Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determines a lot of things, my parents both spent same number of years in the medical profession, my mom was investing through a financial advisor while my dad through the 401k. On retirement, my mom retired with about $5million, while my dad retired with roughly $3.8million.
You are right. I’m in my mid 50’s now, my wife and I were following this same trajectory. Last two years, I pulled out my money and invested with her wealth manager. Not catching up with profits over the years, but at least I’m earning more. I’m making money even before retiring and my retirement funds has grown way more than it would have been with the 401k.
It’s unfortunate most people don’t have such information, I don’t really blame people who panic cos lack of information can be a big hurdle. I’ve been making more than $25k passively by just investing through an advisor, and I don’t have to do much work. It doesn’t matter if the economy is crashing, great CFA will always make good returns.
Finding financial advisors like Melissa Terri Swayne who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Thanks for the information!! She appears to be well-knowledgeable and accredited. I ran a Google search on her name and came across his website, thanks for sharing.
Top 1% household in USA by net worth is over 10M. 5M is between 1% and 2%. When I was young I thought these were big mountains. But once you are on top of them, you realize they are just hills. They are enough to support a comfortable life style, but nothing luxurious.
I think the retirement crisis will get even worse. A lot of people can’t save because of low paying jobs, inflation, and insane rental rates. And now that home ownership is out of reach for middle class Americans, they won’t have a house to retire with either.
Rising prices have affected my intention of retiring at 62, working part-time, and building my savings. I'm worried about whether individuals who weathered the 2008 financial crisis found it less challenging than my current situation. The stock market's volatility, coupled with a reduced income, is making me anxious about having enough for retirement.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
Big Credits to ''Carol Vivian Constable'' she has a web presence, so you can simply search for, there are some others but it might be difficult to get them, but Carol has been a good guide through the year.
I retired a year ago at age 64. My wife and I are comfortable and could afford to spend more than we do. Our expenses last year, putting our son’s wedding aside, amounted to approximately $75k. That included a couple of vacations. We buy what we want when we want or need it, but we continue to live our normal lives. We still laugh about eating tacos on Taco Tuesdays etc. I can’t imagine spending much beyond $100k in any normal year. Our joy comes from spending money on our grand kids!
Definitely peace of mind. We are blessed at 57 that our bills are only 8 percent of our income in retirement. Still hard to spend it so sharing is fun.
A lot of people don't understand that people got to 5 million partly by being frugal. And old habits die hard. So you're absolutely right that those with 5M largely don't live such a different lifestyle.
$5M with 4% rule is $200k inflation-adjusted, and add maybe $50k from Social Security, so $250k per year. When the average person thinks of someone’s lifestyle with $5M in savings, they think of private jets, sports cars, and big vacations. Not at all true at $5M!
@@carolinecollins2441 This is true buty if you have a savvy accountant and are in the right kind of business you minimize w-2 income and maximize other ways of taking compensation that bypasses ss tax so most self employed have smaller SS payments to factor in to their plans, most of the bigger years in my ss calc were in the years I worked for other companies.
Yeah I don't think people understand how expensive private jets are. You can easily get some nice cars, nice houses, even a boat with $5M. But flying private is generally around $15k-$25k per hour, per flight, etc. And that's just a a charter. Owning them is a whole other ball game. They'll make the "rich" go broke quick.
@@ianstallings yep. As a former plane owner there are two great days in airplane ownership. The day you buy it and the day you sell it. My friends that owned RVs and second homes say the same thing.
I have 2.5 million and have a very modest lifestyle, having spent most of my life working overtime and saving as much as I could. Now that I'm retired my spending patterns haven't much changed. The freedom of waking up when I want, eating meals when I want, spending an hour walking outdoors for health during the day, peace of mind and having the time and money to help out family are for me the top benefits of being wealthy. Spending frivolously isn't a priority since I know the effort and sacrifice it took to save.
It’s a little funny that majority audience of this channel are the super savers and the already retirement-smart folks. Hope to become one of you when I retire. In my 40’s here 😎 and learning.
We have the equivalent of $6.5m but it is based on our $205K inflation adjusted annual pretax pension. Our IRS savings and home sale windfalls have added another $1.5m. We have downsized and have 22 and 6 year old cars. We follow Azul advice and basically buy experiences with our money and travel 4-6 months a year. After living out of carry-ons for months at a time, you realize that you don’t need or want things. We dropped the idea that a house is an investment. We rent at half the price it would cost to buy and invest instead. Plus we are FREE from maintenance.
Who has pensions like that? What did you do for a living? IBM stole both my pension and my husbands, but it would not have been anything close to that.
Azul is correct, no one just flips a switch when they retire and go from frugal to spendthrift when they stop working - you develop your lifestyle in your 30's and 40's and pretty much live that way the rest of your life - its just the truth...
Umm, no, it's not. You couldn't be MORE WRONG. I worked my ass off for 41yrs and was frugal asf. Now that I'm retired, I buy WHATEVER I want, WHENEVER I want. And I have WAY more than $5M... So please get your facts straight before you start spouting off BS.
@@Reload77725wtf are you talking about? learn to read - no one ever said you cant buy whatever you want we only said MOST people dont change their spending habits later in life - I would say you are the exception - most people dont live a frugal life then one day just say "fuck it Im spending like a drunken sailor" you can obviously do whatever the hell you want but most people that behave like you are claiming won the lottery - they didnt spend a lifetime earning it.
Disagree a bit, your not in the game anymore, simple stuff like dry cleaning and being active with employees and work friends does stop or slow down dramatically
I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $1m+ before retirement, I'm 55.
Consider financial advisory so you don’t keep switching it up, Top 3 payers for the month were $OHI, $KMI, and $EDP for an over all payout of a little over $20.. not bad for a 350k portfolio.
Agreed, I’ve been investing in the market for 11 years now, last 4 years with the help of a fiduciary advisor apparently due to the covid-19 pandemic crash. Throughout these years of guidance, I've been fortunate enough to 10x my return as a DIY investor, summing up nearly $1m ROI as of today.
No doubt, having the right advisor is invaluable, mind leaving info of your advisor here please? I only invest in 401k for now but particularly interested in diversifying my portfolio and exploring alternative options.
Carol Vivian Constable is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thank you so much for your helpful tip! I was able to verify the person and book a call session with her. She seems very proficient and I'm really grateful for your guidance
None of my neighbors know how much money I have. I live in a middle class suburban neighborhood. I drive a car about equal to the ones I see around the neighborhood. I don't act rich: I had a contractor come over to look at my kitchen cabinets because I wanted them to look better. He went into the ways to save money by just changing the doors, etc.
Let’s face it once you get to $5 million. You quickly realize this isn’t what I thought it was! I’m currently there, and I still complain about alcoholic drinks when I go out to dinner.
Early-retired 10 months ago a 54. Crossed the $5M net worth mark this week. Before retirement, I spent $85K/year for a family of four. My post retirement spend rate is trending to $120K/year due to the insane cost of health insurance for people that are unemployed, under 65, but still have an upper middle-class income stream. I don't feel wealthy or feel like I can safely spend much more than I currently do, even though everyone seems to think I should.
You’re doing great, wife and I are 58, still working and just reached $5M net worth, now looking for some guidance from a fee only advisor to make sure we have all our ducks in a row.
I feel you, retiring in 3 months at 55, have a net worth of about 5.5M. Was just researching an Australian cruise to be our first big post retirement trip and the thought of spending $40K for a month long vacation is very scary even with millions in the bank. My expenses are similar to yours, will probably realize when I'm older that I should/could have spent more.
@rarelycares8416 I live in Sydney & have a net worth, the equivalent of US$5,000,000. However, Sydney house prices are insane & 30% of that money is tied up in the value of my very basic house. I've been on 3 cruises from Sydney in the last 12 months & I just get an inside cabins, as it's just a place to sleep.
We are on track to retire with 5-5.5 million. When I was young I imagined having a jet and vacation apartments. LOL. We will live well , within our means with the odd splurge. Retired at ages 55 & 50. It's all been due to hard work, starting our own businesses and planning, planning, planning. We take 3-4 trips a year with our kids, put them through uni but spend very little on "Stuff" day to day. Cook a lot at home etc. Love to luxury shop splurge a few times a year. We paid off our cars years ago so no car payments. Makes a huge difference.
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
I feel your pain mate, as a fellow retiree, I’d suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes.
@@NancyBetty-x The crazy part is that those advisors are probably outperforming the market and raising good returns but some are charging fees over fees that drain your portfolio. Is this the case with yours too?
That is because most don’t understand the stat shared here, possibly Azul himself too. To be in the top 0.1% net worth in US one needs to be worth ~25M. A small portion of that is actually in their retirement accounts. What WSJ is saying is that if you looked at retirement accounts only, 0.1% percent of people have 5M in them. I believe people who have a net worth of 5M are also commenting that they are in that club when they are actually not.
@@poonekar define retirement accounts. If you mean Tax differed then yes, I will agree - very few can save 5M 401K. But if you include taxable brokerage accounts then most of them are in this comments section.
@@lordabhikingfisher8087 Yes tax-deferred. Azul mentioned WSJ, but that, and many other articles were really based on "Survey of Consumer Finances" which clearly refers to 401K, IRA etc as retirement accounts. I too would've taken pride in the fact of being in the 0.1% if I could've included my taxable brokerage accounts, but I looked closely and I am not included.
I’m 80 and widowed for 5 years. I’m in the $10m range. My husband and I have worked hard with two good salaries. Other than the first decade buying a house and starting a family, we’ve generally lived on one salary and found that adequate. Other than splurge on nice family trips and putting aside money for grandkids college, I don’t have any particular reason to spend more than what I used to. I’ve started flying business class in the last few years, still feel little guilty.
Wow one really interesting take away from this video that I hadn't thought about. More money in retirement does not necessarily mean you can/ or will spend more. It just means that when you do spend you can do so with more confidence that you will not run out of money. Your "probability of success" is higher.
Here is the reality of having 5 Million plus in net worth, we never feel like it's enough. Even when you run through the numbers. We know we will never be able to spend it all and we are doing the, pay for college and some travel…..but truly feeling comfortable has been a challenge. I was a workaholic for years and it almost killed me and now I retired young and should be enjoying that. Sadly I haven't fully embraced that new reality yet….but I am trying, hence looking at this video, which by the way, is awesome….love it. Perspective is very important but no one really talks about their investments or net worth, I am actually a bit embarrassed about how much we have as I didn't grow up in a rich family; paid my way through college, worked for an amazing company and have a great wife…..simple but not easy
We hit the $5M mark two years ago and semiretired at 68 years old. We really don't think that's a lot of money especially here in northern CA. Our lives are very normal, and we don't drive fancy cars. My only lavish thing was paying cash for a new RV recently as a gift to myself to prepare for full retirement. Still concerned for the future of the US with all the domestic and international turmoil going on. I admit it is difficult to start moving into a spending mode with your savings after being so disciplined with investing, saving, and growing my investments for decades.
We are in our mid-40s and we also crossed that milestone a couple of years ago. We are still working largely because our kids are still in school. But we hope that when they leave we can get to live in different parts of the country/ world and experience new things - which would increase our expenses. What about the fear of turmoil prevents you from spending? Is it that it could cause the nest egg to drop in value? Regarding habits being a reason for not spending, I never considered that to be an issue for me. :) But your comment makes me want to reflect on that :)
@@poonekar My portfolio is heavily into equities which explains the growth over the years. A recession or some major international disaster will negatively affect my portfolio. We are definitely spending as I am holding off social security until 70 to get the bigger check.
It isn't necessary to move into "spending mode" if you are happy with your life the way it is. Our total expenses in 2023 were a little over 15% of our minimum mandatory gross income for 2023 and we don't have a pressing need to draw more income than we have to or spend more just because we can. $5M isn't much in light of the turmoil you mentioned. That is barely enough to qualify for expedited permanent residency in some of the more attractive developed countries and still have enough to live on.
I would say that $ 5 million is the high end of working class wealth. If you have a decent job, save and have a little luck it's not impossible to get there . It should provide most people with a comfortable retirement, but clearly is not great wealth
Yes. With good and early investments it is acheivable. Invest most of your excess income instead of spend it on things like football games, new cars, fancy clothes, expensive trips, etc.
It's not impossible, but only 1-2% of households retire today with $5M or more... obviously with the inflation 30 years from now it will be something like 10%..
It depends on where that 5M is invested. If it were in paid off rental properties, it could easily generate 300k cash flow annually and grow faster than the rate of inflation. But if it was under the mattress, you would have to live the lifestyle of an average American.
What people need to realize is you won't be spending as much money when your in your 80's as you will when you're in your 60's. My parents retired at 60 and traveled all around the world. Ate out at fancy restaurants and whatnot - it's all I can do to get them out of the house now. In my opinion you have a window of 20 years to enjoy yourself at a normal retirement age and then ones health starts going and interests in things diminish. Bottomline is, you'll never feel like you have enough to retire - it's how we've been programed. My folks have over 6 million with zero debt and still worry if it's enough.
5 Million and 140 to 150K a year spending. Good Lord !! That's not average or normal. That's way above average. We take 6 to 7 trips a year and only spend 55 to 60 K on all our household and trips. I couldn't spend 150K a year. There just isn't that much stuff that I want. Actually, I don't want or need anything other than experiences and creating memories. A lot of those come free or are inexpensive.
@@Random-ld6wg I know. Our total spend for everything, keeping the lights on and all that for a house and trips or entertainment, Everything we do to live costs less than 60K a year. Last year we took 6 trips and with all our other expenses we spent 44K total for our household of 2. I know costs depend a lot on where you may live but geeese. 150K going out the door a year!! Ok. guess if you have boats and expensive cars and pay 1000 monthly for lawn care.... etc.
Seems that way doesnt it - heres the TRUTH - it all depends on where you live and how you live, its super easy to spend $12k a month in Scottsdale or LA or NYC or SanDiego - basically any hot market, I could easily live on $4-$5k a month in BF Oregon but I dont want to live there, so, you have to pay up for location. Believe me its NOT extravagant living either - by the time you pay all the taxes, go out a couple times a week, take a reasonable vacation or two a year and pay for the up keep and insurances on cars/house/medical it just adds up.
@@agates9383 Agreed…to live in SoCal it’s grueling with anything less than 5k for necessities (assuming mortgage, bills, property tax…) and an additional 2k for ‘wants’…84k per year!
Hi Azul san. Enjoying your vids from Tokyo, Japan. Today, Nikkei (not the index, but the paper. Our version of WSJ and FT) reported that central Tokyo properties gained 37% during 2023. I googled the per square meter of my place to do a casual valuation of my property. That took my net worth over 4mil for the first time. I had decided to retire in six months already, so this certainly doesn’t affect my thinking, but it did give me an additional piece of mind. Sure it might not affect people who have accumulated a lot more than me, but I’ll just say, that if I were to visit Salt Lake City, I’d stay there for three weeks rather than two, which I had in mind before. Subtle, but a big deal to me. That’s all I can say. Many thanks for your insights!
The key is start as early as you can. It works its not about saving a lot it's about starting early as possible. It just works its not about large salaries and all that its about being consistent and save and invest and do not mess with it. Increase the amount you save every year and It just works
I genuinely mean it when I express my stress and concern regarding the market crash and high inflation, particularly in relation to my retirement. I have been experiencing losses for quite some time, and while some may argue that crises can present opportunities, I am feeling overwhelmed. However, I understand that investing is a long-term endeavor, and it is crucial to maintain focus on the bigger picture and the long run...
It's unfortunate most people don't have such information. I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $760k by just investing through an advisor, and I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns....
Great Points: As one gets older and is nauseated by the wasting of money (shopping for new clothes, rip-off boozy expensive restaurants, etc. ) and where one is not INSECURE and does not need to "show off" it gets rather easy and indeed ENJOYABLE to live an simple and frugal life... I may be inheriting 8 figures and I have NO intention to ever use it, merely to leave it to the people I love. God willing it will not "destroy" them. Ideally, I'll write up some trusts to protect them forever from their future wives👺.
@@goodtimes1890 YES, most people have no idea how bad all of this is until they themselves or someone who loves them gets "Divorce Graped.... (Word modified to avoid the auto-censoring...)
We have a Net Worth over $4 million in our late 40s in a very low cost state. We walk down each aisle at Costco and Target and walk out with NOTHING to buy. I summarize this lifestyle like buying your favorite Movie or Song or even dream car. You are glad you accomplished it and have it, but after awhile it's no longer special.
Your last sentence is uber important to getting rich, unfortunately it is a "you have to do it to understand it" kind of thing - kills materialism, at least it did with me. Kind of a "Brewsters millions" theme
I believe several studies show that the "high" of getting rich lasts about 6 months... Of course the other side is, the low of being poor never lets go, so being rid of that is the first step.
Not being sarcastic or anything, just wondering, if you don't want to buy anything why do you go to Costco and Target? Do you just like walking around the store?
@@SoFloCo-ne4rk Very good question! It's winter here and too cold to walk outside, so after eating out at a restaurant my wife (who is rather health conscious) likes to "walk it off", so we prefer larger clean format stores. My wife does like to walking down every isle looking for "deals" that have a * on the price, which I believe means discontinued or final lowest price item. But again, we are buying stuff that we really don't need at this point. Thanks for the great question....I ask my wife this exact question once a month usually....LOL!
Everything in moderation. There are people who don’t treat themselves at all and then die before they ever get to enjoy all the money they socked away.
So true! I now fly first class on most flights...because I can and I want to spend my fortune before I die. I don't need to leave a "legacy" to anyone (though I do have some preferred charities.)
@@Ubermensch-yy7hf Yep, decide how you want to live while you are raising kids - then live that way and save the excess to create generational wealth, trick there is to instill those same values in your children - juries out on mine🙂
@@zoner__ I’m starting to relax by traveling and eating an appetizer at restaurants but I’m still frugal drinking just water, used minivan, wear clothes until they fall apart.
Thanks Azul, good insights. At $10+M in middle-aged retirement, We have cautious comfort and a sense of a high degree of freedom. You have a lot to lose, so you are careful and risk mitigation becomes #1. Given the financial engine is structured to support us perpetually, we can spend/give away/reinvest everything that is spun out. All of it, if we choose. But you cannot easily just change out the horse that got you there. It's hard to do that, even if you know you can and want to. You don't easily forget where you came from or how you got to a place in life. I know, great problems to have. We are very fortunate. There was hard work, patience needed, luck and many challenges and risks dealt with along the way.
@@Random-ld6wg great question. At different times, in combination with coverage on key assets themselves, I've added umbrella's in the $2-5M range. In my jurisdiction, and with coverages on some of the assets themselves, that has been the right level for us. Every situation will be different.
@@feldhdleh my umbrella is 2M but with the networth having increased over the past 10 yrs, it doesn't cover my networth. conventional wisdom is to go up to your networth. i have 2 assets that are erisa protected a 401k and a 457b deferred compensation so those amounts don't need to be covered. it's another reason I'll keep my roth401k for now instead of converting it to roth/trad ira. fidelity's costs are low anyway. my renewal is next month, I'll ask how much it is to increase the coverage. people always say it's a few hundred but our policy already costs 1800 per yr for the umbrella.
53 and about to retire with a bit over $20m (mostly from sale of a business I run), ignoring home property (not income generating) and pension value (too early to claim this). Can’t see myself spending more in retirement than I have for the last 10 years, namely a steady $150k p.a. (in today’s terms). This is enough to fund all the essentials and luxuries I might want. I have more than enough beautiful “stuff” accumulated over the years. The only benefits I see from the wealth I have accumulated is that I’m very unlikely to run out of money, which takes that stress away, and that I can leave a good sum to charity when I and my wife pass.
I'm not that blessed, doing well...Retired at 58, we live in the same house for over 20 years (property tax is only 1600) and we drive decent cars (not over the top). We only go out to eat once a week. We enjoying going on cruises and are waiting to spend money on grandkids, now if our kids would only cooperate LOL.
I think your statistics are way off. About 8% of US households have at least $1 million in financial assets, and about 3% have at least $5 million. Are you just counting retirement accounts? If you have $2 or $3 million in a regular brokerage account, it will come in might handy when you're retired. The main thing about being well-off is that you don't have to worry about running out of money, provided you just live moderately. You can still save additional money while you are retired, instead of spending down.
@@bigpoppa4094 Nope - thats a moderate house in Scottsdale and a small rental, eating out once a week, one decent vacation a year, a couple of moderate late model paid off cars - and a metric tonne of insurances and saving every month. $12k a month today spends about like $7k a month in 2004 - look it up, its the truth.
Retired with 5 Millions in the Bay Area. I dont feel that wealthy. I live like everyone else. Stayes in the same house over 30+yrs. Shop at Target and uses coupons for purchases. Maybe eating out at a nice restaurant once a while and take a couple of overseas vacations. I still balance my checkbook and dont spend money like a crazy.
Yep. If they have a lot of replies mentioning some investment advisor and how great they are its scam. Just press the the 3 vertical dots on the far right end of the post and select "Report" and "Unwanted commerical content or spam" and they disappear.
$5m in investments or $5m in net worth? Also, an 80% probability of a retirement nest egg lasting until the bitter end is perfectly good. The reason is, Monte Carlo simulation do not accurately take into account mid-course corrections.
Retired at 57. I am living a pretty normal life I think. Traveling about two or three times a year. Spending around 160k to 180k a year. Everything is paid for. I did buy a brand new 911 to celebrate two years ago. Beyond that life is pretty simple. Our plans are to travel for longer periods of time for maybe the next 5 or 10 years. Really we want a smaller house at this point, but our 20 year old home is fine for now I suppose. So far, just living off my investment income. Not touching the principle. Spending close to nothing on “stuff”. Happy with it all. It took a lot of hard work. I have a financial planner that handles about 50 percent of my net worth. The rental properties and cash accounts I manage.
What I find shocking is how much net worth you need to have to generate an income to live on. Beyond my car, the only difference is I may take more vacations.
@@JS-ny9ge Yes, agreed. It is hard for people to conceive of requiring $5 or $10M in net worth to generate the incomes to support what amounts to a very nice, but still only upper-middle class lifestyle. I spent much more when I was working-wealthy than now when I am just "wealthy". Of course, some of that required spending from the past is gone now so that helps explain the calculus.
Yes. I remember thinking nothing of pensions when I first started working. Now I realize their value if you are lucky enough to have one. Still, they can be at risk as well and you have no control over them. Interesting how you are “wealthy” by net worth, but quite average in terms of monthly income. I don’t see how people get by on the average or median net worth numbers. I guess you work until 65, collect SS and maybe try a part time job to supplement.
@@bigpoppa4094 To give you sorta of an answer. I own three houses (two rentals) Property taxes, insurance and maintenance on those do add up (just spend 20k on new roofs for two of them this year). I also pay $2,400 a month for just medical as I am covering a family of four (the kids are almost out of college). I did save for the kids college so that does not affect me (too much) as it comes out of their savings accounts. I have car insurance and maintenance for 5 cars currently(2 kids, 2 adults and one extra(about to sell it). We eat out a few times a week or have it delivered to house maybe once. Then there is cable, streaming, iphones(again four of them). We take one or two big (10k each trips a year). I expect my expenses to drop off a lot when the kids get completely off the payroll and certainly there is a lot of "fluff" to be cut out , but really my income is matching my expenses, so I am holding steady for the most part. I know it is a lot, and I could live more frugally as time goes. Right now though I just turned 60 and I am looking to travel quite a bit while I can. The other thing I see is my income will go up in 5 to 7 years with Social Security(offset to inflation the way I look at it)and I probably will be traveled out in the next 5 years. I have seen everything I had a desire to see already with work etc. So, while I am retired, I am really am not with the kids. Daughter graduates this year, my son will be done in three years. I realize I am fortunate and trust me I grew up with nothing and had a very frugal Dad. I see life getting much "simpler" and lower cost in the near future. The good news is I do not golf, own a boat, plane, belong to any "club" etc....
All correct Azul: I wear mostly shorts and tee shirts to work as an engineer, drive my vehicles at least 12 years, didn't buy first new car until 33 and kept loan only two years, paid off our townhouse 13 years off early in San Francisco Bay Area and my Monte Carlo simulation came in at 99%. Net worth is about $8M. I'm 60 and wife is 55; we're retiring next year, but our biggest hurdle will be to spend more money than we already do, according to our wealth management firm.
A strange thing happened to me after I reached 5 million.... Before, I could not wait to buy the latest sports car....now that I can afford to buy any car I want, I am not interested in buying a new car....🤣😂
I should be commenting on how to live on $40K a year Social security and living a fulfilled life. Taking at least 1 trip abroad and 3 short vacations in the US. We are frugal couple; we cook good meals and enjoy the amenities in our beautiful subdivision. There is a lot of scary stories about retiring without millions. If you listen you'll just be scared to death. Just pay off your home, pay off your car and no debt before you retire. It is doable! It helps to live in Northern Alabama. Beautiful State and very easy on your pocket property tax. God bless the 10K retirees every day. Be healthy and enjoy life. Thanks Azul! although we are so far off with your intended audience I enjoy watching your channel.
I live in a very affluent part of New York and have observed that after a certain amount of money, the difference in quality of life is negligible. I’m not at all surprised that $5M is a similar lifestyle to a $1.5M retirement. Once you have your needs met and then your most valued wants (maybe travel, hobbies), the rest is down to how capable you are of being happy. Are you interested in life? Do you know how to enjoy yourself, or do you constantly decide you need what the Jones’s just got?
most of the time enjoying yourself has nothing to do with money. some people like the grind of working while hating it at the same time. didnt feel like hitting the gym today and lifting, but once you do you feel great for a week aftewards
I’m a healthy and happily married 63 year old guy still…. 1. Working my FT job which I love 2. Adjuncting at a local business which I’ve been doing for the last 5 years. I teach 5-7 courses/year 3. Live in my first house where we paid off our mortgage aggressively 20 years ago 4. Never owning cable TV 5. Brown bagging my lunch 6. Taking public transportation and bicycling whenever I can particularly running local errands 7. Aggressively dollar cost averaging 15% into my 401K for the last 40 years 8. Owning only used vehicles 9. Mow my own lawn 10. Clean my own house 11. Put our son 100% thru undergrad and grad (Columbia MBA) schools. 12. Visit local parks for hiking and vacation maybe once a year. 13. Earn 3 Nickels…invest 2 Nickels and maybe spend 1 Nickel. (I’m cheap!) Nobody said life was going to be easy. Make wise choices and live a pragmatic simple life with gratitude moments everyday. God bless.
if you're not crushing it in the america it's on you. i see way too many people outliving their means and buying useless things. i personally know a teacher who never had a year where he made more than $40k and he's worth over $2 million at 65. he lived BELOW his means, never bought a new car, made sure he maxed out retirement contributions, and invest slow and steadily in mutal funds and etfs.
Housing, travel. food......everything is so expensive! Especially to travel well! Hotel rates are outrageous, especially nice hotels. 5M doesn't seem like much now. Homes doubled in price in the past 4 years, waterfront even more. My dream house on the water is now out of reach.
So enjoy reading these comments. For myself and my wife of nearly 50 years of marriage, we enjoy for instance the financial ability to take our daughter and two grandchildren to London for a week. Having said that our good fortune and health we feel is a blessing that requires us to use our money beyond just our family to include organizations and local missions.
62 with $6M or so, expect to retire with more in 3 years. Agree life is not that much different, or won't be. But I drive a BMW and wouldn't otherwise, we don't think twice about eating out a lot, buying best tickets to concerts and events, and don't think twice about buying clothes often. Other than that ? Nothing else I can think of. Not flying first class, as empty nesters a bigger house doesn't seem practical.
initial draw was 141K now at 153K. this gave us more than what we lived on during a regular yr of no big vacation even after accounting for self paid health insurance. i still opted to keep my 2.75% mortgage which was only 16.5% of my monthly draw and is down to 44 months and i still have a car payment ,4% of monthly draw, since i opted to invest the money i had for the car since the apr was 1.9%. we have a 9 yr old honda suv. i bought a new honda pickup(the one with the payments) soon after retirement and turned over my then 16 y/o pickup to my son. we live in a nice neighborhood that i would describe as a nicer middle class. i self manage our assets and continue to do so. what 5M and conservative spending gives you is financial security not an extravagant lifestyle. it better allows you to absorb unexpected expenses. 2nd home? why would i tie up a big chunk of money in a relatively illiquid asset that doesn't earn anything, raw land? what will it produce? boats or rv's? same reason. i don't like wearing suits so i have one i have used since the l mid 90s. i call it my deposition suit. maybe if there's a reason to wear a nice suit i'll get a new one. i told my son there's power in not caring what people think of your clothes so long as it is appropriate for the occassion and not disrespectful. we love a good coupon deal at subway. one of my hobbies is cycling and my current road bike is a well maintained 2006 model. my newest mtb is from 2018. i may get a new road bike later this year if they come down in price as next yrs model arrives. in my other hobby i spend much less on it compared to the other people into the same thing. i enjoy road trips and every couple of years a "nicer" vacation. with the markets rally we are now 20% up from retirement in spite of no more earned income . i still manage our money. this just really entails doing roth conversions, liquidations for living expenses and for paying taxes , doing quarterly estimated tax payments, strategizing which assets to liquidate and rarely reallocating funds.
9 grandchildren and involved in charity…clearly that couple is focused on the right things in retirement and making good life choices that happen to have resulted in a $5 million nest egg.
By the time one reaches $5M it's too late to enjoy all the flashy stuff. That's why their lives don't look much different. If they got to $5M in their 20s it would have been different, but few people do.
Been watching you and subscribed when you were just starting the channel. Now you’re getting close to 100k subscribers! Congratulations and show us your TH-cam award when you reach the 100k milestone!
Mrs. McCooey, who came into $5 million in company stocks from her parents' company, was able to afford a $1.8 million beach house, a $1.9 million house that she sold later for $1.2 million, and sold a Fairfield County home for nearly $5.6 million. She had her 2007 Ford Explorer for a long time. Having a $5 million cushion pretty much ensures that an older person will not run out of money.
If I was to work to "full retirement" age of 67 (I am 52 now), it is pretty likely I would reach the $5m level. I can't see my life being all that different than it is now and I consider my life pretty "normal".
I am in the situation and one thing that was not mentioned in this video is with 5.3 million investable assets and no debt of any kind you basically don't look at pricing if you want to buy something, buy the best foods, travel, or set up your kids for investment success. This year we are going to Europe for 3 months, and after to Australia for 3 weeks. Our portfolio gives us flexibility which is the most important thing in retirement. Also, having zero debt allows us to scale back dramatically when the market has a downturn, even though 80% of our cash flow comes from dividend stocks.
I retired 2 years ago at 52. I'm single no kids and I rent. I have around 6.5 million. Of that 2 million is in an IRA that I can't touch until I'm 59.5. Most of the 4 million is in bonds and cash. A few reits. I make around 210k per year before taxes. After taxes more like 145k. I don't feel rich and I'm bored AF. I travel alittle and workout and swim almost every day
why all in cash and bonds? same here, but now at 63 it's scary to think about moving into stocks. FOMO for not having been invested in stocks. We bailed in 2008 and never really got back in.
I am one of the fortunate ones who has reached that very lofty spot in "retirement land" regarding having saved tremendous amounts of money. Folks, I gotta tell you, it doesn't just happen. I sometimes worked up to 3 jobs simultaneously, accumulating money, and I lived on very little for over 40 years. You can create a bomb ass retirement for yourself, but you have to be willing to put in extremely hard work. You also need to be creating streams of income as you go throughout your life that will help to offset any financial crisis the government or Wall Street has created. I bought a rental property, I made the lower level of my home into a rental property, I bought a garage space to rent, I'm about to rent my attic space, I bought farmland and grow crops on it and sell them, etc. I was nothing more than a legal secretary in my life, so you don't have to be a high income earner to make it big when you retire.
I’m finding taxes eat into my wealth far more than I expected. Our home’s property tax has increased far more than I ever expected. This causes more withdrawals from retirement accounts which in turn increases the amount of income tax that I’m paying. We love where we live but in time will have to move as we are being taxed beyond what I ever thought. I’m 66 years old and just started social security and it’s not enough to pay my property tax. Don’t get me wrong, I’m grateful for our net-worth position but want to preserve it as long as possible.
Always enjoy your videos Azul but that cup of coffee you had in this video might be the biggest one I have ever seen!! 🙂 Thank you for all of your good advice/info in your videos!!
Net worth just shy of $6M here, and planning to retire next summer at age 57 and 60. We don't live much differently today than we did 25 years ago, and don't expect that to change in retirement. What our savings do provide is peace of mind, which can't be overstated. Looking forward to flipping the switch and enjoying simple freedom.
In 2024, Don't set new year financial goals without consulting a financial adviser. Their expertise ensures a solid plan for success. Building wealth involves developing good habits like regularly putting money away in intervals for solid investments.
Thanks for the advice! I'm new to financial planning and wasn't sure where to start. Any tips on finding a reliable financial adviser or resources to guide beginners?
I think in your videos you need to be specific is it $5M net worth , does it include equity in primary residence , income producing real estate and/or invested in stock market? I think you meant these couples have $5M invested in stock market and including some cash on hand??? Thanks!
I’ve been diligently working, saving and contributing towards early retirement and financial freedom, but since covid outbreak, the economy so far has caused my portfolio to underperform, do I keep contributing to my 401k or look at alternative sectors to meet my goals?
I'm in line with having an advisor oversee my day-to-day investing cos, my job doesn't permit me the time to analyze stocks myself. Thankfully, my portfolio has just 5X in barely 5 years, summing up nearly $1m after subsequent investments to date.
bravo! I appreciate the implementation of ideas and strategies that result to unmeasurable progress, thus the search for a reputable advisor, mind sharing info of this person guiding you please?
She goes by '‘Nicole Desiree Simon’ I suggest you look her up online. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did
Thanks for sharing. I curiously searched for her full name and her website popped up after scrolling a bit. I looked through her credentials and did my due diligence before contacting her. Once again many thanks.
5M with the 4% rule after taxes (where applicable) is roughly $12,500 a month to live on. If 2M of that net worth is equity in a home then it's around $7,500 month to live on (before SS or if you're lucky a pension). Insurance and tax on a 2M home varies but we'll say roughly $1,200 a month. That means you'd have $6,400 to play with. Add SS back in the mix and you're back around $7,500 per month. Not bad at all, but not the lifestyle most people believe the wealthy have. This won't afford yachts or private jets. Nice cars, upgraded homes, and fun vacations for sure!
Yep, I dont think most people realize exactly what kind of wealth is really required to live the jet set lifestyle full time - it's A LOT! far beyond my means and I consider myself to be quite successful, we're talking STARTING at $10mm and probably not really being able to do it on less than $20mm
4% is too small drawdown if your goal is to spend most of the savings before you die... Let's say you have all of the $5M invested in an SP500 index fund (like I do), then you can assume ~8-10% return. If you only spend 4% then you will die richer than you retired...
@@johnj8069 That's a good point and how I look at it. Living at 4% should be fine for me - especially knowing it gets bigger every year (likely beyond inflation). Some people may choose to live differently and use more, because we can't take it with us. I can see it both ways.
@@johnj8069 Your 4% WDR allows for sequence of returns risk - it allows for 2-3-4 consecutive down years in the market without harming the long term viability of a retirement account - yes you will likely die with more money than you started with but things work in cycles - we're finishing 12-13 years of debt fueled returns that are going to be hard to repeat over the next decade, IMHO, but who the heck knows right?
Well, when starting with nothing (no family money), we never thought we'd get to $5M, but the long bull market and real estate prices pushed us well beyond. We don't feel wealthy living in a high cost state. Still watch our pennies. No expensive hobbies. Nice cars, but usually drive for 10+ years. Esssentially same lifestyle we've had most of our working lives.
I have not changed my life style in retirement. I feel lucky to have retired in a great home in a great neighborhood. I live next to nature trails and have a pool in the back yard. I still like to do my own maintenance, so that's a full life. I like to cook, so going to the shop for fresh ingredients and cooking up a nice meal. What more do you need? My car is 8 years old and I use it because I like it. I sometimes think about that sports car, but my wife is not a fan and I'd rather spend time with her. So what does 4 or 5m buy? Basically freedom from thinking about money. A lot is tied up in the home, and that's a big buffer should things go sideways. If we want something we just go online and it shows up the next day. But you just buy what you need and that's not a lot. If something breaks, it's nice to just get someone to replace it. Freedom.
You are right. I have 5M in retirement funds and still feel middle class at best. All the commuter Cars in my house have more than 100k. I fix my own lunch sandwich . I do have a new Sports Car and many motorcycles.
how you feel isnt even in the equation. you arent middle class, but objectively balling. jeffrey dahmer felt like he had to kill people. does that make his feelings justifiable. your feeling premise is flawed obviously
Don't buy the nice car, the nice boat, the motorhome or take any lavish trips. Sit inside, read a book and eat ramen noodles. That's what all financial "experts" want you to do with your retirement nest egg.
53, single with $7.5 total pre-tax NW. Home is very modest in CT @ $400K. Looking to significantly upgrade in FL to a $1-5M gated community. Looking to retire in next 1-2 years. BIG CONCERN is getting healthcare and its huge cost. I've been told Health Insurance can cost me $35K/yr. Looking to draw down $200K pre-tax from current assets. BTW, current assets also generate $110K pre-tax (div & interest) annually. Any advice on Insurance (am I overstating cost?) and if can be done? Great job everyone. Looks like a lot of smart people out there.
There’s no way healthcare will cost $35,000 per year for a single person. Even paying the full amount under the ACA, it shouldn’t be much more than $10,000 per year for a good silver plan, or less for a bronze plan. Of course varies from state to state and area to area within a state.
A good silver plan is in the $10k range under the ACA around 55, add another $1k or $2k for our special USA health insurance inflation by the time you retire and you'll be in the ballpark (about $1k/month) The exchange will help estimate total costs if you're a basic healthcare user, or have more needs.
Most people who reach 5M net worth are pretty frugal and this frugality doesn't change after retirement. The problem for many of them to realize they can spend now and it's ok to stay in a hotel that's not motel 6.
because the reality is the biggest luxury in life is the supermarket. most of human existence people were food insecure. buying food is cheap for nearly everyone. people take for granted grabbing produce shipped from hundreds of miles away. not having to raise cattle and just buying a steak. etc
$5 million is my current goal (currently $1.5 million at 40 years old). It would basically maintain a comfortable middle class lifestyle. Flying business class on vacations, etc.
I've noticed that nearly all of these retirement calculators are based on retired couples. Is there one that is for single people. A calculator that factors in the increased and decreased expenses of a single person? Unless it is true that two people can live as cheaply as one, in my mind there must be a difference. As to the caregiver aspect of a spouse, I do have twin daughters that I raised on my own. I trust that if the need would arise, they would see I would be well cared for. I have sufficient funds to cover assisted living or nursing home care.
These days I'm worried more about the state of the world, than I am my retirement account. Climate change, US supported genocide/apartheid in Palestine and now Lebanon, nuclear war with Russia...... scary and dark times.
In another video, with no references to a journal article, he described a couple with $5m living in a big home in affluent neighborhood and thinking of buying a second home in Newport Beach. Today, a different picture. Funny.
Azul! Loved the content of this video and the $3million one. I thought I was unique in consumption behavior at my net worth until I saw this video. Very funny quote about the $5 million dollar inheritance.
Love your videos. Audio is really bad though. You sound better outside -- why don't you use that outside microphone inside? Looking forward to more videos.
I can relate to this video and some of the comments others have made . "Average" people making decent but not "executive" incomes who accumulate this level of wealth likely did it by saving early (starting late 20's / early 30s) and often (every paycheck) and also, up to 20% + of their income for 30 + years. As Einstein said... "compound interest is the 8th wonder of the world" and it's true, investment balances properly allocated REALLY take off like a locomotive in the later years (post 50) provided saving started 15 or 20 years prior. The other truth of this video is that these people likely were not concerned with "keeping up with the Jone's" during their working years so habits are formed and these usually do not include a lot of conspicuous consumption during retirement. More "stuff" just doesn't make this type of person happier. However, peace of mind and a sense of security definitely does as this motivated them to save so diligently in the 1st place.
I'm a single, 43-year-old father who resides in Hamburg. If everything continues to go well for me, I intend to retire at age 50. I couldn't be happier right now than I am that I just bought my first house last month. I'm so happy that I made wise choices that altered my life forever.
Salutations, dude. At your age, you're doing extremely well. I'm 54 years old, and right now my finances are a mess. Any helpful advice would be greatly appreciated in helping to mold my life. I want to buy a home of my own.
It seems like I used the FIRE movement to manage my finances. Investigate it further by doing some research. With the help of a financial professional, they were then successful when investing in stocks, cryptocurrencies, and real estate.
a highly respected figure in her field. I suggest delving deeper into her credentials,Aileen Gertrude Tippy ’ as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
The statistic of only 0.10% having >$5m of retirement funds is surprising. This must not include all investable assets, just 401k and IRAs, since I just read an article that said the threshold to be in the top 1% is $5.8m.
Hi Azul, which state do you live in and do you recommend it? We just left an extremely high tax state and are looking for a tax and retirement friendly state to move to, where real estate and cost of living is much lower. Couple in our early 50s and One kid in college. We are close to the $5 net worth mark and would like to settle soon.
Nevada is great. No state income tax. Property taxes are not obscene (we have a $2m house and our taxes are $12k a year). Prices have definitely gone up in last four years, but you still get much more house compared to some other states.
No house payments and $1million in investments and savings is more than enough. A modest withdrawal from investments, and Social Security easily get to six figures.
Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determines a lot of things, my parents both spent same number of years in the medical profession, my mom was investing through a financial advisor while my dad through the 401k. On retirement, my mom retired with about $5million, while my dad retired with roughly $3.8million.
You are right. I’m in my mid 50’s now, my wife and I were following this same trajectory. Last two years, I pulled out my money and invested with her wealth manager. Not catching up with profits over the years, but at least I’m earning more. I’m making money even before retiring and my retirement funds has grown way more than it would have been with the 401k.
It’s unfortunate most people don’t have such information, I don’t really blame people who panic cos lack of information can be a big hurdle. I’ve been making more than $25k passively by just investing through an advisor, and I don’t have to do much work. It doesn’t matter if the economy is crashing, great CFA will always make good returns.
Do you mind sharing info on the adviser who assisted you? I'm 40 now and would love to grow my stocks investment portfolio and plan my retirement..
Finding financial advisors like Melissa Terri Swayne who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Thanks for the information!! She appears to be well-knowledgeable and accredited. I ran a Google search on her name and came across his website, thanks for sharing.
Top 1% household in USA by net worth is over 10M. 5M is between 1% and 2%. When I was young I thought these were big mountains. But once you are on top of them, you realize they are just hills. They are enough to support a comfortable life style, but nothing luxurious.
I think the retirement crisis will get even worse. A lot of people can’t save because of low paying jobs, inflation, and insane rental rates. And now that home ownership is out of reach for middle class Americans, they won’t have a house to retire with either.
Rising prices have affected my intention of retiring at 62, working part-time, and building my savings. I'm worried about whether individuals who weathered the 2008 financial crisis found it less challenging than my current situation. The stock market's volatility, coupled with a reduced income, is making me anxious about having enough for retirement.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
Mind if I ask you to recommend this particular coach you using their service?
Big Credits to ''Carol Vivian Constable'' she has a web presence, so you can simply search for, there are some others but it might be difficult to get them, but Carol has been a good guide through the year.
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
I retired a year ago at age 64. My wife and I are comfortable and could afford to spend more than we do. Our expenses last year, putting our son’s wedding aside, amounted to approximately $75k. That included a couple of vacations. We buy what we want when we want or need it, but we continue to live our normal lives. We still laugh about eating tacos on Taco Tuesdays etc. I can’t imagine spending much beyond $100k in any normal year. Our joy comes from spending money on our grand kids!
Sounds like a nice life. Well done.
Definitely peace of mind. We are blessed at 57 that our bills are only 8 percent of our income in retirement. Still hard to spend it so sharing is fun.
Where do you live, that you can live so cheaply? And is your house paid off?
@@brettteeter3461 yes in WV.
@@brettteeter3461 we live on the east coast, and certainly not the least expensive area … but yes - house and cars are all paid for. We have no debt.
A lot of people don't understand that people got to 5 million partly by being frugal. And old habits die hard. So you're absolutely right that those with 5M largely don't live such a different lifestyle.
$5M with 4% rule is $200k inflation-adjusted, and add maybe $50k from Social Security, so $250k per year. When the average person thinks of someone’s lifestyle with $5M in savings, they think of private jets, sports cars, and big vacations. Not at all true at $5M!
Chances are, they worked for themselves and never paid into social security. So 200K per year.
You still pay in to Social Security if you're self-employed. You actually pay double because you pay your part and the employer's part!
@@carolinecollins2441 This is true buty if you have a savvy accountant and are in the right kind of business you minimize w-2 income and maximize other ways of taking compensation that bypasses ss tax so most self employed have smaller SS payments to factor in to their plans, most of the bigger years in my ss calc were in the years I worked for other companies.
Yeah I don't think people understand how expensive private jets are. You can easily get some nice cars, nice houses, even a boat with $5M. But flying private is generally around $15k-$25k per hour, per flight, etc. And that's just a a charter. Owning them is a whole other ball game. They'll make the "rich" go broke quick.
@@ianstallings yep. As a former plane owner there are two great days in airplane ownership. The day you buy it and the day you sell it. My friends that owned RVs and second homes say the same thing.
I have 2.5 million and have a very modest lifestyle, having spent most of my life working overtime and saving as much as I could. Now that I'm retired my spending patterns haven't much changed. The freedom of waking up when I want, eating meals when I want, spending an hour walking outdoors for health during the day, peace of mind and having the time and money to help out family are for me the top benefits of being wealthy. Spending frivolously isn't a priority since I know the effort and sacrifice it took to save.
It’s a little funny that majority audience of this channel are the super savers and the already retirement-smart folks. Hope to become one of you when I retire. In my 40’s here 😎 and learning.
Exactly…..keep keeping on! It is worth the efforts and sacrifices
We have the equivalent of $6.5m but it is based on our $205K inflation adjusted annual pretax pension. Our IRS savings and home sale windfalls have added another $1.5m. We have downsized and have 22 and 6 year old cars. We follow Azul advice and basically buy experiences with our money and travel 4-6 months a year. After living out of carry-ons for months at a time, you realize that you don’t need or want things. We dropped the idea that a house is an investment. We rent at half the price it would cost to buy and invest instead. Plus we are FREE from maintenance.
Very interesting scenario and approach. Given you are, relatively speaking, income-rich and asset poor, it makes a lot of sense. Live it up!
Who has pensions like that? What did you do for a living? IBM stole both my pension and my husbands, but it would not have been anything close to that.
Azul is correct, no one just flips a switch when they retire and go from frugal to spendthrift when they stop working - you develop your lifestyle in your 30's and 40's and pretty much live that way the rest of your life - its just the truth...
Hard to change but my new motto is - Let it rip!
Spot on. Been frugal all my life, not going to deviate from that since I've retired.
Umm, no, it's not. You couldn't be MORE WRONG. I worked my ass off for 41yrs and was frugal asf. Now that I'm retired, I buy WHATEVER I want, WHENEVER I want. And I have WAY more than $5M... So please get your facts straight before you start spouting off BS.
@@Reload77725wtf are you talking about? learn to read - no one ever said you cant buy whatever you want we only said MOST people dont change their spending habits later in life - I would say you are the exception - most people dont live a frugal life then one day just say "fuck it Im spending like a drunken sailor" you can obviously do whatever the hell you want but most people that behave like you are claiming won the lottery - they didnt spend a lifetime earning it.
Disagree a bit, your not in the game anymore, simple stuff like dry cleaning and being active with employees and work friends does stop or slow down dramatically
I just switched up my Roth IRA to 50% SCHD, 25% SCHX, 25% SCHG, and my Roth 401k is 70% vanguard S&P 500 index, 20% vanguard growth index, and 10% vanguard international index. Seeking best possible ways to grow $350k into $1m+ before retirement, I'm 55.
Consider financial advisory so you don’t keep switching it up, Top 3 payers for the month were $OHI, $KMI, and $EDP for an over all payout of a little over $20.. not bad for a 350k portfolio.
Agreed, I’ve been investing in the market for 11 years now, last 4 years with the help of a fiduciary advisor apparently due to the covid-19 pandemic crash. Throughout these years of guidance, I've been fortunate enough to 10x my return as a DIY investor, summing up nearly $1m ROI as of today.
No doubt, having the right advisor is invaluable, mind leaving info of your advisor here please? I only invest in 401k for now but particularly interested in diversifying my portfolio and exploring alternative options.
Carol Vivian Constable is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thank you so much for your helpful tip! I was able to verify the person and book a call session with her. She seems very proficient and I'm really grateful for your guidance
None of my neighbors know how much money I have. I live in a middle class suburban neighborhood. I drive a car about equal to the ones I see around the neighborhood. I don't act rich: I had a contractor come over to look at my kitchen cabinets because I wanted them to look better. He went into the ways to save money by just changing the doors, etc.
Same here. The only difference between my neighbors and me is that I don't have any financial stress (although I don't tell them that).
Let’s face it once you get to $5 million. You quickly realize this isn’t what I thought it was! I’m currently there, and I still complain about alcoholic drinks when I go out to dinner.
Yep, being cheap is what gets us there...but just can't turn it off.
@@rarelycares8416 Well said...
@@scootertooter6874I also think it’s an age thing- if we still think we should pay $5 for a drink, when it’s over $20 we are like what the heck! 😅
@@asoliveri1 Can't argue with that logic! We're OLD farts...
yes too small, i know
Early-retired 10 months ago a 54. Crossed the $5M net worth mark this week. Before retirement, I spent $85K/year for a family of four. My post retirement spend rate is trending to $120K/year due to the insane cost of health insurance for people that are unemployed, under 65, but still have an upper middle-class income stream. I don't feel wealthy or feel like I can safely spend much more than I currently do, even though everyone seems to think I should.
You’re doing great, wife and I are 58, still working and just reached $5M net worth, now looking for some guidance from a fee only advisor to make sure we have all our ducks in a row.
@@rickyricardo9917 Trick is to keep your monthly spending in check and not have too much NW tied up in non-income producing RE.
I feel you, retiring in 3 months at 55, have a net worth of about 5.5M. Was just researching an Australian cruise to be our first big post retirement trip and the thought of spending $40K for a month long vacation is very scary even with millions in the bank. My expenses are similar to yours, will probably realize when I'm older that I should/could have spent more.
Let it rip.@@rarelycares8416
@rarelycares8416 I live in Sydney & have a net worth, the equivalent of US$5,000,000. However, Sydney house prices are insane & 30% of that money is tied up in the value of my very basic house. I've been on 3 cruises from Sydney in the last 12 months & I just get an inside cabins, as it's just a place to sleep.
We are on track to retire with 5-5.5 million. When I was young I imagined having a jet and vacation apartments. LOL. We will live well , within our means with the odd splurge. Retired at ages 55 & 50. It's all been due to hard work, starting our own businesses and planning, planning, planning. We take 3-4 trips a year with our kids, put them through uni but spend very little on "Stuff" day to day. Cook a lot at home etc. Love to luxury shop splurge a few times a year. We paid off our cars years ago so no car payments. Makes a huge difference.
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
I feel your pain mate, as a fellow retiree, I’d suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes.
@@NancyBetty-x That's actually quite impressive, I could use some Info on your FA, I am looking to make a change on my finances this year as well
@@FernandoBowen-78 My advisor is VICTORIA CARMEN SANTAELLA;
You can look her up online
@@NancyBetty-x The crazy part is that those advisors are probably outperforming the market and raising good returns but some are charging fees over fees that drain your portfolio. Is this the case with yours too?
“ Fewer than 1/10 of one percent will ever reach the $5 million mark.” Seems like pretty much all of them are in the comments section.
Haha.. But that statistics is not true in the US. About 2% of the households retire with $5M.
That is because most don’t understand the stat shared here, possibly Azul himself too. To be in the top 0.1% net worth in US one needs to be worth ~25M. A small portion of that is actually in their retirement accounts. What WSJ is saying is that if you looked at retirement accounts only, 0.1% percent of people have 5M in them. I believe people who have a net worth of 5M are also commenting that they are in that club when they are actually not.
@@poonekar define retirement accounts. If you mean Tax differed then yes, I will agree - very few can save 5M 401K. But if you include taxable brokerage accounts then most of them are in this comments section.
@@lordabhikingfisher8087 Yes tax-deferred. Azul mentioned WSJ, but that, and many other articles were really based on "Survey of Consumer Finances" which clearly refers to 401K, IRA etc as retirement accounts. I too would've taken pride in the fact of being in the 0.1% if I could've included my taxable brokerage accounts, but I looked closely and I am not included.
Funny how that works ;).
I’m 80 and widowed for 5 years. I’m in the $10m range. My husband and I have worked hard with two good salaries. Other than the first decade buying a house and starting a family, we’ve generally lived on one salary and found that adequate.
Other than splurge on nice family trips and putting aside money for grandkids college, I don’t have any particular reason to spend more than what I used to. I’ve started flying business class in the last few years, still feel little guilty.
Live life large! You've earned it!
Wow one really interesting take away from this video that I hadn't thought about. More money in retirement does not necessarily mean you can/ or will spend more. It just means that when you do spend you can do so with more confidence that you will not run out of money. Your "probability of success" is higher.
Here is the reality of having 5 Million plus in net worth, we never feel like it's enough. Even when you run through the numbers. We know we will never be able to spend it all and we are doing the, pay for college and some travel…..but truly feeling comfortable has been a challenge. I was a workaholic for years and it almost killed me and now I retired young and should be enjoying that. Sadly I haven't fully embraced that new reality yet….but I am trying, hence looking at this video, which by the way, is awesome….love it. Perspective is very important but no one really talks about their investments or net worth, I am actually a bit embarrassed about how much we have as I didn't grow up in a rich family; paid my way through college, worked for an amazing company and have a great wife…..simple but not easy
Don't be embarrassed, you worked hard for it!
We hit the $5M mark two years ago and semiretired at 68 years old. We really don't think that's a lot of money especially here in northern CA. Our lives are very normal, and we don't drive fancy cars. My only lavish thing was paying cash for a new RV recently as a gift to myself to prepare for full retirement. Still concerned for the future of the US with all the domestic and international turmoil going on. I admit it is difficult to start moving into a spending mode with your savings after being so disciplined with investing, saving, and growing my investments for decades.
evidently thats one of the biggest hurdles people face - changing from accumulation to depletion, major psychological change for most
We are in our mid-40s and we also crossed that milestone a couple of years ago. We are still working largely because our kids are still in school. But we hope that when they leave we can get to live in different parts of the country/ world and experience new things - which would increase our expenses. What about the fear of turmoil prevents you from spending? Is it that it could cause the nest egg to drop in value?
Regarding habits being a reason for not spending, I never considered that to be an issue for me. :) But your comment makes me want to reflect on that :)
@@poonekar My portfolio is heavily into equities which explains the growth over the years. A recession or some major international disaster will negatively affect my portfolio. We are definitely spending as I am holding off social security until 70 to get the bigger check.
It isn't necessary to move into "spending mode" if you are happy with your life the way it is. Our total expenses in 2023 were a little over 15% of our minimum mandatory gross income for 2023 and we don't have a pressing need to draw more income than we have to or spend more just because we can. $5M isn't much in light of the turmoil you mentioned. That is barely enough to qualify for expedited permanent residency in some of the more attractive developed countries and still have enough to live on.
how long do you have to live for holding off to 70 make sense, instead of taking it the day you are eligible? @@philc.9280
I would say that $ 5 million is the high end of working class wealth.
If you have a decent job, save and have a little luck it's not impossible to get there .
It should provide most people with a comfortable retirement, but clearly is not great wealth
Yes. With good and early investments it is acheivable. Invest most of your excess income instead of spend it on things like football games, new cars, fancy clothes, expensive trips, etc.
It's not impossible, but only 1-2% of households retire today with $5M or more... obviously with the inflation 30 years from now it will be something like 10%..
It depends on where that 5M is invested. If it were in paid off rental properties, it could easily generate 300k cash flow annually and grow faster than the rate of inflation. But if it was under the mattress, you would have to live the lifestyle of an average American.
Agreed, its comfortable wealth, no real money stress at all
What people need to realize is you won't be spending as much money when your in your 80's as you will when you're in your 60's. My parents retired at 60 and traveled all around the world. Ate out at fancy restaurants and whatnot - it's all I can do to get them out of the house now. In my opinion you have a window of 20 years to enjoy yourself at a normal retirement age and then ones health starts going and interests in things diminish. Bottomline is, you'll never feel like you have enough to retire - it's how we've been programed. My folks have over 6 million with zero debt and still worry if it's enough.
5 Million and 140 to 150K a year spending. Good Lord !! That's not average or normal. That's way above average. We take 6 to 7 trips a year and only spend 55 to 60 K on all our household and trips. I couldn't spend 150K a year. There just isn't that much stuff that I want. Actually, I don't want or need anything other than experiences and creating memories. A lot of those come free or are inexpensive.
that number was the annual spending for the year for that couple not for travel alone.
@@Random-ld6wg I know. Our total spend for everything, keeping the lights on and all that for a house and trips or entertainment, Everything we do to live costs less than 60K a year. Last year we took 6 trips and with all our other expenses we spent 44K total for our household of 2. I know costs depend a lot on where you may live but geeese. 150K going out the door a year!! Ok. guess if you have boats and expensive cars and pay 1000 monthly for lawn care.... etc.
Seems that way doesnt it - heres the TRUTH - it all depends on where you live and how you live, its super easy to spend $12k a month in Scottsdale or LA or NYC or SanDiego - basically any hot market, I could easily live on $4-$5k a month in BF Oregon but I dont want to live there, so, you have to pay up for location. Believe me its NOT extravagant living either - by the time you pay all the taxes, go out a couple times a week, take a reasonable vacation or two a year and pay for the up keep and insurances on cars/house/medical it just adds up.
As Jesse Lee Peterson would say, “Amazing!”
@@agates9383 Agreed…to live in SoCal it’s grueling with anything less than 5k for necessities (assuming mortgage, bills, property tax…) and an additional 2k for ‘wants’…84k per year!
Hi Azul san. Enjoying your vids from Tokyo, Japan. Today, Nikkei (not the index, but the paper. Our version of WSJ and FT) reported that central Tokyo properties gained 37% during 2023. I googled the per square meter of my place to do a casual valuation of my property. That took my net worth over 4mil for the first time. I had decided to retire in six months already, so this certainly doesn’t affect my thinking, but it did give me an additional piece of mind. Sure it might not affect people who have accumulated a lot more than me, but I’ll just say, that if I were to visit Salt Lake City, I’d stay there for three weeks rather than two, which I had in mind before. Subtle, but a big deal to me. That’s all I can say. Many thanks for your insights!
The key is start as early as you can. It works its not about saving a lot it's about starting early as possible. It just works its not about large salaries and all that its about being consistent and save and invest and do not mess with it. Increase the amount you save every year and It just works
62 now but when i was 23 the bank manager tried to talk me out of opening a IRA
I didn’t listen
No matter how much you have, there is always something to worry about.
I genuinely mean it when I express my stress and concern regarding the market crash and high inflation, particularly in relation to my retirement. I have been experiencing losses for quite some time, and while some may argue that crises can present opportunities, I am feeling overwhelmed. However, I understand that investing is a long-term endeavor, and it is crucial to maintain focus on the bigger picture and the long run...
It's unfortunate most people don't have such information. I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than $760k by just investing through an advisor, and I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns....
STEPHANIE KOPP MEEKS, that's whom i work with look her up and thank me later..
Great Points: As one gets older and is nauseated by the wasting of money (shopping for new clothes, rip-off boozy expensive restaurants, etc. ) and where one is not INSECURE and does not need to "show off" it gets rather easy and indeed ENJOYABLE to live an simple and frugal life... I may be inheriting 8 figures and I have NO intention to ever use it, merely to leave it to the people I love. God willing it will not "destroy" them. Ideally, I'll write up some trusts to protect them forever from their future wives👺.
haha as a mother of a divorced son, I understand you completely
Change "austere" to simple and frugal, and I agree completely.
@@SoFloCo-ne4rk 👍
@@SoFloCo-ne4rk Done ❗
@@goodtimes1890 YES, most people have no idea how bad all of this is until they themselves or someone who loves them gets "Divorce Graped.... (Word modified to avoid the auto-censoring...)
We have a Net Worth over $4 million in our late 40s in a very low cost state. We walk down each aisle at Costco and Target and walk out with NOTHING to buy. I summarize this lifestyle like buying your favorite Movie or Song or even dream car. You are glad you accomplished it and have it, but after awhile it's no longer special.
Your last sentence is uber important to getting rich, unfortunately it is a "you have to do it to understand it" kind of thing - kills materialism, at least it did with me. Kind of a "Brewsters millions" theme
I believe several studies show that the "high" of getting rich lasts about 6 months... Of course the other side is, the low of being poor never lets go, so being rid of that is the first step.
@@thomasrebotier1741 I think the novelty wears off pretty quickly, but everyone has their own idea of rich - it's not always having a high net worth.
Not being sarcastic or anything, just wondering, if you don't want to buy anything why do you go to Costco and Target? Do you just like walking around the store?
@@SoFloCo-ne4rk Very good question! It's winter here and too cold to walk outside, so after eating out at a restaurant my wife (who is rather health conscious) likes to "walk it off", so we prefer larger clean format stores. My wife does like to walking down every isle looking for "deals" that have a * on the price, which I believe means discontinued or final lowest price item. But again, we are buying stuff that we really don't need at this point. Thanks for the great question....I ask my wife this exact question once a month usually....LOL!
Everything in moderation. There are people who don’t treat themselves at all and then die before they ever get to enjoy all the money they socked away.
So true! I now fly first class on most flights...because I can and I want to spend my fortune before I die. I don't need to leave a "legacy" to anyone (though I do have some preferred charities.)
What got me to being wealthy are the habits that I continue even after I got there.
@@Ubermensch-yy7hf Yep, decide how you want to live while you are raising kids - then live that way and save the excess to create generational wealth, trick there is to instill those same values in your children - juries out on mine🙂
That's like the guy who wins the lottery and continues to play. You've made it, enjoy it a little.
@@zoner__ I’m starting to relax by traveling and eating an appetizer at restaurants but I’m still frugal drinking just water, used minivan, wear clothes until they fall apart.
Thanks Azul, good insights.
At $10+M in middle-aged retirement, We have cautious comfort and a sense of a high degree of freedom.
You have a lot to lose, so you are careful and risk mitigation becomes #1.
Given the financial engine is structured to support us perpetually, we can spend/give away/reinvest everything that is spun out. All of it, if we choose. But you cannot easily just change out the horse that got you there. It's hard to do that, even if you know you can and want to. You don't easily forget where you came from or how you got to a place in life.
I know, great problems to have. We are very fortunate. There was hard work, patience needed, luck and many challenges and risks dealt with along the way.
how much in umbrella liability policy do you have? 10M coverage ?
@@Random-ld6wg great question. At different times, in combination with coverage on key assets themselves, I've added umbrella's in the $2-5M range. In my jurisdiction, and with coverages on some of the assets themselves, that has been the right level for us. Every situation will be different.
@@feldhdleh my umbrella is 2M but with the networth having increased over the past 10 yrs, it doesn't cover my networth. conventional wisdom is to go up to your networth. i have 2 assets that are erisa protected a 401k and a 457b deferred compensation so those amounts don't need to be covered. it's another reason I'll keep my roth401k for now instead of converting it to roth/trad ira. fidelity's costs are low anyway. my renewal is next month, I'll ask how much it is to increase the coverage. people always say it's a few hundred but our policy already costs 1800 per yr for the umbrella.
Same here.
Love it…sounds like you have great perspective. Living in gratitude is key
53 and about to retire with a bit over $20m (mostly from sale of a business I run), ignoring home property (not income generating) and pension value (too early to claim this). Can’t see myself spending more in retirement than I have for the last 10 years, namely a steady $150k p.a. (in today’s terms). This is enough to fund all the essentials and luxuries I might want. I have more than enough beautiful “stuff” accumulated over the years. The only benefits I see from the wealth I have accumulated is that I’m very unlikely to run out of money, which takes that stress away, and that I can leave a good sum to charity when I and my wife pass.
I'm not that blessed, doing well...Retired at 58, we live in the same house for over 20 years (property tax is only 1600) and we drive decent cars (not over the top). We only go out to eat once a week. We enjoying going on cruises and are waiting to spend money on grandkids, now if our kids would only cooperate LOL.
"You're not that blessed"? Only 20% retire at 58 or earlier.
I think your statistics are way off. About 8% of US households have at least $1 million in financial assets, and about 3% have at least $5 million. Are you just counting retirement accounts? If you have $2 or $3 million in a regular brokerage account, it will come in might handy when you're retired.
The main thing about being well-off is that you don't have to worry about running out of money, provided you just live moderately. You can still save additional money while you are retired, instead of spending down.
$12k a month isnt moderate. that is balling out of control
@@bigpoppa4094 Nope - thats a moderate house in Scottsdale and a small rental, eating out once a week, one decent vacation a year, a couple of moderate late model paid off cars - and a metric tonne of insurances and saving every month. $12k a month today spends about like $7k a month in 2004 - look it up, its the truth.
Retired with 5 Millions in the Bay Area. I dont feel that wealthy. I live like everyone else. Stayes in the same house over 30+yrs. Shop at Target and uses coupons for purchases. Maybe eating out at a nice restaurant once a while and take a couple of overseas vacations. I still balance my checkbook and dont spend money like a crazy.
You still use checks? 😄Well $5M is wealthy, you feel it or not.
Watch out for the scams on here. Lots of people acting like great investors looking to rip people off.
Yep. If they have a lot of replies mentioning some investment advisor and how great they are its scam. Just press the the 3 vertical dots on the far right end of the post and select "Report" and "Unwanted commerical content or spam" and they disappear.
Agreed. Takes 10 seconds and I’ve been reporting them every time.
What? You mean they really didn't make over $1.75 mill every year?😅😅😅
As we age what we do is important. Who we know. What we do and why. What we believe. NOT what we own.
$5m in investments or $5m in net worth? Also, an 80% probability of a retirement nest egg lasting until the bitter end is perfectly good. The reason is, Monte Carlo simulation do not accurately take into account mid-course corrections.
Retired at 57. I am living a pretty normal life I think. Traveling about two or three times a year. Spending around 160k to 180k a year. Everything is paid for. I did buy a brand new 911 to celebrate two years ago. Beyond that life is pretty simple. Our plans are to travel for longer periods of time for maybe the next 5 or 10 years. Really we want a smaller house at this point, but our 20 year old home is fine for now I suppose. So far, just living off my investment income. Not touching the principle. Spending close to nothing on “stuff”. Happy with it all. It took a lot of hard work. I have a financial planner that handles about 50 percent of my net worth. The rental properties and cash accounts I manage.
What I find shocking is how much net worth you need to have to generate an income to live on. Beyond my car, the only difference is I may take more vacations.
@@JS-ny9ge Yes, agreed. It is hard for people to conceive of requiring $5 or $10M in net worth to generate the incomes to support what amounts to a very nice, but still only upper-middle class lifestyle. I spent much more when I was working-wealthy than now when I am just "wealthy". Of course, some of that required spending from the past is gone now so that helps explain the calculus.
Yes. I remember thinking nothing of pensions when I first started working. Now I realize their value if you are lucky enough to have one. Still, they can be at risk as well and you have no control over them. Interesting how you are “wealthy” by net worth, but quite average in terms of monthly income. I don’t see how people get by on the average or median net worth numbers. I guess you work until 65, collect SS and maybe try a part time job to supplement.
how do you even spend $180k a year? what are you buying? that isnt normal at all
@@bigpoppa4094 To give you sorta of an answer. I own three houses (two rentals) Property taxes, insurance and maintenance on those do add up (just spend 20k on new roofs for two of them this year). I also pay $2,400 a month for just medical as I am covering a family of four (the kids are almost out of college). I did save for the kids college so that does not affect me (too much) as it comes out of their savings accounts. I have car insurance and maintenance for 5 cars currently(2 kids, 2 adults and one extra(about to sell it). We eat out a few times a week or have it delivered to house maybe once. Then there is cable, streaming, iphones(again four of them). We take one or two big (10k each trips a year). I expect my expenses to drop off a lot when the kids get completely off the payroll and certainly there is a lot of "fluff" to be cut out , but really my income is matching my expenses, so I am holding steady for the most part. I know it is a lot, and I could live more frugally as time goes. Right now though I just turned 60 and I am looking to travel quite a bit while I can. The other thing I see is my income will go up in 5 to 7 years with Social Security(offset to inflation the way I look at it)and I probably will be traveled out in the next 5 years. I have seen everything I had a desire to see already with work etc. So, while I am retired, I am really am not with the kids. Daughter graduates this year, my son will be done in three years. I realize I am fortunate and trust me I grew up with nothing and had a very frugal Dad. I see life getting much "simpler" and lower cost in the near future. The good news is I do not golf, own a boat, plane, belong to any "club" etc....
All correct Azul: I wear mostly shorts and tee shirts to work as an engineer, drive my vehicles at least 12 years, didn't buy first new car until 33 and kept loan only two years, paid off our townhouse 13 years off early in San Francisco Bay Area and my Monte Carlo simulation came in at 99%. Net worth is about $8M. I'm 60 and wife is 55; we're retiring next year, but our biggest hurdle will be to spend more money than we already do, according to our wealth management firm.
A strange thing happened to me after I reached 5 million.... Before, I could not wait to buy the latest sports car....now that I can afford to buy any car I want, I am not interested in buying a new car....🤣😂
I should be commenting on how to live on $40K a year Social security and living a fulfilled life. Taking at least 1 trip abroad and 3 short vacations in the US. We are frugal couple; we cook good meals and enjoy the amenities in our beautiful subdivision. There is a lot of scary stories about retiring without millions. If you listen you'll just be scared to death. Just pay off your home, pay off your car and no debt before you retire. It is doable! It helps to live in Northern Alabama. Beautiful State and very easy on your pocket property tax.
God bless the 10K retirees every day. Be healthy and enjoy life. Thanks Azul! although we are so far off with your intended audience I enjoy watching your channel.
I live in a very affluent part of New York and have observed that after a certain amount of money, the difference in quality of life is negligible. I’m not at all surprised that $5M is a similar lifestyle to a $1.5M retirement. Once you have your needs met and then your most valued wants (maybe travel, hobbies), the rest is down to how capable you are of being happy. Are you interested in life? Do you know how to enjoy yourself, or do you constantly decide you need what the Jones’s just got?
I believe to have your quality of life grow linearly, your income (not necessarily net worth) needs to grow exponentially.
most of the time enjoying yourself has nothing to do with money. some people like the grind of working while hating it at the same time. didnt feel like hitting the gym today and lifting, but once you do you feel great for a week aftewards
I’m a healthy and happily married 63 year old guy still….
1. Working my FT job which I love
2. Adjuncting at a local business which I’ve been doing for the last 5 years. I teach 5-7 courses/year
3. Live in my first house where we paid off our mortgage aggressively 20 years ago
4. Never owning cable TV
5. Brown bagging my lunch
6. Taking public transportation and bicycling whenever I can particularly running local errands
7. Aggressively dollar cost averaging 15% into my 401K for the last 40 years
8. Owning only used vehicles
9. Mow my own lawn
10. Clean my own house
11. Put our son 100% thru undergrad and grad (Columbia MBA) schools.
12. Visit local parks for hiking and vacation maybe once a year.
13. Earn 3 Nickels…invest 2 Nickels and maybe spend 1 Nickel. (I’m cheap!)
Nobody said life was going to be easy. Make wise choices and live a pragmatic simple life with gratitude moments everyday. God bless.
if you're not crushing it in the america it's on you. i see way too many people outliving their means and buying useless things. i personally know a teacher who never had a year where he made more than $40k and he's worth over $2 million at 65. he lived BELOW his means, never bought a new car, made sure he maxed out retirement contributions, and invest slow and steadily in mutal funds and etfs.
I cannot imagine being a single man spending $12K/month in retirement. $3K/ week is a lot of cash for single person to spend.
Housing, travel. food......everything is so expensive! Especially to travel well! Hotel rates are outrageous, especially nice hotels. 5M doesn't seem like much now. Homes doubled in price in the past 4 years, waterfront even more. My dream house on the water is now out of reach.
So enjoy reading these comments. For myself and my wife of nearly 50 years of marriage, we enjoy for instance the financial ability to take our daughter and two grandchildren to London for a week. Having said that our good fortune and health we feel is a blessing that requires us to use our money beyond just our family to include organizations and local missions.
62 with $6M or so, expect to retire with more in 3 years. Agree life is not that much different, or won't be. But I drive a BMW and wouldn't otherwise, we don't think twice about eating out a lot, buying best tickets to concerts and events, and don't think twice about buying clothes often. Other than that ? Nothing else I can think of. Not flying first class, as empty nesters a bigger house doesn't seem practical.
Sounds like a nice life. Congrats.
Thanks, I checked and we had about $650K 11 years ago, nice change
initial draw was 141K now at 153K. this gave us more than what we lived on during a regular yr of no big vacation even after accounting for self paid health insurance. i still opted to keep my 2.75% mortgage which was only 16.5% of my monthly draw and is down to 44 months and i still have a car payment ,4% of monthly draw, since i opted to invest the money i had for the car since the apr was 1.9%. we have a 9 yr old honda suv. i bought a new honda pickup(the one with the payments) soon after retirement and turned over my then 16 y/o pickup to my son. we live in a nice neighborhood that i would describe as a nicer middle class. i self manage our assets and continue to do so. what 5M and conservative spending gives you is financial security not an extravagant lifestyle. it better allows you to absorb unexpected expenses. 2nd home? why would i tie up a big chunk of money in a relatively illiquid asset that doesn't earn anything, raw land? what will it produce? boats or rv's? same reason. i don't like wearing suits so i have one i have used since the l mid 90s. i call it my deposition suit. maybe if there's a reason to wear a nice suit i'll get a new one. i told my son there's power in not caring what people think of your clothes so long as it is appropriate for the occassion and not disrespectful. we love a good coupon deal at subway. one of my hobbies is cycling and my current road bike is a well maintained 2006 model. my newest mtb is from 2018. i may get a new road bike later this year if they come down in price as next yrs model arrives. in my other hobby i spend much less on it compared to the other people into the same thing. i enjoy road trips and every couple of years a "nicer" vacation. with the markets rally we are now 20% up from retirement in spite of no more earned income . i still manage our money. this just really entails doing roth conversions, liquidations for living expenses and for paying taxes , doing quarterly estimated tax payments, strategizing which assets to liquidate and rarely reallocating funds.
9 grandchildren and involved in charity…clearly that couple is focused on the right things in retirement and making good life choices that happen to have resulted in a $5 million nest egg.
I enjoyed this. I love your videos and you seem like such a nice and down to earth person. Thank you.
By the time one reaches $5M it's too late to enjoy all the flashy stuff. That's why their lives don't look much different. If they got to $5M in their 20s it would have been different, but few people do.
Been watching you and subscribed when you were just starting the channel. Now you’re getting close to 100k subscribers! Congratulations and show us your TH-cam award when you reach the 100k milestone!
Mrs. McCooey, who came into $5 million in company stocks from her parents' company, was able to afford a $1.8 million beach house, a $1.9 million house that she sold later for $1.2 million, and sold a Fairfield County home for nearly $5.6 million. She had her 2007 Ford Explorer for a long time. Having a $5 million cushion pretty much ensures that an older person will not run out of money.
Who cares
If I was to work to "full retirement" age of 67 (I am 52 now), it is pretty likely I would reach the $5m level. I can't see my life being all that different than it is now and I consider my life pretty "normal".
Yeah I think I could hit that as well but I don't want to work for another 20-years. I plan to retire early.😁
I am planning on “downshifting” my employment between 55 and 60, so I am not going to make it to that $5m level if I work my plan.
By their late 30s/40s most people settle into their lifelong patterns of spending and saving.
I am in the situation and one thing that was not mentioned in this video is with 5.3 million investable assets and no debt of any kind you basically don't look at pricing if you want to buy something, buy the best foods, travel, or set up your kids for investment success. This year we are going to Europe for 3 months, and after to Australia for 3 weeks. Our portfolio gives us flexibility which is the most important thing in retirement. Also, having zero debt allows us to scale back dramatically when the market has a downturn, even though 80% of our cash flow comes from dividend stocks.
I retired 2 years ago at 52. I'm single no kids and I rent. I have around 6.5 million. Of that 2 million is in an IRA that I can't touch until I'm 59.5. Most of the 4 million is in bonds and cash. A few reits. I make around 210k per year before taxes.
After taxes more like 145k. I don't feel rich and I'm bored AF. I travel alittle and workout and swim almost every day
Visit Thailand and you won’t look back
why all in cash and bonds? same here, but now at 63 it's scary to think about moving into stocks. FOMO for not having been invested in stocks. We bailed in 2008 and never really got back in.
@selma5885 i said most, not all. Actually I'm closer to 60 percent bonds/cash and the rest in stocks
I am one of the fortunate ones who has reached that very lofty spot in "retirement land" regarding having saved tremendous amounts of money. Folks, I gotta tell you, it doesn't just happen. I sometimes worked up to 3 jobs simultaneously, accumulating money, and I lived on very little for over 40 years. You can create a bomb ass retirement for yourself, but you have to be willing to put in extremely hard work. You also need to be creating streams of income as you go throughout your life that will help to offset any financial crisis the government or Wall Street has created. I bought a rental property, I made the lower level of my home into a rental property, I bought a garage space to rent, I'm about to rent my attic space, I bought farmland and grow crops on it and sell them, etc. I was nothing more than a legal secretary in my life, so you don't have to be a high income earner to make it big when you retire.
I’m finding taxes eat into my wealth far more than I expected. Our home’s property tax has increased far more than I ever expected. This causes more withdrawals from retirement accounts which in turn increases the amount of income tax that I’m paying. We love where we live but in time will have to move as we are being taxed beyond what I ever thought. I’m 66 years old and just started social security and it’s not enough to pay my property tax. Don’t get me wrong, I’m grateful for our net-worth position but want to preserve it as long as possible.
Well, I don't think I'll have to worry about this.
Always enjoy your videos Azul but that cup of coffee you had in this video might be the biggest one I have ever seen!! 🙂 Thank you for all of your good advice/info in your videos!!
We left our day jobs 3 years ago at age 28 and the biggest thing that changed was we got the freedom of time. Great video and insight
Net worth just shy of $6M here, and planning to retire next summer at age 57 and 60. We don't live much differently today than we did 25 years ago, and don't expect that to change in retirement. What our savings do provide is peace of mind, which can't be overstated. Looking forward to flipping the switch and enjoying simple freedom.
In 2024, Don't set new year financial goals without consulting a financial adviser. Their expertise ensures a solid plan for success. Building wealth involves developing good habits like regularly putting money away in intervals for solid investments.
Thanks for the advice! I'm new to financial planning and wasn't sure where to start. Any tips on finding a reliable financial adviser or resources to guide beginners?
Market behavior can be complex and unpredictable. Mind if I ask you to recommend this particular advisor to whom you have used their services?
@CarterHall-re5fu Phishing.
Pfft...I've done just fine by myself.
@@BradCampbellmn It's all bots here advertising.
I think in your videos you need to be specific is it $5M net worth , does it include equity in primary residence , income producing real estate and/or invested in stock market? I think you meant these couples have $5M invested in stock market and including some cash on hand??? Thanks!
Yeah, if you live in San Francisco, you could have a net worth of 5m and feel poor. 😅
I’ve been diligently working, saving and contributing towards early retirement and financial freedom, but since covid outbreak, the economy so far has caused my portfolio to underperform, do I keep contributing to my 401k or look at alternative sectors to meet my goals?
keep contributing! I'd suggest you consider financial advisory at this point in time, remember you are in for the long haul
I'm in line with having an advisor oversee my day-to-day investing cos, my job doesn't permit me the time to analyze stocks myself. Thankfully, my portfolio has just 5X in barely 5 years, summing up nearly $1m after subsequent investments to date.
bravo! I appreciate the implementation of ideas and strategies that result to unmeasurable progress, thus the search for a reputable advisor, mind sharing info of this person guiding you please?
She goes by '‘Nicole Desiree Simon’ I suggest you look her up online. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did
Thanks for sharing. I curiously searched for her full name and her website popped up after scrolling a bit. I looked through her credentials and did my due diligence before contacting her. Once again many thanks.
5M with the 4% rule after taxes (where applicable) is roughly $12,500 a month to live on. If 2M of that net worth is equity in a home then it's around $7,500 month to live on (before SS or if you're lucky a pension). Insurance and tax on a 2M home varies but we'll say roughly $1,200 a month. That means you'd have $6,400 to play with. Add SS back in the mix and you're back around $7,500 per month. Not bad at all, but not the lifestyle most people believe the wealthy have. This won't afford yachts or private jets. Nice cars, upgraded homes, and fun vacations for sure!
Yep, I dont think most people realize exactly what kind of wealth is really required to live the jet set lifestyle full time - it's A LOT! far beyond my means and I consider myself to be quite successful, we're talking STARTING at $10mm and probably not really being able to do it on less than $20mm
4% is too small drawdown if your goal is to spend most of the savings before you die... Let's say you have all of the $5M invested in an SP500 index fund (like I do), then you can assume ~8-10% return. If you only spend 4% then you will die richer than you retired...
@@johnj8069 That's a good point and how I look at it. Living at 4% should be fine for me - especially knowing it gets bigger every year (likely beyond inflation). Some people may choose to live differently and use more, because we can't take it with us. I can see it both ways.
@@johnj8069 Your 4% WDR allows for sequence of returns risk - it allows for 2-3-4 consecutive down years in the market without harming the long term viability of a retirement account - yes you will likely die with more money than you started with but things work in cycles - we're finishing 12-13 years of debt fueled returns that are going to be hard to repeat over the next decade, IMHO, but who the heck knows right?
Well, when starting with nothing (no family money), we never thought we'd get to $5M, but the long bull market and real estate prices pushed us well beyond. We don't feel wealthy living in a high cost state. Still watch our pennies. No expensive hobbies. Nice cars, but usually drive for 10+ years. Esssentially same lifestyle we've had most of our working lives.
I have not changed my life style in retirement. I feel lucky to have retired in a great home in a great neighborhood. I live next to nature trails and have a pool in the back yard. I still like to do my own maintenance, so that's a full life. I like to cook, so going to the shop for fresh ingredients and cooking up a nice meal. What more do you need?
My car is 8 years old and I use it because I like it. I sometimes think about that sports car, but my wife is not a fan and I'd rather spend time with her.
So what does 4 or 5m buy? Basically freedom from thinking about money. A lot is tied up in the home, and that's a big buffer should things go sideways. If we want something we just go online and it shows up the next day. But you just buy what you need and that's not a lot. If something breaks, it's nice to just get someone to replace it. Freedom.
You are right. I have 5M in retirement funds and still feel middle class at best. All the commuter Cars in my house have more than 100k. I fix my own lunch sandwich . I do have a new Sports Car and many motorcycles.
how you feel isnt even in the equation. you arent middle class, but objectively balling. jeffrey dahmer felt like he had to kill people. does that make his feelings justifiable. your feeling premise is flawed obviously
@@bigpoppa4094 Exactly. Middle class or not, that fact I am unsecured about my retirement in spite of having enough is a mind game.
At 62, what is missing for me is “what’s next?” Still searching…
Don't buy the nice car, the nice boat, the motorhome or take any lavish trips. Sit inside, read a book and eat ramen noodles. That's what all financial "experts" want you to do with your retirement nest egg.
53, single with $7.5 total pre-tax NW. Home is very modest in CT @ $400K.
Looking to significantly upgrade in FL to a $1-5M gated community.
Looking to retire in next 1-2 years.
BIG CONCERN is getting healthcare and its huge cost.
I've been told Health Insurance can cost me $35K/yr.
Looking to draw down $200K pre-tax from current assets.
BTW, current assets also generate $110K pre-tax (div & interest) annually.
Any advice on Insurance (am I overstating cost?) and if can be done?
Great job everyone. Looks like a lot of smart people out there.
There’s no way healthcare will cost $35,000 per year for a single person. Even paying the full amount under the ACA, it shouldn’t be much more than $10,000 per year for a good silver plan, or less for a bronze plan. Of course varies from state to state and area to area within a state.
A good silver plan is in the $10k range under the ACA around 55, add another $1k or $2k for our special USA health insurance inflation by the time you retire and you'll be in the ballpark (about $1k/month) The exchange will help estimate total costs if you're a basic healthcare user, or have more needs.
Most people who reach 5M net worth are pretty frugal and this frugality doesn't change after retirement. The problem for many of them to realize they can spend now and it's ok to stay in a hotel that's not motel 6.
because the reality is the biggest luxury in life is the supermarket. most of human existence people were food insecure. buying food is cheap for nearly everyone. people take for granted grabbing produce shipped from hundreds of miles away. not having to raise cattle and just buying a steak. etc
66% of the article was filler. then 3 minutes before the end he starts talking about the topic we all clicked to watch.
$5 million is my current goal (currently $1.5 million at 40 years old). It would basically maintain a comfortable middle class lifestyle. Flying business class on vacations, etc.
Is flying business class a middle class lifestyle?
I've noticed that nearly all of these retirement calculators are based on retired couples. Is there one that is for single people. A calculator that factors in the increased and decreased expenses of a single person? Unless it is true that two people can live as cheaply as one, in my mind there must be a difference. As to the caregiver aspect of a spouse, I do have twin daughters that I raised on my own. I trust that if the need would arise, they would see I would be well cared for. I have sufficient funds to cover assisted living or nursing home care.
These days I'm worried more about the state of the world, than I am my retirement account. Climate change, US supported genocide/apartheid in Palestine and now Lebanon, nuclear war with Russia...... scary and dark times.
It is a common mistake to equate wealth with large consumption
In another video, with no references to a journal article, he described a couple with $5m living in a big home in affluent neighborhood and thinking of buying a second home in Newport Beach. Today, a different picture. Funny.
I've got a net worth of between 7.8-8 million. I'm always the poorest rich guy wherever I go.
How old r u
@Azul that looks like a $5M coffee cup you're drinking from!
Azul! Loved the content of this video and the $3million one. I thought I was unique in consumption behavior at my net worth until I saw this video. Very funny quote about the $5 million dollar inheritance.
Love your videos. Audio is really bad though. You sound better outside -- why don't you use that outside microphone inside? Looking forward to more videos.
I can relate to this video and some of the comments others have made . "Average" people making decent but not "executive" incomes who accumulate this level of wealth likely did it by saving early (starting late 20's / early 30s) and often (every paycheck) and also, up to 20% + of their income for 30 + years. As Einstein said... "compound interest is the 8th wonder of the world" and it's true, investment balances properly allocated REALLY take off like a locomotive in the later years (post 50) provided saving started 15 or 20 years prior.
The other truth of this video is that these people likely were not concerned with "keeping up with the Jone's" during their working years so habits are formed and these usually do not include a lot of conspicuous consumption during retirement. More "stuff" just doesn't make this type of person happier. However, peace of mind and a sense of security definitely does as this motivated them to save so diligently in the 1st place.
I'm a single, 43-year-old father who resides in Hamburg. If everything continues to go well for me, I intend to retire at age 50. I couldn't be happier right now than I am that I just bought my first house last month. I'm so happy that I made wise choices that altered my life forever.
Salutations, dude. At your age, you're doing extremely well. I'm 54 years old, and right now my finances are a mess. Any helpful advice would be greatly appreciated in helping to mold my life. I want to buy a home of my own.
It seems like I used the FIRE movement to manage my finances. Investigate it further by doing some research. With the help of a financial professional, they were then successful when investing in stocks, cryptocurrencies, and real estate.
a highly respected figure in her field. I suggest delving deeper into her credentials,Aileen Gertrude Tippy ’ as she possesses extensive experience and serves as a valuable resource for individuals seeking guidance in navigating the financial market.
thank you for the lead. I searched her up, and I have sent her an email. I hope she gets back to me soon.
I’m single. I can’t imagine having $5 million dollars saved.
I have $6 million but don’t feel wealthy. I’m from London
The statistic of only 0.10% having >$5m of retirement funds is surprising. This must not include all investable assets, just 401k and IRAs, since I just read an article that said the threshold to be in the top 1% is $5.8m.
That's the largest cup of coffee I've ever seen. I want you to be my retirement planner now.
That was one huge coffee cup wowzer.
You’re almost at 100,000 subs. Congrats!!
Hi Azul, which state do you live in and do you recommend it? We just left an extremely high tax state and are looking for a tax and retirement friendly state to move to, where real estate and cost of living is much lower. Couple in our early 50s and One kid in college. We are close to the $5 net worth mark and would like to settle soon.
Nevada is great. No state income tax. Property taxes are not obscene (we have a $2m house and our taxes are $12k a year). Prices have definitely gone up in last four years, but you still get much more house compared to some other states.
No house payments and $1million in investments and savings is more than enough. A modest withdrawal from investments, and Social Security easily get to six figures.
Exactly, It is not too complicated. A Vanguard 500 fund will average over 7%, probably 10 -11%.
My problem is always trying to help kids who have small businesses. Really hard to watch , so we give and give….
Big mistake
Successful people are more likely to have a job they love, so that's a nonzero percentage who keep working till they drop...
its so weird.... at 3%, that's only 150k per year.... that's a an average couple might make while they are working... How is 5 mil all that much?
why do you assume rich people don't like to manage money?