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Dad, Are We Rich?

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Re: Dad, Are We Rich?

#51

Post by gowld »

saltcured wrote: post #46
schwabacher wrote: post #16

Earlier quoted context omitted.

I'd define being 'financially secure', as being confident that you will not need to make changes to your lifestyle for financial reasons. It makes sense that that depends pretty heavily on how expensive your current lifestyle is.

Right. It sounds funny to have a 2x guestimate from many people though. Is that evidence of a common mental heuristic for estimating and mitigating future risk? I personally can think of a net worth figure which seems like it might be comfortable under lucky circumstances (no major crash or catastrophic health issue). And, right now I also feel like twice that would make me feel pretty secure. In spite of my concerns…

"2x" is the same thinking behind "if you don't have a backup for it, you only have it temporarily" , for anything "it" may be.

The thread starter is ambiguous about whether "secure" means "secure in what you currently temporarily have" vs "secure to have a reasonably acceptable life".

Re: Dad, Are We Rich?

#52

Post by throwayEngineer »

rb808 wrote: post #34

I think the HN bubble is far detached from the real world. If you own 100k+ of assets, most of the people in the world will see you as incredibly rich. If you own a house in the Bay Area even with a mortgage most Americans will see you as rich. Sure you might not feel rich because you have to go to the office each day and you dont have a sports car, but you are. Median and mean wealth per adult, in US dollars. USA: 6…

The Physician takes for granted that his profession has a monopoly on perscriptions and declaring medical necessity.

>Laughably some consider me rich

I know the article is supposed to hate on the 0.1%ers, but since Physicians always say this crap about their income, it's important to know Healthcare costs are terrible because he is paid so well.

Re: Dad, Are We Rich?

#53

Post by maerF0x0 »

I think a massive issue in America is the growing Urban vs Rural wealth divide. Progressive tax brackets that make sense in the countryside are punitive in an urban environment.

Eg: making $150k in SF isnt "that much" yet it's taxed at a higher rate than someone making the same where housing is 50% cheaper (or more). I'm starting to think that tax brackets ought to be converted to PPP within their respective zone.

Re: Dad, Are We Rich?

#54

Post by lumberjack »

simonh wrote: post #2

Some 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.

The courts think in a similar manner. When rich couples divorce, the courts mandate that the poorer parent and kids get enough from their other parent to retain the same lifestyle the were used to previously. If that means enough to maintain a private jet lifestyle, so be it.

Re: Dad, Are We Rich?

#55

Post by Mvandenbergh »

challenger22 wrote: post #43
Zaak wrote: post #20

Earlier quoted context omitted.

I agree with you. For example, if I had 100 times my current yearly income in savings/investments/etc, I could live my current lifestyle indefinitely (barring eg, a market crash) because even with zero interest, the money would last 100 years, and with minimal effort (ie index funds) the money would grow over the long term at a rate greater than 1%. Of course, that would require persisting in my current lifestyle in…

Look up the 4% rule and firecalc.com to learn how this 100x multiple is a lot less, more like 25x realistically. A lot of people are irrationally intolerant of risk. Try not to let fear dominate your intuition about investing.

That 4% is empirically derived from data covering the 20th century and is appropriate for earlyish retirement. There's two reasons to be more conservative:

1) We may be in a low-yield world for a long time.

2) Those studies were based on earlier retirement, not on people leaving the workforce in their 20s and 30s, the way that some very lucky HN readers may do.

Re: Dad, Are We Rich?

#57

Post by docker_up »

rb808 wrote: post #34

I think the HN bubble is far detached from the real world. If you own 100k+ of assets, most of the people in the world will see you as incredibly rich. If you own a house in the Bay Area even with a mortgage most Americans will see you as rich. Sure you might not feel rich because you have to go to the office each day and you dont have a sports car, but you are. Median and mean wealth per adult, in US dollars. USA: 6…

This answer is nonsensical. Yes there are vast swaths of people who are living in areas that are much poorer than the US. But that doesn't mean we need to measure ourselves based on the poorest of the world.

Does that mean that we should ignore the demands of workers who want a liveable wage of $15/hr in the US? Should we tell them "you're rich compared to most of the people in the world"?

The fact is that we measure "richness" by our immediate surroundings. If we have $50k in savings and we could move to Madagascar and live like a king doesn't mean we're rich, not even in the slightest sense.

Re: Dad, Are We Rich?

#58

Post by gowld »

stevekemp2 wrote: post #44
lotsofpulp wrote: post #30

Earlier quoted context omitted.

It's not the cost of birthing/feeding/clothing/daycaring. It's the cost of having a house in the best school district you can afford, sending your kids on ski trips or international vacations with their friends who also have higher income parents, and various other activities that are involved with being in the "up and coming" social group.

I think that's an America-centric view. In a lot of places in Europe it wouldn't matter what neighborhood you lived in - the schools available would be equally good.

That covers one segment of the conversation, but "move to Europe" isn't a solution for most people not in Europe.

Re: Dad, Are We Rich?

#59

Post by jaccarmac »

simonh wrote: post #2

Some 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.

Sounds fascinating, got a source for that? Seems to dovetail with the research re: happiness and net worth not being correlated after a point.

Re: Dad, Are We Rich?

#60

Post by jonathankoren »

jedberg wrote: post #27
Zaak wrote: post #20

Earlier quoted context omitted.

I agree with you. For example, if I had 100 times my current yearly income in savings/investments/etc, I could live my current lifestyle indefinitely (barring eg, a market crash) because even with zero interest, the money would last 100 years, and with minimal effort (ie index funds) the money would grow over the long term at a rate greater than 1%. Of course, that would require persisting in my current lifestyle in…

> Of course, that would require persisting in my current lifestyle in the face of a massive increase in wealth, which takes nontrivial self-discipline. And you must maintain that self-discipline in a world where you are constantly bombarded with messages to "spoil yourself" because "you're worth it" and "you can afford it". It's not easy.

Also, you better never have children.
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