You need this much money to never work again

Hypothetically speaking, how much money would you need to have in the bank to never work again?

Of course, it all depends on how you handle your money.

Greg McBride, Bankrate’s chief financial analyst, estimates that a healthy person in their 30s who will likely experience a 3% annual inflation increase for the rest of his or her life would need about $5 million to never work again.

That is, as long as they invest the $5 million wisely.

“There is no one-size-fits-all answer,” McBride told FOX TV Stations.

McBride went along with the idea that a 30-something had somehow made $5 million. What should they do to ensure that $5 million lasts them the rest of their lives?

“You need to invest that money in a fairly diversified portfolio,” McBride explained. “You need to preserve the purchasing power of this money for years to come.”

Open a business

Some may think that buying things that increase in value, whether it’s gold or art, can be a great place to invest your money if you don’t want to lose it on frivolous things.

But according to McBride, that might not be the best thing to do.

“There may be holding or storage costs, for example, as with precious metals. And on the other hand, there will be transaction costs. There is not complete unpredictability as to what that asset will be worth in some cases. In the future, especially for items that are considered collectibles, what you will get is the amount will be what someone else would be willing to pay for it. There’s no underlying intrinsic value to it, as in, say, a business or a company, “it’s security that creates a predictable stream of cash flows,” McBride said.

McBride suggested that when you have that much purchasing power (remember, we have $5 million), it’s probably best to start a business.

“More than 80 percent of millionaires are business owners, and 80 percent of millionaires are first-generation millionaires. The truth is that achieving great wealth is often achieved by owning a business rather than through a one-time windfall like lottery winnings or an inheritance,” he said. McBride stated.

What about real estate?

There may be a few of you scolding yourself for not buying a house in pre-pandemic times. Or maybe it’s because you couldn’t foresee starting to save money to buy property while you were in the womb.

But while owning real estate may seem like a great way to invest in your newfound wealth, it may be a riskier investment than you think, McBride said.

“The thing about real estate is that it is very capital intensive,” he said. “There are tons of transaction costs that come and go, and then carrying costs; you have property taxes, property insurance, maintenance costs, maybe even things like condo or homeowner dues. So there’s a lot of carrying costs in real estate and real estate, and over time, residential real estate is the last Despite our well-publicized housing booms over several decades, house prices over time tend to appreciate at a rate likely faster than inflation.”

Which type of business is the most profitable?

US Chamber of Commerce publishes list top 100 small businesses It opened in the United States last month.

More than half of these businesses generated $1 million or more in revenue in 2023.

“Small businesses represent the flexibility and creativity that define America’s free enterprise system, but they often go unrecognized,” said CO Vice President and Editor-in-Chief. Jeanette Mulvey he said in a statement to FOX Business. CO is a publication created by the U.S. Chamber of Commerce for small businesses.

“As the world’s largest business organization and network representing companies of all sizes and industries, we understand what makes a great business.”

The businesses that ranked first in the list of 100 are as follows:

1. Confero, Inc.: Provides professional services
2. 787 Coffee: Puerto Rican coffee company
3. Aquantuo: Allows individuals and businesses in Africa to shop from any international store and have their orders delivered to them seamlessly
4. Aspire Construction and Design: Real estate and construction
5. Atlantic Sea Farms: Regenerative seaweed farming
6. Beehive Meals: Meal preparation and delivery service
7. Digit7: Specializes in artificial intelligence-supported solutions
8. glassybaby: Handcrafted, American-made glass products
9. Industrial Gymnastics: Latin American gymnastics facility
10. The Cavern Men’s Barber Lounge: High-quality barbering experiences

Other less obvious ideas, such as food trucks, car wash services, enrichment activities for children such as mobile apps, and private lessons such as language or business classes, are ways to start a small business with lower initial but higher costs. growth potential over time, According to Nerdwallet.