Personal Finance

Do you consider 1 million dollars to be a lot of money?

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  • Feb 24th, 2021 5:44 pm
[OP]
Sr. Member
Dec 26, 2008
602 posts
342 upvotes

Do you consider 1 million dollars to be a lot of money?

It sounds like the height of arrogance to say it, but no I don't think 1 million dollars is a lot of money anymore. There are a lot of hungry people in Canada and millions more in the USA and around the world.

But there has also been a paradigm shift - the rich are getting richer but there's more new rich people than ever before.

The last 20 years has created all this, huge booms in real estate (If you own a house in Vancouver or Toronto, even a shitbox, you are basically a millionaire). The growth in Bitcoin. The Tech bubble of the late 1990's. Huge runs in oil in the early 2000s. The huge growth in the stock market. Recently, Marijuana stocks and Reddit popped stocks. I don't believe there has ever been another 20 year period where there has been more opportunity to get rich.
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Deal Addict
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Feb 1, 2012
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Thunder Bay, ON
Its not easy to make a million. Even with growth in tech, some people will be lucky millionaires, but others will lose big time.

A million is not a lot of money to retire on unless you have other sources of income.

Then there is various people's perception regarding the value of money. To a poor person, $100 is not much, but $1 million is a lot. To a rich person, $100 is a lot, but a million is not much. That's a roundabout way of saying many poor people stay that way because they are frivolous and cannot dream of being a millionaire, while many people get rich because the see the value of small savings and investments over time, while $1 million is hard to live on.
I solemnly swear, to never assume I have an inkling at which direction the market will head, and to never make any investments based on a timing strategy.
Deal Fanatic
Dec 5, 2006
9209 posts
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Markham
You own 1 million house but have 800k mortgage, technically you are not millionaire

For regular Canadian, I think 1 million is a lot money. Might be not in RFD. Even in RFD, asking this question in finance forum can only give you sample bias.
Member
Apr 16, 2015
203 posts
286 upvotes
I don't have a million $, but I wouldn't consider those who do to be rich. $25 million is enough to live very comfortably off the annual interest without ever touching the principal - that's the marker for me.
Deal Guru
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Jul 12, 2003
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Toronto
No, even you give me 1 million dollar cash today, I will still keep my job and go to work next day.

Depends on people's living standard, some people spent majority of their live in wel fare, then of courses, 1 million is super BIG.
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Jul 22, 2015
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Aurora, ON
catsoncoffee wrote: I don't have a million $, but I wouldn't consider those who do to be rich. $25 million is enough to live very comfortably off the annual interest without ever touching the principal - that's the marker for me.
I just hope you're not talking about a savings account interest!
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Jul 22, 2015
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Aurora, ON
As for my opinion on is $1M a lot of money?
Yes AND No.

There are plenty of things you can do with $1M. I for one, COULD live off of it. With well placed income investments and some growth it would easily allow my wife and I to live comfortably for the rest of our lives.
But is that the end goal? No.

In summary, I think that it is a lot. And should be the MINIMUM people strive for when they are younger.
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Apr 16, 2015
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Valour002 wrote: I just hope you're not talking about a savings account interest!
Not strictly "interest", but earnings on a very conservative investment portfolio, earning 2-3%.
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Jul 22, 2015
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catsoncoffee wrote: Not strictly "interest", but earnings on a very conservative investment portfolio, earning 2-3%.
That is certainly VERY conservative. I myself would aim for more 4-5% investments. Even the banks nowadays are averaging 5%. Others such as Bell, Enbridge, and MANY more would give you good safety AND a nice chunk of earnings.
Deal Addict
Oct 27, 2012
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Won't be able to buy you a loaf of bread by 2030 at the rate the Zimbabwe Canadian Dollar is going.
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Oct 18, 2004
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Wat
We need a definition of "a lot of money".
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Apr 16, 2015
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Valour002 wrote: That is certainly VERY conservative. I myself would aim for more 4-5% investments. Even the banks nowadays are averaging 5%. Others such as Bell, Enbridge, and MANY more would give you good safety AND a nice chunk of earnings.
I earn more than that with my real life savings, but if I had $25 million, I wouldn't feel the need to put the principle at risk in order to earn more than I need to live off of.
Deal Addict
Mar 3, 2018
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GTA
There is a difference between $1M cash in the bank and owning a $1M property you live in which is a small basic house in the GTA. $1M in the bank means you basically can go on exotic vacations and drive luxury cars. Owning a $1M property means you just have a place to live and may actually be collecting GIS like many GTA seniors do to buy their groceries.
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Jul 22, 2015
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catsoncoffee wrote: I earn more than that with my real life savings, but if I had $25 million, I wouldn't feel the need to put the principle at risk in order to earn more than I need to live off of.
Yes, I was referring to the $1M, not $25M. That is a wide difference. And even at $25M I would probably have the majority invested. Say... $22M
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Jul 22, 2015
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DaveTheDude wrote: There is a difference between $1M cash in the bank and owning a $1M property you live in which is a small basic house in the GTA. $1M in the bank means you basically can go on exotic vacations and drive luxury cars. Owning a $1M property means you just have a place to live and may actually be collecting GIS like many GTA seniors do to buy their groceries.
Yes, and pray the roof doesn't need fixed.
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Jul 16, 2019
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Of course $1 000 000 is a ton of money. If you disagree, you have fallen victim to lifestyle creep.
catsoncoffee wrote: Not strictly "interest", but earnings on a very conservative investment portfolio, earning 2-3%.
2% interest on $25 000 000 is $500 000/year. If you think you need that much to live comfortably, you are out of touch.
catsoncoffee wrote: I earn more than that with my real life savings, but if I had $25 million, I wouldn't feel the need to put the principle at risk in order to earn more than I need to live off of.
I'd feel the opposite way. If I was filthy rich, I'd feel emboldened to make riskier investments. Because if the market crashed, I'd still be rich.
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Apr 16, 2015
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someweirdo wrote: 2% interest on $25 000 000 is $500 000/year. If you think you need that much to live comfortably, you are out of touch.
I can live "comfortably" on 1/4 of that, but I wouldn't have enough to live extravagantly. We are daydreaming here after all Smiling Face With Open Mouth
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Jul 22, 2015
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catsoncoffee wrote: I can live "comfortably" on 1/4 of that, but I wouldn't have enough to live extravagantly. We are daydreaming here after all Smiling Face With Open Mouth
Personally, I believe I would live extravagantly (moderately) on about $1.5M. But my expenses are fairly low and my wife and I do not spend frivolously. So, having that would be incredible. Smiling Face With Open Mouth
[OP]
Sr. Member
Dec 26, 2008
602 posts
342 upvotes
Deepwater wrote: Its not easy to make a million. Even with growth in tech, some people will be lucky millionaires, but others will lose big time.

A million is not a lot of money to retire on unless you have other sources of income.

Then there is various people's perception regarding the value of money. To a poor person, $100 is not much, but $1 million is a lot. To a rich person, $100 is a lot, but a million is not much. That's a roundabout way of saying many poor people stay that way because they are frivolous and cannot dream of being a millionaire, while many people get rich because the see the value of small savings and investments over time, while $1 million is hard to live on.
I have to disagree, it's ok to save every nickel when you're younger. But when you are retired and have millions, I don't see the point of haggling over 5 or 10 dollars here and there. It's a waste of time. It's a sign of Hubris. "I'm rich and I shouldn't have to pay service charges". Can't stand it.

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