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Your new job would be to manage your money full time for growth. Would you feel confident with $5Million, $1Million, $500k? thoughts?

2006-09-07 07:31:03 · 5 answers · asked by Anonymous in Business & Finance Personal Finance

5 answers

A million - because in the bank at 5% interest ... it would draw $50,000 per year in interest. I think that would be sufficient.

2006-09-07 07:36:28 · answer #1 · answered by kentata 6 · 0 1

That depends on how old you are. Man/woman? Your hereditary.
In N.America, statistically speaking, man lives till 85 and woman till 90. If your mom/dad lived to 90's you are likely to live that long.

Now you work backwards.
Assuming you are 60; 25 years to go till you die.
You should consider 60% of your present income as most comfortable to live till 85. (I took the worst case scenario.)

Social security + company pension + old age pension can bring in (all approx). about $3500 a month. Assume mortgage is paid off. No other commitments are assumed. Your kids are in college and independent. They are not expecting anything from you for their education.

If this scenario holds, then you only need to augment enough to come to that 60% figure.(i.e., $?? minus $3,500 = ??) It is the ?? you should figure out how much. That's 60% of your best income in the past 5 years average. You cannot live like a king but hey, you will live very comfortably. I mean *very* comfortably and 2 trips in a year to exotic locales.

To say $500K or $1M or $5M is like poking finger in the cloud. It is hard to say.

Your nest egg earns, say 8% in a cash+equity+bonds combo then you are off to the races. In reality, you really do not need much, because your needs are not there when you were working - such as a new car, clothing, furniture, etc.. etc..

Also - don't forget - as you age (in 80's and 90's) your mobility is limited. So if you are 60 now, you have another 20 years left to do all the trips around the world. Not bad, not bad.

All this calculation does not include the equity in your home. You need a roof over your head to live, right? Do not take that in to your income.

2006-09-07 07:52:41 · answer #2 · answered by Nightrider 7 · 1 1

Reality check:
To accomodate taxes, inflation, and increasing expenses as you age, will require at least 4 million. And if you are going to gamble (oops, I mean "manage...for growth"), then you better have separate funds for that.

Yeah, a bunch of people survive on a lot less, but you said "comfortable". And there are a whole slew of people who have a lot more.

2006-09-07 12:38:10 · answer #3 · answered by veritas 5 · 0 0

I would have to say 5Million, I would invest it. Now in days everything is so expensive.

2006-09-07 07:37:45 · answer #4 · answered by hazelshine 4 · 0 0

I agree with kentat. That was my answer!

2006-09-07 07:38:19 · answer #5 · answered by Gothic Martha™ 6 · 1 1

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