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What is wealth now? Is it still $1,000,000?

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tech/a

No Ordinary Duck
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For as long as I can remember $1,000,000 has been the figure that most aspire to.
Back in the early 20th century a Million was a massive sum.
Today its a bit ho hum.

So how do you determine real wealth that point at which your financially secure.
I'm 54 and told that 3 mill is the minimum for retirement for me and my financial requirements.
There are many sites around that have various calculators to determine your figures.

For someone in their 20s that could/will be way off beam when they reach my age.

How do you determine changes in amount needed.A good dose of inflation or deflation can play havoc with those who have a nest egg and those who are building one.

I remember my father retiring 30 yrs ago on $400,000 owning his property.
That then was seen as very well off---today he is on the pension and has to watch every cent.

Interested in comments and ideas or helpful links.
 
Re: hat is wealth now? Is it still $1,000,000?

I also think it has a lot to do with age... to own 1,000,000 bucks, no debt, by the age of thirty is pretty damn good if you ask me... I think with a global melt down in markets 1,000,000 bucks is still a number to aspire to...
 
To me wealthy is having enough passive income to cover my expenses..im in my 20's and im a third of the way there..

People i know tend to own at least one investment property and have started to buy more.

I guess to me it aint a figure as such, its just being able to choose what you do with your time and have a passive income covering everyday expanses.

David123
 
1 million dollars wealth,a millionaire!
In the last 20 years with the real estate boom, anyone owning their home with an investment property or two,a thriving small business and maybe some resource shares would have sailed past 1000000 with ease.
Many people out there fill this bill so I'd guess 1 million may not cut it anymore!

Im in my 30's and 1 million is some way off,but if I was at retirement age now,living in a capital city,wanted to travel,live comfortably and have plenty tucked away for the unforseen, yeah, 3 million sounds very nice thankyou!
 

Realistically 1 mill isn't enough nowadays.Lets say a conservative 7% interest, that is only 70,000 a year, with a wife like Mrs Porper, that wouldn't even pay for the hair do's.

It depends on so many things also, expected lifestyle when retired, age when retiring, expected life expectancy, whether you own your own home etc.For me (43) I am looking at 2 mill for a reasonable lifestyle hopefully in 10 yrs time.

It is very difficult not really knowing what inflation will be up until then, especially in this uncertain time with economies in trouble (supposedly).

Any financial planner worth there salt can give you an idea of where you are at & where you need to get to.
 

LOL

I worked out our expenses the other day with the wife.

Rent - $1050 (brand new 2 bedroom house 5 mins from city)
Food - $400 (that includes prime scotch fillets etc...)
Petrol - maybe $40 a month (renault clio sport and motorbike)
I have beers up at the fire station every friday night ($2 each) so that covers the socialising.

Add $400 (generous) a month for insurance (health and contents) and utilities

and we come to the grand total of....

$1900 appx a month to live well. (try and do that in Melbourne)


I'd love to have retire on 70 grand a year

Moving to the country was the best thing we could have done.

That's my

Cheers y'all
 
Porper

I've obviously married your wifes sister!
 
Every 7 to 10 some say 12 years money halves in value.

30 years ago $1,000,000 would have buying power of about $3,000,000 now.
30 years from now $1,000,000 will be worth about $300,000
 
Personally I think 1 Million $ is the right amount for retirement for couple with no debts, no car payments, no hanger on-ers (kids) and your own home fully paid for.

If you don't have your own home then it won't be enough.
 
Bill M said:
Personally I think 1 Million $ is the right amount for retirement for couple with no debts, no car payments, no hanger on-ers (kids) and your own home fully paid for.

If you don't have your own home then it won't be enough.
Click to expand...

I agree with that 100%. Although if we're answering the question, what is wealth? This is not it. It's a middle class existence at best. "Well off" to me means at least upper middle, and to have "wealth" is somewhere higher than that.

And of course, it depends on your stage of life. If you're 30-35 and have $1 million already and a decent household income (> $100k a year), then you could definitely afford an upper-middle class lifestyle. Are you wealthy...not yet...but you've got an excellent launching pad.

On the other hand, as I mentioned, $1,000,000 at 60 y.o is commendable, but not 'wealth'.

ASX.G
 
Monetary wealth is is having more than enough income than you want to, or have to spend

our wealth expectations increase as our wealth increases, problem arises when our real wealth decreases from one value to a lower value and our expectations don't - hard to wind back your expectations.

$1,000,000 is still quite an ambitous goal to have as free capital - at any age, so to answer the question - yes, a million dollars would have to be considered a wealthy sum
 
According to Wikipedia:

"In private banking, a high-net-worth individual (HNWI) is a person with a high net worth. Typically these individuals are defined as having investable assets (financial assets not including primary residence) in excess of US$1 million. [1][2] The number of high net worth individuals worldwide is estimated at 9.5 million."

AND

"UHNWI refers to Ultra-High-Net-Worth Individuals, individuals or families who have at least US$30 million[1][2] in investable assets. The number of ultra high net worth individuals worldwide is estimated at about 95,000."

So that's the current formal definition.
 
tech/a said:
Porper

I've obviously married your wifes sister!
Click to expand...

You have my sympathy Tech, only joking wouldn't swap Mrs Porper for the world.

Just wondering if anybody has thought of taking a few years off before retirement, then going back to work for a while after to top up the account again.

Maybe 5 years off, do all the travelling while still young, maybe in your 50's, then work another 5 yrs before retiring fully.I am seriously thinking about this, you never know what health will be like when 65.It's achievable for most owning their own home on a reasonable salary, no kids etc.
 
Some interesting replies.

Passive income very important if we wish to keep in front of inflationary erosion of any retirement funds.

Every 10 yrs money halves in real value.

Only .0015% of the worlds population has the elusive million.
In Australia 96% of the population will require government support at retirement.

Is $1 mill enough.
If you were 65 today and retired today with $1 million and wanted to live on $70,000 a year---bearing in mind in 10 yrs time that $70k would have the buying power of 35k then the answer is a resounding NO.

Have a play with THIS calculator to see where you stand.

http://www.yourmortgage.com.au/calculators/retirement_savings/

At 54 I'm OK but I'm sure you'll find most results pretty distressing.
There is a great deal one can do to alter your outcome.

But as you will notice when playing with the calculator it all hinges on compounding returns on investment into your super.
 
Good news. According to the calculator I can enjoy myself until I am 120 yrs of age. I hope medical science can keep up to me or I will feel robbed.
 
nioka said:
Good news. According to the calculator I can enjoy myself until I am 120 yrs of age. I hope medical science can keep up to me or I will feel robbed.
Click to expand...

I'm in the same boat with savings to go to 120yrs of age! Also accumulating a cool $9 mill in savings! Was conservative in my figures as well. On my side was age (27) and current savings.
 
Aargh! said:
I'm in the same boat with savings to go to 120yrs of age! Also accumulating a cool $9 mill in savings! Was conservative in my figures as well. On my side was age (27) and current savings.
Click to expand...

Not many Paupers on ASF then, must be a rich bunch.
 
Aargh! said:
On my side was age (27) and current savings.
Click to expand...
Age is on my side too I'm retired now, more or less,So that takes out a lot of the risk. As the saying goes "there's many a slip between the cup and the lips". And there has been.
 
Porper said:
Not many Paupers on ASF then, must be a rich bunch.
Click to expand...

Rich no, good income and savings/investments yes, bottomless other half no. If the calculator incorporated another half I'm sure I'd be looking at a retirement savings in the order of minus $200,000
 
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