99.9%. The difference is 999 million, or 0.999 billion.
But also, at that point, less than a tenth of a percent isn’t a significant difference any more. Point is, a million is nothing to a billionaire. Let alone a multi-billionaire. Let alone a double digits billionaire, and it gets worse from there.
I like this one because it helps establish a relative analogy we can all kind of feel and puts things into perspective. We all know what 11 days feels like, and almost all of us know what 33 years feels like. Either because we may have lived it directly or we’ve lived enough of a portion of it to extrapolate that experience.
One trillion seconds is almost 32,000 years. The analogy is broken again as 32K years is already becoming a nonsensical number that none of us can meaningfully interpret. It’s longer than all of recorded human history
Yeah a billionaire buys a million dollar house as easily as a millionaire buys an expensive TV or pretty good gaming pc as easily as a person with only a thousand dollars buys a cheap soda
While that is absolutely true, the millionaire still has the biggest things in common with a billionaire. They will never have to worry about a lack of money. They will never have to choose between clothes or food. And they will never be forced to keep a job, because without it they will literally die due to lack of medical insurance.
The millionaire isn’t your friend either, they’re just a wannebe billionaire.
Boohoo the millionaire can’t afford all the luxuries they want. How will they make the payments on their BMW this month, they might have to switch to weekly tennis lessons instead of 3x weekly.
A million is easily enough to live a comfortable life and never work again. If they ‘struggle to make ends meet’ they are bad at budgeting. They are not working class, they do not need to work. Maybe they work because they want to live in a HCOL area and have extra luxuries but anybody with a million dollars worth of assets can stop working any time they feel like it.
Especially any multi-millionaire is distinctly bourgeois.
Of course, afaik almost no billionaire’s money is liquid either, it’s in properties and businesses and shit.
Like I’m sure bezos has plenty liquid, but most of his billions is just a valuation of amazon/aws/whatever other shit he owns.
Like, if we wanted to take all his money we’d have to completely liquidate amazon and aws, and his house etc, selling the assets off to whoever can afford it, it’s not just breaking into his Scrooge McDuck vault full gold coins.
Not that it’s impossible, it just seems that many people don’t realize this and think it is just the Scrooge McDuck vault.
Owning a house in a HCOL area is one of the luxuries I was talking about. Any million dollar asset is a luxury.
There is a fundamental difference between working to survive and working because you don’t want to move out of your NYC brownstone or further from lake como or whatever the fuck.
I wouldn’t say a house is a luxury. It is a necessity.
Depends on the house.
Really the whole concept of renting is exploitative.
Yes, commodifying necessities like housing (food, water, etc) is a fundamental means of exploiting people. Rent is just one aspect of a much larger pyramid scheme based on human deprivation.
I like the idea of setting a wealth cap at 1000x the median household income. That would be somewhere around $80 million today. The reason for this is that this is really the upper limit of wealth that can be achieved through individual direct effort. This is the kind of fortune that a couple could make if they:
were both neurosurgeons
both had long careers
never had kids
lived like absolute paupers, saving every penny
invested it all in the stock market
In other words, it’s the kind of money that people who get their fortune through actual work could acquire if they absolutely maximize their lifestyle to have the biggest wad of cash at death. Or, perhaps said differently, the highest fortune achievable through the work of your own hands. The highest fortune achievable through ordinary wage labor. I believe 1000x the median household income is a nice round number around that level.
You can certainly earn a fortune larger than this. Again, we’re talking over about $80 million here. Fortunes orders of magnitude larger than this exist. But the only way to earn more than this is not through labor, but through things other than your own work. Being a high level corporate CEO. Inheriting it. Founding a company that makes it big and combines the work of thousands of employees. All of these involve making money primarily through means other than through the work of your own hand and mind.
The difference between a million dollars and a billion dollars is about a billion dollars.
To a billionaire, a mere millionaire is as much a pauper as any homeless person. When the Psychopathic Oligarchs demand a reduction in population, being a millionaire won’t save them.
In fact, the Psychopathic Oligarch’s Capital Hoarding OCD will kick in even bigger over a millionaire, because he actually has the money that they covet so badly. The rest are just drains on society, but a millionaire has something that the mentally-ill financial hoarders actually want - more wealth.
It will be for different reasons, but they’re going to kill the millionaires, too.
It will be for different reasons, but they’re going to kill the millionaires, too.
I want to try to imagine what that actually looks like.
The billionaires have been raiding the federal budget and debt. Eventually we will hit a wall, and then it will be time for some good old-fashioned crisis austerity! And the president will get on the podium and somberly tell the American people. (Imagine this as someone (of either party) after Trump or feel free to translate this to Trump drivel.):
My fellow Americans. After generations of reckless spending, we have finally reached the end. We have tried to balance the budget, but the opposition party has spent years bleeding the budget dry. You know all they have done. Ultimately this is their fault. But unfortunately, we now are incapable of borrowing the amount of money we need to keep the light on, and tough choices have to be made. We will all need to tighten our belts. Taxes will go up, and reforms will be made to retirement programs…
And then out of nowhere a “must pass” reform package will appear. It will be a thousand pages long. Despite the crisis only appearing this week, the bill have clearly taken years to write. They clearly had this thing written beforehand. And the part that will hit the millionaires the hardest? Severe restrictions on the tax-advantaged provisions of IRAs, 401ks, and home ownership. That’s how ordinary people who amass a few million of their working careers usually manage to do it. That and home equity is where most of the wealth of single digit millionaires is kept.
For 401ks and IRAs, look to see that minimum withdraw range rise higher. Make it so you have to be age 70 to access the funds in your 401k without an early withdrawal penalty. Or apply penalties to social security benefits for those with large 401k and IRA balances. If they were really cynical, the billionaires might even cynically sell this as “taxing the millionaires.”
Look for curtailments to the tax advantages to home ownership. It’s very rare for ordinary people to pay capital gains taxes on any increase in their home’s value when they sell it. When a couples sells a home, they are exempt from the first $500k of home appreciation. Plus there’s the mortgage increase and property tax income tax deductions. Etc.
This is how you effectively steal what remains of the wealth of the middle class. The billionaires use both parties to raid the nation’s credit until it is maxed out. Then they keep the grift going by removing all the tax advantages the middle class has earned for itself over the generations. Then at some point, when that is not enough, taxes will simply be raised, but in forms that fall lightest on the wealthy. There is a reason these guys love tariffs.
Excellent speculation. Add to that their out-of-control health care costs, which have been deliberately engineered to strip their wealth, and bankrupt families.
I truly believe that one of their objectives is to kill middle class inheritances. Back in the days when it was possible for the average person to actually build wealth through savings program, pensions, and Social Security. People would then inherit the result of their parents’ saving efforts, hopefully two inheritances for a couple, and somewhere in the 50s or so, between decent jobs, a decent savings account, and an inheritance or two, and a person might be able to retire early, or quit and start their own business, which a company isn’t going to like if if it’s competition. Even if it’s NOT competition, they don’t want to lose a highly experienced worker who might hold an important role. They want to fire them when they gets older, at THEIR discretion, not the workers.
Today, pensions barely exist, financial corporations manage retirement programs to benefit the firm over the investor, and savings accounts don’t have any significant interest. By the time someone dies, they have little or nothing left to pass on to their kids. If they died of a prolonged illness, they may even pass on debts.
So future middle-aged couples can’t look forward to a decent inheritance from their parents to boost their lives into retirement.
And future generations will also die with student loans still to be paid, which will have suppressed any savings opportunities for their entire life, as the career they spent tens of thousands to pursue, is now mostly poorly-handled by AI. I wouldn’t be surprised when the student loan generation starts to die, that the permanent MAGA government will force their heirs to pay off the loans, and saddle the next generation with the previous generation’s debt, too.
The overall objective is to keep prices high (which rich people can always afford), and keep us economically enslaved with several low-wage jobs per multi-generational household in order to stay alive, leaving little time to plot a Revolution.
under 5millions ish, but once you reach 10s millions in worth, the psycopathy starts to show. hasan probably a poor example, as hes comes from a very wealth turkey family but acts like lefty tankie, but hes really just a resistance grifter, he pretends likes hes poor. but his fans are calling him out he never had an actual job before, the one that wasnt due to nepotism, one given by his uncle cenk ughyr, hes part of the bourgeois.
Many leftist have been those from high class families who had the education and means to make a difference. Guevara and Engels being two examples among many. FDR, though absolutely not anywhere close to a leftist, betrayed his own upper class and championed the new deal.
I am not defending wealth. I am a dyed in the red and black commie, but I do think we should recognize that sometimes it’s actually those with enough material means to make a difference who do so.
BTW. Hasan’s a internet personality who abuses his dog, so… This comment was more about people coming from wealthier families being able to do good things.
The crazy thing is millionaires have more on common with us normal workers than they do with billionaires.
I get what you’re saying, that they are millionaires are closer to being broke than to being a billionaire, but they still have more in common with billionaires than normal workers. Once you reach the mid to high single digit millionaire you can pretty much choose your own adventure.
Lemmy is seriously underestimating the number of comfortable millionaires. Got $1M? You can retire and live modestly. Got $3M? That’s a new way of life, not radical, but much better. Got $10M? You’re well set for whatever happens.
In the US, 1 million is not enough to retire comfortably unless you are already retirement age and can collect social security and Medicare. It’s not like you can retire early on 1 million dollars. That doesn’t even buy you a house where I live.
I’m not quite at that level, but I’m getting there. My main concern would be health care. And that my house isn’t fully paid off. And with Trump manipulating the market, idk I get nervous. 2 million might work. But I know 1 million is for sure not enough, at least in the US.
This question always depends heavily on where someone lives and someone’s expected standard of living.
Someone who lives on that much already thinks it would be enough for them until they die, but they might not have ever had open market insurance, and likely not a catastrophic illness while on it. That kind of thing makes you realize how financially vulnerable you really are. It’s not about steady state while healthy, it’s about contingency planning.
I’m in a situation where I could probably relatively safely retire with $2 million, but like you I would be nervous about $1 million.
We’re aiming for $2.5-$3 million in investment income. That’s based on two things:
The median household incomes in the US is about $80,000.
The safe indefinite withdraw rate in stock index funds is about 3%.
(2) is based on the 3% rule, a common retirement planning tool. People have crunched the numbers on historic market returns, factoring in inflation, dividends, etc. 3% is about the amount you can safely withdraw each year while the principal will still remain steady through time, even after adjusting for inflation and crashes. It is the amount you use if you want to be reasonably certain you will not outlive your retirement income.
That’s literally the definition of retirement though. The ability to live without working. And no, $1 million is really not enough to retire on. You’re vastly overestimating the amount of passive income that can safely be earned on $1 million.
You know what a million is worth? $30,000 a year. That’s based on the 3% rule. That really is the safest amount you can rely on in a stock market account while still factoring in the risk of market drops. In retirement planning, that is a number you can use if you want to be reasonably sure you will not outlive your retirement savings. If you do a whole bunch of math on historic returns, inflation rates, and market bubbles and crashes, historically a 3% withdraw rate would be safe to keep your principal constant over time.
Can you live on $30,000 a year? Maybe, but the median household income in the US is $80,000. Half of households earn more than $80k, half less. Some couples do survive on $30k/year. But not many people would be willing to retire on that lifestyle. A couple with a million in retirement savings can safely earn $30k/year from that investment. That’s it. And this is investing in the stock market. If you invest in inflation-indexed treasury bonds, your safe annual income would be more like $10k per year on a $1 million asset.
In 2025, if you want to retire with retirement income (w/o considering social security) equal to the median US household income? Using the 3% rule, that would require approximately $2.7 million in an investment portfolio.
I know this because this is how we’re handling our own retirement planning. We’re probably going to need $2.5-$3 million in retirement assets. We’re lucky enough that unless things go catastrophically wrong in the US economy, we’ll be able to do it. And our wants aren’t incredible. We would like to have a retirement income right around where the average US household income is. And that will take $2.5-$3 million in retirement savings.
So a few things. Since we’re in the weeds at this point I want to remind us both that the original point was that a millionaire and a billionaire both have the same general relationship to living and labor which is ‘they don’t have to worry about selling their labor to have their basic needs met’. This is still true. I was also talking in terms of individual wealth not household wealth but the figures aren’t really that different because housing is such a large share of expenses.
The retirement scenario you’re describing is a very comfortable one. 3% is a conservative drawdown, 3.5% is considered safe, and higher is typical if you can be flexible in spending. Retired households do not have the expenses associated with commuting and most do not have the expenses of childcare. Being able to afford living near employment centers is a luxury for a retired household, not a need. So a retired household with the income of a median working age household is doing quite well.
That’s fine to want to retire moderately well off but once your income is based on rents from capital your class interests are not aligned with the working class.
3M invested is a nice retirement, not a new way of life. That’s a barely 6-figure a year payout. Of course, a chunk of a3m networth is likely your house.
The crazy thing is millionaires have more on common with us normal workers than they do with billionaires.
Hasan Piker was listing all kinds of "a million _____ is _____ but a BILLION ______ is [some ufathomably larger thing].
People don’t understand multiplication very well…
The difference between a million and a billion is about a billion.
You’re 99.99% correct.
edit: I can’t do math for shit.
99.9%. The difference is 999 million, or 0.999 billion.
But also, at that point, less than a tenth of a percent isn’t a significant difference any more. Point is, a million is nothing to a billionaire. Let alone a multi-billionaire. Let alone a double digits billionaire, and it gets worse from there.
If you were to count 1 second, every second, until you reached one million. It will have taken you roughly 11 days.
If you were to count 1 second, every second, until you reached one billion. It will have taken you over 33 years.
I like this one because it helps establish a relative analogy we can all kind of feel and puts things into perspective. We all know what 11 days feels like, and almost all of us know what 33 years feels like. Either because we may have lived it directly or we’ve lived enough of a portion of it to extrapolate that experience.
One trillion seconds is almost 32,000 years. The analogy is broken again as 32K years is already becoming a nonsensical number that none of us can meaningfully interpret. It’s longer than all of recorded human history
Anyways, https://apnews.com/article/musk-tesla-electric-trillion-pay-stock-f2140db92e8032121f4c114234059165
What’s the difference between a million and a billion? About a billion
Comparing a million dollars to a billion dollars is like comparing one dollar to a thousand dollars.
Yeah a billionaire buys a million dollar house as easily as a millionaire buys an expensive TV or pretty good gaming pc as easily as a person with only a thousand dollars buys a cheap soda
Also most millionaires are just homeowners.
As if that isn’t an extreme privilege based on depriving others…
Owning your own home should be the norm, not the exception. It is not like a home is some kind of luxury item. A home is a bare necessity.
And yes, that is quite different once you have more than one home.
That’s kind of like saying that comparing a billion dollars to a triillion dollars is like comparing one dollar to a thousand dollars.
Yes?
While that is absolutely true, the millionaire still has the biggest things in common with a billionaire. They will never have to worry about a lack of money. They will never have to choose between clothes or food. And they will never be forced to keep a job, because without it they will literally die due to lack of medical insurance.
The millionaire isn’t your friend either, they’re just a wannebe billionaire.
Dude, someone who has a freehold home and a retirement portfolio is a multimillionaire in many places.
There will absolutely be people with large assets and low income struggling to make ends meet.
Boohoo the millionaire can’t afford all the luxuries they want. How will they make the payments on their BMW this month, they might have to switch to weekly tennis lessons instead of 3x weekly.
A million is easily enough to live a comfortable life and never work again. If they ‘struggle to make ends meet’ they are bad at budgeting. They are not working class, they do not need to work. Maybe they work because they want to live in a HCOL area and have extra luxuries but anybody with a million dollars worth of assets can stop working any time they feel like it.
Especially any multi-millionaire is distinctly bourgeois.
This is not true. A million dollars buys you a house, so basically cancels rent. But it does not feed you for life and lets you live without working.
There is a big difference between people who own a millon dollars in money and assets and those who have a million dollars in their checkings account.
Of course, afaik almost no billionaire’s money is liquid either, it’s in properties and businesses and shit.
Like I’m sure bezos has plenty liquid, but most of his billions is just a valuation of amazon/aws/whatever other shit he owns.
Like, if we wanted to take all his money we’d have to completely liquidate amazon and aws, and his house etc, selling the assets off to whoever can afford it, it’s not just breaking into his Scrooge McDuck vault full gold coins.
Not that it’s impossible, it just seems that many people don’t realize this and think it is just the Scrooge McDuck vault.
Yes rich people don’t just sit on piles of cash whether a millionaire or a billionaire.
Then sell the house.
Owning a house in a HCOL area is one of the luxuries I was talking about. Any million dollar asset is a luxury.
There is a fundamental difference between working to survive and working because you don’t want to move out of your NYC brownstone or further from lake como or whatever the fuck.
I wouldn’t say a house is a luxury. It is a necessity.
Really the whole concept of renting is exploitative.
Depends on the house.
Yes, commodifying necessities like housing (food, water, etc) is a fundamental means of exploiting people. Rent is just one aspect of a much larger pyramid scheme based on human deprivation.
A house is a necessity, yes, but not a house in the middle of San Francisco or New York.
And live where, genius?
A bit further outside the HCOL area or a smaller dwelling, genius.
If you’re a low end millionaire you can buy a nice house.
If you’re a low end billionaire you can buy an entire town of nice houses.
Neither really has to worry about keeping their homes.
I like the idea of setting a wealth cap at 1000x the median household income. That would be somewhere around $80 million today. The reason for this is that this is really the upper limit of wealth that can be achieved through individual direct effort. This is the kind of fortune that a couple could make if they:
You can certainly earn a fortune larger than this. Again, we’re talking over about $80 million here. Fortunes orders of magnitude larger than this exist. But the only way to earn more than this is not through labor, but through things other than your own work. Being a high level corporate CEO. Inheriting it. Founding a company that makes it big and combines the work of thousands of employees. All of these involve making money primarily through means other than through the work of your own hand and mind.
The difference between a million dollars and a billion dollars is about a billion dollars.
To a billionaire, a mere millionaire is as much a pauper as any homeless person. When the Psychopathic Oligarchs demand a reduction in population, being a millionaire won’t save them.
In fact, the Psychopathic Oligarch’s Capital Hoarding OCD will kick in even bigger over a millionaire, because he actually has the money that they covet so badly. The rest are just drains on society, but a millionaire has something that the mentally-ill financial hoarders actually want - more wealth.
It will be for different reasons, but they’re going to kill the millionaires, too.
I want to try to imagine what that actually looks like.
The billionaires have been raiding the federal budget and debt. Eventually we will hit a wall, and then it will be time for some good old-fashioned crisis austerity! And the president will get on the podium and somberly tell the American people. (Imagine this as someone (of either party) after Trump or feel free to translate this to Trump drivel.):
My fellow Americans. After generations of reckless spending, we have finally reached the end. We have tried to balance the budget, but the opposition party has spent years bleeding the budget dry. You know all they have done. Ultimately this is their fault. But unfortunately, we now are incapable of borrowing the amount of money we need to keep the light on, and tough choices have to be made. We will all need to tighten our belts. Taxes will go up, and reforms will be made to retirement programs…
And then out of nowhere a “must pass” reform package will appear. It will be a thousand pages long. Despite the crisis only appearing this week, the bill have clearly taken years to write. They clearly had this thing written beforehand. And the part that will hit the millionaires the hardest? Severe restrictions on the tax-advantaged provisions of IRAs, 401ks, and home ownership. That’s how ordinary people who amass a few million of their working careers usually manage to do it. That and home equity is where most of the wealth of single digit millionaires is kept.
For 401ks and IRAs, look to see that minimum withdraw range rise higher. Make it so you have to be age 70 to access the funds in your 401k without an early withdrawal penalty. Or apply penalties to social security benefits for those with large 401k and IRA balances. If they were really cynical, the billionaires might even cynically sell this as “taxing the millionaires.”
Look for curtailments to the tax advantages to home ownership. It’s very rare for ordinary people to pay capital gains taxes on any increase in their home’s value when they sell it. When a couples sells a home, they are exempt from the first $500k of home appreciation. Plus there’s the mortgage increase and property tax income tax deductions. Etc.
This is how you effectively steal what remains of the wealth of the middle class. The billionaires use both parties to raid the nation’s credit until it is maxed out. Then they keep the grift going by removing all the tax advantages the middle class has earned for itself over the generations. Then at some point, when that is not enough, taxes will simply be raised, but in forms that fall lightest on the wealthy. There is a reason these guys love tariffs.
Excellent speculation. Add to that their out-of-control health care costs, which have been deliberately engineered to strip their wealth, and bankrupt families.
I truly believe that one of their objectives is to kill middle class inheritances. Back in the days when it was possible for the average person to actually build wealth through savings program, pensions, and Social Security. People would then inherit the result of their parents’ saving efforts, hopefully two inheritances for a couple, and somewhere in the 50s or so, between decent jobs, a decent savings account, and an inheritance or two, and a person might be able to retire early, or quit and start their own business, which a company isn’t going to like if if it’s competition. Even if it’s NOT competition, they don’t want to lose a highly experienced worker who might hold an important role. They want to fire them when they gets older, at THEIR discretion, not the workers.
Today, pensions barely exist, financial corporations manage retirement programs to benefit the firm over the investor, and savings accounts don’t have any significant interest. By the time someone dies, they have little or nothing left to pass on to their kids. If they died of a prolonged illness, they may even pass on debts.
So future middle-aged couples can’t look forward to a decent inheritance from their parents to boost their lives into retirement.
And future generations will also die with student loans still to be paid, which will have suppressed any savings opportunities for their entire life, as the career they spent tens of thousands to pursue, is now mostly poorly-handled by AI. I wouldn’t be surprised when the student loan generation starts to die, that the permanent MAGA government will force their heirs to pay off the loans, and saddle the next generation with the previous generation’s debt, too.
The overall objective is to keep prices high (which rich people can always afford), and keep us economically enslaved with several low-wage jobs per multi-generational household in order to stay alive, leaving little time to plot a Revolution.
under 5millions ish, but once you reach 10s millions in worth, the psycopathy starts to show. hasan probably a poor example, as hes comes from a very wealth turkey family but acts like lefty tankie, but hes really just a resistance grifter, he pretends likes hes poor. but his fans are calling him out he never had an actual job before, the one that wasnt due to nepotism, one given by his uncle cenk ughyr, hes part of the bourgeois.
Many leftist have been those from high class families who had the education and means to make a difference. Guevara and Engels being two examples among many. FDR, though absolutely not anywhere close to a leftist, betrayed his own upper class and championed the new deal.
I am not defending wealth. I am a dyed in the red and black commie, but I do think we should recognize that sometimes it’s actually those with enough material means to make a difference who do so.
BTW. Hasan’s a internet personality who abuses his dog, so… This comment was more about people coming from wealthier families being able to do good things.
I get what you’re saying, that they are millionaires are closer to being broke than to being a billionaire, but they still have more in common with billionaires than normal workers. Once you reach the mid to high single digit millionaire you can pretty much choose your own adventure.
Lemmy is seriously underestimating the number of comfortable millionaires. Got $1M? You can retire and live modestly. Got $3M? That’s a new way of life, not radical, but much better. Got $10M? You’re well set for whatever happens.
In the US, 1 million is not enough to retire comfortably unless you are already retirement age and can collect social security and Medicare. It’s not like you can retire early on 1 million dollars. That doesn’t even buy you a house where I live.
I have a friend who made it big young (well earned IMO, they started working at 15) and they have about 2M in investments.
They make 4k/month after taxes just from the stock dividends every year.
That’s well enough for a comfortable life over here, as their house and cars are paid for - and the money keeps growing in investments.
I’m not quite at that level, but I’m getting there. My main concern would be health care. And that my house isn’t fully paid off. And with Trump manipulating the market, idk I get nervous. 2 million might work. But I know 1 million is for sure not enough, at least in the US.
This question always depends heavily on where someone lives and someone’s expected standard of living.
Someone who lives on that much already thinks it would be enough for them until they die, but they might not have ever had open market insurance, and likely not a catastrophic illness while on it. That kind of thing makes you realize how financially vulnerable you really are. It’s not about steady state while healthy, it’s about contingency planning.
I’m in a situation where I could probably relatively safely retire with $2 million, but like you I would be nervous about $1 million.
We’re aiming for $2.5-$3 million in investment income. That’s based on two things:
(2) is based on the 3% rule, a common retirement planning tool. People have crunched the numbers on historic market returns, factoring in inflation, dividends, etc. 3% is about the amount you can safely withdraw each year while the principal will still remain steady through time, even after adjusting for inflation and crashes. It is the amount you use if you want to be reasonably certain you will not outlive your retirement income.
1 million is ‘not enough’ when you want a passive income that is higher than what half of working people earn.
That’s literally the definition of retirement though. The ability to live without working. And no, $1 million is really not enough to retire on. You’re vastly overestimating the amount of passive income that can safely be earned on $1 million.
You know what a million is worth? $30,000 a year. That’s based on the 3% rule. That really is the safest amount you can rely on in a stock market account while still factoring in the risk of market drops. In retirement planning, that is a number you can use if you want to be reasonably sure you will not outlive your retirement savings. If you do a whole bunch of math on historic returns, inflation rates, and market bubbles and crashes, historically a 3% withdraw rate would be safe to keep your principal constant over time.
Can you live on $30,000 a year? Maybe, but the median household income in the US is $80,000. Half of households earn more than $80k, half less. Some couples do survive on $30k/year. But not many people would be willing to retire on that lifestyle. A couple with a million in retirement savings can safely earn $30k/year from that investment. That’s it. And this is investing in the stock market. If you invest in inflation-indexed treasury bonds, your safe annual income would be more like $10k per year on a $1 million asset.
In 2025, if you want to retire with retirement income (w/o considering social security) equal to the median US household income? Using the 3% rule, that would require approximately $2.7 million in an investment portfolio.
I know this because this is how we’re handling our own retirement planning. We’re probably going to need $2.5-$3 million in retirement assets. We’re lucky enough that unless things go catastrophically wrong in the US economy, we’ll be able to do it. And our wants aren’t incredible. We would like to have a retirement income right around where the average US household income is. And that will take $2.5-$3 million in retirement savings.
So a few things. Since we’re in the weeds at this point I want to remind us both that the original point was that a millionaire and a billionaire both have the same general relationship to living and labor which is ‘they don’t have to worry about selling their labor to have their basic needs met’. This is still true. I was also talking in terms of individual wealth not household wealth but the figures aren’t really that different because housing is such a large share of expenses.
The retirement scenario you’re describing is a very comfortable one. 3% is a conservative drawdown, 3.5% is considered safe, and higher is typical if you can be flexible in spending. Retired households do not have the expenses associated with commuting and most do not have the expenses of childcare. Being able to afford living near employment centers is a luxury for a retired household, not a need. So a retired household with the income of a median working age household is doing quite well.
That’s fine to want to retire moderately well off but once your income is based on rents from capital your class interests are not aligned with the working class.
3M invested is a nice retirement, not a new way of life. That’s a barely 6-figure a year payout. Of course, a chunk of a3m networth is likely your house.
Your math is a bit off
i think is when you reach 10s of millions in wealth is when things becomes very seperate from the plebs.
Hasan Piker mention? In MY lemmy.world post? Without immediate ridicule?
Based