7 ms·

The millionaires at $1m to $10m absolutely DO have to be "frugal" if we use define "frugal" to be about "smart spending" as opposed to fishing pennies out of pu

by jasode 11y ago

The millionaires at $1m to $10m absolutely DO have to be "frugal" if we use define "frugal" to be about "smart spending" as opposed to fishing pennies out of public fountains. The word "million" is deceptive because it is an amount beyond what 99% have. It makes it seem like some mind boggling amount of money but mathematically, it really isn't that much. A person classified as "millionaire" could be tagged that because of total net assets and not the liquid cash in a bank account. E.g. a $500k house + $500k IRA/401k + $25k car is a "millionaire". But let's say you have a multi-millionaire (e.g. 2 million dollars). That might be $1 million in cash in the bank. That's still not much money because: - it's not enough to park $1 million of principal into risk-free US T-Bills and live off the current interest rates of < 1%. That's only $10k income per year which is less than minimum wage. - if your child gets an expensive health problem like leukemia or spouse gets cancer, your medical bills could blow past the lifetime cap of the health insurance policy and therefore, you have to drain your savings to pay for expensive treatments. - non-Ivy League schools can cost $50k per year. If you have 2 children and you want to give them the gift of college education without being burdened with student debt, that's at least $400k. And to stay at $400k, it would require the parents to be "cheapskates" and not fund any extracurricular trips like ski vacations and Spring Break parties down in Mexico. The millionaires that have less than $10 million definitely have to be "frugal" and watch their money. Consider than NBA star Allen Iverson earned $200 million and blew it all away. At $100+ million, one can start getting frivolous and maybe buy a Ferrari. However, $2 million is not enough cushion to live off interest income and be 100% worry-free from unexpected life events. One would still have to work somewhere to keep adding to the nest egg.

deleted 11y ago
[deleted]
hobo_mark 11y ago
Agreed on everything but this line > it would require the parents to be "cheapskates" and not fund any extracurricular trips like ski vacations and Spring Break parties down in Mexico One would assume a 'frugal' household knows better than that and would want to pass their value system on to the next generation too. Want to get wasted in Mexico? Find a way to make it happen yourself.
- cushychicken 11y ago
  I would perceive myself as having done something slightly amiss in raising my kid if they asked me to fund their spring break trip to Mexico. My folks only ever funded my spring break stuff if I was doing something with them. Not the worst thing, since it basically made it so I had to spend spring break with my family, or camping. (Had some great spring break camping trips as a result, though.)
hippich 11y ago
just minor nitpick - "lifetime cap of the health insurance" - i though with obama care this was eliminated, no?
- jasode 11y ago
  Yes, you may be right. I haven't kept up with the new laws. I just remember actor Christopher Reeves getting paralyzed from his horse accident and he blew right past the health insurance lifetime cap ($250k or $1million I can't remember). Afterwards, the actor and friend Robin Williams chipped in to help with some medical bills. If the lifetime cap is gone, some other issue will crop up such as an experimental (and very expensive) cancer drug is not covered by insurance but you want to pay out-of-pocket to try it.
  - SlipperySlope 11y ago
    Regarding insurance, a tactic of the frugal is to forgo insurance if you can withstand the loss. For example, my household does not purchase collision insurance on our vehicles. Likewise we can withstand high deductibles and as a result obtain lower premiums on other sorts of insurance.
  - jrjr 11y ago
    I learn more about that wonderful man every day.
- tptacek 11y ago
  Yes, the ACA prohibits lifetime limits on essential health services. There are things that are insurable that do have caps, but if your kid gets sick, the ACA says there's no limit to how much insurers have to cover.
- yourapostasy 11y ago
  This is a confusing area. Here is the official Health and Human Services page about the subject, but this page is not very comprehensive. http://www.hhs.gov/healthcare/rights/limits/ http://www.hhs.gov/healthcare/rights/limits/ Take the case of cancer. Look at the list of essential services. https://www.healthcare.gov/coverage/what-marketplace-plans-cover/ https://www.healthcare.gov/coverage/what-marketplace-plans-c... I'm not sure where cancer is on that list, so I gather that cancer is not covered by the bare minimum essential services plans. From this, I believe it is incorrect to say ACA (aka Obamacare) requires coverage of unlimited cancer treatment. Also, see this article: http://khn.org/news/obamacare-lightens-load-for-cancer-patients/ http://khn.org/news/obamacare-lightens-load-for-cancer-patie... It points out the key loophole in planning for unexpected catastrophic medical expenses is prescription medication, regardless of lifetime cap issues. Even if you can afford the annual copays and deductibles for the numerous office visits, the medication budget for treating cancer can easily blow out your budget planning by either not being covered at all, or only covered at a 50% level. What makes this aspect especially hard to plan for is you currently have no way to find out in advance what these medications cost under specific plans. So if for example, you have a family predisposition to a certain type of cancer, then you have no way to find out how to financially plan for the possibility you might also get it, and have to start the medication for it. In the US at least, I still firmly believe that prudently planning for severe medical conditions is simply not feasible, even with "catastrophic coverage", for families with less than $10M in liquid assets, and $40M in total assets.
gizmo 11y ago
It's laughable to suggest splurging on a 300k Ferrari is irresponsible at $10M < assets < $100M.
- sk5t 11y ago
  Agreed; lots of folks have enough passion for cars and driving that a Ferrari is not such a preposterous thing, weighed against its marginal utility; and, the race-inclined Ferraris have turned out to be pretty good investments.
- jasode 11y ago
  Everyone's appetite for risk is different. If I had $10,000,001.00 in the bank, I personally would not feel secure enough to spend $300k on a car (and also pay all the expensive maintenance that it entails.) Since the car is 3% of my available funds, I'd be constantly hyper paranoid about a stray rock being kicked up by the truck in front of me. If I had $100 million, the $300k car would feel a little more "disposable". If a runaway shopping cart dings it, I'd just shrug it off and buy another one and donate the imperfect one to my landscape gardener. On the other hand, Elon Musk bought a $1 million Mclaren F1 after the 1999 zip2 sale netted him ~$20 million. Like I said, everybody's risk profile is different and most people including me do not think he's fiscally irresponsible. I think the nuance that's getting lost in translation is my idea of "affording" to buy an exotic car. Yes in mathematical terms, $10 million subtracting $300k leaves plenty left over so one can buy without requiring a loan and still be "wealthy." However, my idea of "afford" also includes the state-of-mind after one pays for it. I'd like the luxury of not giving the super car no more thought than a Toyota Camry. If I'm paranoid about the car, I can't "afford" it no matter what my bank account says. The car is ruling over me instead of the other way around. The cost of ownership is too high (this includes "mental costs"). The threshold isn't "how much money I need to buy the car without a bank loan" but "how much money so that the car feels disposable."
  - greedo 11y ago
    Correspondingly, would you feel insecure if you had 1,000,001 in the bank and spent $30k on a car? The ratios are the same, and most people spend a far higher ratio on their cars.
adrianN 11y ago
I think it really depends on the kind of life you want whether one million is enough to live off. There is this guy, "Mr Money Mustache", that preaches a "frugal" lifestyle as a means of retiring very early with less than a million in the bank. On his blog he talks extensively about this. In particular, he provides some evidence that it's safe to spend 3-4% of your assets every year, indefinitely, if you invest in index funds. That means that it's enough to safe about 30 times your annual expenses. For me, that would be around 650000 Euros. A million certainly would cover this, and have something left over for extreme crisis.
- blumkvist 11y ago
  That looks like some blog pushing info products and ebooks...
  - ryanwaggoner 11y ago
    Yeah, it's not. In fact, I don't see anything for sale at all. Are you looking at the wrong site? http://www.mrmoneymustache.com http://www.mrmoneymustache.com
    - blumkvist 11y ago
      That email newsletter doe.
    - TeMPOraL 11y ago
      Honestly, this is a kind of site I'd run away screaming from, based on how it looks, but a respected HNer vetted for it once, which is what made me stay past my first impression, and it was worth it.
siscia 11y ago
Cannot read the article, however, we should be careful about the definition of "millionaires". If we define "millionaires" as the individual with 1M of worth asset you are definitely right. If we define "millionaires" as High-Net-Worth individual (HNWi), the people who have at least 1M in investable finance without counting the primary residence it start to get more interesting. However, if we define "millionaires" as individual with a net profit of 1M in the last fiscal year, they DO NOT have to be frugal :)
- aptwebapps 11y ago
  I believe your first option is the conventional one so while the others might be interesting they aren't what the article is talking about.
  - walshemj 11y ago
    I think you normally discount primary residence
  - reagency 11y ago
    And what does "convention" say about inflation adjustments?
    - aptwebapps 11y ago
      Something along the lines of "Being a millionaire ain't what it used to be" I guess. Are you suggesting that we should peg it to some point in the past?
- adventured 11y ago
  The last group does have to be frugal most likely. It's a very, very small number of high earners that manage to yield more than $1m in income - much less net that after taxes - and then do it multiple times. There is a very high rotation on high income earners. They tend to ride temporary booms in whatever their specialty is (eg the real estate bubble days), and also peak out at a certain age bracket (their earning power peaks for only a few years out of a long career). If you have this seven year peak earning power: $300k, $500k, $600k, $1m, $600k, $500k, $300k - you've yielded $3.8 million in earnings, paid a likely ~$1.5 million in total income related taxes, and have $2.3m left before life expenditures. You're 52 years old, and your earning power has peaked. You have $2.5 million in savings and investments. That has to last the rest of your life and retirement; you spend $10k per month in total life expenses, and have two children, and a decent house with a mortgage; your income will never be much higher than $300k again, and you're going to pay ~30% in income taxes on that. That's closer to a normal scenario for a $1m earner, than the one where they just yield $1m per year for 20 years and never have a financial care in the world.
allendoerfer 11y ago
As long as your income is greater than your expenses (which include healthcare and retirement saving) you can absolutely buy a sports car if it makes you happy and it is not your life-goal to retire early. I think it is nice if you can provide your children some security, but I do not think that your savings have to be at the highest level when you die. I come from a country where college education is free and healthcare is not capped. I do have to worry about dental care beyond the basics, though.
- crpatino 11y ago
  Without commenting on the goodness/badness of deriving happiness out of a sport car... If you can buy the thing in cash, out of pocket, without depleting more than half of your liquid savings... sure, why not. If on the other hand you buy on credit, you are making a commitment against future earnings, that are in no way guaranteed to match or surpass current earnings. More over, if you make and habit of indulging in anything you happen to fancy, you have no guarantee that other frivolous expenses won't come before you actually finish paying this one. However its other (many) flaws that's one point that Kiyosaki's "Rich dad, poor dad" gets absolutely right: A large income is irrelevant if you inflate your lifestyle even more.
7Figures2Commas 11y ago
You can comfortably purchase a Ferrari with far less than $100 million. In fact, there are circumstances under which you could comfortably purchase a Ferrari with well under $1 million. What most folks don't recognize is that you can get significant leverage on savings, a solid income and a good credit score. In the case of a used exotic car, if you purchase the right make, model and year and negotiate a good deal, you can often drive the car for not much more than the total cost of, say, leasing a Mercedes. In some cases, you can even drive the car for a while for next to nothing. They key is that you buy used, identify a good deal, put down as little cash up front as is possible (i.e. 10%) and extend the loan term out as far as you can (specialty lenders will do 72 to 120 month loans on exotic cars). If you hit the depreciation curve at the right time, you really can't lose. You'd be surprised how many people who could pay cash for a $250,000 Ferrari still have a car note. There's really no good reason to pay cash outright in many cases.
dsugarman 11y ago
From everything I've heard, the cutoff is around $25MM to really not have to ever worry about money
- jpmattia 11y ago
  It really depends on your personal burn rate. In truth, I'm a bit amazed by many of the HN comments. The materialistic stuff (ferrari bmw etc) has powerful symbolism to many. However, if you look at the article, it is mainly about those nearing retirement years. Materialistic wealth loses a lot of appeal to those who are older and wealthier, many who realize that such things require care and feeding, and really end up owning you rather than the other way around. PG has a terrific essay about materalistic icons losing much of their appeal once you realize that you could easily purchase them; Not being able to have them is part of their mystique really. The wealth of financial independence (defined as having enough to supply your burn for the rest of your life) enables you to do with your time as you please. Some great questions arise after achieving that kind of wealth, like "What do I want to do with my life?" It turns out that having-a-purpose is of great importance, and that might well appear to younger journalists like continuing to behave middle class.
- limeyx 11y ago
  Possibly but that amount will barely buy you a decent penthouse pad in Manhattan ....
rsp1984 11y ago
You have some good points here but keep in mind that some of the things you mention (health care, education, etc..) are very US-centric and far less of an issue in other places such as Europe.
jpmattia 11y ago
Good post. One nit tho: > - if your child gets an expensive health problem like leukemia or spouse gets cancer, your medical bills could blow past the lifetime cap of the health insurance policy The lifetime cap was one of the things eliminated by Obamacare afaik.
lazyjones 11y ago
At $10m you can comfortably buy a Ferrari without losing sleep over it (except in anguish that it might be stolen, or damaged). But: between being frugal and buying an overly expensive toy car, there's a lot of space. At $10m, you can spend $20k every month and it'll last you forever if you invest the rest in index funds at 3% or so. So a frugal lifestyle is uncalled for at that point, unless it's your personal way to obtain happiness.
deleted 11y ago
[deleted]
jakejake 11y ago
I think there's a big difference between being frugal and cheap, and it somewhat has to do with personal style and creativity. Somebody with no taste and a need to show off might require a $300k super car because they feel like that's what millionaires do. But you can get an amazingly awesome vintage sports car for $60k or less. The same could be said for houses, vacations or anything else, you don't have to spend the maximum amount possible to get something fantastic. But you also don't have to live like a cheapskate in order to preserve your wealth.
cko 11y ago
Do people with millions of dollars in networth even think about T-bills? Genuinely curious.
- toomuchtodo 11y ago
  Yes, they're extremely safe to park semi-liquid funds in.
downandout 11y ago
FYI Obamacare eliminated lifetime caps on health insurance payouts.

by jasode 11y ago

deleted 11y ago

[deleted]

hobo_mark 11y ago

Agreed on everything but this line > it would require the parents to be "cheapskates" and not fund any extracurricular trips like ski vacations and Spring Break parties down in Mexico One would assume a 'frugal' household knows better than that and would want to pass their value system on to the next generation too. Want to get wasted in Mexico? Find a way to make it happen yourself.

cushychicken 11y ago
I would perceive myself as having done something slightly amiss in raising my kid if they asked me to fund their spring break trip to Mexico. My folks only ever funded my spring break stuff if I was doing something with them. Not the worst thing, since it basically made it so I had to spend spring break with my family, or camping. (Had some great spring break camping trips as a result, though.)

hippich 11y ago

just minor nitpick - "lifetime cap of the health insurance" - i though with obama care this was eliminated, no?

jasode 11y ago
Yes, you may be right. I haven't kept up with the new laws. I just remember actor Christopher Reeves getting paralyzed from his horse accident and he blew right past the health insurance lifetime cap ($250k or $1million I can't remember). Afterwards, the actor and friend Robin Williams chipped in to help with some medical bills. If the lifetime cap is gone, some other issue will crop up such as an experimental (and very expensive) cancer drug is not covered by insurance but you want to pay out-of-pocket to try it.
- SlipperySlope 11y ago
  Regarding insurance, a tactic of the frugal is to forgo insurance if you can withstand the loss. For example, my household does not purchase collision insurance on our vehicles. Likewise we can withstand high deductibles and as a result obtain lower premiums on other sorts of insurance.
- jrjr 11y ago
  I learn more about that wonderful man every day.
tptacek 11y ago
Yes, the ACA prohibits lifetime limits on essential health services. There are things that are insurable that do have caps, but if your kid gets sick, the ACA says there's no limit to how much insurers have to cover.
yourapostasy 11y ago
This is a confusing area. Here is the official Health and Human Services page about the subject, but this page is not very comprehensive. http://www.hhs.gov/healthcare/rights/limits/ http://www.hhs.gov/healthcare/rights/limits/ Take the case of cancer. Look at the list of essential services. https://www.healthcare.gov/coverage/what-marketplace-plans-cover/ https://www.healthcare.gov/coverage/what-marketplace-plans-c... I'm not sure where cancer is on that list, so I gather that cancer is not covered by the bare minimum essential services plans. From this, I believe it is incorrect to say ACA (aka Obamacare) requires coverage of unlimited cancer treatment. Also, see this article: http://khn.org/news/obamacare-lightens-load-for-cancer-patients/ http://khn.org/news/obamacare-lightens-load-for-cancer-patie... It points out the key loophole in planning for unexpected catastrophic medical expenses is prescription medication, regardless of lifetime cap issues. Even if you can afford the annual copays and deductibles for the numerous office visits, the medication budget for treating cancer can easily blow out your budget planning by either not being covered at all, or only covered at a 50% level. What makes this aspect especially hard to plan for is you currently have no way to find out in advance what these medications cost under specific plans. So if for example, you have a family predisposition to a certain type of cancer, then you have no way to find out how to financially plan for the possibility you might also get it, and have to start the medication for it. In the US at least, I still firmly believe that prudently planning for severe medical conditions is simply not feasible, even with "catastrophic coverage", for families with less than $10M in liquid assets, and $40M in total assets.

gizmo 11y ago

It's laughable to suggest splurging on a 300k Ferrari is irresponsible at $10M < assets < $100M.

sk5t 11y ago
Agreed; lots of folks have enough passion for cars and driving that a Ferrari is not such a preposterous thing, weighed against its marginal utility; and, the race-inclined Ferraris have turned out to be pretty good investments.
jasode 11y ago
Everyone's appetite for risk is different. If I had $10,000,001.00 in the bank, I personally would not feel secure enough to spend $300k on a car (and also pay all the expensive maintenance that it entails.) Since the car is 3% of my available funds, I'd be constantly hyper paranoid about a stray rock being kicked up by the truck in front of me. If I had $100 million, the $300k car would feel a little more "disposable". If a runaway shopping cart dings it, I'd just shrug it off and buy another one and donate the imperfect one to my landscape gardener. On the other hand, Elon Musk bought a $1 million Mclaren F1 after the 1999 zip2 sale netted him ~$20 million. Like I said, everybody's risk profile is different and most people including me do not think he's fiscally irresponsible. I think the nuance that's getting lost in translation is my idea of "affording" to buy an exotic car. Yes in mathematical terms, $10 million subtracting $300k leaves plenty left over so one can buy without requiring a loan and still be "wealthy." However, my idea of "afford" also includes the state-of-mind after one pays for it. I'd like the luxury of not giving the super car no more thought than a Toyota Camry. If I'm paranoid about the car, I can't "afford" it no matter what my bank account says. The car is ruling over me instead of the other way around. The cost of ownership is too high (this includes "mental costs"). The threshold isn't "how much money I need to buy the car without a bank loan" but "how much money so that the car feels disposable."
- greedo 11y ago
  Correspondingly, would you feel insecure if you had 1,000,001 in the bank and spent $30k on a car? The ratios are the same, and most people spend a far higher ratio on their cars.

adrianN 11y ago

I think it really depends on the kind of life you want whether one million is enough to live off. There is this guy, "Mr Money Mustache", that preaches a "frugal" lifestyle as a means of retiring very early with less than a million in the bank. On his blog he talks extensively about this. In particular, he provides some evidence that it's safe to spend 3-4% of your assets every year, indefinitely, if you invest in index funds. That means that it's enough to safe about 30 times your annual expenses. For me, that would be around 650000 Euros. A million certainly would cover this, and have something left over for extreme crisis.

blumkvist 11y ago
That looks like some blog pushing info products and ebooks...
- ryanwaggoner 11y ago
  Yeah, it's not. In fact, I don't see anything for sale at all. Are you looking at the wrong site? http://www.mrmoneymustache.com http://www.mrmoneymustache.com
  - blumkvist 11y ago
    That email newsletter doe.
  - TeMPOraL 11y ago
    Honestly, this is a kind of site I'd run away screaming from, based on how it looks, but a respected HNer vetted for it once, which is what made me stay past my first impression, and it was worth it.

siscia 11y ago

Cannot read the article, however, we should be careful about the definition of "millionaires". If we define "millionaires" as the individual with 1M of worth asset you are definitely right. If we define "millionaires" as High-Net-Worth individual (HNWi), the people who have at least 1M in investable finance without counting the primary residence it start to get more interesting. However, if we define "millionaires" as individual with a net profit of 1M in the last fiscal year, they DO NOT have to be frugal :)

aptwebapps 11y ago
I believe your first option is the conventional one so while the others might be interesting they aren't what the article is talking about.
- walshemj 11y ago
  I think you normally discount primary residence
- reagency 11y ago
  And what does "convention" say about inflation adjustments?
  - aptwebapps 11y ago
    Something along the lines of "Being a millionaire ain't what it used to be" I guess. Are you suggesting that we should peg it to some point in the past?
adventured 11y ago
The last group does have to be frugal most likely. It's a very, very small number of high earners that manage to yield more than $1m in income - much less net that after taxes - and then do it multiple times. There is a very high rotation on high income earners. They tend to ride temporary booms in whatever their specialty is (eg the real estate bubble days), and also peak out at a certain age bracket (their earning power peaks for only a few years out of a long career). If you have this seven year peak earning power: $300k, $500k, $600k, $1m, $600k, $500k, $300k - you've yielded $3.8 million in earnings, paid a likely ~$1.5 million in total income related taxes, and have $2.3m left before life expenditures. You're 52 years old, and your earning power has peaked. You have $2.5 million in savings and investments. That has to last the rest of your life and retirement; you spend $10k per month in total life expenses, and have two children, and a decent house with a mortgage; your income will never be much higher than $300k again, and you're going to pay ~30% in income taxes on that. That's closer to a normal scenario for a $1m earner, than the one where they just yield $1m per year for 20 years and never have a financial care in the world.

allendoerfer 11y ago

As long as your income is greater than your expenses (which include healthcare and retirement saving) you can absolutely buy a sports car if it makes you happy and it is not your life-goal to retire early. I think it is nice if you can provide your children some security, but I do not think that your savings have to be at the highest level when you die. I come from a country where college education is free and healthcare is not capped. I do have to worry about dental care beyond the basics, though.

crpatino 11y ago
Without commenting on the goodness/badness of deriving happiness out of a sport car... If you can buy the thing in cash, out of pocket, without depleting more than half of your liquid savings... sure, why not. If on the other hand you buy on credit, you are making a commitment against future earnings, that are in no way guaranteed to match or surpass current earnings. More over, if you make and habit of indulging in anything you happen to fancy, you have no guarantee that other frivolous expenses won't come before you actually finish paying this one. However its other (many) flaws that's one point that Kiyosaki's "Rich dad, poor dad" gets absolutely right: A large income is irrelevant if you inflate your lifestyle even more.

7Figures2Commas 11y ago

You can comfortably purchase a Ferrari with far less than $100 million. In fact, there are circumstances under which you could comfortably purchase a Ferrari with well under $1 million. What most folks don't recognize is that you can get significant leverage on savings, a solid income and a good credit score. In the case of a used exotic car, if you purchase the right make, model and year and negotiate a good deal, you can often drive the car for not much more than the total cost of, say, leasing a Mercedes. In some cases, you can even drive the car for a while for next to nothing. They key is that you buy used, identify a good deal, put down as little cash up front as is possible (i.e. 10%) and extend the loan term out as far as you can (specialty lenders will do 72 to 120 month loans on exotic cars). If you hit the depreciation curve at the right time, you really can't lose. You'd be surprised how many people who could pay cash for a $250,000 Ferrari still have a car note. There's really no good reason to pay cash outright in many cases.

dsugarman 11y ago

From everything I've heard, the cutoff is around $25MM to really not have to ever worry about money

jpmattia 11y ago
It really depends on your personal burn rate. In truth, I'm a bit amazed by many of the HN comments. The materialistic stuff (ferrari bmw etc) has powerful symbolism to many. However, if you look at the article, it is mainly about those nearing retirement years. Materialistic wealth loses a lot of appeal to those who are older and wealthier, many who realize that such things require care and feeding, and really end up owning you rather than the other way around. PG has a terrific essay about materalistic icons losing much of their appeal once you realize that you could easily purchase them; Not being able to have them is part of their mystique really. The wealth of financial independence (defined as having enough to supply your burn for the rest of your life) enables you to do with your time as you please. Some great questions arise after achieving that kind of wealth, like "What do I want to do with my life?" It turns out that having-a-purpose is of great importance, and that might well appear to younger journalists like continuing to behave middle class.
limeyx 11y ago
Possibly but that amount will barely buy you a decent penthouse pad in Manhattan ....

rsp1984 11y ago

You have some good points here but keep in mind that some of the things you mention (health care, education, etc..) are very US-centric and far less of an issue in other places such as Europe.

jpmattia 11y ago

Good post. One nit tho: > - if your child gets an expensive health problem like leukemia or spouse gets cancer, your medical bills could blow past the lifetime cap of the health insurance policy The lifetime cap was one of the things eliminated by Obamacare afaik.

lazyjones 11y ago

At $10m you can comfortably buy a Ferrari without losing sleep over it (except in anguish that it might be stolen, or damaged). But: between being frugal and buying an overly expensive toy car, there's a lot of space. At $10m, you can spend $20k every month and it'll last you forever if you invest the rest in index funds at 3% or so. So a frugal lifestyle is uncalled for at that point, unless it's your personal way to obtain happiness.

deleted 11y ago

[deleted]

jakejake 11y ago

I think there's a big difference between being frugal and cheap, and it somewhat has to do with personal style and creativity. Somebody with no taste and a need to show off might require a $300k super car because they feel like that's what millionaires do. But you can get an amazingly awesome vintage sports car for $60k or less. The same could be said for houses, vacations or anything else, you don't have to spend the maximum amount possible to get something fantastic. But you also don't have to live like a cheapskate in order to preserve your wealth.

cko 11y ago

Do people with millions of dollars in networth even think about T-bills? Genuinely curious.

toomuchtodo 11y ago
Yes, they're extremely safe to park semi-liquid funds in.

downandout 11y ago

FYI Obamacare eliminated lifetime caps on health insurance payouts.