Current Events > If you have a shit ton of money its nearly impossible to run out of it

(+) Yeah! (+)

If you have 5mil in an index fund, and you follow the 3% rule, you will literally get 150k per year (pre-tax) forever and it will never run out. Imagine it gets to 10mil, thats 300k every year and it never runs out. Obviously over time the value will diminish with inflation but still. By that time frame your house and car should be paid off and you pretty much are down to just paying property tax and income tax and enjoying the rest of it as just leisure money. Without having to work.

Just another way the wealthy stay wealthy. And 5mil isn't even super super wealthy. If you're in your late 50s or 60s and you've been working your whole life and maybe bought a few houses you probably have that much if you include your houses, perhaps a small business, retirement savings. Alot of people fit that profile.

This has been another PRO TIP from our CE MVP Dan Haren

DanHaren4Ringz posted...

If you're in your late 50s or 60s and you've been working your whole life and maybe bought a few houses you probably have that much if you include your houses, perhaps a small business, retirement savings. Alot of people fit that profile.

Now tell us how many people who are currently nowhere near that age, are going to fit that profile when they reach it.

Trumble posted...

Now tell us how many people who are currently nowhere near that age, are going to fit that profile when they reach it.

Surprisingly alot. Alot of younger people are inheriting their family businesses and making shit tons of money doing it. Families who owned properties, both commercial and residential, as well as multiple small businesses. These young people (aged 20-40s) are enjoying their lives living off their parents hard work, and basically just collecting paychecks.

this assumes of course that the performance of index funds and especially their dividend yield outpaces inflation

perhaps better to also diversify into international indexes just in case things go belly up stateside

When you have a lot of money you don't really even need to know how to manage it, because it's easy to find a professional who will do that for you. Not so when you're poor.

Yes, rich people with rich parents generally stay rich

What a brilliant observation holy shit you truly are a genius

It takes money to make money, because that way, it keeps the rich rich, and the poor poor.

DarthAragorn posted...

Yes, rich people with rich parents generally stay rich

What a brilliant observation holy shit you truly are a genius

it could really go either way. depends on how they're raised, how the wealth is passed down, and arbitrary life circumstances. rich kids might walk in their parents' footsteps, but they could also end up completely out of touch with reality and making awful life and financial decisions.

TheMikh posted...

this assumes of course that the performance of index funds and especially their dividend yield outpaces inflation

perhaps better to also diversify into international indexes just in case things go belly up stateside

the performance of the index fund will almost invariably outpeform inflation and if it doesn't it will catch up. People get caught up with dividends, dividends serve no useful purpose whatsoever.

DarthAragorn posted...

Yes, rich people with rich parents generally stay rich

What a brilliant observation holy shit you truly are a genius

Mind....blown.

I still believe theres a ton of opportunity in this world for anyone to "make it". Even if it means a simple engineering degree which will earn you a decent income, or learning some kind of trade and marketing yourself. Imaging hiring someone to do anything around the house these days it costs an arm and a leg and everyone is in so much demand. On the other side of that if you have those skills you can really make it profitable.

I might be able to fatFIRE

DanHaren4Ringz posted...

Surprisingly alot. Alot of younger people are inheriting their family businesses and making shit tons of money doing it. Families who owned properties, both commercial and residential, as well as multiple small businesses. These young people (aged 20-40s) are enjoying their lives living off their parents hard work, and basically just collecting paychecks.

They could, or what generally happens is that they tank the businesses and their parents wealth and name to the ground within 1 or two generations. Usually because they didnt inherit their parents character, smarts, work ethic or self control.

DanHaren4Ringz posted...

I still believe theres a ton of opportunity in this world for anyone to "make it". Even if it means a simple engineering degree which will earn you a decent income, or learning some kind of trade and marketing yourself. Imaging hiring someone to do anything around the house these days it costs an arm and a leg and everyone is in so much demand. On the other side of that if you have those skills you can really make it profitable.

Even if anyone can make it, not everyone can make it. Everyone can't be an engineer or programmer or whatever. Even if everyone tried their best some people are still going to end up as a cashiers, dishwashers, fast food workers, etc because somebody has to do those jobs.