The Money Mustache Community
General Discussion => Welcome and General Discussion => Topic started by: bluecollarmusician on July 27, 2024, 10:26:23 AM
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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?
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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)?
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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.
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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
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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.
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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.
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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.
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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!
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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.
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$10 million doesn’t go as far as it used to, especially in NYC, SF or SJ.
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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.
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$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.)
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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.
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$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...
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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$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?
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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/
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$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).
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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."
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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.
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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.
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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.
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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.
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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.
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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....
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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$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.
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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.
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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
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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 ;-).
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I might still try to maximise my net worth solely for fun and for game-playing purposes
This perspective I really don't get. I mean, I get the gamification part, but money is power. "I might try to accumulate as much power as possible, just for fun--I'm not going to DO anything with it" is a very confusing stance to me. Isn't there a point at which you might as well give it away?
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I might still try to maximise my net worth solely for fun and for game-playing purposes
This perspective I really don't get. I mean, I get the gamification part, but money is power. "I might try to accumulate as much power as possible, just for fun--I'm not going to DO anything with it" is a very confusing stance to me. Isn't there a point at which you might as well give it away?
I treat my budget like that. I don't really need to look for better deals or optimize stuff but I do. Each year I want to spend less than the last... at least in inflation adjusted terms. For the past 3 years I've spent less nominally (so a LOT less inflation adjusted), it's fun. My spending is down to 2.5% of my NW when I retired (I FIRED 2 years ago). My planned spending was about 3.5% when I retired.
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I might still try to maximise my net worth solely for fun and for game-playing purposes
This perspective I really don't get. I mean, I get the gamification part, but money is power. "I might try to accumulate as much power as possible, just for fun--I'm not going to DO anything with it" is a very confusing stance to me. Isn't there a point at which you might as well give it away?
As you noted, humans love playing games and they are a good way to mine dopamine. So, while I don't want to work past my mid-40s and I do want to retire once I get to my stash figure, I find it fun to try to gamify things in the meantime. Past a certain point, most of it is game playing, whether people choose to accept that or not, so I might as well enjoy it. The 'power' of money is secondary and relatively inert to me, so if it means nothing to me, then I plan to do nothing with it. I might give some away, or spend some, but like I said money once earned is relatively inert.
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I don't think gamifying your budget is comparable to trying to accumulate the most money possible just for the fun of it. Again, the gamification isn't the part that confuses me. I am just baffled by the idea that money is worth saving simply to have it rather than for increased safety/spending/giving.
Maybe that's not what you meant and I read the original post too literally. Thank you for feeding my curiosity regardless. I think I'm on the same page as you about money feeling "inert" in my life, but personally if I have money that means nothing to me, I figure I might as well give it to someone it will mean a lot to.
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Well, happiness levels tend to increase with more money so that’s one marker.
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Well, happiness levels tend to increase with more money so that’s one marker.
Do you really believe there's no upper bound to that effect?
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I don't think gamifying your budget is comparable to trying to accumulate the most money possible just for the fun of it. Again, the gamification isn't the part that confuses me. I am just baffled by the idea that money is worth saving simply to have it rather than for increased safety/spending/giving.
Maybe that's not what you meant and I read the original post too literally. Thank you for feeding my curiosity regardless. I think I'm on the same page as you about money feeling "inert" in my life, but personally if I have money that means nothing to me, I figure I might as well give it to someone it will mean a lot to.
As you say, we are on the same page as money being inert. The approach to FatFIRE is that you pick a stash number, work towards it (by increasing earning and keeping spending in check and reducing passive money drains) and you plot a course to it. With some luck and some diligence, you end up having (most likely) a 'surplus'. The same mechanism that gets you to the FIRE target in the first place is also the mechanism that most likely will produce a surplus, as you get good at the game. And of course having a surplus gives you increased safety and comfort and choices down the track. So all that is good in a general sense.
We both agree that the surplus is inert. The only difference is that you are motivated to define and give away the surplus, and I am not. Firstly because I see no point in reducing my safety barrier, or having to precisely figure out what the 'safety margin' is (impossible to figure out anyway as no one can see the future). Secondly and independently because I see no point in giving. I already contribute via taxes. I have a few small causes I care about, but on a broad level, I don't otherwise care, so I choose not to.
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Well. I guess the difference is the not caring then.
To be 100% clear, I wouldn't call it a surplus until after achieving a very safe margin. I'm not advocating for a tight safety margin and I won't tell you not to keep saving for a 3% WR. But there's a point at which saving more is no longer meaningfully increasing your safety. And at that point I feel like the surplus might as well go to something useful.
I have been intentionally vague about WHAT to give to in this discussion. Whatever your small cause is, even if it's just treating your friends, seems to me like a better use of money that you don't need than letting it sit around unneeded.
Thanks for explaining your perspective; I disagree with it but I understand it better now.
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$10 MM is better. But not ten times better.
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Well. I guess the difference is the not caring then.
To be 100% clear, I wouldn't call it a surplus until after achieving a very safe margin. I'm not advocating for a tight safety margin and I won't tell you not to keep saving for a 3% WR. But there's a point at which saving more is no longer meaningfully increasing your safety. And at that point I feel like the surplus might as well go to something useful.
I have been intentionally vague about WHAT to give to in this discussion. Whatever your small cause is, even if it's just treating your friends, seems to me like a better use of money that you don't need than letting it sit around unneeded.
Thanks for explaining your perspective; I disagree with it but I understand it better now.
Yep, it is quite hard to know the surplus till you get there - and it's an ongoing exercise to define the surplus, since as you suggest, there is a lot of utility to having a safe margin.
I already do treat friends, but I didn't define that as 'giving', so maybe it's a definitional thing. Once I'm old, and I can more clearly define the surplus, I might well give in a more obvious charitable sense. I don't know that I'd want my money sitting around doing nothing - that doesn't seem useful, but then, it also doesn't seem hugely *not* useful...I'd have to think about it at that later date. So maybe I'm not so far from your position. But the main thing is, to be honest, in making the money, I am not thinking about "what I can do with it down the track". I am thinking, how do I win the game of FIREing. And I think this kind of game approach to FIRE is common among many adherents...and it is probably what leads to people with $10m+ stashes.
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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.
I agree - we hit $1M about 14 years ago and are now approaching $10M using the STUN approach (Strategic Total Utter Neglect). Our brains are simply not wired to understand exponential functions.
The main thing for me is that I don't have the imagination to spend a lot of money. I have everything I wanted as a 16 year old (except for the Lamborghini Countach - which I have crossed off my list 😀).
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Well, happiness levels tend to increase with more money so that’s one marker.
Do you really believe there's no upper bound to that effect?
I’m not sure.
For the person who would be happy with a nice apartment in the city and a second home on the beach in Florida half or more of a $10m stash could be spent on real estate. Say that leaves $5m for a retirement WR of $175k. Taxes and carrying costs on the residences could take maybe $125k, leaving about $4k a month to live. Would she be happier to spend $5k+ a month? Maybe there’s family who could use a little help…maybe there’s grandkids?
Perhaps there’s a limit. But $10m—nice as it is—is probably not it for many people.
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As long as the $10M comes from passive growth in investments while I’m out living my best life, I’m not sure why anyone would put in effort to stop that from happening. Sure, you end up paying more taxes which feels annoying, or have to put in more effort to mitigate taxes and perform stealth wealth (assuming you don’t want others to know you live below your means)…. But these trade offs are hardly enough to make me want to go all cash and stop my stache from growing. It’s nice to at least eliminate the ‘money problems’ from life - doesn’t fix everything though.
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Well, happiness levels tend to increase with more money so that’s one marker.
Do you really believe there's no upper bound to that effect?
Also, correlation is not causation. Ron has a PhD, he knows this.
Happiness also tends to correlate with autonomy, so it's no surprise that folks who have more professional autonomy are happier, and that also happens to be the folks who make more money.
But just because the autonomous, high earning folks are happier doesn't mean the average lower earning person can be happy trying to get to those higher levels.
There's a selection bias at play. The happier folks at those higher levels are the ones who don't burn out along the way.
There's a logical assumption happening that doesn't make sense. You can't assume that lower-level, lower paid folks are making less money because they don't want to make more. Most of them are camping at the fucking bit to make more.
Not everyone can just *choose* to become a happy, autonomous, well compensated executive. There's a selection bias at the top of the wealth pyramid.
But in a consumerism driven world, is it any surprise that virtually everyone wants more money, and that the people who haven't managed to get it are less happy???
But MMM folks aren't that same population. We also have a major selection bias. We're largely populated by the folks who aren't as driven by consumerism as a source of happiness, so general population data isn't necessarily generalizable to our subset.
Populational correlation data is useful, but not necessarily for guiding individual lifestyle decisions. It is worth looking at that data and asking oneself, why might I be different? What life circumstances and philosophical perspectives might make me an outlier to that data?
For me it's that I was raised by OG mustachian hippies, I'm related to extremely miserable wealthy people, and I've been studying human minds and bodies my entire life and believe that human connection, community, exercise, and time in nature are more valuable to my happiness than spending on shit.
I HIGHLY value financial security and am probably the most conservative person here, but I'm also extremely conservative about allowing my money-earning activities to detract from my other quality of life activities.
Everything in life is a trade off. For me, making a fair amount of money is an easy and enjoyable part of my best life. Yay for me, not everyone has easy access to that. But the second that work impacts my self care, time with loved ones, access to as much nature as I want, then the alarm bells go off and I pull back from profits and focus on other resources.
So yeah, more money is great, but it depends entirely on what it costs you to get it. And sometimes, the cost of getting more money is actually too expensive.
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Well, happiness levels tend to increase with more money so that’s one marker.
Do you really believe there's no upper bound to that effect?
I’m not sure.
For the person who would be happy with a nice apartment in the city and a second home on the beach in Florida half or more of a $10m stash could be spent on real estate. Say that leaves $5m for a retirement WR of $175k. Taxes and carrying costs on the residences could take maybe $125k, leaving about $4k a month to live. Would she be happier to spend $5k+ a month? Maybe there’s family who could use a little help…maybe there’s grandkids?
Perhaps there’s a limit. But $10m—nice as it is—is probably not it for many people.
I have a beautiful city apartment and a summer home on the ocean in one of the most stunning locations on earth. They cost me less than 300K combined.
In a consumerism society, there will always be a way to spend more money on things that are relatively modest in terms of their benefits. No one is arguing that there isn't.
That's a feature of the MMM philosophy, not a flaw.
By focusing on spending less, you can sometimes be pushed to be more creative about your options and truly assess the value of them.
I always wanted a waterfront summer home. This is just something I always knew I wanted. By focusing on finding less expensive options, I pushed myself to explore less common locations. I made hundreds of phone calls researching different areas of the country.
I landed on a spot in the middle of nowhere, talking to a real estate agent who used to work in the same industry I used to work in. He and his wife were about our age, child free, similar professional backgrounds and interested. They were from Toronto.
They had taken a vacation out here one year and fell so in love with the area that they impulse bought a house that weekend. Then after coming here for a few summers, they dreaded going back to Toronto, so they left their life, their careers, and moved here.
I was like...well fuck, that's a hell of an endorsement.
There was a property that would make for a good AirBnB investment, so I figure "fuck it" I would buy it, spend a summer renovating it for rental, but also see if this place was as magical as it sounded.
And that's how I ended up buying a property 31 hours away on a remote island off of an island at the edge of the earth in a place I had never even visited. It was also an insanely good deal due to timing, so I didn't want to pass up this particular property.
Within a few weeks of getting here, I absolutely fell in love with the place and the people and now we live here as much as humanly possible and literally everyone who talks to me can see that I absolutely light up when I talk about it. My therapist says buying this house was the smartest decision I've ever made in my entire life.
My point is that if I had endless money and no reason to be actively frugal, I wouldn't have pushed myself to research the entire country, I would have just purchased a lovely river front cottage within an hour of my house, and it would have been lovely, but not massively happiness increasing like this house is. This location is world famous for its astounding nature and incredible people.
Having near-limitless money is convenient, but convenience is not always optimal. Frugality forces the kind of analysis and creative thinking that really pushes you to be introspective about the value of your lifestyle decisions.
Having the money to solve problems with obvious solutions is AMAZING. I'm a big fan of having enough wealth. The amount of cash I've thrown at health problems in the past few years is substantial and I'm insanely grateful to have just piles of capital to throw at expensive problems. I don't want to have to contemplate if thousands of dollars on walking aides is worth the investment, I just buy the expensive walking aides no matter how briefly I benefit from them.
BUT, while there are many decisions out there that simply benefit from more money, there are many, many more that benefit from deeper introspection and insight about self and happiness.
I'm sure that for many people, the expensive city condo and the expensive summer home really are the optimal choice, and spending millions on them really is the best use of their resources. Cool, good for them. But my point is that the cornerstone philosophy of this place is that people put blinders on and just look at the more expensive options as default "better," when there are often creative solutions outside of someone's comfort zone that might be far superior and just not considered.
I found MMM when DH and I were making absolute shit piles of money and we were kind of listless and bored with the lifestyle that more money could buy us. Neither of us were delighted with our jobs either and were on track for climbing the ladders we didn't really want to be on.
Our superiors were wealthier, but utterly miserable and we didn't really want their lives. Mustachianism pushed us to really quantify and qualify what we wanted from our lives, and it turned out that a much, much lower spend produced better outcomes.
Which worked out AMAZINGLY well when I became suddenly disabled and we lost my income, which was double his. So having an AWESOME quality of life that we could readily afford already on his lower income was fucking phenomenal.
And since becoming disabled, that same creative, frugal decision making has resulted in our quality of life steadily increasing since I lost my career.
So while I fully understand that other people have different preferences and lifestyles that truly benefit from more than 10M, ours really wouldn't. And we've put in an enormous amount of work reflecting and communicating to figure out what truly works for us.
I would say if a couple can go through losing a career, the bulk of their income, one partner developing severe chronic pain and losing their ability to walk properly, all during the pandemic, and they manage to come out the other side much happier, then something went right.
And I solidly credit that to our earlier years of exploring the value of spending less to get more.
A bunch of us recently did the Yale course on the Science of Well Being, and virtually every single lesson in the course was something that DH and I figured out through frugality. Not because we always spent less, but because we critically assessed every single trade off in our lives for the maximum benefit.
DH and I now both have careers we absolutely love. We both pivoted away from making more money and towards doing more meaningful and enjoyable work. We both have a deep commitment to health and fitness. Frugality pushed us both to give up alcohol, which actually makes socializing more fun and allows for much richer memories. It pushed us bot to socialize with friends at expensive restaurants, but to do challenging things together, which creates deeper bonds. It pushes us to travel with our animals instead of kenneling them, and that pushes us to try out some really unusual, off the beaten path spots, and focus more on nature-based adventures than tourism.
Most of all, and this is by far the most important thing. It's pushed us to really, heavily invest in loved ones. A 3 hour phone call with my dad on a Sunday morning, sitting on my deck that my neighbour built for me for free, watching the whales play in the harbour costs me a few cents for the tea bags in my pot, and is worth more than any activity I could go out and pay for.
I've worked with seniors for many, many years and few regret not spending more, but most regret not spending more time investing in love.
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1M isn't enough for me so 10M iwould be better but I personally wouldn't see much of a change in lifestyle from 1.5M to 10M. It could backfire with me losing some of my hobbies (home projects and fixing things like cars). I could see how having more money might take those away.
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1M isn't enough for me so 10M iwould be better but I personally wouldn't see much of a change in lifestyle from 1.5M to 10M. It could backfire with me losing some of my hobbies (home projects and fixing things like cars). I could see how having more money might take those away.
If you have a somewhat frugal/savings mindset and are a bit handy you doing home projects until you can’t.
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I think what the OP was trying to get at (in a very convoluted way) was if you were to be given $10m for free, would you give up a portion of it because it would be "too much money". I.e, $3m is objectively better than $10m. If we take into consideration the tradeoff of earning $10m then of course the answer is no for most people. Because most people quit around $1-3m. So since the second scenario is clearly "no", I'm assuming the first question. And I would gladly have $10m for free and I'd rather have $100m for free. I think people here aren't being creative enough if they can't find ways to enjoy $10m if given for free. I'd buy a beautiful coastal house for $5m. If I had a billion I'd start thinking about buying a sports team for fun. Where I think the tipping point to hassle compared to enjoyment would be once you are in the top 100 richest people. Then you become famous for your wealth and you start needing security and deal with stalkers and media harassment. So maybe $10 billion+, is the threshold where I'd start to say "no, thank you" if given for free.
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As long as the $10M comes from passive growth in investments while I’m out living my best life, I’m not sure why anyone would put in effort to stop that from happening. Sure, you end up paying more taxes which feels annoying, or have to put in more effort to mitigate taxes and perform stealth wealth (assuming you don’t want others to know you live below your means)…. But these trade offs are hardly enough to make me want to go all cash and stop my stache from growing. It’s nice to at least eliminate the ‘money problems’ from life - doesn’t fix everything though.
I wouldn't take a paying, restrictive j-o-b again for anything. I would never go all cash either. My money grows passively, so that I will be able to do some great things with it, in my lifetime and posthumously. I give a lot of time and money to causes I care about now. I enjoy thinking about the ways I will be able to help them once I'm gone, the same way I do when I'm alive, only bigger.
Example: the Thrift Shop where I volunteer gives all their profits to our fantastic Trauma Center Hospital. It needs a face-lift and some new fixtures. We don't do it, because it would involve closing the store and loss of revenue. I could make a donation large enough to pay for the remodel and cover the lost income as well. We would love to have an electronic gate, and repave the parking lot. Yeah, I can make my donation large enough to include that as well.
I have ideas such as this for every charity I support. I'm letting my army of green soldiers continue to work for me so they can continue my work when I'm gone.
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I think what the OP was trying to get at (in a very convoluted way) was if you were to be given $10m for free, would you give up a portion of it because it would be "too much money". I.e, $3m is objectively better than $10m. If we take into consideration the tradeoff of earning $10m then of course the answer is no for most people. Because most people quit around $1-3m. So since the second scenario is clearly "no", I'm assuming the first question. And I would gladly have $10m for free and I'd rather have $100m for free. I think people here aren't being creative enough if they can't find ways to enjoy $10m if given for free. I'd buy a beautiful coastal house for $5m. If I had a billion I'd start thinking about buying a sports team for fun. Where I think the tipping point to hassle compared to enjoyment would be once you are in the top 100 richest people. Then you become famous for your wealth and you start needing security and deal with stalkers and media harassment. So maybe $10 billion+, is the threshold where I'd start to say "no, thank you" if given for free.
I'd take any amount of free money offered to me. (ETA: I also would not stop my money from growing just to end up with less of it.) I just wouldn't keep the surplus or spend it on myself. It isn't so much that having $3M is better than having $10M, it's that I can think of so many better uses for $7M than sitting in my brokerage account, not even offering meaningful additional security. And I don't think whatever marginal happiness increase I'd get by spending $7M is worth more than what that money could do making the world better.
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If 1M is enough, is 10M enougher?
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If 1M is enough, is 10M enougher?
Yes.
With 10 mil there's no reason you can't live exactly the way you would with 1 mil - you just have more options and safety. The question isn't is 10 better than 1. This is obviously and trivially true. The question is, is the extra you've got to do to get to 10 worth it for the options and safety that 10 will give. That's very situation and person dependent.
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It strikes me that this thread is like the mustachian version of "What would you do if you won the lottery?" Fortunately, we would be a lot more responsible with it than the average joe-or-jane.
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If 1M is enough, is 10M enougher?
Yes.
With 10 mil there's no reason you can't live exactly the way you would with 1 mil - you just have more options and safety. The question isn't is 10 better than 1. This is obviously and trivially true. The question is, is the extra you've got to do to get to 10 worth it for the options and safety that 10 will give. That's very situation and person dependent.
Also, making more money doesn't necessarily increase your safety.
People who experience burnout trying to earn more can have lasting, permanent cognitive damage. Not to mention the physical toll of neglect on your body that many people experience because of prioritizing work and money.
Just look at the state of our population. These folks aren't doing well, and work is a huge time and energy suck making the things that truly matter a lot harder to maintain.
If you can make more money while optimally investing in you and your family's well being, then awesome. I'm doing that and it's great.
But if crucial resources are being harmed by the pursuit of more money, then it's not increasing your safety, because a lot of the shit you want to protect doesn't get safer with more money than you need.
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For me, there is no question that 10M is better than 1M. This is in absolute terms and not factoring in the additional time/effort it would take to obtain the difference.
More Flexibility
More Security
Increased ability to be generous
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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.
I actually feel like I didn't stretch it far enough:
if 1M is good, and 10M is better, is 50M better> i.e. what do people ACTUALLY think about money independent of time and FI/RE?
I have found people's replies fascinating, and definitely given me stuff to think about- but most of it is rooted in practical things like: "most people wouldn't find it worth it to work that long, etc."
@Dicey yes- it does feel like a "what would you do" mustachian lottery question, but what I am really trying to sus out is objective value of money, and how people view that.
If 1 hamburger is good, is 10 better? not usually.
If 1 wife is good is 10 better? Definitely not- 1 is more than enough :-p
If 1 week of full time with family is good, is full time living with family better? Or time reading, or exercising, or walking on the beach, or riding bikes- or whatever: for most things even things you love "more" is not always better- it's all about balance.
Now money, and money "like" things are absolutely different: it's easier to store than hamburgers, and it doesn't get jealous like a wife.
So my question is from the POV of readers here is more money unique like that, where "more is just always better."
I am dubious about this, and can't think of anything off the top of my head where there is no tipping point. But it seems from most the replies that people think absent other constraints, more money is pretty much better. I am dubious about this- I think that value usually comes from contstraint (i.e. a limited supply.) As F.Scott told us- "There is no boredom like that of the very rich." (or something like that...)
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Hi @wageslave23
What I was trying to ask was (as the title of the thread says):
If 1M is good, is 10M better?
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?
I think that's exactly what was trying to ask... not sure why you would think that what I "meant" was
I think what the OP was trying to get at (in a very convoluted way) was if you were to be given $10m for free, would you give up a portion of it because it would be "too much money". I.e, $3m is objectively better than $10m.
?Not sure where you got that?
Anyway- in a very convoluted way, you actually answered from your pov very well- thanks:
I would gladly have $10m for free and I'd rather have $100m for free.
From your POV- more money is always better, up to a high limit of perhaps 10billion +. Reasoning being that there are many creative ways to spend it, and more is better.
Although not a clear consensus it seems like the tendency is that more is better.
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Wow, solid advice from @Metalcat as usual. All that spoke to me, but especially the part about the pets.
I spent some time walking with my sis on this trip, and she asked when I was going to Hawaii, or Alaska, or whatever. And...I'm tempted, but man I hate flying. And did I mention I'm still suffering from whatever I had on this trip? So tired.
We are very very likely going to adopt a dog in the next 2 weeks. It makes traveling difficult. We typically hire someone to stay in our house. But...why go to Hawaii and hire someone, when you can drive to Bass Lake at Christmas and take the dog? I'm aware they aren't the same type of vacation...
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I think what the OP was trying to get at (in a very convoluted way) was if you were to be given $10m for free, would you give up a portion of it because it would be "too much money". I.e, $3m is objectively better than $10m. If we take into consideration the tradeoff of earning $10m then of course the answer is no for most people. Because most people quit around $1-3m. So since the second scenario is clearly "no", I'm assuming the first question. And I would gladly have $10m for free and I'd rather have $100m for free. I think people here aren't being creative enough if they can't find ways to enjoy $10m if given for free. I'd buy a beautiful coastal house for $5m. If I had a billion I'd start thinking about buying a sports team for fun. Where I think the tipping point to hassle compared to enjoyment would be once you are in the top 100 richest people. Then you become famous for your wealth and you start needing security and deal with stalkers and media harassment. So maybe $10 billion+, is the threshold where I'd start to say "no, thank you" if given for free.
I've often thought about what I'd do if I found $100m lying around, which is about $94m more than I'd ever really need for FIRE purposes. I think I would hire someone to spend $94m buying up 85 or so rental properties, painting each of their roofs a funny colour (say purple) and then see if I could get enough income over time to have a whole neighbourhood with purple roofs. I'd keep the rest of the money for the whopping big land tax bill that I'd be accruing. I think I'd just do something nominal like that, as I cannot think of any real use for the money otherwise.
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Hi @wageslave23
What I was trying to ask was (as the title of the thread says):
If 1M is good, is 10M better?
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?
I think that's exactly what was trying to ask... not sure why you would think that what I "meant" was
I think what the OP was trying to get at (in a very convoluted way) was if you were to be given $10m for free, would you give up a portion of it because it would be "too much money". I.e, $3m is objectively better than $10m.
?Not sure where you got that?
Anyway- in a very convoluted way, you actually answered from your pov very well- thanks:
I would gladly have $10m for free and I'd rather have $100m for free.
From your POV- more money is always better, up to a high limit of perhaps 10billion +. Reasoning being that there are many creative ways to spend it, and more is better.
Although not a clear consensus it seems like the tendency is that more is better.
More money isn't always better though.
Having a ton of extra money can make it extremely challenging to exist in a world of extreme inequality. I mean, if you have WAY more money than you need and you just hoard it and don't feel some moral conflict, then...well...you have bigger issues than money can resolve.
This is a huge reason I've gravitated away from work that would be insanely lucrative. It's hard to hide certain levels of wealth, just by virtue of being affiliated with how you got it. The world becomes a different place and treats you very differently.
I have a personal preference for living and socializing among working class or lower middle class folks. I have plenty of upper middle class and upper class friends, but it's not at all my preferred population. Many of my current social circle are fishermen.
My relative wealth is already an ostentatious outlier in this community. Hell, the fact that I have all of my teeth makes me an outlier here, much less the fact that I'm on my 4th round of braces.
It would be remarkably difficult to coexist peacefully in this community if I were known to be in an extremely lucrative executive role with bonuses in the millions.
What I've seen up close from my 8 figure NW family members, and my ex's billionaire family is that enormous wealth can be unfathomably isolating. To possess a disproportionate share of what everyone around you wants can be incredibly difficult.
Imagine going to a restaurant with a bunch of families and the families can't afford for each person to have a meal, so they order one serving of fries and portion out a few fries to each kid. But you show up and order 10 full servings, take a bite or two from each plate, just getting WAY more food than you could ever possibly need, and they watch you just...not share any of it.
But if you do share, it becomes an expectation that you will always order 10 dishes, enough for everyone, and they don't even need to spend their money on fries, because 10 meals is nothing to you, you're going to order it anyway, because you like 10 different bites and you can afford it. But now you're also obligated to feed these families every single time. So other families join because they heard you buy everyone food.
At what point are you being used?
I'll never forget talking to an 8 figure NW clinic owner about how she never felt like herself with anyone because she had to be so vigilant to why anyone wanted to get close to her. She said that she felt like a blood bag around a pile of mosquitos. She was astoundingly lonely. A man who had similar net worth had what looked like tons of amazing friendships and he was known as the most likeable guy in the profession, but when probed, he too expressed profound loneliness. It was all an act, it was how he disarmed resentment for his success, but when his wife got cancer, the veneer shattered and he isolated completely because he wasn't actually close to anyone.
Obviously there are very wealthy folks who figure it out, and those folks are the ones who fit in with the other wealthy folks, who are comfortable in that community and enjoy their company.
I personally don't, I'll take a fisherman with a few missing teeth at a Newfie singalong any day over 99% of the many, many 10M+ NW folks I've met in my life. And a lot of people in that population don't have the temperament to fit in either, so they're kind of stuck there, struggling to fit in with the modest wealth folks and struggling to enjoy the company of fellow wealthy folks, and they just get fucking weird over time.
Most of the very wealthy folks I know who are happy grew up in wealth and that's where their community has always been. Granted, for every rich kid I know who grew up to thrive in that world, I know another, or several others, who have serious mental health and/or addiction problems.
Living with and among wealth can be remarkably challenging, so in no way do I think that it's a given that more wealth is better. I've seen enormous harms.
I'll take my little fishing village folks. They throw really fucking amazing parties.
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Two counter-points I would raise to that, although I also think generally @Metalcat raises good points:
1. You can earn lots of money and then put it into philanthropy, if you so desire. Earning lots doesn't prevent you from giving lots.
2. No one needs to know how much wealth you have. You can drive the same car (or buy a Ferrari but drive another car to work, if you even drive to work at all - I walk to work so no one knows what car I drive) and you can choose to live in the same house even if you have multiple other properties. People complaining about others knowing that they're rich, etc, almost always are the ones, themselves, telling others how rich they are. None of my colleagues knows what my net worth is.
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More money isn't always better though.
That is my opinion as well.
My observation is that even many (or most) even on these forums don't agree.
The story of your experience of life improvement post disability is a testimony to the nature of how difficulties and challenges in a unanticipated way can lead us to a much better life than we would have know otherwise.
Thanks for sharing...
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I mean, if you have WAY more money than you need and you just hoard it and don't feel some moral conflict, then...well...you have bigger issues than money can resolve.
I think this is the blunter version of what I've been trying to say, lol.
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I’m happy with what I have and don’t want any more. I don’t even want an inheritance, and have agitated not to receive one.
I live in a country with “free” healthcare. It isn’t entirely free. Most medications are on the PBS that are subsidised by the government, so they don’t cost much at all. There are a few that aren’t - experimental drugs, very expensive drugs that haven’t been proven to give decent outcomes… Most other healthcare is cheap, but not things like cosmetic surgery that’s just because you want to look a little bit better. Some people do get terrible diseases, like cancer, go through all the PBS drugs and then hear of the latest fancy drug that might cure them, and pay exorbitant prices for something that’s not proven enough to be on the PBS. I’d rather be in the position where I don’t have that money. We all need to be aware of our own mortality, and be accepting that we can’t have everything.
Similarly, I could want a very expensive house, but the fact that I don’t have that sort of money allows me to stop and assess what I really want in life. I actually don’t want anything large. I want a nice place, where my garden is my own that I can potter around in. I’m not in a neighbourhood where I need a manicured garden to reflect the rest of the street. I want a small place where I can tidy it myself, and think that it’s mine.
I love where I live. It’s just beautiful looking out on the mountains. I’m sure there are nicer places in the world, but I don’t think I’d be as happy elsewhere, so there’s no reason to have more money for something nicer.
FIRE has given me health, happiness and contentment. Much more than when I was working. I’ve been retired for fourteen years, and when I left work, my savings weren’t 25 times my work income, they were 25 times my budget, which was less. So I have already been in a situation where I had more money available to me, and I much prefer my current life with less.
$10million would just be too much. It would allow thoughtlessness to enter my life. It would complicate my life because I’d have to do something with it (even giving it away takes time from other things I’d much rather do). And in a world where more and more people know more and more about you, it’s becoming more difficult to be under the radar. After all, $10million puts you into the wealthiest 6% in the USA, and the wealthiest 0.02% in the world.
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I am dubious about this, and can't think of anything off the top of my head where there is no tipping point. But it seems from most the replies that people think absent other constraints, more money is pretty much better. I am dubious about this- I think that value usually comes from contstraint (i.e. a limited supply.) As F.Scott told us- "There is no boredom like that of the very rich." (or something like that...)
If that is the case, most of us are fortunate to have a constrained supply of money :)
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I can't speak to the 10M figure, but growing up I spent a lot of time and at times lived with a very close relative with many multiples of that, and I would absolutely choose the 1M over the, let's say, 100M. That level of wealth absolutely warps all of your relationships--your romantic relationships, your relationships with your kids, your friendships, your business relationships, all of it. The money is the third party to every relationship you have. Even among people with similar wealth, things are weird and competitive and distant in a way that they're just not for the "millionaire next door." Everybody at some level is hoping to get something from you.
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Two counter-points I would raise to that, although I also think generally @Metalcat raises good points:
1. You can earn lots of money and then put it into philanthropy, if you so desire. Earning lots doesn't prevent you from giving lots.
2. No one needs to know how much wealth you have. You can drive the same car (or buy a Ferrari but drive another car to work, if you even drive to work at all - I walk to work so no one knows what car I drive) and you can choose to live in the same house even if you have multiple other properties. People complaining about others knowing that they're rich, etc, almost always are the ones, themselves, telling others how rich they are. None of my colleagues knows what my net worth is.
At a certain point of wealth, it's extremely hard to hide by virtue of your connection to how you got it.
If you own an extremely valuable business, people will know. If you have an executive role at an extremely lucrative company, people will know.
It's just hard to have an 8-10 figure NW and manage to keep it really stealthy.
Up to 10M, some people can keep it pretty stealthy, but above that, especially if you've retired early, it's tricky not to leave a footprint. Like, I was just working for a startup founder. I can roughly guestimate his NW through a 2 min google of what he's affiliated with and the IPO info.
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I can't speak to the 10M figure, but growing up I spent a lot of time and at times lived with a very close relative with many multiples of that, and I would absolutely choose the 1M over the, let's say, 100M. That level of wealth absolutely warps all of your relationships--your romantic relationships, your relationships with your kids, your friendships, your business relationships, all of it. The money is the third party to every relationship you have. Even among people with similar wealth, things are weird and competitive and distant in a way that they're just not for the "millionaire next door." Everybody at some level is hoping to get something from you.
Exactly!
Massive wealth is not a benign force that just lets you buy shit when you feel like it. It's a force in and of itself that needs to be managed, and not always in pleasant ways.
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Two counter-points I would raise to that, although I also think generally @Metalcat raises good points:
1. You can earn lots of money and then put it into philanthropy, if you so desire. Earning lots doesn't prevent you from giving lots.
2. No one needs to know how much wealth you have. You can drive the same car (or buy a Ferrari but drive another car to work, if you even drive to work at all - I walk to work so no one knows what car I drive) and you can choose to live in the same house even if you have multiple other properties. People complaining about others knowing that they're rich, etc, almost always are the ones, themselves, telling others how rich they are. None of my colleagues knows what my net worth is.
At a certain point of wealth, it's extremely hard to hide by virtue of your connection to how you got it.
If you own an extremely valuable business, people will know. If you have an executive role at an extremely lucrative company, people will know.
It's just hard to have an 8-10 figure NW and manage to keep it really stealthy.
Up to 10M, some people can keep it pretty stealthy, but above that, especially if you've retired early, it's tricky not to leave a footprint. Like, I was just working for a startup founder. I can roughly guestimate his NW through a 2 min google of what he's affiliated with and the IPO info.
Yeah, I think you're right. What's the most wealth a person can accrue completely stealthily? Assume two earners both with high-paying but 'normal' jobs that won't generate any news or unusual interest from strangers. So say a law partner/McKinsey partner/surgeon type career. Two people on $1.0-$1.5m a year combined can save $500k-$750k a year after tax. Compounded over a 15 year-period of peak earnings and you'd get $7.5m-$11 mil without compounding, maybe $15m-$30 mil with investments and compounding. But even then, people at that success level start doing 'newsworthy' things like joining boards and foundations, setting up charitable causes in their own name, and otherwise having a high profile, all of which wrecks the stealth part.
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Two counter-points I would raise to that, although I also think generally @Metalcat raises good points:
1. You can earn lots of money and then put it into philanthropy, if you so desire. Earning lots doesn't prevent you from giving lots.
2. No one needs to know how much wealth you have. You can drive the same car (or buy a Ferrari but drive another car to work, if you even drive to work at all - I walk to work so no one knows what car I drive) and you can choose to live in the same house even if you have multiple other properties. People complaining about others knowing that they're rich, etc, almost always are the ones, themselves, telling others how rich they are. None of my colleagues knows what my net worth is.
You could live in this modest old house for decades, drive a battered old Cadillac, and eat McDonald's for breakfast despite having a few pennies saved (12 figures and counting).
(https://www.fancypantshomes.com/wp-content/uploads/2021/12/warren-buffett-house-omaha-2.jpg)
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Two counter-points I would raise to that, although I also think generally @Metalcat raises good points:
1. You can earn lots of money and then put it into philanthropy, if you so desire. Earning lots doesn't prevent you from giving lots.
2. No one needs to know how much wealth you have. You can drive the same car (or buy a Ferrari but drive another car to work, if you even drive to work at all - I walk to work so no one knows what car I drive) and you can choose to live in the same house even if you have multiple other properties. People complaining about others knowing that they're rich, etc, almost always are the ones, themselves, telling others how rich they are. None of my colleagues knows what my net worth is.
At a certain point of wealth, it's extremely hard to hide by virtue of your connection to how you got it.
If you own an extremely valuable business, people will know. If you have an executive role at an extremely lucrative company, people will know.
It's just hard to have an 8-10 figure NW and manage to keep it really stealthy.
Up to 10M, some people can keep it pretty stealthy, but above that, especially if you've retired early, it's tricky not to leave a footprint. Like, I was just working for a startup founder. I can roughly guestimate his NW through a 2 min google of what he's affiliated with and the IPO info.
Yeah, I think you're right. What's the most wealth a person can accrue completely stealthily? Assume two earners both with high-paying but 'normal' jobs that won't generate any news or unusual interest from strangers. So say a law partner/McKinsey partner/surgeon type career. Two people on $1.0-$1.5m a year combined can save $500k-$750k a year after tax. Compounded over a 15 year-period of peak earnings and you'd get $7.5m-$11 mil without compounding, maybe $15m-$30 mil with investments and compounding. But even then, people at that success level start doing 'newsworthy' things like joining boards and foundations, setting up charitable causes in their own name, and otherwise having a high profile, all of which wrecks the stealth part.
Also, I've worked with exactly those people. The public actually tends to assume that doctors and law partners have a lot more wealth than they actually do. So it's hard to be stealth when you have a job title that screams wealthy to the average person.
And within your own professional community, it's pretty easy to tell who is making more and who isn't, and it's pretty easy to tell what they're spending on or not spending on. So it's pretty hard to hide wealth. You can maybe blue the edges of exactly how much wealth, but it's actually pretty hard to hide with just a bit of key information about someone.
What is fairly easy to hide is debt. A heck of a lot of people appear more wealthy than they are, but have lost tons of money in business and gambling/addiction. But it's very very hard to hide wealth if people know what your job was, how long you worked at it, and what your basic lifestyle is.
It's much, much easier to stealth financial fire straights than it is to stealth substantial wealth.
It's easier to stealth a few million because of what we've been talking about all along. It's very easy to spend a fortune on a "normal" middle class life. So if your household makes 100-300K/yr, it's absolutely feasible that you're living a middle class looking lifestyle and blowing the bulk of that income.
Meanwhile if your Mustachian, you might be living a pretty nice "normal" middle class looking life and spending a fraction of that.
That's where stealth comes in, when the cost of a middle class lifestyle can absorb most of your estimated income. But at certain income levels, you really just exceed what could be reasonably spent on "normal" and it starts becoming self-evident when you don't inflate your lifestyle.
So if it's fairly easy to figure out that you make around 7 figures per year, and you aren't chartering yachts for family vacations, people are going to add 2+2 and find that it equals shit tons of money in the bank.
It doesn't even need to be newsworthy. If you were the president of a corporation, people around you will know that, and someone will figure out roughly what your comp was, and that information is socially valuable, so eventually most people will know. And it doesn't take much to observe your lifestyle.
It's just not that easy to hide basic information about yourself without engaging in very active obfuscation and deception, which is really fucking hard on a long time scale and not exactly pleasant as a day-to-day way of living.
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Two counter-points I would raise to that, although I also think generally @Metalcat raises good points:
1. You can earn lots of money and then put it into philanthropy, if you so desire. Earning lots doesn't prevent you from giving lots.
2. No one needs to know how much wealth you have. You can drive the same car (or buy a Ferrari but drive another car to work, if you even drive to work at all - I walk to work so no one knows what car I drive) and you can choose to live in the same house even if you have multiple other properties. People complaining about others knowing that they're rich, etc, almost always are the ones, themselves, telling others how rich they are. None of my colleagues knows what my net worth is.
You could live in this modest old house for decades, drive a battered old Cadillac, and eat McDonald's for breakfast despite having a few pennies saved (12 figures and counting).
(https://www.fancypantshomes.com/wp-content/uploads/2021/12/warren-buffett-house-omaha-2.jpg)
Not hard to do when you have a $13 million dollar beach house in Laguna Beach CA. But kudos to him as he picked it up for $150,000 in 1971 (the same year my folks bought a place 3 bedroom SFH in OC for $21k).
But this is a good example of wealth allow g you to buy things that may not necessarily bring you more happiness and maybe just cause more headaches. Headaches and unhappiness you may not realize until after trying all the fancy things that society tells you are THE BEST Things to buy and own and do. And because you have the money to do so you cam spend much of your time trying to live that way. And spend just as much time trying to unravel the expensive and time consuming choices you made verses ones you really enjoy more. Advertisers speak and those with money listen! Us low income folk (of the mustache sort) know better.
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But you don’t have to buy headache inducing, high maintenance stuff just because you have 10M or more. Maybe it gets harder for some folks to resist? But not for a true Mustachian. I still drive my 2015 Honda Fit and love being carefree about dings, parking spaces, being robbed, etc. We will probably also downsize our home once our kids move out. The only thing we spend more on is travel, but nobody seems too interested in out NW. Maybe being an engineer and teacher helps, but more apt titles would be investors and philanthropists…
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Hi @wageslave23
What I was trying to ask was (as the title of the thread says):
If 1M is good, is 10M better?
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?
I think that's exactly what was trying to ask... not sure why you would think that what I "meant" was
I think what the OP was trying to get at (in a very convoluted way) was if you were to be given $10m for free, would you give up a portion of it because it would be "too much money". I.e, $3m is objectively better than $10m.
?Not sure where you got that?
Anyway- in a very convoluted way, you actually answered from your pov very well- thanks:
I would gladly have $10m for free and I'd rather have $100m for free.
From your POV- more money is always better, up to a high limit of perhaps 10billion +. Reasoning being that there are many creative ways to spend it, and more is better.
Although not a clear consensus it seems like the tendency is that more is better.
Sorry, you're op may not have been convoluted, but several posters misinterpreted your op to mean "is it worth working for $10m". Which for most people the answer is clearly "no". Your original post would have been more clear if you had used a higher number such as $50m. Because again most people would clearly rather have $10m over $1m if they didn't have to work for it. So adding the qualifier that you don't have to work for it and using a higher number would be helpful to zero in on the question. But otherwise it's now become a very interesting discussion.
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Sorry, you're op may not have been convoluted, but several posters misinterpreted your op to mean "is it worth working for $10m". Which for most people the answer is clearly "no". Your original post would have been more clear if you had used a higher number such as $50m. Because again most people would clearly rather have $10m over $1m if they didn't have to work for it. So adding the qualifier that you don't have to work for it and using a higher number would be helpful to zero in on the question. But otherwise it's now become a very interesting discussion.
I too was surprised by the answers and the direction things went! Just goes to show (me) how differently we can all interpret things and the way we think of it. I think I was surprised how difficult it was to get people to think of $$ in isolation from "doing something to get it" and also as a "FIRE" stache. It is an indicator to me how closely the value of money is associated in our minds with the things we typically do to get it. Basically, the answers were quite a bit more practical than I expected, at least at first. I agree, about clarity and bigger numbers: I should have done more figures like: If 1M is good is 10M better? If so is 50M better than 10? etc. or just simply "is more money always better?" I was just trying to come up with a catchy title. And ironically, several posters said 10M was WAY too much and it would have been a better question if I used a smaller figure like 1M vs 3M.
Go figure. Still- interesting to see the viewpoints.
Because again most people would clearly rather have $10m over $1m if they didn't have to work for it.
That seems to be true, and the reason seems to be "optionality"- (mostly). Refreshing to see other viewpoints though who question that being all positive.
Appreciate your thoughts.
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If 1M is enough, is 10M enougher?
Yes.
With 10 mil there's no reason you can't live exactly the way you would with 1 mil - you just have more options and safety. The question isn't is 10 better than 1. This is obviously and trivially true. The question is, is the extra you've got to do to get to 10 worth it for the options and safety that 10 will give. That's very situation and person dependent.
Also, making more money doesn't necessarily increase your safety.
People who experience burnout trying to earn more can have lasting, permanent cognitive damage. Not to mention the physical toll of neglect on your body that many people experience because of prioritizing work and money.
Just look at the state of our population. These folks aren't doing well, and work is a huge time and energy suck making the things that truly matter a lot harder to maintain.
If you can make more money while optimally investing in you and your family's well being, then awesome. I'm doing that and it's great.
But if crucial resources are being harmed by the pursuit of more money, then it's not increasing your safety, because a lot of the shit you want to protect doesn't get safer with more money than you need.
This is very true. Just had a close family friend work himself literally to death recently at a fairly young age. Probably double or more the net worth of our household, but now they will never get to enjoy it. It's easy enough to do if you have a lucrative career that is a huge part of your identify. You really have to be intentional about taking care of yourself and putting that first or it can kill you. It is not worth it. And as mentioned elsewhere in the thread, people do want things from you after you hit a level where it becomes harder to hide.
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I am enjoying reading about how $1M is better than $10M. We’ve even got a few novellas in here!
Keep ‘em coming!
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If anyone is overburdened with 9 million extra and wants to go back to the clean simplicity of 1 million, please PM me. I'd be willing to assume this hardship as an act of charitable goodwill and personal sacrifice.
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If anyone is overburdened with 9 million extra and wants to go back to the clean simplicity of 1 million, please PM me. I'd be willing to assume this hardship as an act of charitable goodwill and personal sacrifice.
The humanitarianism of this forum has never been more on display than in @GuitarStv 's Frodo-like (was going to say Christ-like but that might've ruffled some feathers) willingness to assume the burden of the ring cross bucks.
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I am enjoying reading about how $1M is better than $10M. We’ve even got a few novellas in here!
Keep ‘em coming!
Maybe I missed it, but I don't remember anyone saying 1M is better, only that "more" money isn't always better than less.
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But you don’t have to buy headache inducing, high maintenance stuff just because you have 10M or more. Maybe it gets harder for some folks to resist? But not for a true Mustachian. I still drive my 2015 Honda Fit and love being carefree about dings, parking spaces, being robbed, etc. We will probably also downsize our home once our kids move out. The only thing we spend more on is travel, but nobody seems too interested in out NW. Maybe being an engineer and teacher helps, but more apt titles would be investors and philanthropists…
That's because we're all the cool kids who understand The Ways of the Mustache so arent going to fall for everything we see that will supposedly be better just because we have some extra money. I mean it's not like we're going about our happy low expenses lifestyle of riding our bike and DIY projects and suddenly decide to buy a $50k or $100k or $500k new car (maybe a Tesla) just because we believe it'll make us happier and we can afford it right? ;-). Probably unlikely since we wouldn't have saved any money if that was our mindset. Personally I'd be tempted to buy stuff if I hadn't learned what really gives me happiness. Not that I'd turn down $10 million but I wouldn't work longer for it - or any amount over my personal "enoughness" level.
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"I will take the money, though I don't know how to spend it..."
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"I will take the money, though I don't know how to spend it..."
Well I wouldn't spend it and I wouldn't just sit on it either. Charity. Of course my online Ethiopean Prince says he could use it all to save his country and free his father the King - perhaps The Mattress King - in which case the world will once again be rich in Ethiopian mattresses to guitar Steve's great joy!
I can't really think of a downside to having more money if it's kept in stealth wealth mode for the most part instead of flashed about. - and for some people flashing your wealth may be an upside if seeking a certain kind of life.
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@spartana I was just being silly. Paraphrasing Frodo in LOTR, per comments upstream. Lol tonthe Ethiopian prince.... :-p
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"I will take the money, though I don't know how to spend it..."
Well I wouldn't spend it and I wouldn't just sit on it either. Charity. Of course my online Ethiopean Prince says he could use it all to save his country and free his father the King - perhaps The Mattress King - in which case the world will once again be rich in Ethiopian mattresses to guitar Steve's great joy!
I can't really think of a downside to having more money if it's kept in stealth wealth mode for the most part instead of flashed about. - and for some people flashing your wealth may be an upside if seeking a certain kind of life.
For me there would be a downside: “oh, no, with this kind of money I can’t just live my normal life and give some to family and charity, this is SERIOUS money and I should do something SIGNIFICANT with it”. Cue stress about researching optimal solutions.
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"I will take the money, though I don't know how to spend it..."
Well I wouldn't spend it and I wouldn't just sit on it either. Charity. Of course my online Ethiopean Prince says he could use it all to save his country and free his father the King - perhaps The Mattress King - in which case the world will once again be rich in Ethiopian mattresses to guitar Steve's great joy!
I can't really think of a downside to having more money if it's kept in stealth wealth mode for the most part instead of flashed about. - and for some people flashing your wealth may be an upside if seeking a certain kind of life.
For me there would be a downside: “oh, no, with this kind of money I can’t just live my normal life and give some to family and charity, this is SERIOUS money and I should do something SIGNIFICANT with it”. Cue stress about researching optimal solutions.
That would cause me a lot of stress too! I'd probably want to unload it fast to something I deemed worthwhile and in need rather then have to deal with it every year - even if it would become more valuable if kept invested and I could oversee that money myself. And decide to who and what amount was given away each year. Rich people problems for sure.
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I don't know that there is some objective "right" level for everyone. It's all subjective and very, very personal. Taylor Swift's life would make me absolutely miserable, because I am a very different person with very different needs. And yet MMM's life would also not make me happy for the same reason. And both of them would probably hate my life with an equal passion.
I go back to that "two levels above/below" thing that I can't ever remember the name of. I am anchored around where I am now. I can easily answer for $1M or $10M because they're within my range of understanding. I cannot possibly answer for $100M or $1B, because that is so far beyond my own experience that I have no idea how I'd actually feel/think. And yet the people who have $100M or $1B aren't exactly giving it all away because they're miserable and want to have less and be happier. So I think for someone with say $1B, it's not about the money per se, it's about doing the thing that brings in that money -- it's some driver to achieve or create or whatever, and the money comes along with it.
I do think that different levels of money bring different kinds of problems, and that the people most likely to get in trouble are those who suddenly change status without the knowledge/experience/guidance to handle that successfully -- particularly if you think having more money solves all your problems and thus are completely unprepared to face the "mo money" problems when they do happen. I remember when DD was small and asking me to buy her things, and I'd always say, "no, we can't afford it"; then I realized that was not true. I was repeating the line I had heard my whole life, but we were much more well-off, so I needed to figure out how much is enough and how to raise kids when I had more money than I actually needed.
Now, that was a much better problem to have than my mom dealt with; she said no all the time because we truly couldn't afford it. And I sure as hell wasn't going to quit my job so I could re-create the poverty of my childhood, just so I didn't have to figure out how to handle DD's questions. But it was still a new issue that our greater wealth created, and I had to figure out how to manage that. And after 20+ years, I've figured out how to manage most of the issues that come along with the $1-to-$10M wealth range. But I still have no experience in the $100M or $1B range, so I have no idea what those issues actually would be.
For me, $10M is better than $1M, because of the freedom it brings. Like my mom was able to help my sister buy a house post-divorce so she didn't have to uproot the kids. And when my MIL had cancer and was prescribed a drug and Medicare was fussing about coverage, my FIL just plunked down $20K to get her started on the meds, without batting an eye. I like the idea of having a big pot of money that I never intend to touch but that is there for those unexpected things; again, going back to the whole growing-up-poor thing, knowing that I can solve a problem by throwing money at it gives me a tremendous sense of comfort and happiness, even when I don't choose to solve the problem that way.
OTOH, I wouldn't want $100M, if it meant that everyone knew who I was and how much I was worth. Which means I probably don't want it, period. I have a ridiculous pull to real estate; I visit somewhere and love it so much and want a home there. So if I had $100M, I'd be the person with like 8 homes. And if I was always out traveling and buying new homes, everyone would have a really good idea of how much I was worth, which we've established would make me unhappy. So better not to be tempted. ;-) OTOH, other people with different personalities seem to handle that just fine -- and like I said, they're not exactly giving their money away to reduce their wealth to my range because they're unhappy having so much. So I have to assume that from their perspective, $100M or $1B is better than $10M or $1M.
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In the "no additional work necessary" hypothetical, I think $10M is definitely better than $1M. Just spend relatively freely on an upper middle class lifestyle without going into any stupid money-pits like boats or sportscars or mansions, and then every year the remainder of your 4% rule budget (probably a couple hundred K...) can go to charities of your choosing. You could do the EA thing and save a bunch of lives in developing countries, be a substantial benefactor of local arts organizations, and still find yourself with some leftover to throw at whatever other charitable causes might come up in your community from year to year. If you don't want the hassle of being known as a rich person, you can just donate anonymously.
I'd think that deciding what charities to support would be a relatively fun and fulfilling project.
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"I will take the money, though I don't know how to spend it..."
You shouldn’t be forced to suffer. I can take it off your hands and see that it finds a good home with people who can appreciate it.
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... I can easily answer for $1M or $10M because they're within my range of understanding. I cannot possibly answer for $100M or $1B, because that is so far beyond my own experience that I have no idea how I'd actually feel/think...
I do think that different levels of money bring different kinds of problems, and that the people most likely to get in trouble are those who suddenly change status without the knowledge/experience/guidance to handle that successfully -- particularly if you think having more money solves all your problems and thus are completely unprepared to face the "mo money" problems when they do happen....
+1
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I am enjoying reading about how $1M is better than $10M. We’ve even got a few novellas in here!
Keep ‘em coming!
Maybe I missed it, but I don't remember anyone saying 1M is better, only that "more" money isn't always better than less.
Yeah, you missed it. It’s OK. We can move on now.
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... I can easily answer for $1M or $10M because they're within my range of understanding. I cannot possibly answer for $100M or $1B, because that is so far beyond my own experience that I have no idea how I'd actually feel/think...
I do think that different levels of money bring different kinds of problems, and that the people most likely to get in trouble are those who suddenly change status without the knowledge/experience/guidance to handle that successfully -- particularly if you think having more money solves all your problems and thus are completely unprepared to face the "mo money" problems when they do happen....
+1
The Onion comes through with some topical news: https://www.theonion.com/billionaire-credits-millionaire-friends-with-keeping-hi-1851607361 😀
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"I will take the money, though I don't know how to spend it..."
Well I wouldn't spend it and I wouldn't just sit on it either. Charity. Of course my online Ethiopean Prince says he could use it all to save his country and free his father the King - perhaps The Mattress King - in which case the world will once again be rich in Ethiopian mattresses to guitar Steve's great joy!
I can't really think of a downside to having more money if it's kept in stealth wealth mode for the most part instead of flashed about. - and for some people flashing your wealth may be an upside if seeking a certain kind of life.
For me there would be a downside: “oh, no, with this kind of money I can’t just live my normal life and give some to family and charity, this is SERIOUS money and I should do something SIGNIFICANT with it”. Cue stress about researching optimal solutions.
Our household income has tripled in the past 5 years (due to my partner and I both starting lucrative, back-ended careers that only start going in your early 30s) and our spending habits have not changed hugely nor have we had any stress about researching optimal solutions. We deal with it in different ways. My partner has just adjusted her spending linearly with income - she still saves about half her pay cheque, but she likes buying nice stuff. I on the other hand simply live as if I was still earning my old income, save for shared things (like holidays and accommodation) where I go with my partner's preference. It hasn't taken too much mental headroom at all. Keeping most of your habits constant also helps with the stealth wealth aspect, though to be frank most of our friends/colleagues are rich anyway so there's no point even being stealthy about it. For example at work no one cares if you wear an Apple watch or an expensive watch or anything in-between. So I find the mental stress to be not that great at all. I buy what I like, and there are some areas where I do spend, but there are many areas where I am just as frugal as ever, and neither option stresses me out.
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I think I was surprised how difficult it was to get people to think of $$ in isolation from "doing something to get it" and also as a "FIRE" stache. It is an indicator to me how closely the value of money is associated in our minds with the things we typically do to get it.
I'd suggest you review your communication rather than hypothesize on difficulty in getting "people to think of $$ in isolation from "doing something to get it".
If you had stated clearly in the OP "1 or 10 million with no additional time or work invested for 10M" I don't think there would have been any such difficulty.
Without stating this explicitly - why would anyone think that 9 million was just going to magically show up into their lives and they could take it or reject it and stay at 1 million?
You were imagining a completely unreal fantasy without saying so and then pondering on the difficulty of getting people to - what exactly? - read your mind?
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I think I was surprised how difficult it was to get people to think of $$ in isolation from "doing something to get it" and also as a "FIRE" stache. It is an indicator to me how closely the value of money is associated in our minds with the things we typically do to get it.
I'd suggest you review your communication rather than hypothesize on difficulty in getting "people to think of $$ in isolation from "doing something to get it".
If you had stated clearly in the OP "1 or 10 million with no additional time or work invested for 10M" I don't think there would have been any such difficulty.
Without stating this explicitly - why would anyone think that 9 million was just going to magically show up into their lives and they could take it or reject it and stay at 1 million?
You were imagining a completely unreal fantasy without saying so and then pondering on the difficulty of getting people to - what exactly? - read your mind?
I don't know. I thought OP was pretty clear. Even in the initial post, blue collar talked about the perspective of the money itself being the liability. Then they clarified just a few posts later that they're not talking about how trading time for money becomes a losing proposition. Instead they said they're taking about just whether more money itself is always good
I, too, was interested in how the topic of work kept coming up when it was pretty clear the focus was just on whether there are actual drawbacks of having more money.
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I think I was surprised how difficult it was to get people to think of $$ in isolation from "doing something to get it" and also as a "FIRE" stache. It is an indicator to me how closely the value of money is associated in our minds with the things we typically do to get it.
I'd suggest you review your communication rather than hypothesize on difficulty in getting "people to think of $$ in isolation from "doing something to get it".
If you had stated clearly in the OP "1 or 10 million with no additional time or work invested for 10M" I don't think there would have been any such difficulty.
Without stating this explicitly - why would anyone think that 9 million was just going to magically show up into their lives and they could take it or reject it and stay at 1 million?
You were imagining a completely unreal fantasy without saying so and then pondering on the difficulty of getting people to - what exactly? - read your mind?
I don't know. I thought OP was pretty clear. Even in the initial post, blue collar talked about the perspective of the money itself being the liability. Then they clarified just a few posts later that they're not talking about how trading time for money becomes a losing proposition. Instead they said they're taking about just whether more money itself is always good
I, too, was interested in how the topic of work kept coming up when it was pretty clear the focus was just on whether there are actual drawbacks of having more money.
Work keeps coming up because that's what we talk about here.
Even if it was specified that it was lottery winnings, eventually feel lks here would say something like "sure, I would prefer winning 10M instead of 1M, but if I had to work for it, that would be a different story."
He talk endlessly about the balance of working and earning. It's what we do here.
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It’s official.
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I think I was surprised how difficult it was to get people to think of $$ in isolation from "doing something to get it" and also as a "FIRE" stache. It is an indicator to me how closely the value of money is associated in our minds with the things we typically do to get it.
I'd suggest you review your communication rather than hypothesize on difficulty in getting "people to think of $$ in isolation from "doing something to get it".
If you had stated clearly in the OP "1 or 10 million with no additional time or work invested for 10M" I don't think there would have been any such difficulty.
Without stating this explicitly - why would anyone think that 9 million was just going to magically show up into their lives and they could take it or reject it and stay at 1 million?
You were imagining a completely unreal fantasy without saying so and then pondering on the difficulty of getting people to - what exactly? - read your mind?
I don't know. I thought OP was pretty clear. Even in the initial post, blue collar talked about the perspective of the money itself being the liability. Then they clarified just a few posts later that they're not talking about how trading time for money becomes a losing proposition. Instead they said they're taking about just whether more money itself is always good
I, too, was interested in how the topic of work kept coming up when it was pretty clear the focus was just on whether there are actual drawbacks of having more money.
I also thought the OP was pretty clear. My first response was what the difference for me personally would be (none) and then I tried think of reasons in general where having more money would be bad. Couldn't think of too many - family/friends wanting handouts, sugar babies wanting to be your bf/gf, kidnappings, robbery, paying more taxes for things you detest, social dynamics amongst peers, etc - all of which could be avoided if you practice stealth wealth. Well except for taxes because the IRS can't be reasoned with. They don't feel pity, or remorse, or fear. And they absolutely will not stop... ever, until you pay!
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I think I was surprised how difficult it was to get people to think of $$ in isolation from "doing something to get it" and also as a "FIRE" stache. It is an indicator to me how closely the value of money is associated in our minds with the things we typically do to get it.
I'd suggest you review your communication rather than hypothesize on difficulty in getting "people to think of $$ in isolation from "doing something to get it".
If you had stated clearly in the OP "1 or 10 million with no additional time or work invested for 10M" I don't think there would have been any such difficulty.
Without stating this explicitly - why would anyone think that 9 million was just going to magically show up into their lives and they could take it or reject it and stay at 1 million?
You were imagining a completely unreal fantasy without saying so and then pondering on the difficulty of getting people to - what exactly? - read your mind?
I don't know. I thought OP was pretty clear. Even in the initial post, blue collar talked about the perspective of the money itself being the liability. Then they clarified just a few posts later that they're not talking about how trading time for money becomes a losing proposition. Instead they said they're taking about just whether more money itself is always good
I, too, was interested in how the topic of work kept coming up when it was pretty clear the focus was just on whether there are actual drawbacks of having more money.
Work keeps coming up because that's what we talk about here.
Even if it was specified that it was lottery winnings, eventually feel lks here would say something like "sure, I would prefer winning 10M instead of 1M, but if I had to work for it, that would be a different story."
He talk endlessly about the balance of working and earning. It's what we do here.
That's fair. It is definitely to be expected on our forum.
I should have said that I found the concept of innate drawbacks on money to be more interesting for this thread. I am all about talking about the time value of money and benefits of not trading more of you're time for money than you need to.
The other part is a less talked about perspective. I've still not decided where I fall in the hypothetical you are given 10 million / 100 million in a bank account with total possibility of stealth wealth - how significant are the drawbacks.
Personally I'm kind of in that situation now with a car. Our cars are older - approaching 300k and beginning to develop some not cosmetic problems. We are more than capable of buying a new car and as has been discussed on here, there are definitely situations where buying a new car to drive forever is not a ridiculous financial decision. That said, there are drawbacks of having a new car I haven't had to deal with. I don't really want to care about it getting dinged up because it's actually nice rather than a beater for example. I feel like newer would be more stressful. Overall, it's an interesting concept to me.
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I think I was surprised how difficult it was to get people to think of $$ in isolation from "doing something to get it" and also as a "FIRE" stache. It is an indicator to me how closely the value of money is associated in our minds with the things we typically do to get it.
I'd suggest you review your communication rather than hypothesize on difficulty in getting "people to think of $$ in isolation from "doing something to get it".
If you had stated clearly in the OP "1 or 10 million with no additional time or work invested for 10M" I don't think there would have been any such difficulty.
Without stating this explicitly - why would anyone think that 9 million was just going to magically show up into their lives and they could take it or reject it and stay at 1 million?
You were imagining a completely unreal fantasy without saying so and then pondering on the difficulty of getting people to - what exactly? - read your mind?
I don't know. I thought OP was pretty clear. Even in the initial post, blue collar talked about the perspective of the money itself being the liability. Then they clarified just a few posts later that they're not talking about how trading time for money becomes a losing proposition. Instead they said they're taking about just whether more money itself is always good
I, too, was interested in how the topic of work kept coming up when it was pretty clear the focus was just on whether there are actual drawbacks of having more money.
I also thought the OP was pretty clear. My first response was what the difference for me personally would be (none) and then I tried think of reasons in general where having more money would be bad. Couldn't think of too many - family/friends wanting handouts, sugar babies wanting to be your bf/gf, kidnappings, robbery, paying more taxes for things you detest, social dynamics amongst peers, etc - all of which could be avoided if you practice stealth wealth. Well except for taxes because the IRS can't be reasoned with. They don't feel pity, or remorse, or fear. And they absolutely will not stop... ever, until you pay!
Thanks. I was really surprised by the post, which is why I had to look back and make sure I hadn't read something in there that wasn't actually there.
I agree that I think I could practice stealth wealth reasonably well, and I certainly wouldn't turn down 10 or even 100 million dollars if it was totally anonymous, but as i mentioned above, I still do think about the consequences of it with interest.
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If past performance is any indication of future performance and the money just showed up, then it probably wouldn't be around for long either way. And it certainly wouldn't go towards the household spending. I got a small inheritance a few years ago, so I know how windfalls go for me.
We have what we need, so if 10 million popped over, I'd do with it what I already do with our excess, find it a good home. It would take a bit more work and diligence, but I'm sure I could find a good foundation that would invest it and use the proceeds to do good stuff every year. Then I'd be back to my usual retired self.
If 1 million additional funds popped over, I might be better able to better manage that myself for investment and donations yearly in a DAF.
So for long term giving, 10 million is better, because 4% of 10 million just goes to help more, that's how math works. But it could make it harder to find the appropriate place or places to send the money for growth long term. Vetting can be hard and I know I wont live for ever. But I also intend it to have no impact on my personal spending because other cash windfalls in my life haven't gone into the personal budget.
If the money was for personal use only, not giving away, then 1 million. We already live on less than that when you take out the giving. So I could be living on more without working longer and chose not to, someone asking the question doesn't change this.
Loren
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I think I was surprised how difficult it was to get people to think of $$ in isolation from "doing something to get it" and also as a "FIRE" stache. It is an indicator to me how closely the value of money is associated in our minds with the things we typically do to get it.
I'd suggest you review your communication rather than hypothesize on difficulty in getting "people to think of $$ in isolation from "doing something to get it".
If you had stated clearly in the OP "1 or 10 million with no additional time or work invested for 10M" I don't think there would have been any such difficulty.
Without stating this explicitly - why would anyone think that 9 million was just going to magically show up into their lives and they could take it or reject it and stay at 1 million?
You were imagining a completely unreal fantasy without saying so and then pondering on the difficulty of getting people to - what exactly? - read your mind?
I don't know. I thought OP was pretty clear. Even in the initial post, blue collar talked about the perspective of the money itself being the liability. Then they clarified just a few posts later that they're not talking about how trading time for money becomes a losing proposition. Instead they said they're taking about just whether more money itself is always good
I, too, was interested in how the topic of work kept coming up when it was pretty clear the focus was just on whether there are actual drawbacks of having more money.
I also thought the OP was pretty clear. My first response was what the difference for me personally would be (none) and then I tried think of reasons in general where having more money would be bad. Couldn't think of too many - family/friends wanting handouts, sugar babies wanting to be your bf/gf, kidnappings, robbery, paying more taxes for things you detest, social dynamics amongst peers, etc - all of which could be avoided if you practice stealth wealth. Well except for taxes because the IRS can't be reasoned with. They don't feel pity, or remorse, or fear. And they absolutely will not stop... ever, until you pay!
Thanks. I was really surprised by the post, which is why I had to look back and make sure I hadn't read something in there that wasn't actually there.
I agree that I think I could practice stealth wealth reasonably well, and I certainly wouldn't turn down 10 or even 100 million dollars if it was totally anonymous, but as i mentioned above, I still do think about the consequences of it with interest.
I've been trying to think of other things where that much extra money would be worse then $1 million but not too many I can think of. The "I have so much money I can buy and do all the things" is an issue from "most" environmental perspective but not always. Being able to afford an electric car or upgrading your home to be more environmentally friendly may be a positive use of extra money compared to flying all over the world and buying all the blood diamonds one can.
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I've been in both of these situations. There's a huge difference between 10M and 1M. You really aren't full on rich at 1M in stocks. Your SWR is a paltry 40k. At 10M your SWR is 400K and can sustain a massive lifestyle. Spend 5% of your NW on a car at 1M NW...you get a mid-range pickup truck. Spend 5% at 10M and for the same ratio you get a decked out Ferrari 812 Superfast where the wheel upgrade option alone cost more than an entire Corvette. Not even in the same stratosphere and sums up the difference between the two.
Also, absent inheretence, the self made person with 10M also has a massive salary that can fund all sorts of shit even ignoring the investments.
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I think I was surprised how difficult it was to get people to think of $$ in isolation from "doing something to get it" and also as a "FIRE" stache. It is an indicator to me how closely the value of money is associated in our minds with the things we typically do to get it.
I'd suggest you review your communication rather than hypothesize on difficulty in getting "people to think of $$ in isolation from "doing something to get it".
If you had stated clearly in the OP "1 or 10 million with no additional time or work invested for 10M" I don't think there would have been any such difficulty.
Without stating this explicitly - why would anyone think that 9 million was just going to magically show up into their lives and they could take it or reject it and stay at 1 million?
You were imagining a completely unreal fantasy without saying so and then pondering on the difficulty of getting people to - what exactly? - read your mind?
I don't know. I thought OP was pretty clear. Even in the initial post, blue collar talked about the perspective of the money itself being the liability. Then they clarified just a few posts later that they're not talking about how trading time for money becomes a losing proposition. Instead they said they're taking about just whether more money itself is always good
I, too, was interested in how the topic of work kept coming up when it was pretty clear the focus was just on whether there are actual drawbacks of having more money.
I also thought the OP was pretty clear. My first response was what the difference for me personally would be (none) and then I tried think of reasons in general where having more money would be bad. Couldn't think of too many - family/friends wanting handouts, sugar babies wanting to be your bf/gf, kidnappings, robbery, paying more taxes for things you detest, social dynamics amongst peers, etc - all of which could be avoided if you practice stealth wealth. Well except for taxes because the IRS can't be reasoned with. They don't feel pity, or remorse, or fear. And they absolutely will not stop... ever, until you pay!
Thanks. I was really surprised by the post, which is why I had to look back and make sure I hadn't read something in there that wasn't actually there.
I agree that I think I could practice stealth wealth reasonably well, and I certainly wouldn't turn down 10 or even 100 million dollars if it was totally anonymous, but as i mentioned above, I still do think about the consequences of it with interest.
10M is my absolute personal max. I would turn down 100M, no question.
I've given my max NW A LOT of thought because I had tough decisions to make on this front a few years ago. I simply do not want to exist in that wealth category.
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To me, $100m wouldn't improve my life any bit over $10m, so I wouldn't be particularly in favour of getting the larger amount. I can't see any downsides though - I could invest it in an index fund or in property all the same, and everything would just scale up by 10.
For me the difference is that money, if not earned, means nothing to me. And whereas $10m is an amount that (with compounding) can very much be earned as a FIRE stash, $100m is literally impossible to do off wages over a lifetime, unless you're an NBA player or Hollywood actor. And I wouldn't want to have any sort of FIRE existence where I was relying on others' largesse, e.g. an inheritance or some massive donation, to achieve an early retirement. I don't value achievements if I haven't earned them.
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10M is my absolute personal max. I would turn down 100M, no question.
I've given my max NW A LOT of thought because I had tough decisions to make on this front a few years ago. I simply do not want to exist in that wealth category.
Why not accept it and donate it? Can you not be anonymous at that level?
I realize this hypothetical doesn't include where the money is coming FROM, which might be part of the calculus.
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10M is my absolute personal max. I would turn down 100M, no question.
I've given my max NW A LOT of thought because I had tough decisions to make on this front a few years ago. I simply do not want to exist in that wealth category.
Why not accept it and donate it? Can you not be anonymous at that level?
I realize this hypothetical doesn't include where the money is coming FROM, which might be part of the calculus.
I've spent many years brokering philanthropy, it's actually a lot of work to do effectively.
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10M is my absolute personal max. I would turn down 100M, no question.
I've given my max NW A LOT of thought because I had tough decisions to make on this front a few years ago. I simply do not want to exist in that wealth category.
Why not accept it and donate it? Can you not be anonymous at that level?
I realize this hypothetical doesn't include where the money is coming FROM, which might be part of the calculus.
I've spent many years brokering philanthropy, it's actually a lot of work to do effectively.
I just give it all to givewell and let them figure it out: https://secure.givewell.org/ (https://secure.givewell.org/), seems easy to give a lot.
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To me, $100m wouldn't improve my life any bit over $10m, so I wouldn't be particularly in favour of getting the larger amount. I can't see any downsides though - I could invest it in an index fund or in property all the same, and everything would just scale up by 10.
For me the difference is that money, if not earned, means nothing to me. And whereas $10m is an amount that (with compounding) can very much be earned as a FIRE stash, $100m is literally impossible to do off wages over a lifetime, unless you're an NBA player or Hollywood actor. And I wouldn't want to have any sort of FIRE existence where I was relying on others' largesse, e.g. an inheritance or some massive donation, to achieve an early retirement. I don't value achievements if I haven't earned them.
Perhaps for high income earners who work and invest a large sum over many years but for the average working stiff earning a median income in the US and trying to save 50% you're very unlikely to reach $10 million in time to be an "early" retiree. And very unlikely to reach that in your lifetime.
Maybe one of the downsides of having too much money is losing touch with the reality of the average person. That and greed and hedonistic adaptation.
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I never said anything about the average working person, did I? I doubt the average working stiff, to use your words, could even get to $3m over a lifetime, though it depends on the degree to which said stiff is imbued with superhuman frugality.
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10M is my absolute personal max. I would turn down 100M, no question.
I've given my max NW A LOT of thought because I had tough decisions to make on this front a few years ago. I simply do not want to exist in that wealth category.
Why not accept it and donate it? Can you not be anonymous at that level?
I realize this hypothetical doesn't include where the money is coming FROM, which might be part of the calculus.
I've spent many years brokering philanthropy, it's actually a lot of work to do effectively.
I just give it all to givewell and let them figure it out: https://secure.givewell.org/ (https://secure.givewell.org/), seems easy to give a lot.
Sure, if you're comfortable with another broker handling your charitable giving. I've worked in the industry long enough to be a little too aware of the darker side of non-profits, so I'm a little more picky about how I move money into that space.
There's a lot of politics too. The book Dark Money covers this well.
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I've been in both of these situations. There's a huge difference between 10M and 1M. You really aren't full on rich at 1M in stocks. Your SWR is a paltry 40k. At 10M your SWR is 400K and can sustain a massive lifestyle. Spend 5% of your NW on a car at 1M NW...you get a mid-range pickup truck. Spend 5% at 10M and for the same ratio you get a decked out Ferrari 812 Superfast where the wheel upgrade option alone cost more than an entire Corvette. Not even in the same stratosphere and sums up the difference between the two.
Also, absent inheretence, the self made person with 10M also has a massive salary that can fund all sorts of shit even ignoring the investments.
This. 10M is next level shit, for us this is FI vs not, with a safety margin that translates into 50pct market drops not affecting FI status. It is 200k home vs 1.5M home, it is having cheap hobbies and vacations vs affording expedition style treks, diving in Maldives, African safaris, etc, if that floats your boat
Now, is the time and effort between 1M and 10 M worth it? In our case, yes. 10 years. But not 10 years in misery, think 10 years of great experiences, vacations and rather fulfilling jobs.
Would I pursue 20, or 30M? No. We likely get there one day with a low SWR but not worth another 10 years for us before FIRE
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I never said anything about the average working person, did I? I doubt the average working stiff, to use your words, could even get to $3m over a lifetime, though it depends on the degree to which said stiff is imbued with superhuman frugality.
True but you didn't say high earning either so I (wrongly) assumed you were talking about the average person. Lots of average earning people DO FIRE on a relatively small amount. It may take them longer do get to FI and mean that they have to make trade offs that a high earner doesn't but doesn't mean they can't get there.
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"I will take the money, though I don't know how to spend it..."
Well I wouldn't spend it and I wouldn't just sit on it either. Charity. Of course my online Ethiopean Prince says he could use it all to save his country and free his father the King - perhaps The Mattress King - in which case the world will once again be rich in Ethiopian mattresses to guitar Steve's great joy!
I can't really think of a downside to having more money if it's kept in stealth wealth mode for the most part instead of flashed about. - and for some people flashing your wealth may be an upside if seeking a certain kind of life.
For me there would be a downside: “oh, no, with this kind of money I can’t just live my normal life and give some to family and charity, this is SERIOUS money and I should do something SIGNIFICANT with it”. Cue stress about researching optimal solutions.
Our household income has tripled in the past 5 years (due to my partner and I both starting lucrative, back-ended careers that only start going in your early 30s) and our spending habits have not changed hugely nor have we had any stress about researching optimal solutions. We deal with it in different ways. My partner has just adjusted her spending linearly with income - she still saves about half her pay cheque, but she likes buying nice stuff. I on the other hand simply live as if I was still earning my old income, save for shared things (like holidays and accommodation) where I go with my partner's preference. It hasn't taken too much mental headroom at all. Keeping most of your habits constant also helps with the stealth wealth aspect, though to be frank most of our friends/colleagues are rich anyway so there's no point even being stealthy about it. For example at work no one cares if you wear an Apple watch or an expensive watch or anything in-between. So I find the mental stress to be not that great at all. I buy what I like, and there are some areas where I do spend, but there are many areas where I am just as frugal as ever, and neither option stresses me out.
But we're not talking income here, we're talking wealth. Sure, a big jump in income without a lot of spending will eventually lead to a big jump in wealth, but normally it takes a lot longer than 5 years for it to start having a noticeable effect.
I wouldn't have mental stress from having a higher household income, and haven't felt that in past such circumstances. Well, I guess except for when I first started earning money, had a nice life, and then started wondering what to do with the piled-up cash. I solved that with learning about investing.
It's the huge gap between "anything I or anyone close to me might need" and 10M that is the problem for me. Which means the problem would be even larger if it were 100M. Earning 3 times more than we do now would be interesting but not a problem, especially since we live in a place with high (and highly progressive) taxation.
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$10 MM is better. But not ten times better.
Succinct and to the point.
This thought exercise reminds me of graphs in college economics. Time versus money is going to have a different “sweet spot” for different people, and also depend greatly on location/cost of living.
$10MM where I currently live would be a crazy large amount of money. $10MM in some other parts of the country/world would buy me a similarly sized and situated house/cover property tax & insurance and leave me at approximately the same standard of living leftover. And in some parts of the world it wouldn’t even be able to buy the same size of house.
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It's hard for me to conceptualize 100 million dollars. Not sure exactly what I'd do with it . . . probably would end up splitting a lot of it out to family/friends and donating a good chunk to some charities I support. There would be a strong temptation to buy a large chunk of land and try to set up an Epicurean commune as well.
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Two counter-points I would raise to that, although I also think generally @Metalcat raises good points:
1. You can earn lots of money and then put it into philanthropy, if you so desire. Earning lots doesn't prevent you from giving lots.
2. No one needs to know how much wealth you have. You can drive the same car (or buy a Ferrari but drive another car to work, if you even drive to work at all - I walk to work so no one knows what car I drive) and you can choose to live in the same house even if you have multiple other properties. People complaining about others knowing that they're rich, etc, almost always are the ones, themselves, telling others how rich they are. None of my colleagues knows what my net worth is.
You could live in this modest old house for decades, drive a battered old Cadillac, and eat McDonald's for breakfast despite having a few pennies saved (12 figures and counting).
(https://www.fancypantshomes.com/wp-content/uploads/2021/12/warren-buffett-house-omaha-2.jpg)
Lol, that "modest" house is 6,570 sf.
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I think Buffet is great.
He is successful, taken with the thrill of running big business, has value as his North Star, and seems down to earth.
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To me, $100m wouldn't improve my life any bit over $10m, so I wouldn't be particularly in favour of getting the larger amount. I can't see any downsides though - I could invest it in an index fund or in property all the same, and everything would just scale up by 10.
For me the difference is that money, if not earned, means nothing to me. And whereas $10m is an amount that (with compounding) can very much be earned as a FIRE stash, $100m is literally impossible to do off wages over a lifetime, unless you're an NBA player or Hollywood actor. And I wouldn't want to have any sort of FIRE existence where I was relying on others' largesse, e.g. an inheritance or some massive donation, to achieve an early retirement. I don't value achievements if I haven't earned them.
Perhaps for high income earners who work and invest a large sum over many years but for the average working stiff earning a median income in the US and trying to save 50% you're very unlikely to reach $10 million in time to be an "early" retiree. And very unlikely to reach that in your lifetime.
Maybe one of the downsides of having too much money is losing touch with the reality of the average person. That and greed and hedonistic adaptation.
OR!
you just need stay retired a long time while it builds up??
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$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?
Would you want to live in San Jose if you had 10 million dollars though?
I visited while living in SF and wasn't impressed...
Personally, 10 million isn't better (for a single person w/o kids) if they're FIRE "minded" and more in the more money=more problems column.
1 million is good but maybe 2 million is better/stable for living in the US (healthcare)? Definitely enough to afford a varied interesting life w/good healthcare and opportunities to be generous without being extravagant.
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$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?
Would you want to live in San Jose if you had 10 million dollars though?
I visited while living in SF and wasn't impressed...
Personally, 10 million isn't better (for a single person w/o kids) if they're FIRE "minded" and more in the more money=more problems column.
1 million is good but maybe 2 million is better/stable for living in the US (healthcare)? Definitely enough to afford a varied interesting life w/good healthcare and opportunities to be generous without being extravagant.
There are parts of San Jose (e.g. the Willow Glen neighborhood) that are pretty nice (you might need more than $10 million to live there though lol). There are other parts that are suburban hell.
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This thread is starting to make me want $10M. Oh, wait, I've been FIRE for twelve years now. Nevermind.
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Yeah, I think you're right. What's the most wealth a person can accrue completely stealthily?
I don't think there's necessarily a limit to what you can accrue stealthily. The issue comes with conspicuous consumption. My own lived experience is that FIRE itself is a conspicuous form of consumption, even if it's not an excessively materialistic form of consumption. When you're not working at 40, that's not stealthy.
Assume two earners both with high-paying but 'normal' jobs that won't generate any news or unusual interest from strangers. So say a law partner/McKinsey partner/surgeon type career. Two people on $1.0-$1.5m a year combined can save $500k-$750k a year after tax. Compounded over a 15 year-period of peak earnings and you'd get $7.5m-$11 mil without compounding, maybe $15m-$30 mil with investments and compounding. But even then, people at that success level start doing 'newsworthy' things like joining boards and foundations, setting up charitable causes in their own name, and otherwise having a high profile, all of which wrecks the stealth part.
'Newsworthy' is just anything that doesn't fit the neighbourhood stereotype norm. If you FIRE, it's probably not going to be talked about in a major newspaper in the same way that being appointed to a Board will be, but it's definitely going to be talked about within very wide social circles and you'll have no control over it. If you want stealth, don't FIRE.
I didn't fully appreciate this when I pulled the trigger on FIRE, but it's definitely a thing. Best not to care that it's a thing.
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Yeah, I think you're right. What's the most wealth a person can accrue completely stealthily?
I don't think there's necessarily a limit to what you can accrue stealthily. The issue comes with conspicuous consumption. My own lived experience is that FIRE itself is a conspicuous form of consumption, even if it's not an excessively materialistic form of consumption. When you're not working at 40, that's not stealthy.
Assume two earners both with high-paying but 'normal' jobs that won't generate any news or unusual interest from strangers. So say a law partner/McKinsey partner/surgeon type career. Two people on $1.0-$1.5m a year combined can save $500k-$750k a year after tax. Compounded over a 15 year-period of peak earnings and you'd get $7.5m-$11 mil without compounding, maybe $15m-$30 mil with investments and compounding. But even then, people at that success level start doing 'newsworthy' things like joining boards and foundations, setting up charitable causes in their own name, and otherwise having a high profile, all of which wrecks the stealth part.
'Newsworthy' is just anything that doesn't fit the neighbourhood stereotype norm. If you FIRE, it's probably not going to be talked about in a major newspaper in the same way that being appointed to a Board will be, but it's definitely going to be talked about within very wide social circles and you'll have no control over it. If you want stealth, don't FIRE.
I didn't fully appreciate this when I pulled the trigger on FIRE, but it's definitely a thing. Best not to care that it's a thing.
We talked about this in another thread (FIRE young and not working being a sign of wealth in and of itself even if your life isn't flashy) and I've seen it looked at both as being wealthy and as being poor and unemployed. "Poor Spartana can't find a job and must not have much money otherwise she'd have nicer stuff." ;-).
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Yeah, I think you're right. What's the most wealth a person can accrue completely stealthily?
I don't think there's necessarily a limit to what you can accrue stealthily. The issue comes with conspicuous consumption. My own lived experience is that FIRE itself is a conspicuous form of consumption, even if it's not an excessively materialistic form of consumption. When you're not working at 40, that's not stealthy.
I read in the paper on occasion about someone who, unbeknownst to the world, had saved up enough to be noteworthy when donated to some local charity. The biggest amount I remember reading about is around $8 million.
I would think, therefore, that if one had professionals working on keeping your money anonymous and they were halfway decent about their jobs, you could stealth wealth up to perhaps $20-25 million. Once you get up to $30 million you start getting hit up by UHNW cold callers and it might be harder to keep it from the neighbors.
Of course you've got to keep a stealth wealth lifestyle as well. If there's a photo of you on someone's yacht in St. Tropez in some gossip rag, someone's gonna notice.
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Many people here save $1M by age 35. Which should be 2M at 45, 4M at 55, 8M at 65, 16M at 75. I'd almost bet $1 they grow their wealth faster than I listed because many will work in some enjoyable fashion and continue to add to the stash.
If you can save $1M before age 45, you can save 2M and likely 10M.
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Yeah, I think you're right. What's the most wealth a person can accrue completely stealthily?
I don't think there's necessarily a limit to what you can accrue stealthily. The issue comes with conspicuous consumption. My own lived experience is that FIRE itself is a conspicuous form of consumption, even if it's not an excessively materialistic form of consumption. When you're not working at 40, that's not stealthy.
I read in the paper on occasion about someone who, unbeknownst to the world, had saved up enough to be noteworthy when donated to some local charity. The biggest amount I remember reading about is around $8 million.
I would think, therefore, that if one had professionals working on keeping your money anonymous and they were halfway decent about their jobs, you could stealth wealth up to perhaps $20-25 million. Once you get up to $30 million you start getting hit up by UHNW cold callers and it might be harder to keep it from the neighbors.
Of course you've got to keep a stealth wealth lifestyle as well. If there's a photo of you on someone's yacht in St. Tropez in some gossip rag, someone's gonna notice.
I mentioned earlier that wealth of a certain amount is hard to hide and someone else jumped to newsworthy. But there's a huge realm between stealth and literally being in the news for your wealth.
For example, a friend of mine owns a large office building where one of his medical practices leases space. Everyone in the industry knows he owns multiple practices and knows he owns this building. He's extremely subtle about spending, but it doesn't take a rocket scientist for virtually everyone who knows him to be able to roughly estimate his NW.
If people know your job or some major assets you own, they can piece together pretty quickly when you're trying to hide a substantial NW, and that info gets around pretty quickly, even if it isn't accurate. And I know from experience that the rumour mill tends to exaggerate NW numbers, so if anyone figures out anything, it tends to spread and take on a life of its own.
But yeah, if you end up in the literal newspaper for your wealth, then it's game over, everyone knows.
The owner at one of my current clinics is a super chill, down to earth guy who would love to have stealth wealth, but because he's a tech guy whose first startup is now worth over a billion, he can't talk to anyone without them thinking he's filthy rich.
Up to 10M, sure, it's not that hard to stealth it, depending on how quickly you earn it. But above that it becomes difficult to even amass that kind of wealth without doing shit that people will notice and talk about.
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Yeah, I think you're right. What's the most wealth a person can accrue completely stealthily?
I don't think there's necessarily a limit to what you can accrue stealthily. The issue comes with conspicuous consumption. My own lived experience is that FIRE itself is a conspicuous form of consumption, even if it's not an excessively materialistic form of consumption. When you're not working at 40, that's not stealthy.
I read in the paper on occasion about someone who, unbeknownst to the world, had saved up enough to be noteworthy when donated to some local charity. The biggest amount I remember reading about is around $8 million.
I would think, therefore, that if one had professionals working on keeping your money anonymous and they were halfway decent about their jobs, you could stealth wealth up to perhaps $20-25 million. Once you get up to $30 million you start getting hit up by UHNW cold callers and it might be harder to keep it from the neighbors.
Of course you've got to keep a stealth wealth lifestyle as well. If there's a photo of you on someone's yacht in St. Tropez in some gossip rag, someone's gonna notice.
I mentioned earlier that wealth of a certain amount is hard to hide and someone else jumped to newsworthy. But there's a huge realm between stealth and literally being in the news for your wealth.
For example, a friend of mine owns a large office building where one of his medical practices leases space. Everyone in the industry knows he owns multiple practices and knows he owns this building. He's extremely subtle about spending, but it doesn't take a rocket scientist for virtually everyone who knows him to be able to roughly estimate his NW.
If people know your job or some major assets you own, they can piece together pretty quickly when you're trying to hide a substantial NW, and that info gets around pretty quickly, even if it isn't accurate. And I know from experience that the rumour mill tends to exaggerate NW numbers, so if anyone figures out anything, it tends to spread and take on a life of its own.
But yeah, if you end up in the literal newspaper for your wealth, then it's game over, everyone knows.
The owner at one of my current clinics is a super chill, down to earth guy who would love to have stealth wealth, but because he's a tech guy whose first startup is now worth over a billion, he can't talk to anyone without them thinking he's filthy rich.
Up to 10M, sure, it's not that hard to stealth it, depending on how quickly you earn it. But above that it becomes difficult to even amass that kind of wealth without doing shit that people will notice and talk about.
I agree that if your wealth is through identifiable properties or companies it is difficult to hide, but if you've built it up in brokerage accounts, treasuries, etc., and maybe stored chunks of it in trusts, donor advised funds, insurance policies, etc., there's not a lot of ways people can find out unless you want them to.
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Yeah, I think you're right. What's the most wealth a person can accrue completely stealthily?
I don't think there's necessarily a limit to what you can accrue stealthily. The issue comes with conspicuous consumption. My own lived experience is that FIRE itself is a conspicuous form of consumption, even if it's not an excessively materialistic form of consumption. When you're not working at 40, that's not stealthy.
I read in the paper on occasion about someone who, unbeknownst to the world, had saved up enough to be noteworthy when donated to some local charity. The biggest amount I remember reading about is around $8 million.
I would think, therefore, that if one had professionals working on keeping your money anonymous and they were halfway decent about their jobs, you could stealth wealth up to perhaps $20-25 million. Once you get up to $30 million you start getting hit up by UHNW cold callers and it might be harder to keep it from the neighbors.
Of course you've got to keep a stealth wealth lifestyle as well. If there's a photo of you on someone's yacht in St. Tropez in some gossip rag, someone's gonna notice.
I mentioned earlier that wealth of a certain amount is hard to hide and someone else jumped to newsworthy. But there's a huge realm between stealth and literally being in the news for your wealth.
For example, a friend of mine owns a large office building where one of his medical practices leases space. Everyone in the industry knows he owns multiple practices and knows he owns this building. He's extremely subtle about spending, but it doesn't take a rocket scientist for virtually everyone who knows him to be able to roughly estimate his NW.
If people know your job or some major assets you own, they can piece together pretty quickly when you're trying to hide a substantial NW, and that info gets around pretty quickly, even if it isn't accurate. And I know from experience that the rumour mill tends to exaggerate NW numbers, so if anyone figures out anything, it tends to spread and take on a life of its own.
But yeah, if you end up in the literal newspaper for your wealth, then it's game over, everyone knows.
The owner at one of my current clinics is a super chill, down to earth guy who would love to have stealth wealth, but because he's a tech guy whose first startup is now worth over a billion, he can't talk to anyone without them thinking he's filthy rich.
Up to 10M, sure, it's not that hard to stealth it, depending on how quickly you earn it. But above that it becomes difficult to even amass that kind of wealth without doing shit that people will notice and talk about.
I agree that if your wealth is through identifiable properties or companies it is difficult to hide, but if you've built it up in brokerage accounts, treasuries, etc., and maybe stored chunks of it in trusts, donor advised funds, insurance policies, etc., there's not a lot of ways people can find out unless you want them to.
That's kind of my point though, it can be very hard to even earn enough to get to over 10M without doing something notable to peers and colleagues. My entire point is that really profitable behaviours tend to get observed and discussed.
People are probably going to be aware if you gained all your money from employment because your job title will probably give away that you earn enough to save over 10M. If you make money off of investing in significant stuff, again, someone will likely notice that you own some significant stuff.
Up to 10M is doable with a roughly very upper middle class income and lifestyle where plenty of folks live and work similarly and don't save nearly as much, but it starts getting a lot harder with bigger numbers.
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"If 1M is good, is 10M better? "
Yes. The answer is yes.
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Here's a tangential $10M story. Wealthy dude knows he's dying, and donates $10M to a hospital he's supported philanthropically* for years, among other places. After he died, his widow decided to donate his high-quality wardrobe to the thrift shop that supports the same hospital. One caveat: it must be anonymous. I loved that his giving was large enough to put his name on a building and small enough to benefit normal folks too. I priced everything and wondered why there were so few ties relative to everything else. Answer: if anyone liked a tie he was wearing, he took it off and gave it to them. Pretty badass, IMO.
Plot twist: he grew up dirt poor.
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1M and 10M is the same, and so is infinite money for that matter.
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1M and 10M is the same, and so is infinite money for that matter.
????? What does that mean? And does it mean that $0 is the same as $infinite? Woot! Were all FI !
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Here's a tangential $10M story. Wealthy dude knows he's dying, and donates $10M to a hospital he's supported philanthropically* for years, among other places. After he died, his widow decided to donate his high-quality wardrobe to the thrift shop that supports the same hospital. One caveat: it must be anonymous. I loved that his giving was large enough to put his name on a building and small enough to benefit normal folks too. I priced everything and wondered why there were so few ties relative to everything else. Answer: if anyone liked a tie he was wearing, he took it off and gave it to them. Pretty badass, IMO.
Plot twist: he grew up dirt poor.
I keep fluctuating between ”what a lovely story” and “how awful that hospital infrastructure is dependent on the charitable whims of individual citizens”.
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Here's a tangential $10M story. Wealthy dude knows he's dying, and donates $10M to a hospital he's supported philanthropically* for years, among other places. After he died, his widow decided to donate his high-quality wardrobe to the thrift shop that supports the same hospital. One caveat: it must be anonymous. I loved that his giving was large enough to put his name on a building and small enough to benefit normal folks too. I priced everything and wondered why there were so few ties relative to everything else. Answer: if anyone liked a tie he was wearing, he took it off and gave it to them. Pretty badass, IMO.
Plot twist: he grew up dirt poor.
I keep fluctuating between ”what a lovely story” and “how awful that hospital infrastructure is dependent on the charitable whims of individual citizens”.
Same.
The hospital I trained at had a second CT because my ex's dad had cancer and wanted easier access to a CT in our publicly funded system.
Like...cool, nice that everyone in the city has more access to CT, but kind of fucked up that that depends on the personal priorities of a rich dude who lived close to that hospital at the time.
And of course, he didn't pay for it personally, it was a tax deductible charitable contribution paid for by multiple corporate entities and optimized to minimize taxes owed, which could have, y'know, paid for whatever medical priorities had been established as more urgent for the public than an additional CT machine in that specific hospital.
But he now has an easier time scheduling his regular CTs, so that worked out well for him...
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Assuming zero additional cost to get the next 9M? You could contrive a circumstance where 10M is not better, but it would be just that: contrived. In all realistic scenarios, having more money strictly dominates having less, since you can do exactly what is done by those with less, and you have more options besides.
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This is an interesting thread.
My thinking started along the lines of the initial question. Is 1 million good? And Is 10m better?
to me, in any context,1 M is good. But could I find out if I think 10 M is better?
My main concern is that there is an amount of wealth, net wealth, that is certainly bad. Like really fucking terribly bad. Bad for me absolutely. Bad for society, for sure. Possibly even bad for everyone to have more than that certain amount. Like metalcat describes some ultra wealthy people experience. I’ll just assume every single UHNW individual is fucked up in a way that I think is not good and not better.
Does 10 M reach that threshold? In the past I have thought 20 M is the threshold at which my policy fantasies would limit wealth inequality. But in this thread I have been trying to find where the upper limit of personal wealth is for me. What is the maximum amount I would keep if given any amount?
I have been encountering a lot of irl statements that more money is always better. I don’t agree with that.
So far, I haven’t considered inflating my lifestyle. This includes not imaging a lottery fantasy. Though I do love imagining a lottery fantasy. Those lottery fantasies typically include achieving FI, giving some to a handful of family and building a large completely out of place apartment building in a cow field, ideally with only bicycle access.
For this thread I am avoiding fantasies. I ran an analysis on how to live my life with less public and private assistance. Less low income benefits. Less straight up charity. But still on a 4% withdrawal rate of some sum that magically appeared in my accounts.
So far I have analyzed 2M. Which would be a yearly spend of $80,000. This would fit really well into how we have been living. We would end up with $20,000 or so per year to spend on something we currently don’t spend on. It would make the things we do simpler and let us do more of them. Send the kids to camps that cost money and do home improvements. 2 million doesn’t seem like too much. We would still be financially limited in many of our decisions and much more independent.
Would I give away any amount over 2 million? Maybe. I recognize that my opinion of larger amounts of money is colored by my low asset/low income perspective. As I get more money and the idea of giving it away above a certain amount becomes a real consideration. I am sure I’d find it to be a more complicated thing to do.
None of that really tells me if I think 10 M is better. I’ve started with the belief that there is an amount that is too much. Others have said 50M is too much or 100M or 1B. But I haven’t found where I think is too much. Certainly less than 50M.
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Assuming zero additional cost to get the next 9M? You could contrive a circumstance where 10M is not better, but it would be just that: contrived. In all realistic scenarios, having more money strictly dominates having less, since you can do exactly what is done by those with less, and you have more options besides.
This is a good point: what did you have to give up to get to $10M?
In my case, I have to honestly say that didn't give up much. I had a good long run in my career when I enjoyed my work and was paid well for it. I did eventually reach a point in my mid 50s when I was sick of work but at that point, I had more than enough money to retire - so I did. I could have worked more but the cost would have been too high.
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1M and 10M is the same, and so is infinite money for that matter.
You have sixteen posts. Stick around, there is so much to learn.
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Here's a tangential $10M story. Wealthy dude knows he's dying, and donates $10M to a hospital he's supported philanthropically* for years, among other places. After he died, his widow decided to donate his high-quality wardrobe to the thrift shop that supports the same hospital. One caveat: it must be anonymous. I loved that his giving was large enough to put his name on a building and small enough to benefit normal folks too. I priced everything and wondered why there were so few ties relative to everything else. Answer: if anyone liked a tie he was wearing, he took it off and gave it to them. Pretty badass, IMO.
Plot twist: he grew up dirt poor.
I keep fluctuating between ”what a lovely story” and “how awful that hospital infrastructure is dependent on the charitable whims of individual citizens”.
Sorry, I don't think I understand the bolded part. Putting one's name on a new addition to a hospital just means you're a major contributor to the effort. Big donations beget more donations. What's awful about the community raising money to help build something that benefits everyone?
The point is that he gave in many ways, large and small.
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Here's a tangential $10M story. Wealthy dude knows he's dying, and donates $10M to a hospital he's supported philanthropically* for years, among other places. After he died, his widow decided to donate his high-quality wardrobe to the thrift shop that supports the same hospital. One caveat: it must be anonymous. I loved that his giving was large enough to put his name on a building and small enough to benefit normal folks too. I priced everything and wondered why there were so few ties relative to everything else. Answer: if anyone liked a tie he was wearing, he took it off and gave it to them. Pretty badass, IMO.
Plot twist: he grew up dirt poor.
I keep fluctuating between ”what a lovely story” and “how awful that hospital infrastructure is dependent on the charitable whims of individual citizens”.
Sorry, I don't think I understand the bolded part. Putting one's name on a new addition to a hospital just means you're a major contributor to the effort. Big donations beget more donations. What's awful about the community raising money to help build something that benefits everyone?
The point is that he gave in many ways, large and small.
The awful thing here is that major infrastructure (hospitals and others) serving the public just shouldn't be decided upon in this way. Either the project is *needed and cost effective, in which case the government serving that community should spend taxpayer money on it, or it isn't. Of course, the gray zone here is huge: which hospital, school, national park, etc. administrator wouldn't like an extra pot of money for some specific worthwhile project? But it's a slippery slope.
Making decisions and building infrastructure based on who wants to donate what to which institution leads to uneven, inefficient, and haphazard allocation of resources, many of which are actually taxpayer resources after all -- I assume most donations of this kind still require staff and overheads from the main organization and aren't completely self contained forever into the future. Not to mention the tax incentives mentioned above by Metalcat, also paid for by public money. A system that allows for and actively encourages these kinds of contributions also lowers citizens' motivation to pay taxes and elect sensible politicians to decide on public finances, since you can get things your way easier and more directly instead.
So the dude in question did indeed do a lovely thing, but the system he operated in is an unhealthy one.
*What is "needed" of course changes a lot across time, cultures, total resources available, and technological advancement (we require a lot more from our hospitals now than we did 30 years ago). But there is still a line somewhere, even though it moves with time, and various worthwhile projects should be compared against each other, not funded because someone picked that particular cause.
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Here's a tangential $10M story. Wealthy dude knows he's dying, and donates $10M to a hospital he's supported philanthropically* for years, among other places. After he died, his widow decided to donate his high-quality wardrobe to the thrift shop that supports the same hospital. One caveat: it must be anonymous. I loved that his giving was large enough to put his name on a building and small enough to benefit normal folks too. I priced everything and wondered why there were so few ties relative to everything else. Answer: if anyone liked a tie he was wearing, he took it off and gave it to them. Pretty badass, IMO.
Plot twist: he grew up dirt poor.
I keep fluctuating between ”what a lovely story” and “how awful that hospital infrastructure is dependent on the charitable whims of individual citizens”.
Sorry, I don't think I understand the bolded part. Putting one's name on a new addition to a hospital just means you're a major contributor to the effort. Big donations beget more donations. What's awful about the community raising money to help build something that benefits everyone?
The point is that he gave in many ways, large and small.
The awful thing here is that major infrastructure (hospitals and others) serving the public just shouldn't be decided upon in this way. Either the project is *needed and cost effective, in which case the government serving that community should spend taxpayer money on it, or it isn't. Of course, the gray zone here is huge: which hospital, school, national park, etc. administrator wouldn't like an extra pot of money for some specific worthwhile project? But it's a slippery slope.
Making decisions and building infrastructure based on who wants to donate what to which institution leads to uneven, inefficient, and haphazard allocation of resources, many of which are actually taxpayer resources after all -- I assume most donations of this kind still require staff and overheads from the main organization and aren't completely self contained forever into the future. Not to mention the tax incentives mentioned above by Metalcat, also paid for by public money. A system that allows for and actively encourages these kinds of contributions also lowers citizens' motivation to pay taxes and elect sensible politicians to decide on public finances, since you can get things your way easier and more directly instead.
So the dude in question did indeed do a lovely thing, but the system he operated in is an unhealthy one.
*What is "needed" of course changes a lot across time, cultures, total resources available, and technological advancement (we require a lot more from our hospitals now than we did 30 years ago). But there is still a line somewhere, even though it moves with time, and various worthwhile projects should be compared against each other, not funded because someone picked that particular cause.
FWIW, it's a state of the art cancer center. It will save lives. He is dead, and knew he would receive no personal benefit from the new facility. Fuck cancer.
@NorthernIkigai, I'm think I'm following what you're saying, but you don't seem to be understanding my point. Would it be easier if I called it a generous gift to a college? He did that, too, over the course of many years.
Self made man goes from being dirt poor to highly successful and gives back in many, many ways, large and small.
This is NOT about the shortcomings of the healthcare system, any healthcare system. Are we clear now?
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I don’t think it’s that I don’t understand your point (although I guess that’s what I’d say also if it were that… since I wouldn’t understand that I didn’t understand it). It’s also indeed not about healthcare! I did give examples outside of healthcare.
It’s about public services in general, and how they are funded. And how non-public funding of public services screws up decision making on a very fundamental level.
Of course fighting cancer is a very worthy cause. But none of us knows if a new cancer wing was the most badly needed resource in that community. Also, you seem to have skipped the whole “what resource will this thing need in the future” argument. Again, the same argument can be made for any public service that gets a random injection of cash.
Charity is commendable, but a system that is dependent on charity is not.
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There is never enough money to fund everything to the level everyone would like. And just because the public comes to a consensus on funding priorities it doesn't follow that's automatically the best use of recourses. For example, it is hard to argue that public funding for professional sports stadiums is the best use of public resources.
I'm sure lots of places would like to have and could make use of, a state-of-the-art cancer ward, but there is no public funding available. So is it bad for private individuals to fill that need?
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there is no public funding available. So is it bad for private individuals to fill that need?
It's good of private individuals to do it, but bad that they have to.
And, of course, it's not that there's no public funding available. It's that the politicians available to be elected have chosen not to spend money on that.
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The problem is that funding something diverts funding from other things. Considering healthcare, the most obvious single statistic to compare healthcare in each country is “life expectancy”. If people last longer, they have better overall health. If children die young, life expectancy plummets.
Funding new cancer hospitals may (depending on whether the cancer strikes old or young people, and whether the treatments give many more years of life or very few) make very little impact on life expectancy. Exercise appears to have a dramatic influence on life expectancy, so funding a stadium may actually increase life expectancy more than the cancer hospital.
Doctors are very influential in our society, and they tend to believe that more and better treatments are the way to go. It’s one reason why some of the countries with the highest expenditures on healthcare don’t have the best health outcomes. To come back to cancer, if your country has the best head and neck cancer specialists and outcomes in the world, and spends more on that, they won’t have as good outcomes as if they spent that extra money on pancreatic cancer research, since it kills many more people.
There is a lot in the literature about how we can all live longer healthier lives. To enable them, we need to transform our thinking about healthcare and reduce the reactive nature of it. We shouldn’t have to develop a disease before we reduce the probability of anyone ever having it. At first glance, better education, more equitable societies, an emphasis on sports participation… aren’t related to health, but money spent on these can be far more effective at increasing our overall life expectancy than spending on hospitals. Of course, we should look after people with diseases, and fix people, but our system currently does this at the expense of overall health and lifespans. It’s often said that civil engineers are responsible for saving many more lives than the medical profession, since they’ve been responsible for improvements like sewerage.
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This is an interesting thread.
It's an absurd thread, and fails due to the human tendency to project one's own values onto everyone else.... "everyone wanting more than me is greedy, everyone wanting less than me lacks ambition."
If it's a binary choice between stopping work at $1m, or stopping work at $10m... for some it will be the former, for others it will be the latter.
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It's an absurd thread
If you say so... :-p
If it's a binary choice between stopping work at $1m, or stopping work at $10m... for some it will be the former, for others it will be the latter.
Correct- but if it is a philosophical question about money and it's abstract nature: is more always better? (Hint- it was meant to be a philosophical question.)
A quote from Schopenhauer comes to mind: "Money is human happiness in the abstract; he, then, who is no longer capable of enjoying human happiness in the concrete devotes himself utterly to money."
Btw, thanks @Sanitary Stache for the thoughtful consideration you gave to the question... :-)
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but if it is a philosophical question about money and it's abstract nature: is more always better?[/i] (Hint- it was meant to be a philosophical question.)
Since it's trivially easy to get rid of money, the answer to that philosophical question seems facile. More is always better. If you decide that you don't like who you are with more, then give it away and have less. You effectively are asking if people think it's better to have more or less control of their own lives. I find it bizarre that some are rooting for less control.
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More is always better.
Your presumption that this is true, and the fact others are not sure is what I find interesting about this question.
I am wondering if this is because we have paper money (concrete) and the idea of money (abstract.)
I can't think of anything else concrete that we would say "more is always better."
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Funding new cancer hospitals may (depending on whether the cancer strikes old or young people, and whether the treatments give many more years of life or very few) make very little impact on life expectancy. Exercise appears to have a dramatic influence on life expectancy, so funding a stadium may actually increase life expectancy more than the cancer hospital.
If the spectators go to the stadium to exercise then yes. But if they go there to drink beer and eat hot dogs--which is what they actually do, then not so much.
Doctors are very influential in our society, and they tend to believe that more and better treatments are the way to go. It’s one reason why some of the countries with the highest expenditures on healthcare don’t have the best health outcomes. To come back to cancer, if your country has the best head and neck cancer specialists and outcomes in the world, and spends more on that, they won’t have as good outcomes as if they spent that extra money on pancreatic cancer research, since it kills many more people.
The United States has excellent outcomes for some forms of cancers. But only fair outcomes for lots of common types.
I agree with your point that there can be misallocation of public resources. So a more prudent allocation of private resources would be a good thing, no?
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but if it is a philosophical question about money and it's abstract nature: is more always better?[/i] (Hint- it was meant to be a philosophical question.)
Since it's trivially easy to get rid of money, the answer to that philosophical question seems facile. More is always better. If you decide that you don't like who you are with more, then give it away and have less. You effectively are asking if people think it's better to have more or less control of their own lives. I find it bizarre that some are rooting for less control.
This perspective relies on the axiom that money doesn't change people, it just reveals who they really are. I agree with this somewhat, but also disagree with it somewhat.
I have always been pretty level headed with money. Despite that, if I was given 10m now, I would certainly do a better job with it than if I was given it at 16. If I was given it at 16, I might have made decisions that would have led me down a path that would put me in a worse position than I am now despite being given 10m. I'd like to think that I'm mature enough now not to be in the same boat. Given the chance, I'd certainly take it and see what happened, but the thought experiment is legitimate enough that I do have at least some reservations.
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There is never enough money to fund everything to the level everyone would like. And just because the public comes to a consensus on funding priorities it doesn't follow that's automatically the best use of recourses. For example, it is hard to argue that public funding for professional sports stadiums is the best use of public resources.
I'm sure lots of places would like to have and could make use of, a state-of-the-art cancer ward, but there is no public funding available. So is it bad for private individuals to fill that need?
To give an example of 'there is never enough money to fund everything to the level everyone would like', consider this: Australia has a robust and fairly efficient public healthcare system. Total yearly federal spending on Medicare (our public healthcare/hospital program) is $40b, or around $2,000 per adult Australian. So far so good.
Australia also has a National Disability Insurance Scheme, which provides publicly funded care and services to those with a 'disability'. Note this only covers medical and rehabilitation services - it does not cover income benefits for disabled people (that is a completely different program). Nor does it cover nursing homes (separate) or acute hospital admissions/cancer/rehab (those are covered under Medicare as normal).
Total yearly spending on the NDIS is $42b and growing at 10% per year. So we spend more for non-acute medical care on the 6% of Australians on the NDIS than we spend on the 100% of Australians covered under Medicare. Is that really a good allocation of resources? Almost 10% of primary school aged boys are on the NDIS for "ADHD" or similar - I suspect a lot of the spending is just papering over poor parenting or other behavioural disorders that should not be treated by throwing money around.
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It's an absurd thread
If you say so... :-p
If it's a binary choice between stopping work at $1m, or stopping work at $10m... for some it will be the former, for others it will be the latter.
Correct- but if it is a philosophical question about money and it's abstract nature: is more always better? (Hint- it was meant to be a philosophical question.)
A quote from Schopenhauer comes to mind: "Money is human happiness in the abstract; he, then, who is no longer capable of enjoying human happiness in the concrete devotes himself utterly to money."
Btw, thanks @Sanitary Stache for the thoughtful consideration you gave to the question... :-)
People frame the question by asking what they have to give up to get to those numbers (factoring in diminishing returns and opportunity cost).... but approach it from another angle, ie luck - if you had a huge lottery win, would you immediately give 90% of it away in so that they had a "optimal amount"? Would you give any of it away in such a fashion. Now how about if I tell you that you don't get to choose who you give it to, but that instead the money goes straight to the IRS or otherwise gets spread evenly across the rest of society (including convicted rapists and murderer).. are you still so keen?
Yes we are getting into ridiculous contrived scenarios here, which is what happens in these, but they are designed to stress test your answer
Few people here would turn down a larger pay rise that would help them to those larger numbers quicker.. but I suspect some would if it meant more job responsibilities.and expectation which is what tends to happen, so in reality it's always a trade off
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More is always better.
Your presumption that this is true, and the fact others are not sure is what I find interesting about this question.
I am wondering if this is because we have paper money (concrete) and the idea of money (abstract.)
I can't think of anything else concrete that we would say "more is always better."
Money is purely an abstract concept. Paper money is worth nothing unless people believe in the abstract concept of a piece of green paper being guaranteed by a government and accepted by other people. Hell, in the past ten years I've rarely even touched physical forms of money. If you're talking about physical stuff then sure . . . I mean, trying to store and protect ten million dollars in cash seems like it would be a bigger headache than doing the same with one million.
At the end of the day though, in the Venn diagram of this situation 'More' completely contains 'Less'. So you can do everything you can with 'Less' if you have 'More' . . . but the reverse isn't true.
but if it is a philosophical question about money and it's abstract nature: is more always better?[/i] (Hint- it was meant to be a philosophical question.)
Since it's trivially easy to get rid of money, the answer to that philosophical question seems facile. More is always better. If you decide that you don't like who you are with more, then give it away and have less. You effectively are asking if people think it's better to have more or less control of their own lives. I find it bizarre that some are rooting for less control.
This perspective relies on the axiom that money doesn't change people, it just reveals who they really are. I agree with this somewhat, but also disagree with it somewhat.
I have always been pretty level headed with money. Despite that, if I was given 10m now, I would certainly do a better job with it than if I was given it at 16. If I was given it at 16, I might have made decisions that would have led me down a path that would put me in a worse position than I am now despite being given 10m. I'd like to think that I'm mature enough now not to be in the same boat. Given the chance, I'd certainly take it and see what happened, but the thought experiment is legitimate enough that I do have at least some reservations.
I'd argue that there's no difference with your scenario. If I was given a million bucks at 16 I'd do stupid shit with it . . . and if I was given ten million bucks at 16 I'd do stupid shit with it. 1 vs 10 doesn't seem to impact that scenario in any meaningful way. If you're mature enough to handle one, I suspect the same holds true for the other.
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I guess I'm not yet mature enough to handle 10 M€ then :-D I haven't calculated our net worth since I'm only interested in our stash, but I guess it's somewhere close to or just below 1 M€. I can definitely handle that. And some.
But the thought of 10 M€ freaks me out. Mo' money and all that.
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I think certain amount of money changes the lifestyle conceptually. It's a little naive to think this: "oh I will have 10 mil and I will live exactly same way, be exactly same person, just more secure in my finances". It's just not how it works in reality. Our lived experiences change us, and that includes acquiring significant wealth.
I don't really know where the point of no return is though. At some point the amount of money transitions from "I can now support my desired middle class lifestyle indefinitely" (FIRE or fat FIRE) to "I can do almost anything I could wish for".
My guess that a the latter stage the existential question of wishing becomes no joke. What will make me happy? Is there anything that will me happy? How can I get it? This is in addition to already discussed aspects of relationship issues, inability to be stealth, etc.
Do I want that for myself? It's a hard question and I have a knee jerk reaction of "of course, I want more money".
However, I probably would never want to cross over into the "I can do almost anything I could wish for" category. Not because I want some hardship on myself, quite the opposite. I would probably want to be able to get any health care I need, money no concern. I'd rather not get into the vortex of those hard existential questions though.
Stuff doesn't buy happiness. Lifestyle inflation does not only apply to material possessions, it also applies to experiences. I do not want to devalue my current points of happiness. Here is an anectode. Generally, I enjoy having a cocktail on a patio. It's something I sought out but I couldn't always get it. It's expensive and not particularly healthy, I can have it as a special occasion only. However, this summer due to life events I had A LOT of cocktails on various patios. And you know what. It lost its shine. I got tired. Yes, it's nice but the thought of going to the cocktail bar does not excite me anymore. It's not that special. It's not that fun. I'd rather do something else. In fact, I prefer something else! I don't know if I will be enjoying it again...
This anecdote might sound silly but I imagine that removing artificial money constraints on experiences might.. deflate them. Make them more mundane.
I want my special occasions to feel special. The treadmill of always searching for an exciting thing sounds exhausting.
Just my $0.02.
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1M and 10M is the same, and so is infinite money for that matter.
For someone who has annual expenses < 40K and a set it and forget it philosophy, I could see this being the case. ERE proponents, for instance.
For folks with annual expenses more like 60K, not so much.
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At the end of the day though, in the Venn diagram of this situation 'More' completely contains 'Less'. So you can do everything you can with 'Less' if you have 'More' . . . but the reverse isn't true.
When is a situation when the "more' does not completely contain the "less"?
When is a situation other than "money" when we would all (ha!) mostly agree that "more" is always better?
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I do not want to devalue my current points of happiness.
I think this same thing from a different perspective: I do not want to become the person who takes all my luxuries for granted instead of always being conscious/grateful that I have somehow managed to wind up with this awesome life.
Ex: My mom and I both travel and both are Marriott whatever. She travels extensively so is top-tier whatever, and so she routinely gets upgraded to the best room without even asking; I travel less, so I do not. After years of this, I've observed that it now takes more to provide her the same level of happiness. If she doesn't get the upgrade, she's actually unhappy; a basic-level upgrade is now the baseline expectation, and it takes something like the Presidential suite to make her really excited. Whereas I'm still thrilled with that basic-level upgrade.
This is where I can see infinite money creating problems. I have really, really enjoyed getting to the point I can solve some problems by throwing money at them. For a very long time, that wasn't an option, so just sitting there, looking at a problem, and knowing I have that choice makes me feel like I've succeeded, like I've really come a long way, and I'm both grateful and somewhat disbelieving that this is actually me, sitting here, able to be frivolous with money if I want to.
But I don't want to become the person who thinks that my money will solve every problem for me. Because of course it won't, and so I will be disappointed when I find a problem that I can't solve that way. But even more, I will lose the joy that I currently get just from realizing that I can solve my problem in that way -- I'll take it for granted because of course I can solve the problem by throwing money at it, because I do it all the time, and that's my baseline expectation now.
tl;dr: I don't like people who take their good fortune and privileges for granted, and so I really, really, really don't want to be tempted to become one of them.
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The more money I have the more I'd be worried about family (or myself) being kidnapped for ransom. $10M is likely still at the under-the-radar level, but I could see it being a significant concern at $50M+.
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At the end of the day though, in the Venn diagram of this situation 'More' completely contains 'Less'. So you can do everything you can with 'Less' if you have 'More' . . . but the reverse isn't true.
When is a situation when the "more' does not completely contain the "less"?
When is a situation other than "money" when we would all (ha!) mostly agree that "more" is always better?
Happiness? Health? Time? Feeling of belonging? Satisfaction?
I can think of tons of times where more is always better.
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At the end of the day though, in the Venn diagram of this situation 'More' completely contains 'Less'. So you can do everything you can with 'Less' if you have 'More' . . . but the reverse isn't true.
When is a situation when the "more' does not completely contain the "less"?
When is a situation other than "money" when we would all (ha!) mostly agree that "more" is always better?
More wisdom is always better?
The limit on more of somthing always being better seems to be when it comes with a trade off. If the thought is that more of something comes without any tradeoff whether that tradeoff be more work, loss of discipline, loss of time, analysis paralysis, etc. - then there probably isn't anything where more is always better. Will more wisdom lead to less action, more love lead to loss of identity, more efficiency lead to loss of friction (then we would be so efficient we couldn't walk!, like because there was no friction on our feet...). Maybe more effiency is always better? I do like sliding.
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MMM had a somewhat relevant article recently:
https://www.mrmoneymustache.com/2024/05/18/the-ultimate-life-coach/
The main issue he addresses is that never having to do something you don't want to do leads to a certain kind of weakness and dissatisfaction. Even at 1M there are lots of things you might not have to do if you don't want to, but I think for most people it's a number where you can't throw money at every problem. At 10M you probably can. Even though I'm not FI yet, I can already tell I've lost some of the excitement of conquering challenges when I had very little money and I suspect my mentality will continue to change as the stash hits higher levels.
That said I'll take 10M over 1M, no hesitation haha. The opportunity to move exactly where I want to be, cover potential medical expenses, and help family if they fall on hard times is too much to pass up.
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The more money I have the more I'd be worried about family (or myself) being kidnapped for ransom. $10M is likely still at the under-the-radar level, but I could see it being a significant concern at $50M+.
As long as I shop at thrift stores and drive an old car, I'm not so worried about that. I do keep an eye on the rearview mirror as i approach my house. I'm more concerned about a random crime of opportunity than I am a targeted kidnapping.
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but if it is a philosophical question about money and it's abstract nature: is more always better?[/i] (Hint- it was meant to be a philosophical question.)
Since it's trivially easy to get rid of money, the answer to that philosophical question seems facile. More is always better. If you decide that you don't like who you are with more, then give it away and have less. You effectively are asking if people think it's better to have more or less control of their own lives. I find it bizarre that some are rooting for less control.
This perspective relies on the axiom that money doesn't change people, it just reveals who they really are. I agree with this somewhat, but also disagree with it somewhat.
I have always been pretty level headed with money. Despite that, if I was given 10m now, I would certainly do a better job with it than if I was given it at 16. If I was given it at 16, I might have made decisions that would have led me down a path that would put me in a worse position than I am now despite being given 10m. I'd like to think that I'm mature enough now not to be in the same boat. Given the chance, I'd certainly take it and see what happened, but the thought experiment is legitimate enough that I do have at least some reservations.
I'd argue that there's no difference with your scenario. If I was given a million bucks at 16 I'd do stupid shit with it . . . and if I was given ten million bucks at 16 I'd do stupid shit with it. 1 vs 10 doesn't seem to impact that scenario in any meaningful way. If you're mature enough to handle one, I suspect the same holds true for the other.
I don't think I agree with this, though, at least for me now. In fact, for the now version of me, I disagree pretty strongly with it. If someone gave me 1M, in the stage I am in, it would accelerate my FIRE plans for sure, but I really don't think I would do much with it at all other than stress a little about how to invest it and maybe go out with DW for a celebratory dinner.
10 M is so far beyond what I need at 4% that things would change. I'm not saying I'd do stupid things with it. I'm just saying that I'd have to actively try not to because the urge would most certainly be there.
I'm actually surprised you don't feel the same. Do you think you'd do a lot of dumb spending with just 1M or not feel the urge to do lifestyle inflation or maybe buy a mattress/cell phone combo at 10M? :-)
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I do not want to devalue my current points of happiness.
I think this same thing from a different perspective: I do not want to become the person who takes all my luxuries for granted instead of always being conscious/grateful that I have somehow managed to wind up with this awesome life.
Ex: My mom and I both travel and both are Marriott whatever. She travels extensively so is top-tier whatever, and so she routinely gets upgraded to the best room without even asking; I travel less, so I do not. After years of this, I've observed that it now takes more to provide her the same level of happiness. If she doesn't get the upgrade, she's actually unhappy; a basic-level upgrade is now the baseline expectation, and it takes something like the Presidential suite to make her really excited. Whereas I'm still thrilled with that basic-level upgrade.
This is where I can see infinite money creating problems. I have really, really enjoyed getting to the point I can solve some problems by throwing money at them. For a very long time, that wasn't an option, so just sitting there, looking at a problem, and knowing I have that choice makes me feel like I've succeeded, like I've really come a long way, and I'm both grateful and somewhat disbelieving that this is actually me, sitting here, able to be frivolous with money if I want to.
But I don't want to become the person who thinks that my money will solve every problem for me. Because of course it won't, and so I will be disappointed when I find a problem that I can't solve that way. But even more, I will lose the joy that I currently get just from realizing that I can solve my problem in that way -- I'll take it for granted because of course I can solve the problem by throwing money at it, because I do it all the time, and that's my baseline expectation now.
tl;dr: I don't like people who take their good fortune and privileges for granted, and so I really, really, really don't want to be tempted to become one of them.
Agree, entitlement to a certain "standard" is a very real thing. Whatever constitutes "the standard" is changing over time though. It's pretty much a direct function of disposable income and the lifestyle inflation.
This entitlement is a really tricky concept though. It actively ruins enjoyment of good things because they suddenly don't seem as good anymore unless you get something even more impressive.
I recently watched a movie about rapid acquisition of wealth (The Billionaire Boys Club). It had a comment about life in Beverley Hills: "While the rest of the world is trying to live better life, everyone here is trying to live the best life".
Imagine what kind of pressure that puts people under. What if your life is NOT THE BEST LIFE? Given the amount of resources you can throw at any problem? Gosh.
Again, I am not saying that I don't want to have more money, because I do, I really do. I also really want to avoid this trap, it looks miserable. It's like screaming "I used to be happy with drinking my mojito, why am I on my 10th mojito and still not achieving bliss??"
I don't know where people get wisdom and internal strength to maintain their sense of contentment (do not confuse with pride of accomplishment) after amassing huge fortunes.
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I don't know where people get wisdom and internal strength to maintain their sense of contentment (do not confuse with pride of accomplishment) after amassing huge fortunes.
. . . but even a million bucks is already a massive fortune!
With that you could buy a Lambourghini Aventador any time . . . and a couple hundred Vitamix blenders. And still have enough for a personal assistant to follow you around and tell you how good you look all day.
These are dumb things to do though. Dumb people who come into money will do them. But this kind of dumb is a choice. Amassing a huge fortune doesn't mean you have to be dumb with it.
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I don't know where people get wisdom and internal strength to maintain their sense of contentment (do not confuse with pride of accomplishment) after amassing huge fortunes.
. . . but even a million bucks is already a massive fortune!
With that you could buy a Lambourghini Aventador any time . . . and a couple hundred Vitamix blenders. And still have enough for a personal assistant to follow you around and tell you how good you look all day.
These are dumb things to do though. Dumb people who come into money will do them. But this kind of dumb is a choice. Amassing a huge fortune doesn't mean you have to be dumb with it.
Yeah I see contentment and wealth (at any level) as two totally different things. If you are content with your life why would amassing more money or stuff or experiences make you more content? If you need more money to bring more contentment to your life when you are already content that just seems odd. The Buddha said, “Contentment is the greatest wealth.” I suppose that's the mustashian version of "enough".
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I don't know where people get wisdom and internal strength to maintain their sense of contentment (do not confuse with pride of accomplishment) after amassing huge fortunes.
. . . but even a million bucks is already a massive fortune!
I agree, it is.
However, I don't view $$ as a dollar amount. I think about it as "how much income will it generate per year in perpetuity?". With that perspective a million bucks is not buying you a crazy lifestyle.
I think it's easy to think that dumb people will do dumb things. However, it looks like a fallacy of "oh, I am definitely smart so I will be better than everyone else". If you are that smart, then congrats! I just don't think I am that much of an abnormality. Hedonic adaptation and lifestyle inflation are pretty universal among humans last I heard.
Sure, I don't care about Vitamix blenders or personal assistants. I have my own set of pet causes and vague desires that would probably will mean lifestyle inflation for me, given the opportunity (and lack of goal to accumulate\preserve wealth and get to FI). For instance, I would totally hire a house cleaner if I could :P And then I would lose the joy of washing the floors myself... lol.
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I don't know where people get wisdom and internal strength to maintain their sense of contentment (do not confuse with pride of accomplishment) after amassing huge fortunes.
. . . but even a million bucks is already a massive fortune!
With that you could buy a Lambourghini Aventador any time . . . and a couple hundred Vitamix blenders. And still have enough for a personal assistant to follow you around and tell you how good you look all day.
These are dumb things to do though. Dumb people who come into money will do them. But this kind of dumb is a choice. Amassing a huge fortune doesn't mean you have to be dumb with it.
It doesn't mean you have to, but it does mean you have to make more decisions in general. Like I said above, 1 M isn't going to change my life one way or the other a whole lot other than allowing RE much sooner. I'm probably going to end up having a 3% or less WR because I'm a pansy. It's still in the tangible level of reality. At 10M, that's $400,000 of withdraw. It's insane.
I'll put it this way, I feel very confident that I would put pretty much 99% of 1M into my Vanguard account. When I think about getting $10M, my thoughts immediately go to, well, I could buy a couple of new cars immediately to replace my 200k mile car and close to 300k mile van even though both definitely have life left in them. I could pay for this home improvement that I don't really need but would be nice. Etc. Etc. Etc. I would like to think that I would go about with literally no changes except more freedom, but I don't know that for sure. I can't imagine I'm the only one.
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[At 10M, that's $400,000 of withdraw. It's insane.
Lots of retirees have a second, vacation home in nice areas. Buying homes in the NY metro area and south Florida—or CA, etc.—could easily cost $3-4M. Then you’ve got $6M. Draw down your reasonable 3% and it’s $180k a year. Maintenance and taxes on the homes ALONE could be close to $100k, Wanna travel? Charity? Help the kids? This is not crazy-ass lifestyle of the rich and famous. No yacht, no his and hers Bentleys.
$10 is nice, don’t get me wrong. But you’re not Snoop…
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I don't know where people get wisdom and internal strength to maintain their sense of contentment (do not confuse with pride of accomplishment) after amassing huge fortunes.
. . . but even a million bucks is already a massive fortune!
I agree, it is.
However, I don't view $$ as a dollar amount. I think about it as "how much income will it generate per year in perpetuity?". With that perspective a million bucks is not buying you a crazy lifestyle.
I think it's easy to think that dumb people will do dumb things. However, it looks like a fallacy of "oh, I am definitely smart so I will be better than everyone else". If you are that smart, then congrats! I just don't think I am that much of an abnormality. Hedonic adaptation and lifestyle inflation are pretty universal among humans last I heard.
Sure, I don't care about Vitamix blenders or personal assistants. I have my own set of pet causes and vague desires that would probably will mean lifestyle inflation for me, given the opportunity (and lack of goal to accumulate\preserve wealth and get to FI). For instance, I would totally hire a house cleaner if I could :P And then I would lose the joy of washing the floors myself... lol.
Not always true with the bolded. Even here where people don't generally inflate their lifestyle you often hear people lamenting the excess in their lives and wishes they could go back to a more carefree live. A smaller house (which isn't a burden to care for), no second homes to care for, no expensive vacations, no luxury items, a simpler life that doesn't require lots of upscale things to maintain, an older car that they don't have to worry about (or just being car free), etc..
While I think much of that is romanticizing the past, there are those who find MORE joy and contentment with fewer or smaller thing regardless of their income or NW. Getting off the middle class or upper middle class spending binge, even high high income spending binge, is something many people long for but often find themselves "stuck". Whether due to debt, societal beliefs that you're a loser if you don't have or do those things, spouse or kids wanting that life, or just any reason that compels to to "move up" rather then "move down" even if moving down would bring you greater happiness and lower stress.
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I don't know where people get wisdom and internal strength to maintain their sense of contentment (do not confuse with pride of accomplishment) after amassing huge fortunes.
. . . but even a million bucks is already a massive fortune!
With that you could buy a Lambourghini Aventador any time . . . and a couple hundred Vitamix blenders. And still have enough for a personal assistant to follow you around and tell you how good you look all day.
These are dumb things to do though. Dumb people who come into money will do them. But this kind of dumb is a choice. Amassing a huge fortune doesn't mean you have to be dumb with it.
It doesn't mean you have to, but it does mean you have to make more decisions in general. Like I said above, 1 M isn't going to change my life one way or the other a whole lot other than allowing RE much sooner. I'm probably going to end up having a 3% or less WR because I'm a pansy. It's still in the tangible level of reality. At 10M, that's $400,000 of withdraw. It's insane.
I'll put it this way, I feel very confident that I would put pretty much 99% of 1M into my Vanguard account. When I think about getting $10M, my thoughts immediately go to, well, I could buy a couple of new cars immediately to replace my 200k mile car and close to 300k mile van even though both definitely have life left in them. I could pay for this home improvement that I don't really need but would be nice. Etc. Etc. Etc. I would like to think that I would go about with literally no changes except more freedom, but I don't know that for sure. I can't imagine I'm the only one.
I don't know. With 1.8 million now I don't seem to make any more decisions than I did with 40k in the bank after my second year working.
For sure, withdrawing 400,000$ a year is insane - but there's no reason to actually do it. I live an incredibly comfortable life with my family that is completely without deprivation under 50k a year.
If I got 10 million dollars I'd put it into the same savings and investment vehicles that I've put the last 1.8 into. There aren't too many really expensive things that I want. I fricking love my '05 Corolla. Why buy a different car? There's some stuff that I could do as far as home improvements on our house . . . but honestly, I want to do those on my own. Working a little bit at a time on things like that is something I enjoy. I've already got more guitar stuff than I need, and have formed emotional bonds with my guitars so wouldn't even be blowing money there. My steel frame road bike is similar - it fits me perfectly and we've been through so many thousands of hours that I wouldn't want to get rid of it for something else. I don't really like travelling. I don't enjoy eating out at fancy restaurants. The only jewelry I wear is my wedding ring (recently around my neck held on by a stainless steel chain). Heck, even my clothes tend to last me a really long time washing everything on cold and hang drying them. It is honestly hard to think of things that I really want to blow money on - maybe some music or writing courses? But those take time so are somewhat self limiting in the amount they can drain.
Some of the biggest temptations for me spending-wise would be to give the money away. I'd probably set up something so that my son receives a few million dollars in his mid thirties after he has made his way in the world for a while. I'd want to give my sister some money too. There are some environmental causes I'd like to donate to. I'd give some money to my Jiu-Jitsu instructor to replace worn mats at the gym. I'd be interested in setting up some sort of fund to improve things in my neighbourhood somehow - homeless and drug related outreach programs, food subsidy stuff, donation to local hospitals and schools, and a large donation to the Toronto Public library. I was reading about a summer camp program where inner city kids are brought out into the woods and taught some basic outdoors skills - camping, hiking/portaging, cooking, fishing, etc. I'd love to do something like that.
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I don't know where people get wisdom and internal strength to maintain their sense of contentment (do not confuse with pride of accomplishment) after amassing huge fortunes.
. . . and a couple hundred Vitamix blenders.
Youre obsessed! get a room!
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[At 10M, that's $400,000 of withdraw. It's insane.
Lots of retirees have a second, vacation home in nice areas. Buying homes in the NY metro area and south Florida—or CA, etc.—could easily cost $3-4M. Then you’ve got $6M. Draw down your reasonable 3% and it’s $180k a year. Maintenance and taxes on the homes ALONE could be close to $100k, Wanna travel? Charity? Help the kids? This is not crazy-ass lifestyle of the rich and famous. No yacht, no his and hers Bentleys.
$10 is nice, don’t get me wrong. But you’re not Snoop…
C'mon. Anyone can Suze Orman our way to explaining any amount of money being not really that much. 1M can buy you a lot of ridiculous things. That's why looking at it as the 4% is a good way to look at it. A person with 40k a year in passive income can do decently well. A person with 400k in passive income has money coming out of their ears. Now, they but a 3M house, a 3M Ashton Martin, 2M yacht, and a 1M stamp collection, they'll only have 1M left and 40k in passive income, so there is that...
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I don't know where people get wisdom and internal strength to maintain their sense of contentment (do not confuse with pride of accomplishment) after amassing huge fortunes.
. . . but even a million bucks is already a massive fortune!
With that you could buy a Lambourghini Aventador any time . . . and a couple hundred Vitamix blenders. And still have enough for a personal assistant to follow you around and tell you how good you look all day.
These are dumb things to do though. Dumb people who come into money will do them. But this kind of dumb is a choice. Amassing a huge fortune doesn't mean you have to be dumb with it.
It doesn't mean you have to, but it does mean you have to make more decisions in general. Like I said above, 1 M isn't going to change my life one way or the other a whole lot other than allowing RE much sooner. I'm probably going to end up having a 3% or less WR because I'm a pansy. It's still in the tangible level of reality. At 10M, that's $400,000 of withdraw. It's insane.
I'll put it this way, I feel very confident that I would put pretty much 99% of 1M into my Vanguard account. When I think about getting $10M, my thoughts immediately go to, well, I could buy a couple of new cars immediately to replace my 200k mile car and close to 300k mile van even though both definitely have life left in them. I could pay for this home improvement that I don't really need but would be nice. Etc. Etc. Etc. I would like to think that I would go about with literally no changes except more freedom, but I don't know that for sure. I can't imagine I'm the only one.
I don't know. With 1.8 million now I don't seem to make any more decisions than I did with 40k in the bank after my second year working.
For sure, withdrawing 400,000$ a year is insane - but there's no reason to actually do it. I live an incredibly comfortable life with my family that is completely without deprivation under 50k a year.
If I got 10 million dollars I'd put it into the same savings and investment vehicles that I've put the last 1.8 into. There aren't too many really expensive things that I want. I fricking love my '05 Corolla. Why buy a different car? There's some stuff that I could do as far as home improvements on our house . . . but honestly, I want to do those on my own. Working a little bit at a time on things like that is something I enjoy. I've already got more guitar stuff than I need, and have formed emotional bonds with my guitars so wouldn't even be blowing money there. My steel frame road bike is similar - it fits me perfectly and we've been through so many thousands of hours that I wouldn't want to get rid of it for something else. I don't really like travelling. I don't enjoy eating out at fancy restaurants. The only jewelry I wear is my wedding ring (recently around my neck held on by a stainless steel chain). Heck, even my clothes tend to last me a really long time washing everything on cold and hang drying them. It is honestly hard to think of things that I really want to blow money on - maybe some music or writing courses? But those take time so are somewhat self limiting in the amount they can drain.
Some of the biggest temptations for me spending-wise would be to give the money away. I'd probably set up something so that my son receives a few million dollars in his mid thirties after he has made his way in the world for a while. I'd want to give my sister some money too. There are some environmental causes I'd like to donate to. I'd give some money to my Jiu-Jitsu instructor to replace worn mats at the gym. I'd be interested in setting up some sort of fund to improve things in my neighbourhood somehow - homeless and drug related outreach programs, food subsidy stuff, donation to local hospitals and schools, and a large donation to the Toronto Public library. I was reading about a summer camp program where inner city kids are brought out into the woods and taught some basic outdoors skills - camping, hiking/portaging, cooking, fishing, etc. I'd love to do something like that.
Do at what amount would you start giving it away?
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I don't know where people get wisdom and internal strength to maintain their sense of contentment (do not confuse with pride of accomplishment) after amassing huge fortunes.
. . . but even a million bucks is already a massive fortune!
With that you could buy a Lambourghini Aventador any time . . . and a couple hundred Vitamix blenders. And still have enough for a personal assistant to follow you around and tell you how good you look all day.
These are dumb things to do though. Dumb people who come into money will do them. But this kind of dumb is a choice. Amassing a huge fortune doesn't mean you have to be dumb with it.
It doesn't mean you have to, but it does mean you have to make more decisions in general. Like I said above, 1 M isn't going to change my life one way or the other a whole lot other than allowing RE much sooner. I'm probably going to end up having a 3% or less WR because I'm a pansy. It's still in the tangible level of reality. At 10M, that's $400,000 of withdraw. It's insane.
I'll put it this way, I feel very confident that I would put pretty much 99% of 1M into my Vanguard account. When I think about getting $10M, my thoughts immediately go to, well, I could buy a couple of new cars immediately to replace my 200k mile car and close to 300k mile van even though both definitely have life left in them. I could pay for this home improvement that I don't really need but would be nice. Etc. Etc. Etc. I would like to think that I would go about with literally no changes except more freedom, but I don't know that for sure. I can't imagine I'm the only one.
I don't know. With 1.8 million now I don't seem to make any more decisions than I did with 40k in the bank after my second year working.
For sure, withdrawing 400,000$ a year is insane - but there's no reason to actually do it. I live an incredibly comfortable life with my family that is completely without deprivation under 50k a year.
If I got 10 million dollars I'd put it into the same savings and investment vehicles that I've put the last 1.8 into. There aren't too many really expensive things that I want. I fricking love my '05 Corolla. Why buy a different car? There's some stuff that I could do as far as home improvements on our house . . . but honestly, I want to do those on my own. Working a little bit at a time on things like that is something I enjoy. I've already got more guitar stuff than I need, and have formed emotional bonds with my guitars so wouldn't even be blowing money there. My steel frame road bike is similar - it fits me perfectly and we've been through so many thousands of hours that I wouldn't want to get rid of it for something else. I don't really like travelling. I don't enjoy eating out at fancy restaurants. The only jewelry I wear is my wedding ring (recently around my neck held on by a stainless steel chain). Heck, even my clothes tend to last me a really long time washing everything on cold and hang drying them. It is honestly hard to think of things that I really want to blow money on - maybe some music or writing courses? But those take time so are somewhat self limiting in the amount they can drain.
Some of the biggest temptations for me spending-wise would be to give the money away. I'd probably set up something so that my son receives a few million dollars in his mid thirties after he has made his way in the world for a while. I'd want to give my sister some money too. There are some environmental causes I'd like to donate to. I'd give some money to my Jiu-Jitsu instructor to replace worn mats at the gym. I'd be interested in setting up some sort of fund to improve things in my neighbourhood somehow - homeless and drug related outreach programs, food subsidy stuff, donation to local hospitals and schools, and a large donation to the Toronto Public library. I was reading about a summer camp program where inner city kids are brought out into the woods and taught some basic outdoors skills - camping, hiking/portaging, cooking, fishing, etc. I'd love to do something like that.
Do at what amount would you start giving it away?
Probably when I'm at about 50% higher than what I think I need for comfortable retirement. Unnecessary, but this would make my little risk averse heart of hearts happy. I'm aiming for 2 mil for retirement right now, so would cap my stuff at 3 mil and then start giving it away.
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Any thought experiment that makes 10M not a fuckload of money has to rely on "well spend $XMillion on a house or two and then..."
Look at it through a rental lens though, and you see that if you follow the "one third of income" rule on housing from 4% rule of $10M and renting a place that costs $11,000/month is comfortably within your budget. Then your "second home" problem can be considered vacation expenses, not housing costs. And even after spending $11k per month on your sick mansion or penthouse or whatever, you still have ~$267k/year of other spending money, which I think can fund some pretty sick vacations. And by not buying a vacation home in one specific location, your vacations can be more varied, and you're not paying for an empty home all year long.
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Any thought experiment that makes 10M not a fuckload of money has to rely on "well spend $XMillion on a house or two and then..."
Look at it through a rental lens though, and you see that if you follow the "one third of income" rule on housing from 4% rule of $10M and renting a place that costs $11,000/month is comfortably within your budget. Then your "second home" problem can be considered vacation expenses, not housing costs. And even after spending $11k per month on your sick mansion or penthouse or whatever, you still have ~$267k/year of other spending money, which I think can fund some pretty sick vacations. And by not buying a vacation home in one specific location, your vacations can be more varied, and you're not paying for an empty home all year long.
But but but...I "need" my own private vacation island and a private plane to get me from my primary mansion home (in San Fran, Silicon Valley or The OC - which 5 minutes ago the News told me were the top 3 most expensive housing markets in the US) to my private island. $10 mil can't buy that!
But seriously, while housing is expensive now and living on 4% of $1mm isn't going to be doable in many high housing markets, 4% of $10mm is so far beyond what's needed it's not comparable.. And of course many can move elsewhere or downsize so that housing cost are lower.
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Any thought experiment that makes 10M not a fuckload of money has to rely on "well spend $XMillion on a house or two and then..."
Look at it through a rental lens though, and you see that if you follow the "one third of income" rule on housing from 4% rule of $10M and renting a place that costs $11,000/month is comfortably within your budget. Then your "second home" problem can be considered vacation expenses, not housing costs. And even after spending $11k per month on your sick mansion or penthouse or whatever, you still have ~$267k/year of other spending money, which I think can fund some pretty sick vacations. And by not buying a vacation home in one specific location, your vacations can be more varied, and you're not paying for an empty home all year long.
The tax on $400k a year would be significant. Here in Australia on $400k in income you would be paying $160k a year in income tax, leaving you with $240k left over - a much smaller chunk. The only way to have an income source be tax free is for it to come from your superannuation which is accessible only after age 60 (so not relevant to early retirees), plus there are additional taxes on: (1) any annual contributions to superannuation above $27,500 and (2) any superannuation account balances over $3 million, so in actuality you'd be paying either income tax at a marginal rate of 47% or you'd be paying 2 lots of superannuation tax, on both contributions and gains.
Maybe the system works very differently in America but I am astounded that the ~40% or so tax burden is never accounted for.
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$240k per year is still a fuckload of money…
Also, I live in an extremely high tax environment, don’t know anything about tricks to lower the taxes on extremely high incomes, and even I know how to get at least 285 k€ from that 400 k€ yearly income*. I bet spending some money on a tax advisor would significantly raise that number.
Edit:
* coming from my lump sum of 10M€. Indeed, if my 400k€ is salary, I pay a loooot more taxes on it.
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Maybe the system works very differently in America but I am astounded that the ~40% or so tax burden is never accounted for.
It it very different. Assuming the withdrawals are from a normal brokerage account (as opposed to an IRA, etc) and married filing taxes jointly, the first $89,250 are tax free. Zippo, no tax. Then the next income up to $553,850 is taxed at 15%. So taxed very lightly. Much lower tax rate than being a school teacher or fire fighter.
The FIRE movement in the USA is highly dependent upon the fact the US tax code strongly discourages productive work. Most people's tax bill drops enormously after quitting work.
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Any thought experiment that makes 10M not a fuckload of money has to rely on "well spend $XMillion on a house or two and then..."
Look at it through a rental lens though, and you see that if you follow the "one third of income" rule on housing from 4% rule of $10M and renting a place that costs $11,000/month is comfortably within your budget. Then your "second home" problem can be considered vacation expenses, not housing costs. And even after spending $11k per month on your sick mansion or penthouse or whatever, you still have ~$267k/year of other spending money, which I think can fund some pretty sick vacations. And by not buying a vacation home in one specific location, your vacations can be more varied, and you're not paying for an empty home all year long.
The tax on $400k a year would be significant. Here in Australia on $400k in income you would be paying $160k a year in income tax, leaving you with $240k left over - a much smaller chunk. The only way to have an income source be tax free is for it to come from your superannuation which is accessible only after age 60 (so not relevant to early retirees), plus there are additional taxes on: (1) any annual contributions to superannuation above $27,500 and (2) any superannuation account balances over $3 million, so in actuality you'd be paying either income tax at a marginal rate of 47% or you'd be paying 2 lots of superannuation tax, on both contributions and gains.
Maybe the system works very differently in America but I am astounded that the ~40% or so tax burden is never accounted for.
In the US you'll be paying only 15% on $400k of long term realized capital gains. State taxes vary (can be zero).
You would only pay a high percentage if it's is coming from a tax-deferred account like a 401k, but I doubt there are many of those with $10M. It's technically possible if you and your spouse maxed your respective 401k accounts for the last 40 years and put it 100% in the SP500 (but then would you really not have any savings elsewhere?).
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$240k per year is still a fuckload of money…
Also, I live in an extremely high tax environment, don’t know anything about tricks to lower the taxes on extremely high incomes, and even I know how to get at least 285 k€ from that 400 k€ yearly income*. I bet spending some money on a tax advisor would significantly raise that number.
Edit:
* coming from my lump sum of 10M€. Indeed, if my 400k€ is salary, I pay a loooot more taxes on it.
It's not possible to reduce the tax on it if it is genuine income (whether earned through wages or rent). You could pay less tax if you cashed out a capital gain (i.e. selling property or shares) or if you used a discretionary trust to split the income into smaller parcels which you distribute among your family. The latter is probably the most tax efficient way to do it in a long-term, sustainable and near-automatic fashion, but you can only split to adult children without incurring a tax penalty, so even then it's fairly limited. The other way to do it is to put your FIRE stash into a business and invest in the business and use the business to generate income, which is subject to a lower business tax rate and which can easily be split. However, that clearly involves additional steps.
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Maybe the system works very differently in America but I am astounded that the ~40% or so tax burden is never accounted for.
It it very different. Assuming the withdrawals are from a normal brokerage account (as opposed to an IRA, etc) and married filing taxes jointly, the first $89,250 are tax free. Zippo, no tax. Then the next income up to $553,850 is taxed at 15%. So taxed very lightly. Much lower tax rate than being a school teacher or fire fighter.
The FIRE movement in the USA is highly dependent upon the fact the US tax code strongly discourages productive work. Most people's tax bill drops enormously after quitting work.
Thanks for the explanation. That's extremely light and it explains why FIRE is so much easier in the US. Australia does have tax-free withdrawals (over most income ranges) but only for those over 60; by that time, you are only 7 years away from getting the very generous age pension, so I think that explains why FIRE is much less of a thing here in Australia.
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Maybe the system works very differently in America but I am astounded that the ~40% or so tax burden is never accounted for.
It it very different. Assuming the withdrawals are from a normal brokerage account (as opposed to an IRA, etc) and married filing taxes jointly, the first $89,250 are tax free. Zippo, no tax. Then the next income up to $553,850 is taxed at 15%. So taxed very lightly. Much lower tax rate than being a school teacher or fire fighter.
The FIRE movement in the USA is highly dependent upon the fact the US tax code strongly discourages productive work. Most people's tax bill drops enormously after quitting work.
Thanks for the explanation. That's extremely light and it explains why FIRE is so much easier in the US. Australia does have tax-free withdrawals (over most income ranges) but only for those over 60; by that time, you are only 7 years away from getting the very generous age pension, so I think that explains why FIRE is much less of a thing here in Australia.
I’m not at all sure that FIRE is less of a thing in Australia. Could you give me a study or something? Some years ago, I worked out that this forum had a roughly similar number of members as a percentage of the population from the US, Canada and Australia (I think they were in that order as a percentage). The UK had a much smaller percentage. I haven’t seen much change since then, although I haven’t done the figures again.
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Thanks for the explanation. That's extremely light and it explains why FIRE is so much easier in the US. Australia does have tax-free withdrawals (over most income ranges) but only for those over 60; by that time, you are only 7 years away from getting the very generous age pension, so I think that explains why FIRE is much less of a thing here in Australia.
My BIL lives in Australia and retired this year. He was here visiting just last week and I discussed this topic a bit with him. He and his wife worked in the public sector and apparently in that case the employer contribution to superannuation is double vs the private sector (18% vs 9%).
I fully acknowledge I may not understand this correctly.
However, his monthly income is, as you put it, very generous. They are pretty well fixed up, income wise.
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Thanks for the explanation. That's extremely light and it explains why FIRE is so much easier in the US. Australia does have tax-free withdrawals (over most income ranges) but only for those over 60; by that time, you are only 7 years away from getting the very generous age pension, so I think that explains why FIRE is much less of a thing here in Australia.
My BIL lives in Australia and retired this year. He was here visiting just last week and I discussed this topic a bit with him. He and his wife worked in the public sector and apparently in that case the employer contribution to superannuation is double vs the private sector (18% vs 9%).
I fully acknowledge I may not understand this correctly.
However, his monthly income is, as you put it, very generous. They are pretty well fixed up, income wise.
Yes, many public sector workers get extra superannuation, plus some other perks (some get to pay mortgage interest with pre-tax money).
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$240k per year is still a fuckload of money…
Also, I live in an extremely high tax environment, don’t know anything about tricks to lower the taxes on extremely high incomes, and even I know how to get at least 285 k€ from that 400 k€ yearly income*. I bet spending some money on a tax advisor would significantly raise that number.
Edit:
* coming from my lump sum of 10M€. Indeed, if my 400k€ is salary, I pay a loooot more taxes on it.
It's not possible to reduce the tax on it if it is genuine income (whether earned through wages or rent). You could pay less tax if you cashed out a capital gain (i.e. selling property or shares) or if you used a discretionary trust to split the income into smaller parcels which you distribute among your family. The latter is probably the most tax efficient way to do it in a long-term, sustainable and near-automatic fashion, but you can only split to adult children without incurring a tax penalty, so even then it's fairly limited. The other way to do it is to put your FIRE stash into a business and invest in the business and use the business to generate income, which is subject to a lower business tax rate and which can easily be split. However, that clearly involves additional steps.
Additional steps is exactly what I’d pay the tax experts to figure out for me.I don’t see the problem with that.
Here, I could get to >285 k€ simply by investing in dividend-paying shares. The dividends are taxed less than gains from selling shares or mutual funds, because the companies pay tax as well.
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Maybe the system works very differently in America but I am astounded that the ~40% or so tax burden is never accounted for.
It it very different. Assuming the withdrawals are from a normal brokerage account (as opposed to an IRA, etc) and married filing taxes jointly, the first $89,250 are tax free. Zippo, no tax. Then the next income up to $553,850 is taxed at 15%. So taxed very lightly. Much lower tax rate than being a school teacher or fire fighter.
The FIRE movement in the USA is highly dependent upon the fact the US tax code strongly discourages productive work. Most people's tax bill drops enormously after quitting work.
I don't think this is true at all. Most FIRE people I have heard of really on 401k contributions or Roth for the majority of their expenses unless they have a pension. That's certainly my plan. The fact that money made off of after tax income in the stock market is taxed at roughly zero for a high amount of "income" for the year is a small perk, as the money I have in after tax accounts is a small percentage of my net worth. Do you have any data or other information to back this up?
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I’d say it’s a huge perk, not a small perk. The comparable system I’d have access to is much less favourable (lower amounts you can stash away pre-tax, much more and — crucially — ever changing rules regarding how to access the money later, higher fees,…). Which is why I haven’t bothered and instead only invest after-tax money.
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The FIRE movement in the USA is highly dependent upon the fact the US tax code strongly discourages productive work. Most people's tax bill drops enormously after quitting work.
I don't think this is true at all. Most FIRE people I have heard of really on 401k contributions or Roth for the majority of their expenses unless they have a pension. That's certainly my plan. The fact that money made off of after tax income in the stock market is taxed at roughly zero for a high amount of "income" for the year is a small perk, as the money I have in after tax accounts is a small percentage of my net worth. Do you have any data or other information to back this up?
Hey @Telecaster ] I wouldn't agree that the FIRE movement in the US is *dependent* on the US tax code. Although it may be a benefit relative to other developed nations. IMHO probably more likely the US FIRE movement is dependent on things like US Dollar as world currency, US is a very rich country, etc. Lots of reasons....
But I do agree with you in principle that in the US unearned income is taxed much more favorably than earned income. Rents, cap gains, dividends etc I pay less taxes than I do on any kind of earned income, especially Self-employee type income. @Wolfpack Mustachian I am not sure that is what telecaster meant- but I kind of agree with that sentiment. At this point in life I have to "earn" 2 dollars for the same amount of money to stay in my pocket as 1 dollar of unearned income.
Maybe the system works very differently in America but I am astounded that the ~40% or so tax burden is never accounted for.
Hi @twinstudy you are right that people tend to gloss over taxes in these kinds of discussions, but I also think that much is overdone about them as well. As @NorthernIkigai pointed out a good tax advisor could surely give you lots of ideas about how to reduce your tax burden. I don't think you argument is made in bad faith, but we certainly would not be talking about 400k of "earned" income by a salary man. Income derived from 10M or more in assets would be coming from a variety of sources.
I don't know Australian tax law- just suggesting that there are loopholes the rich exploit everywhere.
Based on the "internet"
400k in pure capital gains (with no other income) in OZ would yield a 66k tax bill.
A more realistic scenario-
A 200k purchased asset sold for 400k (200k capital gains) with no other income would yield a 23k tax bill- a good amount of money for sure, but a far cry from 160k
Just thinking out loud.
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I’d say it’s a huge perk, not a small perk. The comparable system I’d have access to is much less favourable (lower amounts you can stash away pre-tax, much more and — crucially — ever changing rules regarding how to access the money later, higher fees,…). Which is why I haven’t bothered and instead only invest after-tax money.
The vast majority of my money is in 401k, so I'll be paying the regular tax rates. Will be reserving my small amount of roth and taxable money for irregular expenses so I don't have larger tax years. Will see how long they last though!
I won't be retiring super early, maybe 58/9, so will have access to 401k without penalty. Still, tall taxes!
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I’d say it’s a huge perk, not a small perk. The comparable system I’d have access to is much less favourable (lower amounts you can stash away pre-tax, much more and — crucially — ever changing rules regarding how to access the money later, higher fees,…). Which is why I haven’t bothered and instead only invest after-tax money.
The vast majority of my money is in 401k, so I'll be paying the regular tax rates. Will be reserving my small amount of roth and taxable money for irregular expenses so I don't have larger tax years. Will see how long they last though!
I won't be retiring super early, maybe 58/9, so will have access to 401k without penalty. Still, tall taxes!
But you got to save the money in that 401k pre-tax, right? That’s a huge advantage.
I would only be able to save 5000 € per year pre-tax into the crappy equivalent we have here, and then there are a lot of rules about how to access it (much higher age, you can’t get a lump sum, age may still change, etc.). Unsurprisingly, these have become much less popular as people have realised what a crappy deal they are.
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Hey @Telecaster ] I wouldn't agree that the FIRE movement in the US is *dependent* on the US tax code. Although it may be a benefit relative to other developed nations. IMHO probably more likely the US FIRE movement is dependent on things like US Dollar as world currency, US is a very rich country, etc. Lots of reasons....
But I do agree with you in principle that in the US unearned income is taxed much more favorably than earned income. Rents, cap gains, dividends etc I pay less taxes than I do on any kind of earned income, especially Self-employee type income.
I thought about the word choice of "dependent" but it was late and I couldn't think of something better. In hindsight, I should have said "greatly facilitated by." Take the humble 401(k) for example. The deduction comes at the top marginal rate, so the higher your top marginal rate, the more benefit you receive. That's great if you are on the FIRE track, but not so great for the general public.
Similar issues with the IRA. It was originally designed to help lower and middle income people save, hence the contribution limits and caps on deductible income. So why does the backdoor Roth exist? That helps high income people save. Congress could fix that tomorrow if they wanted. Same with the mega backdoor.
And the capital gains issue as discussed early. You can take a lot of capital gains tax free, which again mostly benefits rich people.
We in the MMM community are in the weird space where by optimizing spending and emphasizing savings, we get to take advantage of portions of the tax code that were designed to mostly benefit high income/high net worth individuals.
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I don't think this is true at all. Most FIRE people I have heard of really on 401k contributions or Roth for the majority of their expenses unless they have a pension. That's certainly my plan. The fact that money made off of after tax income in the stock market is taxed at roughly zero for a high amount of "income" for the year is a small perk, as the money I have in after tax accounts is a small percentage of my net worth. Do you have any data or other information to back this up?
First, I probably should have said "facilitated" instead of "dependent" but in the case of the 401K, the deduction occurs at the top marginal rate, but the withdrawals occur at the effective tax rate. So, say working and married filing jointly with an income of $150K, your deduction would be the top rate of 22%. Let's say in retirement your spending is $75K. Your effective rate would be 11.2% (10% of the first $23,200 and 12% on the next $51,800). So you income tax rate is cut in half. Even if you spent the full $150,000 you'd still be under 12%.
Of course in retirement, FICA goes away too. I was self-employed most of my career so I paid both halves. I don't have any data, but suspect most or at least many here have at least some capital gains in retirement simply because 401(k) contribution limits aren't high enough to get to FIRE very early. Of course, the tax rate for those can be as low as zero.
So get rid of FICA, cut your income tax rate in half, maybe more than that thanks to capital gains, and your tax bill goes way down in retirement, even if your spending remains the same.
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I thought about the word choice of "dependent" but it was late and I couldn't think of something better. In hindsight, I should have said "greatly facilitated by."
Lol- sorry wasn't trying to be the Internet word-choice police. I mostly just wanted to make sure I understood what you mean, and I agree with you wholeheartedly about the advantages available.
We in the MMM community are in the weird space where by optimizing spending and emphasizing savings, we get to take advantage of portions of the tax code that were designed to mostly benefit high income/high net worth individuals.
Agree absolutely *100*- following a strategy of spending like you are "poor" and earning like you are "rich" creates unique ways to maximize value in the inherit inequities in a system that is large and complex.
I learned early on when I was earning maybe 30k a year (but receiving many benefits like travel, housing, and food) it was far better than earning 100k a year and being required to purchase all those things myself. My wife and I lived very "rich" - and did it much more efficiently that if we were *actually* rich.
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So get rid of FICA, cut your income tax rate in half, maybe more than that thanks to capital gains, and your tax bill goes way down in retirement, even if your spending remains the same.
Yes FICA is huge, and agree the 401k is a boon to savers. There are lots of options available- between the Roth and pre-tax options if you are smart you can reduce your tax liability considerably. And of course- the worst case (one we have run into) is that you end up paying more taxes that anticipated because you have way more money than you ever planned on.
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I’d say it’s a huge perk, not a small perk. The comparable system I’d have access to is much less favourable (lower amounts you can stash away pre-tax, much more and — crucially — ever changing rules regarding how to access the money later, higher fees,…). Which is why I haven’t bothered and instead only invest after-tax money.
The vast majority of my money is in 401k, so I'll be paying the regular tax rates. Will be reserving my small amount of roth and taxable money for irregular expenses so I don't have larger tax years. Will see how long they last though!
I won't be retiring super early, maybe 58/9, so will have access to 401k without penalty. Still, tall taxes!
But you got to save the money in that 401k pre-tax, right? That’s a huge advantage.
I would only be able to save 5000 € per year pre-tax into the crappy equivalent we have here, and then there are a lot of rules about how to access it (much higher age, you can’t get a lump sum, age may still change, etc.). Unsurprisingly, these have become much less popular as people have realised what a crappy deal they are.
I was just dispelling the idea the everyone in the us has practically no taxes in retirement.
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I’d say it’s a huge perk, not a small perk. The comparable system I’d have access to is much less favourable (lower amounts you can stash away pre-tax, much more and — crucially — ever changing rules regarding how to access the money later, higher fees,…). Which is why I haven’t bothered and instead only invest after-tax money.
Whilst you have more restrictive access to your superannuation account balances, you also have your employer throwing in a mandatory 11.5% of your pay, going up to 12% next year, so you have much less need to make a pretax contribution - that contribution, on its own right, should come close to funding your 'regular' retirement at say age 67 onward. So, you can focus putting your other savings in aftertax vehicles for your earlier (pre-67) costs. Moreover, Aussies don't need to deal with the potential for major healthcare / insurance costs during FIRE (at least not compared to the US costs), making FIRE easier from that perspective. Overall, I'd say it's close to a wash.
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I was just dispelling the idea the everyone in the us has practically no taxes in retirement.
Americans, including retirees, are subject to sales tax, property tax, inheritance tax, gift tax, income taxes at 2-3 levels of government, tax on gains from sales of equities, interest and dividends taxes, taxes on stuff you bought outside the US, a slew of local taxes, a slew of excise taxes—-and this is not to mention the HUGE shitload of “fees” levied by governments at all levels when you have the audacity to ask to take advantage of things government is paying for with your taxes.
In addition to all the above, it costs me more than $30 in tolls to drive from NY to Philly IF I use their toll tracking device they charge even more for. Of course you will scream when you understand the additional taxes on phone and internet service. And the list goes on.
What the fuck are you talking about???
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What the fuck are you talking about???
He was talking about taxes on income @Ron Scott.
The point was made upthread that there may be a perception that people in RE in the US managed to pay very low or no taxes on income in retirement.
Unearned income is treated much more favorably than earned income from a tax standpoint in the US.
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What the fuck are you talking about???
He was talking about taxes on income @Ron Scott.
The point was made upthread that there may be a perception that people in RE in the US managed to pay very low or no taxes on income in retirement.
Unearned income is treated much more favorably than earned income from a tax standpoint in the US.
Federal? State? 40-50% of retirees pay federal income tax.
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Federal? State? 40-50% of retirees pay federal income tax.
Or put another way according to your numbers, 50-60% of retirees pay no Federal Income Tax.
I am not arguing with anyone here about whether (income) tax rates aid/hinder FIRE type folks in the US (although I think they do help, but just one of many contributors) I merely was answering the question you asked previously.
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I’d say it’s a huge perk, not a small perk. The comparable system I’d have access to is much less favourable (lower amounts you can stash away pre-tax, much more and — crucially — ever changing rules regarding how to access the money later, higher fees,…). Which is why I haven’t bothered and instead only invest after-tax money.
I mean, the benefit with after tax money is certainly nice. I would say a significant portion (speculating a solid majority) of American FIRE people have their 401k as a means of primary investment compared to after tax investment. If that's the case, I would say that although it's a nice perk, it's still a small perk when it comes to facilitating FIRE, although I may be wrong with that speculation.
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The FIRE movement in the USA is highly dependent upon the fact the US tax code strongly discourages productive work. Most people's tax bill drops enormously after quitting work.
I don't think this is true at all. Most FIRE people I have heard of really on 401k contributions or Roth for the majority of their expenses unless they have a pension. That's certainly my plan. The fact that money made off of after tax income in the stock market is taxed at roughly zero for a high amount of "income" for the year is a small perk, as the money I have in after tax accounts is a small percentage of my net worth. Do you have any data or other information to back this up?
Hey @Telecaster ] I wouldn't agree that the FIRE movement in the US is *dependent* on the US tax code. Although it may be a benefit relative to other developed nations. IMHO probably more likely the US FIRE movement is dependent on things like US Dollar as world currency, US is a very rich country, etc. Lots of reasons....
But I do agree with you in principle that in the US unearned income is taxed much more favorably than earned income. Rents, cap gains, dividends etc I pay less taxes than I do on any kind of earned income, especially Self-employee type income. @Wolfpack Mustachian I am not sure that is what telecaster meant- but I kind of agree with that sentiment. At this point in life I have to "earn" 2 dollars for the same amount of money to stay in my pocket as 1 dollar of unearned income.
I definitely agree that US unearned income is taxed much easier than earned income. I just think that for most FIRE people, that is not a huge impact on their FIRE schedule compared to, for example, simple growth in the stock market. Overall, though, yes, I 100% agree that taxing unearned income favorably is extremely nice and is helpful.
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Hey @Telecaster ] I wouldn't agree that the FIRE movement in the US is *dependent* on the US tax code. Although it may be a benefit relative to other developed nations. IMHO probably more likely the US FIRE movement is dependent on things like US Dollar as world currency, US is a very rich country, etc. Lots of reasons....
But I do agree with you in principle that in the US unearned income is taxed much more favorably than earned income. Rents, cap gains, dividends etc I pay less taxes than I do on any kind of earned income, especially Self-employee type income.
I thought about the word choice of "dependent" but it was late and I couldn't think of something better. In hindsight, I should have said "greatly facilitated by." Take the humble 401(k) for example. The deduction comes at the top marginal rate, so the higher your top marginal rate, the more benefit you receive. That's great if you are on the FIRE track, but not so great for the general public.
Similar issues with the IRA. It was originally designed to help lower and middle income people save, hence the contribution limits and caps on deductible income. So why does the backdoor Roth exist? That helps high income people save. Congress could fix that tomorrow if they wanted. Same with the mega backdoor.
And the capital gains issue as discussed early. You can take a lot of capital gains tax free, which again mostly benefits rich people.
We in the MMM community are in the weird space where by optimizing spending and emphasizing savings, we get to take advantage of portions of the tax code that were designed to mostly benefit high income/high net worth individuals.
I did not know you were referring to the 401k. Your initial post highlighted the concept of tax laws that discourage productive work. The 401k, as I see it, is primarily a promoter of savings - granted that benefits wealthy people more than poorer people. I suppose if you think that savings so that people can retire early is discouraging productive work then, I guess I can see that angle, but it's a stretch - or maybe I'm misunderstanding.
You also mentioned in your initial post about how your tax bill will likely go down considerably when you retire. That's 100% true, but without doing the math (again speculating) I feel like the majority of why that goes down for that for FIRE people is due to the progressive tax rate, not on tax benefits designed to favor unproductive work. My tax bill is going to go down not because of weird tax laws but because when I withdraw only a percentage of our current earned income in retirement, I'll be in a lower tax bracket, paying less tax. I just don't see the fact that there are US laws favoring lower taxes for unearned income as being a huge benefit towards people that use stock market investing for early retirement. I can't speak to real estate early retirement, but I'm just not seeing it a whole lot in my situation.
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I was just dispelling the idea the everyone in the us has practically no taxes in retirement.
Americans, including retirees, are subject to sales tax, property tax, inheritance tax, gift tax, income taxes at 2-3 levels of government, tax on gains from sales of equities, interest and dividends taxes, taxes on stuff you bought outside the US, a slew of local taxes, a slew of excise taxes—-and this is not to mention the HUGE shitload of “fees” levied by governments at all levels when you have the audacity to ask to take advantage of things government is paying for with your taxes.
In addition to all the above, it costs me more than $30 in tolls to drive from NY to Philly IF I use their toll tracking device they charge even more for. Of course you will scream when you understand the additional taxes on phone and internet service. And the list goes on.
What the fuck are you talking about???
Who the fuck are you talking to???
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I’d say it’s a huge perk, not a small perk. The comparable system I’d have access to is much less favourable (lower amounts you can stash away pre-tax, much more and — crucially — ever changing rules regarding how to access the money later, higher fees,…). Which is why I haven’t bothered and instead only invest after-tax money.
Whilst you have more restrictive access to your superannuation account balances, you also have your employer throwing in a mandatory 11.5% of your pay, going up to 12% next year, so you have much less need to make a pretax contribution - that contribution, on its own right, should come close to funding your 'regular' retirement at say age 67 onward. So, you can focus putting your other savings in aftertax vehicles for your earlier (pre-67) costs. Moreover, Aussies don't need to deal with the potential for major healthcare / insurance costs during FIRE (at least not compared to the US costs), making FIRE easier from that perspective. Overall, I'd say it's close to a wash.
I was comparing the US vs my own Northern European situation.
I don’t think there’s a widespread idea that US retirees pay no (income) taxes. But even the figures Ron Scott mentions show than many don’t. Here, everyone, even the poorest pensioners with the lowest incomes pay (in their case of course very little) taxes, and median income people of course more. And everyone pays value added tax and local taxes and all those other normal things as well that Ron Scott seems to think are squarely aimed at him.
However, I still think the main difference in FIRE possibilities here and in the US is not tax systems nor even health care but that normal professional jobs can pay a lot more in the US. I of course understand this varies a lot by sector and geographical area, but no one here earns 200 k€ for a “normal job”, which I see routinely in the case studies and elsewhere online. It’s rare to even get to 100 k€ per year, although some of my mid-career lawyer and doctor friends earn that (all salaries are public here). You’d have to be a CEO of a large company or alternatively start your own company to get to figures like 200 and above. Of course many people have FIREd on much lower salaries, but I’m pretty sure the structure of the salary distribution plays an important role here.
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However, I still think the main difference in FIRE possibilities here and in the US is not tax systems nor even health care but that normal professional jobs can pay a lot more in the US. I of course understand this varies a lot by sector and geographical area, but no one here earns 200 k€ for a “normal job”, which I see routinely in the case studies and elsewhere online. It’s rare to even get to 100 k€ per year, although some of my mid-career lawyer and doctor friends earn that (all salaries are public here). You’d have to be a CEO of a large company or alternatively start your own company to get to figures like 200 and above. Of course many people have FIREd on much lower salaries, but I’m pretty sure the structure of the salary distribution plays an important role here.
I think there is some merit to this. My wife used to work for an international company and salary and bonuses were definitely lower in Europe for the exact same position.
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I’d say it’s a huge perk, not a small perk. The comparable system I’d have access to is much less favourable (lower amounts you can stash away pre-tax, much more and — crucially — ever changing rules regarding how to access the money later, higher fees,…). Which is why I haven’t bothered and instead only invest after-tax money.
Whilst you have more restrictive access to your superannuation account balances, you also have your employer throwing in a mandatory 11.5% of your pay, going up to 12% next year, so you have much less need to make a pretax contribution - that contribution, on its own right, should come close to funding your 'regular' retirement at say age 67 onward. So, you can focus putting your other savings in aftertax vehicles for your earlier (pre-67) costs. Moreover, Aussies don't need to deal with the potential for major healthcare / insurance costs during FIRE (at least not compared to the US costs), making FIRE easier from that perspective. Overall, I'd say it's close to a wash.
I was comparing the US vs my own Northern European situation.
I don’t think there’s a widespread idea that US retirees pay no (income) taxes. But even the figures Ron Scott mentions show than many don’t. Here, everyone, even the poorest pensioners with the lowest incomes pay (in their case of course very little) taxes, and median income people of course more. And everyone pays value added tax and local taxes and all those other normal things as well that Ron Scott seems to think are squarely aimed at him.
However, I still think the main difference in FIRE possibilities here and in the US is not tax systems nor even health care but that normal professional jobs can pay a lot more in the US. I of course understand this varies a lot by sector and geographical area, but no one here earns 200 k€ for a “normal job”, which I see routinely in the case studies and elsewhere online. It’s rare to even get to 100 k€ per year, although some of my mid-career lawyer and doctor friends earn that (all salaries are public here). You’d have to be a CEO of a large company or alternatively start your own company to get to figures like 200 and above. Of course many people have FIREd on much lower salaries, but I’m pretty sure the structure of the salary distribution plays an important role here.
You are in the Nordics you write, from what I have learned about taxation and salary structure in this part of the world, yes you have crazy high taxes, but the real killer is actually the compressed salary structure. Effective tax rate in Nordics can climb above 50 percent, but in US, esp CA, you get also effective tax rates above 40 on very high compensations. Now, the issue is really elsewhere imv. Blue collar jobs in US are relatively poorly compensated compared to the Nordics, and opposite holds true for executive jobs. As you write 200k in Nordics is hard to come by as an executive. But also true is that a carpenter in Nordics can often break 100k. Minimum salaries too are higher than in US. So from a FIRE perspective, Nordics are actually potentially more accessible to a wider part of the population I would think, esp when factoring in free health care, education and a state pension for all. From the people I know in the Nordics their mindset is far from FIRE, like most in the US. Quite free spenders, what comes in goes out, multiple vacations per year, design furniture and clothes etc etc. The have massive car loans, mortgages and are pretty much in a completely different world from me. But as a system to achieve FIRE in I think the potential is there and even is better for the lower paid 75 pct of the population compared to US.
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I agree with the above. A lot of the European countries (and also Australia; the UK is much less so) have higher wages at the low end, lower wages at the top end, and heavier personal income tax burdens. I use the example here in Australia - a top tier lawyer/investment banking grad will start his or her career on around $150k AUD ($100k USD) which is about 3.5x minimum wage. Even if we impute a $15 minimum wage to the US, a junior banker or lawyer there will easily be paid 6x that on graduation.
So in Nordic countries and Australia, normal FIRE is a lot more accessible, FatFIRE is less accessible due to more progressive taxes, and lean FIRE is normal living - that is, here in Australia, our welfare safety net is so comprehensive it's incredibly easy to get by.
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I’d say it’s a huge perk, not a small perk. The comparable system I’d have access to is much less favourable (lower amounts you can stash away pre-tax, much more and — crucially — ever changing rules regarding how to access the money later, higher fees,…). Which is why I haven’t bothered and instead only invest after-tax money.
Whilst you have more restrictive access to your superannuation account balances, you also have your employer throwing in a mandatory 11.5% of your pay, going up to 12% next year, so you have much less need to make a pretax contribution - that contribution, on its own right, should come close to funding your 'regular' retirement at say age 67 onward. So, you can focus putting your other savings in aftertax vehicles for your earlier (pre-67) costs. Moreover, Aussies don't need to deal with the potential for major healthcare / insurance costs during FIRE (at least not compared to the US costs), making FIRE easier from that perspective. Overall, I'd say it's close to a wash.
I was comparing the US vs my own Northern European situation.
I don’t think there’s a widespread idea that US retirees pay no (income) taxes. But even the figures Ron Scott mentions show than many don’t. Here, everyone, even the poorest pensioners with the lowest incomes pay (in their case of course very little) taxes, and median income people of course more. And everyone pays value added tax and local taxes and all those other normal things as well that Ron Scott seems to think are squarely aimed at him.
However, I still think the main difference in FIRE possibilities here and in the US is not tax systems nor even health care but that normal professional jobs can pay a lot more in the US. I of course understand this varies a lot by sector and geographical area, but no one here earns 200 k€ for a “normal job”, which I see routinely in the case studies and elsewhere online. It’s rare to even get to 100 k€ per year, although some of my mid-career lawyer and doctor friends earn that (all salaries are public here). You’d have to be a CEO of a large company or alternatively start your own company to get to figures like 200 and above. Of course many people have FIREd on much lower salaries, but I’m pretty sure the structure of the salary distribution plays an important role here.
Sorry, somehow I got the impression that you were writing about Australian conditions, somehow I must have gotten threads crossed in my mixed-up brain.
It's definitely the case that high salaries make FIRE easier if you manage to avoid lifestyle creep.
It's also the case that high salaries like those you mention are not as commonplace in the US as you might get the impression after spending time here or, say, Bogleheads. That's because, I think, (a) there's a strong correlation with financial sophistication and having a skill set that brings in a high salary, (b) these forums tend to attract people closer to FIRE rather than at the very start of their careers (not that there aren't any folks here like that, just that they're rarer) and those people are at later career stages, at the higher end of the earning spectrum, (c) people like to brag so you'll probably find a higher percentage of the 200k earners here mention their salary than the percentage of 50k earners that do, so the distribution you see here gets skewed.
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High American salaries aren't just a matter of selection bias on these forums - though that might play a part, it is not a uniquely American phenomenon - the salary data are easily understood via statistics. In Australia, 99th percentile income is a bit over $250k AUD; 90th percentile is a bit of $130k AUD. Those stats are now 4 years old, so with wage growth at around 20% since then, top 1% today would come to $300k ($200k USD) and top 10% at $160k ($110k USD).
Meanwhile, US top 1% is $683,000 and top 10% is $170,000. Note these are thresholds, not averages within the band.
So US top 10% income is around 50% higher than Aus, and top 1% income is around 3 to 3.5x higher in Aus. Note also in Australia we have a marginal tax rate of 47% from $190k onwards.
It's pretty plain to anyone who has lived in both places that the top 1-5% of earners get a huge amount more in the U.S., whether you are a surgeon, banker, lawyer, engineer, software engineer, quant, etc.
Australian stats:
https://www.afr.com/politics/how-wealthy-are-you-compared-to-everyone-else-in-eight-charts-20221214-p5c6a8
American stats:
https://www.investopedia.com/personal-finance/how-much-income-puts-you-top-1-5-10/
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Any thought experiment that makes 10M not a fuckload of money has to rely on "well spend $XMillion on a house or two and then..."
Look at it through a rental lens though, and you see that if you follow the "one third of income" rule on housing from 4% rule of $10M and renting a place that costs $11,000/month is comfortably within your budget. Then your "second home" problem can be considered vacation expenses, not housing costs. And even after spending $11k per month on your sick mansion or penthouse or whatever, you still have ~$267k/year of other spending money, which I think can fund some pretty sick vacations. And by not buying a vacation home in one specific location, your vacations can be more varied, and you're not paying for an empty home all year long.
The tax on $400k a year would be significant. Here in Australia on $400k in income you would be paying $160k a year in income tax, leaving you with $240k left over - a much smaller chunk. The only way to have an income source be tax free is for it to come from your superannuation which is accessible only after age 60 (so not relevant to early retirees), plus there are additional taxes on: (1) any annual contributions to superannuation above $27,500 and (2) any superannuation account balances over $3 million, so in actuality you'd be paying either income tax at a marginal rate of 47% or you'd be paying 2 lots of superannuation tax, on both contributions and gains.
Maybe the system works very differently in America but I am astounded that the ~40% or so tax burden is never accounted for.
See, it's posts like this that had me question whether you're a troll in another thread.
Aussie here. FIREd for seven years. Gross passive income near enough to $400k to be relevant. Tax waaaaaay less than the $160k you quote. Still a dozen years away from being able to access superannuation, at which point gross income will increase whilst total tax will decrease.
How your income and tax affairs are structured is a choice YOU make. And, in Australia, the more disciplined you are with your money, the greater the range of choices you have. It's like choosing to work as a mechanic or an investment banker or a lawyer or a plumber. Or choosing an investment plan. Or choosing a spouse or whether to have kids. Your language is very absolutist, yet there's plenty of examples of people succeeding where you're potentially falling behind, due, in part, to the lifestyle choices it appears that you are making.
I'm very much enjoying my Australian FatFIRE. I know plenty of others who do as well. You come across as someone making excuses for why others are achieving something that you claim to want, but don't have the discipline to achieve.
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Other than income splitting via family trust (which doesn't work anyway if your spouse's tax rate is also in the top band and if you have no adult dependants), or using business structures (which doesn't work if you're still working and earning PSI income), or using franking credits on dividends (a roundabout way to do it and constantly under political threat), what other options are available?
And what lifestyle choices are you referring to, exactly? If you are going to suggest I'm a troll and criticise my posts, the least you can do is be helpful about it. In particular, claiming I lack 'discipline' and attacking my posts without any sort of constructive feedback is poor conduct.
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"Compressed salary structure" -- thanks Redherring, that's what I was trying to express but didn't find the term for!
But I'm afraid some of the other stuff you mention is true for some parts of the Nordics but not for all of the region... The bit about very high mortgages, car loans, and exotic holidays. I know in Sweden it used to be unusual to even pay down your mortgage, people just paid interest and waited for the value of the property to go up. Nowadays I think you have to pay your mortgage until you get to 50% of the value, and then you can start just paying interest. Crazy! And not possible in the whole region, at all (neither by the law or by the banks).
The same goes for the salaries across this region: I don't actually know any carpenters but find it hard to believe a carpenter here could earn 100+ k€ without either a) working an illegal amount of overtime or b) having their own business. The median yearly salary for a carpenter here is 32,400 €, and only 10% of carpenters earn 42,500 € or above. This is about 36,000 and 47,000 in USD.
twinstudy inspired me to look into the stats for incomes in general here: In 2021 you made it into the highest 10% of salaried people here if you earned just over 75 k in USD. And you reach 50%+ marginal tax rates already at 64 k in USD, so net incomes are a lot lower.
Since we're fighting misinformation here, health care is not free here. It's not prohibitively and unendingly expensive, either, but even the basic level you get from the public service providers does have a price tag for the patient, and many people have private or employer insurance to get a better level of service. And the state pension for all is very, very low, not much more than what our family of four pays for groceries. The main part of the old age provision comes from money you and your employer pay into a pension insurance scheme throughout your career, so it works a bit like a tax on your salary and your employer's bottom line and you can't influence how those funds are invested. Still, it's very much dependent on your salary across your career, not at all something that's paid to everyone. Since we're living longer and there are fewer paying into the system, the age when you can get either of these pensions keeps creeping up and is now close to 70 for people in their 30s. But yeah, most of education is free (for now).
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You are in the Nordics you write, from what I have learned about taxation and salary structure in this part of the world, yes you have crazy high taxes, but the real killer is actually the compressed salary structure. Effective tax rate in Nordics can climb above 50 percent, but in US, esp CA, you get also effective tax rates above 40 on very high compensations.
FWIW, the tax rate in CA + NY can actually get closer to fifty percent on the last marginal dollar. On an income of $1.2M (don't cry too hard for us) Federal: 37% + FICA: 2.35% + State: 6.85% + Local: 3.88% = 50.08%. Average tax closer to 40% after all the basic deduction type thingies, contributing to 401k, etc.
In a European country, our taxes would probably be closer to 60% and we might be paying a wealth tax too, but the real problem in Europe is that there are just not as many highly productive knowledge-based enterprises, which limits how much companies can compete for talent. So it's much more rare to have a gross salary this high in Europe. (Or at any salary level.)
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FWIW, the tax rate in CA + NY can actually get closer to fifty percent on the last marginal dollar. On an income of $1.2M (don't cry too hard for us) Federal: 37% + FICA: 2.35% + State: 6.85% + Local: 3.88% = 50.08%. Average tax closer to 40% after all the basic deduction type thingies, contributing to 401k, etc.
Last marginal dollar is the key part. But you're still double counting a few things. You're not paying FICA on that whole $1.2 million (side note: Holy shit! that's a lot of money). And of course, you're not paying 37% on the whole amount (which you acknowledged) and then state and local taxes are deductible on the federal.
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FWIW, the tax rate in CA + NY can actually get closer to fifty percent on the last marginal dollar. On an income of $1.2M (don't cry too hard for us) Federal: 37% + FICA: 2.35% + State: 6.85% + Local: 3.88% = 50.08%. Average tax closer to 40% after all the basic deduction type thingies, contributing to 401k, etc.
Last marginal dollar is the key part. But you're still double counting a few things. You're not paying FICA on that whole $1.2 million (side note: Holy shit! that's a lot of money). And of course, you're not paying 37% on the whole amount (which you acknowledged) and then state and local taxes are deductible on the federal.
And poorer people tend to pay a higher percentage of their income on things like sales tax and property tax, so you are getting a deal there.
https://itep.org/whopays-7th-edition/
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Last marginal dollar is the key part. But you're still double counting a few things. You're not paying FICA on that whole $1.2 million (side note: Holy shit! that's a lot of money).
It's true that you're not paying all parts of FICA on all the money. You pay a larger amount on the first 150k or so, then: "The Additional Medicare Tax rate is 0.90% and it applies to the wages, salaries and tips of certain employees and self-employed workers. So any part of your income that exceeds a certain amount gets taxed for Medicare at a total rate of 2.35% (1.45% + 0.90%)". That doesn't have an upper limit on when you pay it, which is why I included it in my tabulation of the charges on the last dollar.
State and local taxes are deductible on the federal.
Not since Trump! Only the first $10k, so it doesn't apply to the marginal dollar, and it is already fully utilized by our property tax bill anyway. One of 45's better policies from a social justice perspective. The SALT deduction was a huge giveaway to families like ours.
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For a guy like me I kind of think the 1mil milestone would feel better than the 10mil. I think hitting the 1mil mark would be a huge accomplishment - hope to get there one day.
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For a guy like me I kind of think the 1mil milestone would feel better than the 10mil. I think hitting the 1mil mark would be a huge accomplishment - hope to get there one day.
10 million is the new 1 million.
Value of $1,000,000 from 1966 to 2024
$1,000,000 in 1966 is equivalent in purchasing power to about $9,708,024.69 today, an increase of $8,708,024.69 over 58 years. The dollar had an average inflation rate of 4.00% per year between 1966 and today, producing a cumulative price increase of 870.80%.
https://www.in2013dollars.com/us/inflation/1966?amount=1000000
leastwise from when I was born and thinking about playing monopoly!
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For a guy like me I kind of think the 1mil milestone would feel better than the 10mil. I think hitting the 1mil mark would be a huge accomplishment - hope to get there one day.
There has been a lot of discussion lately about when you really notice the power of compounding taking off. I think for most people you start noticing it after it already has happened. That's because we think linearly where compounding is exponential.
For example, getting to $1 million takes most people many years. But in a not bad-ish market you can go from $3 million to $4 million in four or five years without any additional contributions. In a good market you can go from $9 to $10 million in one year.
To your point, the first million is by far the hardest and takes the longest. The next millions are easier and faster.
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But the first million is also a lot more useful to you than the second million. Not to mention the difference between the ninth and the tenth.
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^ Totally agree.
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^ but the difference between 1st and 10th is clearly more significant.
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That’s also why it’s much easier to spend when you get over the four and five million mark (which is where Pete and Mr.1500Days are)…. At 1 and 2 M, you are still spending carefully to preserve the principal.
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That's certainly been my experienced. We recently passed the point where WR on current spending would be <2%. This has led to us saying yes to luxuries that add value but which we would have been reluctant to splurge on when we were above that number.
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That's certainly been my experienced. We recently passed the point where WR on current spending would be <2%. This has led to us saying yes to luxuries that add value but which we would have been reluctant to splurge on when we were above that number.
You know, in the old days, before Trinity, retired people would say “don’t touch your principal”. Of course interest + dividends in those days were in excess of 4% LOL.
But yeah, we’ve been under 2% WR since day 1 of retirement and whatever. I never lived up to my means when I was working and I didn’t have much of an interest in doing it in retirement. If you have some money spend what you want to spend, not what you CAN spend.
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The idea of spending principal seems remarkably icky to me. Something about it doesn't sit right to me - but then, finances are all a game to me, and I get fun from min-maxing and playing games the way I want to play them. Others will have their own rules. The great thing about life is we all get to set our own rules.
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With the preference for buybacks over dividends, the delineation between principal and income has become somewhat blurred anyway.
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not spending principal implies that you have eaily delineated principal and interest, which seems to indicate a lot more bonds and less stock, since you would never sell shares. So a much more conservative mix than most here.
also boogleheady in that affording a retirement on never touch principal woul require a) many additional years of work which b) may be completely unnecessary after all.
the other caveate is if you are focused on maintaining your stash or still trying to "get rich" after retirement. I think a majority in stocks implies the later.
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the other caveate is if you are focused on maintaining your stash or still trying to "get rich" after retirement. I think a majority in stocks implies the later.
Some of "getting rich" is necessary though as we are constantly trying to beat inflation. Maintaining and not spending the capital is not really enough...
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the other caveate is if you are focused on maintaining your stash or still trying to "get rich" after retirement. I think a majority in stocks implies the later.
Some of "getting rich" is necessary though as we are constantly trying to beat inflation. Maintaining and not spending the capital is not really enough...
yes but I think 30-40% in stocks would do that. Many here are 80-100%, with maybe a short term bond tent for sorr.
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not spending principal implies that you have easily delineated principal and interest
I suspect a lot of people on this thread are using "principal" as shorthand for "the amount of money I came into retirement with (and that will generate the minimum income I need)".
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The idea of spending principal seems remarkably icky to me. Something about it doesn't sit right to me - but then, finances are all a game to me, and I get fun from min-maxing and playing games the way I want to play them. Others will have their own rules. The great thing about life is we all get to set our own rules.
With the preference for buybacks over dividends, the delineation between principal and income has become somewhat blurred anyway.
What is “principal?
In finance, generally speaking it's the original amount of money that is borrowed, lent, or—for our purposes—invested; before any interest, gains, or losses are considered.
But retired folk I know have their own interpretation of principal:
Is it the shares of stock funds and units of bond funds you started with when you retired?
Is it the dollar amount of your invested portfolio at the time of retirement?
Is it the INFLATED dollar amount of your investment portfolio…?
Is it the dollar amount you had at the beginning of the year?
Changes that occur in your “Principal” is a story you tell yourself.
You can have identical financial outcomes from spending dividends OR spending the proceeds of shares of stock you sell that appreciated due to buybacks. But in the first case you didn’t “touch principal” whereas in the second—maybe you did since you sold shares?
I think it’s helpful to think about principal as an amount of money, not shares/units of stocks/bonds.
It is also helpful to think of dividends as a sum of money you are forced to treat as taxable gains in the year distributed, and of buybacks as an increase in the value of your stock, that you can sell to realize gains whenever you choose to, or to keep unsold.
Ultimately, I would ALWAYS want buybacks and NEVER dividends. I don’t need companies telling me when to take gains…I’m fine accepting the responsibility.
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More money will always be financially safer. How safe do we need to be? 90%? 99.5%? 99.995%?
The trade off is, you can do something more personally rewarding instead of grinding away amassing more wealth. Is that worth the risk? One more year is safe, but if you keep doing it, you will never move on to the next thing.
Suze Orman says she hates FIRE, but it is exactly what she did. She left a high paying finance job and started a new, high risk pursuit that happened to make her even richer.
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Suze Orman says she hates FIRE, but it is exactly what she did. She left a high paying finance job and started a new, high risk pursuit that happened to make her even richer.
lol, I thought surely this was hyberole. Nope!
https://finance.yahoo.com/news/going-burn-alive-suze-orman-204023984.html
Benzinga
'You Are Going To Burn Up Alive' — Suze Orman Hates The FIRE Movement And Says You Need At Least $20 Million To Retire Early: 'Two Million Is Nothing. It's Pennies In Today's World'
Direct and unreserved, Orman said, “I hate it. Really, I hate it,” pointing to the FIRE movement.
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According to the article, she said this in 2018. Using an inflation calculator, $20M then works out to $25M today.
But this is clearly hyperbole. If a person at the start of their career knows they will work for 30 years making $75k a year in inflation adjusted dollars, that's $2.25M in present value, assuming a 0% discount rate (to be really conservative). That's about a tenth of what Suze recommends.
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According to the article, she said this in 2018. Using an inflation calculator, $20M then works out to $25M today.
But this is clearly hyperbole. If a person at the start of their career knows they will work for 30 years making $75k a year in inflation adjusted dollars, that's $2.25M in present value, assuming a 0% discount rate (to be really conservative). That's about a tenth of what Suze recommends.
It's just a low IQ person catering to lower IQ people. Don't give her too much credit.
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If you want to sober up, try maintaining a spreadsheet that tracks inflation-adjusted changes in your net worth over time. Inflation is my largest expense.
I started this when I retired in 2017. My nominal increase in NW is about 50%; inflation adjusted is ~18%.
We can argue with people who claim they can “beat inflation” but I mean really. Nobody’s living like it’s 1999…
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We keep track of this, too. Since 2017, nominally our end of year (EOY) net worth for 2023 is 361% of 2017 EOY net worth. Adjusted for inflation, it's 290%.
Your point about inflation is well taken, but aren't you technically beating inflation if your real rate of return is greater than 0%?
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If you want to sober up, try maintaining a spreadsheet that tracks inflation-adjusted changes in your net worth over time. Inflation is my largest expense.
I started this when I retired in 2017. My nominal increase in NW is about 50%; inflation adjusted is ~18%.
We can argue with people who claim they can “beat inflation” but I mean really. Nobody’s living like it’s 1999…
Folks should also keep track of their spending (aka your personal inflation rate). I've kept a very detailed budget since 2020 (FIRED in Feb 2022). My personal spending has actually gone down over those years, with this year being the only year it looks like it's going to be going up, and not by much. Many people have built-in inflation hedges like large mortgages at < 3%.
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If you want to sober up, try maintaining a spreadsheet that tracks inflation-adjusted changes in your net worth over time. Inflation is my largest expense.
I started this when I retired in 2017. My nominal increase in NW is about 50%; inflation adjusted is ~18%.
We can argue with people who claim they can “beat inflation” but I mean really. Nobody’s living like it’s 1999…
Folks should also keep track of their spending (aka your personal inflation rate). I've kept a very detailed budget since 2020 (FIRED in Feb 2022). My personal spending has actually gone down over those years, with this year being the only year it looks like it's going to be going up, and not by much. Many people have built-in inflation hedges like large mortgages at < 3%.
Doesn't matter how careful you are with spending when structural changes come into play. My land tax has gone up 50% in the last 2 years, council rates have gone up around 25%, and house insurance has gone up around 20%. My office rent has gone up 10%. Nothing I can do about that.
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If you want to sober up, try maintaining a spreadsheet that tracks inflation-adjusted changes in your net worth over time. Inflation is my largest expense.
I started this when I retired in 2017. My nominal increase in NW is about 50%; inflation adjusted is ~18%.
We can argue with people who claim they can “beat inflation” but I mean really. Nobody’s living like it’s 1999…
Folks should also keep track of their spending (aka your personal inflation rate). I've kept a very detailed budget since 2020 (FIRED in Feb 2022). My personal spending has actually gone down over those years, with this year being the only year it looks like it's going to be going up, and not by much. Many people have built-in inflation hedges like large mortgages at < 3%.
Doesn't matter how careful you are with spending when structural changes come into play. My land tax has gone up 50% in the last 2 years, council rates have gone up around 25%, and house insurance has gone up around 20%. My office rent has gone up 10%. Nothing I can do about that.
Yep, I'm just saying inflation is a very general population-wide average gauge, so people are going to fall all over the spectrum on whether it's actually hurting them as much, more or less than the average.
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The important thing is the ratio of spending increase to net worth increase. That's the thing that tells you if you are losing or gaining.
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For a guy like me I kind of think the 1mil milestone would feel better than the 10mil. I think hitting the 1mil mark would be a huge accomplishment - hope to get there one day.
10 million is the new 1 million.
Value of $1,000,000 from 1966 to 2024
$1,000,000 in 1966 is equivalent in purchasing power to about $9,708,024.69 today, an increase of $8,708,024.69 over 58 years. The dollar had an average inflation rate of 4.00% per year between 1966 and today, producing a cumulative price increase of 870.80%.
https://www.in2013dollars.com/us/inflation/1966?amount=1000000 (https://www.in2013dollars.com/us/inflation/1966?amount=1000000)
leastwise from when I was born and thinking about playing monopoly!
You only have to go back to the 60s for an inflation-adjusted $10 million today to be $1 million then. That’s why everyone is a millionaire these days - it’s really just $100,000.
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For a guy like me I kind of think the 1mil milestone would feel better than the 10mil. I think hitting the 1mil mark would be a huge accomplishment - hope to get there one day.
10 million is the new 1 million.
Value of $1,000,000 from 1966 to 2024
$1,000,000 in 1966 is equivalent in purchasing power to about $9,708,024.69 today, an increase of $8,708,024.69 over 58 years. The dollar had an average inflation rate of 4.00% per year between 1966 and today, producing a cumulative price increase of 870.80%.
https://www.in2013dollars.com/us/inflation/1966?amount=1000000 (https://www.in2013dollars.com/us/inflation/1966?amount=1000000)
leastwise from when I was born and thinking about playing monopoly!
You only have to go back to the 60s for an inflation-adjusted $10 million today to be $1 million then. That’s why everyone is a millionaire these days - it’s really just $100,000.
isn't that what I said?
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Your point about inflation is well taken, but aren't you technically beating inflation if your real rate of return is greater than 0%?
I think you beat inflation if you a purchase the same or replacement goods and services for the same nominal dollars after the inflation rate has changed.
You don’t necessarily beat inflation if you simply spend the same in nominal dollars in the following year, nor if your investments covered the difference. (In fact there would be no 4% Rule if all your investments did was keep pace with inflation, as your SWR would be equal to your invested assets / years of remaining life.)
Many people can beat inflation over a short period of time. But like I said: It’s hard to live like it’s 1999.
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Your point about inflation is well taken, but aren't you technically beating inflation if your real rate of return is greater than 0%?
I think you beat inflation if you a purchase the same or replacement goods and services for the same nominal dollars after the inflation rate has changed.
You don’t necessarily beat inflation if you simply spend the same in nominal dollars in the following year, nor if your investments covered the difference. (In fact there would be no 4% Rule if all your investments did was keep pace with inflation, as your SWR would be equal to your invested assets / years of remaining life.)
Many people can beat inflation over a short period of time. But like I said: It’s hard to live like it’s 1999.
I don't understand how you're not beating inflation if your purchasing power has increased (due to investments outpacing inflation). Inflation from a practical standpoint is all about purchasing power, or spending capacity. If that capacity has improved and you can purchase an even greater amount goods and services than your starting point, then what would you call it if not beating inflation?
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Most of us are living a lot more luxuriously than we did in 1999.
And if I think about 1 M€ today, I don't really care about what 1 M of any currency was in 1999 or in 1966. Or back in the days when we were trading with squirrel skins. 1 M is only relevant to me in terms of what I can do with it (and the proceeds from it) now and in the future, not about whether I can call myself or our household "millionaires".
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Most of us are living a lot more luxuriously than we did in 1999.
It's interesting to think back to '99 and compare.
We have a better TV now, a better computer, and internet access - so these things are better. We have air conditioning now (although we live in a much warmer part of the country).
I drive an '05 Corolla, don't have a cell phone, and am occupying a house of about the same square footage.
Food quality and quantity seems to be worse. Public health care seems to be worse. Gas is much more expensive.
I dunno - doesn't seem radically more luxurious.
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Most of us are living a lot more luxuriously than we did in 1999.
It's interesting to think back to '99 and compare.
We have a better TV now, a better computer, and internet access - so these things are better. We have air conditioning now (although we live in a much warmer part of the country).
I drive an '05 Corolla, don't have a cell phone, and am occupying a house of about the same square footage.
Food quality and quantity seems to be worse. Public health care seems to be worse. Gas is much more expensive.
I dunno - doesn't seem radically more luxurious.
The things I can do with the technology we have at home and in the office are beyond anything I could have imagined back in 1999 when I was reading emails on text terminals and paying for every single text message of 160 characters. (Although I, personally, can't even operate our "tv" ( = home entertainment system), but that's beyond the point, the kids help me if there's something I really want to watch.)
Our current housing is about the same size as where I grew up, but with much better materials, more automation, much more efficient heating, and smarter solutions for just about everything.
Most people have much better opportunities for travel than they had in 1999.
That gas is more expensive is surely a good thing, since it's closer to the realistic prize of it, when looking at the big picture. There's crap food out there, but there's definitely a lot more choice and among that choice a lot more quality as well. I'm not sure what you mean by worse food quantity -- there's definitely a lot more food for most of us in the Western world than we'd need. Health care and technology has made enormous strides -- things that people just used to die from are often treatable right now. I'd guess almost every individual person actually has access to better healthcare now than they did in 1999, it's just that the expectations of what it can do have changed a lot, and the difference between good coverage and bad coverage have grown a lot.
Humanity has pretty much never had it better. (It's just that the rest of the planet is dying.)
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I think the average person has no idea how easy life is today compared to any point in the past. Particularly given that we are in a low point for overall war/conflict, we have more medical advances than ever, and only in the last 20 years have we gained the ability to access the sum of all human knowledge immediately and for free, the ability to voice chat and video call and use mobile data and internet for almost free.
It's an amazing array of power at our fingertips.
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I think the average person has no idea how easy life is today compared to any point in the past. Particularly given that we are in a low point for overall war/conflict, we have more medical advances than ever, and only in the last 20 years have we gained the ability to access the sum of all human knowledge immediately and for free, the ability to voice chat and video call and use mobile data and internet for almost free.
It's an amazing array of power at our fingertips.
People focus on the negative aspects of life because our news media understands that fear and hatred drive viewership. They’re in a shit business and doubling down on it.
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I'd argue the opposite. The media makes it seem like the average American is struggling to make ends meet, but I don't come across 'average' people struggling. Sure, there are anecdotes and still homeless people, but not worse than it was pre Pandemic.
If anything, people are struggling because there is too much comfort. I generally feel better about my life when I have some friction and resistance to overcome. With too much comfort, I find my brain looking for things to be anxious about and my body feeling unhealthy and weak.
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I'd argue the opposite. The media makes it seem like the average American is struggling to make ends meet, but I don't come across 'average' people struggling. Sure, there are anecdotes and still homeless people, but not worse than it was pre Pandemic.
If anything, people are struggling because there is too much comfort. I generally feel better about my life when I have some friction and resistance to overcome. With too much comfort, I find my brain looking for things to be anxious about and my body feeling unhealthy and weak.
It's interesting you feel this way. I was watching a couple of doctors talk about this same thing. Apparently human beings basically look for problems. When there are no "real" problems (like imminent death, hunger, constant danger, etc.) and we haven't experienced any real problems for comparison, we elevate whatever smaller problems we have to anxiety producing levels... it's like a need. One of the doctors was hypothesizing that this is why the youth is so anxious/have so many mental problems, not because life is so hard, but because life is so easy.
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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 ;-).
You know it’s funny. I live in suburban LI most of the year and I’m a bike rider, couple hundred miles a month.
But I would find it imporssible to bike for my general needs. Maybe a little groceries, OK. But we’re into Costco, Trader Joe’s, and others that are typically located in places that put me on roads I don’t consider bike-safe—or just too much stuff to load on a bike.
Then, mom’s half an hour away and friends are mostly further than a bike ride, and that’s not to mention parks, museums, beaches, and so on. The city is 40 minutes by train, and most of whatever else I do is a short car ride. Combined, my wife and I drive about 9k miles a year, so a price swing of a buck will only cost us $400-$500 a year, which is unremarkable.
When I was a kid my bike was definitely transportation. Now, not really.
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I'd argue the opposite. The media makes it seem like the average American is struggling to make ends meet, but I don't come across 'average' people struggling. Sure, there are anecdotes and still homeless people, but not worse than it was pre Pandemic.
If anything, people are struggling because there is too much comfort. I generally feel better about my life when I have some friction and resistance to overcome. With too much comfort, I find my brain looking for things to be anxious about and my body feeling unhealthy and weak.
It's interesting you feel this way. I was watching a couple of doctors talk about this same thing. Apparently human beings basically look for problems. When there are no "real" problems (like imminent death, hunger, constant danger, etc.) and we haven't experienced any real problems for comparison, we elevate whatever smaller problems we have to anxiety producing levels... it's like a need. One of the doctors was hypothesizing that this is why the youth is so anxious/have so many mental problems, not because life is so hard, but because life is so easy.
This really isn't my experience as a healthcare professional and current therapist.
I do agree that living a distinctly easy life can cause a lot of emotional dysregulation, but I haven't found that the average person lacks substantial hardship.
I've treated thousands of people, in my last job before I became a therapist I was treating a general cross section of the upper middle class population in my area, ages under 1 to over 100, and I would say that the average person was grappling with some pretty gnarly shit.
The reason so many people are so miserable now is not because their lives are so easy, but because there's a brutal lack of deep, meaningful connection.
Humans are pretty obligatory social animals, and while we are more connected than ever, we are severely lacking the kind of connection and community we need to thrive.
I also take what MDs say about mental health worth a grain of salt. My med school classes were pretty shitty with respect to mental health. I'm pretty sure we were taught that only CBT works.
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I'd argue the opposite. The media makes it seem like the average American is struggling to make ends meet, but I don't come across 'average' people struggling. Sure, there are anecdotes and still homeless people, but not worse than it was pre Pandemic.
If anything, people are struggling because there is too much comfort. I generally feel better about my life when I have some friction and resistance to overcome. With too much comfort, I find my brain looking for things to be anxious about and my body feeling unhealthy and weak.
It's interesting you feel this way. I was watching a couple of doctors talk about this same thing. Apparently human beings basically look for problems. When there are no "real" problems (like imminent death, hunger, constant danger, etc.) and we haven't experienced any real problems for comparison, we elevate whatever smaller problems we have to anxiety producing levels... it's like a need. One of the doctors was hypothesizing that this is why the youth is so anxious/have so many mental problems, not because life is so hard, but because life is so easy.
This really isn't my experience as a healthcare professional and current therapist.
I do agree that living a distinctly easy life can cause a lot of emotional dysregulation, but I haven't found that the average person lacks substantial hardship.
I've treated thousands of people, in my last job before I became a therapist I was treating a general cross section of the upper middle class population in my area, ages under 1 to over 100, and I would say that the average person was grappling with some pretty gnarly shit.
The reason so many people are so miserable now is not because their lives are so easy, but because there's a brutal lack of deep, meaningful connection.
Humans are pretty obligatory social animals, and while we are more connected than ever, we are severely lacking the kind of connection and community we need to thrive.
I also take what MDs say about mental health worth a grain of salt. My med school classes were pretty shitty with respect to mental health. I'm pretty sure we were taught that only CBT works.
My experience is, of course, anecdotal. But I had a rough and poor childhood. Same with my SO and a batch of friends I grew up with. The ones I'm still in contact with and my SO all lead much better lives now and I feel like we're all pretty happy about it, but even happier because of the comparison. "Remember when we didn't know what a restaurant looked like inside? haha, now we can uber eats kobe beef burgers! LOL! How amazing is that?!"
My kid, and his friends, all have super spoiled lives (to me). When something goes wrong, a little thing, they think it's a catastrophe. I just think "kid, you don't know what hard is". Maybe this is just old man talk now, because my mom said the same to me and I had it tough, though she was an immigrant single mom with nothing so had it worse. I try to make the life of my kid hard on purpose so his "baseline" won't be so high.
I just think that if your life is already 90/100 on the goodness scale, and it goes to 60/100, you feel like crap. But if your life is a 10/100 and it goes to 50/100, you feel great. Isn't that a thing? The relativity of the goodness of your life? I think it is.
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I'd argue the opposite. The media makes it seem like the average American is struggling to make ends meet, but I don't come across 'average' people struggling. Sure, there are anecdotes and still homeless people, but not worse than it was pre Pandemic.
If anything, people are struggling because there is too much comfort. I generally feel better about my life when I have some friction and resistance to overcome. With too much comfort, I find my brain looking for things to be anxious about and my body feeling unhealthy and weak.
It's interesting you feel this way. I was watching a couple of doctors talk about this same thing. Apparently human beings basically look for problems. When there are no "real" problems (like imminent death, hunger, constant danger, etc.) and we haven't experienced any real problems for comparison, we elevate whatever smaller problems we have to anxiety producing levels... it's like a need. One of the doctors was hypothesizing that this is why the youth is so anxious/have so many mental problems, not because life is so hard, but because life is so easy.
This really isn't my experience as a healthcare professional and current therapist.
I do agree that living a distinctly easy life can cause a lot of emotional dysregulation, but I haven't found that the average person lacks substantial hardship.
I've treated thousands of people, in my last job before I became a therapist I was treating a general cross section of the upper middle class population in my area, ages under 1 to over 100, and I would say that the average person was grappling with some pretty gnarly shit.
The reason so many people are so miserable now is not because their lives are so easy, but because there's a brutal lack of deep, meaningful connection.
Humans are pretty obligatory social animals, and while we are more connected than ever, we are severely lacking the kind of connection and community we need to thrive.
I also take what MDs say about mental health worth a grain of salt. My med school classes were pretty shitty with respect to mental health. I'm pretty sure we were taught that only CBT works.
My experience is, of course, anecdotal. But I had a rough and poor childhood. Same with my SO and a batch of friends I grew up with. The ones I'm still in contact with and my SO all lead much better lives now and I feel like we're all pretty happy about it, but even happier because of the comparison. "Remember when we didn't know what a restaurant looked like inside? haha, now we can uber eats kobe beef burgers! LOL! How amazing is that?!"
My kid, and his friends, all have super spoiled lives (to me). When something goes wrong, a little thing, they think it's a catastrophe. I just think "kid, you don't know what hard is". Maybe this is just old man talk now, because my mom said the same to me and I had it tough, though she was an immigrant single mom with nothing so had it worse. I try to make the life of my kid hard on purpose so his "baseline" won't be so high.
I just think that if your life is already 90/100 on the goodness scale, and it goes to 60/100, you feel like crap. But if your life is a 10/100 and it goes to 50/100, you feel great. Isn't that a thing? The relativity of the goodness of your life? I think it is.
Again, this is not consistent with my experience as a healthcare provider.
Yes, some people face hardship and manage to thrive and build excellent resilience from that...others, not so much.
Also, human beings aren't rational creatures, so while what you have said sounds logical on the surface, that's just not how the human mind actually works, especially since hardship and misery don't actually correlate.
Misery happens when people face hardship with inadequate supports. A really fucking difficult life isn't a bad life and a really easy life isn't a good life. A life with appropriate supports is a good life and a life with insufficient supports is a bad life.
The more we lose meaningful connection, the more we lose the kind of supports that we really need to thrive through the inevitable hardships of life.
I've had a brutally, shockingly difficult life and I'm super chill, very happy person. I wasn't before, I was a fucking mess, but I've found a lot of amazing supports over the last decade that have foundationally altered my dynamic with my brutal history.
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Some people have what it takes to weather hardship and others don't. I guess some of it comes down to support, but a lot of it comes down to internal drive, ability and grit.
I've always wondered why some people - in whatever vocation or profession - are better able to sustain themselves than others. I think of a surgeon who has to do a 24 hour shift or who has to wake up at 2am and immediately drive to hospital to do a life saving operation. Some people can do it and some can't. I think back to the last office job I had and the fact that some employees were absolute superstars who would get shit done without complaint, and others would clock off at 4pm regardless of whether it left someone else in the team high and dry. Incidentally, this disparity was the reason I quit my job and never looked back - I wasn't okay with working in an organisation where you could bill twice as much as another fee-earner and be paid only 10% more. There's no justice in that.
The way I see it, some people have accountability and others don't, and some have the ability to suffer and to work hard, and others don't.
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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 ;-).
You know it’s funny. I live in suburban LI most of the year and I’m a bike rider, couple hundred miles a month.
But I would find it imporssible to bike for my general needs. Maybe a little groceries, OK. But we’re into Costco, Trader Joe’s, and others that are typically located in places that put me on roads I don’t consider bike-safe—or just too much stuff to load on a bike.
Then, mom’s half an hour away and friends are mostly further than a bike ride, and that’s not to mention parks, museums, beaches, and so on. The city is 40 minutes by train, and most of whatever else I do is a short car ride. Combined, my wife and I drive about 9k miles a year, so a price swing of a buck will only cost us $400-$500 a year, which is unremarkable.
When I was a kid my bike was definitely transportation. Now, not really.
It can definitely be a struggle sometimes but I've found some ways to make it easier like having a bike trailer for heavy or large stuff or getting small amounts of groceries each day (I often stop daily on my ride home for fresh fruit and veggies). I can also hitch a ride with someone to stock up on big heavy Costco type stuff. For the most part I lived withing 10 - 20 miles or less of everywhere I needed or wanted on a regular basis, and even when I had a car would usually bike. I just got back from about a 20 mile loop - park, library, beach, ride on beach bike path, grocery store (where I got cake!) and back to home.
My biggest struggles are fear of theft (old bike and trailer but still a hassle if stolen) and night riding when I want to do a night time activity or stay out late. Not always safe from cars or people. That plus occasionally dressing up for something. Or emergencies to get to others fast if needed. But for most of those I could get an uber.
Personally I prefer biking or walking over driving, and the cost savings can be substantial, especially when you add in the cost of insurance and annual registration/licensing fees and repair/maintenance costpmus gas, but yeah, a PITA sometimes. And then there's bad weather! Or too much sun. Or ...some other problem you don't have to deal with when you have a car.
ETA: I also had a couple of larger dogs when I first went car-free in 2019 so that could be probmatic in an emergency as uber's don't always take dogs. But they rode in the trailer together (all 125 lbs combined) and the vet was just down the road but in an emergency I'd call BF, sister, neighbor or friend to take me.
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Some people have what it takes to weather hardship and others don't. I guess some of it comes down to support, but a lot of it comes down to internal drive, ability and grit.
I've always wondered why some people - in whatever vocation or profession - are better able to sustain themselves than others. I think of a surgeon who has to do a 24 hour shift or who has to wake up at 2am and immediately drive to hospital to do a life saving operation. Some people can do it and some can't. I think back to the last office job I had and the fact that some employees were absolute superstars who would get shit done without complaint, and others would clock off at 4pm regardless of whether it left someone else in the team high and dry. Incidentally, this disparity was the reason I quit my job and never looked back - I wasn't okay with working in an organisation where you could bill twice as much as another fee-earner and be paid only 10% more. There's no justice in that.
The way I see it, some people have accountability and others don't, and some have the ability to suffer and to work hard, and others don't.
And where do you think the "internal drive" and "grit" come from?
Oh wait...they largely come from early life experiences of, y'know, facing challenges with the appropriate supports to develop drive and grit.
-
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 ;-).
You know it’s funny. I live in suburban LI most of the year and I’m a bike rider, couple hundred miles a month.
But I would find it imporssible to bike for my general needs. Maybe a little groceries, OK. But we’re into Costco, Trader Joe’s, and others that are typically located in places that put me on roads I don’t consider bike-safe—or just too much stuff to load on a bike.
Then, mom’s half an hour away and friends are mostly further than a bike ride, and that’s not to mention parks, museums, beaches, and so on. The city is 40 minutes by train, and most of whatever else I do is a short car ride. Combined, my wife and I drive about 9k miles a year, so a price swing of a buck will only cost us $400-$500 a year, which is unremarkable.
When I was a kid my bike was definitely transportation. Now, not really.
It can definitely be a struggle sometimes but I've found some ways to make it easier like having a bike trailer for heavy or large stuff or getting small amounts of groceries each day (I often stop daily on my ride home for fresh fruit and veggies). I can also hitch a ride with someone to stock up on big heavy Costco type stuff. For the most part I lived withing 10 - 20 miles or less of everywhere I needed or wanted on a regular basis, and even when I had a car would usually bike. I just got back from about a 20 mile loop - park, library, beach, ride on beach bike path, grocery store (where I got cake!) and back to home.
My biggest struggles are fear of theft (old bike and trailer but still a hassle if stolen) and night riding when I want to do a night time activity or stay out late. Not always safe from cars or people. That plus occasionally dressing up for something. Or emergencies to get to others fast if needed. But for most of those I could get an uber.
Personally I prefer biking or walking over driving, and the cost savings can be substantial, but yeah, a pita sometimes. And then there's bad weather!
ETA: I also had a couple of larger dogs when I first went car-free in 2019 so that could be probmatic in an emergency as uber's don't always take dogs. But they rode in the trailer together (all 125 lbs combined) and the vet was just down the road but in an emergency I'd call BF, sister, neighbor or friend to take me.
Girl—I will ALWAYS prefer a bike over a goddamn car, ALWAYS. I think I got one or 2 more centuries in me and hopefully a few more 6-day tours, but when I’m on a bike I am AT HOME and I’ve been that way since I was 6.
That said, I will give up my cars when I am laid to rest—but you’ve given me inspiration, and I will try a little more shopping via 2 wheels. (I own several bikes, one a city-kicker/touring bike that can handle all the weight you got.) We’ll see.
-
Some people have what it takes to weather hardship and others don't. I guess some of it comes down to support, but a lot of it comes down to internal drive, ability and grit.
I've always wondered why some people - in whatever vocation or profession - are better able to sustain themselves than others. I think of a surgeon who has to do a 24 hour shift or who has to wake up at 2am and immediately drive to hospital to do a life saving operation. Some people can do it and some can't. I think back to the last office job I had and the fact that some employees were absolute superstars who would get shit done without complaint, and others would clock off at 4pm regardless of whether it left someone else in the team high and dry. Incidentally, this disparity was the reason I quit my job and never looked back - I wasn't okay with working in an organisation where you could bill twice as much as another fee-earner and be paid only 10% more. There's no justice in that.
The way I see it, some people have accountability and others don't, and some have the ability to suffer and to work hard, and others don't.
And where do you think the "internal drive" and "grit" come from?
Oh wait...they largely come from early life experiences of, y'know, facing challenges with the appropriate supports to develop drive and grit.
I am not sure what you mean by “appropriate support” so I’ll wait for clarification. FWIW I grew up POOR and had love and a kick in the ass for support, and that was all I needed.
In the meantime I’m liking twinstudy’s take on this one.
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I'd argue the opposite. The media makes it seem like the average American is struggling to make ends meet, but I don't come across 'average' people struggling. Sure, there are anecdotes and still homeless people, but not worse than it was pre Pandemic.
If anything, people are struggling because there is too much comfort. I generally feel better about my life when I have some friction and resistance to overcome. With too much comfort, I find my brain looking for things to be anxious about and my body feeling unhealthy and weak.
It's interesting you feel this way. I was watching a couple of doctors talk about this same thing. Apparently human beings basically look for problems. When there are no "real" problems (like imminent death, hunger, constant danger, etc.) and we haven't experienced any real problems for comparison, we elevate whatever smaller problems we have to anxiety producing levels... it's like a need. One of the doctors was hypothesizing that this is why the youth is so anxious/have so many mental problems, not because life is so hard, but because life is so easy.
This really isn't my experience as a healthcare professional and current therapist.
I do agree that living a distinctly easy life can cause a lot of emotional dysregulation, but I haven't found that the average person lacks substantial hardship.
I've treated thousands of people, in my last job before I became a therapist I was treating a general cross section of the upper middle class population in my area, ages under 1 to over 100, and I would say that the average person was grappling with some pretty gnarly shit.
The reason so many people are so miserable now is not because their lives are so easy, but because there's a brutal lack of deep, meaningful connection.
Humans are pretty obligatory social animals, and while we are more connected than ever, we are severely lacking the kind of connection and community we need to thrive.
I also take what MDs say about mental health worth a grain of salt. My med school classes were pretty shitty with respect to mental health. I'm pretty sure we were taught that only CBT works.
My experience is, of course, anecdotal. But I had a rough and poor childhood. Same with my SO and a batch of friends I grew up with. The ones I'm still in contact with and my SO all lead much better lives now and I feel like we're all pretty happy about it, but even happier because of the comparison. "Remember when we didn't know what a restaurant looked like inside? haha, now we can uber eats kobe beef burgers! LOL! How amazing is that?!"
My kid, and his friends, all have super spoiled lives (to me). When something goes wrong, a little thing, they think it's a catastrophe. I just think "kid, you don't know what hard is". Maybe this is just old man talk now, because my mom said the same to me and I had it tough, though she was an immigrant single mom with nothing so had it worse. I try to make the life of my kid hard on purpose so his "baseline" won't be so high.
I just think that if your life is already 90/100 on the goodness scale, and it goes to 60/100, you feel like crap. But if your life is a 10/100 and it goes to 50/100, you feel great. Isn't that a thing? The relativity of the goodness of your life? I think it is.
This resonates with what is going on in our suburbs. Here in Houston, we have a large first generation community. Those kids go to school like their life depends on every point of every grade until the get in to a tony college. Meanwhile, the vast majority of kids do the bare minimum to get reasonably good grades.
And within my family over the generations, my parents experienced the advent of so many modern conveniences like better TVs, the microwave, and countless quality of life improvements getting cheaper. They always seemed pretty content that life was getting better and better. My generation was probably the last pre-internet that teeters between everything getting better up to that point, then starting to experience the ills of social media, information overload and anxiety, etc in our kids lives... My DW is an elementary school teacher and has stories of her students going to bed in front of their screens night after night and being exposed to all sorts of inappropriate crap hanging out with older siblings...
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Some people have what it takes to weather hardship and others don't. I guess some of it comes down to support, but a lot of it comes down to internal drive, ability and grit.
I've always wondered why some people - in whatever vocation or profession - are better able to sustain themselves than others. I think of a surgeon who has to do a 24 hour shift or who has to wake up at 2am and immediately drive to hospital to do a life saving operation. Some people can do it and some can't. I think back to the last office job I had and the fact that some employees were absolute superstars who would get shit done without complaint, and others would clock off at 4pm regardless of whether it left someone else in the team high and dry. Incidentally, this disparity was the reason I quit my job and never looked back - I wasn't okay with working in an organisation where you could bill twice as much as another fee-earner and be paid only 10% more. There's no justice in that.
The way I see it, some people have accountability and others don't, and some have the ability to suffer and to work hard, and others don't.
And where do you think the "internal drive" and "grit" come from?
Oh wait...they largely come from early life experiences of, y'know, facing challenges with the appropriate supports to develop drive and grit.
I am not sure what you mean by “appropriate support” so I’ll wait for clarification. FWIW I grew up POOR and had love and a kick in the ass for support, and that was all I needed.
In the meantime I’m liking twinstudy’s take on this one.
You literally just described having appropriate support.
Where was I not clear about what I meant by support? Did I not say that it came down to deep connections with people? Healthy love and pressure from a supportive family is exactly that.
That's exactly how someone develops resilience in the face of challenges.
Not everyone gets love and a supportive kick in the ass as a kid.
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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 ;-).
You know it’s funny. I live in suburban LI most of the year and I’m a bike rider, couple hundred miles a month.
But I would find it imporssible to bike for my general needs. Maybe a little groceries, OK. But we’re into Costco, Trader Joe’s, and others that are typically located in places that put me on roads I don’t consider bike-safe—or just too much stuff to load on a bike.
Then, mom’s half an hour away and friends are mostly further than a bike ride, and that’s not to mention parks, museums, beaches, and so on. The city is 40 minutes by train, and most of whatever else I do is a short car ride. Combined, my wife and I drive about 9k miles a year, so a price swing of a buck will only cost us $400-$500 a year, which is unremarkable.
When I was a kid my bike was definitely transportation. Now, not really.
It can definitely be a struggle sometimes but I've found some ways to make it easier like having a bike trailer for heavy or large stuff or getting small amounts of groceries each day (I often stop daily on my ride home for fresh fruit and veggies). I can also hitch a ride with someone to stock up on big heavy Costco type stuff. For the most part I lived withing 10 - 20 miles or less of everywhere I needed or wanted on a regular basis, and even when I had a car would usually bike. I just got back from about a 20 mile loop - park, library, beach, ride on beach bike path, grocery store (where I got cake!) and back to home.
My biggest struggles are fear of theft (old bike and trailer but still a hassle if stolen) and night riding when I want to do a night time activity or stay out late. Not always safe from cars or people. That plus occasionally dressing up for something. Or emergencies to get to others fast if needed. But for most of those I could get an uber.
Personally I prefer biking or walking over driving, and the cost savings can be substantial, but yeah, a pita sometimes. And then there's bad weather!
ETA: I also had a couple of larger dogs when I first went car-free in 2019 so that could be probmatic in an emergency as uber's don't always take dogs. But they rode in the trailer together (all 125 lbs combined) and the vet was just down the road but in an emergency I'd call BF, sister, neighbor or friend to take me.
Girl—I will ALWAYS prefer a bike over a goddamn car, ALWAYS. I think I got one or 2 more centuries in me and hopefully a few more 6-day tours, but when I’m on a bike I am AT HOME and I’ve been that way since I was 6.
That said, I will give up my cars when I am laid to rest—but you’ve given me inspiration, and I will try a little more shopping via 2 wheels. (I own several bikes, one a city-kicker/touring bike that can handle all the weight you got.) We’ll see.
Well I may be striped of my biking laurals soon as I'm planning to get a car! Or am I? I always say I'm going to but then don't. If I give up biking and walking everywhere I'll have to give up cake. And that's just wrong ;-).
But seriously I'm moving this weekend to a place that's extremely bikeable but will get a vehicle soon and just hope I don't fall throes to hedonistic adaptation of cushy seats, AC, heater, music, and drive thru food all without having to lift a finger. No more sweaty, helmet head hair, bugs in my face. Yeah - getting a car isn't going to end well for me LOL.
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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 ;-).
You know it’s funny. I live in suburban LI most of the year and I’m a bike rider, couple hundred miles a month.
But I would find it imporssible to bike for my general needs. Maybe a little groceries, OK. But we’re into Costco, Trader Joe’s, and others that are typically located in places that put me on roads I don’t consider bike-safe—or just too much stuff to load on a bike.
Then, mom’s half an hour away and friends are mostly further than a bike ride, and that’s not to mention parks, museums, beaches, and so on. The city is 40 minutes by train, and most of whatever else I do is a short car ride. Combined, my wife and I drive about 9k miles a year, so a price swing of a buck will only cost us $400-$500 a year, which is unremarkable.
When I was a kid my bike was definitely transportation. Now, not really.
It can definitely be a struggle sometimes but I've found some ways to make it easier like having a bike trailer for heavy or large stuff or getting small amounts of groceries each day (I often stop daily on my ride home for fresh fruit and veggies). I can also hitch a ride with someone to stock up on big heavy Costco type stuff. For the most part I lived withing 10 - 20 miles or less of everywhere I needed or wanted on a regular basis, and even when I had a car would usually bike. I just got back from about a 20 mile loop - park, library, beach, ride on beach bike path, grocery store (where I got cake!) and back to home.
My biggest struggles are fear of theft (old bike and trailer but still a hassle if stolen) and night riding when I want to do a night time activity or stay out late. Not always safe from cars or people. That plus occasionally dressing up for something. Or emergencies to get to others fast if needed. But for most of those I could get an uber.
Personally I prefer biking or walking over driving, and the cost savings can be substantial, but yeah, a pita sometimes. And then there's bad weather!
ETA: I also had a couple of larger dogs when I first went car-free in 2019 so that could be probmatic in an emergency as uber's don't always take dogs. But they rode in the trailer together (all 125 lbs combined) and the vet was just down the road but in an emergency I'd call BF, sister, neighbor or friend to take me.
Girl—I will ALWAYS prefer a bike over a goddamn car, ALWAYS. I think I got one or 2 more centuries in me and hopefully a few more 6-day tours, but when I’m on a bike I am AT HOME and I’ve been that way since I was 6.
That said, I will give up my cars when I am laid to rest—but you’ve given me inspiration, and I will try a little more shopping via 2 wheels. (I own several bikes, one a city-kicker/touring bike that can handle all the weight you got.) We’ll see.
Well I may be striped of my biking laurals soon as I'm planning to get a car! Or am I? I always say I'm going to but then don't. If I give up biking and walking everywhere I'll have to give up cake. And that's just wrong ;-).
But seriously I'm moving this weekend to a place that's extremely bikeable but will get a vehicle soon and just hope I don't fall throes to hedonistic adaptation of cushy seats, AC, heater, music, and drive thru food all without having to lift a finger. No more sweaty, helmet head hair, bugs in my face. Yeah - getting a car isn't going to end well for me LOL.
You might want to get a catheter to go with that car Spartana!
Just kidding ofc
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Some people have what it takes to weather hardship and others don't. I guess some of it comes down to support, but a lot of it comes down to internal drive, ability and grit.
I've always wondered why some people - in whatever vocation or profession - are better able to sustain themselves than others. I think of a surgeon who has to do a 24 hour shift or who has to wake up at 2am and immediately drive to hospital to do a life saving operation. Some people can do it and some can't. I think back to the last office job I had and the fact that some employees were absolute superstars who would get shit done without complaint, and others would clock off at 4pm regardless of whether it left someone else in the team high and dry. Incidentally, this disparity was the reason I quit my job and never looked back - I wasn't okay with working in an organisation where you could bill twice as much as another fee-earner and be paid only 10% more. There's no justice in that.
The way I see it, some people have accountability and others don't, and some have the ability to suffer and to work hard, and others don't.
And where do you think the "internal drive" and "grit" come from?
Oh wait...they largely come from early life experiences of, y'know, facing challenges with the appropriate supports to develop drive and grit.
I am not sure what you mean by “appropriate support” so I’ll wait for clarification. FWIW I grew up POOR and had love and a kick in the ass for support, and that was all I needed.
In the meantime I’m liking twinstudy’s take on this one.
You literally just described having appropriate support.
Where was I not clear about what I meant by support? Did I not say that it came down to deep connections with people? Healthy love and pressure from a supportive family is exactly that.
That's exactly how someone develops resilience in the face of challenges.
Not everyone gets love and a supportive kick in the ass as a kid.
Hmm, I'm not sure that everything relating to discipline and willpower can be boiled down to deep connections and healthy love as a kid. Otherwise no kid from a bad family or dodgy background would ever make it.
I'd agree with supportive pressure - whether from family, friends or school. You need enough pressure to force you to work hard and seek failure and grow from it, but not enough pressure that you crack entirely. My own view is that society doesn't place enough pressure on people, which is why most underachieve.
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Some people have what it takes to weather hardship and others don't. I guess some of it comes down to support, but a lot of it comes down to internal drive, ability and grit.
I've always wondered why some people - in whatever vocation or profession - are better able to sustain themselves than others. I think of a surgeon who has to do a 24 hour shift or who has to wake up at 2am and immediately drive to hospital to do a life saving operation. Some people can do it and some can't. I think back to the last office job I had and the fact that some employees were absolute superstars who would get shit done without complaint, and others would clock off at 4pm regardless of whether it left someone else in the team high and dry. Incidentally, this disparity was the reason I quit my job and never looked back - I wasn't okay with working in an organisation where you could bill twice as much as another fee-earner and be paid only 10% more. There's no justice in that.
The way I see it, some people have accountability and others don't, and some have the ability to suffer and to work hard, and others don't.
And where do you think the "internal drive" and "grit" come from?
Oh wait...they largely come from early life experiences of, y'know, facing challenges with the appropriate supports to develop drive and grit.
I am not sure what you mean by “appropriate support” so I’ll wait for clarification. FWIW I grew up POOR and had love and a kick in the ass for support, and that was all I needed.
In the meantime I’m liking twinstudy’s take on this one.
You literally just described having appropriate support.
Where was I not clear about what I meant by support? Did I not say that it came down to deep connections with people? Healthy love and pressure from a supportive family is exactly that.
That's exactly how someone develops resilience in the face of challenges.
Not everyone gets love and a supportive kick in the ass as a kid.
Hmm, I'm not sure that everything relating to discipline and willpower can be boiled down to deep connections and healthy love as a kid. Otherwise no kid from a bad family or dodgy background would ever make it.
I'd agree with supportive pressure - whether from family, friends or school. You need enough pressure to force you to work hard and seek failure and grow from it, but not enough pressure that you crack entirely. My own view is that society doesn't place enough pressure on people, which is why most underachieve.
The examples you gave don't seem to relate to willpower so much as freedom from responsibilities outside of work. People who stay late at work in the evening likely dont have caregiving responsibility for children or elderly relatives, either because they dont have any or have a stay at home spouse. The surgeon who goes in at 2am almost certainly can afford a live-in nanny if she doesn't have a spouse at home. Lots of people also have medical issues that cause fatigue and dont allow them to work as much as you seem to think is necessary. It's not reasonable to expect everyone to be available to work 24/7, especially if there aren't good quality affordable outsourcing options for childcare and elder care.
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Some people have what it takes to weather hardship and others don't. I guess some of it comes down to support, but a lot of it comes down to internal drive, ability and grit.
I've always wondered why some people - in whatever vocation or profession - are better able to sustain themselves than others. I think of a surgeon who has to do a 24 hour shift or who has to wake up at 2am and immediately drive to hospital to do a life saving operation. Some people can do it and some can't. I think back to the last office job I had and the fact that some employees were absolute superstars who would get shit done without complaint, and others would clock off at 4pm regardless of whether it left someone else in the team high and dry. Incidentally, this disparity was the reason I quit my job and never looked back - I wasn't okay with working in an organisation where you could bill twice as much as another fee-earner and be paid only 10% more. There's no justice in that.
The way I see it, some people have accountability and others don't, and some have the ability to suffer and to work hard, and others don't.
And where do you think the "internal drive" and "grit" come from?
Oh wait...they largely come from early life experiences of, y'know, facing challenges with the appropriate supports to develop drive and grit.
I am not sure what you mean by “appropriate support” so I’ll wait for clarification. FWIW I grew up POOR and had love and a kick in the ass for support, and that was all I needed.
In the meantime I’m liking twinstudy’s take on this one.
You literally just described having appropriate support.
Where was I not clear about what I meant by support? Did I not say that it came down to deep connections with people? Healthy love and pressure from a supportive family is exactly that.
That's exactly how someone develops resilience in the face of challenges.
Not everyone gets love and a supportive kick in the ass as a kid.
Hmm, I'm not sure that everything relating to discipline and willpower can be boiled down to deep connections and healthy love as a kid. Otherwise no kid from a bad family or dodgy background would ever make it.
I'd agree with supportive pressure - whether from family, friends or school. You need enough pressure to force you to work hard and seek failure and grow from it, but not enough pressure that you crack entirely. My own view is that society doesn't place enough pressure on people, which is why most underachieve.
I'll just politely disagree with you.
Many of us who grew up in truly horrific experiences did receive enough love and support to thrive.
There are a lot of flavours of love and support, no one gets perfectly optimal support in their life, but those who get the most appropriate types of support when they need them tend to be more resilient.
I suppose your position is that some people are just born to be resilient and some aren't?
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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 ;-).
You know it’s funny. I live in suburban LI most of the year and I’m a bike rider, couple hundred miles a month.
But I would find it imporssible to bike for my general needs. Maybe a little groceries, OK. But we’re into Costco, Trader Joe’s, and others that are typically located in places that put me on roads I don’t consider bike-safe—or just too much stuff to load on a bike.
Then, mom’s half an hour away and friends are mostly further than a bike ride, and that’s not to mention parks, museums, beaches, and so on. The city is 40 minutes by train, and most of whatever else I do is a short car ride. Combined, my wife and I drive about 9k miles a year, so a price swing of a buck will only cost us $400-$500 a year, which is unremarkable.
When I was a kid my bike was definitely transportation. Now, not really.
It can definitely be a struggle sometimes but I've found some ways to make it easier like having a bike trailer for heavy or large stuff or getting small amounts of groceries each day (I often stop daily on my ride home for fresh fruit and veggies). I can also hitch a ride with someone to stock up on big heavy Costco type stuff. For the most part I lived withing 10 - 20 miles or less of everywhere I needed or wanted on a regular basis, and even when I had a car would usually bike. I just got back from about a 20 mile loop - park, library, beach, ride on beach bike path, grocery store (where I got cake!) and back to home.
My biggest struggles are fear of theft (old bike and trailer but still a hassle if stolen) and night riding when I want to do a night time activity or stay out late. Not always safe from cars or people. That plus occasionally dressing up for something. Or emergencies to get to others fast if needed. But for most of those I could get an uber.
Personally I prefer biking or walking over driving, and the cost savings can be substantial, but yeah, a pita sometimes. And then there's bad weather!
ETA: I also had a couple of larger dogs when I first went car-free in 2019 so that could be probmatic in an emergency as uber's don't always take dogs. But they rode in the trailer together (all 125 lbs combined) and the vet was just down the road but in an emergency I'd call BF, sister, neighbor or friend to take me.
Girl—I will ALWAYS prefer a bike over a goddamn car, ALWAYS. I think I got one or 2 more centuries in me and hopefully a few more 6-day tours, but when I’m on a bike I am AT HOME and I’ve been that way since I was 6.
That said, I will give up my cars when I am laid to rest—but you’ve given me inspiration, and I will try a little more shopping via 2 wheels. (I own several bikes, one a city-kicker/touring bike that can handle all the weight you got.) We’ll see.
Well I may be striped of my biking laurals soon as I'm planning to get a car! Or am I? I always say I'm going to but then don't. If I give up biking and walking everywhere I'll have to give up cake. And that's just wrong ;-).
But seriously I'm moving this weekend to a place that's extremely bikeable but will get a vehicle soon and just hope I don't fall throes to hedonistic adaptation of cushy seats, AC, heater, music, and drive thru food all without having to lift a finger. No more sweaty, helmet head hair, bugs in my face. Yeah - getting a car isn't going to end well for me LOL.
You might want to get a catheter to go with that car Spartana!
Just kidding ofc
LOL! I can pimp it out like Homer Simpson:
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Some people have what it takes to weather hardship and others don't. I guess some of it comes down to support, but a lot of it comes down to internal drive, ability and grit.
I've always wondered why some people - in whatever vocation or profession - are better able to sustain themselves than others. I think of a surgeon who has to do a 24 hour shift or who has to wake up at 2am and immediately drive to hospital to do a life saving operation. Some people can do it and some can't. I think back to the last office job I had and the fact that some employees were absolute superstars who would get shit done without complaint, and others would clock off at 4pm regardless of whether it left someone else in the team high and dry. Incidentally, this disparity was the reason I quit my job and never looked back - I wasn't okay with working in an organisation where you could bill twice as much as another fee-earner and be paid only 10% more. There's no justice in that.
The way I see it, some people have accountability and others don't, and some have the ability to suffer and to work hard, and others don't.
And where do you think the "internal drive" and "grit" come from?
Oh wait...they largely come from early life experiences of, y'know, facing challenges with the appropriate supports to develop drive and grit.
I am not sure what you mean by “appropriate support” so I’ll wait for clarification. FWIW I grew up POOR and had love and a kick in the ass for support, and that was all I needed.
In the meantime I’m liking twinstudy’s take on this one.
You literally just described having appropriate support.
Where was I not clear about what I meant by support? Did I not say that it came down to deep connections with people? Healthy love and pressure from a supportive family is exactly that.
That's exactly how someone develops resilience in the face of challenges.
Not everyone gets love and a supportive kick in the ass as a kid.
Hmm, I'm not sure that everything relating to discipline and willpower can be boiled down to deep connections and healthy love as a kid. Otherwise no kid from a bad family or dodgy background would ever make it.
I'd agree with supportive pressure - whether from family, friends or school. You need enough pressure to force you to work hard and seek failure and grow from it, but not enough pressure that you crack entirely. My own view is that society doesn't place enough pressure on people, which is why most underachieve.
I'll just politely disagree with you.
Many of us who grew up in truly horrific experiences did receive enough love and support to thrive.
There are a lot of flavours of love and support, no one gets perfectly optimal support in their life, but those who get the most appropriate types of support when they need them tend to be more resilient.
I suppose your position is that some people are just born to be resilient and some aren't?
I think it's a mix of nature and nurture. I think resilience is a property that is also modified by willpower and desire, and some people don't have the willpower or desire to actively put themselves through hardship for the sake of achieving something academically/vocationally.
The examples you gave don't seem to relate to willpower so much as freedom from responsibilities outside of work. People who stay late at work in the evening likely dont have caregiving responsibility for children or elderly relatives, either because they dont have any or have a stay at home spouse. The surgeon who goes in at 2am almost certainly can afford a live-in nanny if she doesn't have a spouse at home. Lots of people also have medical issues that cause fatigue and dont allow them to work as much as you seem to think is necessary. It's not reasonable to expect everyone to be available to work 24/7, especially if there aren't good quality affordable outsourcing options for childcare and elder care.
Your reasoning assumes that everyone who logs off work early or who underachieves at work does so due to having caring responsibilities for children/elderly relatives, but that doesn't apply to a large section of the population (for example, most Gen Ys now in their 20s would have responsibility for neither). It also assumes that someone in a difficult and strenuous occupation must necessarily be skimping on, or offloading, his or her caring duties - my anecdotal experience is that some of the best workers I know are also great mums and dads - they will assiduously attend to the 4pm school run and then send off emails at 10 or 11pm at night when the kids are in bed.
I'm not saying this is the only, or even the best, way to live - the whole point of FIRE is to not have work interfere so much with life - but I think the ability to do this, to withstand this (whether for work or for some passion project), is a good thing, and should be cultivated.
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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 ;-).
You know it’s funny. I live in suburban LI most of the year and I’m a bike rider, couple hundred miles a month.
But I would find it imporssible to bike for my general needs. Maybe a little groceries, OK. But we’re into Costco, Trader Joe’s, and others that are typically located in places that put me on roads I don’t consider bike-safe—or just too much stuff to load on a bike.
Then, mom’s half an hour away and friends are mostly further than a bike ride, and that’s not to mention parks, museums, beaches, and so on. The city is 40 minutes by train, and most of whatever else I do is a short car ride. Combined, my wife and I drive about 9k miles a year, so a price swing of a buck will only cost us $400-$500 a year, which is unremarkable.
When I was a kid my bike was definitely transportation. Now, not really.
It can definitely be a struggle sometimes but I've found some ways to make it easier like having a bike trailer for heavy or large stuff or getting small amounts of groceries each day (I often stop daily on my ride home for fresh fruit and veggies). I can also hitch a ride with someone to stock up on big heavy Costco type stuff. For the most part I lived withing 10 - 20 miles or less of everywhere I needed or wanted on a regular basis, and even when I had a car would usually bike. I just got back from about a 20 mile loop - park, library, beach, ride on beach bike path, grocery store (where I got cake!) and back to home.
My biggest struggles are fear of theft (old bike and trailer but still a hassle if stolen) and night riding when I want to do a night time activity or stay out late. Not always safe from cars or people. That plus occasionally dressing up for something. Or emergencies to get to others fast if needed. But for most of those I could get an uber.
Personally I prefer biking or walking over driving, and the cost savings can be substantial, but yeah, a pita sometimes. And then there's bad weather!
ETA: I also had a couple of larger dogs when I first went car-free in 2019 so that could be probmatic in an emergency as uber's don't always take dogs. But they rode in the trailer together (all 125 lbs combined) and the vet was just down the road but in an emergency I'd call BF, sister, neighbor or friend to take me.
Girl—I will ALWAYS prefer a bike over a goddamn car, ALWAYS. I think I got one or 2 more centuries in me and hopefully a few more 6-day tours, but when I’m on a bike I am AT HOME and I’ve been that way since I was 6.
That said, I will give up my cars when I am laid to rest—but you’ve given me inspiration, and I will try a little more shopping via 2 wheels. (I own several bikes, one a city-kicker/touring bike that can handle all the weight you got.) We’ll see.
Well I may be striped of my biking laurals soon as I'm planning to get a car! Or am I? I always say I'm going to but then don't. If I give up biking and walking everywhere I'll have to give up cake. And that's just wrong ;-).
But seriously I'm moving this weekend to a place that's extremely bikeable but will get a vehicle soon and just hope I don't fall throes to hedonistic adaptation of cushy seats, AC, heater, music, and drive thru food all without having to lift a finger. No more sweaty, helmet head hair, bugs in my face. Yeah - getting a car isn't going to end well for me LOL.
Don’t do it! :-)
Remember, using your muscles and being in good shape isn’t just about being able to eat more cake, it’s is very important for your overal health (and it gets more important the older we get).
Also, I can’t believe “better TVs” keeps coming up as an advantage of our current lives compared to the olden days. Seriously? And this among Mustachians? :-)
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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 ;-).
You know it’s funny. I live in suburban LI most of the year and I’m a bike rider, couple hundred miles a month.
But I would find it imporssible to bike for my general needs. Maybe a little groceries, OK. But we’re into Costco, Trader Joe’s, and others that are typically located in places that put me on roads I don’t consider bike-safe—or just too much stuff to load on a bike.
Then, mom’s half an hour away and friends are mostly further than a bike ride, and that’s not to mention parks, museums, beaches, and so on. The city is 40 minutes by train, and most of whatever else I do is a short car ride. Combined, my wife and I drive about 9k miles a year, so a price swing of a buck will only cost us $400-$500 a year, which is unremarkable.
When I was a kid my bike was definitely transportation. Now, not really.
It can definitely be a struggle sometimes but I've found some ways to make it easier like having a bike trailer for heavy or large stuff or getting small amounts of groceries each day (I often stop daily on my ride home for fresh fruit and veggies). I can also hitch a ride with someone to stock up on big heavy Costco type stuff. For the most part I lived withing 10 - 20 miles or less of everywhere I needed or wanted on a regular basis, and even when I had a car would usually bike. I just got back from about a 20 mile loop - park, library, beach, ride on beach bike path, grocery store (where I got cake!) and back to home.
My biggest struggles are fear of theft (old bike and trailer but still a hassle if stolen) and night riding when I want to do a night time activity or stay out late. Not always safe from cars or people. That plus occasionally dressing up for something. Or emergencies to get to others fast if needed. But for most of those I could get an uber.
Personally I prefer biking or walking over driving, and the cost savings can be substantial, but yeah, a pita sometimes. And then there's bad weather!
ETA: I also had a couple of larger dogs when I first went car-free in 2019 so that could be probmatic in an emergency as uber's don't always take dogs. But they rode in the trailer together (all 125 lbs combined) and the vet was just down the road but in an emergency I'd call BF, sister, neighbor or friend to take me.
Girl—I will ALWAYS prefer a bike over a goddamn car, ALWAYS. I think I got one or 2 more centuries in me and hopefully a few more 6-day tours, but when I’m on a bike I am AT HOME and I’ve been that way since I was 6.
That said, I will give up my cars when I am laid to rest—but you’ve given me inspiration, and I will try a little more shopping via 2 wheels. (I own several bikes, one a city-kicker/touring bike that can handle all the weight you got.) We’ll see.
Well I may be striped of my biking laurals soon as I'm planning to get a car! Or am I? I always say I'm going to but then don't. If I give up biking and walking everywhere I'll have to give up cake. And that's just wrong ;-).
But seriously I'm moving this weekend to a place that's extremely bikeable but will get a vehicle soon and just hope I don't fall throes to hedonistic adaptation of cushy seats, AC, heater, music, and drive thru food all without having to lift a finger. No more sweaty, helmet head hair, bugs in my face. Yeah - getting a car isn't going to end well for me LOL.
Don’t do it! :-)
Remember, using your muscles and being in good shape isn’t just about being able to eat more cake, it’s is very important for your overal health (and it gets more important the older we get).
Also, I can’t believe “better TVs” keeps coming up as an advantage of our current lives compared to the olden days. Seriously? And this among Mustachians? :-)
Heretic!!! I plan to die the fittest unhealthy person alive...er...dead. Death by 1000 slices... of cake!
I really don't think I'll give up my healthy ways and workout less since I didn't when I had a car and rarely drove unless longer distances or road trips. But yeah it's easy just to hop in a car to do chores or go to local places so do have to resist that.
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The discussion of the downsides of life being too easy ring very true to me. Much of our social malaise these days comes from living in a world of abundance. This includes the social disconnection, which is partially driven by it being too comfortable and entertaining to sit around alone looking at an abundance of free and addictive entertainment, instead of needing to go out into the world and hang out with people for entertainment.
Some of the quibbling with the notion that some people are more driven than others seems a little reflexively ideological. I think it should be fairly uncontroversial to state that the uneven distribution of conscientiousness/drive/grit/hard-working-ness, like most other human traits, comes from both nature and nurture. Of course there's a meaningful genetic component. Some people can be provided all the loving support in the world, and still just be dispositionally lazier.
The genetic lottery is not fair. Some people are just born with traits that make them "better" than others in various ways. We can strive to make a society that gives people the best opportunities it can within their genetic limitations, and treats the genetically unluckiest people with dignity and respect. But to my mind, the notion that humans are infinitely mutable is faulty and does a lot of harm. Lots of people simply can not ever "learn to code." Lots of people cannot pass the marshmallow test. And lots of people are lazy. It is what it is.
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The discussion of the downsides of life being too easy ring very true to me. Much of our social malaise these days comes from living in a world of abundance. This includes the social disconnection, which is partially driven by it being too comfortable and entertaining to sit around alone looking at an abundance of free and addictive entertainment, instead of needing to go out into the world and hang out with people for entertainment.
Some of the quibbling with the notion that some people are more driven than others seems a little reflexively ideological. I think it should be fairly uncontroversial to state that the uneven distribution of conscientiousness/drive/grit/hard-working-ness, like most other human traits, comes from both nature and nurture. Of course there's a meaningful genetic component. Some people can be provided all the loving support in the world, and still just be dispositionally lazier.
The genetic lottery is not fair. Some people are just born with traits that make them "better" than others in various ways. We can strive to make a society that gives people the best opportunities it can within their genetic limitations, and treats the genetically unluckiest people with dignity and respect. But to my mind, the notion that humans are infinitely mutable is faulty and does a lot of harm. Lots of people simply can not ever "learn to code." Lots of people cannot pass the marshmallow test. And lots of people are lazy. It is what it is.
I agree with you in general, but it's funny that you should mention the marshmallow test! This is because this is literally something that was taught to me at university 20+ years ago, and which has now been cast into a lot of doubt as scientists have tried to replicate it and considered other confounding variables (such as household income and cognitive ability). If a kid grows up in an environment where adults make promises they can't or don't keep, why would they trust the promise of the researcher of another marshmallow?
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The discussion of the downsides of life being too easy ring very true to me. Much of our social malaise these days comes from living in a world of abundance. This includes the social disconnection, which is partially driven by it being too comfortable and entertaining to sit around alone looking at an abundance of free and addictive entertainment, instead of needing to go out into the world and hang out with people for entertainment.
Some of the quibbling with the notion that some people are more driven than others seems a little reflexively ideological. I think it should be fairly uncontroversial to state that the uneven distribution of conscientiousness/drive/grit/hard-working-ness, like most other human traits, comes from both nature and nurture. Of course there's a meaningful genetic component. Some people can be provided all the loving support in the world, and still just be dispositionally lazier.
The genetic lottery is not fair. Some people are just born with traits that make them "better" than others in various ways. We can strive to make a society that gives people the best opportunities it can within their genetic limitations, and treats the genetically unluckiest people with dignity and respect. But to my mind, the notion that humans are infinitely mutable is faulty and does a lot of harm. Lots of people simply can not ever "learn to code." Lots of people cannot pass the marshmallow test. And lots of people are lazy. It is what it is.
I agree with you in general, but it's funny that you should mention the marshmallow test! This is because this is literally something that was taught to me at university 20+ years ago, and which has now been cast into a lot of doubt as scientists have tried to replicate it and considered other confounding variables (such as household income and cognitive ability). If a kid grows up in an environment where adults make promises they can't or don't keep, why would they trust the promise of the researcher of another marshmallow?
There's a great book called The Quick Fix that covers the absolute nonsense of psych research and how most of what people cite as fact because of highly publicized psych research has largely been debunked, that just doesn't get reported widely.
I'm in no way disagreeing that there are fundamental genetic and congenital factors that contribute to various traits that make people successful in life.
But resilience and happiness are very complex things. Absolutely no one is resilient and happy in the face of life's challenges *just* because they were born that way. That is an absolutely absurd notion.
That's also why I said "appropriate" supports. Different people need different supports throughout their development. That's why fraternal twins can have wildly different outcomes. Different genes create different starting points, which create different needs, and different interactions within their environment.
That doesn't mean the genes determined the outcome. Put those same fraternal twins with a different family and the outcomes could be reversed.
I see people at their absolute worst and most dysfunctional, and the process of deconstructing why and how they're not functioning well is extremely enlightening and it's remarkable how radically a person's outcomes can change when some of their foundational dysfunction is resolved.
People's behaviour is exquisitely changeable with the right supports. Figuring out what those supports are is the challenge, especially in a world filled with miserable people who aren't great models for health and thriving.
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I agree with you in general, but it's funny that you should mention the marshmallow test! This is because this is literally something that was taught to me at university 20+ years ago, and which has now been cast into a lot of doubt as scientists have tried to replicate it and considered other confounding variables (such as household income and cognitive ability). If a kid grows up in an environment where adults make promises they can't or don't keep, why would they trust the promise of the researcher of another marshmallow?
The subsequent studies have still, mostly, replicated the correlations; but there does not seem to be a strong correlation independent of other factors such as cognitive ability or family background, as you said. This doesn't mean that willpower isn't important though - it could simply be that there are multiple correlated variables, of which willpower is one, which have a convergent effect on adult outcomes.
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The discussion of the downsides of life being too easy ring very true to me. Much of our social malaise these days comes from living in a world of abundance. This includes the social disconnection, which is partially driven by it being too comfortable and entertaining to sit around alone looking at an abundance of free and addictive entertainment, instead of needing to go out into the world and hang out with people for entertainment.
Some of the quibbling with the notion that some people are more driven than others seems a little reflexively ideological. I think it should be fairly uncontroversial to state that the uneven distribution of conscientiousness/drive/grit/hard-working-ness, like most other human traits, comes from both nature and nurture. Of course there's a meaningful genetic component. Some people can be provided all the loving support in the world, and still just be dispositionally lazier.
The genetic lottery is not fair. Some people are just born with traits that make them "better" than others in various ways. We can strive to make a society that gives people the best opportunities it can within their genetic limitations, and treats the genetically unluckiest people with dignity and respect. But to my mind, the notion that humans are infinitely mutable is faulty and does a lot of harm. Lots of people simply can not ever "learn to code." Lots of people cannot pass the marshmallow test. And lots of people are lazy. It is what it is.
Can we simply stipulate that people fall on many measures unequally? That inequality is a fact of human existence?
If a democracy can agree on laws to curtail the effects of inequality for whatever reason, than it may do so. But laws don’t change the state of nature, do they?
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The discussion of the downsides of life being too easy ring very true to me. Much of our social malaise these days comes from living in a world of abundance. This includes the social disconnection, which is partially driven by it being too comfortable and entertaining to sit around alone looking at an abundance of free and addictive entertainment, instead of needing to go out into the world and hang out with people for entertainment.
Some of the quibbling with the notion that some people are more driven than others seems a little reflexively ideological. I think it should be fairly uncontroversial to state that the uneven distribution of conscientiousness/drive/grit/hard-working-ness, like most other human traits, comes from both nature and nurture. Of course there's a meaningful genetic component. Some people can be provided all the loving support in the world, and still just be dispositionally lazier.
The genetic lottery is not fair. Some people are just born with traits that make them "better" than others in various ways. We can strive to make a society that gives people the best opportunities it can within their genetic limitations, and treats the genetically unluckiest people with dignity and respect. But to my mind, the notion that humans are infinitely mutable is faulty and does a lot of harm. Lots of people simply can not ever "learn to code." Lots of people cannot pass the marshmallow test. And lots of people are lazy. It is what it is.
Can we simply stipulate that people fall on many measures unequally? That inequality is a fact of human existence?
If a democracy can agree on laws to curtail the effects of inequality for whatever reason, than it may do so. But laws don’t change the state of nature, do they?
100%
Re: marshmallow test, I brought it up more metaphorically. The study being debunked is pretty irrelevant to the general observation that people vary in their capacity to delay gratification, and this has significant implications for one’s life outcomes. I’m sure lots of impulsive children grow up to gain self-control, and vice-versa. The point stands that all of us participating here on this forum and talking about early retirement are highly privileged with the intelligence and disposition that enable us to consider trade-offs and execute these long-term plans.
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You know what they say about correlations…
Yes, I get that marshmallows are not the issue here and that Mustachians are pretty much by definition if not so much able to delay gratification at least very much able to make the best of the situation they are in and plan for where they want to end up. (I, for one, don’t feel I’m delaying anything — I’m just living my best life now and that will make me be able to do so in the future as well.)
That’s the situation for us here on this board. But I do think that what makes some children/adults/people in general be able to think and act long-term is hugely relevant, both for the kids in our lives and for kids in general. If we can help humanity think more long-term, why say “oh well, some people just can and it’s not relevant to figure out why”?
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You know what they say about correlations…
Yes, I get that marshmallows are not the issue here and that Mustachians are pretty much by definition if not so much able to delay gratification at least very much able to make the best of the situation they are in and plan for where they want to end up. (I, for one, don’t feel I’m delaying anything — I’m just living my best life now and that will make me be able to do so in the future as well.)
That’s the situation for us here on this board. But I do think that what makes some children/adults/people in general be able to think and act long-term is hugely relevant, both for the kids in our lives and for kids in general. If we can help humanity think more long-term, why say “oh well, some people just can and it’s not relevant to figure out why”?
I mean, yeah, as someone whose job it is to change the way people think about things, it *is* kind of important to understand why they think/behave the way they do and how to change that.
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I understand the value in being about to delay gratification as a strategy to achieve a better, longer-term goal. But don’t let it become a nutty obsession.
To my mind, a better approach is twofold:
1. Develop a deep understanding of your goal and the plan you’ve developed to achieve it. Reevaluate often and don’t feel a need to maintain internal consistency if you see benefit in making changes to the goal or plan. Overvaluing consistency and sticking to a highly specific goal-plan is suboptimal and borderline neurotic.
This is certainly true for those with FIRE goals. Having an aggressive plan for FI and living in a state of delayed gratification on a number of fronts to achieve it is probably fine for some and awful for others. You certainly do not NEED to stick to a plan for years if you realize you don’t like it. You can modify it or toss it. There is no value in simply sticking to the original goal/plan if your life experience isn’t reinforcing it. Changing your outlook, goals, and plans, based on your ongoing experience is natural and healthy.
2. Identify and weed-out the SHOULDS and MUSTS in your life. Most things we feel we should do are perfectly fine being treated as options. Musts can be scary. Many people trap themselves in a crappy headspace by setting up way too many life rules and trying to live up to it all. Ditch that baggage. Relax more.
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Food quality and quantity seems to be worse. Public health care seems to be worse. Gas is much more expensive.
I dunno - doesn't seem radically more luxurious.
Travel is much less expensive than it was then. Food is also, on an inflation-adjusted basis. Healthcare is dramatically better than it was then -- we can now cure cancers that were then fatal, we have ozempic, and RNA cancer destroyers are in second stage trials.
If you're not living more luxuriously than in '99, that is a fine stance, but it is an uncommon one.
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Here's an entertaining post on the FATFire subreddit by a guy who has apparently discovered that $10M is not quite enough for his planned spending :-)
https://www.reddit.com/r/fatFIRE/comments/1fnax5w/wow_i_was_off/
The reality appears to be that although $10M unlocks security, comfort and a good life anywhere in the world (which is more than enough!) it doesn't seem to unlock lower-end rich life luxury.
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I mentioned the book Uneasy Street on page 1 of this thread, but it's a similar story. Tons of people spending 7 figures consider their lifestyles to be "not luxurious, just comfortable upper-middle-class."
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Here's an entertaining post on the FATFire subreddit by a guy who has apparently discovered that $10M is not quite enough for his planned spending :-)
https://www.reddit.com/r/fatFIRE/comments/1fnax5w/wow_i_was_off/
The reality appears to be that although $10M unlocks security, comfort and a good life anywhere in the world (which is more than enough!) it doesn't seem to unlock lower-end rich life luxury.
Just from the part you quoted, he's spot on.
This is a point I made earlier, and is the point that MMM has been making all along: the spending ceiling on a middle-class lifestyle is enormously high.
I learned in my years of living among rather wealthy folks that they all feel "middle class" because they are all essentially spending a fortune to live pretty much a middle class lifestyle with a lot of spendy details.
The level of wealth you need to break into a truly higher standard of living, not just a middle-class lifestyle with expensive details is astronomical.
Middle class spending is basically a heat-sink. You can escalate your spending several times over in every single category and still just have a marginally nicer version of the exact same life.
I've mentioned this many times before, but my experience living among very wealthy folks was that across the board, luxury rarely delivered an increase proportional to the additional cost, meaning, the more you spend, the less value you get for your money.
I found we often had to pay several times as much for around 20% more quality. Like, a concert ticket would be good, and a VIP concert ticket would be around 20-40% better of an experience, but cost 5X.
A tasty, hole in the wall, ethnic restaurant can have great food in a simple setting, while a high end restaurant will have a nicer venue, better service, and use more premium ingredients. The experience is definitely nicer, but not ten times nicer. It's still just eating food that someone else made in a room outside your house.
I have perpetually felt disappointed by what I can get by spending enormous sums of money in most areas of life.
There's a ceiling on how much spending on luxury can add to essentially the exact same experience, but there's almost no ceiling on the cost of that added luxury.
Everyone feels middle class because we're all essentially getting the same middle class experience, just with different small details that drastically alter the cost.
Sometimes the details really matter. For each person, there are certain small details that are truly a priority. A skilled musician might *really* care about the small detail differences of instruments and amps. I deeply care about the small differences between different types of extremely expensive crutches.
We all have our things where the small details matter, but the more of those things that we decide matter, the more and more and more we have to spend just to maintain essentially the same middle class lifestyle.
But if you try to inflate everything, you will find that it takes SO much money to just hit the top level of middle class luxury, almost no one can even afford that.
You don't really start leaving the essentially middle class lifestyle experience until you have multiple live-in staff so that you are relieved of a lot of domestic tasks. That's really where money starts significantly impacting your basic day-to-day way of living.
Everything else is just truffles and gold leaf on an already delicious steak.
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Here's an entertaining post on the FATFire subreddit by a guy who has apparently discovered that $10M is not quite enough for his planned spending :-)
https://www.reddit.com/r/fatFIRE/comments/1fnax5w/wow_i_was_off/
The reality appears to be that although $10M unlocks security, comfort and a good life anywhere in the world (which is more than enough!) it doesn't seem to unlock lower-end rich life luxury.
Yeah, cry me a fucking river dude, you’ve got $10 M/M.
Many Foreign Service folks hire household help when serving overseas in less-developed countries. It’s great not to have to mop or iron, but after managing staff all day, sometimes one has to come home to manage more staff, this gets irksome and tiring. Yeah, I know, cry me a fucking river…
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I mentioned the book Uneasy Street on page 1 of this thread, but it's a similar story. Tons of people spending 7 figures consider their lifestyles to be "not luxurious, just comfortable upper-middle-class."
In my experience, most people are fascinated with the financial situation of others. In some ways I get it, in some I don’t.
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I don't know if I'd classify the situation overall as better or worse, but I find myself managing money more as NW approaches 10M vs. when I was at 1M and had a simple portfolio and tax situation.
I can already hear everyone saying I could just as easily have 10M of index funds as 1M, problem solved, and that theory is correct. But there are so many options available to me that promise diversification, better returns, and being uncorrelated with the S&P500. I have my majority of NW still in index funds and two bond funds, but beyond the core FI investments, I have some private equity, hard lending, individual stocks, and I like to trade short term options when I see an opportunity... I have a CPA to unload the added tax filing burden for the K1's, inherited IRA distributions, and trust fund management but there's undeniably more work. Don't get me wrong, the investing 'work' I do is much more interesting and pays better than W-2 labor so I'm not complaining, just pointing out one more area where 10M might be considered worse for people who don't like these things but don't want to unload it all to an advisor (we are Mustachians after all, and money managers typically charge 1% or more (factoring in trading fees, etc.) and you need to keep an eye on them)...
There are also more spending decisions to be made if you want to make the most of having a higher NW, but that is something you have discretion over. It can still be a hassle though, especially trying not to feel ripped off while also minimizing wasted effort to save twenty bucks on the small stuff.
In summary, having more money becomes a full time job in and of itself unless you unload it to expensive investment advisors. Spending also becomes a job unless you stop caring about being ripped off.
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Here's an entertaining post on the FATFire subreddit by a guy who has apparently discovered that $10M is not quite enough for his planned spending :-)
https://www.reddit.com/r/fatFIRE/comments/1fnax5w/wow_i_was_off/ (https://www.reddit.com/r/fatFIRE/comments/1fnax5w/wow_i_was_off/)
The reality appears to be that although $10M unlocks security, comfort and a good life anywhere in the world (which is more than enough!) it doesn't seem to unlock lower-end rich life luxury.
That person's view of a luxury life is more like $1million/yr in spending and possibly a great deal more depending on how many homes are involved, their location, and cost of staff them. The life described is more like a CEO or rock star than some peon with just $10 million.
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Here's an entertaining post on the FATFire subreddit by a guy who has apparently discovered that $10M is not quite enough for his planned spending :-)
https://www.reddit.com/r/fatFIRE/comments/1fnax5w/wow_i_was_off/
The reality appears to be that although $10M unlocks security, comfort and a good life anywhere in the world (which is more than enough!) it doesn't seem to unlock lower-end rich life luxury.
Just from the part you quoted, he's spot on.
This is a point I made earlier, and is the point that MMM has been making all along: the spending ceiling on a middle-class lifestyle is enormously high.
I learned in my years of living among rather wealthy folks that they all feel "middle class" because they are all essentially spending a fortune to live pretty much a middle class lifestyle with a lot of spendy details.
The level of wealth you need to break into a truly higher standard of living, not just a middle-class lifestyle with expensive details is astronomical.
Middle class spending is basically a heat-sink. You can escalate your spending several times over in every single category and still just have a marginally nicer version of the exact same life.
I've mentioned this many times before, but my experience living among very wealthy folks was that across the board, luxury rarely delivered an increase proportional to the additional cost, meaning, the more you spend, the less value you get for your money.
I found we often had to pay several times as much for around 20% more quality. Like, a concert ticket would be good, and a VIP concert ticket would be around 20-40% better of an experience, but cost 5X.
A tasty, hole in the wall, ethnic restaurant can have great food in a simple setting, while a high end restaurant will have a nicer venue, better service, and use more premium ingredients. The experience is definitely nicer, but not ten times nicer. It's still just eating food that someone else made in a room outside your house.
I have perpetually felt disappointed by what I can get by spending enormous sums of money in most areas of life.
There's a ceiling on how much spending on luxury can add to essentially the exact same experience, but there's almost no ceiling on the cost of that added luxury.
Everyone feels middle class because we're all essentially getting the same middle class experience, just with different small details that drastically alter the cost.
Sometimes the details really matter. For each person, there are certain small details that are truly a priority. A skilled musician might *really* care about the small detail differences of instruments and amps. I deeply care about the small differences between different types of extremely expensive crutches.
We all have our things where the small details matter, but the more of those things that we decide matter, the more and more and more we have to spend just to maintain essentially the same middle class lifestyle.
But if you try to inflate everything, you will find that it takes SO much money to just hit the top level of middle class luxury, almost no one can even afford that.
You don't really start leaving the essentially middle class lifestyle experience until you have multiple live-in staff so that you are relieved of a lot of domestic tasks. That's really where money starts significantly impacting your basic day-to-day way of living.
Everything else is just truffles and gold leaf on an already delicious steak.
As you said, a 'middle class' life (in terms of most aesthetic/sensory parameters) is already very luxurious. A $50 meal is a 8.5/10 already. A $300 meal might be 10/10 but you are getting marginal gains, obviously. And food is actually one of the best value propositions out there: there's no such thing as a 'Veblen good' when it comes to food (because the best restaurants just make it hard to book a table: they're not expensive in the scheme of things). Once you start getting into luxury bags, cars, watches, homes, you could easily drop $1m or $10m and still only go from a 9.3 to a 9.4 out of 10.
So I think it's important to let yourself indulge in a couple of categories - whether that's food, cars, travel, homeware - but otherwise stick to an upper middle class 8/10 level. That's the difference between $100k a year in spending and $1m a year in spending.
Humans are wired to try to minmax and chase the ceiling, but you can do that in other areas of accomplishment besides lifestyle. You can minmax your relationship or your family life or your friends or your career. Don't minmax consumerism, obviously.
One easy way I sometimes put myself off luxury purchases is by examining the people who buy them. I was at an Hermes shop the other day because I wanted to buy a nice tie for a relative, and I didn't mind splashing $400 on it. The store made me line up for 15+ minutes just to get in - this was on a lazy sunday - and most of the others in line were young students who were obviously spending daddy's money. The thought of being like them turned me off completely. Hermes as a brand makes some nice things but I now can't shake the thought that most of its customers are (1) poor people trying to look rich or (2) rich kids who will be poor in 1-2 generations. Yuck.
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Here's an entertaining post on the FATFire subreddit by a guy who has apparently discovered that $10M is not quite enough for his planned spending :-)
https://www.reddit.com/r/fatFIRE/comments/1fnax5w/wow_i_was_off/
The reality appears to be that although $10M unlocks security, comfort and a good life anywhere in the world (which is more than enough!) it doesn't seem to unlock lower-end rich life luxury.
OK, that guy's version of a "rich" lifestyle is like royalty-level. His list is populated with the kinds of things a hugely successful venture capitalist does -- but he is missing the reality that the VC is bringing in $10M per year, because he's still working. He's not trying to live on $10M for the rest of his life.
It reminds me of the poor people who think that winning a $1M lottery means they're rich -- the monetary target is less of a real number than it is some unattainable wish that will solve all problems. And then they get there, and they discover that there's a whole other world of issues and considerations and concerns that they didn't have any clue about, and in fact they're still really far away from whatever that dream was.
Really, the math of what he's talking about is self-evident. $10M in VHCOL, and he wants multiple homes to start with. That's going to take half your money right there (if you're looking for "rich"-level homes). So how are you going to fit in everything else on that list for $5M?
As with everything else, you can have a bunch of stuff on that list with $10M. You just can't have all of it. But really, do you even have the time/desire to fly airplanes, play polo, get your kids lacrosse coaches and into all the competitive travel teams, visit your multiple homes, go to every concert, drive your multiple fancy cars regularly (in VHCOL traffic??), and hang out at the country club every weekend? My God that sounds exhausting.
From what I've learned, you get more happy for your money if you focus your spending in two areas: (1) things that relieve anxiety/fears, provide a cushion against life's hardships, etc.; and (2) areas that are significantly meaningful to you in particular, vs. just focusing on having All The Things that all the other Rich People have.
1. By far the best thing money provides IMO is a safety net against bad shit. At $10M, you can afford excellent medical insurance -- and you've got cash to deal with anything that isn't covered and fight insurance about it later. You can afford to pay for daycare for your kids, or to have/be a SAHP, and to pay for college. You can afford good, safe housing that is convenient to wherever you want to be. If you're in a VHCOL area in the US, those are the three major areas of insecurity. So how freaking awesome is it that you don't have to worry about that ever again???
Along those lines, what parts of life do you just really, really hate? Cleaning? Grocery shopping? Yard work? Cooking? Guess what: you don't have to do that ever again. At $10M, you can hire someone to do it for you. If I'm lucky, I will never have to clean my own house ever again. And it makes me happy happy happy every time the cleaning lady shows up to know that that is one bit of drudgery that I can afford not to have to do myself.
2. No one can have everything. So you can't make "everything" your goal for happiness. You need to define the specific things that make you happy and target your spending there, and then spend less on areas that don't really matter to you. Like: do you have one favorite vacation spot, or do you want to travel the world? At $10M, you can afford a vacation home in your favorite spot, or multiple trips to different places; you just can't do both. So pick the thing that matters most, and enjoy the hell out of doing that. And if that gets old, pick something else, and enjoy the hell out of that.
But like everything else, it is all a matter of perspective. For ex., we didn't have money for stuff like concerts growing up, and even when I had a job and could "afford" concert tix, I couldn't get over the prices. So I missed a whole bunch of events that I regret. So when I discovered this year that John Fogerty was playing 3 hours away, and I was able to immediately buy tickets and get a hotel without even thinking twice about it, it felt like a huge thing -- just knowing I was able to go to a concert without thinking about the cost made me very very happy, even before the concert itself. OTOH, if my life expectations for 30 years had been "I get to go to any concert I want," then I'd likely have been disappointed that I had to drive 3 hrs and stay at a low-end hotel.
IOW, that guy needs to get off Reddit and get him some MMM. He clearly feels guilty for being disappointed with how far away he still is from the lifestyle he expected -- and yet he is disappointed. And you can't talk yourself out of being disappointed. The only thing that will work is to re-set your thinking, where your baseline is basically nothing except basic needs, and anything above that is a luxury instead of an expectation. That's the best way I know to be happy with less than royalty-level wealth.
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His list is populated with the kinds of things a hugely successful venture capitalist does -- but he is missing the reality that the VC is bringing in $10M per year, because he's still working.
Don't VCs just give money to other people to do work and then skim off the top?
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In summary, having more money becomes a full time job in and of itself unless you unload it to expensive investment advisors. Spending also becomes a job unless you stop caring about being ripped off.
I recommend a set-and-forget investment strategy, meeting with your tax accountant once a year to review your plan, and stop toying with the idea that expensive investment advisors are the key to anything of value. No need to get ripped off with this advice.
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In summary, having more money becomes a full time job in and of itself unless you unload it to expensive investment advisors. Spending also becomes a job unless you stop caring about being ripped off.
I recommend a set-and-forget investment strategy, meeting with your tax accountant once a year to review your plan, and stop toying with the idea that expensive investment advisors are the key to anything of value. No need to get ripped off with this advice.
I've had a lot of success with Private Equity and stock options. In my experience, more hands on = better returns. It's like this for practically everything I've added now that I have my FI covered by Indexing...
If I were fully retired, I'd probably sell covered calls like Karsten (Early Retirement Now) does - He Earned a Million Dollars Trading This Option Strategy (https://youtu.be/gls3oW-zyhQ?si=Jp8RxG9fN1-8_sZd)
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I have perpetually felt disappointed by what I can get by spending enormous sums of money in most areas of life.
Exactly this.
In summary, having more money becomes a full time job in and of itself unless you unload it to expensive investment advisors. Spending also becomes a job unless you stop caring about being ripped off.
Also this.
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In summary, having more money becomes a full time job in and of itself unless you unload it to expensive investment advisors. Spending also becomes a job unless you stop caring about being ripped off.
Having more money becomes a full time job...if and only if you desire higher returns/more diversification than you can get by owning a simple portfolio. I don't have $10 million, but if I did, I'm fairy certain my investments would be nearly identical to what they are right now.
As my net worth/income has increased, my spending has gotten easier and takes less time. I don't want or need more stuff than I used to, but now I just buy the thing I want instead of always looking for the low cost solution or compromising on quality. Or I can just write a check for a car instead of financing, for example. Or if the car needs maintenance I can take care of it right away instead of waiting until next month when I have more money, and so on.
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Here's an entertaining post on the FATFire subreddit by a guy who has apparently discovered that $10M is not quite enough for his planned spending :-)
https://www.reddit.com/r/fatFIRE/comments/1fnax5w/wow_i_was_off/
The reality appears to be that although $10M unlocks security, comfort and a good life anywhere in the world (which is more than enough!) it doesn't seem to unlock lower-end rich life luxury.
Just from the part you quoted, he's spot on.
This is a point I made earlier, and is the point that MMM has been making all along: the spending ceiling on a middle-class lifestyle is enormously high.
I learned in my years of living among rather wealthy folks that they all feel "middle class" because they are all essentially spending a fortune to live pretty much a middle class lifestyle with a lot of spendy details.
The level of wealth you need to break into a truly higher standard of living, not just a middle-class lifestyle with expensive details is astronomical.
Middle class spending is basically a heat-sink. You can escalate your spending several times over in every single category and still just have a marginally nicer version of the exact same life.
I've mentioned this many times before, but my experience living among very wealthy folks was that across the board, luxury rarely delivered an increase proportional to the additional cost, meaning, the more you spend, the less value you get for your money.
I found we often had to pay several times as much for around 20% more quality. Like, a concert ticket would be good, and a VIP concert ticket would be around 20-40% better of an experience, but cost 5X.
A tasty, hole in the wall, ethnic restaurant can have great food in a simple setting, while a high end restaurant will have a nicer venue, better service, and use more premium ingredients. The experience is definitely nicer, but not ten times nicer. It's still just eating food that someone else made in a room outside your house.
I have perpetually felt disappointed by what I can get by spending enormous sums of money in most areas of life.
There's a ceiling on how much spending on luxury can add to essentially the exact same experience, but there's almost no ceiling on the cost of that added luxury.
Everyone feels middle class because we're all essentially getting the same middle class experience, just with different small details that drastically alter the cost.
Sometimes the details really matter. For each person, there are certain small details that are truly a priority. A skilled musician might *really* care about the small detail differences of instruments and amps. I deeply care about the small differences between different types of extremely expensive crutches.
We all have our things where the small details matter, but the more of those things that we decide matter, the more and more and more we have to spend just to maintain essentially the same middle class lifestyle.
But if you try to inflate everything, you will find that it takes SO much money to just hit the top level of middle class luxury, almost no one can even afford that.
You don't really start leaving the essentially middle class lifestyle experience until you have multiple live-in staff so that you are relieved of a lot of domestic tasks. That's really where money starts significantly impacting your basic day-to-day way of living.
Everything else is just truffles and gold leaf on an already delicious steak.
*claps*
Although, as you said, MMM talked about this, I think this perspective is the most important MMM point and is not emphasized enough.
You can spend insane levels of money for marginal gain. That's why our "sacrifices" as MMM people don't seem like sacrifices to us.
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Having more money becomes a full time job...if and only if you desire higher returns/more diversification than you can get by owning a simple portfolio. I don't have $10 million, but if I did, I'm fairy certain my investments would be nearly identical to what they are right now.
I understand your point, but I believe projection bias plays a significant role in distorting our perception of such scenarios. Many people claim, 'If I won the lottery, I wouldn’t change a thing,' yet the reality often proves otherwise when it actually happens. While there are always exceptions, most people make decisions based on the best options available to them in their current circumstances—or at least, what they perceive to be the best options. When those options change dramatically, as they often do with a windfall, behavior tends to shift as well. For instance, if you suddenly had a substantial increase in wealth, a more conservative investment approach might make more sense, or you might gain access to unique investment opportunities that aren’t available to typical retail investors. In essence, increased optionality often leads to different choices, highlighting how our perspectives and actions can change when our circumstances do.
As my net worth/income has increased, my spending has gotten easier and takes less time. I don't want or need more stuff than I used to, but now I just buy the thing I want instead of always looking for the low cost solution or compromising on quality. Or I can just write a check for a car instead of financing, for example. Or if the car needs maintenance I can take care of it right away instead of waiting until next month when I have more money, and so on.
However, the increase in quality of life that comes with more wealth follows a bell curve. At a certain point, additional capital doesn’t provide more utility; it simply accumulates. Once your basic needs and desires are met—your car is fixed, you’re eating well, traveling freely, and no longer worry about your simple investment portfolio (indentical to the on you use now!)—you reach a state where you have all the money you need, and more. As the snowball continues to grow, you may find yourself with far more than you could ever spend. The question then becomes: how do you deploy this surplus capital intelligently and meaningfully? Sure, you could leave it all to your kids, and that’s perfectly valid, but that tends to be more of an exception than the rule. Most individuals who have built a substantial nest egg feel a strong pull to ensure that their wealth is used thoughtfully, whether it's through impactful investments, philanthropy, or initiatives that leave a legacy beyond mere accumulation. Although, I suppose you could just pay someone to do that for you, too...
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I found we often had to pay several times as much for around 20% more quality. Like, a concert ticket would be good, and a VIP concert ticket would be around 20-40% better of an experience, but cost 5X.
It is interesting to look at the financial statements of luxury companies like Ferrari and LVMH. Their margins are wildly higher than their non-luxury counterparts. They are definitely not competing on price.
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I found we often had to pay several times as much for around 20% more quality. Like, a concert ticket would be good, and a VIP concert ticket would be around 20-40% better of an experience, but cost 5X.
It is interesting to look at the financial statements of luxury companies like Ferrari and LVMH. Their margins are wildly higher than their non-luxury counterparts. They are definitely not competing on price.
This is one thing that is abundantly clear from listening to Tim Ferriss interview various rich business/marketing people on his podcast. It is such a constant through-line: raise prices, sell to rich people, market exclusivity. Make it prestigious to be the ~kind of person~ who buys your product.
The same applies to selling yourself on the labor market. Charge more. Sell your rare and valuable skills to rich institutions.
In my own field: The difference in pay between a regional orchestra and the best orchestras is massive. Because the business model of orchestras (don’t be fooled that they’re not businesses because they’re “non-profits”) are selling a luxury product to the rich: big donors get to feel like they’re in the club. And it’s way more prestigious to be in the club of people who support a world-class orchestra than a little part-time orchestra, because at the major orchestras, everyone in the club has to donate a lot more.
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Those are Veblen goods and services. It pays to sell a luxury good, and in particular it pays to go past "normal" luxury (think Mercedes, Omega, etc) into "high luxury" (Rolex, Ferrari, Hermes). People buying the former still want a good deal; people buying the latter don't mind paying a luxury tax, and will happily revel in paying a greater amount if they think it leads to exclusivity.
As the poster above suggested, you can price your own labour this way too, within reason. I've put up my professional hourly rate by a cumulative 59% in the 4-5 years since Covid-19. I still have no shortage of work. Inflationary pressures ('Covid inflation') plus clients' willingness to pay a premium for premium service mean that it's easy these days to charge more, and everyone should be doing it. There is no reason to ever compete on value, as you will just cheapskates for clients/customers.
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I found we often had to pay several times as much for around 20% more quality. Like, a concert ticket would be good, and a VIP concert ticket would be around 20-40% better of an experience, but cost 5X.
It is interesting to look at the financial statements of luxury companies like Ferrari and LVMH. Their margins are wildly higher than their non-luxury counterparts. They are definitely not competing on price.
Well yeah, a Supreme T-shirt is just a cotton T-shirt with a logo that looks like a convenience store chain logo, and yet people pay hundreds to thousands for them:
https://stockx.com/supreme-x-louis-vuitton-box-logo-tee-white?country=CA¤cyCode=CAD&size=XXL
When it comes to what people will spend to feel rich, the sky is essentially the limit while barely moving the needle in terms of what the good or service actually does for overall quality of life.
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I found we often had to pay several times as much for around 20% more quality. Like, a concert ticket would be good, and a VIP concert ticket would be around 20-40% better of an experience, but cost 5X.
It is interesting to look at the financial statements of luxury companies like Ferrari and LVMH. Their margins are wildly higher than their non-luxury counterparts. They are definitely not competing on price.
Well yeah, a Supreme T-shirt is just a cotton T-shirt with a logo that looks like a convenience store chain logo, and yet people pay hundreds to thousands for them:
https://stockx.com/supreme-x-louis-vuitton-box-logo-tee-white?country=CA¤cyCode=CAD&size=XXL
When it comes to what people will spend to feel rich, the sky is essentially the limit while barely moving the needle in terms of what the good or service actually does for overall quality of life.
I stumbled across a youtube video a while back that was describing how illogically people value things. Like if you were looking at creating a logical competitor for Coke you would probably brainstorm that to make the product competitive you would want a great tasting drink, maybe in a larger volume, that sells for less money. But the biggest competition for Coke in the past 20 years is actually Red Bull . . . a drink that sells for five times as much, comes in very small volumes, and tastes objectively terrible.
:P
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I found we often had to pay several times as much for around 20% more quality. Like, a concert ticket would be good, and a VIP concert ticket would be around 20-40% better of an experience, but cost 5X.
It is interesting to look at the financial statements of luxury companies like Ferrari and LVMH. Their margins are wildly higher than their non-luxury counterparts. They are definitely not competing on price.
Well yeah, a Supreme T-shirt is just a cotton T-shirt with a logo that looks like a convenience store chain logo, and yet people pay hundreds to thousands for them:
https://stockx.com/supreme-x-louis-vuitton-box-logo-tee-white?country=CA¤cyCode=CAD&size=XXL
When it comes to what people will spend to feel rich, the sky is essentially the limit while barely moving the needle in terms of what the good or service actually does for overall quality of life.
I stumbled across a youtube video a while back that was describing how illogically people value things. Like if you were looking at creating a logical competitor for Coke you would probably brainstorm that to make the product competitive you would want a great tasting drink, maybe in a larger volume, that sells for less money. But the biggest competition for Coke in the past 20 years is actually Red Bull . . . a drink that sells for five times as much, comes in very small volumes, and tastes objectively terrible.
:P
Yep. Human behaviour simply does not follow the systems of reasoning that we tend to think it does. It always makes sense, it's just that the frameworks for the systems of reasoning are quite complex and take a lot to understand.
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I found we often had to pay several times as much for around 20% more quality. Like, a concert ticket would be good, and a VIP concert ticket would be around 20-40% better of an experience, but cost 5X.
It is interesting to look at the financial statements of luxury companies like Ferrari and LVMH. Their margins are wildly higher than their non-luxury counterparts. They are definitely not competing on price.
Well yeah, a Supreme T-shirt is just a cotton T-shirt with a logo that looks like a convenience store chain logo, and yet people pay hundreds to thousands for them:
https://stockx.com/supreme-x-louis-vuitton-box-logo-tee-white?country=CA¤cyCode=CAD&size=XXL
When it comes to what people will spend to feel rich, the sky is essentially the limit while barely moving the needle in terms of what the good or service actually does for overall quality of life.
One of my favorite examples of this was the I Am Rich App from the very early days of the iPhone: https://en.wikipedia.org/wiki/I_Am_Rich
On a per hour basis, Armin Heinrich did pretty good since it looks like he made about $4k for what I can only assume was roughly 15 seconds of work (didn't even proofread).
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Here's an entertaining post on the FATFire subreddit by a guy who has apparently discovered that $10M is not quite enough for his planned spending :-)
https://www.reddit.com/r/fatFIRE/comments/1fnax5w/wow_i_was_off/
The reality appears to be that although $10M unlocks security, comfort and a good life anywhere in the world (which is more than enough!) it doesn't seem to unlock lower-end rich life luxury.
Just from the part you quoted, he's spot on.
This is a point I made earlier, and is the point that MMM has been making all along: the spending ceiling on a middle-class lifestyle is enormously high.
I learned in my years of living among rather wealthy folks that they all feel "middle class" because they are all essentially spending a fortune to live pretty much a middle class lifestyle with a lot of spendy details.
The level of wealth you need to break into a truly higher standard of living, not just a middle-class lifestyle with expensive details is astronomical.
Middle class spending is basically a heat-sink. You can escalate your spending several times over in every single category and still just have a marginally nicer version of the exact same life.
I've mentioned this many times before, but my experience living among very wealthy folks was that across the board, luxury rarely delivered an increase proportional to the additional cost, meaning, the more you spend, the less value you get for your money.
I found we often had to pay several times as much for around 20% more quality. Like, a concert ticket would be good, and a VIP concert ticket would be around 20-40% better of an experience, but cost 5X.
A tasty, hole in the wall, ethnic restaurant can have great food in a simple setting, while a high end restaurant will have a nicer venue, better service, and use more premium ingredients. The experience is definitely nicer, but not ten times nicer. It's still just eating food that someone else made in a room outside your house.
I have perpetually felt disappointed by what I can get by spending enormous sums of money in most areas of life.
There's a ceiling on how much spending on luxury can add to essentially the exact same experience, but there's almost no ceiling on the cost of that added luxury.
Everyone feels middle class because we're all essentially getting the same middle class experience, just with different small details that drastically alter the cost.
Sometimes the details really matter. For each person, there are certain small details that are truly a priority. A skilled musician might *really* care about the small detail differences of instruments and amps. I deeply care about the small differences between different types of extremely expensive crutches.
We all have our things where the small details matter, but the more of those things that we decide matter, the more and more and more we have to spend just to maintain essentially the same middle class lifestyle.
But if you try to inflate everything, you will find that it takes SO much money to just hit the top level of middle class luxury, almost no one can even afford that.
You don't really start leaving the essentially middle class lifestyle experience until you have multiple live-in staff so that you are relieved of a lot of domestic tasks. That's really where money starts significantly impacting your basic day-to-day way of living.
Everything else is just truffles and gold leaf on an already delicious steak.
This is spot on in my experience.
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I think there are some rich people goods and services that are really worth it. If I could afford a personal assistant, that would be nice. Being a member of a country club can be a true moving of the life quality needle if you like doing country club things. If you love flying airplanes, there's really no substitute.
The thing is, as long as you're heavily utilizing that expensive thing that you bought, you probably won't have that much time to need tobuy a bunch of other expensive things. if you're a country club member, you oughta be over there playing golf and squash, working out at the gym, swimming at the pool, and sometimes eating at the restaurant. You don't need a second house as well! You're too busy at the club.
It's when you try to have all these nice things at once you can get into trouble, at least on the type of wealth normal people save. If this guy wants that he should use the freedom he purchased with his first venture to build another startup. Then you can really go into the stratosphere. Or just work a normal job for five more years and let the investment returns push you into a higher orbit.
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I think there are some rich people goods and services that are really worth it. If I could afford a personal assistant, that would be nice. Being a member of a country club can be a true moving of the life quality needle if you like doing country club things. If you love flying airplanes, there's really no substitute.
The thing is, as long as you're heavily utilizing that expensive thing that you bought, you probably won't have that much time to need tobuy a bunch of other expensive things. if you're a country club member, you oughta be over there playing golf and squash, working out at the gym, swimming at the pool, and sometimes eating at the restaurant. You don't need a second house as well! You're too busy at the club.
It's when you try to have all these nice things at once you can get into trouble, at least on the type of wealth normal people save. If this guy wants that he should use the freedom he purchased with his first venture to build another startup. Then you can really go into the stratosphere. Or just work a normal job for five more years and let the investment returns push you into a higher orbit.
That really was part of my point though, that some luxuries are worth the premium, but across the board they aren't, and if you buy into the benefit of all luxuries, you will be stuck chasing an expensive dragon that will generally leave you feeling like you can never spend enough, see Financial Samurai and his nonsense over the past few years.
Of course come luxuries are worth it to some people, that's really the entire point. But each person is highly individual and what matters needs to have a solid reason to matter in order to be worth it.
Even your example, I have zero need for a personal assistant or a country club, those would be HUGE wastes of money for me. But I do have a personal cook and a second home, and those are everything to me.
Granted my second home and personal cook combined cost less than some people's middle class car payments, but still. Those have enormous value to me for my personal reasons. But the majority of categories in my life don't really benefit from much in the way of luxury spending.
This is why I always say I'm not cheap, I'm a snob about spending. A luxury good or service needs to out perform the premium I have to pay for it, and that's a very, very high bar to clear when it's mostly just going to keep me in the same middle class quality of life.
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Many Foreign Service folks hire household help when serving overseas in less-developed countries. It’s great not to have to mop or iron, but after managing staff all day, sometimes one has to come home to manage more staff, this gets irksome and tiring. Yeah, I know, cry me a fucking river…
Having household staff is nice. Having a house manager to take care of all the details that come with having a household staff is another level entirely.
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I think there are some rich people goods and services that are really worth it. If I could afford a personal assistant, that would be nice. Being a member of a country club can be a true moving of the life quality needle if you like doing country club things. If you love flying airplanes, there's really no substitute.
The thing is, as long as you're heavily utilizing that expensive thing that you bought, you probably won't have that much time to need tobuy a bunch of other expensive things. if you're a country club member, you oughta be over there playing golf and squash, working out at the gym, swimming at the pool, and sometimes eating at the restaurant. You don't need a second house as well! You're too busy at the club.
It's when you try to have all these nice things at once you can get into trouble, at least on the type of wealth normal people save. If this guy wants that he should use the freedom he purchased with his first venture to build another startup. Then you can really go into the stratosphere. Or just work a normal job for five more years and let the investment returns push you into a higher orbit.
It’s really not all about the money…especially for those who have it.
I’ve known quite a few very wealthy people who earned what they had by working and while there was the country club thing and other luxuries, most of these people got their jollies from building and accomplishing. NONE of them FIREd. Many continued to work through ad hoc consulting, serving on boards, etc. after retiring at a traditional age.
They had valuable skill sets and put themselves in situations where their abilities were recognized and where they had the opportunity to accomplish even more. This is a HUGE driver for these people.
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I think there are some rich people goods and services that are really worth it. If I could afford a personal assistant, that would be nice. Being a member of a country club can be a true moving of the life quality needle if you like doing country club things. If you love flying airplanes, there's really no substitute.
The thing is, as long as you're heavily utilizing that expensive thing that you bought, you probably won't have that much time to need tobuy a bunch of other expensive things. if you're a country club member, you oughta be over there playing golf and squash, working out at the gym, swimming at the pool, and sometimes eating at the restaurant. You don't need a second house as well! You're too busy at the club.
It's when you try to have all these nice things at once you can get into trouble, at least on the type of wealth normal people save. If this guy wants that he should use the freedom he purchased with his first venture to build another startup. Then you can really go into the stratosphere. Or just work a normal job for five more years and let the investment returns push you into a higher orbit.
It’s really not all about the money…especially for those who have it.
I’ve known quite a few very wealthy people who earned what they had by working and while there was the country club thing and other luxuries, most of these people got their jollies from building and accomplishing. NONE of them FIREd. Many continued to work through ad hoc consulting, serving on boards, etc. after retiring at a traditional age.
They had valuable skill sets and put themselves in situations where their abilities were recognized and where they had the opportunity to accomplish even more. This is a HUGE driver for these people.
yeah - and they should have their own message board somewhere I think.....
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I think there are some rich people goods and services that are really worth it. If I could afford a personal assistant, that would be nice. Being a member of a country club can be a true moving of the life quality needle if you like doing country club things. If you love flying airplanes, there's really no substitute.
The thing is, as long as you're heavily utilizing that expensive thing that you bought, you probably won't have that much time to need tobuy a bunch of other expensive things. if you're a country club member, you oughta be over there playing golf and squash, working out at the gym, swimming at the pool, and sometimes eating at the restaurant. You don't need a second house as well! You're too busy at the club.
It's when you try to have all these nice things at once you can get into trouble, at least on the type of wealth normal people save. If this guy wants that he should use the freedom he purchased with his first venture to build another startup. Then you can really go into the stratosphere. Or just work a normal job for five more years and let the investment returns push you into a higher orbit.
It’s really not all about the money…especially for those who have it.
I’ve known quite a few very wealthy people who earned what they had by working and while there was the country club thing and other luxuries, most of these people got their jollies from building and accomplishing. NONE of them FIREd. Many continued to work through ad hoc consulting, serving on boards, etc. after retiring at a traditional age.
They had valuable skill sets and put themselves in situations where their abilities were recognized and where they had the opportunity to accomplish even more. This is a HUGE driver for these people.
yeah - and they should have their own message board somewhere I think.....
I doubt it. Most of them are just as interested in the same-old as everyone else. Like the saying goes, the rich are different: they have more money. (Period)
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Many Foreign Service folks hire household help when serving overseas in less-developed countries. It’s great not to have to mop or iron, but after managing staff all day, sometimes one has to come home to manage more staff, this gets irksome and tiring. Yeah, I know, cry me a fucking river…
Having household staff is nice. Having a house manager to take care of all the details that come with having a household staff is another level entirely.
Yes, I've often joked that we need to hire a butler to manage the household staff.
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More comedy gold from Reddit (https://www.reddit.com/r/Rich/comments/1g08p4s/who_else_lives_in_the_wealth_no_mans_land/) . So apparently $10M puts you in a weird bucket 😂
I was watching a video the other day about the differences between retiring with a $1M, $5M and $10M net worth. The financial advisor in the video made what I consider to be an interesting observation about those with $10M. He commented that these people are either the richest of the modestly wealthy or they are the poorest of the truly wealthy class. They don’t actually fit in anywhere.
This resonates with me as we’re retired with a net worth of between $12M and $13M and have friends with either considerably higher or lower net worths.
We easily live a very enviable and comfortable lifestyle but can’t afford to fly in a private jet, own a serious yacht or stay in $5K a night ultra exclusive luxury hotels, for a month at a time. I agree we’re in something of a rich persons economic no man’s land.
I think there is this large lifestyle gap between a net worth of between $10M and $50M, at which point there are few if any limits as to what you can do in retirement.
Yes, these are extremely high class problems but I had never really stopped to think about what it takes to be genuinely wealthy. I’ve decided it’s a really big number.
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The violins above this text are so tiny you can only see with with a (really expensive) microscope...
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The violins above this text are so tiny you can only see with with a (really expensive) microscope...
Look, until you've walked a mile in their Gucci shoes and sat on their gold plated toilet, dreaming of flying in a private jet, who are you too criticize?
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More comedy gold from Reddit (https://www.reddit.com/r/Rich/comments/1g08p4s/who_else_lives_in_the_wealth_no_mans_land/) . So apparently $10M puts you in a weird bucket 😂
I was watching a video the other day about the differences between retiring with a $1M, $5M and $10M net worth. The financial advisor in the video made what I consider to be an interesting observation about those with $10M. He commented that these people are either the richest of the modestly wealthy or they are the poorest of the truly wealthy class. They don’t actually fit in anywhere.
This resonates with me as we’re retired with a net worth of between $12M and $13M and have friends with either considerably higher or lower net worths.
We easily live a very enviable and comfortable lifestyle but can’t afford to fly in a private jet, own a serious yacht or stay in $5K a night ultra exclusive luxury hotels, for a month at a time. I agree we’re in something of a rich persons economic no man’s land.
I think there is this large lifestyle gap between a net worth of between $10M and $50M, at which point there are few if any limits as to what you can do in retirement.
Yes, these are extremely high class problems but I had never really stopped to think about what it takes to be genuinely wealthy. I’ve decided it’s a really big number.
This is the genius of NetJets - it bridges the gap between the hoi polloi and the rich. $100 million net worth is the entry point to own and operate a proper jet, such as a Gulfstream. With NetJets you can get all the convenience of flying private for around $300k/yr (assuming you don't fly too much). That leaves $500k/yr to live on (assuming $20 million saved and 4% SWR).
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I hate when you can't afford a serious yacht. Such a deprivation.
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The violins above this text are so tiny you can only see with with a (really expensive) microscope...
Look, until you've walked a mile in their Gucci shoes and sat on their gold plated toilet, dreaming of flying in a private jet, who are you too criticize?
IDK, I think there's something really valid to the existential crisis of living your entire life around earning, getting to a massive net worth, and having really nothing to show for it in terms of quality of life or happiness.
I've had enough long, depressing conversations with older, very wealthy people to recognize an addiction pattern when I see one. Some folks become addicted to the pursuit of wealth and influence, often at the expense of many other very important health and happiness metrics in their lives.
I legitimately feel bad for anyone who works their ass off for something only to come to the realization that it never mattered nearly as much as they believed it would.
If someone got wealthy doing fun work they really enjoyed and the lifestyle it buys them suits them really well and their biggest challenge is figuring out which charities to donate to, then yay for them.
But if they're in their 50s, 60s, 70s, sitting on a giant heap of wealth and reflecting back thinking "what did I even bother?" Then that to me is profoundly sad.
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The violins above this text are so tiny you can only see with with a (really expensive) microscope...
Look, until you've walked a mile in their Gucci shoes and sat on their gold plated toilet, dreaming of flying in a private jet, who are you too criticize?
IDK, I think there's something really valid to the existential crisis of living your entire life around earning, getting to a massive net worth, and having really nothing to show for it in terms of quality of life or happiness.
I've had enough long, depressing conversations with older, very wealthy people to recognize an addiction pattern when I see one. Some folks become addicted to the pursuit of wealth and influence, often at the expense of many other very important health and happiness metrics in their lives.
I legitimately feel bad for anyone who works their ass off for something only to come to the realization that it never mattered nearly as much as they believed it would.
If someone got wealthy doing fun work they really enjoyed and the lifestyle it buys them suits them really well and their biggest challenge is figuring out which charities to donate to, then yay for them.
But if they're in their 50s, 60s, 70s, sitting on a giant heap of wealth and reflecting back thinking "what did I even bother?" Then that to me is profoundly sad.
Don't get me wrong - I love min-maxing - but at some point (probably in the ~$10m range) even I get put off a little. Because I think once you get to a certain line, money goes from "fun way of keeping score" to "yucky and gauche affectation". I was thinking about this when I was lining up for a little Hermes trinket and most of the people I saw in the shop were just young 20 year olds spending daddy's money. I thought "yuck" and I left. And I think at some stage the private jet crowd is the same. Just a little gauche.
I think $5m-$10m is actually the sweet spot. You have enough money to afford anything you want, within reason, plus some genuinely luxurious stuff. But not so much money that you have to hang around wannabes all the time. And not so much money that you're entirely alienated.
All the good stuff in life is cheap. You can have 3 Michelin star meals for $800 a day and with $10m in the bank you can easily afford that a few times a week. That's living!
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The violins above this text are so tiny you can only see with with a (really expensive) microscope...
Look, until you've walked a mile in their Gucci shoes and sat on their gold plated toilet, dreaming of flying in a private jet, who are you too criticize?
IDK, I think there's something really valid to the existential crisis of living your entire life around earning, getting to a massive net worth, and having really nothing to show for it in terms of quality of life or happiness.
I've had enough long, depressing conversations with older, very wealthy people to recognize an addiction pattern when I see one. Some folks become addicted to the pursuit of wealth and influence, often at the expense of many other very important health and happiness metrics in their lives.
I legitimately feel bad for anyone who works their ass off for something only to come to the realization that it never mattered nearly as much as they believed it would.
If someone got wealthy doing fun work they really enjoyed and the lifestyle it buys them suits them really well and their biggest challenge is figuring out which charities to donate to, then yay for them.
But if they're in their 50s, 60s, 70s, sitting on a giant heap of wealth and reflecting back thinking "what did I even bother?" Then that to me is profoundly sad.
Don't get me wrong - I love min-maxing - but at some point (probably in the ~$10m range) even I get put off a little. Because I think once you get to a certain line, money goes from "fun way of keeping score" to "yucky and gauche affectation". I was thinking about this when I was lining up for a little Hermes trinket and most of the people I saw in the shop were just young 20 year olds spending daddy's money. I thought "yuck" and I left. And I think at some stage the private jet crowd is the same. Just a little gauche.
I think $5m-$10m is actually the sweet spot. You have enough money to afford anything you want, within reason, plus some genuinely luxurious stuff. But not so much money that you have to hang around wannabes all the time. And not so much money that you're entirely alienated.
All the good stuff in life is cheap. You can have 3 Michelin star meals for $800 a day and with $10m in the bank you can easily afford that a few times a week. That's living!
It’s probably encouraging you to die early!
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The violins above this text are so tiny you can only see with with a (really expensive) microscope...
Look, until you've walked a mile in their Gucci shoes and sat on their gold plated toilet, dreaming of flying in a private jet, who are you too criticize?
IDK, I think there's something really valid to the existential crisis of living your entire life around earning, getting to a massive net worth, and having really nothing to show for it in terms of quality of life or happiness.
I've had enough long, depressing conversations with older, very wealthy people to recognize an addiction pattern when I see one. Some folks become addicted to the pursuit of wealth and influence, often at the expense of many other very important health and happiness metrics in their lives.
I legitimately feel bad for anyone who works their ass off for something only to come to the realization that it never mattered nearly as much as they believed it would.
If someone got wealthy doing fun work they really enjoyed and the lifestyle it buys them suits them really well and their biggest challenge is figuring out which charities to donate to, then yay for them.
But if they're in their 50s, 60s, 70s, sitting on a giant heap of wealth and reflecting back thinking "what did I even bother?" Then that to me is profoundly sad.
I agree that if people are looking back viewing their life like that, that's really sad. That didn't seem to be the tone of the comment as I read it.
It seemed a little existential crisis ish but at some part still envy of others, so it didn't seem like they were truly regretting time water as much as they were simply upset they didn't earn more. I definitely could be reading into it.
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The violins above this text are so tiny you can only see with with a (really expensive) microscope...
Look, until you've walked a mile in their Gucci shoes and sat on their gold plated toilet, dreaming of flying in a private jet, who are you too criticize?
IDK, I think there's something really valid to the existential crisis of living your entire life around earning, getting to a massive net worth, and having really nothing to show for it in terms of quality of life or happiness.
I've had enough long, depressing conversations with older, very wealthy people to recognize an addiction pattern when I see one. Some folks become addicted to the pursuit of wealth and influence, often at the expense of many other very important health and happiness metrics in their lives.
I legitimately feel bad for anyone who works their ass off for something only to come to the realization that it never mattered nearly as much as they believed it would.
If someone got wealthy doing fun work they really enjoyed and the lifestyle it buys them suits them really well and their biggest challenge is figuring out which charities to donate to, then yay for them.
But if they're in their 50s, 60s, 70s, sitting on a giant heap of wealth and reflecting back thinking "what did I even bother?" Then that to me is profoundly sad.
I agree that if people are looking back viewing their life like that, that's really sad. That didn't seem to be the tone of the comment as I read it.
It seemed a little existential crisis ish but at some part still envy of others, so it didn't seem like they were truly regretting time water as much as they were simply upset they didn't earn more. I definitely could be reading into it.
To be fair, that's kind of the same thing though, it's still looking back on a life of enormous work to accrue wealth and feeling disappointed in the result. Whether the person gains insight about how they needed more than money to be happier or not, it's still really bloody sad to me, especially if their takeaway is "damn it, if only I had been able to make even MORE money."
To have one of your greatest accomplishments feel kind of "m'eh" is pretty awful.
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The violins above this text are so tiny you can only see with with a (really expensive) microscope...
Look, until you've walked a mile in their Gucci shoes and sat on their gold plated toilet, dreaming of flying in a private jet, who are you too criticize?
IDK, I think there's something really valid to the existential crisis of living your entire life around earning, getting to a massive net worth, and having really nothing to show for it in terms of quality of life or happiness.
I've had enough long, depressing conversations with older, very wealthy people to recognize an addiction pattern when I see one. Some folks become addicted to the pursuit of wealth and influence, often at the expense of many other very important health and happiness metrics in their lives.
I legitimately feel bad for anyone who works their ass off for something only to come to the realization that it never mattered nearly as much as they believed it would.
If someone got wealthy doing fun work they really enjoyed and the lifestyle it buys them suits them really well and their biggest challenge is figuring out which charities to donate to, then yay for them.
But if they're in their 50s, 60s, 70s, sitting on a giant heap of wealth and reflecting back thinking "what did I even bother?" Then that to me is profoundly sad.
I agree that if people are looking back viewing their life like that, that's really sad. That didn't seem to be the tone of the comment as I read it.
It seemed a little existential crisis ish but at some part still envy of others, so it didn't seem like they were truly regretting time water as much as they were simply upset they didn't earn more. I definitely could be reading into it.
To be fair, that's kind of the same thing though, it's still looking back on a life of enormous work to accrue wealth and feeling disappointed in the result. Whether the person gains insight about how they needed more than money to be happier or not, it's still really bloody sad to me, especially if their takeaway is "damn it, if only I had been able to make even MORE money."
To have one of your greatest accomplishments feel kind of "m'eh" is pretty awful.
That's a very compassionate perspective. I like it. I know I am thankful for the MMM perspective not just for saving money but for valuing what is valuable to me. I think I'll try to adopt more if your perspective on this
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That's a very compassionate perspective. I like it. I know I am thankful for the MMM perspective not just for saving money but for valuing what is valuable to me. I think I'll try to adopt more if your perspective on this
It always strikes me how open to different perspectives you are. It's something I've noticed over many years here.
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That's a very compassionate perspective. I like it. I know I am thankful for the MMM perspective not just for saving money but for valuing what is valuable to me. I think I'll try to adopt more if your perspective on this
It always strikes me how open to different perspectives you are. It's something I've noticed over many years here.
Thanks! It's something I really strive for. I went through a fairly dramatic paradigm shift in my teen years that I feel was definitely for the good, and I've tried to be always open to change in my viewpoints.
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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!
Do you have a link to that? I'd be curious to read it.
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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!
Do you have a link to that? I'd be curious to read it.
I think this was it:
https://www.reddit.com/r/fatFIRE/s/igi06CV01B
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I think that reddit post is mostly BS.
I mean, here's what it says for up to $100m in wealth:
At this point, you start playing with the big boys. You can fly private (though you normally charter a flight or own a jet fractionally through Net Jets or the like), You stay at 5 star hotels, you have multiple residences, you vacation in prime time (you rent a ski-in, ski-out villa in Aspen for Christmas week or go to Monaco for the grand Prix, or Canne for the Film Festival--for what its worth, rent on these places can run $5k-20k+ per NIGHT.), you run or have a controlling interest in a big company, you socialize with Congressmen, Senators and community leaders, and you are an extremely well respected member in any community outside the world's great cities. (In Beverly Hills, you are a minor player at $80 million. Unless you really throw your weight around and pay out the nose, you might not get a table at the city's hottest restaurant). You can buy any car you want. You have personal assistants and are starting to have 'people' that others have to talk to to get to you. You can travel ANYWHERE in any style. You can buy pretty much anything that normal people think of as 'rich people stuff'
You can fly private a long time before you hit $100m.
And for the rest of it - a power couple (say a law firm equity partner + a surgeon; on $1.5m-$2m a year) can accomplish all the rest. And their net worth might be only a few million, if they're still in their 30s, for example. It's an order of magnitude's difference from the $30m to $100m quoted.
Including the controlling interest in a company thing, the politicians thing, and having a personal assistant (the latter being actually incredibly cheap, even an executive assistant).
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More comedy gold from Reddit (https://www.reddit.com/r/Rich/comments/1g08p4s/who_else_lives_in_the_wealth_no_mans_land/) . So apparently $10M puts you in a weird bucket 😂
I was watching a video the other day about the differences between retiring with a $1M, $5M and $10M net worth. The financial advisor in the video made what I consider to be an interesting observation about those with $10M. He commented that these people are either the richest of the modestly wealthy or they are the poorest of the truly wealthy class. They don’t actually fit in anywhere.
This resonates with me as we’re retired with a net worth of between $12M and $13M and have friends with either considerably higher or lower net worths.
We easily live a very enviable and comfortable lifestyle but can’t afford to fly in a private jet, own a serious yacht or stay in $5K a night ultra exclusive luxury hotels, for a month at a time. I agree we’re in something of a rich persons economic no man’s land.
I think there is this large lifestyle gap between a net worth of between $10M and $50M, at which point there are few if any limits as to what you can do in retirement.
Yes, these are extremely high class problems but I had never really stopped to think about what it takes to be genuinely wealthy. I’ve decided it’s a really big number.
There's a very simple answer here: hang out with the "modestly wealthy" instead of the "truly wealthy." We are all Sneetches, and so it is very very natural to compare yourself to the people around you -- often when you don't even notice you're doing it and believe very strongly that doing so is negative and damaging. (AMHIK)
Example: hanging out with people who take private jets everywhere would make me feel like crap; I really like to travel, and I don't do jet lag well, and so watching my friends do what I'd dearly love to do would constantly make me aware that I won't ever be able to do that. OTOH, I can occasionally fly business class when I go abroad, which helps me sleep and so combat the jet lag. The vast majority of people can't do that. Hanging out with those people reminds me to be grateful of the incredible luxury I have of (a) being able to travel abroad at all, and (b) being able to do so in a relatively comfy, lie-flat seat.
In fact, I am now seriously grateful (in that "whew, so lucky I avoided THAT trap" way) that we chose the UMC neighborhood with pretty damn good schools instead of the uber-wealthy, lily-white neighborhoods with the "best" schools that are about 20 minutes in either direction. The idea of my kids going through school caring about designer purses and new phones and all that -- of having to decide how much money to spend on unnecessary showboating crap to give them protective coloration vs. what level is encouraging keeping-up-with-Joneses -- actually nauseates me. When my kids were in school, every time there was a problem, I wondered if I was doing them a disservice by not choosing the "best" neighborhood when we could have afforded it. Now that they've graduated and I have a little distance, all I feel is relief.
That comment about "genuinely wealthy," however, is total bullshit. You'll never feel like a success if you're always defining "genuine wealth" as some level above whatever you have now. If you have a net worth of $12-13M, you are genuinely wealthy in just about any part of the globe (I have noticeably less than that and definitely consider myself genuinely wealthy). Happiness comes from changing your perspective to being grateful for all of the overwhelming luxury you have, instead of fixating on all of the things that someone else has that you don't.
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More comedy gold from Reddit (https://www.reddit.com/r/Rich/comments/1g08p4s/who_else_lives_in_the_wealth_no_mans_land/) . So apparently $10M puts you in a weird bucket 😂
I was watching a video the other day about the differences between retiring with a $1M, $5M and $10M net worth. The financial advisor in the video made what I consider to be an interesting observation about those with $10M. He commented that these people are either the richest of the modestly wealthy or they are the poorest of the truly wealthy class. They don’t actually fit in anywhere.
This resonates with me as we’re retired with a net worth of between $12M and $13M and have friends with either considerably higher or lower net worths.
We easily live a very enviable and comfortable lifestyle but can’t afford to fly in a private jet, own a serious yacht or stay in $5K a night ultra exclusive luxury hotels, for a month at a time. I agree we’re in something of a rich persons economic no man’s land.
I think there is this large lifestyle gap between a net worth of between $10M and $50M, at which point there are few if any limits as to what you can do in retirement.
Yes, these are extremely high class problems but I had never really stopped to think about what it takes to be genuinely wealthy. I’ve decided it’s a really big number.
There's a very simple answer here: hang out with the "modestly wealthy" instead of the "truly wealthy." We are all Sneetches, and so it is very very natural to compare yourself to the people around you -- often when you don't even notice you're doing it and believe very strongly that doing so is negative and damaging. (AMHIK)
Example: hanging out with people who take private jets everywhere would make me feel like crap; I really like to travel, and I don't do jet lag well, and so watching my friends do what I'd dearly love to do would constantly make me aware that I won't ever be able to do that. OTOH, I can occasionally fly business class when I go abroad, which helps me sleep and so combat the jet lag. The vast majority of people can't do that. Hanging out with those people reminds me to be grateful of the incredible luxury I have of (a) being able to travel abroad at all, and (b) being able to do so in a relatively comfy, lie-flat seat.
In fact, I am now seriously grateful (in that "whew, so lucky I avoided THAT trap" way) that we chose the UMC neighborhood with pretty damn good schools instead of the uber-wealthy, lily-white neighborhoods with the "best" schools that are about 20 minutes in either direction. The idea of my kids going through school caring about designer purses and new phones and all that -- of having to decide how much money to spend on unnecessary showboating crap to give them protective coloration vs. what level is encouraging keeping-up-with-Joneses -- actually nauseates me. When my kids were in school, every time there was a problem, I wondered if I was doing them a disservice by not choosing the "best" neighborhood when we could have afforded it. Now that they've graduated and I have a little distance, all I feel is relief.
That comment about "genuinely wealthy," however, is total bullshit. You'll never feel like a success if you're always defining "genuine wealth" as some level above whatever you have now. If you have a net worth of $12-13M, you are genuinely wealthy in just about any part of the globe (I have noticeably less than that and definitely consider myself genuinely wealthy). Happiness comes from changing your perspective to being grateful for all of the overwhelming luxury you have, instead of fixating on all of the things that someone else has that you don't.
Exactly. No one ever feels rich just from having a lot of money.
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@Laura33 Since you mentioned the "genuinely wealthy", I just saw this article in the financial Times: https://www.ft.com/content/b677d2f1-fe7d-4716-a5ec-b23424331d10
David Gibson-Moore, president of consultancy Gulf Analytica, says the traditional $30mn level “allows for significant investments across multiple asset classes — stocks, bonds, real estate, private equity” — while also furnishing luxuries such as private-jet travel. But, over time, as the financial world has expanded and the accumulation of wealth has accelerated in certain sectors, particularly technology, “the bar for what it means to be ultra-wealthy has risen” he observes. “The $30mn threshold . . . doesn’t carry the same weight or exclusivity it once did. In today’s world, $30mn might secure you a luxurious lifestyle but, in the realms of the ultra-rich, it’s increasingly viewed as just the starting point,” Gibson-Moore adds.
“The ultra-rich today are being measured by new standards, with some financial commentators now suggesting $100mn is the new yardstick for anyone who wants to keep their head held high at private equity parties.”
I'm not sure I really need to "hold my head high" at private equity parties. Also, just to be clear, I'm not actively looking for these articles about the wealthy - I just seem to stumbling on them by happenstance :-)
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If you're the kind of person who goes to a private equity party I'm not sure we would be friends to begin with.
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@Laura33 Since you mentioned the "genuinely wealthy", I just saw this article in the financial Times: https://www.ft.com/content/b677d2f1-fe7d-4716-a5ec-b23424331d10
David Gibson-Moore, president of consultancy Gulf Analytica, says the traditional $30mn level “allows for significant investments across multiple asset classes — stocks, bonds, real estate, private equity” — while also furnishing luxuries such as private-jet travel. But, over time, as the financial world has expanded and the accumulation of wealth has accelerated in certain sectors, particularly technology, “the bar for what it means to be ultra-wealthy has risen” he observes. “The $30mn threshold . . . doesn’t carry the same weight or exclusivity it once did. In today’s world, $30mn might secure you a luxurious lifestyle but, in the realms of the ultra-rich, it’s increasingly viewed as just the starting point,” Gibson-Moore adds.
“The ultra-rich today are being measured by new standards, with some financial commentators now suggesting $100mn is the new yardstick for anyone who wants to keep their head held high at private equity parties.”
I'm not sure I really need to "hold my head high" at private equity parties. Also, just to be clear, I'm not actively looking for these articles about the wealthy - I just seem to stumbling on them by happenstance :-)
It's the algo. I've seen a lot of articles on my news feed about topics similar to one's I've posted in on the forum.
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If you're the kind of person who goes to a private equity party I'm not sure we would be friends to begin with.
I'm sure most of those folks are just fine, just like most folks period. I see plenty of snarky internet comments about people who have my own level of income and wealth, and I know them to mostly be untrue, just looking at myself and my friends around this level. I assume the same difference between commentary and reality exists at higher extremes of wealth.
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If you're the kind of person who goes to a private equity party I'm not sure we would be friends to begin with.
I'm sure most of those folks are just fine, just like most folks period. I see plenty of snarky internet comments about people who have my own level of income and wealth, and I know them to mostly be untrue, just looking at myself and my friends around this level. I assume the same difference between commentary and reality exists at higher extremes of wealth.
Nothing to do with wealth. The idea of thinking it would be fun to have a party about/related to private equity makes me think we would have radically different ideas of the definition of fun.
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If you're the kind of person who goes to a private equity party I'm not sure we would be friends to begin with.
I'm sure most of those folks are just fine, just like most folks period. I see plenty of snarky internet comments about people who have my own level of income and wealth, and I know them to mostly be untrue, just looking at myself and my friends around this level. I assume the same difference between commentary and reality exists at higher extremes of wealth.
Nothing to do with wealth. The idea of thinking it would be fun to have a party about/related to private equity makes me think we would have radically different ideas of the definition of fun.
I think the only relation would be that everyone in there is rich and/or connected enough to be there. If you think about it, many parties/conventions are run on this premise (just with different parameters concerning the exclusion variable).
The only thing that worries me about certain levels of wealth (say >$20m) is that it's not possible to achieve them in a lifetime of normal work. I'm confident in saying that someone with $30m or $40m has had a generational leg-up, and my experience is that there are many different values between self-made and inherited rich.
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If you're the kind of person who goes to a private equity party I'm not sure we would be friends to begin with.
I'm sure most of those folks are just fine, just like most folks period. I see plenty of snarky internet comments about people who have my own level of income and wealth, and I know them to mostly be untrue, just looking at myself and my friends around this level. I assume the same difference between commentary and reality exists at higher extremes of wealth.
Nothing to do with wealth. The idea of thinking it would be fun to have a party about/related to private equity makes me think we would have radically different ideas of the definition of fun.
I think the only relation would be that everyone in there is rich and/or connected enough to be there. If you think about it, many parties/conventions are run on this premise (just with different parameters concerning the exclusion variable).
The only thing that worries me about certain levels of wealth (say >$20m) is that it's not possible to achieve them in a lifetime of normal work. I'm confident in saying that someone with $30m or $40m has had a generational leg-up, and my experience is that there are many different values between self-made and inherited rich.
IIRC aren't you or your spouse a surgeon?
You mean to tell me you don't know any mid 8.figure NW surgeons?
I would say that half of the mid 8 figure NW folks I know are self made medical professionals who started group practices that became fairly large, invested in commercial real estate for their clinics, made a few million a year, and then sold for low 8 figures.
Someone who makes a few million a year and builds equity in a growing company can very easily get to mid 8.figures if they're frugal and don't retire early.
There are tons and tons of senior executives out there making plenty of millions who aren't coming from family money. 3 of my relatives were presidents of major corporations. One the son of poor immigrants who didn't speak English, one the daughter of a single mother who abandoned her as a teen, the other the son of a regular middle class family whose father worked for a utility company.
There's a certain breed of high earning executive who come from humble.roota and never feel comfortable inflating their lifestyle, there's another breed who are just cheap as fuck because they're addicted to money. I'm related to both.
But they're really not uncommon in the mid 8 figure NW population. It is most certainly not just filled with generational wealth.
Nor are self-made mid 8 figure NW folks universally more pleasant than generational wealth folks in the same bracket. In fact, gun to my head and I'll attend a party of dilettantes over bootstrappers in that wealth bracket any day. They're a lot more fun at a party IME...well, they certainly party a lot more that's for sure.
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I think the only relation would be that everyone in there is rich and/or connected enough to be there. If you think about it, many parties/conventions are run on this premise (just with different parameters concerning the exclusion variable).
The only thing that worries me about certain levels of wealth (say >$20m) is that it's not possible to achieve them in a lifetime of normal work. I'm confident in saying that someone with $30m or $40m has had a generational leg-up, and my experience is that there are many different values between self-made and inherited rich.
I'm planning to stop in the next year or so, but if I kept going for another ten, especially if I were going full throttle, I fully expect I'd pass 20M, inflation adjusted (I'd be 50). No generational leg up, besides having college paid for (i.e. no pre-inheritance, no help buying our house, etc.). I don't even have anything crazy like a business or anything -- I'm just a software engineer. I know people who have vastly out-earned me with no help from their parents other than what any child is entitled to.
Anyway, even if it were true that the only way to make more than 20M were to inherit it, why should that be a worry? Any reasonable person should be very well satisfied on half as much. So it's not important that the number isn't achievable via normal work.
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My spouse is a surgeon, yes, but we are in our 30s so we (and our colleagues) have only been earning proper money for 5 or 6 years. The real ramp up comes in your 40s or 50s, if you choose to keep working. Even then, if your family income is say $1.5m ($0.8m after tax here in Australia) you are not going to get anywhere near $30m unless you work to your 50s or 60s and invest assiduously the whole time, when I would have long-ago hit the fatfire trigger.
I do know a few surgeons a generation older who got rich off commercial property. That ship has sailed though I suspect.
Nor are self-made mid 8 figure NW folks universally more pleasant than generational wealth folks in the same bracket. In fact, gun to my head and I'll attend a party of dilettantes over bootstrappers in that wealth bracket any day. They're a lot more fun at a party IME...well, they certainly party a lot more that's for sure.
Yes - I agree with you there. It's a lot easier to spend money when it's not your own.
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I think the only relation would be that everyone in there is rich and/or connected enough to be there. If you think about it, many parties/conventions are run on this premise (just with different parameters concerning the exclusion variable).
The only thing that worries me about certain levels of wealth (say >$20m) is that it's not possible to achieve them in a lifetime of normal work. I'm confident in saying that someone with $30m or $40m has had a generational leg-up, and my experience is that there are many different values between self-made and inherited rich.
I'm planning to stop in the next year or so, but if I kept going for another ten, especially if I were going full throttle, I fully expect I'd pass 20M, inflation adjusted (I'd be 50). No generational leg up, besides having college paid for (i.e. no pre-inheritance, no help buying our house, etc.). I don't even have anything crazy like a business or anything -- I'm just a software engineer. I know people who have vastly out-earned me with no help from their parents other than what any child is entitled to.
Anyway, even if it were true that the only way to make more than 20M were to inherit it, why should that be a worry? Any reasonable person should be very well satisfied on half as much. So it's not important that the number isn't achievable via normal work.
Yeah, I got the figure wrong - a lifetime (say late 20s to retirement in late 60s) of normal work for a 1% household gets you well into the 40m range and that's with conservative investment returns. My net worth figures were incorrect because I keep doing calculations based on a 15 year earning window (age 30 to age 45) because of the FIRE mindset.
In terms of the distinction I drew, my experience has been that self-made people who made their own money, and people who mostly inherited it, have very different worldviews, perspectives and priorities - not just for themselves but also for their children.
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My spouse is a surgeon, yes, but we are in our 30s so we (and our colleagues) have only been earning proper money for 5 or 6 years. The real ramp up comes in your 40s or 50s, if you choose to keep working. Even then, if your family income is say $1.5m ($0.8m after tax here in Australia) you are not going to get anywhere near $30m unless you work to your 50s or 60s and invest assiduously the whole time, when I would have long-ago hit the fatfire trigger.
I do know a few surgeons a generation older who got rich off commercial property. That ship has sailed though I suspect.
Nor are self-made mid 8 figure NW folks universally more pleasant than generational wealth folks in the same bracket. In fact, gun to my head and I'll attend a party of dilettantes over bootstrappers in that wealth bracket any day. They're a lot more fun at a party IME...well, they certainly party a lot more that's for sure.
Yes - I agree with you there. It's a lot easier to spend money when it's not your own.
Okay, that's you, but you folks aren't large group practice owners and by your own admission would retire before getting to that level of wealth. I didn't say all surgeons make that much or work that long but some do. So I was surprised to hear that generalization that mid 8 figure NW worth must come from generational wealth, since you and/or your spouse must personal know or know of multiple older surgeons in exactly that wealth range.
It's just a really surprising generalization to make.
There are plenty of self-made folks out there with multi-million base comp, plus bonuses, plus equity who can easily accrue multiple tens of millions over the course of a multi-decades long career. It's not at all unrealistic. Uncommon, sure, comps that high are uncommon period, but not unrealistic at all without generational wealth.
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I think the only relation would be that everyone in there is rich and/or connected enough to be there. If you think about it, many parties/conventions are run on this premise (just with different parameters concerning the exclusion variable).
The only thing that worries me about certain levels of wealth (say >$20m) is that it's not possible to achieve them in a lifetime of normal work. I'm confident in saying that someone with $30m or $40m has had a generational leg-up, and my experience is that there are many different values between self-made and inherited rich.
I'm planning to stop in the next year or so, but if I kept going for another ten, especially if I were going full throttle, I fully expect I'd pass 20M, inflation adjusted (I'd be 50). No generational leg up, besides having college paid for (i.e. no pre-inheritance, no help buying our house, etc.). I don't even have anything crazy like a business or anything -- I'm just a software engineer. I know people who have vastly out-earned me with no help from their parents other than what any child is entitled to.
Anyway, even if it were true that the only way to make more than 20M were to inherit it, why should that be a worry? Any reasonable person should be very well satisfied on half as much. So it's not important that the number isn't achievable via normal work.
Yeah, I got the figure wrong - a lifetime (say late 20s to retirement in late 60s) of normal work for a 1% household gets you well into the 40m range and that's with conservative investment returns. My net worth figures were incorrect because I keep doing calculations based on a 15 year earning window (age 30 to age 45) because of the FIRE mindset.
In terms of the distinction I drew, my experience has been that self-made people who made their own money, and people who mostly inherited it, have very different worldviews, perspectives and priorities - not just for themselves but also for their children.
Certainly plenty of worker bee software engineers who worked for the right company at the right time (eg. Google, Apple, Facebook) or the right series of startups which IPOd and made it to $20 million within 15 years just by doing their computer day job.
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I think the only relation would be that everyone in there is rich and/or connected enough to be there. If you think about it, many parties/conventions are run on this premise (just with different parameters concerning the exclusion variable).
The only thing that worries me about certain levels of wealth (say >$20m) is that it's not possible to achieve them in a lifetime of normal work. I'm confident in saying that someone with $30m or $40m has had a generational leg-up, and my experience is that there are many different values between self-made and inherited rich.
I'm planning to stop in the next year or so, but if I kept going for another ten, especially if I were going full throttle, I fully expect I'd pass 20M, inflation adjusted (I'd be 50). No generational leg up, besides having college paid for (i.e. no pre-inheritance, no help buying our house, etc.). I don't even have anything crazy like a business or anything -- I'm just a software engineer. I know people who have vastly out-earned me with no help from their parents other than what any child is entitled to.
Anyway, even if it were true that the only way to make more than 20M were to inherit it, why should that be a worry? Any reasonable person should be very well satisfied on half as much. So it's not important that the number isn't achievable via normal work.
Yeah, I got the figure wrong - a lifetime (say late 20s to retirement in late 60s) of normal work for a 1% household gets you well into the 40m range and that's with conservative investment returns. My net worth figures were incorrect because I keep doing calculations based on a 15 year earning window (age 30 to age 45) because of the FIRE mindset.
In terms of the distinction I drew, my experience has been that self-made people who made their own money, and people who mostly inherited it, have very different worldviews, perspectives and priorities - not just for themselves but also for their children.
Certainly plenty of worker bee software engineers who worked for the right company at the right time (eg. Google, Apple, Facebook) or the right series of startups which IPOd and made it to $20 million within 15 years just by doing their computer day job.
Yeah, I know a lot of people who are pulling in > $1M total comp per year and they're just middle management at megacap software companies. So getting to $30M+ wouldn't be that hard if you slog it out.
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I think the only relation would be that everyone in there is rich and/or connected enough to be there. If you think about it, many parties/conventions are run on this premise (just with different parameters concerning the exclusion variable).
The only thing that worries me about certain levels of wealth (say >$20m) is that it's not possible to achieve them in a lifetime of normal work. I'm confident in saying that someone with $30m or $40m has had a generational leg-up, and my experience is that there are many different values between self-made and inherited rich.
I'm planning to stop in the next year or so, but if I kept going for another ten, especially if I were going full throttle, I fully expect I'd pass 20M, inflation adjusted (I'd be 50). No generational leg up, besides having college paid for (i.e. no pre-inheritance, no help buying our house, etc.). I don't even have anything crazy like a business or anything -- I'm just a software engineer. I know people who have vastly out-earned me with no help from their parents other than what any child is entitled to.
Anyway, even if it were true that the only way to make more than 20M were to inherit it, why should that be a worry? Any reasonable person should be very well satisfied on half as much. So it's not important that the number isn't achievable via normal work.
Yeah, I got the figure wrong - a lifetime (say late 20s to retirement in late 60s) of normal work for a 1% household gets you well into the 40m range and that's with conservative investment returns. My net worth figures were incorrect because I keep doing calculations based on a 15 year earning window (age 30 to age 45) because of the FIRE mindset.
In terms of the distinction I drew, my experience has been that self-made people who made their own money, and people who mostly inherited it, have very different worldviews, perspectives and priorities - not just for themselves but also for their children.
Certainly plenty of worker bee software engineers who worked for the right company at the right time (eg. Google, Apple, Facebook) or the right series of startups which IPOd and made it to $20 million within 15 years just by doing their computer day job.
Yeah, I know a lot of people who are pulling in > $1M total comp per year and they're just middle management at megacap software companies. So getting to $30M+ wouldn't be that hard if you slog it out.
Assuming invested at 7% returns... contributing $500k/year over 30 years gets you to $50M. Or you could save just $150k/year for 30 years and then compounding alone will bring you over $30M over the next decade and change. Really not unfathomable numbers with the power of compounding and a full working career timeline.
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My spouse is a surgeon, yes, but we are in our 30s so we (and our colleagues) have only been earning proper money for 5 or 6 years. The real ramp up comes in your 40s or 50s, if you choose to keep working. Even then, if your family income is say $1.5m ($0.8m after tax here in Australia) you are not going to get anywhere near $30m unless you work to your 50s or 60s and invest assiduously the whole time, when I would have long-ago hit the fatfire trigger.
I do know a few surgeons a generation older who got rich off commercial property. That ship has sailed though I suspect.
Nor are self-made mid 8 figure NW folks universally more pleasant than generational wealth folks in the same bracket. In fact, gun to my head and I'll attend a party of dilettantes over bootstrappers in that wealth bracket any day. They're a lot more fun at a party IME...well, they certainly party a lot more that's for sure.
Yes - I agree with you there. It's a lot easier to spend money when it's not your own.
Okay, that's you, but you folks aren't large group practice owners and by your own admission would retire before getting to that level of wealth. I didn't say all surgeons make that much or work that long but some do. So I was surprised to hear that generalization that mid 8 figure NW worth must come from generational wealth, since you and/or your spouse must personal know or know of multiple older surgeons in exactly that wealth range.
It's just a really surprising generalization to make.
There are plenty of self-made folks out there with multi-million base comp, plus bonuses, plus equity who can easily accrue multiple tens of millions over the course of a multi-decades long career. It's not at all unrealistic. Uncommon, sure, comps that high are uncommon period, but not unrealistic at all without generational wealth.
Exactly.
We could easily have hit the $20M+ figure -- I'm a lawyer, and even at my own smaller firm, some of the senior folks bill out at $1000/hr. Plus my DH is an engineer, and we've always had two professional careers. If we had chosen to maximize those careers, we'd probably be close to the $20M mark now, with at least another 10-15 years of high-paid work ahead of us if we wanted to take that path.*
That's all normal work stuff, not "I happened to be the third employee at Facebook" stuff, or "my dad got me an internship at a prestigious hedge fund" stuff. It is very achievable without a silver spoon -- particularly given what the stock market has done since we both started our careers c. 1990. It's certainly not easy, and you do need certain advantages -- primarily intelligence and the means to get a good education. But if you have those things, it's largely hard work, delayed gratification, and luck. A trust fund would make the early parts easier, but it's not necessary to get there in the end.
*We just chose to prioritize lifestyle over massive wealth -- I went part-time for most of my career to have a reasonable life, DH chose the "interesting tech" path over the "I want to be VP/GM" path. And we both chose the "I want to live somewhere I can afford a decent house and send my kids to public schools" path, instead of the maximize-wealth-move-to-SF/Silicon-Valley path.
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...the "millionaire next door."...
This didn't seem worth starting a new thread for, so I just used the forum search to find a recent active thread that mentioned this book so I could drop a fun fact: from the original publication of "The Millionaire Next Door" in 1996, official inflation numbers now peg 1 million 1996 dollars at just over 2 million 2024 dollars. So the level of wealth discussed in that book should now be understood to be at least $2million.
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I'm squarely in the "beyond" cohort and, barring major calamity, likely to hit the upper end of this range sometime in the next 10 years, just by not drastically inflating my lifestyle and letting my little green employees recruit more of their friends.
There's a recurring theme earlier in this thread of "Silicon Valley would mess up all of this for an ordinary worker." Silicon Valley's housing prices are outrageous precisely because so many people here can make enough to afford houses this expensive. Yes, there is too little supply, and it's gotten worse in that respect in the last decade. Yes, we have a lot to answer for when it comes to the gaping wealth inequality. That's already a few other threads, mostly in Off Topic.
For us, though, living in Silicon Valley is how we've been this successful, not why we need to be.
Our net worth in this VHCOL area is roughly divided in three, between a paid-off house (bought a little over 20 years ago for something like 1/3 to 1/4 of what I might be able to get for it with the right upgrades), the amount we've saved and invested from our two engineering salaries, and the value of some well-timed stock compensation in what has turned out to be a successful company.
We're both still a bit under 50 and both born mustachians, if there is such a thing. I haven't done the numbers in a few years, but I think our baseline burn rate in years when nothing special is happening is somewhere in the $30–$40k range. House upgrades or a new car will change that number, of course, but with a little care the upgrades should last for many years, while the bills will be one-and-done.
After I pointed out that the job market had heated up during the years I stayed at the same job, a long-ago manager delivered the largest percentage raise I've ever gotten, with a comment, "I suppose we shouldn't expect you to live like a college student forever." I think DH and I both like it that way, though. We still ride our bikes most places. We cook food from the store and the garden, making extra for leftovers for the next day's lunch. I don't generally wear it to work, but I have apparel older than some of my coworkers. We still make active use of our library cards.
DH and I started pondering our next overseas trip, and I looked up what an upgrade would cost. An $800 plane ticket seems to turn into a ~$4500 business class ticket, and even though he could certainly do with the additional legroom, neither of us cares that much. We will spend an extra few hundred on airfare to reduce logistics. We'll opt for a direct flight instead of layovers that are too long or too short or that add hours on a plane to go through a hub that's not really on the way. We'll pay a little more to avoid arrivals and departures in the wee hours when nobody, including ourselves, is awake and open for business. It's still a modern miracle that we can, if we want, pay some money, spend a day trudging through airports, and wake up in Copenhagen tomorrow.
What @Metalcat said about 5x the price not resulting in 5x the value is an understanding that seems to be built into us. It probably helps that DH and I are introverts with little to no interest in status.* The eventual car upgrade will come when the old one ceases to meet our needs or to be economical to maintain, not when we're the only ones on our street with a car that old.
Maybe it's because we're engineers, but the $6000 smart fridge just looks like a mess of unnecessary electronics that add nothing to the basic task of keeping food cold. They also pose a security risk, and they're sure to be obsolete in something less than the 20 years we've had our current fridge so far.
The frugality also seems to help with stealth wealth. Some of my friends are struggling to varying degrees, and "I could spend circles around you" is not something they need to be reminded of, even if they kind of already know. I suspect the older car helps communicate that there's nothing too fancy inside to steal, either.
The one place it's visible is to the institutions. We have whatever the executive status is at a major brokerage, and they'd just love to help us manage our money. I've gotten cold emails from someone offering investment opportunities in some kind of early stage VC fund. I presume they either figured that anyone who's been at my company a certain length of time is likely to have enough stock to qualify as an accredited investor, or they paid for a high-NW mailing list from someone who did. That kind of stuff feels icky, but it's easy to ignore email.
Another thing @Metalcat got very right, earlier in the thread, is that philanthropy gets more challenging when the numbers start to get bigger. Somewhere between the odd change that you drop in the fishbowl and numbers with commas, it starts to be worth asking if an organization is delivering the results it promises and if that result is actually worth advancing.
House the homeless? Yes, great! House the homeless with a bunch of condescending religious values that are enforced by separating them from their partners as a condition of that housing? And then blame them for not accepting the "help"? No, isn't there someone else who doesn't do that? How do you tell?
See also: reforestation efforts that plant a monoculture of the wrong trees in the wrong places, use up scarce water, fail to keep them alive, and/or sell carbon offsets to polluters for mitigations that look good on paper but mean nothing in real life. If you decide to let Givewell or somebody else curate and vet, do you trust the reviewers?
That eighth and leftmost digit, if/when it happens for us, will likely happen due to compounding and momentum more than any further additions from earned income. So what's it all for? I don't entirely know. RE, yes, probably, although I can't claim to know why yet. It feels pretty weird to think about, and neither of us is sure what we'll do with our time. Maybe that's the kind of thing we'll have to live to find out.
To circle back to the topic of this thread, is $10M better? It's certainly better than any version of having to decide what basic things to do without to scrape by. I may have some exploring to do, to figure out what really feels like purpose to me. I'm fairly sure neither golf nor boat ownership will be involved in the chapters of my story still to come.
*At least not traditional, economic status. Nerd status may be another matter.
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We are in a similar situation. After thirty plus years of
- Good salaries
- Living on one income
- Maxing out retirement accounts and brokerage
we could hit the $10M mark just in investments (excluding house and pensions) in the near future.
I found myself nodding in agreement about most of what you wrote except this:
DH and I started pondering our next overseas trip, and I looked up what an upgrade would cost. An $800 plane ticket seems to turn into a ~$4500 business class ticket, and even though he could certainly do with the additional legroom, neither of us cares that much. We will spend an extra few hundred on airfare to reduce logistics. We'll opt for a direct flight instead of layovers that are too long or too short or that add hours on a plane to go through a hub that's not really on the way. We'll pay a little more to avoid arrivals and departures in the wee hours when nobody, including ourselves, is awake and open for business. It's still a modern miracle that we can, if we want, pay some money, spend a day trudging through airports, and wake up in Copenhagen tomorrow.
After ten years of not traveling at all due to work pressures and caring for ailing family, my wife and I have resumed traveling for pleasure. Nowadays we only travel at the front of the plane and stay in good hotels. We eat in nice restaurants and hire local guides to show us around. We feel no guilt and really enjoy ourselves.
It's a matter of choosing to spend on what really gives you pleasure. We have come to the conclusion that we really enjoy luxury travel.
Mind you when we're not traveling, we don't really spend a lot: we don't eat out at all. We happily drive a couple of completely anonymous cars. Our modest house doesn't stand out in any way. We don't own a boat or a second home.
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After ten years of not traveling at all due to work pressures and caring for ailing family, my wife and I have resumed traveling for pleasure. Nowadays we only travel at the front of the plane and stay in good hotels. We eat in nice restaurants and hire local guides to show us around. We feel no guilt and really enjoy ourselves.
It's a matter of choosing to spend on what really gives you pleasure. We have come to the conclusion that we really enjoy luxury travel.
Mind you when we're not traveling, we don't really spend a lot: we don't eat out at all. We happily drive a couple of completely anonymous cars. Our modest house doesn't stand out in any way. We don't own a boat or a second home.
I approve wholeheartedly of your choices. In our view, the flight is not the trip. Maybe we'll try it someday, but at the moment, it isn't our thing. Once basic needs are well in hand, choosing what's valuable to you is the whole point, and if that's memorable travel and forgettable cars, I applaud you for recognizing that.
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I'm now about 2/3 of the way through the book Uneasy Street, per the apt suggestion from @Tasse up-thread. I do and do not see myself in that book. The author states clearly that she spoke to a small and not particularly random sample, but I don't think I see mustachians in the mix. They're more in the mode of having housekeepers, chefs and nannies, and maybe feeling guilty about it.
I certainly see the part about worrying about looking like a snob and feeling bad that some people have so much less. I have a preferred list of charities, both local and global, and I'm making an effort to distribute the funds in my DAF, but I still wonder about the best uses.
I particularly don't see myself and DH in the chapter I'm now reading about how rich people relationship money dynamics tend to work. We both earn and we both don't spend money.
We both cook and bake and do laundry, and so far, we have not chosen to outsource anything beyond the occasional restaurant visit. I don't have a housekeeper or gardener. I think most of my neighbors do. At this point, I'll call a plumber not to have to spend hours rolling around under a sink, but not to replace a shower head or toilet valve.
If I ask DH what a charge on the credit card was, it's purely to confirm that something I didn't recognize really happened. I'm the "CFO," mainly because I'm the nerd about that topic and I'm also the native in the financial system here. I've made some efforts to include him in the household finances, to educate him about US-specific money topics (he is native to Europe) and generally make him able to take over if ever I'm not able to. He knows the whole picture.
We aren't always decisive about non-routine purchases, but that's more a matter of knowing that we'll be living with a particular choice for some time, rather than anything to do with price or affordability.
I'm not convinced either of us is doing much of the "lifestyle labor" the book describes. It's just not a priority to have things decorated and coordinated or otherwise to keep up appearances.
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Where I really saw Mustachians/myself reflected in that book was the tendency to say "What I have isn't REALLY rich, REALLY rich is one level above me..."
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Where I really saw Mustachians/myself reflected in that book was the tendency to say "What I have isn't REALLY rich, REALLY rich is one level above me..."
I'm aware that people richer than me exist. Some are my neighbors, coworkers, etc. I have no aspiration to become them. I don't think I'd ever be comfortable just blowing through money, even if I had 10x or 100x as much. I just don't see the point of adding to my environmental footprint when I'm already well equipped. But I still boggle at how much I have. I certainly have enough.
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I'm rich as fuck.