Family blows $10M windfall in 10yrs

[TridenT]

besides the fact that yes, the average household is below the needed income to make this work, you do realize what "invest" means, don't you?

Yes. Still, you would need one hell of a financial investment to get going that well.

 

[waggy]

Surprisingly, in my experience, the richest people I know don't spend much of it - you don't get rich spending all of your money

I was shocked the first few times, but it seems that they value every dollar they earned a lot and so it doesn't get spent quickly.

It's interesting to see how the "rich" spend their money - I've seen many for whom the biggest expenses they have are their kids' education while they all drive beaten down cars, live in an okay size home, don't take very lavish vacations, etc.

I don't have too many samples to examine from, but maybe when the person crosses the $100MM+ wealth range, things change and they start spending a bit more with private jets and such, but until that range they seem to not want to spend it all. Maybe part of the reason is that while they may be "wealthy," they don't have a lot of cash because it's mostly invested.

Edit: I'd say this goes for people that earned it - not necessarily those who inherited it. I don't think money changes people, maybe it just brings out their true self though.

I know 3 people who have a few million (my dad, step mother and a uncle). they are exactly how you say. you wouldn't know any of them have money. well besides the fact my dad spends all day fishing and has a nice boat.

they buy 1-2 year old cars (though my step mother gets one every 3 years or so). they do have nice furniture (they get new stuff every 5 years..i get the old stuff woot).

they have a nice small house in very nice area down in Marian IL. they just spend the day doing whatever the hell they want. They do go on a bunch of vacations to see family.

My uncle is a house he has owned for 60 years now. Him and his boyfriend (yes he is gay) do go on a lot of vacations though. other then that you would think they are old couple. shrug

 

[grrl]

This thread delivers. Trident is still delusional and Vic Vega not only abides by all motor vehicle laws, he's well on his way to an early, cash-rich retirement.

 

[Bignate603]

Yeah, supposedly. Stupid fucking advice, IMHO.

If I had $10m, I'd be doing whatever the fuck I want.

Obviously I wouldn't spend it on stupid shit like that guy. I'd do a lot of traveling. Go to school during the weekdays, live in a nice place, and then on the weekends... fly first class to some other city and have fun. Come back on Monday and start the grind, knowing that on Friday I'll leave. You'll always have something to look forward to at the end of the week even when you're grinding away at homework.

Yeah, you'd piss away the money faster than the guy in this article did.

 

[dullard]

Surprisingly, in my experience, the richest people I know don't spend much of it - you don't get rich spending all of your money

I was shocked the first few times, but it seems that they value every dollar they earned a lot and so it doesn't get spent quickly.

Exactly. The only way to stay wealthy is by spending less than what you earn. You can temporarilly be rich by spending as much or more than you earn. But it won't last.

The people with net worths of about $500k - $10M tend to be the stingiest of people. I'm in that group (barely but working my way up), and yes I'm stingy. They just don't consider themselves wealthy yet, even though they have far more than the vast majority of the world.

I was shocked to read recently that people with $1M to $10M of wealth donate about $10k/year (sorry couldn't find the link quickly). With $10M of wealth, that donation level is just 1% (or less) of their income. That is how stingy they are.

For those who say they can retire on $1M. That is probably true, but it won't be pretty. That gives you $40k or $50k per year to spend (and that is BEFORE taxes). Yes, you can survive on that, but it isn't much. If you retire, you'll want to do something with your time, but you'll have very little excess cash.

My goal is $10M. Should be quite doable. I'll be there in my early 60s, if nothing changes and if I get 8% on my investments.

 

[JMapleton]

At 10% interest, it would take $57,041.27 per year to get to 1 million in 10 years (including compounding), which is more than the average household income in the US, IIRC.

If you have two people earning $70k each, one person invests their $70k and another uses it to live off of. That's not unreasonable. And "average household income" in the US is not equal to what most people on here consider to be an "average" person.

 

[dullard]

If you have two people earning $70k each, one person invests their $70k and another uses it to live off of. That's not unreasonable. And "average household income" in the US is not equal to what most people on here consider to be an "average" person.

After taxes (federal + state), you'd have just over $50k each. With good investments, it is barely doable.

But, I'm going to agree with Engineer. The typical household makes about $50k to $60k per year. Your example here is $140k/year. That is more than double the "average". Two professionals can certainly make the $1M level in 10 years. No problem if they are stingy. But, the average family certainly cannot.

 

[JMapleton]

After taxes (federal + state), you'd have just over $50k each. With good investments, it is barely doable.

But, I'm going to agree with Engineer. The typical household makes about $50k to $60k per year. Your example here is $140k/year. That is more than double the "average". Two professionals can certainly make the $1M level in 10 years. No problem if they are stingy. But, the average family certainly cannot.

When you say "average" that's not really "average." The "average" educated and intelligent household makes more than the national average. When considering the national average you're including the uneducated, unemployable, and apathetic.

The "average" person, as most of here consider and encounter as "average" could do this no problem.

 

[dullard]

When you say "average" that's not really "average." The "average" educated and intelligent household makes more than the national average. When considering the national average you're including the uneducated, unemployable, and apathetic.

The "average" person, as most of here consider and encounter as "average" could do this no problem.

But you can't just do that. You can't assume a special average and not say anything about this special clause until far later in the thread. Instead, just say a dual-income no kids professional family can do it. Don't fool yourself into thinking the average* family can.

*As defined however you want so that you are correct and everyone else is wrong.

 

[JMapleton]

But you can't just do that. You can't assume a special average and not say anything about this special clause until far later in the thread. Instead, just say a dual-income no kids professional family can do it. Don't fool yourself into thinking the average* family can.

*As defined however you want so that you are correct and everyone else is wrong.

I'll rephrase it as this.

The "average" person who would have the motivation to save $1m in 10 years and the intelligence to actually do it, makes enough money to do it.

The national "average" person knows little or nothing about investing, so the point is null.

 

[Vic Vega]

I don't think the "average" household could come anywhere near 1 million in 10 years....not even close.

Sure they can, they just aren't willing to.

Hell, I've put over 20% (maybe 30% at times and not including matches) including doubling my salary with overtime and have nowhere near that.

My wife and I put over 50% of out total income into savings and investments. You can live on one income, people just choose not to. 20% of your income isn't going to do it unless you're making 200K or more.

Sorry, just don't buy that the average household can get a million, even with two incomes. Maybe in a lifetime of working (40 years) but not in 10.

Don't feel bad. The world is full of "I Can'ts" which is why everyone isn't wealthy. It's human nature.

At 10% interest, it would take $57,041.27 per year to get to 1 million in 10 years (including compounding), which is more than the average household income in the US, IIRC.

I can assure you that I was going to be a millionaire (in retirement) by the age of 45 and then 2007-2009 happened and I'm not back to about where I was in late 2007 or so. Market is moving sideways and has been (on average) for about a decade or so.

Hang in there. The market will change. I don't know how old you think I am, but I can assure you my plan isn't a "dream" it's real, something my wife and I have done for many, many years. It sounds like you have your head in the right place. Hang in there.

I'm not rich now but I will be. Some people find it hard to accept that a normal family making an average salary can become rich. They deny it because they personally can't do it. Lots of that in this thread (this isn't directed at Engineer).

Not everyone can do it, this is apparent by all the broke people in the world who would rather have the latest whatever right now and can't think a year in advance, let alone 30.

Good luck to you all.

 

[alkemyst]

I'll rephrase it as this.

The "average" person who would have the motivation to save $1m in 10 years and the intelligence to actually do it, makes enough money to do it.

The national "average" person knows little or nothing about investing, so the point is null.

dude I make WAY more than average and will say you are living if a fucking fairy tale.

What you are saying is only idiots can't save double the AVERAGE household income in 10 years.

How much you have saved?

 

[Vic Vega]

You said he can't make 1 million in 10 years unless he saves $57k/year, right after you quoted him saying they live off one income then invest the rest.

I agree 16 million is a stretch unless he is doing more "active" investment, but that's nearly impossible with a full time job.

It's a target, like I said. Thanks for understanding, I knew someone would.

So if we do everything right our goal is to hit the target. If we end up only doing half right, we're still doing great.

 

[JMapleton]

What you are saying is only idiots can't save double the AVERAGE household income in 10 years.

Never said that. Many intelligent people don't make a lot of money because of the profession they choose. Nothing wrong with that and there is nothing wrong with not being rich.

I'm saying the average intelligent household can save $1m in 10 years because the average intelligent household makes enough money to do so.

Never said any absolutes as you claim (or want to claim, perhaps just because you like to argue) like "only dumb people don't have a million bucks." I never said that.

 

[ViviTheMage]

woooooops

 

[guyver01]

You know the saying "You can't take it with you" ...

why even bother trying.

I'd rather spend my money now, on stuff i can enjoy WHILE i can enjoy it.. than save 50,60,70% of my income for "the future" ..

My wife's grandmother saved her entire life. Had a "poor" lifestyle growing up so she saved alot of her money when she earned it. She's in her 80's now.. probably has close to a mil in the bank. Has a nice house, but is too sick to go out and enjoy her money. Most of her money is spent on medicine and doctors and "medical equipment", etc..

I feel really sad for her. Hard life growing up.. Hard life now.. and nothing to show for it but a bank account that she can't enjoy.

 

[sandorski]

Freakin Noobs! I could have done that in a month!!

 

[alkemyst]

Never said that. Many intelligent people don't make a lot of money because of the profession they choose. Nothing wrong with that and there is nothing wrong with not being rich.

I'm saying the average intelligent household can save $1m in 10 years because the average intelligent household makes enough money to do so.

Never said any absolutes as you claim (or want to claim, perhaps just because you like to argue) like "only dumb people don't have a million bucks." I never said that.

You didn't answer the question I asked because I know by your own post here you are no where close to a million bux in the bank.

You honestly have no clue.

A lot of money has to do with luck not intelligence.

 

[Vic Vega]

You know the saying "You can't take it with you" ...

why even bother trying.

I'd rather spend my money now, on stuff i can enjoy WHILE i can enjoy it.. than save 50,60,70% of my income for "the future" ..

My wife's grandmother saved her entire life. Had a "poor" lifestyle growing up so she saved alot of her money when she earned it. She's in her 80's now.. probably has close to a mil in the bank. Has a nice house, but is too sick to go out and enjoy her money. Most of her money is spent on medicine and doctors and "medical equipment", etc..

I feel really sad for her. Hard life growing up.. Hard life now.. and nothing to show for it but a bank account that she can't enjoy.

Different priorities I guess.

Here's how I look at it. I like sailing - a lot. Right now, I can't afford the 700k sailboat I want and sail it all over the globe. Right now, spending the money I have today, I can't do this, I can't come close. But, if I am diligent with my money, and make it work for me, instead of me working for it, when I retire, I can sail around the world. Life doesn't end at 55-60. People these days are living longer than ever.

So, when we're both 65 and I'm living it up and you're still working your ass off, you can look back to when you were young and say, "I'm glad I did those things then." and I can say "I'm glad I did those things then". One way is not right or wrong. If you get satisfaction right now from spending, awesome, no problem, got it. Some of us like to look ahead though to bigger things. Don't take this the wrong way.

PS. I don't plan on there being anything to take when it's time.

 

[MagnusTheBrewer]

Never said that. Many intelligent people don't make a lot of money because of the profession they choose. Nothing wrong with that and there is nothing wrong with not being rich.

I'm saying the average intelligent household can save $1m in 10 years because the average intelligent household makes enough money to do so.

Never said any absolutes as you claim (or want to claim, perhaps just because you like to argue) like "only dumb people don't have a million bucks." I never said that.

Except the "average household" doesn't exist. You've got a ton of people at the bottom, a handful at the median and, a sizeable group at the top. So, in reality, it's only the folks at the upper end that can save that amount. There's nothing wrong with using the term average, it's just common usage often gets confused with it's actual meaning.

 

[guyver01]

So, when, when we're both 65 and I'm living it up and you're living still working your ass off, you can look back to when you were young and say, "I'm glad I did those things then." and I can say "I'm glad I did those things thing".

except when we're both 63 and die of a heart attack, i'll meet you in heaven and say "i'm glad i did those things" and you can say "shit, my fucking relatives are enjoying my money"

People these days are living longer than ever.

and stuff happens that medical science cannot solve. Are you willing to bet you wont get something that medical science can fix?

 

[JMapleton]

You didn't answer the question I asked because I know by your own post here you are no where close to a million bux in the bank.

I do not save or invest as you would, I own a business and that's my "investment," and every penny of my extra income goes into that, so there is not a "dollar amount" I can put on it. Saving and investing as described in this thread is not my plan.

 

[JMapleton]

except when we're both 63 and die of a heart attack, i'll meet you in heaven and say "i'm glad i did those things" and you can say "shit, my fucking relatives are enjoying my money"

You're talking extremes.

I'd rather drive Ferraris for half of my life because I saved or worked the first half than drive Mustangs and Corvettes my whole life.

 

[Vic Vega]

except when we're both 63 and die of a heart attack, i'll meet you in heaven and say "i'm glad i did those things" and you can say "shit, my fucking relatives are enjoying my money"


and stuff happens that medical science cannot solve. Are you willing to bet you wont get something that medical science can fix?

Hey, you can choose to be negative if you want, that's your decision.

I choose not to be.

Like I said, if spending makes you happy, go right ahead and keep doing what makes you happy. Just don't ask me to pay for your retirement when you get to 63 and are broke and then live 30 more years.

 

[Svnla]

<<<---- is a strong believer in "moderation". Not spending every dime and swiming in debt or eating ramen noodles while saving 99&#37; of the money. Live and enjoy life, stay healthy, and plan toward the uncertain future.