A sharp, productive person knows their situation. They know what their expenses are and they know what their obligations are. With this in mind, I know that I spend right around $30,000 a year just to exist. This is my taxes, insurances, food, housing, entertainment, etc.
If a person has 1 million dollars and they can invest it in dividend paying stocks then they should not have much trouble earning 3% - 5% realistically. That means that they can draw $30,000 - $50,000 per year on their 1 million dollar investment and never touch the aggregate investment.
In this situation, yes, they can live on a million dollars indefinitely.
The problem is when they start wanting that $100,000 electric pickup truck or they want to buy new carbon-fiber rotors for their helicopter. This eats at your cash. The trick is budgeting and balancing, limiting what you "deserve" from a life well lived, and knowing how much of a tip you want to leave the hearse driver for the trip to the grave.