Most of us, at one time or another, have thought about being a millionaire. I remember a reporter asking me decades ago if someone could retire comfortably on one million dollars. Back then I said it depends—and I still say the same thing.
It is estimated that 5–6% of Americans are millionaires, according to Spectrem Market Insights 2019. While this is a small percentage, there are still many people who have hit that lofty number. But does that number guarantee you happiness? Does that number even get close to what you need to be financially independent? I say no, in most cases.
As a financial advisor, I have spent a good amount of time around millionaires and multi-millionaires. I ask how they felt when they became millionaires and 100% of the time, I am told they felt no different than the day before. Having one million dollars in the bank is not the end-all that people make it out to be. It is not the magic number that we all must strive for to be able to retire. Many of us will need to have multiple millions to be able to stop working and be comfortable and confident.
Instead of setting a goal based on status, set a goal based on what you will need. How much money do you and your loved ones need to be able to say that you are working only because you want to? That is how I define financial independence. That is a nice thought—having enough money that work becomes optional. For you, it may be one million dollars, or it may be much more. Set a goal based on your needs. Create an in-depth financial plan that builds your dream life and factors in the unexpected. You might find that a million dollars just doesn’t cut it anymore.
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