Why Corey Doesn’t Want To Become a Millionaire

Editor’s Note:  I usually put an indication at the end of a post whether it is a guest post, however, considering the title I felt like notice should be moved up.  This was a guest post from Corey at Passive Income to Retire, where he tracks his progress to retire by the age of 27.

In our society the middle class often aspire to become millionaires. Becoming a millionaire is often a sign of accomplishment. It is an indication of financially security. I know that I usually see it this way. Whether its my upbringing or society’s influence on me, I think of a million dollars and can’t help but ask the “what if” questions. Oh, how life would be different, right?

Yet, as I think critically about becoming a millionaire, I realize that this is a false image. Having a million dollars does not equal financial security and you don’t need Nicholas Cage’s financial failures as an example to tell you this. While growing up, I used to think that having a million dollars would be a sign of success, now I look at it differently.

A Helpful Image of Middle Class Millionaires

There are many great examples of everyday individuals who achieved their “millionaire” status. There is the popularized, ‘millionaire next door’ – the idea that your neighbor works hard for their entire life, saves his/her precious earnings, and is rewarded at an older age with financial security. This large nest egg allows the millionaire to do the things that they were unable to do for their entire life. Because of their sacrifice, they end up becoming a millionaire from all of their savings and it’s possible that you don’t even know it.

This example is often used to teach us that anyone can become a millionaire. If you dedicate enough discipline and avoid the luxury items, you too can achieve this financial security. It teaches us to prepare for the future.

Why I Don’t Aspire to Be a Millionaire

Even though this image can be helpful in teaching us discipline and delaying gratification, I also find it disenchanting. The part that is often overlooked in this story is that the individual is forced to miss out on common experiences throughout his/her life. For example, my grandfather worked his entire life and was quite financially secure in his old age. He often talked of how he never took time off from work, rarely took vacations, and not once traveled outside of the U.S. Did he have financial security because of his sacrifice through life? Absolutely, but at what costs?

The idea of aiming to become a millionaire also seems to contribute to the mentality that is the root of financial disaster. I want to suggest that by aspiring to be a millionaire, one not only misses out on life, but also becomes entirely focused on what they could do with it. As a result, they lose sight of financial responsibility and even security. Think about the last time you answered the question, “What would you do with a million dollars?” I bet you didn’t answer, live modestly and try to help others. Most likely (although I could be wrong) it began with, “I would first buy…”

When I look at my life goals, I no longer aim to become a millionaire. Instead, I am actively pursuing means to create passive income streams that will allow me to further enjoy life by not being forced to work a 9-to-5 job. Yes, I still plan to contribute money towards long term savings as I go along, but I don’t plan to work my entire life away for some false sense of security. Instead I hope to have enough money coming in from my business ideas that I can quit my day job in the next year or two.

After quitting my day job, I hope to work on expanding to the point that I can pay others to manage my business(es) while sustaining or even increasing my net income. This will make my income purely passive and give me the freedom to do whatever I want. This is all part of my early retirement plan. This will certainly take a lot of effort, but I would much rather work now to create systems that will allow me to enjoy life while I am young, rather than wait my entire life to do the things that I wasn’t able to do. In aiming for a cash flow instead of an arbitrary figure, I am setting a different priority. I may end up becoming a millionaire in this process, but it is far from being a goal of mine. I would much rather focus on creating a cash flow from passive income than making sacrifices that I will regret later.

Do you want to become a millionaire? What does it represent for you?

19 Responses to Why Corey Doesn’t Want To Become a Millionaire

  1. Corey,

    First and foremost, thank you for the guest post I appreciate it, but I have to call you out:

    It isn’t that you don’t want to be wealthy it is that you aren’t interested in the self deprivation that it SOMETIMES takes.

    If your passive streams of income threw off $200,000/yr (net of taxes) and you only spent $100,000/yr – you’d WANT to be a millionaire…and it wouldn’t be all that hard.

    I must have been clairvoyant because I wrote a response like 18 months ago lol:

    http://www.myjourneytomillions.com/articles/people-dont-wealthy-lying/

    • Thanks Evan. I was anticipating your response because you always tell it how it is – and I like that.

      Perhaps you are right, but I also have to be realistic. I don’t anticipate ever making $200k in one year. And if I was able to save $100k each year, why would being a millionaire be a goal? That wouldn’t seem like much of a goal. I think the point I was trying to make… well, two things. I don’t want think that aiming for a large lump sum (like a million dollars) is a healthy approach to finances AND I don’t want to sacrifice to get there (because it would be a huge sacrifice). Instead, there is more (or maybe different) financial security in looking at your cash flow, especially if it is passive income. Sure, a lump sum might offer you some relief that if you lose your job, you have something to rely on… but what if you didn’t have to work (a lot) to maintain the same income. I understand that you can take a lump sum and calculate the safe withdrawal rate to get a cash flow, but it would take a long time to get anything close to what I think I can create within a few years by looking just at income.

      • Now this is a comment I can get behind!

        I recently wrote about not really understanding safe withdrawal studies and throw in the fact that multiple streams of income is a goal of mine…put those 2 things together and I think we actually agree with each other!

        What streams do you currently have? I’d love to see a few posts (feel free to link them below)

  2. Reaching a million in net worth isn’t going to change my life drastically. But it will be an awesome milestone. That said, it is a LONG way off!

  3. I really like your philosophy Corey. I feel the same way. Money is a tool to allow freedom and flexibility to enjoy the things you want. For me, I want to be able to complete my bucket list and live a life that is satisfying and amazing.

  4. Nice post Corey (and Evan – I knew you were going to disagree when you moved up the disclosure, heh)!

    I’ll take the cynic side: a million might be a round number, but in a number of places it’s not enough to retire on without a relocation. Another point is if you develop an income stream, you may not have liquid assets of a million dollars, but the income stream has some value. Assuming a 4% payout annually (your mileage may vary), if you’re receiving $40,000 in income from your assets, your income stream is ‘worth’ $1 M.

  5. Growing up, I don’t ever recall wanting a million dollars. In fact, today, I still don’t have a monetary goal in mind. I just want what Miss T spoke about: the “freedom and flexibility to enjoy the things [I] want.”

    I want to be able to make decisions based on what I want to do instead of what I can afford to do. I think everyone would agree that having THAT goal versus a set $$$ goal is better.

    But, it is very true that if you have an account with $1 million at retirement (age 65), it should last you until death so long as you withdraw it at a decent rate. However, it is very frightening to rely on that ONE source of income (since Social Security is not reliable for our generation).

    Generating multiple streams of income (from businesses, rental property, etc.) is a great way to create the feeling of financial security. The feeling of being financially secure is more important than how much money you have at retirement.

  6. What would I do with a million dollars? I would use it to generate passive income. The problem with “real passive income” is that it usually takes a large sum of money to generate. I guess if you wrote a bestseller, that would be good too.
    For a regular person with no discernible talent, having a million dollars is the easiest way to generate passive income.

    • I’m in Retire By 40s camp (except I don’t own real estate yet).

      The problems with businesses is that they all have a cycle, and if they are internet based (or technology based), those cycles have large spikes and relatively quick drops (Netware, dbase, Microsoft?)…

      I’ve noticed that some of the abnormally large blogs have started to lose viewership. To keep a blog at the top requires constant work. If you don’t they lose air like a balloon without one end tied.

      Dividends are a more pure form of passive income (unless they are technology stocks, lol, but technology stock mostly do not pay dividends).

      Nicolas Cage, financial problems aren’t really problems. He doesn’t do any financial planning and lives life very large (like the former artist McHammer).

      As for me, I want to be a multi-millionaire, a lonely million isn’t like a million 30 years ago :)

  7. I’m definitely working on creating passive income streams over working hard to save. If I use leverage I can build passive income streams faster. Working and saving will bring me to the same place but like you said, I may be to old to enjoy it when it comes.

  8. A smart business person knows that worth isn’t the end goal, it’s cash flow. A good example of that is investment property over the past ten years. What’s the value? down, up and now down again.

    It doesn’t matter what the property is worth, the cash flow needs to pay the bills and offer a suitable rate of return.

    Everything that has yield has been bought up over the past 3 years. This makes the cash flow value of a million less than what it was a few years ago.

  9. Corey, let’s be honest. I think you do, but since you can’t get there by 27 in two years, you say you don’t.

    Before you retire at 27, I really would like you to read the post, “The Dark Side Of Early Retirement”. Just google it and have a good think!

  10. This is where the smart money is at. Set up the income streams first so you can focus yourself in whatever direction you want to go.

    I’d rather not wake up one day with a million bucks and a $50k/year nursing home bill slowly draining it away.

  11. I do not have plans on becoming a millionaire. I do have plans on volunteer work I want to do when I retire someday…I am thinking I will be around 80.

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