[MandoMan]

I have great respect for you and your posts, Toymeister, but Investor Times is a quasi- click bait site that seems to provide less than excellent analytics. I don’t know where it got its 39% millionaires statistic, but its comments about that seem to have been generated without much thought.

I suspect that you, like me, remember (barely, in my case) the TV show The Millionaire, 1955-1960, in which someone received a check for a million dollars at the beginning of the show, and often by the show’s end the person had made decisions that ruined his or her life. A million dollars was a lot back then, when my dad was earning $1,500 a month.

However, many financial planners say that if one has money invested for retirement, one can pretty reliably take out 4% a year and die with that same amount available. Some years more, some years less, and it all depends on where you put that money. (Mutual funds, well-chosen, and not a savings account.) Thus, someone here who has $1 million in mutual funds could, if things work out right, take out $40,000 a year and still end up with a million at death to leave to the kids. That sounds like $3,333 a month. But wait! If those retirement savings were made pre- tax, the mutual fund is required to deduct 20% off the top and send it to the IRS. That means the millionaire would get $2,666 a month from that million dollars. There are plenty of people living here on $1,000 a month from Social Security, but it requires constant frugality. Others are getting $2,500 a month from Social Security. That’s better, but still requires frugality. Adding $2,666 a month to that is a big help, but then they also have to pay income tax on their Social Security payments. I’m not sure how much that is. However, I would estimate that the people here with $1 million in mutual funds to live on and Social Security, using 4% of their mutual fund, with $2,500 a month from Social Security, after taxes have about $4,000 a month to use on living expenses and all purchases.

Maybe they have a mortgage and a larger home and are paying $2,500 a month on all those home-related costs. Maybe they are millionaires, yes, but the remaining $1,500 a month makes it difficult to squeeze in payments for a new Corvette, or cover the summer house on a lake in Minnesota, or pay for some cruise up a river in Europe or to Alaska.

Now, if a couple has $2 million, or $3 million, or $4 million in investments, a higher standard of living is possible, and those cruises and toys become possible. But I don’t see having $1 million as being wealthy. (And many in that 39% may only have $1 million.) It’s just the result of a lifetime of prudent saving and investment and postponing middle-aged pleasures. It means that if you are fortunate enough to live in a courtyard villa, free and clear, with a paid-for car and good health insurance, you can live without worrying if you are careful, go to a nice restaurant once a week, play golf on executive courses, give the kids nice Christmas presents. It’s a good life. It’s not a wealthy life.

As for those here (61%) who are not millionaires, they aren’t wealthy, either. (Lots of people have pensions from their work days, whether as teachers, or with good union factory jobs, or from others sorts of work with pension benefits. I don’t know if that is somehow factored into their wealth or not. If you have a pension of $2,666 a month plus Social Security, would that be counted as the equivalent of being a millionaire?)