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> That's basically the definition of financial security. I feel like I'm in crazy town. What kind of definition is that? So, anyone with less than 15-20 millio

> That's basically the definition of financial security. I feel like I'm in crazy town. What kind of definition is that? So, anyone with less than 15-20 million in the bank is financially insecure. Just like the article, which claims that "go[ing] out to expensive bars all the time in the City" is some kind of unfortunate necessity for people with high-paying jobs. Is it just me or is there a serious lack of perspective going on here?

swombat 13y ago
It's certainly not a necessity, but in my experience and observations it's a strong draw. Peer pressure, opportunity, and the pressures of the job (which makes you feel that you deserve a good time after all this hard work - work hard play hard) conspire to make it very hard not to indulge in an expensive social life when you're in a banking job. Some people will resist that and save up anyway. Usually those who resist the pull the best are those with young children - another major financial drain. I personally don't need £20m in the bank to feel financially secure, because I rely on my ability to earn more, and I account for that. £20m sounds about right if you want a very high likelihood of being able to retire on a perma-holiday for the rest of your life, though. I'd find that terribly tedious, myself, which is why I don't need anywhere near £20m!
jcnnghm 13y ago
So, anyone with less than 15-20 million in the bank is financially insecure. Depending on your age, yes. If you are old enough you can draw down your savings, though that's a tricky game because if you live too long you run out of money. If you can't stop working and maintain a comfortable standard of living for the rest of your life, you are financially insecure. Is it just me or is there a serious lack of perspective going on here? There is, you should really try to figure out what you would actually need to live the rest of your life comfortably if you were unable to work. Maybe you want to live like a college student forever, in which case, you would probably need less than $10 million, but if you don't, taking 70% of your salary as an assumption, then multiplying that by 100 wouldn't be a terrible estimate.
- 9999 13y ago
  If you can't stop working and maintain a comfortable standard of living for the rest of your life, you are financially insecure. So if you are 25 years old and cannot retire today and never work a day for the rest of your life, you are financially insecure?
  - vinceguidry 13y ago
    Pretty much, yeah. Security is modeled using two terms, what you're trying to protect, and what threatens it. You're either secure against a certain threat or you're not, that's the idea. Financial security is the model of protecting lifestyle with cash. If you're protecting your lifestyle with something else other than cash, then you don't have financial security, but you still may have security. Basically it's very simple. If you have a big enough chunk of cash in the bank, you can generate enough income from it to secure your lifestyle. (defined in terms of expenditures) You can then use your cash to protect yourself in ways other people cannot. Cash is a cool thing to be able to use because everybody you're going to want to deal with accepts it. If instead you're using skills to protect your relationship, or even worse, a job, then you'll only be protected so long as you can derive cash from those assets. Personally, I protect my lifestyle with my web development skills which I can take with me to any of a large number of companies who will give me cash. This affords me a great amount of security against hardship, but it isn't financial security. For one, I still have to work. Also the world could decide that web development blows and it could suddenly be much more difficult to find a job. I would be forced to take whatever job I could find to secure my lifestyle, and then my security would only last as long as the job does. Financial security is best because cash will (probably) never go out of style.
  - jakejake 13y ago
    People use the term "financially secure" to mean different things. You can say you're secure because you earn enough to support your current lifestyle as long as you continue to work. That is as secure as most of us get. But you can also consider the term like this thread to mean that you are totally secure financially for life - even if you were to become unable to work. So in you're case you may be secure for now, but you're not yet secure for life. Very few 25 year olds are already financially secure for life, though.
xradionut 13y ago
Yes. Consider the high costs of health care, security and such. Also consider that you may want residences in different nations due to the uncertain in the political climate.
- umsm 13y ago
  In all honesty, you may not get a chance to leave for your second home when such a situation arises. Poor mans solution: keep in touch with family in other nations.

swombat 13y ago

It's certainly not a necessity, but in my experience and observations it's a strong draw. Peer pressure, opportunity, and the pressures of the job (which makes you feel that you deserve a good time after all this hard work - work hard play hard) conspire to make it very hard not to indulge in an expensive social life when you're in a banking job. Some people will resist that and save up anyway. Usually those who resist the pull the best are those with young children - another major financial drain. I personally don't need £20m in the bank to feel financially secure, because I rely on my ability to earn more, and I account for that. £20m sounds about right if you want a very high likelihood of being able to retire on a perma-holiday for the rest of your life, though. I'd find that terribly tedious, myself, which is why I don't need anywhere near £20m!

jcnnghm 13y ago

So, anyone with less than 15-20 million in the bank is financially insecure. Depending on your age, yes. If you are old enough you can draw down your savings, though that's a tricky game because if you live too long you run out of money. If you can't stop working and maintain a comfortable standard of living for the rest of your life, you are financially insecure. Is it just me or is there a serious lack of perspective going on here? There is, you should really try to figure out what you would actually need to live the rest of your life comfortably if you were unable to work. Maybe you want to live like a college student forever, in which case, you would probably need less than $10 million, but if you don't, taking 70% of your salary as an assumption, then multiplying that by 100 wouldn't be a terrible estimate.

9999 13y ago
If you can't stop working and maintain a comfortable standard of living for the rest of your life, you are financially insecure. So if you are 25 years old and cannot retire today and never work a day for the rest of your life, you are financially insecure?
- vinceguidry 13y ago
  Pretty much, yeah. Security is modeled using two terms, what you're trying to protect, and what threatens it. You're either secure against a certain threat or you're not, that's the idea. Financial security is the model of protecting lifestyle with cash. If you're protecting your lifestyle with something else other than cash, then you don't have financial security, but you still may have security. Basically it's very simple. If you have a big enough chunk of cash in the bank, you can generate enough income from it to secure your lifestyle. (defined in terms of expenditures) You can then use your cash to protect yourself in ways other people cannot. Cash is a cool thing to be able to use because everybody you're going to want to deal with accepts it. If instead you're using skills to protect your relationship, or even worse, a job, then you'll only be protected so long as you can derive cash from those assets. Personally, I protect my lifestyle with my web development skills which I can take with me to any of a large number of companies who will give me cash. This affords me a great amount of security against hardship, but it isn't financial security. For one, I still have to work. Also the world could decide that web development blows and it could suddenly be much more difficult to find a job. I would be forced to take whatever job I could find to secure my lifestyle, and then my security would only last as long as the job does. Financial security is best because cash will (probably) never go out of style.
- jakejake 13y ago
  People use the term "financially secure" to mean different things. You can say you're secure because you earn enough to support your current lifestyle as long as you continue to work. That is as secure as most of us get. But you can also consider the term like this thread to mean that you are totally secure financially for life - even if you were to become unable to work. So in you're case you may be secure for now, but you're not yet secure for life. Very few 25 year olds are already financially secure for life, though.

xradionut 13y ago

Yes. Consider the high costs of health care, security and such. Also consider that you may want residences in different nations due to the uncertain in the political climate.

umsm 13y ago
In all honesty, you may not get a chance to leave for your second home when such a situation arises. Poor mans solution: keep in touch with family in other nations.