If I were Filthy Rich
By marvelguy1975+142 Did some math the other day on 8 million bucks.
So, got to fantasizing a bit on a 8 million dollar payout for a pick 6 win.
8 million after taxes. Invest in a conservative strategy earning 6% per year.
Draw out $30,000 a month in a "salary". 360k per year. While investing the rest.
Calculate a 3% increase in salary to account for inflation.
25 years later, by the magic of compounding interest I would have somewhere around 22 million dollars, while still drawing around 13 million in total. Over 25 years the initial salary would have risen to 750k per year. Of course there are numerous variables over those 25 years. Good years with a 12% or higher return and lean years with a recession and little to no return. Also this does not take into account large withdrawals for college or buying a home etc.
I got these numbers from an online 401k investment calculator.
This is how you make 8 million last from one generation to the next.
Now tell me why do so many go broke? I sure can live off of 360k a year. And this is 360k drawn from the money. This does not include any outside income from businesses or real-estate etc.
Recent responses
+108 @AlarmedAd7655 >Now tell me why do so many go broke? because of people like me who are emotional AND suck at math
+45 @blingblingmofo Cause if you really try it’s not that hard to spend $8 million dollars.
+14 @someguyonredd1t Because the majority of people who play the lottery are not typically terribly financially literate, making it likely that the winner will not be terribly financially literate. Combine this with suddenly having a massive windfall, and there's this mentality of "even if I buy a $4 million house, I'll still have $4 mil left! I can buy a boat and a Lamborghini after and still have over $3 million. We can finally take those trips we've always wanted, and we're flying first class baby! I can live off $2.5 million no problem." And it continues. They are not familiar with what you've outlined, or what investment vehicles are available to them.
+12 @GAAPInMyWorkHistory How does t average return magically increase every year for inflation?