How much money do you need to never work again, according to financial analysts?
So how much money does it take to never work again? Our experts have an opinion on how much money it is and how it should be spent.
No matter how much money you have, whether it’s hundreds of thousands or millions, knowing how to properly invest that money to make it last will never happen again. This is the key to not working. One financial expert suggests that starting a business is a great way to: And remain a millionaire.
Hypothetically, how much money would you need to keep in the bank in order to never work again?
Well, it all depends on what you do with that money.
Greg McBride, chief financial analyst at Bankrate, says a healthy person in their 30s is likely to experience a 3% annual increase in inflation for the rest of their lives, and would need about $5 million to never work again. We estimate that it will be necessary.
That is, as long as you invest that $5 million wisely.
(File / EpicStockMedia / iStock / Getty Images Plus)
“There’s no one-size-fits-all answer,” McBride told Fox Television.
McBride bought into the idea that a young man in his 30s would somehow come away with $5 million. How can you ensure that $5 million will last you until the end of your life?
“You need to invest this money in a fairly diversified portfolio,” McBride explained. “We need to protect the purchasing power of that money for years to come.”
open a business
If you don’t want to lose money on something boring, you might think that the best investment is to buy something that appreciates in value, whether it’s gold or art.
But McBride says this may not be the best idea.
“For example, in the case of precious metals, there can be storage costs and custody costs, and then there are transaction costs as well. Not to mention, what the value of that asset is. It’s completely unpredictable.” In the future, especially for items that are considered collectibles, the amount you end up getting will be the amount someone will pay for it. There is no underlying intrinsic value, as is the case with businesses and corporations, for example. It’s security that creates a predictable stream of cash flow,” McBride said.
Mr. McBride suggested that when you have that much purchasing power (remember, we have $5 million), it’s probably best to open a business.
“More than 80% of millionaires are business owners, and 80% of millionaires are first-generation millionaires.The reality is that great wealth can be achieved, but it usually comes from lottery winnings or It’s not a temporary windfall like an inheritance, it’s generated by owning a business,”’ McBride noted.
What about real estate?
Some of you may be blaming yourself for not being able to purchase a home during the pre-pandemic period. Or maybe it’s because you didn’t have the foresight to start saving to buy property when you were still in the womb.
But McBride said that while owning real estate may seem like a great way to invest your newfound wealth, it may be a riskier investment than you think.
“The thing about real estate is that it’s very capital intensive,” he said. “There are huge transaction costs, and then there are maintenance costs: property taxes, real estate insurance, maintenance, upkeep, and even things like condo and homeowners dues. Despite the well-documented housing boom of the past few decades, housing prices tend to rise only faster than inflation over time.
File – 100 dollar bill. (Photo by OZAN KOSE/AFP via Getty Images)
What is the most profitable business?
Last month, the U.S. Chamber of Commerce released a list of the top 100 small businesses starting in the United States.
More than half of these companies generated more than $1 million in revenue in 2023.
“Small businesses embody the resilience and ingenuity that characterize America’s free enterprise system, but they often go unrecognized,” Janet Mulvey, Vice President and CO Editor-in-Chief, told FOX Business. said in a statement. CO is a publication produced by the U.S. Chamber of Commerce for small businesses.
“As the world’s largest business organization and network representing companies of all sizes and industries, we understand what makes business great.”
The top 100 companies on the list are:
Confero, Inc.: Providing professional services787 Coffee: Aquantuo, a Puerto Rican coffee company: Enabling individuals and businesses in Africa to shop from international stores and have their orders delivered seamlessly Aspire Construction & Design: Real Estate and ConstructionAtlantic Sea Farms: Regenerative Seaweed FarmingBeehive Meals: Meal Prep and Delivery ServicesDigit7: Specializing in AI-Powered Solutionsglassybaby: Handcrafted American GlasswareIndustrial Gymnastics:Latina-Owned Gymnastics FacilityThe Cavern Men’s Barber Lounge: High quality barbering experience
Less obvious ideas like food trucks, car wash services, enrichment activities for kids like mobile apps, and specialized classes like language or business courses are also low-cost but high-priced ways to start a small business. According to Nerdwallet, it can grow over time.
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Information for this article was gathered from an interview with Bankrate Chief Financial Analyst Greg McBride, reports from NerdWallet, FOX Business, and information from the U.S. Chamber of Commerce website. This story was reported from Los Angeles.
