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"Many people with a large amount of money, perhaps a million or two, consider themselves middle class when clearly they could even retire and live off their pas
by kangnkodos 5y ago
"Many people with a large amount of money, perhaps a million or two, consider themselves middle class when clearly they could even retire and live off their passive income"
If you have a million dollars, stop working, invest the money, you can safely draw about 35K per year for a long time. This is based on long term historic returns of the stock market.
There are different definitions of middle class in the US. The first one I found, Pew 2019, said the range was 46k - 137K.
So living off the passive income of a million dollars puts you well below middle class.
- Cycl0ps 5y agoA quick search shows average returns across the market sit around 8-11%. If we say 5% to be conservative, 1M returns $50'000 each year. That's not bad. That's a house in a quiet neighborhood with no worries about food, or debt. You're not living without a budget, but you could live without working.
- kangnkodos 5y agoIn the last ten years or so, returns have been extremely high. If you look back at all the data available, you get a number closer to 3.5% or maybe at the most 4%. https://en.wikipedia.org/wiki/Trinity_study https://en.wikipedia.org/wiki/Trinity_study