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When can you call yourself a millionaire?

MoonStruckMoonStruck PEx Influencer ⭐⭐⭐
When you're total earnings is 1 million per year or per month or per day? When the money in your bank account or savings is at 1 million? When your total assets such as home, car, gadgets, jewelry, etc. (when figuratively liquidated) amounts to 1 million?

If it's the latter, a lot can call themselves millionaires.

What do you think?

Thanks in advance.

Comments

  • KuyaDannyKuyaDanny Moderator PEx Moderator
    When your net worth (assets minus liabilities) is one million or more. And yes, even by this definition many people can call themselves millionaires.
  • bankerIIbankerII PEx Veteran ⭐⭐
    what for?
    not interested.

    “Being rich is having money; being wealthy is having time”
    :D
  • MoonStruckMoonStruck PEx Influencer ⭐⭐⭐
    KuyaDanny wrote: »
    When your net worth (assets minus liabilities) is one million or more. And yes, even by this definition many people can call themselves millionaires.

    Aha! Pwede pala yun. :D
  • AgapitoAgapito PEx Influencer ⭐⭐⭐
    You should get into the habit of computing your Net Worth from time to time.

    In this world where money is what is keeping you alive, computing your Net Worth is a reality check to see how far or how near you are to the dreaded situation called "Game Over".

    To me, liquid assets must be your primary indicator to determine whether you are a millionaire or not.

    For example, many middle-income people use their median salary earnings to buy assets like house, condo, car, jewelry, a piggery, or a carinderia business. They might be worth millions, but these assets are not liquid.

    Imagine yourself suddenly suffering a heart attack, and you need an emergency triple-bypass operation. You will die, before you can sell your condo.

    You must have a standby hard cold cash worth a million.

    Jollibee stock shares are fine (if you bought it at P78 per share like i did :D), although they would need 3 days to clear before you get the money.

    And this is where your GOLD CREDIT CARD comes into play. You don't use your credit card regularly, it's just a backup to get instant cash in case of emergency. Credit cards are not assets, they are liabilities. I'm just adding some strategy tips here, which is another topic altogether.
  • MoonStruckMoonStruck PEx Influencer ⭐⭐⭐
    Agapito wrote: »
    You should get into the habit of computing your Net Worth from time to time.

    In this world where money is what is keeping you alive, computing your Net Worth is a reality check to see how far or how near you are to the dreaded situation called "Game Over".

    To me, liquid assets must be your primary indicator to determine whether you are a millionaire or not.

    For example, many middle-income people use their median salary earnings to buy assets like house, condo, car, jewelry, a piggery, or a carinderia business. They might be worth millions, but these assets are not liquid.

    Imagine yourself suddenly suffering a heart attack, and you need an emergency triple-bypass operation. You will die, before you can sell your condo.

    You must have a standby hard cold cash worth a million.

    Jollibee stock shares are fine (if you bought it at P78 per share like i did :D), although they would need 3 days to clear before you get the money.

    And this is where your GOLD CREDIT CARD comes into play. You don't use your credit card regularly, it's just a backup to get instant cash in case of emergency. Credit cards are not assets, they are liabilities. I'm just adding some strategy tips here, which is another topic altogether.

    So it would be safe to say that you can only call yourself a millionaire if you do have actual money (could be in the bank) that amounts to millions.
  • AgapitoAgapito PEx Influencer ⭐⭐⭐
    MoonStruck wrote: »
    So it would be safe to say that you can only call yourself a millionaire if you do have actual money (could be in the bank) that amounts to millions.
    Practically, yes.

    Technically, check your net worth computation.
  • MoonStruckMoonStruck PEx Influencer ⭐⭐⭐
    Agapito wrote: »
    Practically, yes.

    Technically, check your net worth computation.

    I see. Thanks!
  • Still networth ang basehan ko (asset-liabilities).
    And it is not easy to see from outside.
    Just because your neighbor lives in a 3M house does not mean he has at least 3M. He could actually be just worth 10% of it for the deposit he paid.

    Any decent financially literate person should have enough liquid cash as part of networth at least for emergency funds, for standby investible funds, or liquid investments. being asset rich yet cash poor is threading on knife's edge.

    What you may not have considered is the aspect of globalization, as well as currency standards.
    It is now a small world, your peso is not only used for buying Philippine products, but products from around the world, imported or via travels. Though philippine prices are still cheaper, they are and will always be normalized by inflation (take the effect of oil)

    That is why there are so many "millionaires" now, but actually, their net asset (after inflation) is just a mere shadow of what really a "millionaire" means during the time when being a millionaire is hard to become.
    With globalization, a good standard of measure then is not peso, but a global currency, which is for now still USD.

    So in summary for me, being a millionaire (in essence) is having a networth of 1M USD.

    So how many do you know have current net worth (asset-liabilities) of 45M Peso or above?

    :D
  • AgapitoAgapito PEx Influencer ⭐⭐⭐
    Well, the term "millionaire" comes from the root word "million".

    So to be simplistic about it, anyone who owns something that counts to a "million", is by Webster definition- a millionaire.

    Now appreciation of your "million" possession, would be another story.

    "Globalization" is a broad term. But if you are not going abroad and you will spend your money locally, perhaps "inflation" would be a much better factor to consider in terms of appreciating one's "million".

    For example, if you have P1 million in cash, but a can of Ligo sardines will cost you P20,000 each, then your million is probably worth not much. It's just like owning 1 million Yen in Japan.

    In Zimbabwe, 1 million Zimbabwe dollars would not have been enough to buy a McDonald's cheeseburger.

    But you can still call yourself a "millionaire".

    So perhaps, a more appropriate term to use to be better appreciate what we mean, we can ask:

    "When can you say, you are financially wealthy?"

    Also, with regards to "being asset rich, yet cash poor", i think there are very limited types of liquid assets that one can possess which you can convert to cash on short notice.

    There is a drawback in holding too much cash.

    Cash is losing its value at any given rate. So holding cash, and not compensating the value lost while holding it, is probably not a good idea.

    If it were up to me, i would:

    1. Allocate enough cash in an ATM account, enough to cover 3 months worth of living expenses.

    2. Maintain in good standing, a credit card with a high credit limit.

    3. Put remaining cash on a 3-month coupon Treasury Bills.

    4. Maintain a long-term portfolio of dividend issuing stock holdings.

    Keep tangible possessions you can sell (or pawn) in short notice. This may include:

    1. Precious metals and jewelry.

    And to top it off, always maintain a gorgeous body. When worse comes to worst, you can convert your gorgeous body into CASH within minutes. :D
  • KuyaDannyKuyaDanny Moderator PEx Moderator
    I wouldn't mind seeing pictures of those gorgeous bodies. ;)
  • AgapitoAgapito PEx Influencer ⭐⭐⭐
    KuyaDanny, do you give good appraisals? :lol:
  • MoonStruckMoonStruck PEx Influencer ⭐⭐⭐
    sentry wrote: »

    So in summary for me, being a millionaire (in essence) is having a networth of 1M USD.

    So how many do you know have current net worth (asset-liabilities) of 45M Peso or above?

    :D

    That definition of a millionaire makes even high rollers locally be demoted to upper middle class only. :p
    Agapito wrote: »
    And to top it off, always maintain a gorgeous body. When worse comes to worst, you can convert your gorgeous body into CASH within minutes. :D

    Now that's the gist of your statement. :lol:
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