$10 Million Net Worth Lifestyle Protection
Is a $10 million net worth lifestyle considered rich? Can you retire securely with $10 million?
It may seem like a lot, and it is a lot compared to many other people. But here’s the thing:
Someone with a $10 million net worth lifestyle will face numerous and unique challenges regarding wealth protection. If things go wrong, you can lose huge chunks of it to poor investments, medical issues, lawsuits, and other unforeseen situations, many of which are beyond your control. Get a free copy of our in-depth book that reveals secrets of high net worth investment management, estate, tax, and financial planning, written specifically for those with $10 million or more to invest.
We’ve seen it happen. Many times.
We Are Different Because We Are Laser Focused On Helping You Achieve Financial Serenity Through Our Proven Comprehensive Goals-Based Planning & Investing Strategies.
These challenges can be difficult to overcome on your own.
If you are an investor with $10 million to $500 million in liquid investment assets and you want to secure your future lifestyle, here’s where to start:
Get a free copy of our in-depth book that reveals secrets of high net worth investment management, estate, tax, and financial planning, written specifically for those with $10 million or more to invest.
Table of Contents
Having a net worth of $10 million may seem sufficient for a secure retirement, but it isn’t a guarantee. Wealth has to be protected to prevent losses due to poor investments, medical issues, lawsuits, and unforeseen situations, many of which are beyond your control.
With $10 million in income-producing assets, you can earn at least $200,000 per year as income, which is a good income for most people, without being extravagantly wealthy.
Whether or not you can live off $10 million depends on how much income that money can generate, which depends in part on how much of it is invested in income-producing assets.
In the United States, more than one percent of the population has a net worth over $10 million. That’s around 1.5 million households who are in the top 1% of income earners.
The key to investing $10 million is to diversify your asset allocation as much as possible to protect your wealth and invest in assets that have a yield of 2–5%.
Managing large sums of money successfully requires diversification of assets to protect the capital. Then, buy the things you want and need and remember to pay it back by giving to charity.
Invest that money in a variety of assets, including real estate, which never loses value. Plan for the future, including your retirement and your children’s education.
Somewhat more than 1% of American households have a net worth of $10 million, which is a significant number of people who can live off their earnings for their remaining lifetime.
Having a net worth of $10 million means having assets with a net value of $10 million after subtracting the value of any debts, such as a mortgage or other loans.
At a typical bank, $10 million could earn between $50,000 and $100,000 per year in interest. Depending on your lifestyle, that could be enough to live of comfortably.
You can live off the interest for the rest of your life; you can invest in real estate; you can invest in stocks, bonds, ETFs, and mutual funds, and you can give to charity.
Six $10 Million Net Worth Lifestyle Challenges
- Expanding Your Portfolio
- Protecting Your Wealth
- Optimizing Your Portfolio
- Achieving a Comfortable Retirement
- Passing On Your Wealth
- Managing Your Taxes
However, the truth is that these investors still face many of the problems that other individuals with a higher or lower net worth experience. Please speak with our wealth managers to learn more about the challenges of a $10 million net worth lifestyle.
Let’s take a deeper look at these challenges:
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1. Expanding Your Portfolio
Growth is good. But at what cost?
Throwing caution to the wind and making the most aggressive and risky investments possible isn’t a good strategy. It’s just a different form of gambling. Yes, you could strike it big, but you can also lose big.
The question is:
How do you expand your portfolio without taking on too much risk?
When markets crash, inflation increases, and economies experience volatility and tumult, even wealthy investors can watch helplessly while the value of their portfolios implode.
We have had people come to us from other wealth managers after recessions had decimated their portfolios. Early in our career, we were astonished to see people who had lost 70%, even 80% of their net worth!
We had one couple come to us who used to have $32 million, and after a recession they had just $5 million.
Can you imagine?
Today, we’re no longer astonished by this, because too many wealth managers and financial advisors take on reckless amounts of risk just to grow a portfolio by a few more percentage points. We’ve seen high net worth portfolios that were invested 100% in equities. No risk management in place at all.
They fail, and the investor is the one who suffers.
2. Protecting Your Wealth
If you have spent many decades building your net worth, you should take steps to protect your wealth.
It can be easy to assume that someone with a $10 million dollar net worth won’t have to worry about losing their wealth.
But here’s the truth:
A market crash or an unexpected medical emergency could leave you with far less wealth than before.
$10 million, $15 million, even $25 million can disappear fast if you don’t have strong wealth protection measures in place.
Investors that wish to maintain their current lifestyle should prioritize wealth protection for this reason.
3. Optimizing Your Portfolio
Every investor should strive to create an efficient portfolio that offers them their desired returns, but without too much risk.
The good news is that there are many ways to make your portfolio more efficient and improve its performance. You can learn about some of these specialized portfolio performance improvement strategies in this free guide.
4. Achieving a Comfortable Retirement
The more time and sweat you expend in your career, the more you probably look forward to a comfortable retirement. And having a $10 million net worth at retirement can certainly give you a good start.
You can certainly retire and live a comfortable lifestyle with a net worth of $10 million. But you need to manage it well and plan for the challenges ahead, such as unforeseen medical costs. Not to mention the possibility of making poor investments, which can wreck your plans for a peaceful retirement.
But here’s the kicker:
Your retirement savings can deplete relatively quickly if you don’t make a strong plan for how to manage your investments and maintain healthy retirement income.
What if you live 15 years longer than anyone else in your family history?
Can you retire with a $10 million net worth if you end up living 40 years after retiring?
Many investors work around such issues by investing in stable assets whose profits offer passive income in retirement. If you require assistance with choosing such assets, please get in touch with our wealth managers.
5. Passing On Your Wealth
Someone with a $10 million net worth should be concerned about how their wealth will be distributed following their passing. This large sum of money and assets can make your family’s and beneficiaries’ lives much easier, so you should ensure it is passed on to them correctly.
But guess what?
If you do not have a suitable will in place, the state will decide to distribute your wealth according to its own practices. This is called probate court, and you do not want to go through that.
Your wealth may end up being distributed in a manner you did not intend.
And it gets worse:
The probate process is riddled with delays and legal costs, both of which can be a headache for your children and beneficiaries.
6. Managing Your Taxes
Don’t be misled:
Millionaires pay some of the highest taxes in the country.
Many of these taxes are considered part and parcel of owning multiple assets. However, too few investors realize that they can reduce the amount of taxes they legally owe by restructuring their portfolio.
This is a practice that many famous billionaires have perfected over the years. You can also make your portfolio more tax-efficient with the help of an investment advisor or a wealth manager. Learn about tax-efficient investment practices in our guide for investors with $10 million or more.
Is a $10 Million Net Worth Enough?
You may be wondering, “Is a net worth of $10 million a lot?”
The answer to this question depends on who you ask. The median net worth of U.S households is around $120,000, so this makes a $10 million net worth far above average. But that’s too simplistic.
Here’s a better answer:
It depends on what you need this money to achieve for you.
That’s why a better question may be, “Can you live off $10 million dollars?”
You can certainly live a comfortable lifestyle with a $10 million net worth. But you need to manage it well and plan ahead for the challenges mentioned above.
5 Reasons Why Investors With $10 Million Should Use a Wealth Manager
All investors can benefit from using a wealth manager’s services. These professionals offer a wide variety of services related to managing and safeguarding your wealth, and helping it grow. Please speak with our wealth managers to learn how their services can benefit you.
These services include:
- Portfolio analysis
- Asset management
- Retirement planning
- Estate planning
- Insurance planning
Let’s take a brief look at each service:
1. Portfolio Analysis
A wealth manager can analyze your portfolio and identify any risks that may be present.
They can also spot inefficiencies that may be holding your portfolio back.
They can then offer advice or create plans to help you optimize your portfolio and achieve the returns you desire.
2. Asset Management
Wealth managers can also manage your assets and take this burden off your plate, so you can go enjoy your life without having to worry.
They can carry out buying, selling, and trading activities on your behalf. This asset management service allows you to focus on other wealth-building activities.
3. Retirement Planning
Wealth managers are familiar with the many retirement planning challenges people with high net worth will face.
They can help you with budgeting, investing, and generating retirement income at the level you need to help you achieve your dream retirement.
4. Estate Planning
As mentioned earlier, all investors should decide how they wish to distribute their wealth after their passing. A wealth manager or an estate planner can help you create a comprehensive estate plan that outlines your preferred distribution strategy.
Depending on your age, for example, they may help set up a trust that ensures your children’s or grandchildren’s education costs are covered following your passing.
Pillar Wealth Management works with a select group of high net worth estate planning specialists who understand the unique needs of clients who have tens of millions in net worth.
5. Insurance Planning
Even wealthy individuals can feel the financial strain of paying for high medical bills out of pocket. Some emergency surgeries can cost millions of dollars and leave you with far less wealth than before.
Here’s the good news:
A wealth manager can help you avoid such problems by planning ahead even for unexpected life events like these.
3 Factors Why Choose a Wealth Manager Over a Financial Advisor?
- Number of Services
- Client Net Worth
- Fee Structure
Wealthy investors typically work with wealth managers over ordinary financial advisors.
What’s the difference?
Here are a few reasons why a wealth manager may be better suited to handle the needs of someone with a net worth of $10 million.
1. Number of Services
Ordinary financial advisors can offer advice on financial planning and meeting some of your financial goals. However, their expertise is limited in certain areas.
Wondering how we know that?
See an in-depth investigation into how well the big financial brokerage firms Fidelity, Schwab, and Vanguard serve investors with ultra high net worth.
As you’ll see, wealth managers deliver a far wider and more specialized, customized range of services to clients with high net worth. Their expertise in the issues you’re facing simply doesn’t exist with typical financial advisors or large firms.
2. Client Net Worth
Another key area where wealth managers differ from ordinary financial advisors is in their clients’ net worth. Ordinary financial advisors may offer their services to clients of any net worth. This could be young graduates who are interested in making their first investments or seasoned investors that wish to alter their portfolio.
That’s a broad audience.
You are part of a very exclusive group with very specific needs.
Wealth managers only offer their services to clients with a high net worth or an ultra-high net worth.
At Pillar Wealth Management, we work with clients who have $5 million to $500 million in liquid investment assets.
3. Fee Structure
Wealth managers also stand out from other financial advisors because of their fee structure. These professionals charge their clients a fixed fee based on their asset value.
This fee can seem high, especially if your assets are worth millions.
But here’s the valuable secret:
This fee structure enables you to use a wealth manager’s services as frequently as you need, without worrying about extra charges.
Ordinary financial advisors often charge an hourly rate or a flat fee for their services. Neither of these fee structures enable you to work continuously and freely with them, seeking their expertise in as new situations, questions, decisions, and challenges arise – as they are bound to for anyone with $10 million or more in net worth.
If you need to use financial advisory services on an ongoing basis, it is much better to go with a wealth manager.
Why Choose Pillar Wealth Management
Wealthy investors across the country reach out to our wealth managers for wealth management services. Our clients consider us to be one of the top wealth management firms in the nation for a variety of reasons.
Each of our wealth managers possesses expertise in a variety of financial areas and can help you achieve your future financial goal.
We also strive to maintain regular communications with each of our clients. After all, we understand how crucial it can be to get in touch with your wealth manager on short notice, especially when you need assistance with a time-critical decision.
Our wealth managers also strive to provide each client with personalized plans and services. This customized approach allows us to help you meet your needs better. If you would like to get started with better wealth management, please set up an appointment with our wealth managers free of charge.
Is a $10 Million Net Worth the Ideal Net Worth Amount for Retirement?
Due to inflation, $10 million today may be the $1 million of yesterday. More than 1% of Americans have a net worth of at least $10 million. So, is $10 million a good net worth for securing your retirement? That depends! It depends on your lifestyle, that is, how much money you need to spend each year to feel comfortable with your day-to-day existence.
How much net worth you will need to have when you retire also depends of how many people there are in your household, how many dependents you have, who may need your financial assistance. You may want to support your children financially even when you are no longer here. In addition, your health and the health of your spouse are important factors in a budget. Do you anticipate having big medical bills or needing assisted living services?
There’s a lot to consider.
Another factor is how much of your net worth is in investable assets. Even if all of it is investable, you could expect to earn only about $200,000 per year with those investments, and that’s not a huge income when you consider the possible unforeseen expenses you could incur.
Financial Planning for Growth
The answer to this dilemma is to focus your financial planning on increasing your wealth and income. From the point of view of risk, this always means making diversification a key to you plan because diversification protects your wealth. Aim for yields at around 2–5% with a good diversification. So, you may need to take on more risk to earn more.
For example, in addition to stocks, bonds and mutual funds, your investments can benefit from dividend earning stocks and REITs.
Invest in Real Estate
Be sure to include real estate in your asset allocation plan. Real property always grows in value. You can own property that you might use as a vacation home, and you can earn rental income on it when you’re not using the property. You can own commercial property that will be used by a business or several businesses.
You can invest in real estate trusts (REITs) so you don’t buy and sell property directly but invest in a trust fund of real estate holdings. REITs are required by law to distribute 90% of their taxable income to shareholders. Unlike property you own, which takes time to sell, you can sell your shares in REITs on the stock market.
Make Your Income Go Farther
Without opting for more risk, you can stretch your income by making other changes to your life. Consider where and how your live now, and think about how you might live differently in retirement while still having a comfortable lifestyle.
Traditionally, many retirees move south to Florida to save money and keep warm! Actually, they’re also moving somewhere with a lower cost of living, which could be an option for you. If you live in a major metropolitan area and also enjoy all the big city amenities, you could have the same pleasure in a smaller city — less stressful and crowded, too!
Without taking on the upheaval of a major move away from where you’ve been living for the last 20 or 30 years, you can enhance your income through modifying your lifestyle by reducing your expenses. You can also increase your income by not taking early retirement, waiting to get the maximum benefits.
Generate More Income from Work
Besides increasing your disposable income by modifying your lifestyle, you can make a choice to continue working after retirement.
Many retirees today continue to work because their Social Security and pension income is insufficient. But many continue to work because they feel a need to remain active and involved outside the home. They may leave a job in order to devote themselves to work that is more fulfilling and better aligned with their values — not being motivated just by the profit motive. And they may think there’s more to life than being a couch potato!
You can work part-time and still have plenty of time for hobbies and other activities that you may have neglected while in the proverbial rat race. You can work as a freelancer, set your own hours, and work from home.
Make a Budget
Whatever choices you make to maintain and grow your wealth and ensure a comfortable retirement, you need a budget. What are your expenses and how much income do you need to cover them?
It’s never too soon to have a budget. A budget shows you month by month and year by year how much you spend on the necessities of life (and the extras when there’s money left over).
Make a list of all your expenses and how much you think you spend on each one, and every time you spend money, log that amount next to the corresponding expense. Some of these expenditures will be weekly and sometimes daily, like food, clothing, and transportation. Some will be monthly, like car payments and utility bills, and some will be six-monthly or yearly, like insurance premiums and property taxes.
Your budget will need other line items, like medical and dental bills you paid that month. Did you eat out? Did you indulge in a weekend away? At the end of each month, calculate the total of your expenditures for the month. Did you go over your budget? If so, you need to adjust the budget to better reflect your actual expenditures.
You will quickly get a good feeling for where your money goes and, maybe, where you may have spent money unwisely! And that’s the key to budgeting — having a clear picture of where the money goes so you can maximize your savings.
Life After Retirement
Now, imagine you’ve spent the last few decades saving for retirement. Will that be enough? Take a look at your budget, and you’ll see that your expenditures are bound to change. Some line items will decrease; for example, you’ll save on commuting costs, and you’ll stop investing in suits and high-heeled shoes!
However, some of your expenses may increase, particularly medical bills — should you be looking at long-term care insurance? If your retirement planning included more travel, is your retirement income sufficient to cover that 3-month vacation on that Pacific island? All those future contingencies need to factor into you financial planning today.
But Don’t Wait to Spend It
If you’ve got that $10 million net worth, don’t put all your time and energy into growing your wealth to ensure your retirement. Spend some now, too. Invest in your children’s future by funding their education plans, and give more to charity.
To be 100% transparent, we published this page to help filter through the mass influx of prospects, who come to us through our website and referrals, to gain only a handful of the right types of new clients who wish to engage us.
We enjoy working with high net worth and ultra-high net worth investors and families who want what we call financial serenity – the feeling that comes when you know your finances and the lifestyle you desire have been secured for life, and that you don’t have to do any of the work to manage and maintain it because you hired a trusted advisor to take care of everything.
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