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Millionaire Status and inflation
The negative power of inflation is pretty scary.
Technically, if one has $1,000,000 of assets, one is considered a millionaire. For a 'tighter' definition, the house should be excluded since it really is not income producing. So let's say, you have $1mil in cash (or stocks) and the interest (or dividend) is on average 2%. That is only $20,000 per year. Further assuming Social Security is kaput (at least for you since you have 'assets'), $20,000 really is not much to live on. I think $1,000,000 is now the new $250,000. On a different note, the government says inflation is low. However they base that statement on their CPI that does NOT include Food and Energy. Sure, the prices of CD players have dropped but how often do you buy a CD player versus gasoline.
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Ben 1987 190d 2.5Turbo |
#2
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I'm now aspiring to be a five or ten millionaire . . .
I wouldn't want to be a billionaire. That's just wrong . . .
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" We have nothing to fear but the main stream media itself . . . ."- Adapted from Franklin D Roosevelt for the 21st century OBK #55 1998 Lincoln Continental - Sold Max 1984 300TD 285,000 miles - Sold The Dee8gonator 1987 560SEC 196,000 miles - Sold Orgasmatron - 2006 CLS500 90,000 miles 2002 C320 Wagon 122,000 miles 2016 AMG GTS 12,000 miles |
#3
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“Millionaire Status” is to be based on income producing assets ?
That’s news to me. I think $1M is still $1M, because someone with $250K can’t buy what someone with $1M can.
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1980 300D - Veggie Burner ! |
#4
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If I count my houses, I'm a millionaire. I don't live like what I always used to think millionaires should live. I got no complaints, though. My life is pretty good. Being happy with what you have is more important than having a lot just to have it.
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" We have nothing to fear but the main stream media itself . . . ."- Adapted from Franklin D Roosevelt for the 21st century OBK #55 1998 Lincoln Continental - Sold Max 1984 300TD 285,000 miles - Sold The Dee8gonator 1987 560SEC 196,000 miles - Sold Orgasmatron - 2006 CLS500 90,000 miles 2002 C320 Wagon 122,000 miles 2016 AMG GTS 12,000 miles |
#5
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I’ll second that, for sure.
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1980 300D - Veggie Burner ! |
#6
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If being a millionare is if you owe a million I qualify!
I thought you were a millionaire if you can pay off all your debts and sell everything you own for a million or more. All I can say to that is depends on what I can sell things for...heh! The other thing I always say is ....a million won't buy what it used to!
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[SIGPIC] Diesel loving autocrossing grandpa Architect. 08 Dodge 3/4 ton with Cummins & six speed; I have had about 35 benzes. I have a 39 Studebaker Coupe Express pickup in which I have had installed a 617 turbo and a five speed manual.[SIGPIC] ..I also have a 427 Cobra replica with an aluminum chassis. |
#7
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It all depends on what angle you look at it.
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Ben 1987 190d 2.5Turbo |
#8
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I guess I'll buy that part.
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1980 300D - Veggie Burner ! |
#9
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Anyone in the know realizes the vast advantages of owning all the real estate you can. The advantages are well worth one's time and effort. People in the enviable position of having amassed income producing real estate - though unpaid for - produces a stream of cash to pay it off and throw off a tad of spendable cash after expenses - are really in the best position of all, when it comes to what they control. Many are in a very good position in regards to their personal residence - that is, they have liquid assets equal to being able to pay off their home - but keep their low interest mortgage while their liquid assets produce gains over time. The only problem with the above two scenarios involves risk. How much risk does one want to take with having unpaid debt around. That is the question. Certainly having liquid assets positioned in investments appropriate for the particular investor is good too. The more - the better. |
#10
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A million bucks really isn't what it used to be.
Forbes had an article about what they consider "wealthy". If I remember correctly you had to have a pretty liquid $5m to be wealthy by their deffinition.
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1999 SL500 1969 280SE 2023 Ram 1500 2007 Tiara 3200 |
#11
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“Wealthy”
I hate that word with a passion. Let’s go with “Comfortable” instead.
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1980 300D - Veggie Burner ! |
#12
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I think that if your house has $300k in equity, then you can book that $300k as part of your assets; ignoring that doesn't make any sense to me.
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- Brian 1989 500SEL Euro 1966 250SE Cabriolet 1958 BMW Isetta 600 |
#13
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However, let's say hypothetically, that that is all you own. When you retire with $300k in equity. How will you eat? You can't eat equity. My point is you will have to convert some or all of your equity into an income producing asset. You will have to : -sell the house to get the $300k OR -start renting rooms in the house for income Think it through and you will see why people with big homes (and small savings accounts) downsize.
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Ben 1987 190d 2.5Turbo |
#14
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Many are satisfied with a large portion of their net worth in their home. Mainly because either by accident or on purpose, they have not built sizeable assets elsewhere in their net worth. I've never bought in to making your home the largest portion of your assets. Too much non-producing dead money there. Income producing real estate is naturally the top of the heap. Speculative, non-income producing real estate is just that - speculating on the future come of it. If both are paid for - so much the better. |
#15
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