My first million at…
September 3, 2008 – 8:34 amIf you're new here, I suggest you subscribe to my RSS feed. or bookmark this blog. You'll be able to easily keep up to date with new posts. Thanks for visiting!
One of my sisters Kat asked me a very interesting question before…
“When do you think you’ll make your first million?”
I didn’t think much of it at the time and said “Hopefully by 30″ or something along that line.
Thinking into this deeper… this question implies that my sister has somewhat confidence in my ability to amass wealth. I’m pretty sure my father didn’t attain his first million until well into his 40s. However he had significant disadvantages (never finished high school, refugee from a war-torn country, etc. etc.). However his advantage was that he had the drive and street smarts. He was hungry and had 4 kids to feed. He was backed into a corner and had to make it.
To attain a million by age 30 I’d have to earn a total of $980,000 over a period of 9 years. That’s an average earning of $108,888.88 per year. That million dollar mark seems a little out of reach. A million dollars won’t buy what it can today but it’ll still be a significant sum of money.
Which brings me to another point. It really annoys me when someone says a million dollars is not that much money. In most cases the person has a negative net worth so it’s ironic that they make that comment. Yes a million dollars today isn’t what it use to be but a person can still retire on it.
If you received a million dollars today you could invest in 5% tax-free municpal bonds for an annual income of $50,000. Since it’s tax-free it’s equivalent to a $70,000 annual salary which is taxed. The income is higher than the median average income and if you can’t retire off that then I don’t know what to say.
2 Responses to “My first million at…”
Totally agree with you here. It really doesn’t take that much money, relatively speaking, to have a comfortable life and your example of what you can do with a million dollars is a great one! I need two because I’d use the extra $50K for Kiva loans!
By Scott on Sep 13, 2008
I think a lot depends. $50k a month sounds great, but it isn’t so much if:
* You have to pay medical insurance for a family of 4 (perhaps $1000 a month)
* Live in California, New York, Hawaii (rent over $1500 a month)
That leaves $20k for cars, food, furniture, medical copays, orthodontia, education, prescriptions and so on. It might work NOW, but costs go up and the annual amount could stay $50k.
By Colette on Sep 13, 2008