Let’s face it, accumulating wealth must have a perceivable end and that goal when we are still in our teens should have been around a million dollars. Fast forward to our adulthood, some of us might have “made it” through various ways and achieved a million dollars in liquid assets. When that time comes, what would you do with that money? Some of us might ridicule the mere thought of having a million dollars but have we ever considered the actual realities of having a million dollars (SGD/USD)? In this post, I will share my views on this from a perspective of an investor.
A million dollars can generate minimally $40,000 in dividends if you invest it all
It is awesome to have a million dollars working for you throughout the year and generating more than $40,000 for you. Isn’t that the dream of many laypersons in the world? While all of that is great to have, the reality is that the funds that you have pumped into stocks or bonds are constantly changing in value and the truth of the matter is that dividends are not guaranteed. During any of the past financial crises, almost all companies will take a cautious stance and payout fewer dividends to conserve cash. For a pure dividend investor/retiree, you would have to bear the consequence of a huge dip in your asset value as well as lower dividend income to spend for those years. Therefore, although the thought of having a million dollars work for you for the rest of your life might sound good, it is not nearly as foolproof. To make things worse, our worse enemy “inflation” will slowly creep in and make everything more expensive for you as well.
A million dollars with a YOLO mindset to enjoy life
While few of us would admit that we will take on this approach to spend that million dollars that we have, many of us would have fantasized about living as a “baller” and spending without thinking about the future. To say the least, such mindsets are the most wasteful but for what it’s worth, these people would have thoroughly enjoyed themselves while it lasts. To each its own, or so they say right? As an investor, I really feel that not everybody is gifted enough to manage a sizeable sum of money. Hence, I would argue that no doubt having a million dollars would be life-changing but for some, it will not be a lasting change.
Honest sharing from people who have worked their way to a million dollars
Having a million dollars does very little to those of us who painstakingly accumulate the first few hundred thousand of capital. This is because we know how hard it was for us to sacrifice every spare hour to generate additional income to accelerate our progress. Even though it might be easier to grow our wealth when you have reached a certain amount of savings, it does not change our mentality about wastage and spending. In other words, you might have a few more zeros on your banking or portfolio apps but that will have minimal impact on your overall lifestyle. So what is the point for these people to accumulate wealth then? Well, I believe that the money probably just didn’t matter to them as much from the onset and their ability to accumulate wealth at an admirable rate is just a byproduct of their personality and earnestness.
Closing thoughts
Barring those who do anything illegal or immoral to extract wealth from others for their personal benefit, I feel that anyone who worked from the bottom and reached a million dollars deserves proper recognition so that others can be inspired in the right way and learn a small fraction of what it takes to be a good manager of wealth and capital. The point of this article is to help burst the bubble for a second and ponder about the whole idea of becoming a millionaire. If it is not what you thought it was going to be, then why bother wasting time and energy to blindly accumulate wealth? Personally, I would rather focus on other aspects of life that guarantee lasting satisfaction and happiness.
