"Feel free to post pictures of your Ferrari/Lamborghini below"

There you go, stereotyping us millionaires :)

Regards,

$nTMan

in the owrds of monty python ...

"i'm not!"

Quando Omni Flunkus Moritati

...therefore I am.

Mike McCann
MMC Engineering

mike,

spare us a fiver till payday ...

Quando Omni Flunkus Moritati

Elon Musk is my hero.

Maybe you should let our HR department in on medium incomes of engineers.

i'm sure the HR depart exec's balance it all out (it's a crappy job but someone's got to do it)

Quando Omni Flunkus Moritati

The company bosses tell me they are looking for a 5% return on capital. Therefore at that rate I nearly have the income of a millionaire before tax!

Yes... I was working on that first million after 40+ years of week to week survival.
I had actually come out of retirement in 2007 to work on the Space Shuttle replacement.
Then there was a fellow by the name of Obama who was elected POTUS. A year latter I was
RIFed so I'm back on SS and a tiny pension. I believe I'm going to join the Nanny State
for sure... Free this and Free that. Isn't this great or what?

Normalize that data for the number of degrees granted and for the income level of the person's parents and then maybe you'll have something worth looking at!

The article does claim that most of the people who made it rich didn't do so by working within the discipline they were educated to work in. So the most popular education may be engineering, but the most popular employment was probably "entrepreneurship". What they fail to notice is that if you looked at the most popular employment amongst people declaring personal bankruptcy, that too probably contains a large number of entrepreneurs. All you're seeing is the positive side of the volatility of that high risk, potentially high reward enterprise.

I guess it depends on the definition of what constitutes being a 'millionaire'.

I've always been told that in order to be technically considered a 'millionaire' you had to have a 'net worth' (assets minus liabilities) of one million dollars, AFTER deducting the equity in your primary residence.

Based on that criteria, my wife and I, after working all of our lives (she's 67 and I'm 66) and inherting nothing from our parents, in other words, what we have is what we've earned from the sweat of our labor as well as what our investments have returned, we're on the verge of becoming 'millionaires'. Unfortunately that isn't as impressive as it was when I was kid and used to watch the TV program 'The Millionaire' which was on in the late 50's.

So since I'm a degreed engineer, BSME, and my wife's earnings, while always decent, never came even close to mine (except for the first 4 years of our marriage while I was still in school and she worked so that I could finish my degree) but we've now reached the point where we could soon be classified as 'millionaires', at least in the most technical sense of the word, the premise of the article may in fact be more accurate than some might at first think. Anyway, that's my 2 cents on the subject...

John R. Baker, P.E.
Product 'Evangelist'
Product Engineering Software
Siemens PLM Software Inc.
Industry Sector
Cypress, CA
Siemens PLM:
UG/NX Museum:

To an Engineer, the glass is twice as big as it needs to be.

John,
That sounds like my situation. I "retired" in 2003 at age 50 and rolled my 401k and lump sum retirement into an IRA that (due to some really good luck) is worth slightly more than $1 million today. If I actually retire at 67 and start living off my IRA, and my wife and I live to the ages of our parents (possible), then we would have to live on a monthly income that is slightly less than I was making at retirement for it to last as long as we do. So basically a million dollars will give us the same income we had in 2003 when I was making slightly over $100k, which (when you deduct inflation for 17 or 37 years) is a lifestyle that matches an income of around $75k in 2003. I'm just hoping that royalties on my inventions make up the slack. This whole "millionaire" thing just isn't what I've been led to believe.

David Simpson, PE
MuleShoe Engineering

Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat

Yes, and we too have had a good return on our investments. Year to date, the increase in the value of our investments, plus the dividends paid (which have all been reinvested), is more than the total of what my wife and I made together during the first 9 years of our marriage. And this does NOT include any increase in the equity in our home (if that were included, it would take us up to the first 15 years of our 46 years together). And I know exactly what you mean about what will be happening when I finally do retire (my wife retired 6 years ago when her mother had a stroke and needed full time care), which is planned to be almost exactly two years from now. Even if by then we do achive the technical definition of being considered 'millionaires', it is going to be very difficult maintaining something even close to our current lifestyle, and what's really shocking, at least with respect to what we see around us, we are in MUCH better shape than most couples who have reached our age. When you read what the retirement savings are for the average married couple in America it is very distressing when you try and contemplate what society will be like in a few years. For example, the aricle below includes a statistic that 39% of the people over 55 years of age have retirement savings of less than $25,000. Now I don't know if this equates to a couple having $50,000 but still, this is a very scary number indeed.

http://www.iravs401kcentral.com/average-retirement...

John R. Baker, P.E.
Product 'Evangelist'
Product Engineering Software
Siemens PLM Software Inc.
Industry Sector
Cypress, CA
Siemens PLM:
UG/NX Museum:

To an Engineer, the glass is twice as big as it needs to be.

I have to stop "investing" in Bryston audio...

Although I probably did contribute to raising their stock value in 2012-2013.

To quote Seinfeld:

"No soup (- retirement -) for you!".

Thing is that if you are the cat's pyjamas then you might get 8% return on that million, year on year, which is kind of OK in itself, except of course you'll be killed by inflation, so you really ought to reivest 3% of that which brings your income down to 50000 which is frankly not enough for two people. And if you can really /average/ 8% long term then you are very special. Oddly enough I fluked into 13% over 13 years with my original house (before tax and inflation), and I loathe real estate.

Of course the simplest way to generate an investable wodge in the first place is to buy a secondhand car for cash and run it forever, while investing the money that would have been used for repayments. Yes, it'll take 5 years to get to a lump sum that looks worthwhile, but that is how things work. Again for me, I bought the proverbial worst house in the street for cash, in a fairly downmarket but reasonable neighbourhood, and all the money I would have spent on rent or mortgage was invested in the stockmarket, which of course was harrowing at times.

And for the OP, no Ferrari, I gather that being a point made repeatedly in "The Millionaire Next Door".

Cheers

Greg Locock


New here? Try reading these, they might help FAQ731-376: Eng-Tips.com Forum Policies http://eng-tips.com/market.cfm?

While it's a cardinal sin to "old money" if you tap into capital, look up the term "safe withdrawal rate" when considering how much you can draw from savings in retirement. Consensus seems to end up around 4% for a reasonably invested portfolio, but there are a lot of factors involved.

Yes, I've heard the same recommended withdrawl rate of 4%, which seems appropriate when mentioning 'old money' in your comment since this generally assures that nearly 100% of the original amount of equity in one's portfolio will be passed on to your heirs. After all, how exactly did you think that 'old money' got their 'money'?

I'd rather live like my parents did. They managed to enjoy their retirement without worrying too much about what they were going to leave us kids, other than what it took to pay their final medical bills (granted, my father retired from 30+ years of public service so they had outstanding medical insurance) and thier funerals (which they had already pre-paid years before). Neither I nor my siblings ever begrudged them a moment over the fact that they 'spent our inheritance'. More power to 'em.

John R. Baker, P.E.
Product 'Evangelist'
Product Engineering Software
Siemens PLM Software Inc.
Industry Sector
Cypress, CA
Siemens PLM:
UG/NX Museum:

To an Engineer, the glass is twice as big as it needs to be.

4% of $1 million is $40 k before taxes. That qualifies for food stamps and Medicaid (if the existence of the million didn't disqualify you). To have the US median income at 4% you'd have to be a two-millionaire.

The way that rule was explained in Rule Your Retirement a few of months ago was that you should plan on lowering your capital by no more than 4%/year. So if you're earning 4%, then you're living on up to 8%. If you're earning 12% (my full year average over the last 10 years) then you can live pretty well on 16% of a million the first year (or make the capital last longer by capping your withdrawals at what you need to live frivolously). I figure if I can continue above 10% earnings then I can live well on the earnings, and if I'm only earning 4% then the capital will last till my wife is 95 (I don't figure a fat guy with hypertension and crappy exercise and dietary habits is going to still be around).

My dad's definition of a "successful life" is for the first check you ever bounce in your life to be the one your executor writes for your funeral. He didn't miss it by much. I've told my kids that their inheritance will be limited to the genetic inheritance they started with, and they can fight over who gets my tools.

David Simpson, PE
MuleShoe Engineering

Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat

Inflation being what it always is, being a millionare today is basically nothing compared to being a millionaire in the '60s. Ten-millionaire doesn't have the same ring at all. And subtracting the value of your principal residence makes no sense at all to me- it's an asset, admittedly not all that liquid, but an asset all the same. In terms of real wealth, I'd be a hell of a lot poorer if I rented instead of buying when real estate was at a historical low!

Chap on the radio this morning was describing why he still worked, even though he'd scooped £2+M in some lottery (lottery winnings are tax free here, so you just get a massive wedge shoved into your bank account). He reckoned he could not bother working for 20 years. But then he'd need to find a job aged 48, with a 20 year hole in his work history.

- Steve

Yeah, but I bet he doesn't take any crap from management.

David Simpson, PE
MuleShoe Engineering

Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat