Are there any benefits to achieving "great wealth"?

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Fallible
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Re: Are there any benefits to achieving "great wealth"?

Post by Fallible »

miamivice wrote:OK Bogleheads,

I have achieved what I consider "great wealth". I am not Donald Trump wealthy, nor CEO wealthy, nor San Francisco wealthy. But for a person who doesn't fit the previously listed criteria, I have achieved "great wealth". I'm in the 99th percentile by age, according to one net worth calculation website.

My question is, what does this do for me? We are not supposed to talk about money in our society, so I have not earned "bragging rights". I can go spend it (in college, I ooh'd and ah'd over high end stereo systems) and I technically can go buy one of the highest end 5.1 or 7.1 surround sound systems on the market. I suppose I could go buy a fancier house than I live in today. But, I've met plenty of people who have achieved "great wealth" and then spent it, and are now working to pay off their debt, so I won't spend mine.

My question is simple. What, if anything, does achieving the status of "wealthy" gain someone, if you do not spend it nor talk about it? Is there anything that it provides in life?
It's interesting that a person of great wealth should be asking what it means, as if it should generally mean the same for all. You've asked specifically what it can do for you personally and I assume that's something only you can determine. You've mentioned being able to spend it on material things for yourself, but now you have enough to give to charities?
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
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jazman12
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Re: Are there any benefits to achieving "great wealth"?

Post by jazman12 »

experience life's great pleasures or what good is wealth.Charity is also a great pleasure that gives splendid returns
Act soon... time is running out
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Just sayin...
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Re: Are there any benefits to achieving "great wealth"?

Post by Just sayin... »

miamivice wrote:...What, if anything, does achieving the status of "wealthy" gain someone...
Reduced stress about financial-related events
More time to do what you want
The ability to hire the best to amplify your experiences (health care, fly fishing guides, craftsmen, etc.)
Elena
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Re: Are there any benefits to achieving "great wealth"?

Post by Elena »

Great question. For me, it is a matter of security. I would have the leeway to act upon stressful situations, while other people would be stuck (with a system, with a war, catastrophes, crisis, etc.). I would be well suited in those times.
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HomerJ
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Re: Are there any benefits to achieving "great wealth"?

Post by HomerJ »

miamivice wrote:My question is simple. What, if anything, does achieving the status of "wealthy" gain someone, if you do not spend it nor talk about it? Is there anything that it provides in life?
Peace of mind, mostly.

I don't have to worry about money anymore. If I lose my job tomorrow, it won't be a big deal. My wife quit a job she hated, because we no longer needed the high salary. That's a pretty huge benefit of "great wealth".

But there are also material benefits. I do have a nicer house with a nicer view out back. I've gone on vacations and seen things I couldn't have afforded to see 15 years ago. If we want to fly our daughter home for Christmas, we just pay for it. We have a lake condo, and a boat and a jetski.

They say money can't buy happiness, but I've never seen anyone look sad on my jetski. :)
henrikk
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Re: Are there any benefits to achieving "great wealth"?

Post by henrikk »

I have to disagree with those that say that wealth gives you "independence" or "peace of mind" or the like. I agree that it *can* give you those, but there are plenty of examples where wealth did not bring "peace of mind" to people (there stuff or fears owned/enslaved them). Wealth has to be coupled with the right mind set and attitude, otherwise it can be a trap and it will bring no joy or peace.

This is why get-rich-quick can be a problem... just look at the percentage of lottery winners that are broke 5 to 10 years after they cashed the big check.
Last edited by henrikk on Thu Dec 29, 2016 11:47 am, edited 1 time in total.
gotlucky
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Re: Are there any benefits to achieving "great wealth"?

Post by gotlucky »

ponyboy wrote: Whenever someone uses a billionaire as an example it never works out. The inner circles of billionaires are other billionaires...they're the wealthiest people on earth. If one of them buys a $300,000,000 yacht...to the rest of the inner circle billionaires it doesnt matter. They're not impressed because they can all afford/buy one if they want. Everyone below them...working class people and even multi millionaires are impressed but to a billionaire they do not care what those peoples opinions are.

Why do you think buffet buys $30+billion dollar companies but still lives in the same house? Thats really the only way to get anyones attention he runs with. Not to mention he wants to get richer. Again buffet can upgrades to a $1billion dollar home his "crew" wont care.
It seems to me that you equate wealth with being able to show off. While I agree that this is a viewpoint held by many, I will continue to assert that those that have amassed "great wealth" are usually people who are not trying to impress others. It's almost a disorder; people who build great fortunes are addicted to the utility aspect of money rather than the status aspect. Yes, there is a certain amount of competition that billionaires feel and money is the way they keep score. However, most people who build great wealth are notoriously and excessively frugal and hyper analytical. If you just want to have more money so you can buy things, you'll quit after you have $50M; you can already buy everything, it isn't worth the added stress and you won't have time to play with your toys. It seems a lot of people focus on buying houses or toys.

This is precisely the reason why none of my friends or none of my non-immediate family has any clue about how much I have. They know I have enough to have quit my engineering job at age 31. If they actually knew, they would ridicule me for making conscious decisions to not partake in activities that I don't value, ie. being cheap. For example, certain members of my family enjoy going to Morton's or Ruth's Cris. While I certainly enjoy both those fine restaurants, the value I get from a single $200 meal is no where near what I get from spending the same amount of money treating my friends to a grilled steak and beer in my backyard wearing shorts and flip flops. Frankly, I'd rather donate $200 and not go to Morton's.

I try to be humble and not judge others because I realize other people value money for what it can buy and how they need to appear successful in life. That's fine. It's just not me; I much prefer analyzing for utility than actually buying stuff. I probably get a distorted smugness because I have much more stress-free time from 1) not working a job, 2) not having to take care of my stuff, and 3) not worrying about people trying to rip me off because they think "I can afford it". Ever serviced an exotic car or boat or needed work done on your La Cornue range? I would never enjoy that feeling.

Wasting time, money and resources was just as painful as a poor student as it is as a financially independent adult.
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Re: Are there any benefits to achieving "great wealth"?

Post by Grt2bOutdoors »

Of course, but with great wealth comes great responsibility.
Benefits: Write the check for any amount without worry about where the money for said check will come from. Where will you write the check to? hmm, college bursars office so your kid doesn't need a loan, favorite charity, the car dealer, etc.

Cons: If you advertise it, you will attract every leach, con artist, relative (yes, relatives too!) and "charity" out there looking to take a piece or perhaps, many pieces of your wealth.

Yes indeed! with wealth comes great responsibility. How you handle it is up to you. Just be prepared to change your phone number and hire a few attorneys to step in between you and your new "friends".
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
alexost
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Re: Are there any benefits to achieving "great wealth"?

Post by alexost »

henrikk wrote:I have to disagree with those that say that wealth gives you "independence" or "peace of mind" or the like. I agree that it *can* give you those, but there are plenty of examples where wealth did not bring "peace of mind" to people (there stuff or fears owned/enslaved them). Wealth has to be coupled with the right mind set and attitude, otherwise it can be a trap and it will bring no joy or peace.

This is why get-rich-quick can be a problem... just look at the percentage of lottery winners that are broke 5 to 10 years after they cashed the big check.

- Henrik

You're thinking too much. Of course there are people who cannot have certain states of mind. However wealth is a necessary, but maybe not sufficient condition of a comfortable state of mind.

To put it even more bluntly and correctly; wealth helps you survive. And most humans are primordially wired to survive.
inbox788
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Re: Are there any benefits to achieving "great wealth"?

Post by inbox788 »

miamivice wrote:I have achieved what I consider "great wealth". ...But, I've met plenty of people who have achieved "great wealth" and then spent it, and are now working to pay off their debt, so I won't spend mine.

My question is simple. What, if anything, does achieving the status of "wealthy" gain someone, if you do not spend it nor talk about it? Is there anything that it provides in life?
Congratulations! While it's a great situation to be financially independent, I could imagine myself being paralyzed about what to do next. That you're feeling is that your usual buckets or goals are filled and you need to find new goals (financial), which isn't an easy thing. Worse, some of the goals may begin to conflict with your past ideals, and you need to resolve them.

The simple answer is to spend it wisely and just don't squander it. But you need to find you own way, just keep things in perspective.

Just think, the average person making $50k doesn't think too much of spending $10 on fast food. Someone making $500k can treat a $100 meal the same way. And at $5M, the $1000 meal is nothing. Do you stress if you walk into the dollar store and buy 20 items? The $500k earner walks into Walmart and buys 20 items the same way. The $5M earner walks into Macys or pretty much any other regular store and feels the same.

There are stores built for the rich, and it's easy to spend if you want to. I'm finding that what I considered premium and high end brands only begin to scratch the surface, and with almost every product category, there are even higher end brands I have never even heard of or imagined. Once the impossible becomes possible, you may begin to want to consider it. Live it up alittle! :beer

For me, my first upgrade would be flying first class vs economy. I would have to have "tremendous wealth" to consider private planes and fractional ownership, but for now, I'm looking forward to achieving "great wealth" some day.
2015
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Re: Are there any benefits to achieving "great wealth"?

Post by 2015 »

“Money doesn't make you happy. I now have $50 million but I was just as happy when I had $48 million.”

- Arnold Schwarzenegger
orca91
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Re: Are there any benefits to achieving "great wealth"?

Post by orca91 »

miamivice wrote:My question is simple. What, if anything, does achieving the status of "wealthy" gain someone, if you do not spend it nor talk about it? Is there anything that it provides in life?
In your case, it seems to have gained you nothing. If I recall, you have posted about being envious of others taking vacations while you don't, being envious of other people's homes even if they don't have your kind of money, being upset about other people's kids getting scholarships or loans that your kids won't have because of your money, and other things along those lines.

Don't mean to be harsh, but your wealth only seems to have gained you jealousy and envy. I'd say it's pretty pointless to have great wealth if you still worry about what others are doing and are unwilling to do things you want to change that.

To answer your question with a question.... What were your goals and what did you want to be able to do when you achieved great wealth?
a
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Re: Are there any benefits to achieving "great wealth"?

Post by a »

henrikk wrote:Wealth has to be coupled with the right mind set and
attitude, otherwise it can be a trap and it will bring no joy or
peace.

This is why get-rich-quick can be a problem... just look at the
percentage of lottery winners that are broke 5 to 10 years after they
cashed the big check.
Reminds me of something Michael Crichton said in Jurassic Park (the
book) (through the character of Ian Malcolm):

Once a karate master has advanced to the point
where his hands have become a deadly weapon, he has
also progressed to the point where he won't misuse it. He does
not lose his temper and kill someone in a bar. The man who kills
someone in a bar is the man who has purchased his power in the form
of a Saturday night special. (paraphrase/slight modification by me)

It is partially echoed by what Jeff Bridges says in The Vanishing.
"If you want to know what Diane went through, you'll have to go
through the same things she did."

Complete knowledge that fulfills what we would call real
"understanding" can't be gained any other way than by going through
the whole process of getting it.
Not only is it not really possible to get rich quick, you do not want
to be one of the people who in any way gets the money in a way that
would be too quick. That is just proof that you gained it improperly,
unsustainably.

Who is the karate master and who is the gun buyer out of these two:
the "tech.titans" or Wall Street?
radiowave
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Re: Are there any benefits to achieving "great wealth"?

Post by radiowave »

Value vs Wealth. . . what is the value of a good life, e.g. doing something worthwhile or what accomplishments have been achieved vs. how much wealth do I need to achieve a good life to be comfortable and not have to worry about money.

Two very different questions.
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EFF_fan81
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Re: Are there any benefits to achieving "great wealth"?

Post by EFF_fan81 »

I would like to one day become wealthy enough that I can (1) know that I can comfortable live an upper-middle class lifestyle (possibly with a few luxuries like a vacation home) in perpetuity without working even if the market turns south or I hit some unexpected bad luck and (2) fully-fund private school (first parochial, then independent catholic, then hopefully top-tier college and if appropriate graduate school) for two (maybe hopefully one day three) children.

Hopefully I get there in my late 50s or early 60s and ease into part-time work. I have no real strong desire to retire early. (Shift jobs, start a business maybe. But if I fully retire while in my prime I am just going to waste time on the internet...)

Beyond that, I personally can't think of any benefits, honestly. You can probably donate a lot and get a plaque out of it, which is nice. Also, maybe you get to meet more rich people if you are rich by going to rich person type events like country club annual golf events or museum exhibit openings. But by virtue of a great education I know a lot of rich people already, so little marginal value there. Personally, I prefer to meet nice and interesting people. As long as they are rich enough to pay their tab at the bar, that's OK by me.
goblue100
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Re: Are there any benefits to achieving "great wealth"?

Post by goblue100 »

This table shows the top 1% by age.

http://www.financialsamurai.com/top-one ... ts-by-age/

It looks about right to me. I guess I could see how a 25 year old with 380,000 may not feel like he has great wealth, but I would expect if you are over the age of 40 with 2.2 million or more you would feel wealthy.

In any case, the best thing about money is what it can do for you. I couldn't find the article, but I read a piece by Michelle Singletary recently where she pointed out that people who are somewhat happy are those who spend money where their passions and beliefs lie. No one here can tell you what your passions or beliefs are. Perhaps you need some?
"Confusion has its cost" - Crosby, Stills and Nash
inbox788
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Re: Are there any benefits to achieving "great wealth"?

Post by inbox788 »

a wrote:Reminds me of something Michael Crichton said in Jurassic Park (the
book) (through the character of Ian Malcolm):
Reminded me of The Italian Job, where I feel like the Steve character (sorry it's a little long):
And I want to propose a toast to Charlie because we just stole $35 million worth of gold without even holding a gun because he planned this down to a "T '." Nobody else could have done that. Nobody. Charlie!
-Charlie!
-Yay!
Thank you.
So, come on, gentlemen. Shopping list. Who's doing what? Spare no dirty details. Come on, you guys.
Take a lesson from an old man. Don't spend it. Invest.
In what?
In gold.
Let's figure out how to get out of here first, all right?
What are you getting, Rob?
I don't know--there's a lot of things you can buy with a lot of money.
You know, I'm just thinking about naked girls in leather seats.
Obviously. See?
Suppose I get the Aston Martin Vanquish?
There's not a lot a girl won't do on the passenger seat of one of those things.
I'm going to get a NAD T770
I'm going to get a NAD T770 digital decoder with a 70-watt amp and Burr Brown DACs.
Yeah.
It's a big stereo.
Speakers so loud they blow women's clothes off.
Now you're talking.
$35 million-- you can't get more creative than that, man?
I'm going to Andalucia, south of Spain... right there.
Get me a big house... get me a library full of first editions.
Get a room for my shoes.
What about you, Steve?
I don't know--
I haven't decided yet.
You haven't decided yet?
Come on, man,
is it the mountain air, just...?
I liked what you said.
I'll take one of each of yours.
Well, well, two of everything
-for Steve then.
-Two of those.
Oy!
Loved the toast.
But you could've pulled this off with your eyes closed.
No, you were incredible. Just incredible.
You saw the whole picture. You covered all the angles.
You know, Charlie, there are two kinds of thieves in this world: the ones who steal to enrich their lives, and the ones who steal to define their lives.
Don't be the latter.
Makes you miss out on what's really important in this life.
What are you talking about, John?
You've been a good father.
Sitting in prisons doesn't make you a good father.
I spent half my kid's life in prison.
Don't get to be my age with nothing but this, Charlie.
Find somebody you want to spend the rest of your life with and hold onto her forever.
-Okay?
And later Charlie says:
Charlie Croker: [in a restaurant] You've got no imagination. You couldn't even decide what to do with all that money, so you had to buy what everybody else wanted.
btenny
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Re: Are there any benefits to achieving "great wealth"?

Post by btenny »

From what I see from a few 8 figure people I know.

Fly private for many trips
Take very good vacations like African safaris or world cruises
Own your own business and like to run it
Enjoy working so you keep the business
Keep working well into 70s because of above
Have big issues on who will run the business and inherit it
Sell some/all of the business in their late 70s to solve inheritance issues.
Own several homes
Maybe not use those homes but kids and friends do
Too busy to really play a lot
Bored with full retirement

Good Luck
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Sandtrap
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Re: Are there any benefits to achieving "great wealth"?

Post by Sandtrap »

miamivice wrote:OK Bogleheads,

I have achieved what I consider "great wealth". . . . . .
. . . . . . . My question is simple. What, if anything, does achieving the status of "wealthy" gain someone, if you do not spend it nor talk about it? Is there anything that it provides in life?
A sort of "Horatio Alger Story" re: "great wealth".

I played golf for many years with a group of retired folks and their wives, all with "great wealth". They played several times a week at the best resort golf courses. As an established "club", they had great discounts on green fees, IE: $35 compared to $200 non resident green fees.

I had been invited by an old friend and played for many years because I got to play on golf courses that I could never afford otherwise (though said nothing about my income level). As everyone was a retiree/senior with "great wealth", all assumed that everyone else, including me, had "great wealth". So that was the topic of discussion for many of them during the rounds and also at lunch in the country clubs, "great wealth", not how to earn it or how to spend it, just having it.

Over the years I had long talks (3-4 hour round of golf) with whoever my "cart mate" happened to be on how they aquired "great wealth". This is very much like a "Horatio Alger" story. Everyone had a different story but never tired of telling me about their "great wealth". Not a single person asked me what I did for a living beyond a few lines, and then quickly getting back to thier "great wealth" stories.

Some folks were worth maybe a million or so, some 100's of millions. Some inherited thier wealth. Some were "trust fund" kids grown old. One or two had earned it from scratch and they were the only ones that shared their love of golf and appreciation for what they had earned and learned . . . the "benefits of great wealth".
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RAchip
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Re: Are there any benefits to achieving "great wealth"?

Post by RAchip »

what is "great wealth?". To me its a bare minimum of 100mm. and really "great wealth" today is $500mm. Is that what we are talking about? I can tell you what to do with 10 or 20mm but that is not "great" wealth.
Last edited by RAchip on Thu Dec 29, 2016 7:16 pm, edited 2 times in total.
matto
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Re: Are there any benefits to achieving "great wealth"?

Post by matto »

Nassim Taleb wrote:I suppose that the main benefit of being rich (over just being independent) is to be able to despise rich people (a good concentration of whom you find in glitzy ski resorts) without any sour grapes. It is even sweeter when these farts don't know that you are richer than they are.
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Phineas J. Whoopee
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Re: Are there any benefits to achieving "great wealth"?

Post by Phineas J. Whoopee »

Ascension to power, presuming that's truly a benefit.
PJW
Rodc
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Re: Are there any benefits to achieving "great wealth"?

Post by Rodc »

Are there any benefits to achieving "great wealth"?
If I had an answer it would be merely speculation.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.
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8foot7
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Re: Are there any benefits to achieving "great wealth"?

Post by 8foot7 »

RAchip wrote:what is "great wealth?". To me its a bare minimum of 100mm. and really "great wealth" today is $500mm. Is that what we are talking about? I can tell you what to do with 10 or 20mm but that is not "great" wealth.
I don't understand where people get these relatively random "thresholds." You would seriously look a guy with $50 million in the face and tell him he was only halfway to "great wealth?"
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ClevrChico
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Re: Are there any benefits to achieving "great wealth"?

Post by ClevrChico »

To me, wealth buys freedom and flexibility. More wealth, buys more of both.

I worked for a billionaire who was able to start a brand new family very late in life because of his wealth.

For myself of not great wealth, it's the ability to have normal working hours, generous vacation time, and long holidays with the family. That wouldn't be possible if I was struggling financially.
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HomerJ
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Re: Are there any benefits to achieving "great wealth"?

Post by HomerJ »

ClevrChico wrote:I worked for a billionaire who was able to start a brand new family very late in life because of his wealth.
Heh, it doesn't take any money to start a new family.

Or maybe you mean it takes a lot of money to get a young wife (under 45) when you're 80?
RAchip
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Re: Are there any benefits to achieving "great wealth"?

Post by RAchip »

"For myself of not great wealth, it's the ability to have normal working hours, generous vacation time, and long holidays with the family. That wouldn't be possible if I was struggling financially."

Working, vacations and holidays are not the way to think with great wealth. Every day is a "vacation" if you want it that way. If you "work" its because you own the company and still oversee things. Or you are an athelet or actor. You have homes in different places and spend time at them when the conditions at each are best.

To me, it takes a minimum of 100mm to have your own jet and even at that level its a stretch. If you want to fly cross country you need at least a citation x. if you are mostly going up and down the east coast you can get by with less, but pilots and staff at the different houses produce expenses of easily 1-2-3 mm per year.
tphp99
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Re: Are there any benefits to achieving "great wealth"?

Post by tphp99 »

OP, if you don't see the benefits of your "great wealth" already, you may never.

Life/money is like running long distances. You'll get out what you put in. You also have to own up to the results and be content with it.

It is the unfortunate sloth who thinks he'll qualify for the Olympic team without tremendous sacrifices. It is the unfortunate millionaire/billionaire (what have you) who wants more without working harder, or isn't afforded the opportunities. Those people are miserable - money wise.

I remember being so happy to see my first paycheck (@ $3 per hour) from my first job. I'm just as happy today with what I make - luckily, it's a bit more.

“Money will only make you more of what you already are.” - T. Harv Eker
tphp99
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Re: Are there any benefits to achieving "great wealth"?

Post by tphp99 »

HomerJ wrote:
ClevrChico wrote:I worked for a billionaire who was able to start a brand new family very late in life because of his wealth.
Heh, it doesn't take any money to start a new family.

Or maybe you mean it takes a lot of money to get a young wife (under 45) when you're 80?

Mr Heffner, is that you? Thought you were Homer?
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stemikger
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Re: Are there any benefits to achieving "great wealth"?

Post by stemikger »

I didn't read the other replies yet but as far as I'm concerned the only real reason to achieve great wealth is freedom. Also, at the end of your time here, you can do some good in the world by giving it to charities that you believe in. I don't believe in giving too much to your heirs, but I will give what I can when that time comes.
Choose Simplicity ~ Stay the Course!! ~ Press on Regardless!!!
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ClevrChico
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Re: Are there any benefits to achieving "great wealth"?

Post by ClevrChico »

HomerJ wrote:
ClevrChico wrote:I worked for a billionaire who was able to start a brand new family very late in life because of his wealth.
Heh, it doesn't take any money to start a new family.

Or maybe you mean it takes a lot of money to get a young wife (under 45) when you're 80?
Hah, exactly! This AND send multiple kids to private school, then university, when most people are thinking about retiring. They are an interesting family, and they're still together.
sambb
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Re: Are there any benefits to achieving "great wealth"?

Post by sambb »

a lot of americans have great wealth by global standards, and by global standards, the top 1% is quite common in the USA.
There are a lot of people that have subtle negative things to say about wealth here, unclear why that is, but I see the same when sometimes when someone wants to buy a nice car too.
Wealth is not an endpoint, and if you can do it, then go for it. Perhaps you are a brilliant inventor, entertainer, or business mind. Go for it. You've probably added more wealth to us via the companies you built and supported.
TRC
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Re: Are there any benefits to achieving "great wealth"?

Post by TRC »

miamivice wrote:OK Bogleheads,

I have achieved what I consider "great wealth". I am not Donald Trump wealthy, nor CEO wealthy, nor San Francisco wealthy. But for a person who doesn't fit the previously listed criteria, I have achieved "great wealth". I'm in the 99th percentile by age, according to one net worth calculation website.

My question is, what does this do for me? We are not supposed to talk about money in our society, so I have not earned "bragging rights". I can go spend it (in college, I ooh'd and ah'd over high end stereo systems) and I technically can go buy one of the highest end 5.1 or 7.1 surround sound systems on the market. I suppose I could go buy a fancier house than I live in today. But, I've met plenty of people who have achieved "great wealth" and then spent it, and are now working to pay off their debt, so I won't spend mine.

My question is simple. What, if anything, does achieving the status of "wealthy" gain someone, if you do not spend it nor talk about it? Is there anything that it provides in life?
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Re: Are there any benefits to achieving "great wealth"?

Post by bloom2708 »

sambb wrote:a lot of americans have great wealth by global standards, and by global standards, the top 1% is quite common in the USA.
There are a lot of people that have subtle negative things to say about wealth here, unclear why that is, but I see the same when sometimes when someone wants to buy a nice car too.
Wealth is not an endpoint, and if you can do it, then go for it. Perhaps you are a brilliant inventor, entertainer, or business mind. Go for it. You've probably added more wealth to us via the companies you built and supported.
I don't think you will find much negativity about wealth itself. Having wealth and keeping wealth are two different things.

Buying a $50k car that depreciates to $15k in 3 years is an example of wealth slip sliding away. I find nothing wrong with a $50k car other than it is the opposite of wealth building.

Buying that car at 30 or 70 does have a different impact.
RAchip
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Re: Are there any benefits to achieving "great wealth"?

Post by RAchip »

"Buying a $50k car that depreciates to $15k in 3 years is an example of wealth slip sliding away. I find nothing wrong with a $50k car other than it is the opposite of wealth building."

For someone who has great wealth, a $50k car is a beater they have around for the housekeeper and gardner to run errands. A good caddy escalade is $100k. Most of the better Mercs, BMWs and porsches are well over 100k. This is not a big deal at all if you have great wealth. One of the many benefits of great wealth is you have a 5+ car garage and have nice vehicles that you change out every few years. And you have a guy who takes care of your cars for you and is your driver when you need that.
orca91
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Re: Are there any benefits to achieving "great wealth"?

Post by orca91 »

That is an issue that shows up in Bogleheads. Great wealth seems to still mean spending as little as possible. I don't really understand the grip some here have on their money. I don't mean one should spend wildly and out of control. But, someone with millions of dollars.... a $50k car is nothing. Some replies in that one said one shouldn't buy a car that expensive until their net worth is at least $10 million. Really??? To each their own, but reality seems out of reach for some around here.

What's the saying about being the richest man in the cemetery??

There is no benefit to great wealth, if one still lives like they don't have a dime to their name, IMO.
KlangFool
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Re: Are there any benefits to achieving "great wealth"?

Post by KlangFool »

goblue100 wrote:This table shows the top 1% by age.

http://www.financialsamurai.com/top-one ... ts-by-age/

It looks about right to me. I guess I could see how a 25 year old with 380,000 may not feel like he has great wealth, but I would expect if you are over the age of 40 with 2.2 million or more you would feel wealthy.
goblue100,

<< I would expect if you are over the age of 40 with 2.2 million or more you would feel wealthy.>>

I disagreed with that article and the above statement.

A) If you are at age 40 with 2.2 million or more but your annual expense is much more than 2.2 million, do you feel wealthy? Let's assume that the 2.2 million can only last 3 months if the person lost his job and/or income, does the person feels wealthy?

B) If you are at age 40 with 2.2 million or more and your annual expense is 40K, do you feel wealthy?

IMHO, whether a person feels wealthy has to do with his living expense versus his wealth.

In the case of (A), the person is one year away from poverty. How could the person feel wealthy?

In the case of (B), the person has much more than he needs, he is wealthy.

The sense of wealth has nothing to do with income. It has to do with the ratio of wealth versus the person's expense.

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orca91
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Re: Are there any benefits to achieving "great wealth"?

Post by orca91 »

If someone spends $2.2 million in a year or 3 months, I bet they feel plenty wealthy. :happy

A feeling is just a feeling. Someone can go out for a nice night on the town, blow some money, and feel wealthy for the night.

Whether they are or not is another thing, as you said.
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amp
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Re: Are there any benefits to achieving "great wealth"?

Post by amp »

goblue100 wrote:This table shows the top 1% by age.

http://www.financialsamurai.com/top-one ... ts-by-age/

It looks about right to me. I guess I could see how a 25 year old with 380,000 may not feel like he has great wealth, but I would expect if you are over the age of 40 with 2.2 million or more you would feel wealthy.
I don't know where the numbers in that link come from, they only list their own website as the source, but they don't look right to me.

First, they list $380K as the top one percent income regardless of age. That's clearly wrong. Then, all the net worth figures are multiples of that income, which is fishy. Finally, those numbers look much too low. Here's what an article from CNBC says.
For people in their 40s, it takes a total net worth of $5.8 million to get into the one percent. For people in their 50s, it takes nearly $10 million. For people in their 60s, it takes around $11.6 million.
CNBC cites the Federal Reserve for their data. The article dates from 2012, so the numbers should be even higher today.
gotlucky
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Re: Are there any benefits to achieving "great wealth"?

Post by gotlucky »

orca91 wrote:That is an issue that shows up in Bogleheads. Great wealth seems to still mean spending as little as possible. I don't really understand the grip some here have on their money. I don't mean one should spend wildly and out of control. But, someone with millions of dollars.... a $50k car is nothing. Some replies in that one said one shouldn't buy a car that expensive until their net worth is at least $10 million. Really??? To each their own, but reality seems out of reach for some around here.

What's the saying about being the richest man in the cemetery??

There is no benefit to great wealth, if one still lives like they don't have a dime to their name, IMO.
My point is that buying a $50k car vs a $30k car that provides the EXACT SAME utility DOES NOT contribute to great wealth building. It may be more enjoyable and may make one happier, but it is a detriment to wealth building. Most people who have built great wealth focus (arguably obsessively) on the bottom line. The same argument can be used for a $30M yacht or a vacation home where the expenses outpace the potential for appreciation. Of course, an expensive principal home in a good area can provide utility while keeping pace with inflation or slight appreciation.

Everyone I know who is "quietly" wealthy deals with this dilemma. They'd much prefer to buy another apartment building than an exotic car. If a wealth builder has a $10M net worth and a $30k car fully satisfies all his needs, then I would never judge him for not splurging on a flashy car. It's his money and he can spend it how he pleases. It's likely that if he cared so much about that status derived from the car he drove, he never would have amassed $10M in the first place.

Those that use the "richest man in the cemetery" argument just see the value of spending money. That's fine, but understand that some may want to give back after they are gone.
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TheTimeLord
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Re: Are there any benefits to achieving "great wealth"?

Post by TheTimeLord »

orca91 wrote:That is an issue that shows up in Bogleheads. Great wealth seems to still mean spending as little as possible. I don't really understand the grip some here have on their money. I don't mean one should spend wildly and out of control. But, someone with millions of dollars.... a $50k car is nothing. Some replies in that one said one shouldn't buy a car that expensive until their net worth is at least $10 million. Really??? To each their own, but reality seems out of reach for some around here.

What's the saying about being the richest man in the cemetery??

There is no benefit to great wealth, if one still lives like they don't have a dime to their name, IMO.
To save money you have to convince yourself (frivolous) spending is bad or at least delayed gratification is better. You do that long enough and it probably becomes a pretty hard habit to break. Their is nothing wrong with someone living frugally even with millions in the bank, it just probably isn't the motivation most people start out with when they begin to save. But after decades of working to see your portfolio grow, I imagine beginning to spend it down is a lot more difficult than many people would think. We all have inconsistencies, I can drop $100 on a meal and not blink but might drive a couple miles to save 10 cents a gallon on gas. Is that silly, yes but we all perceive value and savings in different ways.
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TonyDAntonio
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Re: Are there any benefits to achieving "great wealth"?

Post by TonyDAntonio »

I don't have great wealth. Heck, I still wonder if I have 'enough'. But what my money allows is for me to start a job I think I will love....grounds crew member at AT&T Park and some field work during SF Giants games. :D I'll barely make enough to pay for my Bart tickets and lunch but it could be my field of dreams. That seems like a benefit to having some money.
orca91
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Re: Are there any benefits to achieving "great wealth"?

Post by orca91 »

gotlucky wrote:
orca91 wrote:That is an issue that shows up in Bogleheads. Great wealth seems to still mean spending as little as possible. I don't really understand the grip some here have on their money. I don't mean one should spend wildly and out of control. But, someone with millions of dollars.... a $50k car is nothing. Some replies in that one said one shouldn't buy a car that expensive until their net worth is at least $10 million. Really??? To each their own, but reality seems out of reach for some around here.

What's the saying about being the richest man in the cemetery??

There is no benefit to great wealth, if one still lives like they don't have a dime to their name, IMO.
My point is that buying a $50k car vs a $30k car that provides the EXACT SAME utility DOES NOT contribute to great wealth building. It may be more enjoyable and may make one happier, but it is a detriment to wealth building. Most people who have built great wealth focus (arguably obsessively) on the bottom line. The same argument can be used for a $30M yacht or a vacation home where the expenses outpace the potential for appreciation. Of course, an expensive principal home in a good area can provide utility while keeping pace with inflation or slight appreciation.

Everyone I know who is "quietly" wealthy deals with this dilemma. They'd much prefer to buy another apartment building than an exotic car. If a wealth builder has a $10M net worth and a $30k car fully satisfies all his needs, then I would never judge him for not splurging on a flashy car. It's his money and he can spend it how he pleases. It's likely that if he cared so much about that status derived from the car he drove, he never would have amassed $10M in the first place.

Those that use the "richest man in the cemetery" argument just see the value of spending money. That's fine, but understand that some may want to give back after they are gone.
If one has great wealth and many millions of dollars, $20k is chump change and wouldn't have made a dent in their path to great wealth.

Your point that it wouldn't contribute to the wealth building is correct. But, you skip the point that they would have got to $10 million no matter what car they drove.

And, you are judging by assuming car guys only drive cool cars for status purposes. :wink:
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praxis
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Re: Are there any benefits to achieving "great wealth"?

Post by praxis »

Every single time I can answer the question: "does this expense threaten my financial security?" with "no", I am conscious of the benefit of what I have in savings. I guess I seriously ask this question a few times a month. I am trained to review ALL expenses in my life, but there are few unexpected large ones. I don't define my wealth as "great".
RAchip
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Re: Are there any benefits to achieving "great wealth"?

Post by RAchip »

The original question was wht does "great wealth" really get you if you dont talk about it or spend it. The answer is it provides real security for you. you dont have to work and can instead live off of the income your money produces. If you cant live off the income your money produces then you dont have "geat wealth.". Plus real money enables you to solve problems. You hire people to deal with and solve problems for you. You have caretakers and other staff to manage your properties. Your life is like a business. You have employees (pilots, drivers , housekeepers etc). You are the ceo. If you are worrying about a $50k car you are nowhere near great wealth. A person with real wealth can have the stock portion of their portfolio fluctuate by millions each day and not even blink at that.
KlangFool
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Re: Are there any benefits to achieving "great wealth"?

Post by KlangFool »

RAchip wrote:
The original question was wht does "great wealth" really get you if you dont talk about it or spend it. The answer is it provides real security for you. you dont have to work and can instead live off of the income your money produces.
RAchip,

This does not necessary apply in OP's case. Hence, it may not deliver real security in OP's case. His wealth places him at 1% for people in his age's group. But, it may not be big enough as compared to his annual expense. Hence, OP may not enjoy any real security.

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RAchip
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Re: Are there any benefits to achieving "great wealth"?

Post by RAchip »

Understood. This is way we need specifics to really discuss an issue like this. i guess to some people a few million or maybe even less is "great wealth" but not to me.
inbox788
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Re: Are there any benefits to achieving "great wealth"?

Post by inbox788 »

ChuangTzu wrote:One or two had earned it from scratch and they were the only ones that shared their love of golf and appreciation for what they had earned and learned . . . the "benefits of great wealth".
Too bad I don't play golf, but this never gets old for me...
https://www.youtube.com/watch?v=pcnFbCCgTo4
sambb
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Re: Are there any benefits to achieving "great wealth"?

Post by sambb »

orca91 wrote:That is an issue that shows up in Bogleheads. Great wealth seems to still mean spending as little as possible. I don't really understand the grip some here have on their money. I don't mean one should spend wildly and out of control. But, someone with millions of dollars.... a $50k car is nothing. Some replies in that one said one shouldn't buy a car that expensive until their net worth is at least $10 million. Really??? To each their own, but reality seems out of reach for some around here.

What's the saying about being the richest man in the cemetery??

There is no benefit to great wealth, if one still lives like they don't have a dime to their name, IMO.
thanks for the very insightful comment.
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Re: Are there any benefits to achieving "great wealth"?

Post by TRC »

orca91 wrote:That is an issue that shows up in Bogleheads. Great wealth seems to still mean spending as little as possible. I don't really understand the grip some here have on their money. I don't mean one should spend wildly and out of control. But, someone with millions of dollars.... a $50k car is nothing. Some replies in that one said one shouldn't buy a car that expensive until their net worth is at least $10 million. Really??? To each their own, but reality seems out of reach for some around here.

What's the saying about being the richest man in the cemetery??

There is no benefit to great wealth, if one still lives like they don't have a dime to their name, IMO.
I agree 100%. And personally speaking, seeing 2 former classmates unexpectedly pass away this year in their late 30's reinforces the need to have a balance on saving & spending and to enjoy life NOW. Don't wait to spend all your hard earned money & investments later in life...there's no guarantee you'll make it that long.
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