to hate making mortgage payments, 'cuz I believed all the mainstream stuff I'd heard and read. Then an equally stubborn BF pounded into my head that mortgages were a good thing, if used correctly. I followed his (and Ric Edelman's) advice, somewhat skeptically, and I couldn't believe how my investments grew. Lucky for me I started saving in earnest (and ignoring accelerated mortgage payoff advice) in around 2008.

I am now firmly in the "and Beyond" club and I still can hardly believe it! So many things that used to be problems, or things I worried about (eating catfood, anyone?) became utter non-issues. My IBL seems to have left the planet (whew!).

Back to your point: My goal was never to attain "and Beyond" status. I just wanted to retire early. I worked diligently toward it for years, and then suddenly the market did what the market does and now I am way past any number I ever dreamed of.

Could $10M happen to us, even post-FIRE? Based on our ages and what we've seen on the path to FIRE, I'd bet on it. Would I ever have set a goal of $10M? HaHaHaNever! Compound interest for the win, baby!

P.S. To those who might say we over saved, I couldn't pull the trigger without healthcare, and the ACA didn't exist yet. DH was working toward a Defined Benefit Pension w/COLA, and he wasn't about to leave before he secured it.

P.P.S. Oh yeah, we give a lot of money away. It gives me a thrill to see the total when I pop into my DAF.

[Chris Pascale]

The differences are vast, and certainly could be better. The life you can live with $1M is a modest lifestyle without working, but with $10M you could explore many options through the years while growing your net worth.

[MrGreen]

As a tool, more money means more possibilities. I FIREd before we hit our desired number so I'm definitely not in the "work longer for more" camp. But now that we're approaching a decade retired, our stash is more than double what it was. Unless the future is not like the past, it seems inevitable that we'll end up in the 8 figure club. As a person with childhood trauma around shelter security, more options = more safety.

[Dicey]

As a tool, more money means more possibilities. I FIREd before we hit our desired number so I'm definitely not in the "work longer for more" camp. But now that we're approaching a decade retired, our stash is more than double what it was. Unless the future is not like the past, it seems inevitable that we'll end up in the 8 figure club. As a person with childhood trauma around shelter security, more options = more safety.

Amen to that.

[RedmondStash]

I mean -- better how? Better for what purpose? "Better" is a vague word. Whether $10M is better depends on your goals, and on what it would cost you to get to $10M.

I sometimes play the "what would I do if I had $10M" game. There are certain background worries that would go away, I think, though humans are built for worry, so maybe I'd find new things to focus on. Maybe I'd start a game company to bring to fruition a favorite video game idea. Maybe I'd shift my AA to such safe investments that I'd never worry about the stock market again.

But $10M has never been my goal. I'm quite content with my measly-by-comparison FIRE stash.

[NorthernIkigai]

Having 1M and having 10M are not directly comparable, because usually gaining 1M and 10M are not comparable. As in, it takes a lot more to end up with 10M. If it would take the same, I’d pick 10M rather than 1 M.

On the other hand, if there was an option of 3M, I’d pick that over 10M. It’s enough for anything I could need (certainly considering I already have a bit of a stash), and not so much I’d stress about what to do with it. Yes, there’s always legacy and charity, but I can handle those with 3M, and 10M would just introduce stress into those decisions.

[daverobev]

I really like the (in reference to billionaires) idea that acquiring so much money is actually a disease. It's like hoarding - it's more than any person or family could possibly need, and would be so much better if spread out sensibly (ie Bezos paying people properly, treating them like humans).

Now, I don't know that $10 million hits that limit, but let's be honest it's not far from it. What on earth could you possibly need that much money for, which isn't literally just wasteful insanity (ie replacing a $100k car every two years just because, and owning 4-5 of them).

I know that for you Americans you have healthcare issues. And I know houses in nice cities the world over are now very expensive to buy, even modest ones - so *one* million may be a difficult amount of net worth to finish at in those situations. But if you can live in a place where housing isn't insanely expensive, and you don't fly too much and stay in five-star resorts for weeks at a time, I reckon 1 million is a lot closer to 'plenty' than 10 million is.

[twinstudy]

I really like the (in reference to billionaires) idea that acquiring so much money is actually a disease. It's like hoarding - it's more than any person or family could possibly need, and would be so much better if spread out sensibly (ie Bezos paying people properly, treating them like humans).

Now, I don't know that $10 million hits that limit, but let's be honest it's not far from it. What on earth could you possibly need that much money for, which isn't literally just wasteful insanity (ie replacing a $100k car every two years just because, and owning 4-5 of them).

I know that for you Americans you have healthcare issues. And I know houses in nice cities the world over are now very expensive to buy, even modest ones - so *one* million may be a difficult amount of net worth to finish at in those situations. But if you can live in a place where housing isn't insanely expensive, and you don't fly too much and stay in five-star resorts for weeks at a time, I reckon 1 million is a lot closer to 'plenty' than 10 million is.

$10m is not far from it? Lol, two professionals on high-incomes - say $500k household income - who have any investing ability will hit $10m in the course of their lifetimes if they don't choose to FIRE. And as you noted, a decent house in a city like Sydney costs $2-$2.5m USD. So I don't think $10m is what it used to be.

As for $1m in one's stash, here in Australia if I had the equivalent ($1.5m AUD) and I withdrew 4% per year, so $60k AUD, after taxes I'd have about $52k which is 10% above minimum wage. It would not be a liveable income.

[deborah]

I really like the (in reference to billionaires) idea that acquiring so much money is actually a disease. It's like hoarding - it's more than any person or family could possibly need, and would be so much better if spread out sensibly (ie Bezos paying people properly, treating them like humans).

Now, I don't know that $10 million hits that limit, but let's be honest it's not far from it. What on earth could you possibly need that much money for, which isn't literally just wasteful insanity (ie replacing a $100k car every two years just because, and owning 4-5 of them).

I know that for you Americans you have healthcare issues. And I know houses in nice cities the world over are now very expensive to buy, even modest ones - so *one* million may be a difficult amount of net worth to finish at in those situations. But if you can live in a place where housing isn't insanely expensive, and you don't fly too much and stay in five-star resorts for weeks at a time, I reckon 1 million is a lot closer to 'plenty' than 10 million is.

$10m is not far from it? Lol, two professionals on high-incomes - say $500k household income - who have any investing ability will hit $10m in the course of their lifetimes if they don't choose to FIRE. And as you noted, a decent house in a city like Sydney costs $2-$2.5m USD. So I don't think $10m is what it used to be.

As for $1m in one's stash, here in Australia if I had the equivalent ($1.5m AUD) and I withdrew 4% per year, so $60k AUD, after taxes I'd have about $52k which is 10% above minimum wage. It would not be a liveable income.

It’s definitely a very livable income, especially if it came out of superannuation. I’m sure a decent house in Sydney also costs less - the median house price in Sydney is a lot less.

[YttriumNitrate]

There seems to be an implicit assumption on the forums here that more money is always "better."
What do you think?  Is it? If so, why?  If not, why not?
At what point is more money a liability rather than a benefit?

Like the lottery guy bacchi mentioned, more money becomes a liability when it attracts attention. Not that I will ever have this problem, but I recall reading an article about how the 500th through 1000th richest people in America have better lives than the 1st through 499th (dividing line is currently a bit over $2 billion). The "poorer" group has similar lifestyles (e.g., having $2 billion versus $4 billion isn't going to have much impact on the value of a person's primary residence), but has much more anonymity.

[GilesMM]

$10 million doesn’t go as far as it used to, especially in NYC, SF or SJ.

4% withdrawal from $10M is $400k/year.

I know plenty of people living very good lives in both NYC and SF who will never make $400k/year in their entire careers.

The Joneses in these cities are richer, and trying to keep up with them is potentially more ruinous than in a place where especially high incomes are rarer. But the fundamental cost of living is not even remotely close to 10x that of a modest locale where Mustachians happily live on $40k/year.

$10 million in San Jose would take maybe $2.5 million for a 2500 sq ft home. Frugally using a 3.5% SWR gets you $262k/yr.  State and fed taxes could easily be 20%, leaving you $210k.  Throw in some day care, property tax, Bay Area prices for food, gas, etc and suddenly you are not feeling so rich, right?

[jeroly]

Despite having recently argued in another thread that more money was obviously better, I'm going to argue (seemingly) the opposite here.

I believe in a "this is just stupid" number. It's the number where you can already afford every really desirable thing money can buy you, and there is no respectable reason to accumulate more instead of giving it away. I would say $10M is above this threshold; at that level, you can afford an extremely comfortable lifestyle AND a very low/safe withdrawal rate AND a plan to leave a lot of money to your heirs. If that's not enough money, nothing ever will be.

Of course, what counts as a "really desirable thing" and a "respectable reason" are very subjective, and lots of non-FIRE folks would probably say exactly the same thing about $1M! It's easy to say that people richer than you are being greedy if they want more, and harder to say that about a level of wealth that is actually attainable for you.

It's important to be able to say "$X is enough." I also think it's important to be able to say "$Y is too much, actually," and to have a plan for the excess.

Somebody did a Reddit post about what different levels of wealth open up, going up to $1 billion and up.  Once you start getting upwards of $10 million, though, you have most bases covered ;-)

I'd be curious to see this post, if you can find it.

https://www.reddit.com/r/ifiwonthelottery/comments/9qv4e1/post_on_the_different_levels_of_wealth_that_i/

[daverobev]

$10 million doesn’t go as far as it used to, especially in NYC, SF or SJ.

4% withdrawal from $10M is $400k/year.

I know plenty of people living very good lives in both NYC and SF who will never make $400k/year in their entire careers.

The Joneses in these cities are richer, and trying to keep up with them is potentially more ruinous than in a place where especially high incomes are rarer. But the fundamental cost of living is not even remotely close to 10x that of a modest locale where Mustachians happily live on $40k/year.

$10 million in San Jose would take maybe $2.5 million for a 2500 sq ft home. Frugally using a 3.5% SWR gets you $262k/yr.  State and fed taxes could easily be 20%, leaving you $210k.  Throw in some day care, property tax, Bay Area prices for food, gas, etc and suddenly you are not feeling so rich, right?

Ehhh no I'd feel pretty rich if I had $210k a year.

Pretty big disconnect between 'normal people' who earn sub $50k gross and multi-millionaires (even accepting that there is inflation, yes, and that $1 million in 1980 is not the same as $1 million in 2024).

[clarkfan1979]

Somebody did a Reddit post about what different levels of wealth open up, going up to $1 billion and up.  Once you start getting upwards of $10 million, though, you have most bases covered ;-)

I'd say that more money = more options at any given level.  For example, I got stuck in the Crowdstrike/Microsoft morass and had multiple flights cancelled on me and was looking at another 3 days before getting a seat on a flight home, but I was able to come up with $400 to pay for a second ticket on a different airline, not knowing if I'd ever be reimbursed for it by the original airline.  If I had saved $1 million and was FIREd with no additional income, I might not have felt like I had the room in the budget for the extra expense and might still be sitting in the airport.  If I had $100 million, I might have been tempted to get a charter instead of that Spirit Air seat!

More money means more options of the purchasable kind, but if it means more time working, that can also limit a lot of options.

A lot of great things in life are cheap or free, but can require a lot in the way of time and energy resources. I have a lot of things that I value deeply more available to me now that I'm not tethered to a job in a brick and mortar clinic.

The question is always if the additional things you can purchase are more valuable than the time and energy it takes to be able to purchase them.

I'm currently planning out my new career now that I'm going back to work after 4 years of retirement, and because I can set my hours exactly as I choose, I'm having to very carefully calculate precisely how much time and energy dedicated to work makes for optimal use of my resources.

And I can guarantee that that equation doesn't favour maximizing my income.

DH and I very, very seriously contemplated what inflating our lifestyle substantially would do for us a few years ago. I had the opportunity to own part of a very successful business, which would have made us very, very wealthy, but eaten up the bulk of my time, energy, and emotional resources.

We couldn't come up with enough lifestyle inflations to be worth the trade offs.

Really good quality of sleep, plenty of exercise, quality time with my partner and other loved ones, leisure time spent doing casual activities, hobbies, time and energy to cook and eat together, etc, etc. All of these basics of a good life would have been sacrificed in the name of being able to buy shit that would never make up for those losses.

Time, energy, and emotional well being are all extremely high value resources, and exchanging them for more money is only a good trade up to a certain point.

Being able to buy things when it's convenient is definitely nice, but so is having incredible amounts of quality time with great friends.

I'm quite happy to go back to work part time, as long as it fits into the hours where I don't have anything else I would rather be doing. But if it impacted my self care, time with my friends, family, pets, etc, then it would be a bad trade for me.

+1 to "The question is always if the additional things you can purchase are more valuable than the time and energy it takes to be able to purchase them."

[twinstudy]

The poster mentioned taking the cost of day care, property tax etc away from the $210k a year. It obviously is heavily jurisdiction dependent, but as I mentioned land tax in my state, assuming $3m of investable assets, is approx $30k a year. Council rates on the same amount of property would be around $6k a year. So already you're $36k down, plus cost of daycare and whatever other expenses you have. I haven't even gotten into schooling, since hopefully the kids would be going to a selective school or on a scholarship, but the money gets chewed up quickly.

[Tasse]

Explaining how you could spend $210k per year (for example, on selective schooling) doesn't make it a not-rich amount of money, IMO.

People all over the world justify spending millions per year with this exact same "it doesn't go as far as you'd think!" line. But the definition of "rich" isn't "I couldn't even imagine how to spend all this money."

I recently read the book/sociology study "Uneasy Street" (recommended by @grantmeaname) and it's all about how very wealthy people (tens of millions) think about their money. One of the takeaways is that, apparently at any level of wealth, it's easy/comfortable to claim that you are actually middle class and the people richer than you are the ones who are *actually* rich. "That's just what it takes to live in NYC" is a common justification, but of course it's not true--that's what it takes to live their particular very comfortable lifestyle in NYC.

It made me reflect on the same "My level of wealth isn't REALLY rich" rhetoric that I've seen in the FIRE community (even though I acknowledge this is typically not comparable wealth to what's described in the book). And it made me want to try getting more comfortable with calling a spade a spade. If we're not rich yet at $1M, then we're certainly pretty darn close.

[Metalcat]

The poster mentioned taking the cost of day care, property tax etc away from the $210k a year. It obviously is heavily jurisdiction dependent, but as I mentioned land tax in my state, assuming $3m of investable assets, is approx $30k a year. Council rates on the same amount of property would be around $6k a year. So already you're $36k down, plus cost of daycare and whatever other expenses you have. I haven't even gotten into schooling, since hopefully the kids would be going to a selective school or on a scholarship, but the money gets chewed up quickly.

It's been one of MMM's main points from the very beginning that a "normal" middle class life can cost you an absolute fortune without feeling like much of an upgrade.

That's kind of a cornerstone philosophical concept for this community. That you can spend A LOT of money and still feel like you're treading water.

No one would argue that there aren't countless ways, locations, lifestyles, that could easily cost multiples of the national median income and still feel middle class and not wealthy.

Most people who make a lot of money don't feel wealthy for exactly that reason. That is the main argument for frugality. That finding creative ways to not spend that much on a basic middle class life is often a better option than trying to earn your way out of an expensive middle class cash crunch.

[Much Fishing to Do]

Somebody did a Reddit post about what different levels of wealth open up, going up to $1 billion and up.  Once you start getting upwards of $10 million, though, you have most bases covered ;-)

I'd say that more money = more options at any given level.  For example, I got stuck in the Crowdstrike/Microsoft morass and had multiple flights cancelled on me and was looking at another 3 days before getting a seat on a flight home, but I was able to come up with $400 to pay for a second ticket on a different airline, not knowing if I'd ever be reimbursed for it by the original airline.  If I had saved $1 million and was FIREd with no additional income, I might not have felt like I had the room in the budget for the extra expense and might still be sitting in the airport.  If I had $100 million, I might have been tempted to get a charter instead of that Spirit Air seat!

More money means more options of the purchasable kind, but if it means more time working, that can also limit a lot of options.

A lot of great things in life are cheap or free, but can require a lot in the way of time and energy resources. I have a lot of things that I value deeply more available to me now that I'm not tethered to a job in a brick and mortar clinic.

The question is always if the additional things you can purchase are more valuable than the time and energy it takes to be able to purchase them.

I'm currently planning out my new career now that I'm going back to work after 4 years of retirement, and because I can set my hours exactly as I choose, I'm having to very carefully calculate precisely how much time and energy dedicated to work makes for optimal use of my resources.

And I can guarantee that that equation doesn't favour maximizing my income.

DH and I very, very seriously contemplated what inflating our lifestyle substantially would do for us a few years ago. I had the opportunity to own part of a very successful business, which would have made us very, very wealthy, but eaten up the bulk of my time, energy, and emotional resources.

We couldn't come up with enough lifestyle inflations to be worth the trade offs.

Really good quality of sleep, plenty of exercise, quality time with my partner and other loved ones, leisure time spent doing casual activities, hobbies, time and energy to cook and eat together, etc, etc. All of these basics of a good life would have been sacrificed in the name of being able to buy shit that would never make up for those losses.

Time, energy, and emotional well being are all extremely high value resources, and exchanging them for more money is only a good trade up to a certain point.

Being able to buy things when it's convenient is definitely nice, but so is having incredible amounts of quality time with great friends.

I'm quite happy to go back to work part time, as long as it fits into the hours where I don't have anything else I would rather be doing. But if it impacted my self care, time with my friends, family, pets, etc, then it would be a bad trade for me.

+1 to "The question is always if the additional things you can purchase are more valuable than the time and energy it takes to be able to purchase them."

Not just spending but also assurance in the FIRE plan...$10M over $1M allows for horrible black swans in returns or unexpected expenses, and for much more giving, etc.

Now is it worth a 40 year old working a job they hate for an extra 20 years to go from $1M to $10M? I'd say of course not. An extra 1 year?  I'd say probably.

[Metalcat]

Not just spending but also assurance in the FIRE plan...$10M over $1M allows for horrible black swans in returns or unexpected expenses, and for much more giving, etc.

Now is it worth a 40 year old working a job they hate for an extra 20 years to go from $1M to $10M? I'd say of course not. An extra 1 year?  I'd say probably.

A leap from 1M to 10M in one year of work just isn't in the realm of possibility for any appreciable population of people though.

It's almost silly to even compare 1M and 10M. The folks who have the capacity to save 10M in a reasonable timeline just aren't going to quit at 1M. And the folks who need a good chunk of time to get to 1M just aren't ever going to get to 10M.

Compare 1M to 3M and then we'll start having a really meaningful conversation, because having three times as much money is A LOT, and also a very realistic, very tangible decision a lot of folks around here have to make, since for a lot of folks around here 1M is way too low, 2M is better, and 3M+ might just require a bit too much of a work trade off to make it optimal.

Certainly, plenty of folks here have way more than 3M, but I'm basing this off of the recent thread about LeanFI, FI, FatFI numbers that were reported.

And again, the folks who can readily save more than 3M and still retire early were probably never going to even look at 1M as a remotely reasonable number in the first place, so it's a moot point.

The scale of the initial question puts either end into the "unrealistic" category for too many people.

[bluecollarmusician]

I love where this conversation has gone and seeing/hearing the input from everyone.

Of course there are many practical reasons why someone would continue to work past 1M (though not particularly aiming for 10M or whatever). 

There are so many posts I would like to respond to specifically, but I don't have a lot of time this morning to add I all I would like.  I mostly wanted to add a note to say that really 1M and 10M were really quite arbitrary numbers.  And I really meant this as a more philosophical question.

We spend plenty of time debating the time value of money- earning more, if it's worth more of your time in life once you have "enough".

What I am thinking of is sort of a Goldilocks Principle and how it may or may not relate to money.

I have thought about this in the back of my head- but @Metalcat  made a comment in another thread (will post here, sorry for the crossthread copy)

At first you seemed to be asking if people would literally prefer 250K or 1M, and virtually everyone will prefer 1M.

Now this comment was made in the context of retirement, and I have to agree - if you are intending to support yourself on income from assets in North America, it would be much easier to do this on 1M vs. 250k- and I agree that virtually everyone would prefer this.

Along this train of thought, I wonder over a variety of domains when this would still prove true.
Again- we all can understand if we are trading time for money, then there is a point where the value of remaining time will exceed the value of earning more money.

But in questioning our assumptions about money and the value of money- is more always better? If in the context of asset accumulation we virtually all agree that winning the 1M Lotto is preferable to 250k, then is 10M better than 1M?  Is 100M better than 10M?  Objectively is more money better?  If so, why?  If not, why not?

Does the Goldilocks Principle apply to asset accumulation?

I have enjoyed the variety of answers already- and especially people who have a strong concept of why "enough" is enough to them.  Also appreciate the comments about increased optionality in life with more assets at play.

Thanks everyone for your input....

[bluecollarmusician]

Despite having recently argued in another thread that more money was obviously better, I'm going to argue (seemingly) the opposite here.

Hi @Tass this is exactly the kind of reasoning that I intuitively "get" and also that makes me question the intrinsic value of money, and at what point is becomes a liability. Because I agree with this, and yet I recognize that it is also somewhat contradictory.  In practical terms obviously it is context driven... but it's a philosophical question- maybe not of interest to others, but it makes me very curious. 

[bluecollarmusician]

Like the lottery guy bacchi mentioned, more money becomes a liability when it attracts attention.

This is one excellent example that I thought of as well- at what point it is impossible to maintain anonymity.

[Dicey]

I mean -- better how? Better for what purpose? "Better" is a vague word. Whether $10M is better depends on your goals, and on what it would cost you to get to $10M.

I sometimes play the "what would I do if I had $10M" game. There are certain background worries that would go away, I think, though humans are built for worry, so maybe I'd find new things to focus on. Maybe I'd start a game company to bring to fruition a favorite video game idea. Maybe I'd shift my AA to such safe investments that I'd never worry about the stock market again.

But $10M has never been my goal. I'm quite content with my measly-by-comparison FIRE stash.

If a person gets to $1M early enough in life and keeps their spending in check, $10M can happen almost effortlessly.

[bluecollarmusician]

We are neither an extreme frugality community nor a Bogleheads-style wealth-porn community.

While I don't disagree, I think that is largely our own (in-community) perspective (of ourselves.). Like the Bogleheads, and whoever the richer-than-the Bogleheads are we think of ourselves as middle-class and making responsible financial decisions.  Most of the world would just view us all as very rich.  I am not making an argument for anything. Just pointing out that is how we view ourselves in-community, and is not how anyone outside the community would see us.  I would go a step further and say that your description of the ERE crowd and BH's crowd is also what allows the MMM community to sort of define it's place in the FIRE crowd at large, and within the larger economic community.  Most of the ideas of reasonable #'s are based on a sort of group consensus agreed (lol sort of) on in the community as "what is reasonable" so that's why the #'s say 1-4M or so seem "reasonable"  amounts- 10M seems "a lot" and 50M seems "ridiculous crazy wealth that no human should possess." 

It's all very perspective dependent on what "a lot" of money is, and I guess I am trying to question that perspective, and look at money a little more objectively.

[Metalcat]

I love where this conversation has gone and seeing/hearing the input from everyone.

Of course there are many practical reasons why someone would continue to work past 1M (though not particularly aiming for 10M or whatever). 

There are so many posts I would like to respond to specifically, but I don't have a lot of time this morning to add I all I would like.  I mostly wanted to add a note to say that really 1M and 10M were really quite arbitrary numbers.  And I really meant this as a more philosophical question.

We spend plenty of time debating the time value of money- earning more, if it's worth more of your time in life once you have "enough".

What I am thinking of is sort of a Goldilocks Principle and how it may or may not relate to money.

I have thought about this in the back of my head- but @Metalcat  made a comment in another thread (will post here, sorry for the crossthread copy)

At first you seemed to be asking if people would literally prefer 250K or 1M, and virtually everyone will prefer 1M.

Now this comment was made in the context of retirement, and I have to agree - if you are intending to support yourself on income from assets in North America, it would be much easier to do this on 1M vs. 250k- and I agree that virtually everyone would prefer this.

Along this train of thought, I wonder over a variety of domains when this would still prove true.
Again- we all can understand if we are trading time for money, then there is a point where the value of remaining time will exceed the value of earning more money.

But in questioning our assumptions about money and the value of money- is more always better? If in the context of asset accumulation we virtually all agree that winning the 1M Lotto is preferable to 250k, then is 10M better than 1M?  Is 100M better than 10M?  Objectively is more money better?  If so, why?  If not, why not?

Does the Goldilocks Principle apply to asset accumulation?

I have enjoyed the variety of answers already- and especially people who have a strong concept of why "enough" is enough to them.  Also appreciate the comments about increased optionality in life with more assets at play.

Thanks everyone for your input....

It's still not a black and white question.

Money doesn't mean anything in and of itself. It's what you can do with money that matters. So if you have a giant pile of money that you never use, it's essentially meaningless.

Now *having* that money will always create a sense of being able to do a lot with it, which will fundamentally alter how you exist in the world, so that does matter, but still, if you only need, say 2.5M for an optimal quality of life and you have 10M or 50M, the difference between those two is irrelevant.

I have two relatives worth somewhere in the 50-100M range, probably close to 50M, but honestly I have no idea at this point.

They live lives that are well within the 5M net worth range (not including primary residence). I doubt either have ever, ever spent 200K in a given year.

Neither have relationships with their children where they would leave them money. Neither travel much aside from work travel. Neither have expensive hobbies or cars, beyond what you might expect for someone with a few million. 

Having the wealth they do is literally irrelevant to them. They could each lose 80% of their wealth and experience literally zero impact on their lives.

It's a point of fascination to wonder what the hell will happen to their wealth when they die. They won't leave it to anyone they know, certainly no family members. I know one wants to have some form of foundation formed after she dies, but that shit doesn't really matter to her, she would do it while she is alive if she actually cared about benefitting anyone with her wealth. She just wants her name to live on in something aside from her son, in whom she has no pride.

What wealth means to someone is personal. It all comes down to what they actually do with it.

Having a lot of money also comes with a massive alteration in how the world treats you. So if you start doing shit with your money, folks will typically figure out that you have a lot of it, and living in our society as a person with wealth is...tricky, and can be remarkably isolating.

I've spent much of my life around quite wealthy folks, and not wanting to live in that community is a huge factor in the professional decisions I've made to actively *avoid* opportunities to make a lot of money.

Depending on your role, it can be impossible to be stealth about your wealth, just by virtue of your position of influence.

So yes, there is a "goldilocks" lifestyle for everyone, and how money plays into that is nuanced.

[Metalcat]

We are neither an extreme frugality community nor a Bogleheads-style wealth-porn community.

While I don't disagree, I think that is largely our own (in-community) perspective (of ourselves.). Like the Bogleheads, and whoever the richer-than-the Bogleheads are we think of ourselves as middle-class and making responsible financial decisions.  Most of the world would just view us all as very rich.  I am not making an argument for anything. Just pointing out that is how we view ourselves in-community, and is not how anyone outside the community would see us.  I would go a step further and say that your description of the ERE crowd and BH's crowd is also what allows the MMM community to sort of define it's place in the FIRE crowd at large, and within the larger economic community.  Most of the ideas of reasonable #'s are based on a sort of group consensus agreed (lol sort of) on in the community as "what is reasonable" so that's why the #'s say 1-4M or so seem "reasonable"  amounts- 10M seems "a lot" and 50M seems "ridiculous crazy wealth that no human should possess." 

It's all very perspective dependent on what "a lot" of money is, and I guess I am trying to question that perspective, and look at money a little more objectively.

I fully agree that our "norms" here are largely informed by the majority of folks here being fairly high income.

I never meant to imply otherwise. My points have all been around the fact that a range of 1-10M doesn't really capture the sense of the question being asked, it stretches too far into outlier territory for anyone close to either end of the question.

Virtually no one here aiming for 1M would find the trade offs to get to 10M reasonable. And almost no one who could reasonably achieve 10M would consider 1M reasonable. Of course there are always exceptions, but the vast majority of the population here wouldn't ever be in a situation to realistically contemplate 1M vs 10M as FI targets.

That's not to say that the folks here aren't significantly wealthy. That's not my point at all. My point is that most high earning folks who can save a few million and still retire early aren't likely to save either 1 or 10 million. So it detracts from the meaning of the question.

That's kind of like talking to someone who is considering buying a 30K car and asking is it better to buy a used beater or a Maserati. Their answer isn't going to give you meaningful insight into their car buying decision process.

[jeroly]

Putting up $10 million is a bit of a straw man. 
Virtually nobody looking at FIRE would consider the extra time necessary to get to a $10 million 'stache. 
You do find a few loonies like that in r/FatFIRE but most that are finding themselves in that position are less focused on the FIRE part and more on the 'becoming as Fat as possible' -er, make that the 'maximizing the exit from this business' part.

Comparing to $2 million, or $3, or even $4mm, though, ... a whole different story, lots of potential discussion.

I ran the numbers and if someone had saved the 401(k) maximum each year for the past 30 years and invested it in the S&P 500 index, they'd have $2mm today.  So very doable for anybody who had been taking a MMM approach over the course of a 30-yr career.

My personal opinion (YMMV) is that living in a VHCOL area on $40k/yr is possible, but not enough income to provide for many potential activities, and probably requires living in a peripheral suburb and/or in a shared living situation.  To some extent, you'd be scraping by. On the other hand, living in an LCOL area makes a $40k/yr expenditure level more doable (and potentially even luxurious in an expatFIRE situation in, say, Cambodia).

So it's all a balance.  It's very easy to minimize the value of not working when doing all these calculations, though - life's a precious thing, don't work more years than you have to if you're not enjoying the work!

I'd say that if you take a 'start low and go slow' approach to FIRE, though, you will probably see the 'stache slowly build over the years to a pretty comfy level even if not quite $10mm.

[Wolfpack Mustachian]

The poster mentioned taking the cost of day care, property tax etc away from the $210k a year. It obviously is heavily jurisdiction dependent, but as I mentioned land tax in my state, assuming $3m of investable assets, is approx $30k a year. Council rates on the same amount of property would be around $6k a year. So already you're $36k down, plus cost of daycare and whatever other expenses you have. I haven't even gotten into schooling, since hopefully the kids would be going to a selective school or on a scholarship, but the money gets chewed up quickly.

It's been one of MMM's main points from the very beginning that a "normal" middle class life can cost you an absolute fortune without feeling like much of an upgrade.

That's kind of a cornerstone philosophical concept for this community. That you can spend A LOT of money and still feel like you're treading water.

No one would argue that there aren't countless ways, locations, lifestyles, that could easily cost multiples of the national median income and still feel middle class and not wealthy.

Most people who make a lot of money don't feel wealthy for exactly that reason. That is the main argument for frugality. That finding creative ways to not spend that much on a basic middle class life is often a better option than trying to earn your way out of an expensive middle class cash crunch.

Just wanted to echo this as this point has resonated with me a lot lately. We are in a fortunate financial situation. We're not close to RE... Not FI either., but we're not doing bad.

I see so many others around that are in different and not as positive financial situations. The thing is, although we may make or have made some more overall than they do or have, it's not that much, and yet our financial situations are radically different.

It's not that people looking at our lives would think that we're doing terribly. I'm many ways, we look like we're spending tons of unnecessary money. Our house is larger than we need. We travel a lot.

There are other things though, that we avoid  The things that cost a fortune for others - eating out, nice cars on rotation, etc - we don't do them. They wouldn't make a meaningful improvement in our lives, and I doubt it's making a meaningful improvement in theirs.

It's taken awhile, but I've really started to not just intellectually but at a gut level, understand how basic habits that we've formed, coupled with compound interest, can make an incredible difference. I think it's hard to state too much that you can live a middle class, luxuriant lifestyle with really minimal sacrifices and do extraordinarily well financially.

[iris lily]

I like 2 million. Whenever I get much above that I make a large charitable donation.

What would I do with 10 million? I have annuitized enough to survive on, some set aside for assisted living/nursing home, and enough left over to do whatever I feel like doing. I don't like spending money frivolously.

I like 3 million, total assrts. That is supporting us nicely and I am giving nice chunks away.

[clarkfan1979]

Explaining how you could spend $210k per year (for example, on selective schooling) doesn't make it a not-rich amount of money, IMO.

People all over the world justify spending millions per year with this exact same "it doesn't go as far as you'd think!" line. But the definition of "rich" isn't "I couldn't even imagine how to spend all this money."

I recently read the book/sociology study "Uneasy Street" (recommended by @grantmeaname) and it's all about how very wealthy people (tens of millions) think about their money. One of the takeaways is that, apparently at any level of wealth, it's easy/comfortable to claim that you are actually middle class and the people richer than you are the ones who are *actually* rich. "That's just what it takes to live in NYC" is a common justification, but of course it's not true--that's what it takes to live their particular very comfortable lifestyle in NYC.

It made me reflect on the same "My level of wealth isn't REALLY rich" rhetoric that I've seen in the FIRE community (even though I acknowledge this is typically not comparable wealth to what's described in the book). And it made me want to try getting more comfortable with calling a spade a spade. If we're not rich yet at $1M, then we're certainly pretty darn close.

I was at my wife's 20-year high school reunion in summer 2022. I was speaking with the husband of one her friends from high school. We got along pretty good and he shared some personal information. He is a Physician and she is a nurse and they have two kids. I think one kid was in school and the other was definitely not in school. Maybe 1-2 years old?

He took a job in Phoenix (starting in 2-3 months) because he didn't think his current salary provided enough money to live the life he wanted in Denver. He really wanted to stay in Denver, but Denver was, "just too expensive", according to him. He also acknowledged that his income was very high and he didn't understand how other people making much less than them could afford to survive in Denver. He suggested that they pay was about the same, but could potentially have more upside long term. However, he suggested that because Phoenix is cheaper, his salary will go farther and get an immediate boost to quality of life.

I disagree, but it's not my life.



 

[twinstudy]

The poster mentioned taking the cost of day care, property tax etc away from the $210k a year. It obviously is heavily jurisdiction dependent, but as I mentioned land tax in my state, assuming $3m of investable assets, is approx $30k a year. Council rates on the same amount of property would be around $6k a year. So already you're $36k down, plus cost of daycare and whatever other expenses you have. I haven't even gotten into schooling, since hopefully the kids would be going to a selective school or on a scholarship, but the money gets chewed up quickly.

It's been one of MMM's main points from the very beginning that a "normal" middle class life can cost you an absolute fortune without feeling like much of an upgrade.

That's kind of a cornerstone philosophical concept for this community. That you can spend A LOT of money and still feel like you're treading water.

No one would argue that there aren't countless ways, locations, lifestyles, that could easily cost multiples of the national median income and still feel middle class and not wealthy.

Most people who make a lot of money don't feel wealthy for exactly that reason. That is the main argument for frugality. That finding creative ways to not spend that much on a basic middle class life is often a better option than trying to earn your way out of an expensive middle class cash crunch.

To be clear, I spend nothing like $210k a year - my annual spend is about 1/3 of that. And for the most part I plan to keep it that way. But I can see how others would be able to spend $210k a year and not feel like they are living a lavish lifestyle. My responses were in the context of another poster/s suggesting that these sort of figures were getting into lavish or profligate territory. If someone has the earning power to spend that kind of money readily, i.e. with a SWR of 3.5%, then I can see many uses to which the money could be put, even if I personally would try to avoid some of them.

I also agree with what you said, that $1m and $10m are mutually exclusive targets, and so for most standard middle/upper-middle class people the option for FIRE is really whether you go for something like $1.5m versus $2m or $3m, the former being more normal FIRE and the latter getting closer to FAT Fire. For most people, there is an upper bound beyond which they don't much care for more money. I think for most people that upper bound would be around $3m-$4m - only a few would care to go all the way to $10m. For myself, I think my upper bound would be $4m US ($6m AUD). At 3.5% SWR - after taxes 2.5% SWR - that unlocks $150k AUD a year indefinitely, which is good enough. I might still try to maximise my net worth solely for fun and for game-playing purposes but I have set a time limit to pull the retirement trigger based on meeting that bound. But for others their bound will be lower or higher.

[Log]

$10 million doesn’t go as far as it used to, especially in NYC, SF or SJ.

4% withdrawal from $10M is $400k/year.

I know plenty of people living very good lives in both NYC and SF who will never make $400k/year in their entire careers.

The Joneses in these cities are richer, and trying to keep up with them is potentially more ruinous than in a place where especially high incomes are rarer. But the fundamental cost of living is not even remotely close to 10x that of a modest locale where Mustachians happily live on $40k/year.

$10 million in San Jose would take maybe $2.5 million for a 2500 sq ft home. Frugally using a 3.5% SWR gets you $262k/yr.  State and fed taxes could easily be 20%, leaving you $210k.  Throw in some day care, property tax, Bay Area prices for food, gas, etc and suddenly you are not feeling so rich, right?

Daycare is a very short-lived expensive, and you don't need daycare if you're retired, so worrying about daycare in your withdrawal rate in perpetuity, and at a 3.5% withdrawal, and worrying about property taxes in CA (prop 13) is just hilarious levels of unnecessary anxiety.

Also just... don't live in San Jose? San Francisco, Oakland, Berkeley, or various Peninsula/South Bay suburbs that I'm not as familiar with have much better walkability/bikeability. I think one of the highest value takeaways from MMM is that you should design your life to not have to care that much about gas prices.

[spartana]

As to the OP: At my current expense level (which is pretty well grounded after being FIRE for many years) whether a million or $10 millon wouldn't really effect my spending. I like my current lifestyle and don't believe spending more would increase my happiness or satisfaction level (although spending less might!). So most would he given away. Im in the process of giving away some money I can't see that I'd ever need.

[dividendman]

Not to mention that gas should be such a small fraction of your overall spending that any non-crazy increases shouldn't matter to your budgeting

[spartana]

Not to mention that gas should be such a small fraction of your overall spending that any non-crazy increases shouldn't matter to your budgeting

Lol that and car insurance, registration/tags, smogging, repairs and maintence, car replacement, etc. Of course I make up for it in food consumption to pedal my stupid bike everywhere ;-).