Is One Million a Lot?

There was a time when reaching a net worth of $1 Million dollars was a big deal. Becoming a millionaire was the epitome of success and security. A million dollars seemed to be an infinite amount of money that could last a person forever.

Today I noticed a 1 million milestone on this blog.

View Count

There is a widget doohickey on this website that, I think, tracks the number of page views and it now says this blog has had over a million page views. I don’t know if it is accurate or if it is even counting the right metric. To be honest, I really don’t know what a page view is. The Widget supposedly counts the number of visitors. I think maybe it is counting page views, from what I have read about webistes. Doesn’t matter, I’m not interested enough to investigate or figure it out. Originally it said “Number of Visitors.” It took me a long time to figure out how to change the darn thing from “Visitors” to “View Count.” Whatever it is counting, it looks like a huge number. Compared to the number of people living on earth, it is small. The World’s population is about 7.4 billion. A million people is about 1/10th of a percent of the the total population, or 0.1%. That’s a small amount.


A while back the big news story was the $1.5 Billion Power Ball jackpot. Only problem is the odds of winning it was 1 in 292 million. It is much better to keep your money rather than buy a bunch of lottery tickets. This isn’t pessimism, it’s reality.

Last year one of my wife’s nephews told me that if he won a million dollars, he would take care of everyone in his family. Really? He didn’t grasp the reality of a million dollars. Let’s take a look at it…

So you win $1 million in cash!

The Federal Government is going to immediately take 35% of it.

If you live in California, the state will take 13%.

Oops. Now the $1 million dollars has decreased to $642,000 before you have spent a dime. But you press on. You have 20 close relatives you want to share your winnings with and you want to keep an equal share too. All of a sudden you realize that everyone will get $30,571 each. Egads, Charlie Brown, that’s $21,368 LESS than the average yearly median income in the US.

In California the sales tax is 7.5%, exclusive of any local taxes. If you live in my city, Palm Springs, it is 9%. This means that if my wife’s nephew gave us that $30,571, we could buy something that costs $27,819. Hmm.


Let’s say you are ready to retire and you have $1 million in your retirement account. You’re set for life, right? We’ll if you take $50,000 out per year, you run out of money in 20 years. Oops.

But you are smart and put it into an Immediate Annuity that pays you a guaranteed fixed amount for as long as you live, which would be $5,584 a month. Let’s say you live 20 years past the day you retire. This annuity will pay you a 20 year total of $1.34 million. I’m not telling an annuity is your best strategy, because if you die 10 months after you invest that $1 million, you only have receive $55,840 and the insurance company makes a profit of nearly $950,000!

What I am saying is that a million dollars isn’t a lot of money, and you need a retirement plan. Whatever your age, today is the day to start planning.

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