The impact that the following sums of money would have on your life

[mr_wolf]

Boy, for so many people here their ideal life is the catchall phrase ‘to retire’. Would you retire much? Would you retire intensively or just casually? What if you overretire? Wouldn’t it be boring to keep retiring every day all daylong for the rest of your life?

[octopus]

@iljitsch

I’m surprised to see so many people mention debt.

Borrowing money to buy a house makes sense, because you get to live in the house and thus save on rent if you get a mortgage. You could make a similar argument for a first car. But why keep buying cars with borrowed money? Or put stuff on credit cards?

That’s a whole other topic!

[octopus]

@Dangerosa

Rule of thumb - 4% that you’ll have to pay taxes on. That assumes an average 8% return and 4% inflation. So $400,000, of which plan on 50% in state and federal taxes, for take home of $200,000. You can do that - if you aren’t going on a hookers and blow bender.

(But get rid of the financial guy - he’ll take a cut off the top - just a Vanguard index fund - maybe a Vanguard bond fund)

Bonds only aren’t a good idea at the moment in my humble opinion.

[Chefguy]

@Dogzilla

I resent the implication that the 90% of us who have no buffer at all do not work hard. That’s bullshit and you know it. Not everyone has the same educational opportunities, not everyone was raised in a family where people knew how to manage money responsibly. Most people I know, who are not struggling, are one bad car accident away from ruin. Or one dreaded disease diagnosis. Shit happens and it can happen to anyone.

Where on earth did I say anything remotely like that? I was just responding to your “must be nice” statement, which sounded snarky to me. Nobody gets out from under without hard work, and quite often even that isn’t good enough. All I was saying is that people here who DID get out from under likely worked to get there rather than having it handed to them. Sheesh, lighten up, man.

[octopus]

@rbroome

I hear you. I am not in that position-I am retired and have the buffer you speak of. In the last few years I have come to realize that most people are in the situation you describe. For the last couple of decades I had my head down in day to day work and didn’t see what was happening. I read about it. But didn’t understand it like I am beginning to. The Republicans just learned the hard way that the US isn’t super conservative nor is it all Silicon Valley. Everyone needs to recognize that people deserve not only a decent standard of living but security for that life. And in a democracy folks are going to do what they can to get what they deserve.

To get what they “deserve.” And what exactly is that?

[kaylasdad99]

@rbroome

I hear you. I am not in that position-I am retired and have the buffer you speak of. In the last few years I have come to realize that most people are in the situation you describe. For the last couple of decades I had my head down in day to day work and didn’t see what was happening. I read about it. But didn’t understand it like I am beginning to. The Republicans just learned the hard way that the US isn’t super conservative nor is it all Silicon Valley. Everyone needs to recognize that** people deserve not only a decent standard of living but security for that life.** And in a democracy folks are going to do what they can to get what they deserve.

@octopus

To get what they “deserve.” And what exactly is that?

Not to answer for him, but it doesn’t look like he stuttered…

[california_jobcase]

1-10k? No change. just put it in the bank.
100k? Fix up the houses faster. Maybe buy a decent road trip car.
Million? Buy one nice house, settle in one place, save/donate the leftovers.

[BigDadWolf]

Currently unemployed which skews the results somewhat.

$1,000 - no impact at all.
$10,000 - virtually no impact. A little peace of mind.
$100,000 - This would probably allow me to adjust my salary requirements down which would open up more opportunities.
$1,000,000 - Not quite enough to retire but it would remove a lot of worries.
$10 million - life changing as this would be enough for generous charitable gifts, retirement, and setting up trust funds for my kids.

[spamforbrains]

Quote:
Originally Posted by Dogzilla View Post
What you are really not grokking is that most of us do not make enough money, after covering necessary expenses, to save up for a car to pay cash each time. When you trade a car in, it has half or less than half the value at which you bought it. Even inexpensive cars run in the $20,000 range. Let’s say you can get a used one for $12,000. I drove my old car for 17 years. The money I saved after I paid it off went toward the downpayment to buy my house. "

How nice for you that you have such a buffer that you do not have to fuss over such details in your life."

I’d wager that those of us who are financially comfortable and without debt have worked hard to get to that point. My wife and I put money away even when we had debt to pay off and it wasn’t comfortable to do. We doubled down on mortgage payments and refinanced to a shorter term to lop off interest. We refused to rack up credit card debt that couldn’t be paid off monthly. So yes, it’s “nice”* to have a buffer, but it came at a cost.

I don’t think you understand that many people cannot do that. Period. At all. At any cost. I have never in my life had enough money to buy a car with cash (cars are not a luxury, they are essential in many places), or to put a down payment on a house (most of the places I’ve lived in, houses start at $1 million and go up from there, and most people who buy them do so with a down payment provided by their parents). I am well-educated and work extremely hard. Any credit debt is all from emergencies, not over-spending. I don’t expect to ever be able to retire, since I’m from that generation where pensions and so forth simply don’t exist. I’ve had periods where I had to decide between eating and paying the rent.
I’d wager that people who are financially comfortable were either born into a world quite different from mine (older people) or had a LOT of help from wealthy parents.

[Nametag]

$1,000: No change in life. Goes in the checking account, may delay transfer from savings.

$10,000: Virtually no change. Goes in savings account, will definitely delay selling shares.

$100,000: Probably no change in the short term. I’m behind on retirement savings, and this money would most likely go into a retirement account, grow nicely, and allow me to retire more comfortably, but not earlier. Might conceivably go toward buying a house or condo, though - depends on the market.

$1,000,000: Might buy a house or condo, might just sock it away – either way, adds great reassurance to retirement prospects.

$10 million: Definitely buy a place, add to retirement fund, and set up a trust. Quit my job? Hell no - it would take another zero for that.

[Scribble]

@Karen_Lingel

$1000 - $100,000 – no impact. Just mix this money into my other money. Maybe I’d take a trip to NYC (with $8,000 and up).

$1,000,000 – take a 3-week vacation somewhere.

$10,000,000 – buy a slightly bigger house, closer to work, but keep working. This would have SIGNIFICANT impact on my life. I would have a craft room where everything would be organized and accessible. It would be beautiful! Being closer to work means 30 minutes on the road every day instead of 2 hours. Ooooohhhhh, the stuff I can do with that extra time (plus an organized craft room.) I dream about this every day. (Note: $1M doesn’t buy squat, house-wise, in Silicon Valley. I definitely need $2-4M for the kind of thing I want.)

$20,000,000 – buy slightly larger house and retire.

What vacation are you thinking of that would cost a million dollars? And how long would you stay in NYC for $8k?

[DrDeth]

@Dogzilla

Seriously? You actually expect what percentage of Dopers here to be wealthy enough to have absolutely no student loan, credit card, or auto loan debt?

Y

I am not wealthy, but I have no debt other than a killer Mortgage.

[jtur88]

@octopus

To get what they “deserve.” And what exactly is that?

What the previous generations of American worked hard for. My father and grandfather worked hard, so I wouldn’t have to risk my life and my health in grueling manual labor with no safety net. It would be a slap in the face to refuse to accept and appreciate what they did for me, and insist on replicating the same hardships myself and imposing them on my own children – who will hopefully get a share of the rich national treasure that they deserve as a birthright. It’s the difference between being born in Amereica and being born in Yemen or Uzbekistan or Malawi, the latter of which most Americans would not choose.

[Lord_Feldon]

@Arcite

With that kind of principal, invested conservatively, you could get what, $50k per year? I know plenty of people live on that much, I’m just surprised to see so many people who’d apparently be content with that.

Close to half of the households in the USA would be getting a raise if you gave them $50k a year to live on. People are usually content with what they have (whatever that is), so offering them more is going to look even better.

[Senegoid]

Smaller amounts: That will extend by maybe a few weeks or months or maybe even a few years how long my savings will last before I’m flat out broke and living out of (or maybe in) a dumpster in some back alley.

Larger amounts, say in the high 5-figures: If I keep to my current budget, perhaps savings will last for my reasonably foreseeable life span, maybe even with enough to pay for better medical coverage to keep me passably pain-free in my later years. Maybe. Perhaps spend rather more, a bit more freely, on medical care for myself.

1 mil (say, after taxes): The above, plus: Attempt to invest in some safe place, see if I can get a good steady 5% per annum return to live on. That comes to $50,000, which is more money per year than I’ve ever made. So I could live on that. Oh, is 5% too optimistic? Maybe 4% or just 3%? Well, $40,000 or $30,000 per year already puts me substantially beyond any lifestyle to which I’ve been accustomed. I envision improving my lifestyle maybe 10% to 20% (new clothes, somewhat nicer apartment in a nicer area). Beyond that, save up a bit more money to use as in above paragraph.

2 mil: Much more definitely possible to do everything in above paragraph. Maybe even help out a few sort-of-close relatives who have on-going medical problems.

4 mil or more: Be able to do all of the above for sure. Don’t really picture myself making any really major upgrades to my accustomed lifestyle, really, no matter how much money I might have.

[glee]

@spamforbrains

… I have never in my life had enough money to buy a car with cash (cars are not a luxury, they are essential in many places), or to put a down payment on a house (most of the places I’ve lived in, houses start at $1 million and go up from there, and most people who buy them do so with a down payment provided by their parents). I am well-educated and work extremely hard. Any credit debt is all from emergencies, not over-spending. I don’t expect to ever be able to retire, since I’m from that generation where pensions and so forth simply don’t exist. I’ve had periods where I had to decide between eating and paying the rent.
I’d wager that people who are financially comfortable were either born into a world quite different from mine (older people) or had a LOT of help from wealthy parents.

Obviously it matters where you live and what jobs are available.

I’ve never owned a car (I live in the UK and use public transport.)
I saved up for my first house deposit (it took 15 years.) My parents didn’t have any money (e.g. they never owned a car either.)
I never paid any interest on my credit card (because it’s an expensive way to borrow money) - I got an overdraft with my bank instead to cover emergencies.
I sympathise over pensions. I’m 62 and when I joined British Telecomunications 40 years ago they had an excellent pension scheme (I asked about it at my job interview ) Now (like everyone else) they’ve changed it for the worse.

[glee]

@Karen_Lingel

$1,000,000 – take a 3-week vacation somewhere.

That’s some vacation! :eek:

A few years ago I flew from the UK to Vegas and stayed for a month at the Luxor. The whole trip cost just under £2,000 (about $3,000.)

[Ruken]

~$5MM is the threshold where I’d be comfortable with us ending our employment. That threshold would be lower if we were older. Anything below that goes into the investment accounts.

[Napier]

This is a pleasant daydream.

$1,000: no impact, don’t recall how much is in the checking accounts to this precision
$10,000: replace my car or do a major home repair
$100,000: replace car and do multiple major home repairs
$1,000,000: this is about what I hoped to add to retirement savings in the next 8 years…
$10 million: wheeeee! ahem. well, when I retire, which would be as soon as my work stopped feeling satisfying, it would be with my own little hobby business/activity…

[Dangerosa]

@Bill_Door

50% state and federal taxes is too much. With ten million dollars all of your income is going to be dividends or, after the first two years, long term capital gains. You’ll pay no more than 33% even in California, which looks to have the highest rate.

Yeah, I just figure 50%. Its way too much, but its the easy mental game for rule of thumb calculations. And, if you are going to live off investment income, its best, IMHO, to underestimate your income, and over estimate taxes and inflation.