+44 7393 450837


Follow on

Is 5 million enough to retire?

I often write on Quora.com, where I am the most viewed writer on financial matters, with over 531.4 million views in recent years.

In the answers below I focused on the following topics and issues:

  • Is 5 million enough to retire?
  • Is it possible to become a millionaire without money or connections?
  • What celebrities have you encountered that were either really nice or really horrible?
  • How easy is it to start your own business in the UK if you’re not from there?

If you want me to answer any questions on Quora or YouTube, or you are looking to invest, don’t hesitate to contact me, email (advice@adamfayed.com) or use the WhatsApp function below.

Some of the links and videos referred to might only be available on the original answers. 

Source for all answers – Adam Fayed’s Quora page.

Is 5 million enough to retire?

Most people assume so, and think they will be living in a place like this with no worries:

main qimg 971e9ddda76be7a42b34acdc310fb4ad lq

Often this isn’t the case.

That is one reason there are so many broke former lottery winners and professional athletes.

Whether $5m is enough depends on

  • Where you live as this impacts taxes
  • Your lifestyle and how much you withdraw on a yearly basis.
  • What you invest in

The last thing is key.

If you keep millions in cash, that will work out if you only have a few years to live.

Over decades, it likely won’t, due to inflation and currency collapses.

There are many former USD multi-millionaires in places such as Argentina, Venezuela and even probably Ghana now after the recent decade of depreciation.

What is more, if you have $5m in a house and pensions, it isn’t liquid.

There are many asset-rich, cash-poor people, and those known as ‘house poor’ – often widowed old ladies who are struggling in big homes.

There are also many people who have $5m business valuations but they never find a buyer.

$5m will work for most people if it is in relatively safe, liquid, dividend-producing assets, and your lifestyle isn’t crazy.

Most studies show you can withdraw 3%-4% per year safely, if you are invested in the right areas.

That is 150k-250k on $5m and you can increase it in line with inflation .

Yes there are ways to make much higher dividends and profits but often by taking bigger risks.

A safe/cautious portfolio will often yield 2% or so above inflation per year, on average, which makes withdrawing 3%-4% sustainable for most people.

If you are sensible and don’t assume that you can’t possibly run out of cash, then $5m should be more than enough for most people.

Those who get caught out will be reckless or keep too much in cash.

Is it possible to become a millionaire without money or connections?

I presume you mean is it possible to become a millionaire without money and connections right now.

Of course becoming a millionaire is about having more than a million Pound, Euro or USD in assets, which is about money.

In any case, most of the world’s millionaires and multi-millionaires started off poor or middle-class.

Part of the reason for that is there aren’t many inherited wealthy people in the world compared to those who start off poor or middle, and plenty of the inherited wealthy blow the money.

main qimg 5c5615f0ca3f80a69cd762c3f540f4ff pjlq

Most of the multi-millionaires I have encountered started with zero, and instead started businesses and/or invested for the long-term.

It is estimated that 14% of the world’s millionaires are teachers, and middle managers and accountants are also quite common job types to become wealthy over time.

The key thing is starting young enough so you can compound:

main qimg 6960e8a4c6400104911d0549a4263168 pjlq

What is much more difficult is to become seriously wealthy, and not just end up with a few million in retirement.

Getting to say $10–20m+ in addition to a private business which is generating 300k-500k in passive income per year or more.

For that, starting earlier obviously helps, so you have time to build a good business, after getting some experience in the field.

However, sensible risk-taking and a bit of luck is also needed. If Facebook (or most big firms) would have been started two or three years before or after it established, it probably wouldn’t have blown up.

Even somebody like Buffett wouldn’t be what he is if he wasn’t born in a developed country and didn’t live so long to compound:

main qimg 724c32df0e016c0d7f31afbce79468a9 lq

He admitted himself that he also wouldn’t have been wealthy had he been born hundreds of years ago, when physical strength was more important.

You do make your own luck up to a point though, through persistence, hard work, resilience etc.

What celebrities have you encountered that were either really nice or really horrible?

Depends how you define a celebrity.

In the early 2000s, I met Dwight Yorke, who was big at the time in the uk:

main qimg df23e84c3050f0b18bd242ca6c7514c3 lq

He was pretty nice but I met him in the stands – interestingly he was in the Aston Villa end with no security.

Aston Villa was his former club as well.

If you think about it, somebody who doesn’t want to mingle won’t just randomly come into the opposition fans area.

When I interviewed Kevin O’Leary over a year ago, he was nicer off the screen on our one-on-one talk, compared to on screen, which is a good sign.

main qimg da2856aa0fa58d59fa3d412c5dd0b53a lq

Most people are the opposite.

The people I have had the worst experience with are people in academia or politics.

Anneliese Dodds is a senior Labour Party politician, who was briefly the shadow chancellor (the opposition finance minister)

main qimg 5a54d2d52bc17a3fd2aeb5112cde4e30 lq

She used to teach at my old university.

Didn’t come across as a bad person, but had radically different opinions before she came into politics versus today.

An example of this was when the then Bank of England Monetary Policy member Adam Posen came to visit.

main qimg 870188a01aaf406cbb23e9439c1612fe lq

He himself is amiable when people agree with him but not so much when challenged, but that is a point for another day.

Anyway, after the event there was a question and answer session.

She raised her hand to say ‘aren’t homes just mainly owned by older and richer people anyway’- more of a statement than a question.

Quite typical of her political outlook at that point – quite socialist.

Fair enough if that is her view, but you can imagine my shock at seeing her paint herself as a moderate since going into politics.

Adapting and knowing when you were previously wrong is good provided you are transparent about it.

However, I doubt she has changed her views that much as she was well into her 30s when I met her.

Somebody having a bad mood is one thing – I think we would all get fed up with people asking for our autographs all day in the case of sports and entertainment celebrities and we have all lashed out.

Cynical moves are quite different. She briefly showed her real beliefs when she first ran at the time I met here.

She lost the election in 2009 where she pledged to quote “take the average wage for people living in my constituency (Reading East), and invest the rest in an improved service for my constituents”.

Didn’t work then and now she is …..drawing a full MPs salary and presenting as a moderate after winning a parliamentary election a few years after that pledge.

No wonder many people are cynical about politicians!

How easy is it to start your own business in the UK if you’re not from there?

The UK has the most companies in the world because you can go onto Companies House and set up a firm in 24 hours or so.

main qimg b0568625f0edc909fbfe61674120e940 lq

This is what people often fail to understand about “offshore”.

The UK and the US, especially Delaware, is an easier place to set up in than a country like the Cayman Islands, which is now (in some aspects) more highly regulated than their “colonial brothers and sisters”.

Even if you live in places like Cayman or Bermuda, getting banking can be difficult these days.

It isn’t the 1970s or 1980s, when these traditional offshore locations were sleazy in some ways, compared to places like the UK.

What is more, if you use a firm like yourcompanyformations to incorporate in the UK, it will make it even easier.

The tricky thing is banking, but some firms will allow non-residents to get it.

If only one director lives locally, it makes it easier to get banking, but some allow it if nobody lives locally.

The hardest thing is if you are starting a business in an area which is sensitive for money laundering such as online gambling and some financial services, or highly regulated industries such as arms.

That is the case globally now, but is usually workable provided you are doing everything properly.

It shouldn’t therefore be a surprise that many non-British people have a UK-entity, and deduct payroll taxes against UK corporation tax, if they live in a place like the UAE or any other low or no tax jurisdiction.

Obviously get it checked out by a qualified tax expert or accountant though.

Pained by financial indecision? Want to invest with Adam?

smile beige jacket 4 1024x604 2

Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.



Gain free access to Adam’s two expat books.

Gain free access to Adam’s two expat books.

Get more strategies every week on how to be more productive with your finances.