Poll: Millionaire Status

I consider myself a millionaire because:

  • My net worth is a $1 million or more
  • My annual income is $1 million or more
  • Both

0 voters

It doesn’t matter what your income is - if you’re not putting enough into assets so that you have a net worth of more than $1MM, you aren’t a millionaire. For instance, if your only asset is $5MM in property that you have $10MM in loans that the property ‘secures’ means that not only are you not a millionaire, you probably need to look at bankruptcy.

AJ

3 Likes

Why would such information provided be of value?
Why ask?
Why would anyone have faith in any of the data volunteered?

Howie52
Then there is the question of what business is the answer to anyone - but if you wanted
to get a judgement about the general financial position of posters, why wouldn’t you structure
the poll to get a range of net worth’s - (>1, < 5),(>5, <10), (>10, < 15) or something along
those lines?

Morning mend…

While ever near the annual income, we did OK between my WeCo/LU labors, non-management plus DW’s career where because of my stable income, she could tell idiot bosses to stuff it and move on the more interesting jobs in other companies that needed her talents, as well as being able to complete her college degree. I went to a lot of night classes, hoping to go ahead and earn myself a degree in engineering or computer science, but my job put me out on the road, weeks, months at a time, no way to keep any sort of schedule, so I let it go, a lot of class time in the latest technologies, again on the road to various training centers for a month or more at a time…

Luckily, after nasty losses in LU, my AAPL investments paid off nicely, dividends there, and a couple others do add up…

Quite a ride…

I’m still wondering the annual income of our DD’s FIL, a couple hundred rentals, well managed, long since paid off, all I really know is that its impossible to pick up the tab for dinner, and his toys are pretty nice… And they’ve been very generous with the GK’s over the years…

In any case, it’s all welcome, surprising, but we’re still pretty cautious…

Enjoy it, we can’t take it with!

weco

3 Likes

For millionaires, I suspect income is an irrelevant term. Do you count paper profits? And if not its mostly about how much you want to pay taxes on.

Its a number for the benefit of Uncle Sam. Otherwise irrelevant.

With markets down and many heading for cash as a safe haven, many are aware of the big question. How much are you willing to pay capital gains taxes on? Its an ouch that limits versatility.

3 Likes

For millionaires, I suspect income is an irrelevant term.

I tend to think that gross annual income is more relevant than how many millions that I may or may not have as it defines how much I can safely spend each year.

I define gross annual income as annuities, pensions, Social Security, and other sources of guaranteed income, dividends and interest earned in taxable accounts plus RMD and other withdrawals from 401(k) and IRA accounts. Capital gains or losses are ignored as they don’t apply to 401(k) and IRA accounts and tend to be one off events.

1 Like

Most of us are best off to hold paper profits because your heirs inherit them tax free.

Hence you only take capital gains when you need them to minimize the tax bill. But of course selling stocks with paper profits to hold cash requires paying taxes on those profits.

3 Likes

For millionaires, I suspect income is an irrelevant term.

I find the term “income” interesting and irrelevant without qualification.

There’s:

  • Taxable Income
  • Adjusted Gross Income
  • Modified Adjusted Gross Income
  • Passive Income
  • Earned Income
  • Unearned Income
  • Capital Gains (income by another name)
  • Appreciation (another income by another name)
  • Other kinds

Trying to understand people’s behavior based upon “income”, such as AGI or Taxable Income, will never provide consistent results. I believe using a term I call “True Income” which is the annual change in net worth plus the previous year’s expenditures, will give a better understanding of people’s behavior.

For example, someone with a $50k/yr taxable income and zero net worth, will behave differently than someone with a $50k/yr taxable income and a $5M net worth.

I also understand most people’s “True Income” isn’t available, thus can’t be used when evaluating people’s behavior.

Jack

1 Like

Because I am comfortable and have enough.

5 Likes

<< For millionaires, I suspect income is an irrelevant term.>>

I tend to think that gross annual income is more relevant than how many millions that I may or may not have as it defines how much I can safely spend each year.

I suppose you could look at it both ways. But I still think that someone who has a Roth worth $5 or $10 million, but only has an income of $150-200k, is still a millionaire by any reasonable definition.

I define gross annual income as annuities, pensions, Social Security, and other sources of guaranteed income, dividends and interest earned in taxable accounts plus RMD and other withdrawals from 401(k) and IRA accounts. Capital gains or losses are ignored as they don’t apply to 401(k) and IRA accounts and tend to be one off events.

Maybe what you are describing is a spendlionaire (someone who spends a million a year)? After all, why withdraw money (and pay tax on it) from pre-tax accounts unless you are spending it? (other than the special case of converting regular IRA money to Roth IRA money)

5 Likes