You Know You're Rich When...
It's the $64,000 question, or the million-dollar question, or something in between.
Back in January, I wrote a column about the benefits of getting your finances under control and accumulating a decent wad of savings. The story ran under the provocative headline "Why It 's Good to Be Rich."
That headline earned me a truckload of snarling e-mail from readers offended by such materialistic sentiments. I also, however, got a slew of messages asking the same simple question: What counts as rich?
Taking Five
I suspect the most popular definition of rich is something like "not having to work." If you are wondering how close you are to full financial independence, try this rule of thumb.
The rule: Each year in retirement, you should be able to withdraw 5% of your portfolio's beginning-of-year value, equal to $5,000 for every $100,000 saved. Keep in mind that not all this money can go toward living expenses, because you will owe taxes. Also, if you spend your dividends and interest, that would count toward the $5,000.
Let's say you want $35,000 a year in retirement. Based on the 5% rule, you would need $700,000. If you currently have $250,000 saved, you might seem well short of your goal. But you don't actually have to sock away another $450,000. After all, with $250,000 already invested and merrily clocking gains, you should get substantial help from the markets.
Alternatively, if you don't like the 5% rule, here's a second approach. Go to
www.vanguard.com and click through to the section on "IRAs, rollovers, and retirement investing." Next, head to the area devoted to annuities and check out the Vanguard Lifetime Income Program. Once there, request an instant quote for a life-only income annuity that kicks off inflation-indexed income.
That will tell you how much income your retirement savings will generate if you go the safest route, which is to buy an inflation-indexed stream of income that is guaranteed for life. The quotes for men are higher than those for women, because men have shorter life expectancies. Also, the older you are, the more income your savings will generate. Indeed, if you are in your late 60s and you purchase an annuity on a single life, your savings will yield over 5% in the first year, giving you roughly the same income as the 5% rule.
Taking Issue
To be honest, if I had to pick a definition of rich, "not having to work" wouldn't be my first choice. Fact is, if that's the definition, most of us won't get there until our 60s. At that point, pretty much everybody else is retiring, so "rich" sure doesn't seem like anything special.
Moreover, in our 60s, retirement is possible not because we have diligently saved, but because Medicare is covering much of our medical costs and Social Security is providing a chunk of monthly income. Remember that $35,000 a year you wanted? If you get $15,000 from Social Security, suddenly you need just $20,000 from savings. Based on the 5% rule, that puts your savings target at a more manageable $400,000.
So if "not having to work" isn't the best definition of rich, what is? I would focus on financial stress. I have met families who have the trappings of riches, including a driveway full of luxury cars and closets full of designer clothes, but they feel they are a step away from financial disaster.
And that may be true. The cars are leased, the house is fully mortgaged and the credit cards are maxed out. These folks are hauling in big paychecks and yet they spend all that money and more -- and I am not sure they are really enjoying themselves.
That is why, for me, wealth is a sense of financial control and not worrying about money is a key sign you are rich. That doesn't mean you can buy anything you want and that doesn't mean you can quit your job tomorrow. But at least you aren't lying awake at night, fretting about next month's bills.
Of course, families can spend excessively for years without a problem, and they might even have some delusional sense of financial control. That fiction is exposed only when there's a major financial crunch.
Ask yourself this: How long could you go without a paycheck before you started skipping mortgage and car-loan payments, racking up great wads of credit-card debt or dipping into retirement accounts and thereby triggering taxes and penalties? If you could muddle through 12 months without wreaking this sort of damage, I would argue you have your finances under control. What if there's no way you could make it through a year? Maybe you should be lying awake at night.
Taking Cover
That brings me to another definition of rich -- and another opportunity to annoy insurance agents. If you want to chart your financial progress, think about the insurance you don't need.
Insurance is a way of getting others to assume risks you can't afford to shoulder yourself. For instance, most of us have a homeowners' policy because, if our house burned down, the loss involved would be unbearably large.
But as you amass more wealth, there are more and more risks that you can afford to shoulder yourself -- and thus there is less need to pay an insurer to take on these risks. You might find yourself skipping extended warranties, passing up trip-cancellation insurance, raising the deductibles on your auto and homeowners' policies, dropping your life insurance and deciding you don't need long-term-care insurance.
Yes, I have heard about all the emotional reasons for having these policies. You may decide you want trip-cancellation insurance, a low-deductible auto policy or long-term-care coverage, because they give you peace of mind.
But it is worth thinking about whether you really need these policies. Between your retirement savings, your pension and Social Security, could you afford annual long-term-care costs of $70,000, or $140,000 if both you and your spouse needed care at the same time? If the answer is "yes," you don't objectively need long-term-care insurance -- and that's another sign that you are indeed rich.
怎样才算“有钱”？
这是一个有关64,000美元、或百万美元、抑或是介乎这两者之间的问题。
1月份我曾为这个专栏写了一篇有关如何控制个人理财、积累大量财富的文章，这篇文章有一个饶有趣味的标题：“有钱的25个好处”(Why It's Good to Be Rich)。
之后我收到了大量的读者来信，对这种充满实用主义的标题表示不满。不过，还有一些读者来信问了我一个同样简单的问题：怎样才算有钱呢？
我怀疑对有钱的一个最普遍的定义是否就是“不用工作”。如果你想知道自己距离完全经济独立还有多远，不妨试试用下面这条经验法则来检验一下。
法则：在你退休后的每一年，你都应该能从投资组合中取出相当于其年初值5%的资金，也就是说，每10万美元的投资组合能拿出5,000美元。记住，这些钱不是都能用做生活费的，因为你还要纳税，而且，如果你曾经动用过股息和利息，这些钱应该也算在5,000美元内。
假设你希望退休后每年能拿出35,000美元，按照这条5%法则，你需要有70万美元。如果你现在只有25万美元的存款，那么你离这个目标还有很远的距离。不过你也不必真的要再存45万美元，毕竟你已经有了25万美元的投资，市场给你带来回报也不错，应该能从中获得不少收入。
如果你不喜欢这条5%法则，这里有另外一个办法。登录
www.vanguard.com网站，点击进入其“IRAs, rollovers, and retirement investing”页面。然后再进入有关年金的栏目，察看“Vanguard Lifetime Income Program”。你可以在这里要求提供剔除通货膨胀因素后的终生收入年金的报价。
你可以从中了解到：如果你采用最为稳妥的投资方式，即购买能终身为你提供收入来源的按通货膨胀率调整的年金，你的退休存款能带来多少收入。男士的报价要高于女士，因为男士的平均寿命预期要较女士短。另外寿命越长，由此带来的收入就越多。实际上，如果你已经快70岁了，你购买了单生年金(single life annuity)，第一年你存款的收入回报将超过5%，这也基本符合上面提到的5%法则。
坦率地讲，如果让我选择“有钱”的定义，“不用工作”不会是我的首选。实际上，如果这就是“有钱”的定义，那么我们多数人都不能算是“有钱”，除非我们到了60岁，因为到了这个岁数，几乎每个人都已经退休，不用再工作，因此“有钱”肯定不会像是什么特别的事情。
另外，我们到了60岁有可能退休不是因为我们已经辛辛苦苦攒够了钱，而是因为美国老年保健医疗制度(Medicare)可以为我们支付大部分的医疗费，同时我们每个月还能从社会保险(Social Security)获得不少的收入。还记得你退休后每年还想获得35,000美元的收入吗？如果你从社会保险已经获得了15,000美元，突然间你只需从存款里再拿出20,000美元。根据5%法则，你的存款目标就可以降至更好接受的40万美元。
因此，如果“不用工作”不是有钱的最佳定义，那最佳定义又是什么呢？在我看来应该重点强调财务压力。我曾遇到几个家庭，他们看上去都是很有钱的样子：开豪华轿车、穿高级时装，但是他们都感觉自己离财务危机不远了。
这种情况有可能发生。他们的豪华轿车是租来的，房子全是用抵押贷款买的，信用卡也用到了极限。这些人虽然收入不菲，钱却是花光用光，甚至还欠债。我不知道他们是否真正觉得这样挺好。
这也是为什么我认为财富就是一种财务控制观念、不用为钱操心只是有钱的一个重要表现。这并不意味著你能随意购买你想要的所有东西、也不意味著你明天就能辞职回家，但至少你不用在晚上为下月的帐单发愁得睡不著觉。
当然，有些家庭挥霍无度地过上好几年都不会出现问题，他们有时甚至还误以为家庭财务状况在自己的掌控之下。只有当出现重大的财务危机时，问题才会暴露出来。
问问自己这样的问题：在没有收入来源的情况下，你还能维持多长时间的生活，直到你还不起房贷和车贷、大量透支信用卡、或是开始动用退休帐户，进而不得不支付相关税款和罚款？如果你能坚持12个月，我认为你的财务状况控制得不错；如果你无法熬过一年，恐怕你就该辗转难眠了。
这让我想到了另一个“有钱”的定义－－一个让保险公司懊恼的定义。在你制定理财规划时，考虑清理一下那些你并不需要的保险。
保险是一种让别人替你承担你自己无法承受的风险的方法。比如，我们都购买了房屋财产保险，因为万一房屋被损毁，所带来的巨大损失将是我们难以承受的。
不过，当你积累了更多的财富时，自己能够承受的风险也越来越大，因此你购买保险的必要性随之下降。你会发现自己不再需要延期保证和旅行取消保险，并可以提高汽车和房屋的免赔额度、决定减少人寿保险和不再投保长期护理保险。
的确，我听到过各种各样保留这些保险的动人理由。你可能会觉得自己需要旅行取消保险、免赔额度低的汽车保险或是长期护理保险，为的是求得心里踏实。
不过你是否真的需要这些保险还值得商榷。如果使用你的退休存款（包括退休金和社会保险），你每年是否能够承受70,000美元、或者说夫妻二人共140,000美元的长期护理费用？如果答案是肯定的，那么说明你并不是真正需要长期护理保险，这从另一方面也说明你的确是“有钱”。
