Net Worth 4.2 Million

[Tamela]

Like many of my art journalist colleagues, I reacted to the $119.9 million sale of Munch's "The Scream" with one raised eyebrow and a half-curled upper lip - the face of skepticism and slight dismay. And I still find myself somewhat frozen in that posture, if only metaphorically. Is that painting really worth that much?

Sure, some would say it was an investment buy -- but they'd be wrong. As an investment, a $120 million artwork is a pretty lousy bet, for reasons I've explored here before: there are a small few collectors out there able and willing to spend enough money to purchase the piece on resale for enough cash to make the return on the investment worthwhile; among those, you'd have to find the few who even want this work (a pastel, by the way, not - as some have reported - a painting) in the first place -- about five in the world, it would seem from the action at the auction itself; and you'd have to find one who wanted it so much that, knowing what you'd paid for it, he would be willing to pay enough on top to make it worth your while.

Meantime, you could have (I would have) bought dozens of equally-predictable Warhols or Jasper Johnses, or less-predictable but more relevant works by living, younger artists -- Adel Abdessesmed, Cai Guo Qiang (a favorite of the Qatari royals, by the way), and Daniel Richter among them. Or as Fabian Bocart, an expert in art investment, reasoned recently, you could pour the funds into safer investments of Old Masters.

Outside of its investment value, the "Scream" is, indeed, however, a safe buy. It's a sure thing, the way a honeymoon at a Caribbean all-inclusive resort is a sure thing. You don't have to like it to love it, and you don't have to question its greatness because that's all been laid out there for you, not only by history books but by a massive, over-the-top -- and obviously very effective -- marketing effort by Sotheby's, one that relied far more on the sensationalism of the painting's renown than on the actual aesthetics and greatness -- if it is all that great -- of the work. Was it effective? Obviously. But in the long term, I suspect the art bubble has now been blown, and if so, it will have been the auction houses' fault (not that that's so surprising). There are too many other well-known paintings out there, many of them even better than this one, for this to remain the auction record very long; indeed, I'd not be surprised if the upcoming Post-War and Contemporary sales don't smash this record within the next few days.

They say a picture is worth 1000 words, but how much is a video worth? The value of video goes beyond basic ROI calculations. After all, a single explainer video can be the catalyst that launches a billion dollar business.

You may not process every detail of every image, but we take in a lot more subconscious information than you might think. Scientists generally accept that the human eye can process images at up to 60 fps and some studies go even higher.

The best way to prove this theory is to look at the real impact of video on marketing plans. Remember when Olson and Loquist gushed about the value of video? Here are the kinds of results that make marketers so excited.

Studies have found that people remember what they see better than what they read or hear. One study found that adding pictures to audio helped people retain 65% of the information three days later. Compare that to people who only heard the voiceover and remembered 10%.

High quality, marketing and explainer videos are incredibly valuable. People want helpful content that can answer their questions in seconds, and video is still the only way to do that. Ignore the crazy marketing stats and wild theories, and embrace video as the fastest, most effective way to reach new leads.

My friend and I then got to talking about other people we knew who checked out in their 30s and 40s. They too, had cleared over 10 million dollars in net worth or investable assets. They had all been early employees at successful startups. Or they had risen up the ranks at a big tech company while holding a lot of shares.

As a personal finance blogger, I subsequently got to thinking: Is 10 million dollars the ideal net worth amount for retirement? Is 10 million actually the new one million due to inflation? It seems to me that a net worth of $10 million or greater is ideal before leaving work behind.

The sad part about wondering whether 10 million dollars is enough to retire comfortably is that plenty of people who make a lot of money still go broke. Just look at so many ex-NFL players who end up with very little soon after their careers are over. The reason why they end up broke is due to a lack of financial education.

For fun, because this is what personal finance enthusiasts do, let's discuss whether 10 million dollars is the ideal net worth for retirement. Of course, we can always retire with less. Most have. But where's the fun in that?

You can live in a big fancy house, pay private school tuition, eat whatever you want, fly first class, and even fly private on occasion. You can also eat all the toro sashimi and Kobe beef you want. Yum!

$340,000 a year is a healthy amount of risk-free retirement income, especially if you don't have any debt. However, if there's more than one of you to support and if you have surprise costs, such as a big medical bill, perhaps it might not be enough.

What's the solution? Take more risk with your 10 million dollars by trying to earn a higher return. I don't recommend reaching too far for yield. Reaching for 4%-5% yields or returns is the most I'd go for. Remember, with 10 million dollars, you've already won the game! Further, with stock market valuations so high, returns could come down in the future.

Just imagine being all-in on dividend stocks before the March 2020 sell-off. You would be pooping bricks if your portfolio declined by $3.2 million in just one month! As a result, most multi-millionaires are highly diversified.

The one thing I must caution is having a retirement withdrawal rate much higher than 2X the risk-free rate of return. As we've seen during previous periods where low interest rates stayed low for an extended period of time, asset bubbles can form and then burst.

If you don't want to take on more risk, the next best way to make your ten million dollars go farther is to lower your cost of living. Since you're no longer tied down to a job, you could relocate to the heartland of America to save on living costs.

Ten million dollars in New York City may be like having 30 million dollars in Des Moines. If you can bear the weather and the more homogeneous environment, off you go to Iowa! Besides, the weather in New York City isn't much better. But if you're coming from San Diego, LA, or SF, then moving to the MidWest may be more difficult.

See the minimum net worth levels required to feel wealthy in various cities. The biggest surprise is how high of a net worth is required to feel wealthy in low-cost cities such as Dallas, Houston, and Chicago. The other surprise is how much more financially satisfied residents are in expensive San Francisco.

Once you've made your retirement fortune, it makes sense to geoarbitrage if you want to feel even richer. Some retirees have relocated to different countries like Mexico or Malaysia to save on living costs. Then again, if you have 10 million dollars, you probably don't have to go anywhere to save.

Another way to get your 10 million dollars to last longer is to not touch it for longer. Instead of retiring before you're 60, wait until your 60s or later. This way, you allow your 10 million dollars to compound for longer and potentially grow even bigger.

Of course, if you retire with a pension on top of your 10 million dollars, then you should be set for life. If you have a pension, please count your lucky stars. Its value has gone way up with a decline in interest rates.

By now, we should all agree that 10 million dollars is enough to retire well. However, I still suggest generating additional side income in retirement to ensure your capital will last for another generation. Earning side income also brings about a sense of purpose.

This site generates a decent amount of supplement retirement income. However, only one source of online income is passive: my severance negotiation book, which gets updated every couple of years. Writing articles, responding to business development inquires, and doing interviews takes time.

This $250,000 budget is for a household of four with two young children living in big city like Los Angeles. Both parents have decided to retire early in their 40s to take care of their children until they never come back.

The couple made their money working at six-figure jobs for 20+ years. During their careers, they averaged a 40% after-tax saving rate. They invested the majority of it in various investments that produce income.

Once their kids are done with college, they will free up another $30,000 in cash flow by not having to contribute to two 529 plans. If saved properly, the two 529 plans should be able to pay for most of their children's college expenses.

In fact, my friend's sister who checked out at 37 with 10 million dollars has budgeted to spend $175,000 a year. She's focused on capital preservation after hitting it big. Here are some thoughts on what to do with $10 million if you so happen to have a nice windfall.

As a result, the passive income that I thought was enough wasn't. Therefore, I had to figure out ways to make more. In fact, going back to work is definitely in the cards now that our kids are in school full-time and college costs continue to grow aggressively!

Don't expect your lifestyle and your expenses to stay static once you retire. You might have kids late like we did. Or, god forbid, you might get into an accident or have an expensive recurring health issue.

If you're still on your journey to financial independence, trying to accumulate a $10 million net worth or $10 million in investable assets is a worthwhile goal. Just know that even with so much money, you probably should continue to invest due to inflation.

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