When $5,000,000 isn’t enough

“Five’s a nightmare.
Can’t retire.
Not worth it to work. 
Five will drive you un poco loco, my fine feathered friend.
Poorest rich person in America
The world’s tallest dwarf.
The weakest strong man at the circus.”

This is a make-believe comment from the make-believe show Succession.

In the scene, one of the naive heirs (Conor) to the patriarch’s billions (Logan Roy) boasts about the $5 million he’s due to inherit. That’s when his swashbuckling NYC/Hamptons relatives set him straight.

“$5 million will drive you un poco loco.

Now I had seen succession, but had forgotten the aforementioned “Poco Loco” scene when I posted a throwaway tweet last Saturday night:

Damn, that sh** went bonkers.

It got 2 million impressions. And 1,200 responses. From both sides of the aisle.

Here’s a recap of all the arguments – mathematical, absurd and profound.

Response 1: I have questions!!!!

First, I triggered a well-known financial parody account. He wanted specifics! Details! Assumptions!

I’m like, bro “Ever heard of a thought exercise?” This question is not searching for a universal truth. It’s forcing you to reckon with your own assumptions about money. Particularly the unspoken ones.

Response 2: Die with Zero!

Next came the Die with Zero crowd. They took a few variables (life expectancy and long-term market returns) and figured out how to run it to zero.

The interesting thing about this type of response is that it tended to overlook some key variables: inflation, taxes and healthcare expenses.

Response 3: Live off of the distributions

Next came the FIRE (aka. Financial Independence, Retire Early) crowd and the safe withdrawal rate (SWR).

It’s a derivative of the Die with Zero crowd in that it looks at historical data to infer what you can “safely” withdraw. One of the big oversights with many of these responses is that they took the long-term average of the stock market and assumed they could earn that each year. (In financial speak, they overlooked volatility.)

Yes, it’s true that stock markets have averaged 6-8% over the past 100ish years. It’s also true that we could have a deflationary Japan-style “lost” quarter century:

Source: Seeking Alpha

Response 4: Look at the averages

Averages make everything look so simple. And while I recognize that given the inequality in the US (and the rest of the world) that this question can appear out of touch – the readers of this blog tend to be ambitious and high-performing professionals.

And they don’t want to be average.

There were MANY responses like this, which are accurate. But again, they talk about averages.

Do you want to be average at work? Do you want to have an average house? Do you want to raise your kids to be average?

When given the opportunity to “outperform” average, most people will take it.

Response 5: The battle of the Coasts

Forget Pac and Biggie. This battle found NYC/SF/LA united against much of the rest of the country.

The argument goes as follows. And likely passes muster:

These threads refer the coastal snobs to Arizona, Ohio, Kansas, Grand Rapids and many other nooks and crannies of our glorious Nation.

And then there’s the poor souls who like hipster dive bars, watching their coffee drip out of a minimalist Chemex and recognizing their tribesmen via their NPR tote bags.

Response 6: The “new middle class”

Viral threads like these rope in entire side conversations that are completely disconnected from the original tweet. Like this one:

This person was going to the grave fighting the mob on the $300K hill

Absolutely no one on Twitter wants to hear that $300K is middle class in NYC.

No one.

(But if you’ve lived in NYC, especially with kids – you know that sh** gets expensive.)

Response 7: What’s our relationship with work?

If I’m honest with myself, this was the true origin of my initial tweet. What’s our relationship to life, when you remove our financial constraints.

Maybe you find something that makes you come alive?

Or maybe you’re the type of person who (for better or worse) are the type of person who NEEDS to find that aliveness through work and ambition.

Ultimately, this is a question of using self-awareness to truly understand your preferences. Your preferences for work, comfort, nice things, geography, culture, education, and ambition.

And the premium you’re willing to pay from your handle-bar mustache’d Barista!

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