Generally the ‘safe withdrawal rate’ for investments is 4% per year. At this rate, the principal will grow a bit above normal inflation, and you’ll have basically a guaranteed inflation-adjusted salary.
Someone worth 10M, with maybe 8M of that in liquid investments (i.e. 2M in real estate) could clear about $320K every year. It’s good money, but like you said it isn’t unfathomable wealth. It is ‘fuck you’ money, though, where basically anyone can live comfortably without having to take work they don’t want to do.
The key benefit is the money is free - it doesn’t need to be saved for retirement because the nest egg is already secured, you already own the house and don’t have mortgage, any extra money from an external salary just increases the principal, etc.
Yeah, its fuck you money because it is reliable and constant and you can live comfortably. A job that pays the same on the other hand has the uncertainty of how long can this last? Will I be let go? How long do I have to do this?
Money that is dependable is the best kind of money. Its why people save and invest hoping they can reach a point they aren’t reliant on the uncertainty of the job market for money.
Generally the ‘safe withdrawal rate’ for investments is 4% per year. At this rate, the principal will grow a bit above normal inflation, and you’ll have basically a guaranteed inflation-adjusted salary.
Someone worth 10M, with maybe 8M of that in liquid investments (i.e. 2M in real estate) could clear about $320K every year. It’s good money, but like you said it isn’t unfathomable wealth. It is ‘fuck you’ money, though, where basically anyone can live comfortably without having to take work they don’t want to do.
The key benefit is the money is free - it doesn’t need to be saved for retirement because the nest egg is already secured, you already own the house and don’t have mortgage, any extra money from an external salary just increases the principal, etc.
Yeah, its fuck you money because it is reliable and constant and you can live comfortably. A job that pays the same on the other hand has the uncertainty of how long can this last? Will I be let go? How long do I have to do this?
Money that is dependable is the best kind of money. Its why people save and invest hoping they can reach a point they aren’t reliant on the uncertainty of the job market for money.