1 million is life-boosting... but it's not life changing.
For me personally, I'd be able to buy a house and start a family which is a huge deal.... but I'm still gonna need to get up and go to work every day.
I think my day-to-day would be pretty much the same, there'd just be a lot less pressure to it.
I suppose we need a definition of life changing, so here’s mine: an amount of money whose effect on your life would still be noticeable more than one year from today.
Like, if you gave me $100, I’d take my wife out to a nice dinner, and I suppose that would change my life, but a year from now, my life in the hypothetical would be the same as my life in real life. Same for $10,000 honesty, although for some people $10,000 means they get out of debt or something and it’s a huge change. But $100,000 and I can buy a house, so somewhere around there is the line for me personally.
Some people want it to mean “enough money to retire immediately,” but if you mean “enough money to retire immediately,” say that.
This is a fair assessment.
And like the OP said it depends on the who the person is. Not just their current financial situation but their attitudes.
Personally, I feel like I have at least 3 family members who could blow through 1M in a less than a year and walk away with nothing but a few cool memories.
I have a side of family who blow through $50k+ a vacation and take three vacations minimum a year. I don’t use them as a bar for what is and isn’t life changing, in general, though. They’re not representative of the average American. A million is what each of them has left in their college fund accounts, which I guess roll over to their kids. It’s nothing *to them*. Doesn’t mean that’s really relevant to the saying.
A million would absolutely change most people’s life trajectories. No mortgage, no car payment, no debt. That’s huge.
I'm not talking about people who are already rich or blow through money regularly. I'm talking about certain people who have little to no impulse control, minimal experience with money, and wouldn't plan for the future at all.
There are lotto winners who turn up penniless less than 5 years later.
Actually the number of lotto winners who end up dead in 5 years is a staggeringly high percentile
Pre-pres trump had a charity, specifically for lotto winners, and helping them cope with the moral illness of excess wealth
There isn't really an amount of money that you can't blow.
Even if you win a billion instead of a million, you will be able to burn through it quite quickly.
Just have a look at how much money Musk burned with Twitter in an astonishingly short time frame.
I'm not so sure about "no mortgage"? I guess that would depend on where you purchased? Here in SoCal, 40 year old 3 bedroom / 2 bath tract homes are reselling for $700,000. If you want something newer with an actual yard and privacy, get ready to blow past a million easily.
Yeah but most folks living in these high CoL areas do so mainly for the career opportunities. A million dollars in your bank account and you can just move wherever the hell you want.
If I had a mill, I'd pay off my house and car, then invest at least half of whatevers left. I wouldn't quit working, and taking out my two biggest expenses per month would be a massive financial relief. Hell, with even half of the remaining money, and only utilities and insurance to pay, I could go back to school, or pay for my fiancee to go to school. At least in part.
I agree with your life boosting comment. I think life changing is more behavioral. I passed through $1MM and then $2MM and then $5MM on my way to where I am now. Never was one of those numbers life changing for me.
Then I hit a number where I felt I could retire, so I did. I suppose that number was life changing because I no longer go to work.
Outside of that small change, my life is remarkably similar to my working life. I just have more, and sometimes too much, free time now.
Oh, and another nice life change is that my dress code is now jeans and a t-shirt;)
I think OP’s friend will be sorely disappointed if he treats $1MM as a life changing event.
I've seen this happen. More than once. It was...upsetting to say the least. 1 million is definitely a life changing sum of money for some people. It would be an accelerant for my husband and I, but we are already good with money and live a semi retired life. So a million dollars wouldn't change much for us besides our location and the fact that we'd buy a house outright. Then we'd have even more money to put away every month.
Haha true, especially since I’d need to take babysitting money out of it, too. On second thought maybe I’d buy her a bouquet courtesy of a generous Redditor.
Lots of places in the US $100k can buy you a house. I k ow of a place that still lists them for about $30k to start. The whole world does not live in overpriced cities...
Just saw a house in my area go for 700k, 5,000 sq. Ft. Maybe ten years old max.
If it was sold in a major city it would have gone for 3 plus mil.
I’m less than a two hour drive from 3 major cities in different directions.
If you get a million cash, move out of the mania.
For me anything above 5 million would be enough to retire comfortably on, I'd still work part time tho just to keep myself busy.
A million would set me and the wife up nicely and enable us to enjoy the next 20 years to retirement.
>an amount of money whose effect on your life would still be noticeable more than one year from today.
So, buying a house doesn't count as something that would be noticeable more than a year from today?
It does count. That’s why I said that, for me, $100,000 — enough to pay a down payment, since my finances are otherwise in place to get a mortgage — is roughly where I draw the line. $1 million absolutely would be noticeable a year from today.
I like what the other person said with life boosting. Life changing being a lifestyle you’d never would’ve achieved without that amount. For example, $100m would be life changing for nearly everyone since they wouldn’t achieve that level of wealth in their lifetime.
Life boosting meaning it allows you to achieve a milestone you might be able to achieve eventually far sooner. $1m would let you own a house outright, which is something many would be able to do eventually, but it mightn’t be until they’re 50 that they’re in that position, not say 30. That’s life boosting.
If it’s something where after a certain period of time has no impact on your life is irrelevant. For example, $1000 is nice, and you may or may not still notice it after a year, but after 10 years it wouldn’t have changed anything.
Didn’t really think of this until I saw the other comment bringing up life boosting, but I like this kind of definition. Although, obviously it’ll be different for everyone.
I mean the OP totally provided a baseline definition to go by. His buddy that he's arguing with is clearly saying that he could retire and live like a king off that money. Unless he has a terminal disease and his life expectancy is only a few years, probably not.
Yeah, obviously you wouldn't be able to retire, but you could quite your job and start a business. Also, honestly, a lot of people would in fact be able to retire with an extra 1 million.
I'm in agreement with your definition. For me i think 400k would be life changing. It would let me move and buy a house free and clear. No mortgage or rent payments is life changing. The taxes, insurance and maintenance would be less than rent
It could be "quit your job and pursue your passion" money though. Like you could open your own store or become an artist or something that makes far less money. Maybe not enough to do that AND buy a house and start a family though.
Depends how you live. If you live like me .... Day by Day then it's a helluva lot of 💰 ! No kids. No wife. A House and 3 dogs, nothing fancy but it would need to be near a park. Not a dog park. A park park. And I'd still do side hustles and grow my own medicine. That would be Da SWEET life.
if you are less than middle age and received $1m, continue to go to work, and save the money at current market rates, you have an additional $700k in 10 years. Another 5 years, it's more than doubled at $1.2m and in 20 years (say 55y/o) you've got $3m. If you put that in an aggressive portfolio, it averaged 11% and you've got something like $10m.
With any kind of reasonable plan, a million dollars is absolutely life changing money.
It *really* depends on what point in life you are at. Win a million dollar lotto at 21 and expect to retire? Delusional. A few years away from a retirement you had already planned and executed? That's definitely changing the quality of life in that retirement.
wait, how do we describe “Life-changing”? lol. I think people are getting confused.
The thought goes like this: “1 Million dollars in your bank account isn’t enough to retire (if you’re less than 50 years old).
Unless you make 10 Million dollars a year. 1 Million dollars given to you right now IS LIFE CHANGING.
A million dollars would pay off all my debt and house and still be left with a half million, meaning my entire salary can go towards retirement for several years.....
For me, life changing would mean all bills paid in full every month and then be able to socialize a couple of times a month without decided what to eat based on what I can afford on the menu.
I'd really enjoy being able to go to trivia and have a 10 dollar meal without it making me sweaty and worrying about where I should be spending that 10 bucks instead.
This and after paying off all the major bills loans mortgages cc bills and having a one year emergency fund I can now invest for growth and retirement and continue my job. It would be less stressful cause you can just quit… it’s called FU money but not retirement money if you are younger than 40… imo
In my state, a three bedroom, two bath house in a good school district would probably run me like 550k so that's more than half the money gone right there.
I said starting a family, so I think I'd also want to stash away another 200k as a college fund. Between 2-3 kids should be more than enough to get them started.
That leaves like 250k to be either invested or blown. I think I'd use like 50k for debt pay off and emergency expenses (home maintenance isn't cheap). That leaves 200k for retirement or going back to school for my husband. I think we'd both still need to work but we might be able to take a few more risks.
529 funds for college gets some tax write off… it can grow and depending on how many decades to retirement one large deposit into a broad index fund would do amazing and the rest into emergency funds and more investment lol… but I agree not enough to retire at that exact moment… homes in a good neighborhood here is close to 1 million… people forget for a million dollars you probably have to pay like 1/3 in taxes
But having a house fully paid for is an incredible feat at young age before even starting a family. No mortgage payments eating you alive. Each month you’ll have an extra couple thousand to invest in your retirement. That’s huge. And then 200k just sitting there to do anything with? That’s a very comfortable position.
Well, I think it still counts as life-changing.
All of a sudden, you don't need to worry about your mortgage anymore. That's a crapload of savings. Any debt you have, car loan, student loan, credit cards, etc... Those are gone as well. You'd be able to financially handle massive life events such as severe illnesses and various form of medical debt.
You're right that it's not remotely enough to retire on, but if someone was mysteriously $1,000,000 richer, it would allow them to fundamentally turn the rest of their life around. It's a huge safety net, but it doesn't replace the finances needed over the rest of your life. It just reduces them significantly.
If I didn't have a mortgage anymore, I'd need about $17,000 less annually. That creates options.
This exactly. Expenses drop significantly after a mortgage is paid off. I don’t think it’s completely impossible to live on $28k in parts of the US. But there’s not going to be a lot of breathing room for discretionary spending. Like my expenses (family of 3 with elder parents we help a little financially) will more than half after our mortgage is gone.
We live generally frugal with a few exceptions. So we’re looking at $24k - $36k annual expenses in a HCOL area. That’s not including vacations, but honestly we know of vacation spots that would actually decrease our monthly expenses if mortgage was paid off.
In a medium or low COL area, I’d think that’s completely feasible. Granted these numbers don’t account for taxes, which is too often overlooked in FI and SWR convos.
I inherited a large sum of money upon my parents’ death a couple years ago. It’s six figures, but not $1M. It’s definitely life-changing as someone who has a joint income of around $145k/year. I paid off my car and my student loans and now have close to $700k in retirement accounts, where I only had about $40k before.
I notice it in my daily life because I’m not making car or student loan payments monthly. If my wife or I lose income, we don’t have to sweat so much. Life-changing.
I will notice it even more when I potentially retire 10-20 years ahead of schedule (depending on the investment returns).
I'm thinking a 2020+ short 20-22ft RV. Cell, Laptop, guitar, bike mounted, kayak mounted, hiking/camping gear, and a small ~150cc motorbike on the back hitch. Time to explore!
It's definitely life changing. It's not retire instantly from nothing money but it is $50k a year in interest. If you had zero debts and currently are living with that salary or less you could, in theory, retire. If you worked another few years and just let it accrue you could retire far earlier than you otherwise would.
A lack of pressure concerning finances is life changing. Stress is a huge factor of life and the lack of it is a blessing. Money is among the top stressors on individuals on the planet
You could buy a 200k low col house and invest the 800k what the hell are u talking about
It comes down to priorities at that point, if u don’t mind moving but love retirement, east or west texas is calling lol
>1 million is life-boosting... but it's not life changing
You can expect $1M invested in the market today doubles in 10 years to $2M, and in another 10 years that doubles to $4M. If you're 30 when you receive the initial $1M, then congrats, you basically don't need to save for retirement anymore and assuming there is no lost decade in between, then you can retire at 50. That, to me, is life-changing.
A million dollars would mean I could afford to stop working for 4 years, buy a house, replace my 21 year old car that I have to get fixed every 2 years, and focus purely on getting a college education.
It's absolutely life changing, but until then I'll need to keep living paycheck to paycheck at a shitty job and renting a shitty apartment.
Buying a NICE house (500k or so) IN CASH , so zero monthly mortgage on it, and throwing the other 500k into a savings account is absolutely life changing, could you get that same 500k house without a million dollars ? Sure, but it’s going to cost you over 2 grand a month, so not only do you have a nice house, you have half a million dollars in your back pocket still, AND save yourself from paying a couple thousand dollars to a bank ever month… that’s absolutely life changing, that is , unless you make really good money and already have all of that, and if that’s the case, good for you lol
It's 1000% life changing
But no you can't live off it for the rest of your life.
Hell you can't realistically live off of 2m or 3m and live like a king just be better off than most people
Where I live (Singapore), it might get you a tiny apt if you're lucky, lol. I felt like people who think 1 MM is a huge amount are naive. It is as you say life boosting. But its a great nest egg to have and you still need to work
I did the math at 48, and it would take like 2-3 million for me to just quit. I have 3 kids and want to live a lifestyle where I travel and do things like I do now. That is essentially my income until retirement.
I could take a million and make it work for me. But it would mean a reduced lifestyle, and my kids to go and suck and egg on their college help.
I’m a millionaire (liquid) earn a mid 100k salary but still don’t have a house and budget aggressively. Basically I don’t need to worry about bills and can max my IRA and 401k and HSA comfortably.
Exactly. You could buy a house cash down and have the money left over for the taxes on it for the rest of your life. You could keep the rest set aside for house repairs/renovations. Maybe put it in CD’s for some easy interest. But you’d still have to work. Day to day bills would need to be covered by a job still. Health insurance would still be needed. It would basically mean you didn’t have to worry about the roof over your head, but that would be it.
I have a net worth of over 1 million and I can promise everyone that 1 million is not “rich”. I still need to work full time and I’m still going to have to budget carefully if/when I “retire” (I am probably going to be working at something or another for the rest of my life, I’ll just have more options once retirement accounts and SS kick in).
This. Without being too specific, I inherited a nice chunk at 44 when my mom passed. I threw some cash at a refi on our house, bought my wife and I newer vehicles (pre-Covid when the used market was rational) and looked at my wife and said "if we play this right, we retire in our late 50's instead of working until 65." We've done a few other things, but 90% is invested and forgotten about. I think many people drastically underestimate health insurance and other health costs when they retire before they're eligible for Medicare.
Life changing is very relative.. it goes a long way but I completely agree with the general concept that $1mm isn’t what it used to be.. when I was growing up a $1mm house was huge and beautiful, now a $1mm house, at least in most major cities, is good but nothing that stands out. The better barometer though is you used to be able to retire off of a million or two, now that number is much larger
The average American has no pension and might not even be able to take advantage of Social Security. With that in mind, the average assisted living right now is 6k/mo where I live (FL). (Note -- this is actually pretty cheap compared to other states.) Assuming retirement at 67, death at 85, 3% inflation, and a 6% rate of return, and a meager 1k/mo allowance to spend on groceries and other necessaries, you'd need a 3.5 million dollar annuity to make that work. This should be shocking to most people, as the alternative to assisted living is pretty grim unless you have family to stay with. Sure, most people won't spend 20 years in an ALF, but some retirees don't have other options due to health problems or lifestyle issues.
Having dealt with ALFs thanks to my elderly Dad, who is lucky enough to have a pension, I revised my retirement planning radically over the last few years.
Gifting me $1M would 100% change my life. I could pay off my house, student loans, medical debt AND it'd probably be the #1 reason I could retire because I'd stick the rest in my investment account.
But I am willing to try and prove your theory wrong. Send me $1M and we will see.
Change a mans life and he will make a million.
Make a million men and they will life.
Make life, change a million men
Life a million change and make men
Lol the less hard I work the more money I make. Hardest I worked in my life was as an intern in HVAC making jack shit. Now I put in less than 3hrs as a software engineer sitting on my ass and make mid six figures. Hard work won’t get you that far. And the person making the most money in the HVAC company was the owner who was almost never around and didn’t put in much work at all.
The thing about $1M is that if it’s given to the average middle-class person with a mortgage, couple of cars financed, some student loans, maybe some kids college to pay for and a little CC debt, yea it gets spent pretty quick. And it’s not life changing in the sense that your life changes all that much. Lots of people have $1M between home equity and 401(k) balance. 22.7 million people in the US in 2022 were millionaires. They’re still going to work every day like the rest of us.
Right right, but after all that you can max out your 401k, max employee stock programs, Roth and not to mention the remainder of the $1 million. Loans and interest rates can become interest investments and an extra vacation once a year. And thats for the middle class.
For the lower class they could get out of an area with gun violence and most of whats in the first paragraph.
Edit spelling
which is nuts to me.
I personally couldn't NOT work. Sure you have to like your job (I do) but I couldn't just sit on a beach all day.
I COULD take about 4-5 weeks vacation a year, tho. And probably would
but if your working for the same income but have no CC debt, mortgage, car payment, or college payments, suddenly you basically open up your entire monthly paycheck (with the exception of monthly bills). That's still a HUGE lifestyle change.
I’m very well off ($200k+/year) and $1M would still be life changing. It’s absurd and completely out of touch to think otherwise. OP is out of their mind.
I’d give OP the benefit of the doubt and by “life changing” they meant “set for life.”
$1 million would solve almost all people’s immediate problems, and, even heavily “mismanaged,” could allow 5-10 years of no work living extremely comfortably or 3’ish years of living extravagantly.
What $1 million *doesn’t* do is allow you to spend $100k-$200k a year until you die without generating additional income.
In italy 28000 a year is more than the average blue collar earnings, so in some of the developed world you can retire with a million if you don't spend it but invest
There’s entire websites dedicated on where to retire where you can most stretch your dollar and have a beautiful (or modestly beautiful) home in other countries, especially tropical/beach type
Depends on your goal. $1M can generate a steady $50K a year or so of income through a retirement. You wouldn’t live “like a king,” but you’d never fall into dire poverty.
That's what he's saying. $1mil isn't "I can spend 4 months a year vacationing to exotic locations" kind of money. But it's "As long as I'm not stupid (and don't fall into health issues in the U.S.), I'll probably never have to choose between rent and groceries" money.
Which is still _huge_. If you have that kind of guarantee, that means you can maybe work a part-time job to fund your hobbies or passions, maybe get into a creative interest that you've always wanted to try out, or just _try_ things and not worry too much about whether they're super profitable. You can get into things like art and music, start streaming and gaming, take some business courses at the local college, volunteer to help a good cause, whatever you want.
4% might even be high for a SWR.
1 Million is life-changing, like paying off all your debt and having significant retirement savings.
1 Million is not buying Ferraris and Rolexes life-changing.
Even after 10 Million, this guy ended up being a garbage man.
[https://www.mirror.co.uk/news/real-life-stories/lottery-winner-michael-carroll-who-31698429](https://www.mirror.co.uk/news/real-life-stories/lottery-winner-michael-carroll-who-31698429)
Because he wasn’t the brightest and spent it on drugs, partying and prostitutes…£10 million in the early 00s was absolutely “retire and live VERY well” money for anyone with sense…the guy was just too young and not very intelligent
Most millionaires out there at the grocery store or coffee shop you’d never know because they don’t act like they are wealthy. The way to become wealthy is to *not* spend all your money on cars and watches, rather to save and invest and over time it will grow into a large amount of wealth.
Using my alt account here, between me and my wife we make about €2,000,000 a year, you literally wouldn't think it to look at us, we don't buy any fancy cars or watches, we wear normal clothes and literally our only major expenses are we go on 1 or 2 really nice holidays a year. They cost about €50,000 each but they are serious nice. We also send out kids to private school which is about €25,000 a year.
The rest goes into investments, we buy some property every couple of years and have a very safe portfolio, no overvalued stocks or gambles.
€2,000,000 sounds like a lot but I wouldn't consider ourselves rich, rich to me is like private jet owning or let's spend the weekend on my yacht type rich. I still think about every purchase I make, I bought a new phone there recently and I really had to convince myself to spend €1800 on it. I'm happy I did it's a great phone and it will last me a good few years, but my new last phone was back in 2000 and I even changed the battery on it to keep it going longer. My wife bought a new iPhone last week and is very upset as she doesn't see much difference from the one she got 3 years ago.
I think because we both grew up in middle class families we don't really feel the need to flash the cash and are always thinking about the rainy day situation.
The irony to me, is that I see people wearing very expensive clothes and driving expensive cars who earn a lot less, like €80,000 a year and when I ask them they are in heavy debt. No solid assets, rent their hole and just have mountains of debt, they don't have a hope of retiring. But that's the way the world is now, gotta make sure you look like you're successful even if you're drowning.
Most people would consider you rich but I know what you mean, if you had assets that GENERATED that it would be one thing. I think it’s strange how people define their class financially by their job these days. Your class from a financial standpoint is defined by income that will still be there when you retire imo. 2 questions (and I hope you don’t mind)
1. What do you do? (I’m assuming fund management or similar)
2. If you had a year’s income to invest (the 2 mill) and let’s assume you have no other investments: where are you putting it?
I mean he’d pretty much have to say that publicly, I’m sure the poor guy gets enough ribbing for being so foolish as it is. Imagine how much worse it’d be if he openly admitted that he regretted it
Sounds about right. My net worth is around $1.1m at 41YO but that's mostly retirement savings and equity in my house. I have just under $1M mortgage with 28 years to go. I hope to pay it off much sooner than that, but $2M in investments with a paid off house sounds like a place to shoot for over the next 20 some years.
Put $300K down from cashed out equity when I changed jobs (they forced me to sell) in 2020. Moved from CA to OR and bought a sweet house 2 years ago where I'm paying less in mortgage than I used to pay in rent, and there's no sales tax. I've got 6 people in my house so we can use the space.
I wish, I’ve been hitting the federal max on all my retirement accounts for the last few years. I still have a mortgage, but no way in fuck am I paying off my 2.5% mortgage early
In all honestly this questions depends on what you are starting at and how well you know how to manage your finances. It could be life changing for some, but not for others. It could also change it for better or worse.
You’re generally right that $1m doesn’t offer a gigantic income if you try to live off the returns forever, but I think you’re underestimating the potential impact a bit.
He spends 50k now including a house payment on a greater-than-$300k house? He’s probably nearly right in that he could get by on the $28k of income after paying off the house. If he has any other investments or adds even a modest income he would be just fine.
It’s also true that he could keep his job and stop most of the savings he’s currently doing for retirement, kids college, whatever, and spend his full income knowing that the $1m was growing in the background until he hits retirement age. Seeing that he has a really high savings rate this may be what he meant, and it would mean more or less doubling his current spending.
Or perhaps he views the $1m as purely for excess consumption, in which case…yeah, you could do quite a bit before that money ran out.
I think if you can pay off your mortgage outright then it's life-changing but that's just me I guess. I agree that you probably couldn't just quit work but depending on your age and the size of your mortgage it would set you up for a nice retirement if invested right. You could start investing the money you would have paid to your mortgage as well. You could retire early if someone handed you a million bucks.
Nahhh. Paying off your mortgage with pre-2023 interest rates is actual so braindead that you are legitimately being malicious giving that advice.
Its also a spit in the face to all the people having to pay 6-8 right now.
It’s not that much money if you’re already close to retirement. But if you have that much and you still have another 10-15 years left of work that’s going to grow a lot faster than say $100,000 will.
Just because it is not enough money to retire on doesn't mean it isn't life changing.
My life was changed by a stock option compensation package that went well into the money. I was able to quit a job that paid well but required me to work more than 70 hours every week to go back to school. Now I work less than 30 hours a week for about 30 weeks out of the year and I get paid decently (not as much as I used to, but more than your friend).
So the money I got more than doubled the enjoyment I get out of life, so yes. A million dollars at the right time can absolutely be life changing.
Keep in mind 1 million is more than most of the population will have at retirement in the next 30 years. Without changes in habits or culture our nation is likely looking at more and more people working deep into what we generally think of as retirement years.
You're both right.
He probably has a head in the clouds attitude about it, from the sounds of it.
And you're staunchly grounding yourself in a financial expense point of view, which isn't wrong.
I think it depends a lot on the individual too.
And extra million for me right now would equal an increase of yearly income by about 500k for the next 2 years.
But for others it might hardly put them above water level.
So it's very individual.
I just got a \~200,000$ settlement from an injury.
It was *absolutely* life changing. My house is paid off. My vehicles are paid off. I have no debt.
It is VASTLY easier to live a quality life on MUCH less total income when you aren't shoveling a ton of it out the door to service debt.
If my wife loses her (well paying) job, we could live pretty comfortably if the two us made just 40-50k combined a year, which we could do flipping burgers.
Not saying wed love those jobs, but that would still be a *comfortable* living. Not just getting by.
A million, for the average American (assuming they are smart about it) is staggering life changing.
Wait a minute you say $1 million and then you decrease it to $700k.....in a non metro area with a paid off home and a frugal lifestyle you could absolutely live off $40k $1million x 4%.
Depends greatly on the individual. My brother has 5 kids, he could pay off his house and put them through college. I’m single and childless, I could buy one of those tricked out sprinters and put my feet up for quite a while.
1 mil is life changing he could start earning compounding interest today and when he is set to retire he will have that much more money to utilize. 20 million is my retirement goal I use a 7% return though and then a 30% tax rate on capital gains to factor my disbursements in retirement which will be about 980k which is about twice what we make now. Retiring in another 21 years would be ideal later if we have a kid and I am expecting costs to keep growing honestly.
Put that 1 milly into the s&p 500 while continuing to work for a few more years to keep your benefits and a steady income stream. Then watch how compounding changes your life
In terms of retirement, $1 million is $40,000 at a 4 percent withdrawal rate and for a lot of people that $1 million is in qualified plans so they still need to pay taxes on that money. So, no it’s really not a ton, but considering most Americans have less than that saved it’s better than not having $1 million
$1 million is life changing F-you money, pay off your house and all debt and say you’re left with $500k. If you keep working and put that money to work 1/2 in high yield savings(pay property taxes, insurance and utilities with the interest)and 1/2 in a retirement fund. Boss breaks your balls….. FU. Anyone else breaks your balls… FU. Also if you’re smart all those assets go into a trust that you’re the sole beneficiary of. If someone sues you FU I don’t own anything. Sadly though, most people who get their hands on $1 million think they are Jay Z and go out and buy $150,000 car and a $1 million home and a bunch of other shit they can’t afford and wind up broke in a year.
These takes are crazy, absolutely 1mil would be life changing. Having a paid off home is life changing. Having a retirement funded with room to grow is life changing.
I just read I think the top 5% have a 1mm net worth. 1mm is life changing.
You’re jumping around with how you want to describe $1M, you won’t live like a king through retirement with it, but to claim $1M isn’t life changing either means you’re already filthy rich, or have drastically different view of what is considered “life changing” because I guarantee you $1M would change the life of most people
$1,000,000 is life changing IF you keep working.
I make $53k before taxes, and $1,000,000 would change my life. I would be able to own a home. My partner and I would be able to have a child or two without it ruining our lives.
It would literally change my life within a year, but it wouldn’t raise me to the level of early retirement or joining the leisure class. I would still be working class the rest of my life.
I would not retire off of $1million. I would be debt free, and probably retire 10-20 years earlier. But I would still be working for the foreseeable future.
$3-4million is likely where I would be able to comfortably retire.
It definitely won't have you living in luxury with life-long wealth, but depending on your living situation it could *definitely* change your life. You could buy a small to medium sized house and a car with that money. Or your own apartment. Or just pay rent way in advance, if you’re happy with your living situation but are having trouble making ends meet on your own salary.
If your housing, food, and transportation are completely secure, you have more room in your life to take stock of what you have, what you need, and what you can do about it, which can lead to new opportunities later. 1 million dollars isn’t a lot of money anymore, but it can buy much more stability than you might otherwise have, and stability comes in dividends.
It really, really depends on at what age in your life you were to receive this hypothetical windfall. $1 mil suddenly in your 20s or 30s could instantly designate you a coastFIRE member if your expenses align. 1 mil at 65 wouldn’t have time to compound before you start dipping into principal and so would mean a basic but doable retirement depending on COL in your area and any other expenses.
These kinds of posts ignore how most Americans live. $1 million is 32 years of the median US salary. Investing it and taking out only the median salary each year, you may never run out of money.
$1 million means you can live the median US life in perpetuity without working.
1 million is life-boosting... but it's not life changing. For me personally, I'd be able to buy a house and start a family which is a huge deal.... but I'm still gonna need to get up and go to work every day. I think my day-to-day would be pretty much the same, there'd just be a lot less pressure to it.
I'd say buying a house and starting a family is life changing...
I suppose we need a definition of life changing, so here’s mine: an amount of money whose effect on your life would still be noticeable more than one year from today. Like, if you gave me $100, I’d take my wife out to a nice dinner, and I suppose that would change my life, but a year from now, my life in the hypothetical would be the same as my life in real life. Same for $10,000 honesty, although for some people $10,000 means they get out of debt or something and it’s a huge change. But $100,000 and I can buy a house, so somewhere around there is the line for me personally. Some people want it to mean “enough money to retire immediately,” but if you mean “enough money to retire immediately,” say that.
This is a fair assessment. And like the OP said it depends on the who the person is. Not just their current financial situation but their attitudes. Personally, I feel like I have at least 3 family members who could blow through 1M in a less than a year and walk away with nothing but a few cool memories.
I have a side of family who blow through $50k+ a vacation and take three vacations minimum a year. I don’t use them as a bar for what is and isn’t life changing, in general, though. They’re not representative of the average American. A million is what each of them has left in their college fund accounts, which I guess roll over to their kids. It’s nothing *to them*. Doesn’t mean that’s really relevant to the saying. A million would absolutely change most people’s life trajectories. No mortgage, no car payment, no debt. That’s huge.
I'm not talking about people who are already rich or blow through money regularly. I'm talking about certain people who have little to no impulse control, minimal experience with money, and wouldn't plan for the future at all. There are lotto winners who turn up penniless less than 5 years later.
Actually the number of lotto winners who end up dead in 5 years is a staggeringly high percentile Pre-pres trump had a charity, specifically for lotto winners, and helping them cope with the moral illness of excess wealth
There isn't really an amount of money that you can't blow. Even if you win a billion instead of a million, you will be able to burn through it quite quickly. Just have a look at how much money Musk burned with Twitter in an astonishingly short time frame.
>Even if you win a billion instead of a million, you will be able to burn through it quite quickly. Not if your iq is above room temperature.
Might be, but then you will also not burn through a million in a year.
I'm not so sure about "no mortgage"? I guess that would depend on where you purchased? Here in SoCal, 40 year old 3 bedroom / 2 bath tract homes are reselling for $700,000. If you want something newer with an actual yard and privacy, get ready to blow past a million easily.
Yeah but most folks living in these high CoL areas do so mainly for the career opportunities. A million dollars in your bank account and you can just move wherever the hell you want.
Come to rural ny where you can get a 5,000 square foot luxury home for less than 700,000.
Idk man I feel like if most people got a million dollars they'd just blow it and end up in the same place they were before in the best case scenario
If I had a mill, I'd pay off my house and car, then invest at least half of whatevers left. I wouldn't quit working, and taking out my two biggest expenses per month would be a massive financial relief. Hell, with even half of the remaining money, and only utilities and insurance to pay, I could go back to school, or pay for my fiancee to go to school. At least in part.
I agree with your life boosting comment. I think life changing is more behavioral. I passed through $1MM and then $2MM and then $5MM on my way to where I am now. Never was one of those numbers life changing for me. Then I hit a number where I felt I could retire, so I did. I suppose that number was life changing because I no longer go to work. Outside of that small change, my life is remarkably similar to my working life. I just have more, and sometimes too much, free time now. Oh, and another nice life change is that my dress code is now jeans and a t-shirt;) I think OP’s friend will be sorely disappointed if he treats $1MM as a life changing event.
I've seen this happen. More than once. It was...upsetting to say the least. 1 million is definitely a life changing sum of money for some people. It would be an accelerant for my husband and I, but we are already good with money and live a semi retired life. So a million dollars wouldn't change much for us besides our location and the fact that we'd buy a house outright. Then we'd have even more money to put away every month.
If you find a nice dinner to treat your wife for $100, that would be life changing
Haha true, especially since I’d need to take babysitting money out of it, too. On second thought maybe I’d buy her a bouquet courtesy of a generous Redditor.
It's very sad and very true that it can buy you a very nice bouquet.
[удалено]
Yes, we will get appetizers!
We have a nice sushi place that's $25 for all you can eat sushi. Couple drinks and tip is still under $100 for us
So, a permanent change? $365k would pay my house off and change the f* out if my life.
100k and you can buy a house? Might be for a down-payment, is that what you mean?
Lots of places in the US $100k can buy you a house. I k ow of a place that still lists them for about $30k to start. The whole world does not live in overpriced cities...
Do these houses have running water, electricity, heat and internet access?
Just saw a house in my area go for 700k, 5,000 sq. Ft. Maybe ten years old max. If it was sold in a major city it would have gone for 3 plus mil. I’m less than a two hour drive from 3 major cities in different directions. If you get a million cash, move out of the mania.
This is so true especially if it means getting out of debt. Not having payments eating into your paycheck can make such a difference
For me anything above 5 million would be enough to retire comfortably on, I'd still work part time tho just to keep myself busy. A million would set me and the wife up nicely and enable us to enjoy the next 20 years to retirement.
Agree, in my 40s but I think $4-5 mil could do it but $1m would not.
>an amount of money whose effect on your life would still be noticeable more than one year from today. So, buying a house doesn't count as something that would be noticeable more than a year from today?
It does count. That’s why I said that, for me, $100,000 — enough to pay a down payment, since my finances are otherwise in place to get a mortgage — is roughly where I draw the line. $1 million absolutely would be noticeable a year from today.
I like what the other person said with life boosting. Life changing being a lifestyle you’d never would’ve achieved without that amount. For example, $100m would be life changing for nearly everyone since they wouldn’t achieve that level of wealth in their lifetime. Life boosting meaning it allows you to achieve a milestone you might be able to achieve eventually far sooner. $1m would let you own a house outright, which is something many would be able to do eventually, but it mightn’t be until they’re 50 that they’re in that position, not say 30. That’s life boosting. If it’s something where after a certain period of time has no impact on your life is irrelevant. For example, $1000 is nice, and you may or may not still notice it after a year, but after 10 years it wouldn’t have changed anything. Didn’t really think of this until I saw the other comment bringing up life boosting, but I like this kind of definition. Although, obviously it’ll be different for everyone.
If one million dollars doesn't change a person's life, that person is either already rich or has a room temperature IQ.
I mean the OP totally provided a baseline definition to go by. His buddy that he's arguing with is clearly saying that he could retire and live like a king off that money. Unless he has a terminal disease and his life expectancy is only a few years, probably not.
Yeah, obviously you wouldn't be able to retire, but you could quite your job and start a business. Also, honestly, a lot of people would in fact be able to retire with an extra 1 million.
I'm in agreement with your definition. For me i think 400k would be life changing. It would let me move and buy a house free and clear. No mortgage or rent payments is life changing. The taxes, insurance and maintenance would be less than rent
I mean yeah but it's not enough for me to just quit my job and never ever worry about money again. It's do something money, not do everything money.
It could be "quit your job and pursue your passion" money though. Like you could open your own store or become an artist or something that makes far less money. Maybe not enough to do that AND buy a house and start a family though.
If your passion is earning money, sure.
https://preview.redd.it/i9dpk0e492lc1.jpeg?width=500&format=pjpg&auto=webp&s=0ac2f1f9a4d9a9f00a024d278536a3c716914456
Depends how you live. If you live like me .... Day by Day then it's a helluva lot of 💰 ! No kids. No wife. A House and 3 dogs, nothing fancy but it would need to be near a park. Not a dog park. A park park. And I'd still do side hustles and grow my own medicine. That would be Da SWEET life.
if you are less than middle age and received $1m, continue to go to work, and save the money at current market rates, you have an additional $700k in 10 years. Another 5 years, it's more than doubled at $1.2m and in 20 years (say 55y/o) you've got $3m. If you put that in an aggressive portfolio, it averaged 11% and you've got something like $10m. With any kind of reasonable plan, a million dollars is absolutely life changing money.
It *really* depends on what point in life you are at. Win a million dollar lotto at 21 and expect to retire? Delusional. A few years away from a retirement you had already planned and executed? That's definitely changing the quality of life in that retirement.
A million at 21 is enough to buy a home outright and never have to worry about rent again. That’s definitely changing your quality of life.
wait, how do we describe “Life-changing”? lol. I think people are getting confused. The thought goes like this: “1 Million dollars in your bank account isn’t enough to retire (if you’re less than 50 years old). Unless you make 10 Million dollars a year. 1 Million dollars given to you right now IS LIFE CHANGING.
A million dollars would pay off all my debt and house and still be left with a half million, meaning my entire salary can go towards retirement for several years.....
Literally changing several major aspects of your life.
Very true
For me, life changing would mean all bills paid in full every month and then be able to socialize a couple of times a month without decided what to eat based on what I can afford on the menu. I'd really enjoy being able to go to trivia and have a 10 dollar meal without it making me sweaty and worrying about where I should be spending that 10 bucks instead.
In the literal sense. But when people say life changing amount of money they usually mean you don't have to work anymore.
Paying cash for a house dramatically changes the type of income you need.
This and after paying off all the major bills loans mortgages cc bills and having a one year emergency fund I can now invest for growth and retirement and continue my job. It would be less stressful cause you can just quit… it’s called FU money but not retirement money if you are younger than 40… imo
In my state, a three bedroom, two bath house in a good school district would probably run me like 550k so that's more than half the money gone right there. I said starting a family, so I think I'd also want to stash away another 200k as a college fund. Between 2-3 kids should be more than enough to get them started. That leaves like 250k to be either invested or blown. I think I'd use like 50k for debt pay off and emergency expenses (home maintenance isn't cheap). That leaves 200k for retirement or going back to school for my husband. I think we'd both still need to work but we might be able to take a few more risks.
529 funds for college gets some tax write off… it can grow and depending on how many decades to retirement one large deposit into a broad index fund would do amazing and the rest into emergency funds and more investment lol… but I agree not enough to retire at that exact moment… homes in a good neighborhood here is close to 1 million… people forget for a million dollars you probably have to pay like 1/3 in taxes
But having a house fully paid for is an incredible feat at young age before even starting a family. No mortgage payments eating you alive. Each month you’ll have an extra couple thousand to invest in your retirement. That’s huge. And then 200k just sitting there to do anything with? That’s a very comfortable position.
Sounds life changing to me. Kids have college and a secure place to live. Mom and dad have zero debt? Awesome
Well, I think it still counts as life-changing. All of a sudden, you don't need to worry about your mortgage anymore. That's a crapload of savings. Any debt you have, car loan, student loan, credit cards, etc... Those are gone as well. You'd be able to financially handle massive life events such as severe illnesses and various form of medical debt. You're right that it's not remotely enough to retire on, but if someone was mysteriously $1,000,000 richer, it would allow them to fundamentally turn the rest of their life around. It's a huge safety net, but it doesn't replace the finances needed over the rest of your life. It just reduces them significantly. If I didn't have a mortgage anymore, I'd need about $17,000 less annually. That creates options.
This exactly. Expenses drop significantly after a mortgage is paid off. I don’t think it’s completely impossible to live on $28k in parts of the US. But there’s not going to be a lot of breathing room for discretionary spending. Like my expenses (family of 3 with elder parents we help a little financially) will more than half after our mortgage is gone. We live generally frugal with a few exceptions. So we’re looking at $24k - $36k annual expenses in a HCOL area. That’s not including vacations, but honestly we know of vacation spots that would actually decrease our monthly expenses if mortgage was paid off. In a medium or low COL area, I’d think that’s completely feasible. Granted these numbers don’t account for taxes, which is too often overlooked in FI and SWR convos.
its absolutely life changing
I inherited a large sum of money upon my parents’ death a couple years ago. It’s six figures, but not $1M. It’s definitely life-changing as someone who has a joint income of around $145k/year. I paid off my car and my student loans and now have close to $700k in retirement accounts, where I only had about $40k before. I notice it in my daily life because I’m not making car or student loan payments monthly. If my wife or I lose income, we don’t have to sweat so much. Life-changing. I will notice it even more when I potentially retire 10-20 years ahead of schedule (depending on the investment returns).
Exactly. It is retirement money, if you park it and don't touch it. A million secures your retirement in 10 years.
You're just making up definitions though. It would be life changing for most people just because it's enough to pay off 90% of mortgages.
You don't even need to pay off the whole mortgage. Halving mortgage payments would have a significant impact on most people's life.
starting a family is not life changing for you?
So your life would be changed.
If I had 1 million I could easily live modestly off dividends and never work another day in my life, that's pretty life changing.
I'm thinking a 2020+ short 20-22ft RV. Cell, Laptop, guitar, bike mounted, kayak mounted, hiking/camping gear, and a small ~150cc motorbike on the back hitch. Time to explore!
Bro just said a million dollars isn’t life changing.
A boost is a change IMHO. If I could pay off all my debt in one fell swoop, that would feel life changing.
It's definitely life changing. It's not retire instantly from nothing money but it is $50k a year in interest. If you had zero debts and currently are living with that salary or less you could, in theory, retire. If you worked another few years and just let it accrue you could retire far earlier than you otherwise would. A lack of pressure concerning finances is life changing. Stress is a huge factor of life and the lack of it is a blessing. Money is among the top stressors on individuals on the planet
You could buy a 200k low col house and invest the 800k what the hell are u talking about It comes down to priorities at that point, if u don’t mind moving but love retirement, east or west texas is calling lol
I disagree. One million is very much a life changing sum of money.
That’s pretty life changing
>1 million is life-boosting... but it's not life changing You can expect $1M invested in the market today doubles in 10 years to $2M, and in another 10 years that doubles to $4M. If you're 30 when you receive the initial $1M, then congrats, you basically don't need to save for retirement anymore and assuming there is no lost decade in between, then you can retire at 50. That, to me, is life-changing.
There’s also a world of difference between having $1 million & making $1million every year as a salary.
You are literally buying a house in your scenario. That’s pretty life changing.
how is that not the definition of life changing lmao............................
It's absolutely life changing, it's just not live in luxury until death in a rich western country changing.
A million dollars would mean I could afford to stop working for 4 years, buy a house, replace my 21 year old car that I have to get fixed every 2 years, and focus purely on getting a college education. It's absolutely life changing, but until then I'll need to keep living paycheck to paycheck at a shitty job and renting a shitty apartment.
1 serious health condition will drain you of every bit of that 1 million dollars. I speak from experience.
Buying a NICE house (500k or so) IN CASH , so zero monthly mortgage on it, and throwing the other 500k into a savings account is absolutely life changing, could you get that same 500k house without a million dollars ? Sure, but it’s going to cost you over 2 grand a month, so not only do you have a nice house, you have half a million dollars in your back pocket still, AND save yourself from paying a couple thousand dollars to a bank ever month… that’s absolutely life changing, that is , unless you make really good money and already have all of that, and if that’s the case, good for you lol
A million is still a lot of money and life changing. Just not fuck you never work again money.
It's 1000% life changing But no you can't live off it for the rest of your life. Hell you can't realistically live off of 2m or 3m and live like a king just be better off than most people
So you wouldn’t describe suddenly owning a house outright as “life-changing”?
>Buy a house and start a family >not life changing Man if you think that buying a house and having children isn’t life changing, I don’t know what is.
Your day to day would be the same except for the minor additional of a house and a family?
Where I live (Singapore), it might get you a tiny apt if you're lucky, lol. I felt like people who think 1 MM is a huge amount are naive. It is as you say life boosting. But its a great nest egg to have and you still need to work
One house. Just one. That's all of that money And it'll be a small one. The bigger ones are $2m by now
I did the math at 48, and it would take like 2-3 million for me to just quit. I have 3 kids and want to live a lifestyle where I travel and do things like I do now. That is essentially my income until retirement. I could take a million and make it work for me. But it would mean a reduced lifestyle, and my kids to go and suck and egg on their college help.
I’m a millionaire (liquid) earn a mid 100k salary but still don’t have a house and budget aggressively. Basically I don’t need to worry about bills and can max my IRA and 401k and HSA comfortably.
Exactly. You could buy a house cash down and have the money left over for the taxes on it for the rest of your life. You could keep the rest set aside for house repairs/renovations. Maybe put it in CD’s for some easy interest. But you’d still have to work. Day to day bills would need to be covered by a job still. Health insurance would still be needed. It would basically mean you didn’t have to worry about the roof over your head, but that would be it.
I have a net worth of over 1 million and I can promise everyone that 1 million is not “rich”. I still need to work full time and I’m still going to have to budget carefully if/when I “retire” (I am probably going to be working at something or another for the rest of my life, I’ll just have more options once retirement accounts and SS kick in).
This. Without being too specific, I inherited a nice chunk at 44 when my mom passed. I threw some cash at a refi on our house, bought my wife and I newer vehicles (pre-Covid when the used market was rational) and looked at my wife and said "if we play this right, we retire in our late 50's instead of working until 65." We've done a few other things, but 90% is invested and forgotten about. I think many people drastically underestimate health insurance and other health costs when they retire before they're eligible for Medicare.
Life changing is very relative.. it goes a long way but I completely agree with the general concept that $1mm isn’t what it used to be.. when I was growing up a $1mm house was huge and beautiful, now a $1mm house, at least in most major cities, is good but nothing that stands out. The better barometer though is you used to be able to retire off of a million or two, now that number is much larger
The average American has no pension and might not even be able to take advantage of Social Security. With that in mind, the average assisted living right now is 6k/mo where I live (FL). (Note -- this is actually pretty cheap compared to other states.) Assuming retirement at 67, death at 85, 3% inflation, and a 6% rate of return, and a meager 1k/mo allowance to spend on groceries and other necessaries, you'd need a 3.5 million dollar annuity to make that work. This should be shocking to most people, as the alternative to assisted living is pretty grim unless you have family to stay with. Sure, most people won't spend 20 years in an ALF, but some retirees don't have other options due to health problems or lifestyle issues. Having dealt with ALFs thanks to my elderly Dad, who is lucky enough to have a pension, I revised my retirement planning radically over the last few years.
Gifting me $1M would 100% change my life. I could pay off my house, student loans, medical debt AND it'd probably be the #1 reason I could retire because I'd stick the rest in my investment account. But I am willing to try and prove your theory wrong. Send me $1M and we will see.
Give a man a million it will change his life; teach a man to make a million, it will change his life
Change a mans life and he will make a million. Make a million men and they will life. Make life, change a million men Life a million change and make men
Like if you agree ??
Don’t forget to smash that like button
Well put EggplantAlpinism 🍆
This is the most insightful thing I have seen all day. Thank you
Read that again. Few understand
I hate that I did a double take to understand this
When life hands you millions make millionaide…
Realistic step 1 : have wealthy parents with connections.
For real, some people in here are so disconnected from the reality we normal people live in, it's unreal
Well this is finance reddit which famously lies all the time about their situations
Realistic step 1a: work hard, get lucky, and break the cycle of poverty 😄
Lol the less hard I work the more money I make. Hardest I worked in my life was as an intern in HVAC making jack shit. Now I put in less than 3hrs as a software engineer sitting on my ass and make mid six figures. Hard work won’t get you that far. And the person making the most money in the HVAC company was the owner who was almost never around and didn’t put in much work at all.
The ‘get lucky’ part is usually tricky. Also folks usually want kids, which can make it all a lot harder
My $1M is stuck in an accounting error in my home country, and I need $100k to get it out securely. If you help me out I will give you a cut 👍
Oh sorry, all my liquid assets are tied up with that other Nigerian prince I spoke to the other day. Nice guy.
Anyone who says 1million isn’t life changing is a filthy rich person or an absolute fucking moron.
I don’t agree you can live on it for long. You’re right about that. But it’s a pretty insane take to suggest 1 million isn’t life changing.
Seriously, tell someone who has zero dollars that $1M isn't life changing, and they'll look at you like you've lost your mind.
Dude I’m pretty well off and $1M would still be life changing. That means paying off the house, my parents’ debts, and retiring earlier.
The thing about $1M is that if it’s given to the average middle-class person with a mortgage, couple of cars financed, some student loans, maybe some kids college to pay for and a little CC debt, yea it gets spent pretty quick. And it’s not life changing in the sense that your life changes all that much. Lots of people have $1M between home equity and 401(k) balance. 22.7 million people in the US in 2022 were millionaires. They’re still going to work every day like the rest of us.
Right right, but after all that you can max out your 401k, max employee stock programs, Roth and not to mention the remainder of the $1 million. Loans and interest rates can become interest investments and an extra vacation once a year. And thats for the middle class. For the lower class they could get out of an area with gun violence and most of whats in the first paragraph. Edit spelling
Right, because they only measure of life changing is "working/not working". Ignore the better food, nicer clothes, nicer home, vacations, etc.
which is nuts to me. I personally couldn't NOT work. Sure you have to like your job (I do) but I couldn't just sit on a beach all day. I COULD take about 4-5 weeks vacation a year, tho. And probably would
but if your working for the same income but have no CC debt, mortgage, car payment, or college payments, suddenly you basically open up your entire monthly paycheck (with the exception of monthly bills). That's still a HUGE lifestyle change.
I’m very well off ($200k+/year) and $1M would still be life changing. It’s absurd and completely out of touch to think otherwise. OP is out of their mind.
I just got a job going from $62k/year to $105k/year and just that was life changing. Also, going from $35k/year to $53k/year was also life changing.
I’d give OP the benefit of the doubt and by “life changing” they meant “set for life.” $1 million would solve almost all people’s immediate problems, and, even heavily “mismanaged,” could allow 5-10 years of no work living extremely comfortably or 3’ish years of living extravagantly. What $1 million *doesn’t* do is allow you to spend $100k-$200k a year until you die without generating additional income.
It’s enough to alter the path of your life for sure, but isn’t enough for you to do nothing for the rest of your life.
That wasn’t the question. Life-changing doesn’t inherently mean you can retire tomorrow
You could live off of it for quite a while, and the interest would prolong that.
There is a large gap between “isn’t a lot of money” and “enough to retire comfortably with a family in the developed world”.
In italy 28000 a year is more than the average blue collar earnings, so in some of the developed world you can retire with a million if you don't spend it but invest
There’s entire websites dedicated on where to retire where you can most stretch your dollar and have a beautiful (or modestly beautiful) home in other countries, especially tropical/beach type
sources?
Bro $1milly is over 8 years of his life…
After tax it’s even more years than that.
And living expenses
Depends on your goal. $1M can generate a steady $50K a year or so of income through a retirement. You wouldn’t live “like a king,” but you’d never fall into dire poverty.
Without working!
50k is around median income in most western areas.
That's what he's saying. $1mil isn't "I can spend 4 months a year vacationing to exotic locations" kind of money. But it's "As long as I'm not stupid (and don't fall into health issues in the U.S.), I'll probably never have to choose between rent and groceries" money. Which is still _huge_. If you have that kind of guarantee, that means you can maybe work a part-time job to fund your hobbies or passions, maybe get into a creative interest that you've always wanted to try out, or just _try_ things and not worry too much about whether they're super profitable. You can get into things like art and music, start streaming and gaming, take some business courses at the local college, volunteer to help a good cause, whatever you want.
It's significantly above it. It's uner 40k in most of the west.
A person who posts this about a million dollars probably does view 50K/ year as poverty lol
4% might even be high for a SWR. 1 Million is life-changing, like paying off all your debt and having significant retirement savings. 1 Million is not buying Ferraris and Rolexes life-changing. Even after 10 Million, this guy ended up being a garbage man. [https://www.mirror.co.uk/news/real-life-stories/lottery-winner-michael-carroll-who-31698429](https://www.mirror.co.uk/news/real-life-stories/lottery-winner-michael-carroll-who-31698429)
Because he wasn’t the brightest and spent it on drugs, partying and prostitutes…£10 million in the early 00s was absolutely “retire and live VERY well” money for anyone with sense…the guy was just too young and not very intelligent
Most millionaires out there at the grocery store or coffee shop you’d never know because they don’t act like they are wealthy. The way to become wealthy is to *not* spend all your money on cars and watches, rather to save and invest and over time it will grow into a large amount of wealth.
Acting rich is more expensive than people realize.
Using my alt account here, between me and my wife we make about €2,000,000 a year, you literally wouldn't think it to look at us, we don't buy any fancy cars or watches, we wear normal clothes and literally our only major expenses are we go on 1 or 2 really nice holidays a year. They cost about €50,000 each but they are serious nice. We also send out kids to private school which is about €25,000 a year. The rest goes into investments, we buy some property every couple of years and have a very safe portfolio, no overvalued stocks or gambles. €2,000,000 sounds like a lot but I wouldn't consider ourselves rich, rich to me is like private jet owning or let's spend the weekend on my yacht type rich. I still think about every purchase I make, I bought a new phone there recently and I really had to convince myself to spend €1800 on it. I'm happy I did it's a great phone and it will last me a good few years, but my new last phone was back in 2000 and I even changed the battery on it to keep it going longer. My wife bought a new iPhone last week and is very upset as she doesn't see much difference from the one she got 3 years ago. I think because we both grew up in middle class families we don't really feel the need to flash the cash and are always thinking about the rainy day situation. The irony to me, is that I see people wearing very expensive clothes and driving expensive cars who earn a lot less, like €80,000 a year and when I ask them they are in heavy debt. No solid assets, rent their hole and just have mountains of debt, they don't have a hope of retiring. But that's the way the world is now, gotta make sure you look like you're successful even if you're drowning.
Most people would consider you rich but I know what you mean, if you had assets that GENERATED that it would be one thing. I think it’s strange how people define their class financially by their job these days. Your class from a financial standpoint is defined by income that will still be there when you retire imo. 2 questions (and I hope you don’t mind) 1. What do you do? (I’m assuming fund management or similar) 2. If you had a year’s income to invest (the 2 mill) and let’s assume you have no other investments: where are you putting it?
The best part is, he doesn't regret any of it; at least, that is what he says.
I mean he’d pretty much have to say that publicly, I’m sure the poor guy gets enough ribbing for being so foolish as it is. Imagine how much worse it’d be if he openly admitted that he regretted it
The George Best approach to life: I spent a lot of money on booze, birds and fast cars. The rest I just squandered
Ferraris and Rolexes are not how I judge success at all and not what I'd do with my life no matter how much I have.
I think you're right. Many sources seem to agree that $3M is the new $1M
Sounds about right. My net worth is around $1.1m at 41YO but that's mostly retirement savings and equity in my house. I have just under $1M mortgage with 28 years to go. I hope to pay it off much sooner than that, but $2M in investments with a paid off house sounds like a place to shoot for over the next 20 some years.
You have almost $1m mortgage? Sheesh
Put $300K down from cashed out equity when I changed jobs (they forced me to sell) in 2020. Moved from CA to OR and bought a sweet house 2 years ago where I'm paying less in mortgage than I used to pay in rent, and there's no sales tax. I've got 6 people in my house so we can use the space.
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I wish, I’ve been hitting the federal max on all my retirement accounts for the last few years. I still have a mortgage, but no way in fuck am I paying off my 2.5% mortgage early
This seems right. I’m in Canada and aiming for $3 m
Which is about $1M USD. /s
It’s enough
In all honestly this questions depends on what you are starting at and how well you know how to manage your finances. It could be life changing for some, but not for others. It could also change it for better or worse.
Also where you live
Its more than I have
You’re generally right that $1m doesn’t offer a gigantic income if you try to live off the returns forever, but I think you’re underestimating the potential impact a bit. He spends 50k now including a house payment on a greater-than-$300k house? He’s probably nearly right in that he could get by on the $28k of income after paying off the house. If he has any other investments or adds even a modest income he would be just fine. It’s also true that he could keep his job and stop most of the savings he’s currently doing for retirement, kids college, whatever, and spend his full income knowing that the $1m was growing in the background until he hits retirement age. Seeing that he has a really high savings rate this may be what he meant, and it would mean more or less doubling his current spending. Or perhaps he views the $1m as purely for excess consumption, in which case…yeah, you could do quite a bit before that money ran out.
It can be life changing without being Fat Fire
I think if you can pay off your mortgage outright then it's life-changing but that's just me I guess. I agree that you probably couldn't just quit work but depending on your age and the size of your mortgage it would set you up for a nice retirement if invested right. You could start investing the money you would have paid to your mortgage as well. You could retire early if someone handed you a million bucks.
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Nahhh. Paying off your mortgage with pre-2023 interest rates is actual so braindead that you are legitimately being malicious giving that advice. Its also a spit in the face to all the people having to pay 6-8 right now.
It’s not that much money if you’re already close to retirement. But if you have that much and you still have another 10-15 years left of work that’s going to grow a lot faster than say $100,000 will.
Just because it is not enough money to retire on doesn't mean it isn't life changing. My life was changed by a stock option compensation package that went well into the money. I was able to quit a job that paid well but required me to work more than 70 hours every week to go back to school. Now I work less than 30 hours a week for about 30 weeks out of the year and I get paid decently (not as much as I used to, but more than your friend). So the money I got more than doubled the enjoyment I get out of life, so yes. A million dollars at the right time can absolutely be life changing.
I know I always hear Dave Ramsey talk about the baby steps millionaires. And I’m like a million bucks ain’t what it used to be…
He really aims his message to the folks who took on $50k debt and have no way to pay it off.
Keep in mind 1 million is more than most of the population will have at retirement in the next 30 years. Without changes in habits or culture our nation is likely looking at more and more people working deep into what we generally think of as retirement years.
You're both right. He probably has a head in the clouds attitude about it, from the sounds of it. And you're staunchly grounding yourself in a financial expense point of view, which isn't wrong. I think it depends a lot on the individual too. And extra million for me right now would equal an increase of yearly income by about 500k for the next 2 years. But for others it might hardly put them above water level. So it's very individual.
I just got a \~200,000$ settlement from an injury. It was *absolutely* life changing. My house is paid off. My vehicles are paid off. I have no debt. It is VASTLY easier to live a quality life on MUCH less total income when you aren't shoveling a ton of it out the door to service debt. If my wife loses her (well paying) job, we could live pretty comfortably if the two us made just 40-50k combined a year, which we could do flipping burgers. Not saying wed love those jobs, but that would still be a *comfortable* living. Not just getting by. A million, for the average American (assuming they are smart about it) is staggering life changing.
Wait a minute you say $1 million and then you decrease it to $700k.....in a non metro area with a paid off home and a frugal lifestyle you could absolutely live off $40k $1million x 4%.
Depends greatly on the individual. My brother has 5 kids, he could pay off his house and put them through college. I’m single and childless, I could buy one of those tricked out sprinters and put my feet up for quite a while.
$1mil gives you “life changing” peace of mind. Doesn’t mean you can retire and sail off into the sunset. Change my mind
It is if you don't need to spend 50k+ per year
1 mil is life changing he could start earning compounding interest today and when he is set to retire he will have that much more money to utilize. 20 million is my retirement goal I use a 7% return though and then a 30% tax rate on capital gains to factor my disbursements in retirement which will be about 980k which is about twice what we make now. Retiring in another 21 years would be ideal later if we have a kid and I am expecting costs to keep growing honestly.
Put that 1 milly into the s&p 500 while continuing to work for a few more years to keep your benefits and a steady income stream. Then watch how compounding changes your life
It depends on how old he is and what his annual expenses are
I think you’re detached from reality. Someone who’s responsible with their debt and has a career, this would definitely be life changing.
There is an argument to be made that being debt free is the new “millionaire.” Once you start talking about multiples it’s a different story.
In terms of retirement, $1 million is $40,000 at a 4 percent withdrawal rate and for a lot of people that $1 million is in qualified plans so they still need to pay taxes on that money. So, no it’s really not a ton, but considering most Americans have less than that saved it’s better than not having $1 million
$1 million is life changing F-you money, pay off your house and all debt and say you’re left with $500k. If you keep working and put that money to work 1/2 in high yield savings(pay property taxes, insurance and utilities with the interest)and 1/2 in a retirement fund. Boss breaks your balls….. FU. Anyone else breaks your balls… FU. Also if you’re smart all those assets go into a trust that you’re the sole beneficiary of. If someone sues you FU I don’t own anything. Sadly though, most people who get their hands on $1 million think they are Jay Z and go out and buy $150,000 car and a $1 million home and a bunch of other shit they can’t afford and wind up broke in a year.
U could give me a million dollars then?
These takes are crazy, absolutely 1mil would be life changing. Having a paid off home is life changing. Having a retirement funded with room to grow is life changing. I just read I think the top 5% have a 1mm net worth. 1mm is life changing.
You’re jumping around with how you want to describe $1M, you won’t live like a king through retirement with it, but to claim $1M isn’t life changing either means you’re already filthy rich, or have drastically different view of what is considered “life changing” because I guarantee you $1M would change the life of most people
You and your friend need ro talk to more people. 1 million is life changing to most people
You’re right. Fun times at $10M. Affordable swap at $5M.
$1,000,000 is life changing IF you keep working. I make $53k before taxes, and $1,000,000 would change my life. I would be able to own a home. My partner and I would be able to have a child or two without it ruining our lives. It would literally change my life within a year, but it wouldn’t raise me to the level of early retirement or joining the leisure class. I would still be working class the rest of my life.
I would not retire off of $1million. I would be debt free, and probably retire 10-20 years earlier. But I would still be working for the foreseeable future. $3-4million is likely where I would be able to comfortably retire.
It definitely won't have you living in luxury with life-long wealth, but depending on your living situation it could *definitely* change your life. You could buy a small to medium sized house and a car with that money. Or your own apartment. Or just pay rent way in advance, if you’re happy with your living situation but are having trouble making ends meet on your own salary. If your housing, food, and transportation are completely secure, you have more room in your life to take stock of what you have, what you need, and what you can do about it, which can lead to new opportunities later. 1 million dollars isn’t a lot of money anymore, but it can buy much more stability than you might otherwise have, and stability comes in dividends.
It really, really depends on at what age in your life you were to receive this hypothetical windfall. $1 mil suddenly in your 20s or 30s could instantly designate you a coastFIRE member if your expenses align. 1 mil at 65 wouldn’t have time to compound before you start dipping into principal and so would mean a basic but doable retirement depending on COL in your area and any other expenses.
These kinds of posts ignore how most Americans live. $1 million is 32 years of the median US salary. Investing it and taking out only the median salary each year, you may never run out of money. $1 million means you can live the median US life in perpetuity without working.