With a $5 million net worth, you can live a pretty sweet lifestyle. Not the swanky luxuries of the rich and famous, but a good one nonetheless.
The key to living comfortably with $5 million is staying on top of your finances like a hawk. This includes tracking your spending, eliminating debt, and investing wisely.
1. Buy a mansion
If you have $5 million, you can probably buy a pretty nice house. But be careful not to get carried away and spend more than you can afford to maintain. It’s important to balance your luxury lifestyle with saving and investing.
Having a net worth of $5 million means you’re in the top 3% of wealth in America. It’s not an easy feat, and most people who have it got there by living frugally and diligently saving.
If you want to retire comfortably with $5 million, it’s best to work with a financial advisor who specializes in working with high-net-worth clients (HNWI). SmartAsset’s free tool matches you with qualified advisors in your area, and you can interview advisor matches at no cost before choosing the one that’s right for you. Start the process today.
2. Travel the world
Traveling the world is a dream for many people. And with a few million dollars in the bank, it can become a reality.
To travel the world on a budget, it’s best to plan your trip well in advance. That way, you can take advantage of the low-season rate and save money on airfare, hotels, and other costs.
If you have kids, it’s also a good idea to travel with them before they turn 12. That way, they can enjoy the experience and it won’t cost as much. Another way to make your vacation more affordable is to stay in hostels or cheap hotels. You can also visit free museums and explore a city on foot to save money on sightseeing. This will allow you to spend more of your budget on activities like hiking or exploring a local market. By planning ahead and being smart with your spending, you can make $5 million last a lifetime in retirement.
4. Retire early
If you’re a couple, and you both work full-time, it will take you roughly $11,000 per month to reach $5 million in retirement savings by age 55. That’s a big number, but it’s not unobtainable with frugality, investing, and aggressive saving.
But remember that $5 million is only the beginning. You’ll still have to pay taxes, and withdrawing your investments will take a big bite out of the amount you have saved. You’ll also have to deal with inflation.
A net worth of $5 million can allow for a comfortable lifestyle, but you won’t be able to spend like the rich and famous. Most people that achieve financial independence get there with good paying jobs, living frugally, and a strong saving habit. They also save for a long period of time and invest their money wisely.