Is $1 Million Still Considered Rich?
Summary
The hosts answer listener questions about personal finance, including whether a $1 million net worth is still considered wealthy, how to prioritize tax-advantaged accounts when going to a single income after having a baby, the pros and cons of aggressively paying down an 8.24% SBA loan, how to account for a rental property within asset allocation, and whether selling stocks to buy a home makes sense. They emphasize that a million dollars in liquid assets still places one in the top tier globally but feels less impactful due to inflation and location.
- The hosts clarify that $1 million in liquid investable assets still places a person in the top percentiles globally, but age, location, and inflation affect how rich it feels.
- They provide a hierarchy of tax-advantaged account funding when prioritizing savings on a single income: 401k match, HSA, Roth IRA, max 401k, then 529, mega backdoor Roth, and finally the new 530A.
- For a small business owner with an 8.24% SBA loan, they suggest not panicking; after tax deductions the effective rate is lower and the loan supports business expansion with manageable payments, though paying down earlier saves interest.
- Rental properties are treated as a separate asset class, not purely equity or fixed income, with unique local risks and inflation-hedging properties.
- Selling stocks to buy a primary residence is more a personal finance decision than an investment comparison, as housing provides consumption and forced savings benefits beyond spreadsheets.
