Idle speculation - how much money would you need to never need to work again? And what do you define as "Rich"?

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It's interesting - they discussed this on Jezza Vine a while back. Concluded that being a millionaire is no longer enough - £1m just doesn't go very far any more.

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3.5 million

1 mil for THE house i want which backs on to the beach in a loacl village - has an annex and an ootdoor swimming pool - that i can see.

60k per year for 40 years + a bit

You have to allow for inflation and increase in the cost of living. £60K may not be much in 40 years.

DH would still work regardless. Would probably just reduce his hours more and play golf more, and travel more.

Would need a few million I reckon to never have to worry about money again.

DH was saying that he needs ot have at least 1 million in his pension fund by time he retires - let alone stopping work now!

My DH has done the sums (as a result of health problem having to stop full time work). He makes pessimistic assumptions about inflation, pensions etc. Comes up with - after having paid for house - about £5M. if we want to be able to live comfortably in current nice-but-ordinary house into our 90s and pay for DDs education.

Thats probably an overestimate but the right order of magnitude.

Sigh. Oh well I would hate to give up my part time job anyhow.

play golf hula

sympathy

wouldnt the interest cover the inflation? or am i just being a complete girl?

i dont want anything beyond my lovely house and my kids and anthony the 6ft tall black athletic personal trainer.

Well custy rather tragically I have worked it out for you

If you bought house for £1million and invested £1.5 million assuming compound interest (at 5% pa) and paying yourself £60k a year index linked at 3% pa you would run out of money after 35 years

(i have just done that on a spreadsheet how sad is that )

No £60K wouldn't cover 4 sets of school fees. I worked out once that educating 4 children for 7 years each in private school (just an ordinary private school obviously, not Eton or Winchester!) would cost somewhere in the region of £250,000.

But if I won the lottery (or whatever) I would pay off the mortgage, put aside £250,000 for the children's education and after that, £60K a year would "do" me!

I work for a private bank - to be considered a millionaire in the old sense of the word, you need at least £5m in todays money to equate to £1m historically. Anything under that is just not enough to maintain the "millionaire" lifestyle and all that comes with it these days..

We reckon we can actually get by if dh retires when we have £3m cash in the bank. That's on top of the house (we'd stay in this one) being mortgage free, and the school fees already being put away. Reckoning on a 4% yield that would give £120,000 a year, or £10k per month. And I think 4% drawdown is perfectly feasible, given that some would be in assets that would still be producing capital growth, and much would be tax free as we have been building up TOISA's, ISA's and VCT investments over the past few years.

Whilst I am perfectly capable of being selfish, and more than happy to potter, I do think we will both probably end up doing undemanding part time jobs once dh does retire. I miss work, and not only because it was a doddle compared to looking after kids. I liked the validation, the sense of being good at something, so my ideal would probably be to temp, doing something like swaps settlements/documentation - undemanding in terms of intellectual rigour needed, and not something that would cause you to take stress home but demanding enough in terms of technical knowledge that somebody would be prepared to pay me £50 an hour. And dh would becoem a consultant, helping to launch just a couple of funds a year.

(Can you tell that dh and I hav been doing a lot of thinking about this)

prufrock, what's your field - is it finance too? if not you can do my meetings for me for £50 an hour if you like. maybe 40.

anyway in answer to original q: I've thought about this before. I reckon I could buy a near perfect house for 300k, and without a mortgage or rent to pay we'd need about 1.5k a month to be comfortable, and I'd want a 20k savings stash for emergencies (probably don't need that much, but if I used it it wouldn't be replenished very quickly). so I'd need 320k plus enough to give a 18k income - let's say in the bank at 5% - 360k: 680k in total. Now admiteddly that's not inflation-proof, so let's call it 1 million.

rich = anyone who doesn't have to worry about money. and, given, touch wood, currently that includes us.

is my 5% a bit optimistic then, pru?

Sorry haven't read whole thread, have no idea in answer to the OP, but, FioFio...it really does help to be happy if you have enough money not to worry about getting to sleep at night, and not having a sleep deprived baby (the neighbours are annoying me again and i just HAD to say it!).
People had probably best not reply to that comment, you'll only encourage my rantings

are people taking into account inflation?

e.g. dg says £60k a year, but you would need to have enough capitla that after 40% capital gains you would have that amount left (so need £100 k in interest each year, so need to invest 2m if assuming 5% return)
ANd in 30 years time, £60k won't buy you as much as it does now - college fees, clothes, food, holidyas etc will all have gone up. so if you intend to re-invest an additional 10% of your capital each year, after you pay tax, and still have a decent income (say £60 k index linked).

You nedd about 3 to 4 million.

Which just covers 2 or 3 kids going to college, doesn't buy them each a 3 bed semi to get started in life!

yes, I suppose enough money to get a maternity nurse would be good too.

You see at the moment I am fearing redundancy and knowing that I need to get another job to maintain our lifestyle so 200K which would pay off our mortgage and leave us with a reasonable lump sum would remove a lot of anxiety. Also I would be able to tell this place to stick it, instead of having to turn up 3x a week waiting for my pay off. I think that would increase my happiness. I could take a break until DD starts reception next September and then look around for something.

SenoraPostrophe, re your earlier post yesterday, wowee, where can you find a perfect house for £300k? Or did you mean £300k adding on to your current home?