How much does it take to be ‘rich’ now?

[Blugolds]

42 minutes ago, rohitc99 said:

My takeaway from the thread - how expensive raising kids is. No wonder population growth is slowing and even dropping. I am sure my kids and their generation is already on the fence on having kids of their own and it is showing up in the stats already

 

From a pure economics standpoint, marry - dont have kids and you can retire 20 years early 

 

 

Could also have kids later than previous generations (also a trend) that way your early years are spent socking as much as possible away to get a large chunk put to work, get a jump on getting to "hockey stick" territory, later in life earnings go up and the expense of childcare is not such a large percentage of your monthly net. 

 

Sometimes this is planned, sometimes its not. But if you are young, earnings are the lowest they will be in your career (theoretically) and a large percentage, or even majority of your earnings or that of your partner is going to childcare that puts a tremendous damper on how much you are able to put away and you lose out via mind numbing opportunity cost. 

[Parsad]

2 hours ago, maxthetrade said:

What an interesting thread! I live in a small town in Germany and most of you would be shocked how little I spend and still, I eat japanese Wagyu, drink good wine, have nice vacations, drive a X3M, etc. all on <60k/year. I really can't think of much that i'd like to do but don't do because of monetary considerations. Money just keeps piling up. The one thing that comes to mind is that I'd like to travel by NetJets, I really hate the security shit and lines at airports. And one day when I'm really pissed I'll sign up  

 

Teach me master!  I want Wagyu and only want to spend $60K a year.

 

Max are you married?  Do you have kids?  I'm guessing probably married, but no kids.

 

I totally agree on the Netjets thing!  Cheers!

[gfp]

5 minutes ago, rkbabang said:

I really only know two types of people in my life.  People who think a million dollars isn't really that much money and people who think $100k in the bank makes you rich.

This is so true.

[Parsad]

2 hours ago, maxthetrade said:

 

You might be surprised but with the exception of rent/real estate it's not very expensive. If you're comfortable living in a small appartment  (~€3k/month) your tax savings will easily pay for everything! 

 

My aunt lives in Monaco.  Max is right...rent is probably on par with New York or San Francisco.  But other stuff is expensive! 

 

Also getting residency status in Monaco is relatively easy as long as you can put like $500K Euros or $1M Euros...something like that in a bank there.  Citizenship approval takes like 10 years of permanent residency.

 

Cheers!

[maxthetrade]

12 minutes ago, Parsad said:

Teach me master!  I want Wagyu and only want to spend $60K a year.

 

Max are you married?  Do you have kids?  I'm guessing probably married, but no kids.

 

 

 Well, I don't have kids and I'm not married, but my sister and her husband have three kids and enjoy a lifestyle similar to mine. They are both M.D.'s. Of course they have to drive a shitty car with three kids  

I'm very price sensitive and buy my meat, wine etc. at wholesale prices, e.g. I pay e.g. ~140€/kg Kobe Tri Tip, ~350€/kg Kobe tenderloin. Of course I don't eat that every day but that's not because of the price but for health reasons... You can buy some really excellent italian or portugese wine for ~20-25 bucks per bottle! Much better than french wine at four times the price!

Edited June 5, 2023 by maxthetrade

[maxthetrade]

10 minutes ago, Parsad said:

Also getting residency status in Monaco is relatively easy as long as you can put like $500K Euros

 

That's correct, €500k securities at a local bank. I'm thinking a lot about moving there, better weather and food than in Germany and no income tax!!  

[Sweet]

52 minutes ago, maxthetrade said:

 

 Well, I don't have kids and I'm not married, but my sister and her husband have three kids and enjoy a lifestyle similar to mine. They are both M.D.'s. Of course they have to drive a shitty car with three kids  

I'm very price sensitive and buy my meat, wine etc. at wholesale prices, e.g. I pay e.g. ~140€/kg Kobe Tri Tip, ~350€/kg Kobe tenderloin. Of course I don't eat that every day but that's not because of the price but for health reasons... You can buy some really excellent italian or portugese wine for ~20-25 bucks per bottle! Much better than french wine at four times the price!

Is Kobe wagyu?  Where do you get it from?  

[Castanza]

1 hour ago, rkbabang said:

Great thread.  I agree with whatever gets you enough to live the lifestyle you want makes you rich.   It doesn't matter what other people think.  I really only know two types of people in my life.  People who think a million dollars isn't really that much money and people who think $100k in the bank makes you rich.

 

 

Lmao very true 

[maxthetrade]

13 minutes ago, Sweet said:

Is Kobe wagyu?  Where do you get it from?  

 

Yes it's certified Kobe A5 Wagyu with BMS 10-12+. That beeing said, Kagoshima, Myiazaki, Nakamoto etc. japanese Wagyu is of similar quality and often a much better deal. I have a friend who has an import license and I buy it at wholesale price from him. 

Edited June 5, 2023 by maxthetrade

[Paarslaars]

8 hours ago, Parsad said:

 

Very true!

 

Until you get hit with a $250K medical bill because you didn't buy travel insurance or you get diagnosed with ALS and need care for the rest of your remaining life. 

 

Cheers!

I always get travel insurance, I have an epileptic daughter so if she has seizures where I am not covered, I'll go bankrupt

 

But that is why I specified "in good health". Makes all the difference...

 

I had the Kobe Wagyu in Kobe itself, really not that expensive over there... 

 

Personally I rarely forgo an activity because I can't afford it, sometimes I just feel too guilty spending so much money. I have a wife and 2 kids, we live very comfortable in a large house (300m²) with a nice garden (1200m²). I make about 70k before taxes, my wife 30k. I do get a lot of things (car, internet, health insurance..) from my employer. Honestly my main reason to grow my portfolio is early retirement, there isn't any thing I would buy that I can't now...

Edited June 6, 2023 by Paarslaars

[Sweet]

8 hours ago, maxthetrade said:

 

Yes it's certified Kobe A5 Wagyu with BMS 10-12+. That beeing said, Kagoshima, Myiazaki, Nakamoto etc. japanese Wagyu is of similar quality and often a much better deal. I have a friend who has an import license and I buy it at wholesale price from him. 

my next question was where do you get it.  Never tried wagyu must see if I can get some.  It’s very healthy I understand 

Edited June 6, 2023 by Sweet

[Intelligent_Investor]

18 hours ago, james22 said:

 

4% is considered the Safe Withdrawal Rate because it survived the historical worst-case scenarios.

 

2% leaves time and money on the table.

 

https://www.kitces.com/blog/4-percent-rule-bengen-morningstar-report-the-state-of-retirement-income-safe-withdrawal-rates/

4% is fine, I'm just a paranoid value investor who always wants an excessive margin of safety lol

[maxthetrade]

6 hours ago, Sweet said:

my next question was where do you get it.  Never tried wagyu must see if I can get some.  It’s very healthy I understand 

 

Well I wouldn't go so far to label japanese Wagyu health food but it's probably a little bit healthier because of the higher content of omega 3 fatty acids. The fat really melts in your hands. But it's very rich, you really don't want to eat much more than say 200g. 

In the US you can get it from Grand Western Steaks: https://grandwesternsteaks.com/wagyu.html

[Blugolds]

24 minutes ago, maxthetrade said:

 

Well I wouldn't go so far to label japanese Wagyu health food but it's probably a little bit healthier because of the higher content of omega 3 fatty acids. The fat really melts in your hands. But it's very rich, you really don't want to eat much more than say 200g. 

In the US you can get it from Grand Western Steaks: https://grandwesternsteaks.com/wagyu.html

 

Costco also sells great Wagyu at a great price! One of their "luxury" items available that has been written about extensively.

 

https://ca.style.yahoo.com/costco-carrying-worlds-most-expensive-161700818.html

 

Costco offers some of the best of the best wagyu beef. Wagyu typically refers to a specific breed of cow from Japan and has a reputation for having some of the most flavorful, marbled beef in the world. It's also known for being the most expensive—starting at around $250 per pound.

The name is typically misused by imitators trying to hop on the bandwagon, but Costco's Wagyu is the real deal. They import their A5 Wagyu (the highest quality distinction available) from the Kagoshima Prefecture in Japan. They offer several different cuts at steep discounts. For example, their thinly sliced striploin is sold for $99.99 a pound, less than half the price at specialty butcher shops

 

 

 

[backtothebeach]

22 minutes ago, Blugolds11 said:

The name is typically misused by imitators trying to hop on the bandwagon

Yeah I bought something called Wagyu at an HEB supermarket a few weeks ago, it looked beautiful, but turned out terrible, was like 50% water.

Not $250 a pound of course, should have known.

[Ross812]

The topic question is difficult to answer. Take travel for instance:

 

1. You drive because air travel + car rental is expensive (working/middle class)

2. You fly budget airlines (working/middle class)

3. You fly economy (middle class)

4. You upgrade your economy tickets with more expensive seats (middle class/wealthy)

5. Only fly business class (wealthy)

6. Only fly first class (wealthy)

7. Only fly private (rich)

 

My wife and I make somewhere in the high 200's to low 300's depending on bonuses, capital gains, etc and are well over the million dollar hurdle in liquid assets and do not have kids. I would consider ourselves upper middle class bordering on wealthy. I am between 3 and 4 of the travel scale and cannot fathom paying 2.5x+ for a business class ticket because the difference between 1K and 3-4K for an international flight for two still seems significant for me. I would imagine if I had double the disposable income - maybe the equivalent of making 150k more after taxes I wouldn't bat an eye and move into the 5/6 range. I'd say that's around 400K-450k in W2 income and 300k in investment income so using the 4% rule - $7.5M to be wealthy. I'd guess 4x that, so $1.2M+ in investment income, to be considered rich - call it  30M?  

[Sweet]

1 hour ago, maxthetrade said:

 

Well I wouldn't go so far to label japanese Wagyu health food but it's probably a little bit healthier because of the higher content of omega 3 fatty acids. The fat really melts in your hands. But it's very rich, you really don't want to eat much more than say 200g. 

In the US you can get it from Grand Western Steaks: https://grandwesternsteaks.com/wagyu.html

I’m in the UK, there are places that sell it online, but I would rather know someone who can vouch for their products before I buy.

[Saluki]

It's all mental/emotional.  In previous eras, being poor meant that you didn't know if you were going to eat that day. Now it means that you have an older iPhone.  Beyond your basic survival needs, all money is just a story that we tell ourselves. The poor, middle class, and rich, all eat the same kind of food, drive on the same roads, get treated with the same medicine and wear similar clothes.  In the 1500s, a peasant had one or two set of clothes, and you could tell a lord from a peasant by the way they were dressed.  Today, there is some psychological difference in an expensive suit vs a cheap suit, but if I showed you a picture of a rich kid starting his internship at Goldman or a poor kid wearing his interview suit, I don't think you could tell who was rich and who isn't. 

 

So to some extent whether you are rich just means whether you can afford your desires, which are related to the story you tell yourself about them and about money. If you like expensive cars and champagne at the club, and you can afford it, then you are rich and if you want them but you can't,  then you aren't rich. But if you don't have those desires, you are rich if you can afford the ones you want with no problem.  I have one house, one car, one lady and one dog.  I like to travel and read books.  I am rich because I can afford it. If wanted 3 houses and 3 cars and 3 ladies and 3 dogs, and a ferrari, then I am not rich.  I'll stay with the way I am.  I like being rich  

[rkbabang]

I've never figured out how to like posts on this site, but @Saluki nailed it.  No one is truly poor anymore. This is true at least in the first world countries, with the exception of the mentally ill who aren't being taken care of properly, and increasingly close to true in the 3rd world as well. And being rich is in your mind more than anything else.  Some are rich with comparably little and others have enormous amounts, even $billions in some cases, but feel they don't have enough.

 

 

[james22]

“All the way up the income-wealth spectrum,” Norton told me, “basically everyone says [they’d need] two or three times as much” to be perfectly happy.

 

https://www.theatlantic.com/family/archive/2018/12/rich-people-happy-money/577231/

[CorpRaider]

19 hours ago, rohitc99 said:

My takeaway from the thread - how expensive raising kids is. No wonder population growth is slowing and even dropping. I am sure my kids and their generation is already on the fence on having kids of their own and it is showing up in the stats already

 

From a pure economics standpoint, marry - dont have kids and you can retire 20 years early 

 

It's brutal.  Thanks to all the parentals for our efforts to perpetuate the species.

[Gregmal]

All I know if Wagyu definitely ain’t healthy. It’s like 75% fat. 
 

 

[rohitc99]

1 hour ago, Saluki said:

It's all mental/emotional.  In previous eras, being poor meant that you didn't know if you were going to eat that day. Now it means that you have an older iPhone.  Beyond your basic survival needs, all money is just a story that we tell ourselves. The poor, middle class, and rich, all eat the same kind of food, drive on the same roads, get treated with the same medicine and wear similar clothes.  In the 1500s, a peasant had one or two set of clothes, and you could tell a lord from a peasant by the way they were dressed.  Today, there is some psychological difference in an expensive suit vs a cheap suit, but if I showed you a picture of a rich kid starting his internship at Goldman or a poor kid wearing his interview suit, I don't think you could tell who was rich and who isn't. 

 

So to some extent whether you are rich just means whether you can afford your desires, which are related to the story you tell yourself about them and about money. If you like expensive cars and champagne at the club, and you can afford it, then you are rich and if you want them but you can't,  then you aren't rich. But if you don't have those desires, you are rich if you can afford the ones you want with no problem.  I have one house, one car, one lady and one dog.  I like to travel and read books.  I am rich because I can afford it. If wanted 3 houses and 3 cars and 3 ladies and 3 dogs, and a ferrari, then I am not rich.  I'll stay with the way I am.  I like being rich  

+1 if you are a poor immigrant to begin with, then you are rich the day you make some money. when you reach the 50 percentile, you feel wealthy ! low expectation

 

its because the reference point was much lower and hence the story is much better. Kids born to such immigrants are not this lucky. They start with much higher expectations

[rkbabang]

51 minutes ago, CorpRaider said:

20 hours ago, rohitc99 said:

My takeaway from the thread - how expensive raising kids is. No wonder population growth is slowing and even dropping. I am sure my kids and their generation is already on the fence on having kids of their own and it is showing up in the stats already

 

From a pure economics standpoint, marry - dont have kids and you can retire 20 years early 

 

It's brutal.  Thanks to all the parentals for our efforts to perpetuate the species.

 

 

My wife stayed home with our kids.  This costs us a lot in lost income, but from what I'm reading here about childcare costs, maybe not as much as I assumed.   I know we were in the minority.  I'm not sure why this isn't done more often as it isn't just about the money, there are a lot of non-monetary benefits to making this choice.  

 

[CorpRaider]

It's a tough call.  Math changes a little, I think, if you factor in lost raises/benefits accrued.  Really hard work staying home with them.  I kept our ~3 month old solo for a month after mom went back to work and before the daycare slot was ready; was totally wreck'd.

Edited June 6, 2023 by CorpRaider