But, when its an indefinite source of 100k for essentially life that it covers the monthly cost of mortgage which ends up steadier than the unpredictability of rent I think that is super rich in my eyes.

Because the big thing is the continued 100k isn't unpredictable like the uncertainty of the job market, which can get worse as people get older with companies looking to lay them off for the next generation who will take less and new skills.

So it might not seem the stereotypical super rich of private jets and mansion, but once you look at the stability of the money source it is deceptively super rich. Like the millionaire next door type rich, and the type of rich that would take the average person decades and decades of saving and investments turning out well to attain and be super old by then.

[–] Prove_your_argument@piefed.social 1 points 6 days ago (2 children)

I don't even know what your point is. Sure, almost everyone in the world would be set for life with 4m. It's still only enough to provide means for a very modest life with dividends in cities like Boston, LA, NYC...

We usually successful performers burn through their monies quick because with no need to work, you can blow cash REAL quick. Few are so disciplined as to live on something like 4m forever if they weren't brought up with wealth and the understanding to live frugally.

[–] skibidi@lemmy.world 2 points 6 days ago (1 children)

Generally the 'safe withdrawal rate' for investments is 4% per year. At this rate, the principal will grow a bit above normal inflation, and you'll have basically a guaranteed inflation-adjusted salary.

Someone worth 10M, with maybe 8M of that in liquid investments (i.e. 2M in real estate) could clear about $320K every year. It's good money, but like you said it isn't unfathomable wealth. It is 'fuck you' money, though, where basically anyone can live comfortably without having to take work they don't want to do.

The key benefit is the money is free - it doesn't need to be saved for retirement because the nest egg is already secured, you already own the house and don't have mortgage, any extra money from an external salary just increases the principal, etc.

[–] Lfrith@lemmy.ca 1 points 6 days ago

Yeah, its fuck you money because it is reliable and constant and you can live comfortably. A job that pays the same on the other hand has the uncertainty of how long can this last? Will I be let go? How long do I have to do this?

Money that is dependable is the best kind of money. Its why people save and invest hoping they can reach a point they aren't reliant on the uncertainty of the job market for money.

[–] Lfrith@lemmy.ca 1 points 6 days ago

Point is people often just view money from what can you buy outright to decide if something is a lot of money, but even wealthy people don't always choose to buy property outright choosing to go with mortgages. They prefer to invest in other things instead of tying up all their money in one lump sum to one real estate property might be one reason.

When you calculate how many years or decades and what age you'd be to have accrued that much money it really sinks in how much money that really is. And how much money you need to be at a stage where you have a livable indefinite flow of money coming in, which is a huge milestone in life.

Like 100k at a glance might not be impressive, but then when you stop and realize that 100k is just coming in every year without reliance on a job and how much uncertainty there can be in the job market you realize how life changing it actually is. And how much wealth it is. People kind of lose sight despite not having that much money because they keep comparing things to the most extravagant displays of wealth.

So sure you might not be able to buy property outright, but you can take out mortage and not work and still have more secure state of finances than someone who is making 100k working and can be let go at any time and doesn't have even a million in savings to fall back on.