Financial tip of the day.com - FREEDOM THROUGH FINANCE
Social Sites
  • Financial Tip Of The Day
  • Books
  • Websites
  • Contact Us
  • Disclosure

Why $2.5 million is the perfect level of FUCK YOU MONEY...

25/9/2015

1 Comment

 
Editor: Crass Cash
Picture
In the movie THE GAMBLER with Marky Mark Wahlberg there's a scene where John Goodman (loan shark) is discussing "the position of fuck you" or "fuck you money" as I like to call it.  What's fuck you money?  In case you don't already know read the definition above. 

How do you know when you've gotten to fuck you money?  Well it depends upon your situation, but in my financial opinion, if you're a married American couple the magic number is around $2,500,000.  Why?

Because with $2.5 million you could into perpetuity make 3% on your money (dividends) and never have to draw on the principle.  This is the ideal situation.  Why is $75,000 ($2.5 million x 3%) an important number though?  Well it doesn't need to be that exact and it changes each year, but ideally you wouldn't want that number to be above the 15% tax bracket.  As of this year it's actually $74,900 but taxes are a tricky game where everybody's is different.  This is theoretical so look at your own situation when implementing this.

If you put $2.5 million into ETF's netting at least 3%, after 1 year they would be classified as ordinary income, which is great because it taxes them at a lower tax bracket.  The tax laws changed favorably over 10 years ago when Congress decided to not tax passive income for people who's income was within the 15% or lower tax bracket.  If you're married and make under $74,900 this year, you pay no federal income tax!  

This is huge!  Since you wouldn't have to pay any taxes this is the equivalent of making probably $120,000 of earned income.  Put $2,500,000 in investments, have your house paid, and a small emergency fund to cover insurance premiums if needed.  You're good to go!      
1 Comment
holistic financial planning link
22/3/2016 04:25:44 am

The financial planning competition was an extreme success, and I thought that all three teams did a phenomenal job.

Reply



Leave a Reply.

    Author

    This website was created due to the atrociously misguided financial advice that I've heard over the decades.  Financial freedom is not intellectually strenuous, but it takes discipline. 

    RSS Feed

    Categories

    All
    BHAG UPDATE
    College Savings
    College Savings
    Credit
    Economics
    Estate Planning
    Estate Planning
    Financial Planning
    Financial Planning
    Insurance
    Investing
    INVESTMENT JOURNAL
    Mistakes
    Net Worth Update
    Retirement
    Tax
    Thrift

    Archives

    October 2017
    August 2017
    May 2017
    April 2017
    February 2017
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    January 2011

Powered by Create your own unique website with customizable templates.