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November 11, 2010


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1. Income and wealth are not the same as FMF loves to harp on. There is no wealth tax. Simply having wealth does not increase your taxes. High income increases your taxes.
2. Luckily you can pay people to do things for you.
3. Why is meeting people a drawback?
4. Yeah sharing sure does suck!
6. Then put it in something safe and stable.
7. TRUE but we all face that to varying degrees.
8. TRUE so you live in the nicer neighborhood, get security system and don't be paranoid and don't flaunt your wealth.

Jim --

I don't "harp", do I? ;-)

9. Relationships get skewed, screwed up, and skewered by significantly outearning your partner. From gold-diggers to leeches to the insecure, underperforming (financially) male.

I am definitely not your average millionaire since (excluding two pieces of real estate) I didn't become one until 1997, five years after I retired, largely due to being a savvy enough investor to do very well in the market. When I worked as a Lockheed engineer I didn't follow the market closely. For one thing I was kept far too busy at work and also because for many years I couldn't change the way my 401K was invested and even by the time I retired I was only able to change the basic allocation between stocks, bonds, and a MMF twice/year.

We fall into the pattern of "The millionaire next door", we don't live the "millionaire" lifestyle at all. I make all of our investment decisions myself, we don't employ a gardener or a cleaning lady and I wash our cars and fix most things around the house, and we never go near the fancy & expensive restaurants of which there are many in Silicon Valley. Now after reaching the first million in '97 and with the benefits of 13 more years of annual compounding, fortunately it averaged 14.8%/yr., we are firmly in the multi-millionaire bracket but life goes on pretty much the same. We still live in the same home we bought in 1977 and nothing would convince us to move - our garden for example is a 33 year work in progress that we both enjoy and the neighborhood, location and climate are fabulous. Neither of us have ever had the typical American love affair with the automobile. It took me a while to get over the fact that we Brits fought two terrible wars with Germany but I finally got over it and bought two Mercedes, but both were "used" and are now '91 and '98 sedans, with low mileage because we don't drive ourselves on long trips. My 5.6 liter gas guzzler for example averages about 500 miles/year, the other 2.3 liter smaller one about 2,500 miles/year. For entertainment we prefer Netflix from the comfort of our home and watching BBC serial dramas on a 26in flat screen HDTV - we didn't like the idea of having to join the crowd and totally redesign our family room just to accomodate a giant screen.

The biggest splurge that sets us apart from most people is that we started our world travelling as soon as the kids had moved out in 1984 and have been all over the world and visited many countries, some several times. We did all of the most physically demanding and adventurous, third world, trips in the beginning and then gradually eased off in difficulty until the last few have been non demanding European river cruises. Now there's nowhere left that we're anxious to visit. Our 2010 vacation was our last one overseas, after two hip replacements and a sore back my wife doesn't walk as well as she used to, and it's becoming too big a hassle making long flights and navigating our way through huge crowded airports, even when flying business class.

It's funny because, though many people flaunt their wealth, most of the wealthy people I know look like and act like your average ordinary citizen.

I think there are many millionaires all around, you just wouldn't recognize them as millionaires if you met them. Although our neighbors calls us the millionaires next door, I don't think they actually believe we are millionaires. They just know that we do some odd things, like pay for our house with a check (no mortgage), do renovations if we feel like it will make the house more comfortable, and drive really old cars. Lots of millionaires live in small older homes and don't make a big deal out of having money. And if you don't let people know you have money, you eliminate a lot of the problems that go along with having money.

Good post. A lot of these problems in the article aren't exclusive just to the rich. Who doesn't pay taxes, get spam, etc.? Who hasn't met the Joneses?

These really are just common money problems that everyone faces, but it's just more apparent for the wealthy because they have more of it. If you have a lot of money, you could live pretty comfortably off fixed-income investments that aren't as risky.

It's unfair to generalize the stock market as a giant roller coaster, because some areas are more volatile than others. If you diversify correctly, you can save yourself a lot of stress because of market fluctuations.

The biggest way to avoid most of those is to not tell everyone you are a millionaire, either through your actions (purchases or current ownership) or words.

"harp on" ... "say more than once" : same difference. ;)

Allow me to quote Good Charlotte:

Always see it on T.V.or read it in the magazines
Celebrities want sympathy
All they do is piss and moan inside the Rolling Stone
Talking about how hard life can be

I'd like to see them spend the week livin' life out on the street
I don't think they would survive
If they could spend a day or two walking in someone else's shoes
I think they'd stumble and they'd fall
They would fall (fall)

Lifestyles of the rich and the famous
They're always complaining, always complaining
If money is such a problem
Well they got mansions
Think we should rob them

Did you know when you were famous
You could kill your wife and there's no such thing as
25 to life as long as you've got the cash to pay for Cochran
And did you know if you were caught and you were smoking crack
McDonald's wouldn't even want to take you back
You could always just run for mayor of D.C.

I'd like to see them spend the week livin' life out on the street
I don't think they would survive
If they could spend a day or two walking in someone else's shoes
I think they'd stumble and they'd fall
They would fall (fall)

Lifestyles of the rich and the famous
They're always complaining, always complaining
If money is such a problem
Well they got mansions
Think we should rob them

Lifestyles of the rich and the famous
They're always complaining, always complaining
If money is such a problem
You got so many problems
Think I could solve them
Lifestyles of the rich and famous
We'll take your clothes, cash cards, and homes just stop complaining
Lifestyles of the rich and famous
Lifestyles of the rich and famous
Lifestyles of the rich and famous

I comment on here regularly, but I'm going incognito this time for obvious reasons.

The MSN Money article is asinine. My spouse and I have a net worth in the low 8 digits, and almost none of those drawbacks are valid:

1. The tax system is set up to screw WAGE EARNERS who don't have the wherewithal to create corporations and tax shelters. Most rich people, who derive their income from non-wage sources, don't feel a thing proportionately speaking.

2. Possessions? We own real estate, and that's about it. I thought our home entertainment system was fairly ostentatious until I saw what some of our friends who live in modest neighborhoods choose to spend their money on. We have one car apiece, and together they're worth about $30,000. Who owns a yacht and doesn't regret it?

3. Again, how is meeting people a drawback? And we keep largely to ourselves anyway.

4. Our friends can expect all the fancy gifts they want. We don't buy gifts for each other, so why would we buy gifts for them? And if those friends thus consider us cheap, then they're welcome to call off the friendships anytime.

5. This is the most valid objection, and even it's pretty weak. We can, and do, say no.

6. No truly rich person grips over the market. And even if they did, is that better or worse than gripping over this year's 2% raise and hoping you survive the next round of layoffs?

7. Oh, please. Yes, because once you achieve a certain dollar figure, you forget how to throw away junk mail and use a spam folder.

8. One great thing about having money? Being able to afford almost anything at our local gun store.

There are about 70 million millionaires around the world... Still upper middle class so most lifestyles aren't going to change.

It's the folks who are earning $1 million a year from nothing who lose perspective and go nuts.


Agree that it helps to be unostentatious about accumulated wealth. It also helps that most of our wealth ($1M+), thanks to a better stock market in 2010, is either in tax deferred retirement savings, or real estate equity. Neither position is easily liquidated and thus could be blown on frivolous pursuits.

Hmm, I'm not a millionaire yet, but I would think that I definitely wouldn't go around advertising it!

It cracks me up when I read that the rich don't pay as much as they should in federal income taxes, when in reality 40% of the population don't pay federal income taxes at all.

I think another negative to being rich is the constant portrayal of the rich as the bad guys. They are almost demonized! That would wear me down (it does so already).

But the rich are the ones how employee others and give to charity. If the rich weren't there to invovate and make things happen! Life in America would not be as pleasant as it is now...

@Black Hole Sun
Amen to #8.

My girlfriend is a millionaire. I am not. I make under 75K.
She can buy anything she wants. I can't. The problem is, I don't know what I can buy her as gifts. Anything I can afford seems like it would be chintzy to her tastes. Any jewelry I could afford seems like it would be something she wouldn't look at twice. She's loving and kind and a wonderful woman.
The obvious answer is "If she loves you, she won't care what you buy her". Yes, I know that. But still... I would like to not have to resort to her being understanding. I'd like to give her things that would make her genuinely happy, regardless of either of our financial situations.

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