You live in a safe deposit box?
That’s a lot of toilet paper for someone who doesn’t buy food.
It’s all that coffee.
Life-changing money is money that either enables you to retire at once, or at least puts you on a very firm path to retire soon.
Yes, three years later they were able to buy a little house in a new subdivision, for $12K. My dad said they could barely afford it.
If you knew my dad … he was worth betting on. I’m sure others could see it.
Or allows you to buy a house, or pay off o student loans, or a ton of other things that don’t equate to retirement, but changes your life.
I get food stamps. 292 a month.
I live in Hud housing.
Its a third of your income, or 25 if no income.
My whole post was laying out a wide variety of different definitions of “life-changing”. My eventual bottom line was that for me IMO, life-changing discussed in the context of receiving a windfall means getting to a new and better lifestyle / life circumstance you’d never been before and could not have gotten to on your own but for the windfall. By that idiosyncratic definition, no, that woman getting that car was not life-changing. Although it did change her life, it’s far from clear to me that she wasn’t going to accomplish the same recovery anyway. And, by (my) definition, recovering to where she had been previously is not life-changing.
Asking from a position of ignorance:
For a young 20-something McDonald’s worker with no spouse or family yet, still living with their parents (say) … $50,000 free-and-clear is enough to begin some meaningful investment, is it not?
I would say hell yes. But that’s not usually where it goes. They may need a car, down payment on a house whatever.
The sad fact is that it takes money, to make money.
This is my POV as well. If I got $2 million, the one financed vehicle and the house would be paid off, and we’d put in probably another 20-30k in updates and repairs we’ve put off (new electrical panel, new carpets, new roof). Pay off the rest of the student loans and credit card bills, so around 400,000 for all of that.
$1.6 million invested even in a fixed annuity at say 4% is going to result in a more than survivable income in a world without mortgage or car payments.
That would be life changing IF I didn’t want to change my lifestyle. The key element in a lot of larger windfalls NOT working out is that sure, it changed their lives, but they changed their lifestyles to match the windfall.
If you’re not changing your lifestyle, it’s not really life changing.
Sure it is. If I could draw from a pile of cash and got to quit working while maintaining my current lifestyle, that’s absolutely life changing.
I’d say somewhere around $10M.
Money that comes in easy, tends to go out easy.
But a smart young person could use that 50K to finance college. That would easily pay for a 2 year trade degree.
For us, it would be “paying off the mortgage” money- less than $500K.
It is likely taxable.
A solid middle to upper middle class lifestyle isn’t bad. Most folks at that income level (and other income levels, of course) feel stressed over money. If you get more money and largely keep the lifestyle, you get rid of the stress, and can enjoy your life.
I’m in that comfortable life zone, but I want to spend money on relatively modest things that are a bit out of reach. A better car, but not a Porsche, fixes to the house, but not a mansion, vacations but not jetting to Fiji for a month.
This.
For the working solid middle to upper-middle class person who’s also middle-aged, they don’t need more lifestyle. Instead they probably need to work a lot less than they do, and they need a lot less stress about money (both income now and asset accumulation for retirement).
Those things (reduced work & money stress) are life-changing even if the person only does those spending things @Cheesesteak mentions.
They certainly could, per @RitterSport, change their lifestyle. But for a one-time windfall, that lifestyle change tends to be hard to reverse after the windfall has been consumed. When the windfall money is gone and there’s still 3 years on the Porsche’s loan, well, something bad is gonna happen.
So that suggests that the amount of incremental lifestyle one can prudently adopt after a windfall is whatever post-tax post-inflation ROI the windfall can produce. For e.g. $100K, that’s (arguably) ~5$K. At that rate it’s going to take a pretty big windfall to move the needle for a fairly typical guy like our @Cheesesteak.
Once someone is retired, their life stress is already low(er), and their required spending is winding down, then a different set of tradeoffs apply and what “moves the needle” might be a lot different.
A quarter million would probably make it where I wouldn’t feel the need to work part time unless I felt like it after I retire this coming summer. It would double the size of my IRA, so with that, my pension, and whatever Ms. P brings in would be plenty. House is paid off, although property taxes are high to how much our house has appreciated.
It can also be money that enables you to get and keep a job. Or to get a job/take up work that’s much better for you. Or that enables you to become educated. Or that enables you to be or become housed. Or that gives you the confidence to help create a child, in the expectation that you can house and feed that child. Or that allows you to be confident that you can continue to house and feed already existing child(ren).
If the only significant life change that you can imagine is retirement, I think you should imagine more widely.
OK. I’m disagreeing with your definitions.
I disagree with that one too. If you’re not changing your lifestyle, but all your financial anxiety about whether you can keep living that way goes away – that would sure as hell be life changing for me.
Definitely agree with this.
Several years ago, I was laid off but with a generous severance package. Due to that, I was able to live “normally” for the six months it took me to find another job, and had enough left over to pay off my student loans.
If I hadn’t received that severance? There would have been a very real chance that bills would not have been paid, I might have lost my house, and my credit would have been shot. So while it didn’t change my ability to retire, it certainly staved off some very hard financial times. To me, that severance was “life changing.”