5 ms·

How did you get to this point? I have $2M+ net worth, and while I live somewhere rent controlled, $2M isn't that much in the Bay Area. I'm still scared to lose

How did you get to this point? I have $2M+ net worth, and while I live somewhere rent controlled, $2M isn't that much in the Bay Area. I'm still scared to lose my job.

recursive 2y ago
It's not net worth. It's how long you can abide. If you have $2M net worth and $1.99 is tied up in a way you can't spend on bills, that don't mean nothin'. If things got bad, I guess you could move. You could probably buy a house now in fly-over country and just retire, living on interest from conservative investments.
deleted 2y ago
[deleted]
nine_zeros 2y ago
At 2M net worth, the only thing that is making you fearful is your own poor assessment of risk/regret in life. You are more likely to regret taking large debts or missing out on life milestones than on losing the job or going hungry.
Muromec 2y ago
Why do you even bother to work if you have 2M ?
- supportengineer 2y ago
  Doesn't help you much if you are a family in Bay Area.
  - deleted 2y ago
    [deleted]
  - Muromec 2y ago
    Of course I'm a random person on the internet and you haven't asked for my advice. Just saying -- kids pick up languages real fast, friendship treaties and tax benefits are abundant and with 2M you can shop around for a better lifestyle if you really want to not have that stress and fear, unless you are determined to become filthy rich, I ofc don't know you.
zappchance 2y ago
If you're scared about your financial situation with over a $2M net worth either you are prone to paranoia or you're living well above your means. I'm constantly surprised how many well-off people try to pass themselves off as "one of the poors". My family and friends do okay with a net worth way below that, in the Bay Area. I've worked minimum wage jobs here in the bay, and had co-workers actually struggling to make it to the next paycheck. It really gets on my nerves when someone in software chimes in with "we're all struggling"—No, we are not all struggling on the same level. Guess how much the person making your fast food or working at your local grocery store is making... And think about how they still live in the same city as you. "$2M isn't that much". Man, I can't imagine what it takes to come to that conclusion.
- michaelt 2y ago
  I'm not one of these rich people that drives a gold-plated Lamborghini, like my obnoxious boss with his huge collection of supercars. I just drive a regular, normal Lamborghini - like my father, and his father before him.
- RHSeeger 2y ago
  > If you're scared about your financial situation with over a $2M net worth either you are prone to paranoia or you're living well above your means. As someone who was layed off and went without a job for 13 months (tech bubble), I am _always_ scared about my financial situation. Sure, if I lose my job, I have the resources to hold out while I find another, but - It _will_ impact my lifestyle, because I'll need to be more careful about what money I spend - It _will_ make my family unhappy, for the same reasons - I've been in the position where it's "do we eat or pay rent next month?", and it sucks. I likely won't get back there, but the fear of getting there persists. Look, I get it, $2M is a lot of money. But there's a fair number of people that can get to that amount (especially living in an area where a 2br dwelling is easily $1M of that), still be saving _more_ money, and still fear the idea of being out of work for months. Especially if it's a single earner household. And especially if there's children.
  - maeil 2y ago
minkles 2y ago
Two dead parents worth of houses. Mortgage paid off and a side job. It would have been that without the houses but there is an ex wife involved. Avoid those. My net worth is less than yours. I could live on your interest fine and just retire.
camdenreslink 2y ago
With a $2m+ net worth you could move to 90% of the country, retire and live off of the interest.
- jjav 2y ago
  > With a $2m+ net worth you could move to 90% of the country, retire and live off of the interest. Not really for most scenarios. For someone who is single and has no kids and plans to stay that way forever and is happy to live a very simple lifestyle, perhaps. Anyone else, no. You'd still need to buy a house even if you move to a real cheap area, so you don't have 2M in cash. Then, how are you paying for health care? Kids education?
  - SkyPuncher 2y ago
    $500k buys a very nice house in many part of the country. Health insurance can be purchased from healthcare.gov in largely the same way home insurance works. $1.5M would get you $60k/year without ever touching your principal. That being said, waiting even a few years drastically changes the math into your favor. 5 years of a job, plus interest on your retirement fund could easily double it.
- vundercind 2y ago
  To support a sibling post, depends very much on age and circumstances. 50, healthy, no wife or kids and no plan to have them? Might be fine retiring at $2m. 30 with a family? Ehhhh… Likely-time-remaining is a huge factor in figuring out how much it’ll take to retire at a given level of risk (of running out of money too early).
  - camdenreslink 2y ago
    It's $80k/year at a 4% withdrawal rate. If you were 30 with a family it might be cutting it close (depends on things like student loans, cost of health insurance, car payments, cost of mortgage, etc). Bumping it up to $2.5m would probably make things a lot more comfortable, but the point remains that OP has no reason to worry.
prewett 2y ago
What is your $2m generating? For instance, if you invested in high quality dividend stocks, you can get 3% and it should generally grow about what GDP does (which should also include inflation effects). So that's $60k/year, or after 15% dividend tax + let's say 5% California state tax, for a net of $48k. If you're in somewhere rent-controlled, seems like even with a family you're not going to on the streets starving. Alternatively, if you have $2m in stocks that are growing, you could consider the growth amount as potential income, because you could always sell it. Generally the growth is better than 3%, but down times will also hurt worse since you might have to sell at a low. Or you could purchase a residence with $1m, and buy dividends with the rest. Taxes on the residence will be about $10k, with dividend income of $24k, leaving $14k for food, etc. You won't independently wealthy in any of these scenarios (not in the Bay Area, anyway), but in these scenarios you don't actually need much from a job, maybe $40k with a family. So you should be able to save several years worth of that on a Bay Area salary, which leaves you with quite a long runway. And if things get really bad, you can move to the middle of nowhere, buy a house for $300k and actually be independently wealthy.
- fragmede 2y ago
  if you're only getting 3% with dividends, can I interest you with an HYSA paying 5%?
  - toomuchtodo 2y ago
    10 year US treasuries my good friend, no state or local income taxes and HYSA rates will decline as the Fed lowers the federal funds rate. 3% is on par for SCHD, which is a popular ETF dividend fund (that provides income, but also growth). Different risk profile than treasuries though. https://finance.yahoo.com/quote/SCHD/ https://finance.yahoo.com/quote/SCHD/
    - fragmede 2y ago
      We're still under a yield curve inversion, no? 3-month t-bills are paying 5.149% which is more than the rest.
fragmede 2y ago
That's a mindset problem. If you have $2M net worth, if $1M is in cash in a HYSA paying 5% APY you're making $3.5k/month on that alone. I don't know what your costs are; rent, healthcare, partner, kids, other dependents; if you caught long covid and became disabled and couldn't work another full day in your life, you'd still be making $3.5k a month. I don't wish that disability on anyone, but what helps the mental switch on what to do is to pull a years worth of living expenses out of savings into a cash account, and then just go do that for a year. Don't think about the rest of the pile, just sit with that year's worth of just living and doing no work.

How did you get to this point? I have $2M+ net worth, and while I live somewhere rent controlled, $2M isn't that much in the Bay Area. I'm still scared to lose my job.

recursive 2y ago

It's not net worth. It's how long you can abide. If you have $2M net worth and $1.99 is tied up in a way you can't spend on bills, that don't mean nothin'. If things got bad, I guess you could move. You could probably buy a house now in fly-over country and just retire, living on interest from conservative investments.

deleted 2y ago

[deleted]

nine_zeros 2y ago

At 2M net worth, the only thing that is making you fearful is your own poor assessment of risk/regret in life. You are more likely to regret taking large debts or missing out on life milestones than on losing the job or going hungry.

Muromec 2y ago

Why do you even bother to work if you have 2M ?

supportengineer 2y ago
Doesn't help you much if you are a family in Bay Area.
- deleted 2y ago
  [deleted]
- Muromec 2y ago
  Of course I'm a random person on the internet and you haven't asked for my advice. Just saying -- kids pick up languages real fast, friendship treaties and tax benefits are abundant and with 2M you can shop around for a better lifestyle if you really want to not have that stress and fear, unless you are determined to become filthy rich, I ofc don't know you.

zappchance 2y ago

If you're scared about your financial situation with over a $2M net worth either you are prone to paranoia or you're living well above your means. I'm constantly surprised how many well-off people try to pass themselves off as "one of the poors". My family and friends do okay with a net worth way below that, in the Bay Area. I've worked minimum wage jobs here in the bay, and had co-workers actually struggling to make it to the next paycheck. It really gets on my nerves when someone in software chimes in with "we're all struggling"—No, we are not all struggling on the same level. Guess how much the person making your fast food or working at your local grocery store is making... And think about how they still live in the same city as you. "$2M isn't that much". Man, I can't imagine what it takes to come to that conclusion.

michaelt 2y ago
I'm not one of these rich people that drives a gold-plated Lamborghini, like my obnoxious boss with his huge collection of supercars. I just drive a regular, normal Lamborghini - like my father, and his father before him.
RHSeeger 2y ago
> If you're scared about your financial situation with over a $2M net worth either you are prone to paranoia or you're living well above your means. As someone who was layed off and went without a job for 13 months (tech bubble), I am _always_ scared about my financial situation. Sure, if I lose my job, I have the resources to hold out while I find another, but - It _will_ impact my lifestyle, because I'll need to be more careful about what money I spend - It _will_ make my family unhappy, for the same reasons - I've been in the position where it's "do we eat or pay rent next month?", and it sucks. I likely won't get back there, but the fear of getting there persists. Look, I get it, $2M is a lot of money. But there's a fair number of people that can get to that amount (especially living in an area where a 2br dwelling is easily $1M of that), still be saving _more_ money, and still fear the idea of being out of work for months. Especially if it's a single earner household. And especially if there's children.
- maeil 2y ago

minkles 2y ago

Two dead parents worth of houses. Mortgage paid off and a side job. It would have been that without the houses but there is an ex wife involved. Avoid those. My net worth is less than yours. I could live on your interest fine and just retire.

camdenreslink 2y ago

With a $2m+ net worth you could move to 90% of the country, retire and live off of the interest.

jjav 2y ago
> With a $2m+ net worth you could move to 90% of the country, retire and live off of the interest. Not really for most scenarios. For someone who is single and has no kids and plans to stay that way forever and is happy to live a very simple lifestyle, perhaps. Anyone else, no. You'd still need to buy a house even if you move to a real cheap area, so you don't have 2M in cash. Then, how are you paying for health care? Kids education?
- SkyPuncher 2y ago
  $500k buys a very nice house in many part of the country. Health insurance can be purchased from healthcare.gov in largely the same way home insurance works. $1.5M would get you $60k/year without ever touching your principal. That being said, waiting even a few years drastically changes the math into your favor. 5 years of a job, plus interest on your retirement fund could easily double it.
vundercind 2y ago
To support a sibling post, depends very much on age and circumstances. 50, healthy, no wife or kids and no plan to have them? Might be fine retiring at $2m. 30 with a family? Ehhhh… Likely-time-remaining is a huge factor in figuring out how much it’ll take to retire at a given level of risk (of running out of money too early).
- camdenreslink 2y ago
  It's $80k/year at a 4% withdrawal rate. If you were 30 with a family it might be cutting it close (depends on things like student loans, cost of health insurance, car payments, cost of mortgage, etc). Bumping it up to $2.5m would probably make things a lot more comfortable, but the point remains that OP has no reason to worry.

prewett 2y ago

What is your $2m generating? For instance, if you invested in high quality dividend stocks, you can get 3% and it should generally grow about what GDP does (which should also include inflation effects). So that's $60k/year, or after 15% dividend tax + let's say 5% California state tax, for a net of $48k. If you're in somewhere rent-controlled, seems like even with a family you're not going to on the streets starving. Alternatively, if you have $2m in stocks that are growing, you could consider the growth amount as potential income, because you could always sell it. Generally the growth is better than 3%, but down times will also hurt worse since you might have to sell at a low. Or you could purchase a residence with $1m, and buy dividends with the rest. Taxes on the residence will be about $10k, with dividend income of $24k, leaving $14k for food, etc. You won't independently wealthy in any of these scenarios (not in the Bay Area, anyway), but in these scenarios you don't actually need much from a job, maybe $40k with a family. So you should be able to save several years worth of that on a Bay Area salary, which leaves you with quite a long runway. And if things get really bad, you can move to the middle of nowhere, buy a house for $300k and actually be independently wealthy.

fragmede 2y ago
if you're only getting 3% with dividends, can I interest you with an HYSA paying 5%?
- toomuchtodo 2y ago
  10 year US treasuries my good friend, no state or local income taxes and HYSA rates will decline as the Fed lowers the federal funds rate. 3% is on par for SCHD, which is a popular ETF dividend fund (that provides income, but also growth). Different risk profile than treasuries though. https://finance.yahoo.com/quote/SCHD/ https://finance.yahoo.com/quote/SCHD/
  - fragmede 2y ago
    We're still under a yield curve inversion, no? 3-month t-bills are paying 5.149% which is more than the rest.

fragmede 2y ago

That's a mindset problem. If you have $2M net worth, if $1M is in cash in a HYSA paying 5% APY you're making $3.5k/month on that alone. I don't know what your costs are; rent, healthcare, partner, kids, other dependents; if you caught long covid and became disabled and couldn't work another full day in your life, you'd still be making $3.5k a month. I don't wish that disability on anyone, but what helps the mental switch on what to do is to pull a years worth of living expenses out of savings into a cash account, and then just go do that for a year. Don't think about the rest of the pile, just sit with that year's worth of just living and doing no work.