To me, being rich is simply about living life through passive income sources. Most of the rich people I know live this way - they make their money through investments, especially fixed income assets like real estate.

This does not exist.

The moment you have money there is people out there that want to take it. It has always been, there is this part on the Bible that says that when you have money, there will be robbers making holes in your walls to take it. That was thousands of years ago.

It is human nature.

For me, being really rich is that you know the way to make wealth(not money) when you need it. This knowledge is more useful than the outcome of it.

If you have a few millions in an index fund and are discrete about it, no one is going to take it.

There are many rich people who live ordinary lives.

You're basically never 100% safe. In this particular case, the broker at which you bought the index fund units can scam you. It actually happened in Poland maybe 10 years ago - managers at a respectable brokerage firm were taking in orders from people but, instead of buying the requested papers, bought something else which they believed would be more profitable. They ended up being wrong and, when the clients wanted to eventually "sell" their papers (which were never bought in the first place), the company folded as it didn't have enough to pay the clients.

You are also never 100% safe if you are poor.

You are never safe but millions/billions gives you options.

Because stock market crashes never happen?

If memory serves, The largest single-day drop was around 25% and the biggest total was around 90%. That leaves 10% to live off of: if you have 10x what’s necessary for the rest of your life invested you can absorb those losses.

To have 10x what's necessary, you need to be able to survive on 1% returns (I'm trying to be generous there). So if you can live on $30,000, you need to have "only" $3MM invested.

You should also not be investing more than 25% of your assets into a single asset class, so you need to have $6-12MM of assets (range depending on considerations) in the first place.

I think having even $3MM is a reasonably called 'rich', but others may disagree.

Oh; you certainly have to be rich to pull this off. But the context was “a few millions in an index fund,” which is what your analysis came up with.

Also, if you’re going to posit funds in other asset classes, you should also include the worst-case returns of those funds in the analysis.

I don't think the people who are non-obvious rich put their money solely in an index fund. They'll generally have about 50-500 apartment units in some big city, which (if properly insured) guarantees you can weather anything except for wars and asteroids. Maybe they put their earnings into an index fund though ...

Not solely, but index funds are probably the most common investment. Just look at the total money Vanguard has under management.

$5M in Vanguard also is safe from everything but wars and asteroids.

If you’re smart you diversify so you’re earning a few percent a year on some portion at very low risk.

Donald Trump was once asked, “how much money is enough?” He answered, “just one dollar more.”