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Define 'millionaire'

trailingspouse
Posts: 4,042 Forumite


Just interested, having spent some time looking at tinktay's Millionaire Challenge.
What's your definition of a millionaire?
Some possible ideas -
1) Has £1,000,000 in the bank
2) Has a personal net worth of £1m - ie, property + other tangible assets + money in the bank
3) Has earned £1m (before tax? after tax?)
4) Would be able to raise £1m if required (eg if someone was buying a house for £1m you would expect part of it to be in the form of a mortgage)
Any other suggestions?
What's your definition of a millionaire?
Some possible ideas -
1) Has £1,000,000 in the bank
2) Has a personal net worth of £1m - ie, property + other tangible assets + money in the bank
3) Has earned £1m (before tax? after tax?)
4) Would be able to raise £1m if required (eg if someone was buying a house for £1m you would expect part of it to be in the form of a mortgage)
Any other suggestions?
No longer a spouse, or trailing, but MSE won't allow me to change my username...
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Comments
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I think most would regard there answer as 2.
If you can, eventually convert everything you have currently into £1m or more, you're a millionaire.
1 would be a millionaire, but could be a multi millionaire when assets were considered.
3 ditto (after tax)
4 Not a millionaire unless they have assets to combine to over £1 million regardless of any mortgage. In theory anyone earning over £250k fish could get a £1m mortgage, normal diligence considered.0 -
trailingspouse wrote: »Just interested, having spent some time looking at tinktay's Millionaire Challenge.
What's your definition of a millionaire?
Some possible ideas -
1) Has £1,000,000 in the bank.
That's the bank, it's not you? Okay, it's your account. Why have you got all your money in one account?Advent Challenge: Money made: £0. Days to Christmas: 59.0 -
Agree......number 2.
Millionare means Assets - minus liabilities come to £1m0 -
Number 2, but we should all be aiming for number 1.0
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Yes, #1 was my first thought - but who would keep £1m in bank accounts (unless they were worth a great deal more than a million)? You would do other things with it, surely - buy property, invest in artworks, collect fast cars, start a charitable foundation...
And that's what brought me on to #2 - but with this definition, you could be living in a property that is now worth £1m, without the liquid assets to live what most of us would regard as a 'millionaire lifestyle'.No longer a spouse, or trailing, but MSE won't allow me to change my username...0 -
A millionaire lifestyle may take a million a year in income.
A million a year invested using a commonly used guideline for drawdown income in retirement uses 4% of the pot of invested money so a million invested could produce £40k a year of gross income for 30 years without significant chance of running out of money. Less than that if more years are needed. A more modern rule would use about 5-6% so 50-60k.
My own definition is net worth but for many purposes it's investable assets including personal pension pots if available to be drawn on that matter, which excludes the home you live in.
Another potentially useful definition doesn't involve a million. It's just being able to live for the rest of your life on your assets and the income they produce for you, at the level of spending you desire, however high or low that is. This one is normally called financial independence since you get to choose whether to work or not. The lower the spending level the easier it is to achieve.
If the challenge you're referring to is linked to a stock trading course, don't take the course or pay any money.0 -
trailingspouse wrote: »2) Has a personal net worth of £1m - ie, property + other tangible assets + money in the bank
The thing that's missing from the list is pensions, especially for people lucky enough to be in a defined benefit (DB) scheme.
HMRC regard the value of a DB pension (for lifetime allowance purposes) as 20 x the annual payment. So someone with a £25k a year pension coming to them is half way to becoming a millionaire already.0 -
Yes of course, pensions - didn't think of that when I put the list together. Interesting that £25,000 pa pension is half way to being a millionaire - I'm sure they wouldn't feel like it.
Annual income of £1m was another that I didn't think of. I suspect that's the only one that would give you a 'millionaire lifestyle'.
I like the idea of 'financially independent', which of course you could do on a lot less than a million.No longer a spouse, or trailing, but MSE won't allow me to change my username...0 -
You should have popped over and asked us
I can't speak for everyone, but I don't think any one in the millionaire challenge is focused on getting to the million and that being the end of the road. It is more about being financially focused, wanting to get out of the 'rat race' as they call it and generally wanting to be able to say we are financially independant.
For me, being a millionaire would be having a networth of £1m, but my goal is to not have to work whilst being able to travel the world and not have to worry about where my next pay check is coming from. It's not really about the final figure, but more about where it will take me.
I guess we're just a group of like minded people supporting each other on our path to financial freedom.People don't know what they want until you show them.0 -
I almost did - but didn't want to hijack your thread with a new question, so decided to start a new thread. Thanks for stopping by!!No longer a spouse, or trailing, but MSE won't allow me to change my username...0
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