At what point does money become irrelevant?

[M_Six]

I was watching the quali for the Monaco GP today and they reported that Lewis Hamilton (Mercedes driver) just signed a 3-year extension for $150 million. That got me thinking about the relevance of money with the uber-rich. At what point do you stop questioning costs because you have an essentially endless supply of money? At what point does one's mindset change to accept the reality that you can have virtually anything you want?

I read through the Watch forum every now and then just to see what new watches are out there. Watches aren't my thing, but I can understand the interest in watches by those who collect them. I just can't justify the expense given our financial situation, which is comfy enough, but certainly not unlimited. But there are purchases I make now without blinking an eye that I would have never considered making just a few years ago. And that's because our financial situation has improved to the point where it's ok to spend a little more. Granted, these are very small potatoes compared to the uber-rich buying yachts or airplanes or exotic cars, but the idea is the same. As you gain wealth, you spend more freely without worrying about the impact on your bank account.

What must it be like to be Warren Buffett or Bill Gates or even Lewis Hamilton? Aside from mansions and airplanes and super-yachts, do they even bother asking how much something costs?

[bimmette]

Originally Posted by M_Six

I was watching the quali for the Monaco GP today and they reported that Lewis Hamilton (Mercedes driver) just signed a 3-year extension for $150 million. That got me thinking about the relevance of money with the uber-rich. At what point do you stop questioning costs because you have an essentially endless supply of money? At what point does one's mindset change to accept the reality that you can have virtually anything you want?

I read through the Watch forum every now and then just to see what new watches are out there. Watches aren't my thing, but I can understand the interest in watches by those who collect them. I just can't justify the expense given our financial situation, which is comfy enough, but certainly not unlimited. But there are purchases I make now without blinking an eye that I would have never considered making just a few years ago. And that's because our financial situation has improved to the point where it's ok to spend a little more. Granted, these are very small potatoes compared to the uber-rich buying yachts or airplanes or exotic cars, but the idea is the same. As you gain wealth, you spend more freely without worrying about the impact on your bank account.

What must it be like to be Warren Buffett or Bill Gates or even Lewis Hamilton? Aside from mansions and airplanes and super-yachts, do they even bother asking how much something costs?

I remember Oprah talking about when it clicked for her. She was shopping for towels and couldn't choose between two colors. And then she realized she didn't have to choose. She could buy them all!
But yeah, I think when one reaches probably about $100mill, it just doesn't matter anymore. You get anything you want in life.

[ehoffman]

Originally Posted by bimmette

I remember Oprah talking about when it clicked for her. She was shopping for towels and couldn't choose between two colors. And then she realized she didn't have to choose. She could buy them all!
But yeah, I think when one reaches probably about $100mill, it just doesn't matter anymore. You get anything you want in life.

I'd have to partially disagree. The point at which it doesn't matter is quite over $100mill. I say that because it's human nature to always want more, and want what you can't have. For example, a significant percentage of professional basketball players, football players, etc go bankrupt a few years after retiring despite the fact they earned millions.

[NemesisX]

Yeah it's an interesting question and it's been surveyed a lot over the years.

One survey suggested people need around $5M USD before they consider themselves wealthy -

http://www.cnbc.com/id/100904381

Another one lists the magic number at $7.5M-

http://www.wsj.com/articles/BL-WHB-4709

And then the most interesting one to me is the fact that the "magic number" depended entirely on where you were currently. People tended to say that they need around double what they have currently before they felt "wealthy." If you have $2.5M now, you need $5M. If you have $4M you need $8M before you feel "wealthy," and so on.

For me personally I think one becomes "wealthy" when one has accumulated enough passive income producing assets to cover 150%-200% of "regular" annual expenses. A lot (in fact most) of this will probably be in the form of stocks and bonds, in which case I would want to conservatively assume a real ROI (after inflation) of no more than 3% annually. Sometimes it'll be more. Sometimes you'll be severely in the negative (2000, 2008) but by and large I think 3% is a good, solid, conservative figure especially for your run-of-the-mill portfolio that's heavy in broad market ETFs and mutual funds.

[bimmette]

Originally Posted by ehoffman

I'd have to partially disagree. The point at which it doesn't matter is quite over $100mill. I say that because it's human nature to always want more, and want what you can't have. For example, a significant percentage of professional basketball players, football players, etc go bankrupt a few years after retiring despite the fact they earned millions.

Ok, yeah. Money can't buy you intelligence. You're right. A lot of stupid rappers and athletes go bankrupt.

On the flip side, I have also met the possibly richest man in the world and am also friends with another billionaire and both are very frugal and don't own mansions and yachts.

[Mr Tonka]

When it happens for you, you'll know it. Until it does, you'll never know.

While reading responses, i said about 10mil for me. Then i realized that doubling theory above made sense. And upon reaching 10mil, maybe i would want that giant house on the cliff in NorCal.

But in fantasying about winning the lottery that i never play, i've always imagined that if i won 200million net, i'd buy any real estate i wanted, a few choice cars, have zero debt, keep around 30mill and give the rest away. With no debt and major purchases out of the way, even a ROI of 3% on the 30mill leaves you with $900k of disposable income each year. That's over $40k every month after taxes.

[M_Six]

I did read once that Bill Gates contested a tax bill on his huge mansion in WA. The tax bill was in the millions, but he was saying it should have been $50k lower. That's like me fussing about $50 on my property tax bill. I'd never catch the oversight in the first place because I can't be bothered doing all the math to see if they're taxing me right. My taxes are about normal for my neighborhood, so I figure they're not off by much, if any. Why bother with the calculations and fighting about it for less than I pay for a bottle of scotch?

Of course, maybe that's why I'll never be uber-rich.

[gary88]

For me I stopped worrying once I hit around $50M. I can finally justify that BMW performance exhaust and carbon fiber interior trim kit now.

[M_Six]

Originally Posted by gary88

For me I stopped worrying once I hit around $50M. I can finally justify that BMW performance exhaust and carbon fiber interior trim kit now.

No way $50M buys you that carbon kit. Not without having to find a second job.

[MrPrena]

Depends of what you want to do.


If someone is comfortable driving 458 speciale at an avg beach home, $10mil would be comfortable level.

If someone is comfortable by having a $2mil helicopter w/ halipad on a mansion, I would say $25mil is comfortable.

IF someone needs a Golfstream G5xx, then $300mil is probably bare minimum.

If someone wants to M&A a company like AMD , Lumber Liquidator, Janus, etc, I would say $20bil is minimal.

[TXSTYLE]

OP... The question is "relative".

It is a commonly known fact that the Rich desire only one thing... To be more rich.

What do Powerful people desire most? More power.

It is the "excessive nature perpetuated by the society of GREED" that we live in today.

For some people... A whole lot is NOT enough.

It really comes down to "character, emotion, conscience, value and upbringing" IMO on how one chooses to decide when "enough is enough".

[Zeiss]

The day one can pay for a Fincantieri in full with 30 hand selected escorts on yearly payroll

Serene by K B, on Flickr

[MrPrena]

I think Toto and Dieter went full retard.


This was when Dieter was sane. (when Ross and Schumacher was there)




This is when Dieter , toto, and Lewis has bromance. (2014-present)




This is when Dieter , toto, and Lewis has bromance. (2014-present)

Originally Posted by M_Six

I was watching the quali for the Monaco GP today and they reported that Lewis Hamilton (Mercedes driver) just signed a 3-year extension for $150 million.

[Taskmaster]

I'm not a shoe or sneaker guy, but Hamilton's shoes in that last photo are fresh as Fuuu.

I think there was a study conducted that said 75K (individual) was where people felt really happy - beyond that there was no real measurable increase. I'll hopefully be there (or above) soon....

[Nismo G]

I work with a lot of very wealthy individuals/families and I can say that it never becomes irrelevant. Once you have established wealth it becomes harder and harder to protect what you've worked for or have. The old saying "more money, more problems" is so true...yes you can buy and do whatever you want and for the most part, but there is always someone looking to take what you have. From what I have seen this becomes true at about the 10MM point (with an exception to mega yachts and planes, mansions etc).

[AW335TT]

Originally Posted by TXSTYLE

OP... The question is "relative".

It is a commonly known fact that the Rich desire only one thing... To be more rich.

What do Powerful people desire most? More power.

It is the "excessive nature perpetuated by the society of GREED" that we live in today.

For some people... A whole lot is NOT enough.

It really comes down to "character, emotion, conscience, value and upbringing" IMO on how one chooses to decide when "enough is enough".

I think it depends on how people got rich or powerful. If you genuinely love how you are making money, the money doesn't matter as much.

The one thing Lewis Hamilton wants is to win another championship, and more after that.. Money just happens to come with it. I'm sure he doesn't race each year to make more money, he races to win more races and championships because that's what he dedicated his life too.

To answer the original question, In my opinion.. It really depends on a persons personality and life style. I can blow through 150 million pretty easily, or I can make 20 million last a life time. I personally would be happy with 30 million. 1-2 mill on a house, 1-2 mill on cars, 1 mill for misc things I might want, few mill liquid.. Invest the rest, and just live my life with no worries.

[ASBSECU E93]

Wealth is relative to several factors...including but not limited to where you live, cost of living in that area, what is needed from retirement and savings to live your current lifestyle...

Some of the people I work with have limited liquidity; however they own considerable Real Estate assets that generate substantial Net Income - which they use to invest in more assets and retire debt (Real Estate Rich - Cash Poor).

Then...you have people like Floyd Mayweather who have excessive amounts of their net worth in cash, and in a single bank account...

So - if the question is how much wealth (liquidity) do you need to live a lifestyle and never earn another paycheck from gainful employment...depends on too many factors to quantify...

[NickyC]

There are quite a few yachts sitting in that Monaco harbor which are worth well more than $150 million. To the big fish, Hamilton is a little minnow.

It's all relative, lottery winner/pro athletes, etc. are well known to blow through that kind of money in short order. The problem is, they become accustom to a lifestyle which is unsustainable on one big win/short career. The tastes and the expenses from that taste continue long after the money supply is over.

I'm quite interested to see what will become of Floyd Mayweather ten years out of the ring. He's absolutely primed to blow through all that money the way he spends.

[dreamingat30fps]

Originally Posted by TheAxiom

I think there was a study conducted that said 75K (individual) was where people felt really happy - beyond that there was no real measurable increase. I'll hopefully be there (or above) soon....

I have also seen this study mentioned many times. It does make sense to some extent. If you make about that much you don't necessarily have to worry about money in the sense that you are not worried about rent getting paid or having money to buy food, go out to eat etc.

When I was younger I was very focused on making more $$ so I could buy more crap. As I'm getting older I'm seeing money differently in that it's value is really in the time it can buy you. Ultimately time is really the most valuable thing we have after our basic necessities are met. Wether you make 75k or 75 million we will all run out of time eventually. Money gives you the ability to spend that time doing what you please.

Personally I think things only make you happy for a short period of time (even though I purchase my share of useless crap). While things that you do for your own personal growth, and the experiences that you have, last much much longer.

Ok now gotta go back to cleaning the car I just bought even though I have absolutely no need for another car. What a materialistic pos I am.

[M_Six]

Money = Time is an interesting twist on the old adage. Certainly money can buy you more quality time. Vacations, extensive (and very comfortable) travel, maybe even doing something you enjoy for employment or no employment at all.

But even at a very much lower scale, money can buy you actual time because you have better access to health care. While not every rich person lives a long and healthy life, being rich certainly doesn't hurt your chances. While being poor (or worse, lower middle class) certainly can affect your health. If you fall into the donut hole of ACA, you might make just enough to not get a subsidy and still not make enough to afford a decent health care plan. The "affordable" tag in the ACA is a joke. It's hardly affordable for many people.

I know a couple who used to both make very comfortable livings. Then the 2008 recession caused a major downturn in both their fields of work. Then they got hit with a particularly nasty run of bad health luck. Shoulder and knee replacement, breast cancer, gall bladder surgery, and an accident causing both legs to be broken badly. The 80/20 plan they had meant they owed 20% of some astronomical hospital bills. That wiped out pretty much all their savings and retirement plans. They kept their house and are slowly crawling back out of the hole, but there is no retirement on the horizon for them. At least they had some insurance and were able to be treated. Those who fall into the aforementioned donut hole and can't afford any plan will put off seeing a doctor and hope the symptoms go away. Usually by the time they end up in the ER, they have one foot in the grave even if the disease or condition was originally treatable.

[Whostheboss]

My philosophy is:
Normal people have normal lives and have normal bank accounts.
Crazy people have crazy lives and crazy bank accounts.

My point is, you can never be rich if you are normal and think logically. You have to be insane, crazy, greedy and damn near psycho to make a lot of money. You got to use this insane mentality to drive your energy.

So that's the answer to why it seems like Rich people keep getting rich and are greedy.

And to answer OP's question. I say US$10 million.

[P1]

Originally Posted by TheAxiom

I'm not a shoe or sneaker guy, but Hamilton's shoes in that last photo are fresh as Fuuu.

I think there was a study conducted that said 75K (individual) was where people felt really happy - beyond that there was no real measurable increase. I'll hopefully be there (or above) soon....

A CMO of a large Fortuna 500 company told me the same thing, but said it was $60K. I tend to agree.