Estate Planning

True Wealth - What's Your Number?

By Hull and Hull LLP

Three bakers won the Lotto Max $50 million dollar prize this week, they plan to stop working and enjoy their retirement (as reported by the Toronto Star here). It seems that winning approximately $16.6 million dollars each has allowed them to consider themselves wealthy. 

The perception of wealth has taken a beating in the last few years. With the recession causing a bumpy ride for many since 2007, the recent economic improvement in the stock markets has perhaps again altered our expectations. The number of people who can claim millionaire status in the United States jumped by 8% last year (based on net worth). Shocking? Maybe, but the number still falls short of the highs of 2007. 

I've written a fair bit this week on our individual view points, however, today's blog is the one in which I feel that our subjective perspective is likely the most varied. The reality is that depending on how you calculate millionaire status, being a millionaire may not allow you the freedom you wish for. A million dollars may seem like a significant amount, but if the majority of your net worth is tied up in real estate, an economic downturn like the recent recession will quickly bump you off that list. That's just one of the many considerations that should be on your mind when reading these statistics.

So where does your number rank? I'm convinced that at most water coolers, around the time that your receptionist asks if you're in for the office lottery ticket pool this week, you may start to plan what your life would be like if you win. Certainly, even moderate amounts make a difference. The number of people lined up at Tim Hortons with their ‘Roll up the Rim' free coffee in hand proves that.  Still, I leave you with this, in a recent survey conducted by Fidelity Investments (reported here), it takes having $7 million in net worth to feel wealthy. I think I could probably do with less than that. If you've ever seen me win a free coffee, you know what I'm talking about.

Have a great weekend,

Nadia M. Harasymowycz

Full post as published by Toronto Estate Law Blog on March 18, 2011 (boomark / email).