What does it feel like to have $1M+ liquid?

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mikhailtech
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What does it feel like to have $1M+ liquid?

Post by mikhailtech » Sat Oct 20, 2012 11:12 pm

How does it feel to have at least $1M liquid?

This isn't to bring call out any millionaires per se, but I'm genuinely curious about the state of being, both internal and external. Particularly for someone who has built it up from 0 vs. being born into it or winning a lottery or equivalent.

I've been searching for some articles/personal accounts but haven't found anything yet of substance.

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Re: What does it feel like to have $1M+ liquid?

Post by sscritic » Sat Oct 20, 2012 11:20 pm

Ignoring whether I have $1 million liquid or not, the feeling is normal.

When I didn't own a house it didn't feel any different than when I did own a house. Now that I own one again, I am still the same. Liquid has nothing to do with how I feel about myself or my financial situation.

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Re: What does it feel like to have $1M+ liquid?

Post by cbeck » Sat Oct 20, 2012 11:29 pm

There are interesting results from the happiness researchers. While it's true that after the basic needs are taken care of (the usual number cited is $75k/yr), there is no reported improvement in happiness from additional income, it turns out that happiness in this case is a technical term meaning short-term feelings of well-being. However, the same people who report no additional feeling of short-term happiness from increased wealth above the threshold nevertheless do report an increased feeling of satisfaction with their lives overall.

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Re: What does it feel like to have $1M+ liquid?

Post by VictoriaF » Sat Oct 20, 2012 11:32 pm

sscritic wrote:Ignoring whether I have $1 million liquid or not, the feeling is normal.

When I didn't own a house it didn't feel any different than when I did own a house. Now that I own one again, I am still the same. Liquid has nothing to do with how I feel about myself or my financial situation.
A house and bars of gold are solid investments.
Oil is a liquid investment.
Money in the form of 1's and 0's is a gas, a fog.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Re: What does it feel like to have $1M+ liquid?

Post by Erwin » Sat Oct 20, 2012 11:58 pm

I suggest that you research Bhutan, a small country somewhere in the Himalaya, that uses the Gross National Happiness indicator (instead of GDP) to guide the government. This will certainly lead you to the answer of your $1MM question.
http://www.telegraph.co.uk/news/worldne ... index.html
Erwin

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Re: What does it feel like to have $1M+ liquid?

Post by pyld76 » Sun Oct 21, 2012 12:39 am

Presumably it feels like a psychology thesis.

At what point do you get the "feeling?" When you roll over from 999,999? At 951k where you might be able to round up and brag about it (if that was your thing)? When you cash it out and make it "liquid?"

Almost every person I've ever met whose "feelings" changed when they obtained some large and arbitrary financial figure subsequently managed to piss away a nontrivial portion of their wealth. The folks who merely soldiered on thru the next day have generally been successful and either held onto or increased their wealth dramatically subsequent upon reaching whatever "milestone" that could provoke a "feeling."

I aspire to enough wealth to where I'd have a legitimate need in my AA for a million in liquidity, but I can't fathom reaching that point short of hitting the powerball. I like to think I'd adjust my spending or whatever was driving the liquidity need, because that's a lot of cash to have deflating in your proverbial pocket. I'd want to put it (cash) back to work.

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Re: What does it feel like to have $1M+ liquid?

Post by steve roy » Sun Oct 21, 2012 1:22 am

When I was going to college on the GI bill and had very little, I didn't feel differently day to day than I do now.

The ONLY difference between now versus, say, twenty-five years ago: THEN I had small children, a mortgage and not much money coming in. NOW the kids are grown (mostly) and the house has lot of equity, and I have money coming in. And because I'm close to retirement with a pension, Social Security and liquid assets, I find I'm more relaxed than when circumstances were tight and I had years of employment stretching ahead of me.

But I'm the same person with the same thoughts, foibles and personality that I was when I owned a smaller bank account.
Last edited by steve roy on Sun Oct 21, 2012 4:23 pm, edited 1 time in total.

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Re: What does it feel like to have $1M+ liquid?

Post by DualIncomeNoDebt » Sun Oct 21, 2012 1:44 am

When you first hit two-comma liquid net worth, it's a nice milestone. Better if you have a significant other or business partners to share the achievement with. If you are grounded and sensible, it's not like you are popping champagne or running around screaming, "whoot, there it is!" If you're normal, it's a fairly pedestrian affair. And the happy feelings recede pretty quickly as you focus on the day-to-day tasks.

You also realize it's not something you can, or should, discuss with distant family, friends, or anyone else. You'll either sound like a braggart, don't want to stir up jealousy, and will have a genuine concern about safety/security. You can never be sure when one of your "friends" will open their stupid mouths to someone else, and where that information will travel. So in sum, it's a personal "thing" and I can't say there is some noticeable transformation. These are the general thoughts you are likely to have.

This may not directly answer your question, but two things do stand out when you hit the mark. First, you may focus more intently on preserving principal and having investment returns (interest, dividends, etc.) pay for things. Taxes become a very big deal when you hit the upper brackets.

Second, goddamn do the bankers and investment advisors come out of the woodwork looking to manage the money -- for hefty fees, of course. For example, banks want you to join their private banking/client groups -- and then they want to pitch you to manage the money. Ditto with the major brokerage houses, once you cross a threshold it triggers the private client groups to start pitching you, inviting you to things, etc. So you start getting invites to luxury boxes at the horse races, dining events, client seminars at hotels and resorts, etc. Don't be fooled -- all of it is a pitching opportunity, and landing even one client will likely pay for the event's expense. I generally think this starts at the two-comma mark. If you are at $10M+, that kicks you into another level entirely, and you will be very aggressively pitched -- as in being flown first-class for meetings, or bankers flying out to meet you face-to-face to "manage" your account. Seen it first-hand.

Personally, I hate all of it. You just know you are a walking dollar sign, a mark for one of their investment transactions and their fee comes off the top, win or lose. I never heard from any of these people in my life, yet all of a sudden they want to be your "friend." It's all about the money, and for me it left a very sour taste, to the point where I hardly discussed money with anyone at all. Online is just about the only place I even converse about it anymore, and that's the reason I even bothered to answer the question. I run in the opposite direction when I see bankers.

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Re: What does it feel like to have $1M+ liquid?

Post by BHCadet » Sun Oct 21, 2012 2:02 am

It is just a benchmark to calculate how many years till financial independence.
Don’t ask and don’t tell to anyone except parents and mature adult child(ren).

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Re: What does it feel like to have $1M+ liquid?

Post by upsydaisy » Sun Oct 21, 2012 3:05 am

It happened very suddenly to me. One day I got a pay check that had the gross sum of $1.32M. Not only was it a One Million Dollar check but, after taxes and added to my other savings, it took me over $1M net worth as I already owned my small apartment. I knew it was coming, so I can't say that it was a surprising moment per se, but it did feel special. On the way back from the office I bought a 6-pack of my favorite local beer and called my fiancee and told her to meet me at a tiny park near our place that has amazing view over San Francisco. She met me there, I sat her down, cracked open a couple of beers, showed her the check and we both giggled.

Apart from that, you just start worrying a lot about inflation and not losing it now that you have it.

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Re: What does it feel like to have $1M+ liquid?

Post by Professor Emeritus » Sun Oct 21, 2012 3:21 am

I do remember the day in 1991 when I realized that , no matter what happened (short of a world disaster) , we would never lose the house and our children would go to college.
It was a wonderful feeling. In 2001 I realized we could retire by age 60. Also a wonderful feeling. All I can suggest Live modestly, have a high savings rate and stay married to a nice person.

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Re: What does it feel like to have $1M+ liquid?

Post by ks289 » Sun Oct 21, 2012 3:57 am

I remember a thread recently about joining the "2 comma club"
http://www.bogleheads.org/forum/viewtop ... st=1486111

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Re: What does it feel like to have $1M+ liquid?

Post by NAVigator » Sun Oct 21, 2012 5:45 am

Reaching a goal is different for each person. Does anyone remember what you did on any particular birthday? Did you feel different when you turned 21, 35, 40, 50, 59-1/2, 62, etc? Maybe you recall this and maybe you don't.

Reaching a financial goal may be memorable or it might not be. Do you remember the date? Do you remember the year? For me, not really.

Yet there are some events that absolutely make a difference. For instance a major medical diagnosis is clearly remembered; the day, month, and year. It can change your life. Now every day is valued and time is not to be wasted.

For some, the pivotal event may be marriage, or the birth of a child, or the death of someone you loved.

In life, some things matter more than others. It depends on what you value the most.

Jerry
"I was born with nothing and I have most of it left."

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Re: What does it feel like to have $1M+ liquid?

Post by Padlin » Sun Oct 21, 2012 6:25 am

It's like driving from New England to Florida and you finally pass the Florida state border, then you think about how you still have 10 hours to Key West. A moment of celebration, then it's gone.
Regards | Bob

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Re: What does it feel like to have $1M+ liquid?

Post by dekecarver » Sun Oct 21, 2012 6:35 am

Depends on where you live and what your needs are.

In the end you will feel like you have enough or need to generate more.

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Re: What does it feel like to have $1M+ liquid?

Post by VictoriaF » Sun Oct 21, 2012 7:39 am

pyld76 wrote:At what point do you get the "feeling?" When you roll over from 999,999? At 951k where you might be able to round up and brag about it (if that was your thing)? When you cash it out and make it "liquid?"
You don't need $951k. $950,001 will round up to $1,000,000.
pyld76 wrote:Almost every person I've ever met whose "feelings" changed when they obtained some large and arbitrary financial figure subsequently managed to piss away a nontrivial portion of their wealth.
If you can piss it away, it must be liquid.
pyld76 wrote:The folks who merely soldiered on thru the next day have generally been successful and either held onto or increased their wealth dramatically subsequent upon reaching whatever "milestone" that could provoke a "feeling."
I have observed the opposite. As people succeed in accumulating assets they hold on to their money ever more tightly.

Victoria
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Re: What does it feel like to have $1M+ liquid?

Post by Toons » Sun Oct 21, 2012 8:46 am

Padlin wrote:It's like driving from New England to Florida and you finally pass the Florida state border, then you think about how you still have 10 hours to Key West. A moment of celebration, then it's gone.
+1 :happy
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Re: What does it feel like to have $1M+ liquid?

Post by jojay » Sun Oct 21, 2012 9:08 am

Some very funnt comments here. The journey from NE to Florida was on point.
We have been saving for decades and hit the $1m mark a couple of years ago. Happy? Of course but not in the same sense as stiing around the dinner table with the family just talking and laughing. There is defintely some pride even though a millionaire these days is far more pervasive than when the only millionaire we knew was Thurstom Howell the 3rd. Secure? Yes but as we age we see the fragile components of our security like health etc. Satisfied? Yes. Comfortable? Still have several work years to go ( see security ) but happy to have it. You can read data about ages and levels of savings and having a million at a certain age might tell you that you are in a better financial position than "x" percentage in your age group.
Happy? I've always been happy with my life, spouse and children. The money just provides more breathing room and the opportunities to take advantage of what your life already offers you.

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Re: What does it feel like to have $1M+ liquid?

Post by staythecourse » Sun Oct 21, 2012 10:22 am

I think the answer to that question depends on a few factors. One was mentioned by the OP about was it earned or given to you, i.e. inheritance, etc...

The other I think is the AGE at which you attained it. Hitting 1 mill. under 35 is much different then hitting it after a lifetime of investing at now being 60. No offense to the older posters, but I have no clue how everyone older has not hit a million. Folks in their 60+ had the best luck/ good fortune of living through the greatest bull market in stocks, bonds, and real estate in the history of the world! No other generation will find it so easy.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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Re: What does it feel like to have $1M+ liquid?

Post by baw703916 » Sun Oct 21, 2012 10:46 am

Victoria wrote:A house and bars of gold are solid investments.
Oil is a liquid investment.
Money in the form of 1's and 0's is a gas, a fog.

Victoria
Hi Victoria,

Would investing in a plasma TV increase the diversification of one's portfolio?

Brad
Most of my posts assume no behavioral errors.

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Re: What does it feel like to have $1M+ liquid?

Post by VictoriaF » Sun Oct 21, 2012 11:05 am

baw703916 wrote:
Victoria wrote:A house and bars of gold are solid investments.
Oil is a liquid investment.
Money in the form of 1's and 0's is a gas, a fog.

Victoria
Hi Victoria,

Would investing in a plasma TV increase the diversification of one's portfolio?

Brad
Hi Brad,

It's an excellent point. A physically-diversified investor would sit in his solid house full of solid gold and liquid oil, watching the gaseous ticker tape on a plasma TV.

Cheers,

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Re: What does it feel like to have $1M+ liquid?

Post by iceman99 » Sun Oct 21, 2012 11:13 am

jojay wrote: The money just provides more breathing room and the opportunities to take advantage of what your life already offers you.
Spot on.

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Re: What does it feel like to have $1M+ liquid?

Post by missybon » Sun Oct 21, 2012 11:16 am

A couple of people have mentioned Happiness indicators and my income is right around the leveling off threshold of $75,000, and I inherited $1,000,000. It is comforting and liberating; a relief, but not a game changer. As an earlier poster noted with moderation and without a world apocalypse, it means: we keep our house, our kid goes to college, we take a trip if we want and if the car breaks down we fix it- and we don't have to worry about how to afford it.
It is a nice feeling. Sometimes I forget and can be frustrated when I do take a trip and still fly economy and not first class and wonder "why?" If you are not going to spend it all on the same day, $1,000,000 is not that much money. It is pretty close to "enough". It has let me put satisfaction before salary in choosing jobs and it is looking like I will be able to give these same opportunities to my daughter.

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Re: What does it feel like to have $1M+ liquid?

Post by VictoriaF » Sun Oct 21, 2012 11:22 am

missybon wrote:Sometimes I forget and can be frustrated when I do take a trip and still fly economy and not first class and wonder "why?" If you are not going to spend it all on the same day, $1,000,000 is not that much money.
With a mere $1m, one still flies economy. $10m is an opportunity to get into the business class or even the first class. At the $100m level, one buys her own jet.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Re: What does it feel like to have $1M+ liquid?

Post by obgyn65 » Sun Oct 21, 2012 11:28 am

+1
NAVigator wrote:In life, some things matter more than others. It depends on what you value the most.
"The two most important days in someone's life are the day that they are born and the day they discover why." -John Maxwell

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Re: What does it feel like to have $1M+ liquid?

Post by Fallible » Sun Oct 21, 2012 1:28 pm

Victoria wrote:
missybon wrote:Sometimes I forget and can be frustrated when I do take a trip and still fly economy and not first class and wonder "why?" If you are not going to spend it all on the same day, $1,000,000 is not that much money.
With a mere $1m, one still flies economy. $10m is an opportunity to get into the business class or even the first class. At the $100m level, one buys her own jet.

Victoria
Some of my Depression-era grandmother's children were financially well off and would try to put her in first class when she visited them. She was in her 80s and early 90s then and although she was still in amazingly good health, they thought she would appreciate and maybe even be a little impressed with the additional attention. Her answer was always no, that it was "silly" to spend so much more money just to "sit in the front of a plane." She wanted to be in coach, "where I belong." And in case her kids didn't get the complete message, she would add, "and where you belong, too." Last time I looked, I didn't have a million, but I'm sure if I did, somehow coach is where I belong, too.:happy
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Re: What does it feel like to have $1M+ liquid?

Post by VictoriaF » Sun Oct 21, 2012 1:54 pm

Fallible wrote:
Victoria wrote:
missybon wrote:Sometimes I forget and can be frustrated when I do take a trip and still fly economy and not first class and wonder "why?" If you are not going to spend it all on the same day, $1,000,000 is not that much money.
With a mere $1m, one still flies economy. $10m is an opportunity to get into the business class or even the first class. At the $100m level, one buys her own jet.

Victoria
Some of my Depression-era grandmother's children were financially well off and would try to put her in first class when she visited them. She was in her 80s and early 90s then and although she was still in amazingly good health, they thought she would appreciate and maybe even be a little impressed with the additional attention. Her answer was always no, that it was "silly" to spend so much more money just to "sit in the front of a plane." She wanted to be in coach, "where I belong." And in case her kids didn't get the complete message, she would add, "and where you belong, too." Last time I looked, I didn't have a million, but I'm sure if I did, somehow coach is where I belong, too.:happy
My answer is "it depends" ;-). If I can save money without sacrificing my main objectives, I do. If I need to spend money on something I need or enjoy, I do that too. For example, on my way to and from BH-11 I could drive through the Delaware toll plaza or take side roads through the Pennsylvania's country side. I chose the latter, not because spending a few dollars would have made any difference, but because I like the challenge of finding my way using maps. On the other hand, while attending the conference I could have stayed at a youth hostel at a fraction of the hotel cost, but I wanted to spend more time talking to other Bogleheads like yourself and the hotel expense was justified.

Victoria
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Re: What does it feel like to have $1M+ liquid?

Post by baw703916 » Sun Oct 21, 2012 2:58 pm

Victoria,

Richard Branson once remarked that the easiest way to become a millionaire is "to start out as a billionaire and buy an airline." Of course then he started his own airline, so I'm not quite sure what the conclusion is...

So if you in fact owned the airline, they might let you fly first class. But since you would then "only" be a millionaire, you couldn't otherwise afford to fly first class. I'm getting confused...

Brad
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Re: What does it feel like to have $1M+ liquid?

Post by VictoriaF » Sun Oct 21, 2012 3:12 pm

baw703916 wrote:Victoria,

Richard Branson once remarked that the easiest way to become a millionaire is "to start out as a billionaire and buy an airline." Of course then he started his own airline, so I'm not quite sure what the conclusion is...

So if you in fact owned the airline, they might let you fly first class. But since you would then "only" be a millionaire, you couldn't otherwise afford to fly first class. I'm getting confused...

Brad
Hi Brad,

I would adopt Branson's solution and fly only in balloons,

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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Re: What does it feel like to have $1M+ liquid?

Post by SamB » Sun Oct 21, 2012 3:21 pm

mikhailtech wrote:How does it feel to have at least $1M liquid?

This isn't to bring call out any millionaires per se, but I'm genuinely curious about the state of being, both internal and external. Particularly for someone who has built it up from 0 vs. being born into it or winning a lottery or equivalent.

I've been searching for some articles/personal accounts but haven't found anything yet of substance.
That happened quite awhile ago, but I certainly did not experience any change at the time. For some reason, when I reached the age of 65 I did loosen up a bit with money, but nothing drastic. I actually started paying people to do things I always did myself, and if I do stay in a hotel, it is no longer the Motel 6. For some reason I have never forgotten growing up dirt poor, and I doubt some liquid asset threshold will ever change that.

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Re: What does it feel like to have $1M+ liquid?

Post by steadyeddy » Sun Oct 21, 2012 4:03 pm

It's threads like these that confirm I am part of the "Rental Nation" that Time Magazine profiled back in a September issue. My net worth is five figures and all my physical possessions are probably worth less than $10k combined, but my wife and I are spend lavishly on experiences and wouldn't stay in a Motel 6 unless our life circumstances changed considerably. I'm Hilton Gold through work, so we can get better rooms and executive lounge access when on vacation. The free breakfast and cocktails can come in very handy for a couple twenty-somethings vacationing in expensive destinations! I guess you could say that we're hotel-poor rather than house-poor! ;)

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Re: What does it feel like to have $1M+ liquid?

Post by Grt2bOutdoors » Sun Oct 21, 2012 4:16 pm

I'm assuming you mean liquid and completely after-tax money. I reckon most would say somewhat liberating to know you have options available that otherwise may not be. Some have said it means "not having to worry about how to pay for car repairs, worry about not being able to keep the house and that they could pay for their kids college education without having to worry about loans - that about sums it up.

Things I've noticed about those who have attained such a level - they keep their financial status vague - they act like a regular Joe. They avoid bankers, financial advisers and salesman like the plague. They don't like to spend money, period. Always looking for a deal - especially those who had to work for it. Those who've had it thrown in their lap tend to be more free with it - lending credence to the saying "first generation earns it, second generation inherits it, third generation blows it" After that it's pretty much back to square 1 unless the "old money" set up a generational or dynasty trust.
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Re: What does it feel like to have $1M+ liquid?

Post by Grt2bOutdoors » Sun Oct 21, 2012 4:21 pm

Victoria wrote:
missybon wrote:Sometimes I forget and can be frustrated when I do take a trip and still fly economy and not first class and wonder "why?" If you are not going to spend it all on the same day, $1,000,000 is not that much money.
With a mere $1m, one still flies economy. $10m is an opportunity to get into the business class or even the first class. At the $100m level, one buys her own jet.

Victoria
Some may like to spend 25%+ of their net liquid worth on a depreciating asset plus hourly 5 figure plus maintainance fees, not I.
In the words of Ben Franklin, "many a mickle, one soon finds themselves in a pickle" - The Way to Wealth.

Besides, worldly travelers need to spend somewhere on the order of $35 million to get an extended range non-stop jet. Don't know many millionaires who like taking the "local" when time is of the essence.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: What does it feel like to have $1M+ liquid?

Post by YDNAL » Sun Oct 21, 2012 5:11 pm

mikhailtech wrote:How does it feel to have at least $1M liquid?

This isn't to bring call out any millionaires per se, but I'm genuinely curious about the state of being, both internal and external. Particularly for someone who has built it up from 0 vs. being born into it or winning a lottery or equivalent.

I've been searching for some articles/personal accounts but haven't found anything yet of substance.
Each milestone in life is special... a child's birth, first steps, words; High School graduation, College, Medical School. Your first promotion at work, buying a first home, establishing a business, etc. Your 20th, 30th wedding anniversary with the love of your life. All important, all special, all come with a feeling of accomplishment and happy times. Also unhappy times... loss of loved ones, etc.

At 60, I've enjoyed the JOURNEY, and hope and wish you do the same, mikhail!
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Re: What does it feel like to have $1M+ liquid?

Post by twist101 » Sun Oct 21, 2012 10:31 pm

Quora has some good answers:

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Re: What does it feel like to have $1M+ liquid?

Post by Robert44 » Sun Oct 21, 2012 10:52 pm

I have to say it feels wonderful! No debt, virtually no worries.

I really like going on a trip and spending as much as I want, buying other people a dinner for no reason, gifting my kids and grandkids. I also like tipping generously. I just love life.
We have been very blessed in our lives. Worked hard, started with scratch, returned soda bottles for deposit to buy milk for kids, but we invested wisely and now reaping the benefits.

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Re: What does it feel like to have $1M+ liquid?

Post by tbradnc » Mon Oct 22, 2012 8:11 am

What an interesting topic.

Without going into a long bio of my life I will say that I grew up poor, developed a taste for alcohol, and spent some time without an address. In 1985 I turned my life around and my first "real" job was driving a truck for a building supply center.

In 1992 I started a little side business building and selling PC's which morphed into a subscription BBS, which morphed into selling things on the internet. Fast forward to 2012 and my little business has had over $100M in sales since 1992. I have done all this with a high school education.

This is all relevant because I became a member of the 7 figure club in the past few years. I still live in the same modest house, with the same blue collar neighbors that would give you the shirt off their back, mow my grass with a push mower, and drive my jeep around town.

Nothing about me has changed with the exception I get the urge to diddle with my portfolio from time to time and get obsessed with that.

FWIW, one of the main reasons I am a member of the 7 figure club is because you fine folks answer my questions with patience and give the best free advice on the planet.

p.s. The 1st million is the hardest. Having just passed the 7 figure mark in the past 2 years I am already well on my way to the 2nd million.

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Re: What does it feel like to have $1M+ liquid?

Post by tbradnc » Mon Oct 22, 2012 8:20 am

Oh.. and the best thing ever is to owe no one on the planet money in the form of a loan.

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Re: What does it feel like to have $1M+ liquid?

Post by ascenzm » Mon Oct 22, 2012 8:54 am

staythecourse wrote:I think the answer to that question depends on a few factors. One was mentioned by the OP about was it earned or given to you, i.e. inheritance, etc...

The other I think is the AGE at which you attained it. Hitting 1 mill. under 35 is much different then hitting it after a lifetime of investing at now being 60. No offense to the older posters, but I have no clue how everyone older has not hit a million. Folks in their 60+ had the best luck/ good fortune of living through the greatest bull market in stocks, bonds, and real estate in the history of the world! No other generation will find it so easy.
Good luck.
+1,000. I've discussed this very thing on another message board. My thought was that Americans born around 1935-1940 are probably the luckiest Americans based on their date of birth. They missed the Great Depression and were too young to serve in WWII/Korea and too old to serve in Vietnam. They were able to work when the American economy was number one after WWII. As you said future American generations will not be as fortunate. My friend fits into this category - born in 1936. He was able to afford to go to the University of Michigan as an out of state student in the 1950s and then worked his entire professional career for one large employer - PPG. He retired to a pension that was 80% of his last year's salary and he also started to draw SS. He told me he was making more retired than during his last year of employment.

Younger generations will not be as fortunate. I can see this where I work. My large Forture 500 employer seems to only hiring engineers/technical writers from Asia (China/India). Sometimes when I report to work, I feel like I'm in the third world or back in engineering school where most of the professors were foreign and spoke poor English. Glad I'm near the end of my work career.

Mike
Last edited by ascenzm on Tue Oct 23, 2012 7:06 am, edited 1 time in total.
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LH
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Re: What does it feel like to have $1M+ liquid?

Post by LH » Mon Oct 22, 2012 8:57 am

One million in todays dollars is the same as:

1970 170 thousand
1980 360 thousand
1990 560 thousand
2000 740 thousand
2010 940 thousand

2012 1 million

HUGE difference between a 1970 "millionaire", and todays "millionaire". Basically, to be a millionaire in 1970 term, you would have to have 6 million dollars.

Being a millionaire nowadays does not mean what it once did. MIght as well pick 900,000.

To me, having around 4-5 million range today, you could be considered to be a "millionaire" in terms of having enough to not have to work to live an upper middle class lifestyle, and ssome extravagance, with maybe a low end of 2 million today, to live a middle class lifestyle for 40 years without much worry of running out of money (sans extravagance). Thats not jet set, to be a jet setter you have to go back to 1970 millionaire, more around 5 million and more realistically 10 million up range.

http://www.bls.gov/data/inflation_calculator.htm
Last edited by LH on Mon Oct 22, 2012 9:00 am, edited 2 times in total.

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Re: What does it feel like to have $1M+ liquid?

Post by ascenzm » Mon Oct 22, 2012 8:57 am

tbradnc wrote:What an interesting topic.

Without going into a long bio of my life I will say that I grew up poor, developed a taste for alcohol, and spent some time without an address. In 1985 I turned my life around and my first "real" job was driving a truck for a building supply center.

In 1992 I started a little side business building and selling PC's which morphed into a subscription BBS, which morphed into selling things on the internet. Fast forward to 2012 and my little business has had over $100M in sales since 1992. I have done all this with a high school education.

This is all relevant because I became a member of the 7 figure club in the past few years. I still live in the same modest house, with the same blue collar neighbors that would give you the shirt off their back, mow my grass with a push mower, and drive my jeep around town.

Nothing about me has changed with the exception I get the urge to diddle with my portfolio from time to time and get obsessed with that.

FWIW, one of the main reasons I am a member of the 7 figure club is because you fine folks answer my questions with patience and give the best free advice on the planet.

p.s. The 1st million is the hardest. Having just passed the 7 figure mark in the past 2 years I am already well on my way to the 2nd million.
Awesome. I will second your opinion that this is the best finance forum on the Internet. The posters and authors here have been instrumental in allowing me to close in on FIRE status (Financially Independent Retire Early)
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Re: What does it feel like to have $1M+ liquid?

Post by JArthur » Mon Oct 22, 2012 9:09 am

ascenzm wrote: +1,000. I've discussed this very thing on another message board. My thought was that Americans born around 1935-1940 are probably the luckiest Americans based on their date of birth. They missed the Great Depression and were too young to serve in WWII/Korea and too old to serve in Vietnam. They were able to work when the American economy was number one after WWII. As you said future American generations will not be as fortunate. My friend fits into this category - born in 1936. He was able to afford to go to the University of Michigan as an out of state student in the 1950s and then worked his entire professional career for one large employer - PPG. He retired to a pension that was 80% of his last year's salary and he also started to draw SS. He told me he was making more retired than during his last year of employment.

Younger generations will not be as fortunate. I can see this where I work. My large Forture 500 employer seems to only hiring engineers/technical writers from Asia (China/India). Sometimes when I report to work, I feel like I'm in the third world or back in engineering school where most of the professors were foreign and psoke poor English. Glad I'm near the end of my work career.

Mike
Totally agree.

I'm a Gen-Xer and a few years ago I thought that the Boomers/Jones were the last generation to enjoy perhaps the greatest period of economic growth in history. I now think that Gen-X will get to enjoy most of it as well. We won't have the pensions, but good returns for the last 20 years before 2007 and more importantly we are entering management and have over a decade of work experience. I know very few people my age who are out of good work. It's Gen-Y who seems to be chronically under or unemployed. I believe the good times for the US are going to come to an end sometime in the next 2-20 years, so I plan on earning, saving, giving, and enjoying the fruits of my labor as much as possible before that time.

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Re: What does it feel like to have $1M+ liquid?

Post by Abe » Mon Oct 22, 2012 9:50 am

I always thought that I would feel secure if I reached a certain goal financially, but I didn't. I realize now that I will never feel secure. There is a saying that happiness is not having what you want, but wanting what you have. It's not the destination but the trip. I'm still working on that. I still tend to think of money as a means to an end. There is an essay called "The Station" by Robert Hastings that has helped me think more in that vein. Here is a link to it.

http://news.google.com/newspapers?nid=1 ... 42,3253731
Slow and steady wins the race.

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Re: What does it feel like to have $1M+ liquid?

Post by Random Poster » Mon Oct 22, 2012 10:42 am

I'm sorry, but I don't see how having $1M+ in liquid investments (which presumably means having $1M+ outside of any retirement accounts) equates to having "virtually no worries."

$1M isn't a lot of money. It may seem like it is, but it isn't. It certainly isn't the level that I would consider to provide me with "virtually no worries."

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Re: What does it feel like to have $1M+ liquid?

Post by tbradnc » Mon Oct 22, 2012 10:49 am

It is. however, a notch above living paycheck to paycheck.

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Re: What does it feel like to have $1M+ liquid?

Post by Random Poster » Mon Oct 22, 2012 10:52 am

tbradnc wrote:It is. however, a notch above living paycheck to paycheck.
That would depend on what your paycheck is, no? :D

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Re: What does it feel like to have $1M+ liquid?

Post by Abe » Mon Oct 22, 2012 11:05 am

Random Poster wrote:I'm sorry, but I don't see how having $1M+ in liquid investments (which presumably means having $1M+ outside of any retirement accounts) equates to having "virtually no worries."

$1M isn't a lot of money. It may seem like it is, but it isn't. It certainly isn't the level that I would consider to provide me with "virtually no worries."
There was a time when I thought $100k was a lot of money. :wink:
Slow and steady wins the race.

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Re: What does it feel like to have $1M+ liquid?

Post by tbradnc » Mon Oct 22, 2012 11:18 am

I'll stop with the personal stories but I vividly remember standing in a Hardees with $2 to my name trying to decide if I wanted 2 hamburgers or a half pint of vodka.

You guys just don't know.... :)

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Re: What does it feel like to have $1M+ liquid?

Post by Snow Boarder » Mon Oct 22, 2012 11:33 am

cbeck wrote:There are interesting results from the happiness researchers. While it's true that after the basic needs are taken care of (the usual number cited is $75k/yr), there is no reported improvement in happiness from additional income
+1. Money does not make you happy. Money gives you options and options make you happy.
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Re: What does it feel like to have $1M+ liquid?

Post by Grt2bOutdoors » Mon Oct 22, 2012 11:53 am

Random Poster wrote:I'm sorry, but I don't see how having $1M+ in liquid investments (which presumably means having $1M+ outside of any retirement accounts) equates to having "virtually no worries."

$1M isn't a lot of money. It may seem like it is, but it isn't. It certainly isn't the level that I would consider to provide me with "virtually no worries."
I grew up in a low income household. Given the choice, I'd rather have money in my pocket than not, if only for financial reasons. I don't miss those feelings in my youth of having to decline or defer certain opportunities simply because of affordability - those opportunities were not extravagant in cost to average folk, but they were in my household. I agree with the other posters, once you've been on the "poor" side of the track, you avoid taking risks that could put you back there. For those 100% equities posters or "all in" types, just remember what could be waiting for you on the other side.

As for the poster LH who stated $1MM today is like $170K in 1970 - well, if the average two family home in our neighborhood cost $30K in 1970, I'd say you were pretty much well-off if you did have $170K in 1970. Heck, most gross incomes back then were somewhere between $8K and $10k.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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