5 ms·

$10M being enough depends on a lot of things: 1. Do you have children, and if so, are they going to expensive private schools or have other expensive hobbies

$10M being enough depends on a lot of things: 1. Do you have children, and if so, are they going to expensive private schools or have other expensive hobbies 2. Are you planning on stopping working, and how many years do you need to support at what lifestyle 3. Debt 4. Do you support others, like parents, etc 5. Do you have health issues, or will you, that will be expensive to support There are more factors but these are just some that prevent 10M from being enough.

dbingham 1y ago
It also matters whether we are considering it a static $10 million or considering reality. In reality, if you have $10 million, you put it in the S&P500 and make an average of 10% ($1 million) per year. Far more than inflation and more than enough to cover those things you're talking about unless you have a pretty extreme medical condition or very expensive hobbies.
- phkahler 1y ago
  Except the market is a bubble. It's going to pop within 10 years as the boomers retire and die. Thats assuming low inflation. With significant inflation the younger folks might afford to prop it up.
  - jama211 1y ago
    Even if that’s the case, with 10 million you have 100 years of 100k+ a year even if you can only barely stave off the rate of inflation.
  - misja111 1y ago
    Can you elaborate? Why is the market going to pop "as the boomers retire and die"?
- dkural 1y ago
  I agree with this directionally, however I think you'll make more like 7.2% per year, and inflation will be about 2.5% per year. You'll also likely pay about 30% in federal and local taxes in the USA on it since you're actually selling it to live on it (more on taxes later). So you'll pay 2.2% in taxes. So on average you'll get 7.2 - (2.5 + 2.2) = 2.5% of income. If you have $10M, you can withdraw about 250K a year in today's dollars every year. i.e next year you can withdraw 256.3K or so, and keep doing this to keep your current standard of living. In down years you may want to adjust / tighten belt a tiny bit to not veer off track too much. And you can get cute with taxes but not recommended. That loan interest will add up over time, and when it's time to actually pay those loans, you'll still sell stock and pay taxes on it, unless your offspring inherit both.. and who knows what the laws will be then.
  - rurp 1y ago
    Agreed, but would caveat that the historical market returns happened as the world's dominant economic and technical powerhouse. The current trajectory is looking different, to put it mildly. The US is undermining nearly every advantage that led to such strong growth. Barring some massive pivot in the near future, medium term economic growth will most likely be lower.
  - bakkoting 1y ago
    The 7.2% number is already adjusted for inflation. Historically the stock market has gotten about 10% nominal return, 6.5-7% real.
    - dkural 1y ago
      Huh! I genuinely didn't know that and this makes me very happy.
- stripe_away 1y ago
  inflation was double-digits in the 70s. and the S&P was flat at 1.6% for the decade despite some pretty amazing technical innovations pocket calculator and microcomputer (Altair 8800), first email, pong, floppy disks (they were the standard for 20 years), VCR, cell phone (1973 Motorola), barcode scanners, rubiks cube, ... https://www.modwm.com/lost-decade-of-the-1970s/ https://www.modwm.com/lost-decade-of-the-1970s/
  - NoLinkToMe 1y ago
    > and the S&P was flat at 1.6% for the decade Nah not really. Nominally S&P500 did 23% in the 70s, and 2.08% annualised, but financial returns are not just the stock prices, they're also dividends. If you include and reinvest dividends, you'd have made 83% in the decade and 6.2% per year. Its true inflation was high though, and an investment in Jan 1970 would've in real terms returned -1.1% a year after adjusting for inflation. If you continued investing equal amounts each year from 1970 to 1980, it'd actually be about -0.5%. But no investment would've meant you lost half of all your money due to 7% average inflation, so investing would've been a pretty good idea, offsetting almost all inflation in the worst decade 50 years ago. Also it's common knowledge to do a stock/bond split. Bond returns fared a bit better. -- and it should be said, the following decade inflation came way down and in nominal terms the S&P500 did +364% with dividends reinvested. I do agree with your general point though, you can't just rely on a 10% annual average and spend that amount. The commonly referenced safe withdrawal rate (WR) of 4% is 2.5x less than the average S&P500 return for a good reason (based on a ton of monte carlo sims that indeed would lead to disastrous results at 10% WR in the 1970s).
cloverich 1y ago
Lifestyle is the only real issue past a few million, particularly if you own your home (and at 10m you certainly would). Beyond that its all status oriented which is where the "should be enough" bit comes in; if its status your after then theres never really enough.
- anon191928 1y ago
  after few million you start securing the retirement and few decades. like what if you live up to 100 or more? Anything below $3million means no retirement now or money has chance to be all spent in next 2-3 decades. After $10Million it's all enough
  - randlet 1y ago
    3 million invested means you can withdraw $100000 annual income with virtually no risk of ever going broke. That is financial independence. $10MM is way too high a bar.
testing22321 1y ago
Almost all your points are eliminated if you just live in a developed country. I’m very, very far from rich, yet 1. University costs nothing for everyone 2. Good social safety net, but yes, having own retirement savings is very important. 3. Not for school or medical, the two biggest reasons in the US. 4. Free healthcare for all, aged care, etc. 5. Free healthcare for all. It’s eye opening to see that the American dream is now “live a quality of life that dozens of countries take for granted”.
- anon191928 1y ago
  sure but all of those are not that sustainable long term. Denmark made retirement age 70 and that will change in the future because your social economy is not sustainable. This also includes a lot of government things in USA. $10M and more buys true freedom and reach to global travel and countries. All of those free things in Europe require certain level of native labor and population aging fast is not helpin that across globe.
  - testing22321 1y ago
    The US is $37 trillion in debt. It’s pretty clear doing it terribly is not sustainable. Meanwhile dozens of countries are doing the above without immense debt.
    - achenet 1y ago
      Counter-argument, largely lifted from Graeber's _Debt, the first 5000 years_: The US trade deficit isn't ever really meant to be repaid, it's basically the modern equivalent of the Roman Republic/Empire demanding tribute from weaker states with a thin veneer of "I'll pay you back" to make it more palatable. Like the time the homeless dude living under a bridge near me asked to "borrow" 50€ from me :)
      - testing22321 1y ago
        Whether a loan is meant to be repaid or not doesn’t change the fact that the need to borrow money to get something done makes it unsustainable.
dpkirchner 1y ago
I feel like $5M should be enough to cover your first 100 children, but then the next 100 should be cheaper as they get the hand-me-downs.
the_gastropod 1y ago
I assure you, if $10M doesn’t seem like it’s clearly enough for you, $100M won’t either. That worry doesn’t go away. $10M generates a passive $400k per year (trinity study 4% rule yada yada). If you can’t manage on $400k/year, you might be what we call extremely out of touch.

dbingham 1y ago

It also matters whether we are considering it a static $10 million or considering reality. In reality, if you have $10 million, you put it in the S&P500 and make an average of 10% ($1 million) per year. Far more than inflation and more than enough to cover those things you're talking about unless you have a pretty extreme medical condition or very expensive hobbies.

phkahler 1y ago
Except the market is a bubble. It's going to pop within 10 years as the boomers retire and die. Thats assuming low inflation. With significant inflation the younger folks might afford to prop it up.
- jama211 1y ago
  Even if that’s the case, with 10 million you have 100 years of 100k+ a year even if you can only barely stave off the rate of inflation.
- misja111 1y ago
  Can you elaborate? Why is the market going to pop "as the boomers retire and die"?
dkural 1y ago
I agree with this directionally, however I think you'll make more like 7.2% per year, and inflation will be about 2.5% per year. You'll also likely pay about 30% in federal and local taxes in the USA on it since you're actually selling it to live on it (more on taxes later). So you'll pay 2.2% in taxes. So on average you'll get 7.2 - (2.5 + 2.2) = 2.5% of income. If you have $10M, you can withdraw about 250K a year in today's dollars every year. i.e next year you can withdraw 256.3K or so, and keep doing this to keep your current standard of living. In down years you may want to adjust / tighten belt a tiny bit to not veer off track too much. And you can get cute with taxes but not recommended. That loan interest will add up over time, and when it's time to actually pay those loans, you'll still sell stock and pay taxes on it, unless your offspring inherit both.. and who knows what the laws will be then.
- rurp 1y ago
  Agreed, but would caveat that the historical market returns happened as the world's dominant economic and technical powerhouse. The current trajectory is looking different, to put it mildly. The US is undermining nearly every advantage that led to such strong growth. Barring some massive pivot in the near future, medium term economic growth will most likely be lower.
- bakkoting 1y ago
  The 7.2% number is already adjusted for inflation. Historically the stock market has gotten about 10% nominal return, 6.5-7% real.
  - dkural 1y ago
    Huh! I genuinely didn't know that and this makes me very happy.
stripe_away 1y ago
inflation was double-digits in the 70s. and the S&P was flat at 1.6% for the decade despite some pretty amazing technical innovations pocket calculator and microcomputer (Altair 8800), first email, pong, floppy disks (they were the standard for 20 years), VCR, cell phone (1973 Motorola), barcode scanners, rubiks cube, ... https://www.modwm.com/lost-decade-of-the-1970s/ https://www.modwm.com/lost-decade-of-the-1970s/
- NoLinkToMe 1y ago
  > and the S&P was flat at 1.6% for the decade Nah not really. Nominally S&P500 did 23% in the 70s, and 2.08% annualised, but financial returns are not just the stock prices, they're also dividends. If you include and reinvest dividends, you'd have made 83% in the decade and 6.2% per year. Its true inflation was high though, and an investment in Jan 1970 would've in real terms returned -1.1% a year after adjusting for inflation. If you continued investing equal amounts each year from 1970 to 1980, it'd actually be about -0.5%. But no investment would've meant you lost half of all your money due to 7% average inflation, so investing would've been a pretty good idea, offsetting almost all inflation in the worst decade 50 years ago. Also it's common knowledge to do a stock/bond split. Bond returns fared a bit better. -- and it should be said, the following decade inflation came way down and in nominal terms the S&P500 did +364% with dividends reinvested. I do agree with your general point though, you can't just rely on a 10% annual average and spend that amount. The commonly referenced safe withdrawal rate (WR) of 4% is 2.5x less than the average S&P500 return for a good reason (based on a ton of monte carlo sims that indeed would lead to disastrous results at 10% WR in the 1970s).

cloverich 1y ago

Lifestyle is the only real issue past a few million, particularly if you own your home (and at 10m you certainly would). Beyond that its all status oriented which is where the "should be enough" bit comes in; if its status your after then theres never really enough.

anon191928 1y ago
after few million you start securing the retirement and few decades. like what if you live up to 100 or more? Anything below $3million means no retirement now or money has chance to be all spent in next 2-3 decades. After $10Million it's all enough
- randlet 1y ago
  3 million invested means you can withdraw $100000 annual income with virtually no risk of ever going broke. That is financial independence. $10MM is way too high a bar.

testing22321 1y ago

Almost all your points are eliminated if you just live in a developed country. I’m very, very far from rich, yet 1. University costs nothing for everyone 2. Good social safety net, but yes, having own retirement savings is very important. 3. Not for school or medical, the two biggest reasons in the US. 4. Free healthcare for all, aged care, etc. 5. Free healthcare for all. It’s eye opening to see that the American dream is now “live a quality of life that dozens of countries take for granted”.

anon191928 1y ago
sure but all of those are not that sustainable long term. Denmark made retirement age 70 and that will change in the future because your social economy is not sustainable. This also includes a lot of government things in USA. $10M and more buys true freedom and reach to global travel and countries. All of those free things in Europe require certain level of native labor and population aging fast is not helpin that across globe.
- testing22321 1y ago
  The US is $37 trillion in debt. It’s pretty clear doing it terribly is not sustainable. Meanwhile dozens of countries are doing the above without immense debt.
  - achenet 1y ago
    Counter-argument, largely lifted from Graeber's _Debt, the first 5000 years_: The US trade deficit isn't ever really meant to be repaid, it's basically the modern equivalent of the Roman Republic/Empire demanding tribute from weaker states with a thin veneer of "I'll pay you back" to make it more palatable. Like the time the homeless dude living under a bridge near me asked to "borrow" 50€ from me :)
    - testing22321 1y ago
      Whether a loan is meant to be repaid or not doesn’t change the fact that the need to borrow money to get something done makes it unsustainable.

dpkirchner 1y ago

I feel like $5M should be enough to cover your first 100 children, but then the next 100 should be cheaper as they get the hand-me-downs.

the_gastropod 1y ago

I assure you, if $10M doesn’t seem like it’s clearly enough for you, $100M won’t either. That worry doesn’t go away. $10M generates a passive $400k per year (trinity study 4% rule yada yada). If you can’t manage on $400k/year, you might be what we call extremely out of touch.