In 1992 the band Barenaked Ladies released a song with this title (maybe they meant $1 million US dollars in Canada). When i was younger, i used to think that $1 million was a lot of money. Look at all those zeroes (1,000,000). i don't know if my alleged father ever made $30,000 a year. Now it doesn't seem that impressive
How much is $1 million (ignoring tax implications)?
- $50,000 a year for 20 years (it sounds like more than it is). i use this amount since i think one could live on that (though subscription services - internet, phone, utilities, cable or Netflix, etc) could cut into that. If you had a $1,200 a month rent or mortgage, that would take you down to $35,600 a year (before stuff like food and any other bills).
- A $15 dollar minimum wage for 40 hours a week assuming a 52 week work year (a terrible idea, but for illustrative purposes): roughly $31,200 a year. It would take about 32 years to get a million.
Yes, it is still a bunch of money for a significant portion of the US population. However, it is not nearly as much as it used to be. In other words, if you got $1 million dollars, maybe you shouldn't quit your day job
So what would $1 million do in today's world? Ready for a bunch of non-realistic figuring (like ignoring taxes).
-Many people would blow through a significant portion of that in the first year
- a house and setting it up (or hoose if you're Canadian) - probably would take 25-40% right there. Now you only have $600,000 - $750,000 left. i guess you could get a mortgage and lock in the rate (especially if you could get a better rate of return on investments that the interest rate)
How long could you live on $600-750K?
- Assuming a $50K year budget (you probably could live on less), that is 12-15 years (18-.22 years @ $33k)
- $1 million isn't even enough for many people's retirement
Of course, i assume that $50k won't cut it in 20 years - when the purchasing power of the dollar should be significantly diminished (through constant erosion).
No comments:
Post a Comment