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What net worth do you consider financially wealthy?

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  • Avatar beagler 
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    When one has net worth that is leveraged, the chances of it becoming markedly lower during the next crash are much higher than unleveraged net worth.

    But, net worth is net worth. Risk is another matter so is liquidity.

    Solo Internist, Midwest

    Avatar beagler 
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    Consider my previous definition of wealthy: a NW where a 50% haircut to your NW (next crash) has no effect on your spending and retirement plans.

    Doc #1 has 2M assets and 1M debt = 1M NW. 50% haircut, NW is now 0. Add illiquidity (house can’t sell during a crash) result = bankrupt. This happened to many 2008, docs included.

    Doc #2 has 1M assets and 0 debt = 1M  NW. 50% haircut, NW is now 500k. Not so bad for an employed doc, save on and live on.

    Solo Internist, Midwest

    #243030 Reply
    Avatar Dont_know_mind 
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    Well, these other items are just specifiers such as wealthy and leveraged, or wealthy and cashflow poor or wealthy and undiversified. It doesn’t obviate the fact that they are wealthy.

    One thing I would question is that being wealthy implies that you stop worrying about money. I have NW over 10M but I’m more worried about not having enough money now than I was when I had 1M.

    I think this relates back to a base fear of not having enough money, which strangely enough more money doesn’t fully alleviate. Probably at 20M I would worry about whether I would have enough to leave to children.

    I like to think I would not be worried at 40M, but probably I would be. Maybe more than now.

    I am wondering what a solution to this could be .

    #243123 Reply
    Avatar ZZZ 
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    “I like to think I would not be worried at 40M, but probably I would be. Maybe more than now. I am wondering what a solution to this could be.”

    Counseling?

    #243136 Reply
    Avatar Kamban 
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    I think this relates back to a base fear of not having enough money, which strangely enough more money doesn’t fully alleviate. Probably at 20M I would worry about whether I would have enough to leave to children. I like to think I would not be worried at 40M, but probably I would be. Maybe more than now.

    Click to expand…

    There is no one number that one can say is the right amount that you would like to have. When you have almost nothing you think $1M is enough. At $1M you think that $2.5M should give you FIRE. Then when you get to $2.5M, you want $5M for Fat FIRE. Later you like to accumulate $10M to feel wealthy. Maybe $20-50M to do all you dreamed of. But then you want to buy properties in other areas of the world to have when you travel and need $500M or $1B. At that stage you start comparing yourself to other billionaires and want to go up the ladder to $5B or $10B and rank higher and higher in the Forbes Richest Person list. It never ends.

    #243142 Reply
    Avatar StarTrekDoc 
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    I think this relates back to a base fear of not having enough money, which strangely enough more money doesn’t fully alleviate. Probably at 20M I would worry about whether I would have enough to leave to children. I like to think I would not be worried at 40M, but probably I would be. Maybe more than now. 

    Click to expand…

    There is no one number that one can say is the right amount that you would like to have. When you have almost nothing you think $1M is enough. At $1M you think that $2.5M should give you FIRE. Then when you get to $2.5M, you want $5M for Fat FIRE. Later you like to accumulate $10M to feel wealthy. Maybe $20-50M to do all you dreamed of. But then you want to buy properties in other areas of the world to have when you travel and need $500M or $1B. At that stage you start comparing yourself to other billionaires and want to go up the ladder to $5B or $10B and rank higher and higher in the Forbes Richest Person list. It never ends.

    Click to expand…

    For some people.

    #243173 Reply
    Avatar Dont_know_mind 
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    “I like to think I would not be worried at 40M, but probably I would be. Maybe more than now. I am wondering what a solution to this could be.”

    Counseling?

    Click to expand…

    I saw a counselor about this and they told me to see a financial planner. The financial planner told me to buy whole life !

    On a more serious note, whatever issues are there will probably still be there whatever the wealth I reckon.

    The idea that made most sense to me was someone said this fear of not having enough, for me probably goes back to fear of losing everything, which goes back to a shared cultural memory. In my case, my parents were migrants from a communist country who lost everything, so I have this fear of a big wave, like a tsunami.

    Currently, I’m not sure if I’m somewhat miserable due to taking up 4 hours of an admin job a week or whether it’s something else.

    I think it’s easy to believe that having a certain amount of net wealth can take away life’s other problems, which is like the idea that your life is set once you become a medical practitioner. In some ways it’s true, in other ways not.

    #243344 Reply
    Liked by q-school
    childay childay 
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    I like to think I would not be worried at 40M, but probably I would be. Maybe more than now. I am wondering what a solution to this could be .

    Click to expand…

    I’ll be happy to take a few millions off your hands if it would make you less worried

    #243385 Reply
    Avatar FIREshrink 
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    The reason it’s dumb to include personal property is that most of the time people are tied to an area and can’t just sell their home. For example these two people to me have equivalent net worths:

    Person 1: paid off house in the Midwest worth 300K with 2million brokerage account
    Person 2: paid off house in Bay Area worth 3 million with 2 million brokerage account

    Since both people are tied to the area their living in and can’t move they both have the same buying power so i see both as having the same net worth.

    Also unless your estate is with >22million the new tax law won’t affect either of you when you die

    Click to expand…

    As others have pointed out, the federal estate tax exemption reverts to $5 million in 2026, a figure which is certainly relevant to many on this board. In addition many states have estate taxes quite a bit lower than the federal limits.

    I promise you neither the feds nor my state exclude personal property/primary residence when calculating net worth.

    #243549 Reply
    Liked by Craigy, SLC OB
    Avatar FIREshrink 
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    “I like to think I would not be worried at 40M, but probably I would be. Maybe more than now. I am wondering what a solution to this could be.”

    Counseling?

    Click to expand…

    Prozac

    #243550 Reply
    Craigy Craigy 
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    Status: Spouse
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    Joined: 09/16/2016

    In my experience, it takes quite a lot of “wealth” for a person to admit that he is, in fact, “wealthy.”

    Most people who have a couple million don’t seem to feel wealthy, even if by many objective and subjective standards they are, and would tend to say they are something like “comfortable” “fortunate” “upper middle class” etc.

    I’d guess somewhere in the $25-$50M range, before most people would have a hard time not calling themselves wealthy.

    Also, for what it’s worth, it’s not particularly uncommon for an old person or couple to have a million or two net worth.  Being a millionaire doesn’t carry nearly the same weight it did in the 1980s or 1990s.  And there are many, many older people out there that would typically be viewed as middle-middle class, or even lower-middle class, blue collar with high six and low seven figure retirement account balances, especially with market performance over the past decade+.

    LEVEL 1 WCI FORUM MEMBER.

    #243674 Reply
    Craigy Craigy 
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    The reason it’s dumb to include personal property is that most of the time people are tied to an area and can’t just sell their home. For example these two people to me have equivalent net worths:

    Person 1: paid off house in the Midwest worth 300K with 2million brokerage account
    Person 2: paid off house in Bay Area worth 3 million with 2 million brokerage account

    Since both people are tied to the area their living in and can’t move they both have the same buying power so i see both as having the same net worth.

    Also unless your estate is with >22million the new tax law won’t affect either of you when you die

    Click to expand…

    As others have pointed out, the federal estate tax exemption reverts to $5 million in 2026, a figure which is certainly relevant to many on this board. In addition many states have estate taxes quite a bit lower than the federal limits.

    I promise you neither the feds nor my state exclude personal property/primary residence when calculating net worth.

    Click to expand…

    To be specific, the basic exclusion amount is $5,000,000, indexed for inflation from year 2010.

    In 2026 it likely will be something close to $6,500,000 depending on cpi.  Or ~$13M per couple.  $13,000,000 sounds like a lot, but I think a lot of physicians here who continue to earn high six figures and invest with average returns over an average lifespan will easily approach and exceed this, even as it continues to be inflation-adjusted.

    And of course that’s assuming congress doesn’t tinker with it again, which they tend to do every few years.  Most of the democratic candidates lean toward lowering the exclusion amount.

     

    LEVEL 1 WCI FORUM MEMBER.

    #243677 Reply
    The White Coat Investor The White Coat Investor 
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    Joined: 05/13/2011

    Moving this one to the Lounge as I’m getting emails about it.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #243926 Reply
    Avatar benign_user 
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    Status: Physician
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    Joined: 01/14/2016

    Moving this one to the Lounge as I’m getting emails about it.

    Click to expand…

    Wow, people take the time to email you and complain that this thread not being in the right category 😀

    I thought it was just patients who complain about nonsensical things.

    #243973 Reply

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