Wealthy $5 Million

What Does It Take to Be Wealthy? $5 Million

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Are all millionaires wealthy? Not if you ask them.
A whopping 70% of those with at least $1 million in investable assets don't consider themselves to be wealthy, according to a survey of 4,500 affluent investors by UBS. Rather, it's only when they hit the $5 million mark that millionaires begin to feel "wealthy."
Why $5 million? Apparently, that's the level at which most rich people feel they have "no constraints on activities," according to the survey. For them, feeling wealthy requires more than never having to work again or ensuring a comfortable lifestyle for future generations of their family.
Related: Best advice now for getting richer
In addition to feeling like money is no object, most wealthy people are more confident about investing if they hold about 20% of their assets in cash for emergencies.
And while they're aware and worried about inflation, wealthy investors say they still need significant cash holdings to give them peace of mind.
"Investors aren't quick to forget the significant losses they endured in 2008," the UBS report said.
The survey asked respondents about their investable assets, not including the value of their homes.
Related: China's fastest-growing cities for millionaires
Even though they're setting aside a sizable portion of their assets for a rainy day, a majority of respondents are optimistic about the economy and their personal financial situations over the long term.
Most of them aren't too worried about the Federal Reserve's eventual policy changes either, according to the survey. Although recent messages from the central bank and Fed chief Ben Bernanke have sparked volatility in the stock market, most affluent investors believe that the central bank's eventual move to end its stimulus policies will help stabilize the economy.
And a majority of them aren't changing their investment strategy in light of the Fed's upcoming changes.

How I Retired at 30

Meet Mr. Money Mustache. Hundreds of thousands of readers follow his bold advice on his self-titled blog — and for good reason. He has cracked the retirement code while many of us were struggling with student loans. At 23 years old he began working and saving…and saving some more. By age 30, he’d amassed some $800,000 in cash and investments, and then entered early retirement.

How, exactly? I flew to his home in Longmont, Colorado, where the now 38-year-old lives with Mrs. Money Mustache and Mustache Junior, for the scoop.

The Rule of 70%

While a popular rule of thumb is to try to save 10% of your income every month, in the race to retirement Mr. Money Mustache saved and invested close to 70% of each paycheck until he had about $800,000 racked up. At that point he felt comfortable quitting his job, as the dividends from his stock portfolio and income from a rental property were finally enough to support his family’s lifestyle. “I just figured based on a 4% withdrawal rate of your savings, if you have $800,000 saved, you could draw an income of $32,000 a year from that. Our needs are less than that, so we actually don’t need $800,000 in savings.”

Also see: Daily Habits of the Wealthy

Live Simply

But wait. How does the family live on less than $30,000 a year with a child? “It’s by cutting out stuff, the invisible stuff, that’s most expensive. I kept the headline items, like a house, trip to Australia and good friends and good food, but I cut out stuff like spending $50 on coffee a week or having a brand new car every few years,” he says. “We do a lot of stuff ourselves. We go to parks. We do music together. We ride our bikes, go to the library. Kids love it. Costs almost nothing to do.”

Also see: 30 Days to Financial Health

Treat Debt Like Your Hair Is on Fire

We should mention that Mr. Money Mustache graduated without any student loans. He never really had any credit card debt and advises his readers, who aim to retire early like him, to treat debt like a scary emergency, as if their hair is literally on fire. “If you have credit card debt, you don’t make little payments on it. You don’t go to the movies and put $10 on the credit card. You stay home, you earn as much money as possible, you eat the cheapest food possible and get that emergency solved,” he says.

Also see: How We Got Out of $50,000 Worth of Debt

Location Matters

The Mustaches intentionally live in a town with a relatively low cost of living. Their property taxes in Longmont are only $200 per month, and the home’s solar design and insulation keep energy bills to under $40 per month.

Also see: Best Reward Credit Cards in July 2013

Who Needs a Car?

Longmont is also a bike-friendly town, which encourages even more saving. By biking to most places, Mr. Money Mustache figures it helps the family save roughly $10,000 a year on transportation costs. “I kind of have a rule: You do not drive the car for trips within the city, because you don’t need to. The bike will do it just as fast, and it’ll be better for you,” he says.

Vitamins You Can Do Without

Vitamins and supplements are some of the most unregulated things we put in our bodies. In this episode Dr. Stork highlights which vitamins you might not need to take and how overdosing on these supplements can negatively impact your health.

A Great Way To Propose

Man Uses 42 Bed Sheets to Write 'Will You Marry Me?' on Girlfriend's Farm

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A Tennessee man's desire to make his wedding proposal "unique" led him to a truly down-to-earth idea.
Clifton Smith, 25, of Clarksville, Tenn., used bed sheets to spell out "Will You Marry Me?" in 15-foot-tall letters he strategically placed together in a field on his girlfriend's family farm.

"I had just talked to my parents a few months ago and thought of some really outlandish ideas," Smith told GoodMorningAmerica.com. "And one of them was to see something in a plane. I originally thought about getting paint or something, but I wanted it to be more unique.

"So I thought about the idea to use thrift store bed sheets," he said. "I went around and collected 42 sheets and cut those into uniformed strips and built the letters from there, using staples and wood to piece them together."


Smith's girlfriend, Rachel Weakley, 25, had no idea what was in store for her when he asked her to join him for a casual plane ride overlooking some land as part of his "graduate work." The pilot, a family friend, was totally on board to help with the proposal.


"I told her a story that it had to do with some of my graduate work," Smith said. "My roommate and I were supposed to go up, and he conveniently backed out a couple days before so she could go up. I told her we could fly over the farm before getting to the school stuff.
"She was really excited because we were getting close and she could see her neighbor's houses, and then we get right over her parent's house and she could see what it said."
Even Weakley's father was in on the plan, as he strategically cut an acre-sized heart shape into the field for the letters to be placed.
"He actually had the idea to cut the heart into the field," Smith said. "He's an engineer, so he used surveying equipment they have and we plotted the points and he used an aerial photo to draw it out and cut the heart into the field."
Bride Tosses Bouquet from Giant Human Sling Shot
Once Weakley noticed Smith was actually popping the question, she immediately turned to him and started crying.
"Once we saw the big heart in the field and the letters I turned around and looked at him and he had the box out and I said, 'Yes,' and started crying," Weakley said. "It was just awesome. It was unbelievable."
The happy couple credits Smith's aunt for their relationship.
"We actually were on the same baseball team when we were about 8 or 9 years old," Smith said. "We didn't really have connections after that, but the reason we started dating is because my aunt goes to church with her family and she thought we'd be really good together."
Turns out she was right, as they plan to wed next March.