On my Apple News feed, a recent story popped up about the Kansas State Lottery ‘Holiday Millionaire’ game, which gets drawn on the day after New Year’s. Winning that would change most people’s lives, wouldn’t it?
Well … some people don’t think so. As much as the media loves to bedevil wealthy people these days, they also like to poo-poo the idea that having a million dollars is a lot of money. This ARTICLE from Forbes is a perfect example.
Smart people aren’t buying it. A million dollars in net worth is still a VERY big deal for most people. Some millionaire facts:
- Millionaires have 10x the median net worth of the typical household in the USA.
- The median net worth of households at retirement is $202K. Although 80% of Millionaires are still working, they are 5x that wealthy.
- A millionaire is in the top 0.56% of all people in the world in wealth.
- At a 4% withdrawal rate, a million dollars provides for about $40K a year in tax free spending.
- A million dollars puts one in the 91st percentile of American households.
- 80% of millionaires earned their wealth on their own. 20% inherited their wealth.
- 70% of millionaires own their own businesses. That’s 5.8x higher ownership rate than the general public (including people who are self-employed).
A million dollars in the bank may not make you feel like a king, but it certainly buys you a solid middle-class lifestyle in one of the wealthiest countries in the world. Combined with social security income, it should insure a very comfortable retirement.
I’m not a lottery player, but you can definitely see the appeal of finding a ‘Holiday Millionaire’ lottery ticket in your Christmas stocking. In this season of gratitude, it’s worth appreciating how fortunate we are to pursue a lifestyle of FIRE!
Image Credit: Pixabay
MrFireStation 
A million dollars will not fix your problems but I sure would love to see how much it would help.. I don’t play the lottery so my chances would be extremely low but we do put scratch tickets in our Christmas stocking. Thanks for all your articles.
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My wife got a lottery ticket at a work party years ago. Only time she ever played the lottery and she is proud to say she won $2!
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Two funny lotto stories… Many years ago, Virginia started their state lottery, and my wife wanted to buy a lottery ticket. So the first week, we happened to be getting gasoline at our local convenience store, and I bought my first lotto ticket as I was paying for my gas (I knew better, but wanted to make my wife happy!) Well, we won a free lotto ticket on that first ticket purchase, so I walked back in the store and got my free lotto ticket. I walked back to the car and we scratched it off…it was a loser…and I’ve never bought another lotto ticket in what has probably been thirty years of our state lottery!
My second funny story…While still working at Mega-Corp (a few years back), my office work team decided to all chip in and buy lotto tickets as a group. They approached me for my dollar, and I explained, that I don’t buy lotto tickets, I prefer to get rich the old fashioned way…savings (said with a smile)! They all laughed and said, fine, but when we win it all, and leave you here working by yourself, don’t come crying to us that you didn’t buy one! They’ve since bought tickets every week for as long as I can now remember. To my knowledge, they are all still working and buying tickets every week…I’ve been early retired for nearly three years now! 😉
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That first story is like my wife’s experience. Got a lottery card as a gift, won $2, and has never played again. Your MegaCorp story is a delicious allegorical tale for saving, as you say, ‘the old-fashioned way’. I unfortunately do enjoy playing the lottery when the prize pot gets huge and the odds tip to the player. How else am I going to dream about flying on private jets again? 😉
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I live in a state with no state income tax, but one that has a lottery (Washington). I’ve always considered playing the lottery like paying extra tax to the state, which uses lottery money in our general fund. It’s terribly regressive, since the people most likely to play are the ones who can least afford additional taxes. I do occasionally buy a state lottery ticket, knowing that I will never win, in order to tip the taxation scale toward the higher end of the wealth continuum.
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Well that is quite charitable of you. We live in MN, which Kiplinger’s has named the ‘Least Tax Friendly State’, so I am not so charitable when it comes to giving the government more money! 😉
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Hearing stories about lotteries always draws me like not being able to keep from looking at the scene of a horrible car accident. With all the tragic stories of poor or middle class people wasting their precious, hard earned money on a losing proposition, it kind of seems like a bad joke played on folks that are bad at math.
I’ve read recently that, if I remember right, about half of the US adults play lotteries and they average $100 month for tickets! Just imagine if they would plug that into an Index fund instead? They would be millionaires in the long run.
Also, as a side note, to get a million pay out you really need to win a $2.5 million lottery prize if you take a lump sum payout after taxes. As you’ve noted, that equates to about $40k a year– sorry to say, that will not put people into Lifestyles of the Rich and Famous territory that I think most people imagine when they buy those tickets.
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It’s not just the lottery … booze, cigarettes, drugs, gambling … there are lots of ways stupid people waste their money!
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