How much money do you need to live like a millionaire today?
How much money do you need to live like a millionaire today?
Introduction.
Back in 1981, Derek 'Del Boy' Trotter famously declared, 'This time next year, Rodney, we'll be millionaires'. But in today's world, does having a million pounds still buy the millionaire lifestyle, and if not, what level of wealth is required today?
Want to calculate how much capital you will need for your own millionaire lifestyle? We’ve built a dedicated calculator below.
Note: In this article, we use a flat tax rate of 50% to keep things simple when deciding how much money is required to generate an income. There are always ways to reduce this, but overnight cash lump sums are more difficult to shelter from tax than investment accounts that have been drip-fed over decades. This is not financial advice, and this article is meant for entertainment purposes only.
What exactly is a millionaire?
So, what exactly is a millionaire? For the purpose of this article, we're referring to someone with a net worth of a million pounds or more. Net worth is the total value of your assets, such as your home, car, investments, and savings, minus your liabilities, like mortgages, loans, and credit card debt. It's essentially your financial standing in life.
Are you a millionaire? Working out your net worth.
Crucial to determining if you are a millionaire is understanding your net worth. For instance, if your house is valued at £750,000, but your mortgage stands at £300,000, your net position on the house is £450,000.
Next, we'll examine your investible assets, which could include your pension, ISAs, savings, and cash. For the purpose of the exercise, let's assume you have £325,000 spread across these different asset classes, bringing your total net worth to £725,000. Adjust the figures to suit your circumstances.
What is the millionaire lifestyle?
Throughout Only Fools and Horses, Del's view of wealth is expressed in snippets and off-the-cuff comments, often including:
Symbols of success: big cars, foreign holidays, cigars, flashy clothes, and champagne.
Prestige and respect: he imagines himself running a global business empire ("Trotters Independent Traders PLC").
Freedom from hardship: a life where he no longer has to hustle or "duck and dive".
Is £1million enough to live the millionaire lifestyle today?
It's doubtful that a net worth of £1m will result in you feeling like a millionaire today. If we go back and look at Del Boy's millionaire specification, it's fair to say that:
A millionaire doesn't need to work; their income is derived from investments.
They own a lovely house outright.
They have a serious cash buffer for emergencies.
They drive an expensive car and take frequent holidays.
How much did Del Boy have when he became a millionaire?
It took Del Boy until 1996 to become a millionaire, when he managed to sell a pocket watch for around £6.2 million, which he shared with Rodney. So, he broke the mould and achieved the dream, with both of them having a net worth in the region of £3m after taxes and fees.
The effect of inflation.
Back in 1981, £1 million was a substantial amount of money. Adjusted for inflation using the Bank of England’s calculator, that sum would be worth approximately £3.85 million today - a significantly larger figure.
Del Boy's £6.2m windfall from the sale of the pocket watch in 1996 is worth about £12.5m in today's terms, which is a substantial sum by any measure. This would leave the Trotters with about £6m each today if the proceeds were split equally.
What does the millionaire lifestyle cost today?
To live the millionaire lifestyle that Del Boy once dreamed of, a combination of capital purchases and cash income is necessary. Perhaps he has decided that running the international business is too stressful, so he prefers passive income from investments instead and we will work on this basis.
His predominant capital purchase will be a very nice, but not over the top, house in the South of England, for which he will need a cash budget of at least £1.75m.
The remainder of his millionaire lifestyle needs can be covered with a regular income from his investments.
Cars.
Cars are always likely to be one of the biggest drains on one's income. Because Del Boy doesn't want to put his capital into depreciating assets and plans to offset his returns against the cost of finance, he decides to set aside £1m into a dedicated investment account to run a nice car.
Del Boy always uses a theoretical return of 5% from his investments, as this will allow some margin for bad years and also allows inflation to run and not eat into his capital. As such, the £1m car fund would provide him with a pre-tax income of £50,000, which, due to his tax banding, leaves him with about £25,000 each year to finance and run his car.
He often chooses a one-year-old Mercedes S Class because it offers the prestige he's after, and he knows that buying this way will mitigate the depreciation. He typically chooses the PCP option, which limits his capital exposure. He finances it for two years until the warranty expires and then rolls the equity into a newer one. He budgets around £1,500 each month for the car payment, which is £18,000 each year, and he uses the balance for deposit savings and running costs. This way he keeps his capital and the income runs his car and replaces it on a continual basis.
Holidays.
Del Boy has always dreamed of foreign holidays, and he wants to go skiing in the Alps over New Year, then head to the Caribbean for some sun in February. In the summer, he drives down for a week on the Costa Del Sol, and in the Autumn, he goes slightly further afield. His budget for each trip is £10,000, so he needs £40k a year of income after tax (£80k pre-tax). Which, using his 5% rule, means he needs to set aside another £1.6m to generate sufficient income to cover this part of his life.
The day-to-day costs of life.
Del Boy doesn't want to worry about the cost of living. As such, he has budgeted £20k a year to run his house and keep it well-maintained. His food and wine bill is about £250 a week (£13,000 a year), and he likes to be smart, buy a few toys and eat out, so he has an annual discretionary budget of £15,000 for him and his wife. This totals a further £48,000 net or £96,000 gross, requiring a general income fund of £1.92m
How much money does one need to live the millionaire lifestyle?
For Derek Trotter to achieve his millionaire lifestyle, he will need the following sums to provide the necessary income streams:
House: £1.75m one-off capital outlay.
Car fund: £1m for £50k gross/£25k net.
Holiday fund: £1.6m for £80k gross/£40k net.
General income fund: £1.92m for £96k gross/£48k net.
TOTAL CASH REQUIRED: £6.27m
INCOME FUND REQUIRED: £4.52m
The gross income generated from the funds, once the house has been purchased, is around £226,000 each year, which equates to around £113k after tax.
As we know, Del Boy and Rodney sold the pocket watch for just over £6m in 1996, which is the equivalent of just over £12m today. Split 50:50, it gives them in the region of £6m each, which is more or less the exact figure we have arrived at from today's millionaire lifestyle budget above.
As a result, it is pretty safe to assume that they can both live like millionaires with their share of the watch proceeds, if it were sold for £12m today (£6m each).
What does this mean for everyone else?
If your surname isn't Trotter, but you want to know when you will start to feel like you have the disposable income of a millionaire, or want to set an income/capital fund target for yourself, the millionaire lifestyle budget is undoubtedly a good place to start.
From what we've learned above, the net worth you need to live like a millionaire in the UK starts at about £2.5m on the lower end (mainly governed by the value of your home and the wrappers your money is held in) and £6m on the upper end (again, primarily led by the value of your home, requirement for increased lifestyle options and tax treatment of income).
However, suppose you wanted to think a little more modestly and you are happy with your home (which is paid-off), but you still want the income of a millionaire. In that case, you will likely require a passive pre-tax income of between £100k and £150k each year - for which you will need an investment fund of between £2m and £3m in total.
You can then add the value of your home to that figure to arrive at your total net worth target.
Calculate the cost of your own millionaire lifestyle.
This calculator takes the annual costs of your chosen lifestyle - cars, holidays, and everyday living - and works out how much invested capital would be needed to generate that income, based on your preferred investment return and tax rate.
Simply adjust the sliders for each category to reflect your own budgets. The tool will show you:
The gross income required before tax.
The lump sum you’d need invested to produce that income.
Your total cash requirement including any one-off purchases, such as a house.
It’s a quick way to test the numbers behind the “millionaire lifestyle” and see whether your capital really would sustain it.
Millionaire lifestyle calculator
Annual lifestyle budgets - net of tax
- Car - net budget£
- Car - gross income required£
- Car - capital to generate income£
- Holidays - net budget£
- Holidays - gross income required£
- Holidays - capital to generate income£
- Day-to-day total - net£
- Day-to-day total - gross£
- Day-to-day - capital to generate income£
- House purchase - one-off cash£
- Income fund required£
- Total cash required£
- Annual gross income from funds£
- Annual net income after tax£
This calculator and the figures provided are for illustrative purposes only. They do not constitute financial advice and should not be relied upon for making investment or lifestyle decisions. Actual returns, taxation, and costs will vary and may be higher or lower than shown. You should seek personalised advice from a qualified financial adviser before acting on any information.
Conclusion.
The key takeaway is that the millionaire lifestyle is heavily income-dependent, as capital is often tied up in one-off purchases such as buying a home outright.
One of the most common mistakes is depleting capital on upfront costs, leaving insufficient income to sustain the lifestyle or replace depreciating assets. In many cases, a larger investment fund focused on generating sustainable income proves more effective.
It’s also essential to consider the tax wrappers your capital is held in; whether that’s a Stocks and Shares ISA (where income and gains are tax-free), a SIPP (which allows taxable withdrawals), or a property holding company (offering flexibility via salary, dividends or benefits in kind). The more tax-efficient the wrapper, the lower the capital sum needs to be.
Overall, a net worth of £1 million is unlikely to deliver the lifestyle or sense of financial freedom it once did in 1981. Today’s entry point appears to start north of £2 million and, depending on lifestyle expectations and investment structure, could easily exceed £6 million.
In reality, being a millionaire is no longer sufficient for Del Boy to achieve his dreams; his catchphrase today would need to be: “This time next year, we’ll be multi-millionaires.”
What’s next?
Wherever you are in the UK, we invite you to book a free initial consultation with one of our experienced financial advisers. Whether you’re concerned about the economic outlook, managing your investments, planning for retirement, or better understanding pensions, we provide expert advice tailored to your needs. Based in Tunbridge Wells, Kent, we proudly serve clients nationwide.
Locally, we serve clients across Kent, including Ashford, Maidstone, Sevenoaks and Tonbridge. In East Sussex, we have clients in Bexhill, Crowborough, Eastbourne, Hastings, Heathfield and Uckfield.
Don't forget, this article offers general financial information and should not be taken as personal advice. Remember that investments and pensions can go up and down in value, so you could get back less than you put in. Tax rules can change and will depend on your individual circumstances.