This is how much money you need to never work again

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

Well, that all depends on how you handle that money. 

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

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

"There’s not a one-size-fits-all answer," McBride told FOX TV Stations. 

McBride played along with the idea that somehow, a 30-something-year-old, came into $5 million. What should they do to make sure that $5 million lasts them until the end of his or her life? 

"You need to invest this money in a pretty diversified portfolio," McBride explained. "You need to protect the buying power of that money over the course of many years to come."

Open a business

Some might think buying things that appreciate in value, whether it’s gold or art, could be a great place to put your money if you don’t want to just lose it on frivolous things. 

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

"There may be holding or storage costs as in the case of precious metals, for example. And then there's going to be transaction costs on the other end. Not to mention there's the whole unpredictability of what is that asset going to be worth at some point in the future, particularly for items that are considered collectibles. The amount you ultimately get is going to be what somebody else is willing to pay for it. There's not an underlying intrinsic value as there would be with, say, a business or a security that's generating a predictable stream of cash flow," McBride said. 

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

"More than 80% of millionaires are business owners and 80% of millionaires are first-generation millionaires. The reality is to come into great wealth, that that’s typically generated by owning a business rather than some one-off windfall like lottery winnings or inheritance," McBride noted. 

What about real estate? 

There may be a few of you out there who are kicking yourselves for not buying a home during pre-pandemic times. Or maybe for not having the forethought when you were in the womb to start saving up to buy property. 

But McBride said that while owning real estate may seem like a great way to invest your newly-acquired wealth, it may be a riskier investment than one might think. 

"Thing about real estate is, it's very capital intensive," he offered. "There are a ton of transaction costs coming and going and then the carrying costs – you have property taxes, property insurance, maintenance, upkeep, maybe even things like condo or homeowner dues. So there's a lot of carrying costs involved in real estate and over time, residential real estate. Despite our well-publicized housing booms over the last couple of decades, home prices over time tend to only appreciate at a rate that's likely faster than inflation." 

What kind of business is the most profitable? 

The U.S. Chamber of Commerce released its list of the top 100 small businesses that opened in America last month. 

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

"Small businesses embody the resilience and ingenuity that define America’s free enterprise system, yet they often go unrecognized," Vice President and Editor-in-Chief of CO Jeanette Mulvey told FOX Business in a statement. 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 business great." 

The businesses that topped the list of 100 included:

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 & Design: Real estate and construction
5. Atlantic Sea Farms: Regenerative seaweed farming 
6. Beehive Meals: Meal prep and delivery service
7. Digit7: Specializes in AI-powered solutions
8. glassybaby: Handcrafted, American-made glass products
9. Industry Gymnastics: Latina-owned gymnastics facility
10. The Cavern Men’s Barber Lounge: High-quality barbering experiences

Some other, less conspicuous ideas such as food trucks, car wash services, enrichment activities for children such as mobile apps, and specialized classes such as language or business courses are ways to start a small business that has lower costs in the beginning but high-growth potential over time, according to Nerdwallet.