5 ms·

This was somewhat surprising to me: "The vast majority — 80% — either started their own business or worked for a small company that saw explosive growth. And al

by smanek 18y ago

This was somewhat surprising to me: "The vast majority — 80% — either started their own business or worked for a small company that saw explosive growth. And almost all of them made their fortune in a big lump sum after many years of effort." I guess it just reaffirms the pg/yc philosophy.

noonespecial 18y ago
It also decimates the "rich get richer", "us vs them" lines of BS politicians maniacally shovel our way in order to extract our votes. Good news folks. Its possible to get rich through hard work and a little cleverness. That's also the bad news.
- Retric 18y ago
  5M is a good retirement but it's not rich. When your assets are passively generating 5M a year then your rich.
  - Retric 18y ago
    With a good investment stratagy you can live off of ~4% of your capital per year and keep up with inflation. 4% of 5M is 200k/year. But if your retiring early you should aim for a 50% cushion which works out to 133k/year which far from amazing when you need to pay for your own heathcare etc. PS: Rich means "Possessing great material wealth" which I think it stands for more than just the ability to support an upper middle class lifestyle without working.
    - stcredzero 18y ago
      By the standards of most of the world, "comfortably middle class" in the US is rich.
  - arockwell 18y ago
    I always defined "rich" as being independently wealthy, and 5M is plenty to achieve that.
    - tesseract 18y ago
      Taking that line of reasoning further, a reasonable definition of "independently wealthy" might be, "able to maintain an upper-middle-class lifestyle on investment income alone, while also growing one's capital at or above the rate of inflation". (That last part is to distinguish the truly "independently wealthy" from retirees who may be living off their investments, but can only do so by drawing down the principal.) Under that definition, $5M seems to be around the lower limit of wealth necessary to achieve this. As others have mentioned, you will be paying for your own healthcare, and you will also be paying capital gains rather than regular income tax on all of your income. To sustain a flamboyantly "rich" lifestyle on investments alone, the lower limit of necessary wealth is probably more like $30-$50M. That's, of course, significantly harder to achieve (Wikipedia says 95k people worldwide are this wealthy). In fact, the groups of people I can think of who are typically associated with such flamboyant lifestyles (Fortune 500 execs, financiers, entertainment icons) do not, as a rule, do so based on their investments alone - rather they continue to work and are merely paid large salaries.
- breck 18y ago
  I don't think this article makes much of a case for that. It's not scientific at all and full of so many flaws that it doesn't come close to "decimating" any idea.

by smanek 18y ago

noonespecial 18y ago

It also decimates the "rich get richer", "us vs them" lines of BS politicians maniacally shovel our way in order to extract our votes. Good news folks. Its possible to get rich through hard work and a little cleverness. That's also the bad news.

Retric 18y ago
5M is a good retirement but it's not rich. When your assets are passively generating 5M a year then your rich.
- Retric 18y ago
  With a good investment stratagy you can live off of ~4% of your capital per year and keep up with inflation. 4% of 5M is 200k/year. But if your retiring early you should aim for a 50% cushion which works out to 133k/year which far from amazing when you need to pay for your own heathcare etc. PS: Rich means "Possessing great material wealth" which I think it stands for more than just the ability to support an upper middle class lifestyle without working.
  - stcredzero 18y ago
    By the standards of most of the world, "comfortably middle class" in the US is rich.
- arockwell 18y ago
  I always defined "rich" as being independently wealthy, and 5M is plenty to achieve that.
  - tesseract 18y ago
    Taking that line of reasoning further, a reasonable definition of "independently wealthy" might be, "able to maintain an upper-middle-class lifestyle on investment income alone, while also growing one's capital at or above the rate of inflation". (That last part is to distinguish the truly "independently wealthy" from retirees who may be living off their investments, but can only do so by drawing down the principal.) Under that definition, $5M seems to be around the lower limit of wealth necessary to achieve this. As others have mentioned, you will be paying for your own healthcare, and you will also be paying capital gains rather than regular income tax on all of your income. To sustain a flamboyantly "rich" lifestyle on investments alone, the lower limit of necessary wealth is probably more like $30-$50M. That's, of course, significantly harder to achieve (Wikipedia says 95k people worldwide are this wealthy). In fact, the groups of people I can think of who are typically associated with such flamboyant lifestyles (Fortune 500 execs, financiers, entertainment icons) do not, as a rule, do so based on their investments alone - rather they continue to work and are merely paid large salaries.
breck 18y ago
I don't think this article makes much of a case for that. It's not scientific at all and full of so many flaws that it doesn't come close to "decimating" any idea.