When I graduated from college, I quickly realized one fact. I wanted to retire by the age of 50. I thought at the time I should save and have a million dollars in the bank for my dream to become a reality. But realized the second fact quickly. Working a 9-5 alone would not yield my desired results. Thus my love for investing started.
Striving to be a millionaire sounds good, but if you do the mat,h it's not that impressive any more thanks to inflation. If you retired today at 65 with $1 million and no Social Security, you’d only be able to spend $40,000 – $50,000 a year for 25 years until you’d likely run out of money. Goodness forbids you don’t face any exorbitant medical expenses, either.
The minimum wage in America is now between $8 – $15 an hour, and gas is anywhere from $3.3 – $4.2 a gallon depending on where and what type you get. I think it’s interesting that the minimum wage used to be 4X the amount of one gallon of gas. Now the gap has fallen to only ~3X as the cost of goods has surged faster than wage inflation.
It’s vital to grow your earnings faster than your costs, and increase that gap as wide as possible.
Being a millionaire isn't a ticket to mansions, yachts and caviar, as it once was, but the goal is more reachable than ever. According to Phoenix Marketing International, a firm that tracks the affluent market, 6.2% of U.S. households now have investable assets of $1 million or more.
That's only one way to measure if someone's a millionaire, of course. A net worth of $1 million also qualifies; subtract liabilities, including mortgages and car loans, from assets, including home equity and retirement savings, to determine your net worth.
Either way, hitting the million-dollar mark is no small feat.
Being a millionaire is nice, but it’s not what it used to be. Shoot for a $3 million net worth if you’re going to shoot for millionaire status.
With a $3 million net worth and no government support at age 65, you can now spend a much more luxurious $120,000 a year or so until you run out of money in 25 years.