I’m a Millionaire (but don’t look it) part 1

I’ve just had a very rough quote for a transfer out of my defined benefit final salary pension and if I were to accept it, we’d be pushed into the ranks of millionaires!

The thing is that I just don’t look like a millionaire, spend like a millionaire and I definitely don’t look like a millionaire. So what’s that all about then?

Read part 2 here

Of course the first question is; what does it mean to be a millionaire?

The term was first coined in 1816  in a letter of Lord Byron. Of course, with inflation that £1m is actually about £100m now – so these days it doesn’t mean as much.

In fact, being a millionaire is no longer a rarity at all.  There are over 40 million millionaires in the world (that’s about 1 per 200 people) but in the states there are over 17 million (around 5%) and even in the UK there about 3.6 million (6%) with London having more than its fair share – although exactly how many million and billionaires have homes in London but don’t call it home (for tax purposes) is anyone’s guess.

Now, GFF wasn’t born with a silver spoon in his mouth. I also don’t look like a millionaire as I don’t shop in Millionaire&Spencers (much) or have a jewelry collection to rival Mr T. And neither was George Gordon Byron, 6th Baron Byron FRS who was born in lodgings and had to endure part of his life in rural Aberdeenshire – I’ve been to his (not ruined) house and it’s no Blenheim Palace nor even a Haddo House).

Most of what I have is down to my own guile, stinginess and occasional hard work. I’ve been helped in that I don’t want to show-off my wealth and my parents attitude to obscene displays of wealth or conspicuous consumption have prevented me from “showing off”.

And lucky for me because in the Millionaire Next Door by Thomas Stanley, you’d find out that most millionaires are quite ordinary people who’ve generally followed the basic principles of earning well (but not like footballers or hedge fund managers), saving well (over many years) and investing wisely. They avoid flashy things and are generally content with life. They go under the radar and don’t look like millionaires, drive beat up old cars and defintely don’t look flash – just like GFF).

The book is from 1996 originally and it has a few detractors but I think that it’s a good guide to a longer term view of wealth. A lot of the FIRE movement is written from the perspective of millennials (or Xennials) but the path to FI may just be time (and massively rising property values + final salary pensions). So don’t dismiss Boomers  experiences outright.

Has becoming a millionaire changed you GFF?

No, can’t say it has. I should add that I’m the same old grump as I was a few days ago. The difference is that if I transfer our my old final salary pension I’ll get a large 5 figure sum for it. I haven’t done it yet and I’m not decided if I should or shouldn’t.

One thing that I should add is that our family problem is that having money that I’ll need to wait over 20 years to access is a bit of a problem when we are looking at Early Retirment and not Fancy Retirement. I’ve covered it here, and here and here  and here and here. We’re not out of the woods yet and raising a family can be a very expensive experience – years of new shoes, violin lessons, school uniforms and holidays await us.

So, I’m more focused on the here and now. In part 2 I’ll talk about transferring out and the balance between longevity risk, sequence of returns risk and how on earth my modest pension is worth so much.

Thanks, GFF




  1. It’s funny, I’m a multimillionaire but because I dress nicely on occasions where it is appropriate and my old used car looks new and my career I retired from was highly visible and powerful everyone assumes I’m more like a millionaire 50 times over, which I am not! We live simply, and never made the massive corporate compensation people think I did. But they’re is no such thing as stealth wealth for me. Instead it’s stealth frugality. Unless I hide my frugal choices it confuses my rich friends.

    Liked by 1 person

  2. I get an annual CETV from my deferred Defined Benefit scheme. Like you I’d also be a millionaire if I transferred out. However, I’m not transferring out yet. I’ll continue to monitor the health of the scheme and get the annual CETV. My deferred benefits increase with RPI each year.

    Liked by 1 person

      1. Crikey, RPI up to 7% is an amazing deal.My deferred scheme is RPI but limited to a maximum 5%. Indeed, keep an eye on the scheme as many have tried to change the terms from RPI to CPI. Also ensure the scheme is healthy as if it’s not you’d want to transfer out rather than falling into the PPF and it’s significantly less generous terms.

        Liked by 1 person

  3. “GFF wasn’t born with a silver spoon in his mouth like George Gordon Byron.”

    Byron was born in lodgings in London; the “lame brat” grew up in straitened circumstances in Aberdeen.

    The silver spoon came only later.

    Liked by 1 person

  4. The inflation-linking on my principal DB pension is uncapped. In a hyperinflation that wouldn’t matter because the scheme would presumably go bust and in the PPF I’d lose virtually all my inflation-linking.

    And at the moment my pension rises are always lower than CPI anyway because of interaction with the State Retirement Pension (an interaction that I have only occasionally, fleetingly understood).


  5. Well done on reaching seven figures. This high five figure pension looks a bit marginal compared to that. Rightly or wrongly I transferred out a small five figure pension many years ago mostly so I could manage it more closely myself. It was also marginal in the scheme of things.


  6. Good to hear that becoming a millionaire hasn’t gone to your head, GFF!

    I haven’t bothered to get a quote for my DB pension as I would rather not know, although based on a ex-colleague’s quote, it too will be a nice 5-figure sum. However, it wouldn’t be enough to make me a millionaire. I’ve no plans to transfer it out.

    It does seem like being a millionaire is a lot more common these days and I would love to be one but it’s a dream, not a plan – kind of like winning the lottery. For me, being a millionaire would be to have £1m in my bank or involvement accounts, ie not include the house.

    And for some reason, in my mind, it’s all in bank notes and I’d be rolling around in it like Scrooge McDuck!


      1. I suspect some don’t count the value of their principal residence in their calculations as they live in it as their home and would never sell it withing their lifetime. However, I do count my home in m my net worth calculations.


      2. that’s how I feel – although we might sell it at some point. I update the value of the house on a monthly basis (based on the ROS figues – http://www.ros.gov.uk) but I don’t pay too much attention to the value.
        In the same way I look at the outstanding mortgage every month and consider the capital repayment as a reduction in the mortgage liability and not as money disappearing into nowhere.


      3. If you do think that a house is not an asset then you are choosing to ignore it. But I know that our house saves us maybe £800-1000 per month in rent and costs us less overall. That’s the value in the asset even if you think that because you live in it and don’t plan to sell it, it’s not an asset.

        MEWing (mortgage equity withdrawal) is a good way to capitalise your increase in house price to invest in real assets like flashy cars, fancy holidays and a new wardrobe.
        Equity release is a beige version of the same.


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