Can I live off of interest on $100 Million for life?

[Merging Left]

My question must be silly if that is coming from a reputed old member like you unlike an amateur calling me an idiot above just for asking an innocent question. I have never done taxes on my own as all my business affairs are managed by my family's accountants. Also, I have been pampered by my parents since birth, so I have very little real world tax experience. And yes, I never worked a day in my life. All in all I am not ashamed that I had to ask this stupid question as it's been answered nicely by the lovely TMF community.

Biophase, in the $5 Million interest example above, how do you suggest I grow the principal to negate inflation? And will I still be paying 40% taxes if that interest comes from dividends or capital gains and not necessarily bank interest?

Here's the answer to end all answers:

Once you get your $100M, hire a damn accountant and attorney to figure it out for you.

Talk about putting the cart before the horse...

 

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[lowtek]

Wasting time? There is no such thing as a dumb question. I wanted to research the same after finding some conflicting numbers in some examples on Quora.

Guys, please clear this up. One Quora answer first deducts inflation rate from the yearly interest rate and then applies 15% tax on the difference. Is that how it works?

Yes, there are lots of dumb questions. Asking if you can live off the interest of 100m when you are probably living off something like 25k a year qualifies as a dumb question.

 

[Almantas]

I'll let you know as soon as my long-lost Nigerian cousin wires €100m into my bank account.

 

[Scot]

Wasting time? There is no such thing as a dumb question.

You’re 27, not 7. “There are no stupid questions” only applies to elementary school.

Also, I have been pampered by my parents since birth, so I have very little real world tax experience. And yes, I never worked a day in my life.

I genuinely hope you’re being sarcastic here.

You’ve been a member of this forum for almost 5 years. You say you’re 27. You should know better by now...

And if you don’t... what are you going to do about that?

 

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[MJ DeMarco]

Also, I have been pampered by my parents since birth, so I have very little real world tax experience. And yes, I never worked a day in my life.

But you're soon to come into $100M simply by virtue of your awesome work ethic, your expansive industry experience, and your rough childhood.

I'm sorry, but are you expecting to win the lottery? Because you don't fall a$$-backwards into a $1B startup.

 

[MJ DeMarco]

@FastLaner007 - You indicated you read Unscripted .

Did you not read Chapter 48?

Because it covers a lot of this discussion.

 

[Vigilante]

Wasting time? There is no such thing as a dumb question. I wanted to research the same after finding some conflicting numbers in some examples on Quora.

Guys, please clear this up. One Quora answer first deducts inflation rate from the yearly interest rate and then applies 15% tax on the difference. Is that how it works?

There are absolutely dumb questions.

The first and immediate thing you can do to change your life and head toward your goals is to immediately and permanently stop listening to whom ever told you that there is no such thing as a dumb question.

 

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[Ayanle Farah]

This is a good thread to ask the question, suppose you have millions of dollars and for whatever reason you don't feel like living off the interest, how else do you invest the money? Maybe put it all toward buying real estate or something else?

Btw I get where you're coming from with your question OP, I think it's important to feel inspired.

 

[biophase]

My question must be silly if that is coming from a reputed old member like you unlike an amateur calling me an idiot above just for asking an innocent question. I have never done taxes on my own as all my business affairs are managed by my family's accountants. Also, I have been pampered by my parents since birth, so I have very little real world tax experience. And yes, I never worked a day in my life. All in all I am not ashamed that I had to ask this stupid question as it's been answered nicely by the lovely TMF community.

Here is the reason your question is silly.

First, anyone who makes $100M would have professionals doing this kind of stuff for them.

Second, anyone who makes $100M would have gone through questions like these at $1M, $5M, $10M etc.

Third, anyone who makes $100M does not worry about inflation anymore.

Fourth anyone that makes $100M does not do it by trying to preserve all their capital in low risk interest building investments. If they did this, they would be stuck at $10M.

Finally, to answer your question "how do you suggest I grow the principal to negate inflation?", you do it by doing the same thing that got you to $100M.

Think of it this way. If you were able to go from $0 to $100M running a business. Why do you stop and suddenly hit the brakes so hard. Why wouldn't you put $50M away and continue to use the other $50M doing what you were doing.

So your questions is silly because it's not relevant and the answers that you get will mean nothing to you. A real answer would be some guy telling you to open up trusts, move offshore, establish more LLCs, get annuities, etc... All this stuff that you will have no idea what they are talking about. Also, if you did learn everything there is to know about trusts, offshore accounts, and annuities, laws would have changed by the time you got $100M so it's kind of pointless.

Biophase, in the $5 Million interest example above, how do you suggest I grow the principal to negate inflation? And will I still be paying 40% taxes if that interest comes from dividends or capital gains and not necessarily bank interest?

Nobody can answer how much you will pay in taxes. Just assume it will be somewhere between 20-40%. Does it really matter at that point?

The question is why? Why do you have to grow it? You have $100M in the bank! But if I had to give you an answer, I'd say buy some real estate with it. Spend $2M a year on REI, and spend the $1M on yourself.

 

[AllenCrawley]

It seems you're implying that you have $100M already?

 

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[fhs8]

5% dividends and interest from investments => $5 Million
Inflation => 3% ($3 Million)
Taxes => 15% to 40% approx? (Not sure how much would the capital gains tax is be).

Will I be paying taxes on the whole of 5% interest/dividend income or on 2% (after deducting the 3% inflation rate from the 5% interest)?

Please kindly answer my question above guys as I have not yet found an answer online for many days.

Many days and you still haven't found the answer? You're 27! Of course you can't deduct the inflation rate! Capital gains also deals with selling securities such as stocks. It has nothing to do with dividends or interest.

 

[Fox]

Dear diary: the forums didn’t provide any concrete feedback on what to do regarding interest once I get to 100,000,000. I will try again tomorrow until the answer is clear and once solved start right away on my logo design and business name.

 

[Xeon]

What color is your lambo??

I was lying in bed reading the more serious post above yours, then I saw your one liner, and I choked.

 

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[AgainstAllOdds]

Inflation | Finance and capital markets | Khan Academy

Interest and debt | Finance and capital markets | Khan Academy

Taxes | Finance and capital markets | Economics and finance | Khan Academy

@FastLaner007 -- here are three links to help you understand the math to your question.

 

[SEBASTlAN]

Dear diary: the forums didn’t provide any concrete feedback on what to do regarding interest once I get to 100,000,000. I will try again tomorrow until the answer is clear and once solved start right away on my logo design and business name.

lmao

 

[Fastlane Liam]

Is this a troll? Like seriously?
Is one hundred million dollars enough to live off? What do you think? Are you high?

 

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[lowtek]

Dear diary: the forums didn’t provide any concrete feedback on what to do regarding interest once I get to 100,000,000. I will try again tomorrow until the answer is clear and once solved start right away on my logo design and business name.

rofl

savage

 

[Ecom man]

Honest answer... no one worth 100 million has it sitting in a bank making 5%. They have a few million in real estate, a few million in annuities, a few million in index funds, a few million in dividend paying stock, a few million in internet startups, a few million in bonds, a few million in land deals and 75 million in their business.

Your hypothetical question will never happen to anyone unless they won the lottery because as you build a 100 million dollar business you are going to be pulling some off and investing it here and there over time.

I know a business owner that is currently worth north of a million. They don’t have a million in the bank. They have inventory, real estate, stocks, internet investments, and more worth the 1 million+. The amount in their bank account? 10-20k

 

[advantagecp]

It takes at least ONE BILLION DOLLARSS to eke out survival on the interest.

Small timer...

 

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[Nigel B]

Dear diary: the forums didn’t provide any concrete feedback on what to do regarding interest once I get to 100,000,000. I will try again tomorrow until the answer is clear and once solved start right away on my logo design and business name.

I don't think I ever used LMAO in a post anywhere - but this one gets it!

 

[Arrived2015]

If I earn $100Million...

Curious...

Why is that sum so concerning for you?
________

biophase's response is the reason for my curiousity especially as I agree with:

...anyone who makes $100M would have gone through questions like these at $1M, $5M, $10M etc.

I'm thinking unless you project to go from $0 to $100m within days, during your journey to your $100m target, it's impossible to avoid paying taxes (and more). Consequently, because those sums ($1mto$99m) are in the middle you'll have the answers to your questions by the time you reach $100m.

Am I thinking wrongly?

Isnt it, by the time you arrive at $100m, you'll be experienced enough to be able to tell us the answers here or correct those on Quora?

I have not earned the 100 Mil yet. Many guys in my markets have made hundreds of millions and even billions. I wanted to ask the question for motivation

Perhaps the guys who have arrived at your target figure of $100m (and beyond) are the best ones to motivate you in what to expect and answer you best.

Similar to visiting a country you've never been before and wanting to take part in an activity of climbing their known treacherous mountain. Will you take advice and follow a local who has never climbed the mountain therefore being hypothetical with the best way for you both to climb to the top (peeps on forums or Quora)

OR

seek a trained recognised guide who because they have completed the climb so many times, they can do it in their sleep? (guys/experts you refer to)

what taxes will I need to pay on yearly interest/dividends of 5% from investments of the $100Million principal after accounting for 3% inflation for example?

Worry is the interest you pay on a debt you don't owe.
Source: Unknown

 

[GoGetter24]

What percentage of that sum do you currently have, OP?

Why people entertain these time wasters is beyond me.

 

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[Roli]

If I earn $100Million after taxes via businesses in the USA and Europe, what taxes will I need to pay on yearly interest/dividends of 5% from investments of the $100Million principal after accounting for 3% inflation for example? I am 27 now BTW. And let's assume that I will live till 85. Can I live a luxurious lifestyle while simultaneously beating inflation and not touching the principal forever? In fact I want the principal to grow every year in proportion to inflation.

Appreciate your valuable replies, FastLaners.

You know what? I don't think your question is stupid, and I get why you didn't 'just Google it'.

The whole point of this forum is that there are people who have, or are close to making that kind of dough. So why not get answers from the horses mouth?

To answer your question, that's a clear yes. Especially if you've already bought the house(s) you want to buy and you're happy living below your rather vast means.

I personally know that with that kind of money, I probably wouldn't spend more than $200,000 per year.

So that's 500 years before my $100 mil runs out without any interest at all.

Basically as long as you don't have the mentality of a sidewalk millionaire, $100,000,000 will last you, your family and your descendants for a long time to come.

Good luck getting there, hope this motivates you that tiny little extra bit!

 

[RichieG]

Thanks for the replies so far guys. I have not earned the 100 Mil yet. I wanted to ask the question for motivation as I am on track to starting some high growth ventures. Many guys in my markets have made hundreds of millions and even billions.

s.

Kanye West, Jay Z..........
Lebron James, Kobe Bryant
Mark Zucherberg, Bill Gates

These make millions and billions but can you break into their field?

What is your field? Affiliate Marketing?

 

[Suzanne Bazemore]

I think calculating if you can live off future earnings can be extremely motivating and eye-opening. It was for me (unfortunately the figure I was using wasn't $100 mil).

 

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[100k]

I feel like punching the OP.... but..... wooooosaaaaaaa.

 

[MJ DeMarco]

There are people who live off $500,000 in savings. Granted they live in tents and call themselves minimalists, but it being totally FREE (subjective) can be done relatively inexpensively if you have your housing situation taken care of.

 

[Suzanne Bazemore]

There are people who live off $500,000 in savings. Granted they live in tents and call themselves minimalists, but it being totally FREE (subjective) can be done relatively inexpensively if you have your housing situation taken care of.

And think of how many people try to do just that. For people with jobs, like me, it's hard to even save $500K. It would be especially difficult for people with $100K of debt that they're actually paying someone else 10% interest on.
This Is How Much Debt the Average American Has Now—at Every Age
When I stumbled across TMF this past summer, I was actually trying to be frugal and save my way toward investing in properties. Then I read TMF and recognized myself in the definition of a Slowlaner trying to Scrooge my way to the Fastlane. What fun.

 

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[GoGetter24]

How do these threads make it to 3 pages? Just tell systemic losers like these to F*ck off and hit the ignore button.

Loser's been here since 2014 too. Done anything except wank since then OP? There should be an automatic ban on douchebaggery like this.

 

[Real Deal Denver]

How do these threads make it to 3 pages? Just tell systemic losers like these to f*ck off and hit the ignore button.

Loser's been here since 2014 too. Done anything except wank since then OP? There should be an automatic ban on douchebaggery like this.

Let's take it up a notch! Let's talk serious money!