by Hayley Doyle
Well, as the old Cole Porter song goes, the next lyric is, “I don’t!”
Except, I do. I mean, who doesn’t?
And not because I want to be filthy rich. There’s a dark side to bottomless pits of money, isn’t there? Although really, I have no idea what I’m talking about. I’ve only ever been able to imagine it, thanks to movies, books and TV shows such as Succession, and that sense of deep dissatisfaction and emptiness might be fictionalised, but must be based on some sort of truth. I remember somebody telling me that their boss (born rich, kept getting richer) kept throwing wads of cash at the live band on stage at their work Christmas party, requesting (demanding) songs for them to sing. I mean, ugh. But if someone were to give me, say, a million quid, that would be nothing short of awesome, right?
Of course…
…If I wanted to buy some fancy things that honestly, I just don’t need. Or take my family skiing in the Alps for a few years on the trot. Or get the kids (just about) through private school. Or buy a house in London. And by house, I mean a well-kept part-modernised three-bedroom terrace, with a small back garden, no front garden, on-street parking and the potential to build a loft extension if I take out a loan. “So, don’t live in London!” I hear you cry. “Move up north! Buy a property in Spain! You could get an 8000-square-foot home in Ohio, Alabama or Texas! Become a travelling nomad!” A-hem. Yes, thank you for the wonderful suggestions. All possible. Plausible. But in reality, easier said than done. As lovely as it would be to simply go where the wind takes us, we tend to go where the work wants us. Most city dwellers aren’t choosing to live in the world’s most expensive locations for an overpriced giggle. It’s about a much bigger picture. However, being a millionaire in Dubai, for example, isn’t going to cover both buying a family home and getting the kids educated. It’s one or the other, and then, what do you do? Start making a million again from scratch?
Now, of course, there is investment. We all know that the sensible side of finances is about pouring the right amount into the right places. But being a millionaire is no longer what we perceive it to be. Let’s pretend that somebody gives you a million dollars and you don’t invest it. Instead, you go away and spend a thousand dollars every day. You’re living the high life…ish. It’s no big challenge to blow a grand in no time. Dinner for two at a mediocre restaurant is a couple of hundred, easy. Let’s say you take some days off the spree, maybe if you’d bought yourself a car at the weekend, or got that island fitted in your kitchen. Oh, and since you’re a millionaire, you’ve decided to be extra generous with birthday gifts and treating your loved ones. By the end of three years, you’d be left with nothing. Just three short years of grand-blowing and bam, you’re broke.
Morgan Housel, the author of The Psychology of Money, says, “When most people say they want to be a millionaire, what they really mean is ‘I want to spend a million dollars,’ which is literally the opposite of being a millionaire.” He points out, there’s a vast difference between having a million dollars and spending a million dollars. One can beget the other, but then you’re left with nothing, and that’s not the best way to approach being a millionaire. So if you have a cool million in the bank, don’t be thinking you can live it up with the Kardashians and fly around on your private jet. Perhaps it’s just best to live a humble life until retirement…
Can you even retire as a millionaire?
Hmm. Not on a yacht, which might have been the goal. A million dollars will fetch as far as a 50' to 90' used yacht but bear in mind, gas, storage, maintenance, and staff cost extra. According to the personal finance website, Physician on Fire, a million-dollar retirement portfolio would give you $30,000 to $40,000 per year to spend annually. That’s enough for an individual to have a decent middle-class lifestyle in a low-to-moderate cost-of-living area. But a family? Well, that could be tight. The average American household spends around $63,000, so the money isn’t going to last too long. Oh, how times have changed…
In the early 20th century, there were about 5000 millionaires in the United States. No wonder these rich folk were ooh’d and ahh’d and put on a pedestal. In 1905, just one million dollars was worth the equivalent of $29.2 Million today! Interestingly, $30 Million is now the standard for meeting the definition of an Ultra-High-Net-Worth Individual. As of 2020, 240,000 people have achieved that in the states, which is nearly half of the 513,000 worldwide. America has always been obsessed with the millionaire lifestyle. Look at the success of The Great Gatsby, written by F. Scott Fitzgerald and published in 1925, one of the greatest bestsellers of all time. Set around the lavish life of champagne parties, Forbes staff writer Michael Noer believes Jay Gatsby would have been more of a billionaire, whereas New York Magazine has speculated that Jay Gatsby’s lifestyle would have surely left him broke.
Still, having a million or so to play with is a lot of money in today’s world. Most humans get by on a hell of a lot less. One million dollars puts you at the 88th percentile in terms of US wealth and the 99th percentile globally, per the Credit Suisse Global Wealth Report. However, it’s certainly not the Roaring Twenties this century, and bricks and water have shot up astronomically. As time goes by, we might all have to start rethinking our retirement plans. A million - no matter how you spend it - just ain’t what it used to be.