Comments on: Let’s Stop Envying Millionaires

By: MikeS

MikeS — Tue, 09 Jun 2009 16:38:14 +0000

I created my own retirement analysis, so I could factor in assumptions about increasing my savings (additional 1% of salary every year) and salary increases that outpaced inflation (I’m optimistic). My “number”, assuming I retire at 65, would be between $6.5 and $7.5 million. Do I need all of that? I don’t know, but I’ve got 30 years to find out. What I do know, is that if I use the 4% withdraw rate, I’ll be getting north of $100,000 a year. That’s more that I make now and when I retire, I won’t have a mortgage. If I can’t live on that, I’ve got some problems.

By: Kevin M

Kevin M — Tue, 09 Jun 2009 14:54:37 +0000

@MyJourney – I think Jacob’s point is you don’t NEED any of that extraneous stuff – cable/internet, car, etc. Not to mention by retirement you should have your house and student loans paid off.

For example, our living expenses (2 adults, 1 toddler) are about $1,700 monthly/$20,000 annually not including mortgage payments. At a 4% withdrawal rate, I would only need about $500k to retire. And I’m not even as extreme as Jacob :-). That doesn’t even take into account any income from Social Security.

By: MyJourney

MyJourney — Tue, 09 Jun 2009 12:59:01 +0000

Jacob,

I couldn’t disagree more; its about where you live. My Townhouse (yes, a condo not a dual barn like creation) costs approximately 23,000 in just mortgage and taxes. You think spending an extra 20K is tough? Cable/internet (1200/yr), food, Electricity/Gas (2400ish/yr), car insurance, car payments, STUDENT LOANS, etc.

I don’t think spending 40K between two people who are not “extreme” frugalists is crazy.

Yup, I am from New York.

By: Jacob

Jacob — Tue, 09 Jun 2009 06:10:12 +0000

I could see how living a house the size two barns and needing a car to drive between them in the picture above could require $40k, but otherwise I do not quite understand how it is possible to spend that money on two people unless it involves large amounts of consumption, buying stuff and replacing it every other year; maybe hence the need for barnyard sized housing? ;-) 40k is as far as I remember still the median household income, so half of everybody lives on less than that. In terms of moving to another country, the Millionaire Next Door book suggests that spending is not so much a function of which country you live in but rather which country you grew up in, so if you want to learn how to live comfortably without gushing money, ask any first-generation immigrant ;-)

By: John

John — Tue, 09 Jun 2009 02:18:14 +0000

The New York number is a much better “retirement calculator” than any other retirement calculator i’ve seen so far. Enough so that i blogged about it and posted a trackback link. Keep up the great work and thanks for the inspiration.

By: MyJourney

MyJourney — Mon, 08 Jun 2009 19:20:01 +0000

Flexo,

I think this post is really just splitting hairs. Whether my goal is to reach $1mil, Multiple Millions (as per my site lol), or a Billion – I think the important thing is people are striving for a better life.

Case in point, I have a negative net worth today (thank you mortgage and law school loans) the fact that I follow your blog and others like it – even though most are not anywhere near millionaires is still a step in the right direction.

By: dawn

dawn — Mon, 08 Jun 2009 17:43:03 +0000

That New Yorker story was written for New Yorkers, who have one of the highest cost of livings in the world. I think many people get by comfortably on $40,000 a year, assuming they’ve paid off their house and have no mortgage.

By: UH2L

UH2L — Mon, 08 Jun 2009 16:10:25 +0000

You can work forever, but I read that people who retire later in life die soon after retiring whereas those who retire earlier live longer. Work means stress, and older people should take it easy at some point. That said, I think hobbies are important for seniors. They need to keep active and busy to keep their minds and bodies fit.

By: ObliviousInvestor

ObliviousInvestor — Mon, 08 Jun 2009 15:11:39 +0000

Agreed. Most everybody in my generation (Gen Y) will need far more than $1 million in order to retire comfortably.

That said, I’m a big fan of the “don’t retire” idea. Find work you love instead. Then plan to work as long as you’re capable (while maintaining disability insurance for the chance that “as long as you’re capable” isn’t very long).

By: Flexo

Flexo — Mon, 08 Jun 2009 13:35:56 +0000

I realized this on the drive in to work today. I’ll see if I can edit the title from here. :-)

By: Mike

Mike — Mon, 08 Jun 2009 11:41:51 +0000

I think you mean “let’s stop envying millionaires.” If you “covet” a millionaire, that DOESN’T mean you want to be one; it means you want to possess one. (Read Exodus 20:17, for example, to see how “covet” is properly used; it really isn’t the same thing as “envy”).

Don’t “envy” millionaires; don’t “covet” what they have.