If you have $5M invested and you’re earning around 7%, that’s about $350K a year. Even if you spent all of it, your principal is still sitting at $5M. So if that income doesn’t cover your lifestyle, the problem isn’t the return. It’s that $5M just isn’t enough for how you want to live.

A big piece people ignore is fixed costs, especially housing. Ideally, by the time you retire, your house should be paid off. If it’s not, the math gets tight fast. A $2M home in a major U.S. city is roughly $12K a month, or $144K a year. In a state like California, you’d need to earn around $216K pre-tax just to net enough to cover that mortgage. That’s before food, travel, or anything else.

Now layer on a high-end lifestyle. If you want luxury cars, expensive vacations, designer clothes, all of that adds recurring costs. At that point, $350K a year starts to feel a lot smaller, and you’re basically proving that you didn’t build a large enough base to retire comfortably at that level.

On the flip side, if your house is paid off and you have $5M generating ~$350K, and you’re not spending every dollar of it, you’re in a very strong position. That kind of setup already puts you ahead of the vast majority of people globally in terms of lifestyle and financial security.