Dad, Are We Rich?
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Dad, Are We Rich?
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Re: Dad, Are We Rich?
#2Some wealthy trust fund babies were asked how much wealth they thought they would need to really feel financially secure long term. They had inherited wealth ranging from tens, up to hundreds of millions. Almost all of them named a figure about double their personal net worth, regardless of what that net worth was.
Re: Dad, Are We Rich?
#3> The bad news is that 1M isn’t what it used to be. It would take 20M to match the buying power of 1M from a century ago.
Wholly disagree with the purchasing power notion. I have lived frugally for years and 1M is enough to set me up for life (providing I don't have kids). This is because budgeting is now an ingrained habit and I wouldn't suddenly stop budgeting just because I can now spend more on things.
Re: Dad, Are We Rich?
#4> The bad news is that 1M isn’t what it used to be. It would take 20M to match the buying power of 1M from a century ago. Wholly disagree with the purchasing power notion. I have lived frugally for years and 1M is enough to set me up for life (providing I don't have kids). This is because budgeting is now an ingrained habit and I wouldn't suddenly stop budgeting just because I can now spend more on things.
Having kids is the wrench in the gears for many people I'd guess. There's a reason for the term DINK (Dual income, no kids).
Edit: Also to clarify, I absolutely agree with the living frugally thing, and think most people would be in general better off if they focused less on spending every penny they make.
Re: Dad, Are We Rich?
#5> The bad news is that 1M isn’t what it used to be. It would take 20M to match the buying power of 1M from a century ago. Wholly disagree with the purchasing power notion. I have lived frugally for years and 1M is enough to set me up for life (providing I don't have kids). This is because budgeting is now an ingrained habit and I wouldn't suddenly stop budgeting just because I can now spend more on things.
That just means you can live on a budget of $40K a year, which is totally reasonable for a single person who isn't in a big city. And that's great! If that's what you want to do, then by all means. But that life isn't for everyone. And if you plan to have kids and go on vacations, then purchasing power is important.
I have a friend who did exactly that. We worked together in tech for 10 years, he lived super frugally here in the Bay Area, and then when he had saved $1M, he retired back to his native Kansas, bought a house for under $100K, and just kicks back enjoying his time.
Re: Dad, Are We Rich?
#6My kids asked me this and I said we are "comfortable". We are easily 1%-ers in terms of income level but we don't consider ourselves rich.
I consider someone rich who has the luxury of not working and still maintaining a very good lifestyle. In Silicon Valley you can't do that without substantial net worth.
The reason why we don't consider ourselves rich is because both my wife and I have to work very hard. We love our jobs and don't mind working hard, but we do have to work very hard. My work-life-balance is better than my wife's so I do more of the child-rearing, but I still jump online to finish some work after the kids are asleep.
Re: Dad, Are We Rich?
#7My measure of rich is "Can I live my current lifestyle without regular income from a job?". If the answer is yes, then you are rich. The trick here is to make sure to keep your lifestyle costs in line with your salary when you first start out, so that as your income grows you can save.
So yeah, if you want a big house and nice cars and nice vacations, you wouldn't consider yourself rich compared to people who don't have those things and don't want them.
But at some point, no matter how you live your life, you get to a point where my initial statement is true, usually around a few tens of millions, which is why we can draw a definitive line around there and call everyone above it rich.
Re: Dad, Are We Rich?
#8> The bad news is that 1M isn’t what it used to be. It would take 20M to match the buying power of 1M from a century ago. Wholly disagree with the purchasing power notion. I have lived frugally for years and 1M is enough to set me up for life (providing I don't have kids). This is because budgeting is now an ingrained habit and I wouldn't suddenly stop budgeting just because I can now spend more on things.
Having kids is the wrench in the gears for many people I'd guess. There's a reason for the term DINK (Dual income, no kids). Edit: Also to clarify, I absolutely agree with the living frugally thing, and think most people would be in general better off if they focused less on spending every penny they make.
The second you have dependents, the equation changes. Now you're optimizing not just for your remaining years of life, but for your children and possibly their children. Which, in most cases, means living in higher cost of living areas to get them in better schools and access to wealthier networks. Also, any adverse health events can sink your whole family, so you need to keep on the treadmill until you have sufficient passive income to keep any health issues from causing financial insecurity.
I have noticed that my friends and family that grew up in higher cost of living, higher income areas and went into the standard higher paying careers (doctor/lawyer/finance/engineering) are more financially secure than those who weren't as fortunate or focused on the rat race. At what mental/other cost though, I can't say.
Edit: The most financially secure are those who invested in commercial real estate and development.
Re: Dad, Are We Rich?
#9I think the author is a bit too narrow in their definition of "political clout". They seem to define it as the ability to personally influence federal policy. However, as a class, people with $4M in wealth or more have an immense amount of political clout. Most contemporary US local, state, and even federal policies are geared toward attracting and retaining these people. Think property tax caps, mortgage interest deductions, zoning, traffic and transit policy...etc.
If you have $4M in wealth, you might not be able to personally call up a lawmaker and get them to pass your pet law, but governments everywhere are bending over backward for you and people like you.
Re: Dad, Are We Rich?
#10So “comfortable” (or what I will equate with upper-middle) is now somewhere between 100k and 15m?
Even excusing cost of living differences (BFE Kansas vs Market District, SFO or Manhattan), that’s a hell of a range.
Assuming I’m single and have no kids one of those is, to me at least, comfortable to the point that I’m comfortable traveling pretty much whenever and wherever I want. The other is quite literally “f* you” money.