The logical fallacy in that statement irritates me greatly.
I get it, but that is why he put it in quotation marks.
Basically the word "Millionaire" came to mean someone who is very wealthy, can spend lavishly and frivolously if they want to back when a net worth of $1 Million actually did permit that.
Today you can't spend lavishly and frivolously on a net worth of $1 Million for long so we are clumsily trying to define what that figure is. Personally, I think
@Cincydawg is a little high at $100M but a lot of that is location and taste. I live in the Midwest and I don't have extraordinarily expensive tastes but even at that I think that to live like what I picture when I think "Millionaire", I'd need a lot more than $1 Million. I don't think I'd need two orders of magnitude more like Cincy but I do think I'd need one order of magnitude more.
My thinking:
A net worth of $10M even at very conservative investments would get me 2-3% which is $200-300k. That would be enough for me to not only not have to work but to feel "rich". But that is in the Midwest with relatively cheap tastes. If you live in Manhattan or San Francisco I'm not sure that would be enough to pay for parking.
I get what
@MikeDeTiger is getting at. If you don't have to work, you are rich but I agree with this:
I think age is a significant factor.
If I didn't have to work another day in my life at 50 -- that's feels rich.
If I don't have to work another day in my life at 67-1/2 --- that's retirement.
Even at 50, you are old enough that you can spend some principal. I had defined it as "enough money to not have to work regardless of age" because that takes the principal consumption out of it.
Think of it this way, insurance companies sell what are called lifetime annuities. You pay a fixed sum up front and they pay you $X per year for life. Let's say you want to put your entire net worth into one of these and you have a net worth of $2M. If you are 67-1/2 you are going to get a pretty hefty annual sum because the Insurance Company actuaries are going to look it up and see that a 67-1/2 year old American male is a little under 16 years. Thus, even without accounting for interest the insurance company could pay you $125k/yr.
If you are 50 your actuarial lifespan is 28 years. That drops the amount they can pay you (before accounting for interest) by almost half to just $71k/yr.
If you are 36 your actuarial lifespan is 40 years so the insurance company can only pay you $50k/yr (again before accounting for interest).
