https://thisecommercelife.com/blogs/comics/the-day-all-billionaires-died
I’m sure it’s annoying for some to click offsite, but it’s 20 panels long. IMO worth the read, though!
https://thisecommercelife.com/blogs/comics/the-day-all-billionaires-died
I’m sure it’s annoying for some to click offsite, but it’s 20 panels long. IMO worth the read, though!
Well that would mean a return of 30k annually, which is a pretty low quality of life in the US. If you lived in a low COL place it may be enough to get by, but you can’t live in any US city with that.
Sure but assuming you’re healthy and relatively young you could just not touch any of it and roll the interest back into it. In 23-24 years it’d be 2 million and your 3% return would be 60k. More if you added excess earnings to it during that period, of course
Of course depending on risk tolerance you could speed this up considerably. Bonds are more like 4-5% and stocks are closer to 10%. But then of course risk raises, sometimes considerably but a 7% return more than halves the timeline to around a decade (though keep in mind sometimes bubbles burst, 2008 returns were -38% and that AI bubble is getting shakier and shakier)
The bigger issue is lifestyle creep and consumerism. The majority of people who get to this level of wealth get attracted to relentless consumerism. Then 60k, which can easily cover cost of living in most areas (especially with the assumption that your housing is paid for and otherwise debt free), is suddenly no longer adequate
And of course the biggest issue is that 99% of people will never have the financial resources to even consider the above
The scenario I was replying to was that you could just live off a million dollars, as in no work your whole life. I completely agree with everything you’re saying though. I lived very comfortably on $60k in one of the highest col areas in the US.
You can also use the $M up slowly.
Sure, no golden toilets, but food on the table and more for life is kinda a lot IMO. But that was not what the example was for ofc.
What’s $M up slowly mean?
You can use the 1.000.000 dollars during your lifespan too.
that might be a fine strategy if you’re retirement age, but for younger people that isn’t a good idea
Of course you can’t use 5.000 a month at 20. I thought people wouldn’t think, so I wrote using it “slowly”.
You’d run out much faster than you’d think. Life is expensive, especially if you have a home you need to maintain. Have a spouse or kids and you’ll run through that million in a decade.
Tell me you don’t understand compound interest without saying you don’t understand compound interest.
Edit: you wouldn’t run out if you do your math.
I understand compound interest very well, and your interest can’t compound if you’re constantly drawing on the principal. You’d need a job to offset expenses until your investments had time to mature, especially if your returns were at 3%.
Your premise was that $1m at 3% return was enough to live your whole life on and that’s just a fantasy unless you intend to die very young or live very poorly; and alone.
So you can’t live off 2500 a month? Where the hell do you live 🤣, and using up the money during your life you could get more out per month and not be buried with 1 million, but for that you have to calculate things, which you do not seem to be able to do.
I mean show me the numbers.
You’re neglecting capital gains tax off top, it’s 2125 a month. Rent where I reside is roughly $1800 for a 1br. That leaves $325 for literally everything else you need. Health insurance will be a minimum of $400. Need a car? Let’s call that another $300 for insurance and gas, maintenance would obviously increase this. Food could be as low as $200 if you skip meat entirely and basically stick to rice and beans. Utilities $200. You’re gonna need clothes too, there’s another $50. Need to see the doctor? Oh boy, good luck. This omits the majority of incidental expenses too, which add up real fast.
Now you’ve well exceeded your interest, hence no compounding interest; in fact your principal is dwindling meaning less interest and more drawing from principal going forward.
Have a kid? Unexpected chronic medical issue? There’s another chunk. You could realistically stretch it for decades, especially if (like I said yesterday) you lived outside of a city. In a low COL country it could last a lifetime, but that’s not the scenario you were responding to.