How much money would you need to retire right now??

[teddyFBI]

Lots of variables here, I suppose, but just for argument's sake, let's say you're between 25 and 35, no outstanding school loans or anything. No kids (but maybe married).

How much $$ would you need to have in the bank to feel comfortable quitting your job and "retiring". (I think we probably also have to assume that you're not planning on making any substantial additional poker income...otherwise, I could technically "retire" right now.)

[JonPKibble]

Enough money to make me $100,000 a year from the interest alone... let's say I invest it at 5% (conservative estimate) I'd need $2 million then.

But $1 million would probably be good enough anyway.

[TheMainEvent]

I think this thread has been done before. But assuming I will have no other income for the rest of my life (hopefully 60+ years) I would say 5 million minimum, to be comfortable. And I don't want/need to live an expensive lifestyle like a lot of people on here do.

edit: if this money will not be taxed, probably more like 3 mil

[mmcd]

40 million.

[edfurlong]

[ QUOTE ]
I think this thread has been done before. But assuming I will have no other income for the rest of my life (hopefully 60+ years) I would say 5 million minimum, to be comfortable. And I don't want/need to live an expensive lifestyle like a lot of people on here do.

edit: if this money will not be taxed, probably more like 3 mil

[/ QUOTE ]

Thats about what I came up with.

[siccjay]

A million would be plenty. I can leave under my means easily.

[teddyFBI]

yeah i'm sure this thread has been done already, but this is OOT -- most threads have been 'done' in some respect. I came up with around 2Mil if i didn't need to live fancy...but realistically assuming having to put kids thru college some day, i'd like 4 - 5 Mil.

[Exitonly]

definitely don't need 5 million.

you could just take 1 million and live off of interest from CD's.

to quit work forever, i think i'd need a million to be really comfortable, but i could get by on much less.

[DrunkIrish05]

It would be tough for me to give up the slight chance that I get really rich through my own success. However, it would be even harder to give up the opportunity to do nothing forever. I would say 4-5 mil seems right, but if I was offered 2 mil and could retire and just manage my money I don't see how I could turn it down.

[edfurlong]

[ QUOTE ]
definitely don't need 5 million.

you could just take 1 million and live off of interest from CD's.

to quit work forever, i think i'd need a million to be really comfortable, but i could get by on much less.

[/ QUOTE ]

What is the best interest you can get? I doubt it as high as five percent thats what? 30k a year give or take.

[Los Feliz Slim]

$10 million

[Exitonly]

well 5% of 1 mill would be 50k a year.

And i think you can get around 5% (but i dont know) in CD's or something.. you should be able to get more than that in some high-return stock things.

[DrunkIrish05]

[ QUOTE ]
well 5% of 1 mill would be 50k a year.

And i think you can get around 5% (but i dont know) in CD's or something.. you should be able to get more than that in some high-return stock things.

[/ QUOTE ]

This is terribly wrong

[pokerdirty]

*insert pic of cows and mountains here*

[Exitonly]

[ QUOTE ]
[ QUOTE ]
well 5% of 1 mill would be 50k a year.

And i think you can get around 5% (but i dont know) in CD's or something.. you should be able to get more than that in some high-return stock things.

[/ QUOTE ]

This is terribly wrong

[/ QUOTE ]'

Whoops.

I stand by that i don't need 5 million to retire.

[Wes ManTooth]

how much I need, $0... how much I want, a lot more

[bwana devil]

easily $1 mill and live comfortably.

who needs $5 and puts everything in CDs?

put most in the stock market which returns 10-11% historically. put a small % in bonds and CDs. that's essentially what a retirement fund does.

so w/ $1 mill you can can make ~100k a year and never touch the principal. i can deal w/ that.

edit: see you guys at the end of november. my last OOT post until then...

[DrunkIrish05]

[ QUOTE ]
easily $1 mill and live comfortably.

who needs $5 and puts everything in CDs?

put most in the stock market which returns 10-11% historically. put a small % in bonds and CDs. that's essentially what a retirement fund does.

so w/ $1 mill you can can make ~100k a year and never touch the principal. i can deal w/ that.

[/ QUOTE ]

If you can't work again then you cannot put your money in anything near this risky because a downswing would be so disastrous; you couldn't make near 10%

[david050173]

[ QUOTE ]
A million would be plenty. I can leave under my means easily.

[/ QUOTE ]

A million would give you about 30-40K a year in inflation adjusted dollars (ie you have to invest the first 2-4%(pretax) you make every year just to stay even). Not exactly a great life but definitely liveable if you are not on the coasts. I am guessing that this income would be about equal to normal salary (you should pay less in taxes but you have to pay for health care and the like) but I haven't done the math.

[Dr. Strangelove]

250k. But I'll never "retire" retire. That'd be too boring.

[mmcd]

I'm surprised all of these numbers are so low. When I retire, I want to spend my days sitting in a hot tub on my yacht smoking cigars, not worrying about budgeting my money so I can pay my bills. I'd also like to give my kids (when I have them) a very good head start in life. A million dollars, 2 million dollars, or even 5 million dollars doesn't seem like all that much money to me. All of those amounts are certainly life-changing, but if someone handed me a check for 5 million dollars tomorrow, I wouldn't think "Wow, now I never have to work again". I probably wouldn't work a regular job for a salary mind you, but I'd still be essentially working full time to grow that 5 million into what I'd consider a more meaningful amount.

[peachy]

20 million bare minimum

[peachy]

[ QUOTE ]
well 5% of 1 mill would be 50k a year.

And i think you can get around 5% (but i dont know) in CD's or something.. you should be able to get more than that in some high-return stock things.

[/ QUOTE ]

CDs barely get 3% right now and u never wanna lock them for more than 6 months at a time which lowers ur rate....

[Vavavoom]

[ QUOTE ]
Lots of variables here, I suppose, but just for argument's sake, let's say you're between 25 and 35, no outstanding school loans or anything. No kids (but maybe married).


[/ QUOTE ]


I would need £5million.....(Sterling not dollars)

That would keep me more than happy FWIW....and let me be able to continue a very happy life.....

How much $$ would you need to have in the bank to feel comfortable quitting your job and "retiring". (I think we probably also have to assume that you're not planning on making any substantial additional poker income...otherwise, I could technically "retire" right now.)

[protocol]

[ QUOTE ]
but if someone handed me a check for 5 million dollars tomorrow, I wouldn't think "Wow, now I never have to work again".

[/ QUOTE ]

Well, I would. You're seriously saying you would continue to show up at work day after day with $5m in the bank? I don't believe you.


I'm pretty sure I could pull this off with 500k. Yes, I would have to live cheaply, but I don't mind that, and it sure beats working.

[mmcd]

[ QUOTE ]
[ QUOTE ]
but if someone handed me a check for 5 million dollars tomorrow, I wouldn't think "Wow, now I never have to work again".

[/ QUOTE ]

Well, I would. You're seriously saying you would continue to show up at work day after day with $5m in the bank? I don't believe you.


[/ QUOTE ]

[ QUOTE ]
I probably wouldn't work a regular job for a salary mind you, but I'd still be essentially working full time to grow that 5 million into what I'd consider a more meaningful amount.


[/ QUOTE ]

You read very well.

[codewarrior]

$3M.

[mmcd]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
but if someone handed me a check for 5 million dollars tomorrow, I wouldn't think "Wow, now I never have to work again".

[/ QUOTE ]

Well, I would. You're seriously saying you would continue to show up at work day after day with $5m in the bank? I don't believe you.


[/ QUOTE ]

[ QUOTE ]
I probably wouldn't work a regular job for a salary mind you, but I'd still be essentially working full time to grow that 5 million into what I'd consider a more meaningful amount.


[/ QUOTE ]

You read very well.

[/ QUOTE ]

Just to clarify, my thoughts would be something along the lines of, "Good, now I have a little something to work with. It'll save me 10+ years of grinding."

[KaneKungFu123]

[ QUOTE ]
Enough money to make me $100,000 a year from the interest alone... let's say I invest it at 5% (conservative estimate) I'd need $2 million then.

But $1 million would probably be good enough anyway.

[/ QUOTE ]

Its so insanse to me that youd need 100K/year. You must live a very expensive lifestyle!!

[Arnfinn Madsen]

Haven't read the thread, but just one piece of advice which many forget. The living standard needed for you to feel satisfied will probably be significantly higher in 20-30 years time than it is now; since average living standard will be much higher then due to economic growth. Take into account that you need to find money to finance this somehow.

[mmcd]

[ QUOTE ]
[ QUOTE ]
Enough money to make me $100,000 a year from the interest alone... let's say I invest it at 5% (conservative estimate) I'd need $2 million then.

But $1 million would probably be good enough anyway.

[/ QUOTE ]

Its so insanse to me that youd need 100K/year. You must live a very expensive lifestyle!!

[/ QUOTE ]

Somehow, I don't think he'd be flying around in his private jet, dividing his time between staying in his various mansions and going on lavish vacations. It's not like Robin Leech is going to come calling on him or anything.

A married couple both working as public school teachers probably make an amount similar to this. Do you think most teachers live a very expensive lifesyle?

[FatalError]

Assuming i'm allowed to play 0 EV poker any time i want, 20 million, i'll live off the interest

[KaneKungFu123]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Enough money to make me $100,000 a year from the interest alone... let's say I invest it at 5% (conservative estimate) I'd need $2 million then.

But $1 million would probably be good enough anyway.

[/ QUOTE ]

Its so insanse to me that youd need 100K/year. You must live a very expensive lifestyle!!

[/ QUOTE ]

Somehow, I don't think he'd be flying around in his private jet, dividing his time between staying in his various mansions and going on lavish vacations. It's not like Robin Leech is going to come calling on him or anything.

A married couple both working as public school teachers probably make an amount similar to this. Do you think most teachers live a very expensive lifesyle?

[/ QUOTE ]

i thought OP wasnt about a couple but about just him without kids. i think 100K/yr is alot for one person. Maybe not alot for someone living in a very expensive city like NY or LA though. How big of a house is a single guy living in? where is he spending all of his money?

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Enough money to make me $100,000 a year from the interest alone... let's say I invest it at 5% (conservative estimate) I'd need $2 million then.

But $1 million would probably be good enough anyway.

[/ QUOTE ]

Its so insanse to me that youd need 100K/year. You must live a very expensive lifestyle!!

[/ QUOTE ]

Somehow, I don't think he'd be flying around in his private jet, dividing his time between staying in his various mansions and going on lavish vacations. It's not like Robin Leech is going to come calling on him or anything.

A married couple both working as public school teachers probably make an amount similar to this. Do you think most teachers live a very expensive lifesyle?

[/ QUOTE ]

i thought OP wasnt about a couple but about just him without kids. i think 100K/yr is alot for one person. Maybe not alot for someone living in a very expensive city like NY or LA though. How big of a house is a single guy living in? where is he spending all of his money?

[/ QUOTE ]

Where I live, a single guy making 100k a year, is doing very well. Could easily afford a nice 3-4 bedroom house, 60k+ car, and have a lot of money left over to have fun with. An emigrant direct account @ 4% interest, w/2 million yields, 80k. I think that is decent income for the rest of your life. Ecspecially if you currently play Pokeher, you could add a lot on to that initial principle.

[mmcd]

Just because a person is single/living alone right now doesn't mean they'll stay that way. If you're looking at how much you'd need to retire you can't just take your current situation and extrapolate it forward in terms of lifestyle and yearly expenses. Personally, I think even looking at this situation in terms of X dollars per year is wrong. I think far to many people focus on paying their bills and maintaining their lifestyle or whatever rather than accumulating wealth.

Ofcourse I can live very comfortably off 100k right now, but once I end up getting married and having a couple kids, things would be pretty tight. Maybe then, I could live very comfortably of 200k or 250. 30 years from now though, that 200 or 250 won't be that much and I'd probably need something more like 500 or 600.

IMO the whole point is to accumulate enough so none of that will be a concern. Ever.

[RunDownHouse]

[ QUOTE ]
A married couple both working as public school teachers probably make an amount similar to this. Do you think most teachers live a very expensive lifesyle?

[/ QUOTE ]
You're nuts. Where'd you get this figure for a teacher's salaries?

My yearly expenses come under $25k/yr, probably under $20k, and I don't live a particularly sparse lifestyle. But I still wouldn't feel comfortable retiring without more than $2M.

[KaneKungFu123]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Enough money to make me $100,000 a year from the interest alone... let's say I invest it at 5% (conservative estimate) I'd need $2 million then.

But $1 million would probably be good enough anyway.

[/ QUOTE ]

Its so insanse to me that youd need 100K/year. You must live a very expensive lifestyle!!

[/ QUOTE ]

Somehow, I don't think he'd be flying around in his private jet, dividing his time between staying in his various mansions and going on lavish vacations. It's not like Robin Leech is going to come calling on him or anything.

A married couple both working as public school teachers probably make an amount similar to this. Do you think most teachers live a very expensive lifesyle?

[/ QUOTE ]

i thought OP wasnt about a couple but about just him without kids. i think 100K/yr is alot for one person. Maybe not alot for someone living in a very expensive city like NY or LA though. How big of a house is a single guy living in? where is he spending all of his money?

[/ QUOTE ]

Where I live, a single guy making 100k a year, is doing very well. Could easily afford a nice 3-4 bedroom house, 60k+ car, and have a lot of money left over to have fun with. An emigrant direct account @ 4% interest, w/2 million yields, 80k. I think that is decent income for the rest of your life. Ecspecially if you currently play Pokeher, you could add a lot on to that initial principle.

[/ QUOTE ]

80k is taxed.

[durron597]

http://lachlan.bluehaze.com.au/nanoshite/dr_evil/drevil_finger_one_million_dollars01_s.jpg

[KaneKungFu123]

[ QUOTE ]
Maybe then, I could live very comfortably of 200k or 250.

[/ QUOTE ]

Hahahahaha. I made a thread saying that if I ever got married and have kids Id need alot of money (like those figures you quoted) to live comfortably, and everyone gave me hell. I agree with you though, less then 200K (in the United States, with a wife and kids really isnt enough, for me atleast).

[mmcd]

[ QUOTE ]
[ QUOTE ]
A married couple both working as public school teachers probably make an amount similar to this. Do you think most teachers live a very expensive lifesyle?

[/ QUOTE ]
You're nuts. Where'd you get this figure for a teacher's salaries?

My yearly expenses come under $25k/yr, probably under $20k, and I don't live a particularly sparse lifestyle. But I still wouldn't feel comfortable retiring without more than $2M.

[/ QUOTE ]

[ QUOTE ]
Loc: Nashville

[/ QUOTE ]

I'm from Connecticut so there's probably a huge regional difference in terms of cost of living. There's no way you could get by on under 20k a year unless you lived a VERY sparse lifestyle. Just renting a semi-reasonable apartment will run you north of 1k/month. If you want to buy a house in a decent town with decent schools and whatnot, you'd be hard-pressed to find one for less than 300 or so.

I have a cousin that's been a teacher for 3 or 4 years and he makes ~45. I'm pretty sure they start at 36 first year out. The ones who have been teaching for a number of years make closer to 70.

[tonypaladino]

I'd want 10 Million. 5 to be invested in conservative investments to live off the interest, and $5 for my bankroll.

[renodoc]

This is what happens when you are in college.

Dude, you need at least $5M. Unless you aren't planning on living very long. Do the math. You'd be lucky to get 3% from a bank right now.

[BradleyT]

Anyone who says $1,000,000 and doesn't already own a home is on crack.


$4,000,000 (properly invested) is the correct answer for most people.

[lacticacid]

[ QUOTE ]
[ QUOTE ]
Enough money to make me $100,000 a year from the interest alone... let's say I invest it at 5% (conservative estimate) I'd need $2 million then.

But $1 million would probably be good enough anyway.

[/ QUOTE ]

Its so insanse to me that youd need 100K/year. You must live a very expensive lifestyle!!

[/ QUOTE ]

pre-tax 100k/year gets you two cars and a house in most areas.

I think I'd need about 6 million if I couldn't work again. But for much less I'd be back in grad school and not working for a while.

[Reef]

3 mil after taxes- I'd buy 2 Mil worth of investment property right off the bat and stick 800k in a Cd/mutual fund

[ QUOTE ]
If you can't work again then you cannot put your money in anything near this risky because a downswing would be so disastrous; you couldn't make near 10%

[/ QUOTE ]

Why couldn't you work again? He said you'd be 25-35 or something like that. I'd say $750K would be good for me. With 30% interest (trust me, i have my ways), i could live on $200K a year, and grow my worth $25K a year.

[splashpot]

If I moved to Thailand, I could probably live off of $50,000.

[astroglide]

[ QUOTE ]
Its so insanse to me that youd need 100K/year. You must live a very expensive lifestyle!!

[/ QUOTE ]

IS IT INSANE BECAUSE YOU LIVE IN THAILAND?

ARE THINGS CHEAPER IN THAILAND?

HOW INSIGHTFUL

[antidan444]

I'm pretty sure I could do it comfortably for $3 million where I live (Western Maryland). I could buy a very nice house for $400K, and then live off the interest from the rest of the money, which I think would be enough to withstand cost-of-living increases (especially since my house is paid for). It may even be possible on $2 million, but I'd prefer $3 million just to be a little more safe. For what it's worth, a nice house (and a few luxury things ... big-screen TV, spa, pool, game room) is all my wife and I would really want.

Obviously, as other posters said, this answer changes A LOT based on where you reside.

(Edited out the "and how old you are" since I forgot that was defined by the OP.)

[moondogg]

[ QUOTE ]
[ QUOTE ]
If you can't work again then you cannot put your money in anything near this risky because a downswing would be so disastrous; you couldn't make near 10%

[/ QUOTE ]

Why couldn't you work again?

[/ QUOTE ]

Because then you wouldn't be retired?

[mmbt0ne]

[ QUOTE ]
I have a cousin that's been a teacher for 3 or 4 years and he makes ~45. I'm pretty sure they start at 36 first year out. The ones who have been teaching for a number of years make closer to 70.

[/ QUOTE ]

This is all dependent on the district they live in. Also, they make more where it costs more to live. My mom has > 20 years experience, and 2 post-graduate degrees and makes just over 60k a year in one of the best school districts in the country.

[jackdaniels]

[ QUOTE ]
With 30% interest (trust me, i have my ways),

[/ QUOTE ]

B U L L S H I T.

That is all.

[peachy]

[ QUOTE ]
[ QUOTE ]
With 30% interest (trust me, i have my ways),

[/ QUOTE ]

B U L L S H I T.

That is all.

[/ QUOTE ]

last time 30% was anywhere near a possibility was the early 80s

[david050173]

[ QUOTE ]
[ QUOTE ]
With 30% interest (trust me, i have my ways),

[/ QUOTE ]

B U L L S H I T.

That is all.

[/ QUOTE ]

Come on. 30% is so easy. I made like 125% in 1999. /images/graemlins/grin.gif

The other point is that if you even have to think about going back to work, you can't retire for the purposes of this discussion. Otherwise I can retire on 5k. I just have to back to work at the end of the month.

And as far as teachers salaries
http://www.census.gov/statab/ranks/rank20.html
so the your 2 teacher family makes between 64.8k-112.4k in 2003.

[DrSavage]

[ QUOTE ]
http://lachlan.bluehaze.com.au/nanoshite/dr_evil/drevil_finger_one_million_dollars01_s.jpg

[/ QUOTE ]
nh

[Subfallen]

[ QUOTE ]
[ QUOTE ]
Its so insanse to me that youd need 100K/year. You must live a very expensive lifestyle!!

[/ QUOTE ]

IS IT INSANE BECAUSE YOU LIVE IN THAILAND?

ARE THINGS CHEAPER IN THAILAND?

HOW INSIGHTFUL

[/ QUOTE ]

/images/graemlins/heart.gif

[Hellrazor]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Enough money to make me $100,000 a year from the interest alone... let's say I invest it at 5% (conservative estimate) I'd need $2 million then.

But $1 million would probably be good enough anyway.

[/ QUOTE ]

Its so insanse to me that youd need 100K/year. You must live a very expensive lifestyle!!

[/ QUOTE ]

Somehow, I don't think he'd be flying around in his private jet, dividing his time between staying in his various mansions and going on lavish vacations. It's not like Robin Leech is going to come calling on him or anything.

A married couple both working as public school teachers probably make an amount similar to this. Do you think most teachers live a very expensive lifesyle?

[/ QUOTE ]

i thought OP wasnt about a couple but about just him without kids. i think 100K/yr is alot for one person. Maybe not alot for someone living in a very expensive city like NY or LA though. How big of a house is a single guy living in? where is he spending all of his money?

[/ QUOTE ]

Where I live, a single guy making 100k a year, is doing very well. Could easily afford a nice 3-4 bedroom house, 60k+ car, and have a lot of money left over to have fun with. An emigrant direct account @ 4% interest, w/2 million yields, 80k. I think that is decent income for the rest of your life. Ecspecially if you currently play Pokeher, you could add a lot on to that initial principle.

[/ QUOTE ]

80k is taxed.

[/ QUOTE ]

Not only that.. if you spend all your interest each year (minus taxes) you will never build the principal. Given inflation do you think 100,000 a year would be as comfortable 30 years from now?

Give me 10 million - at the conservative estimate of 5% per year I spend the equivalent of 200k a year pre tax now. (Even then I would lack something I may want in the NYC area) put that additional 300k towards the prinicipal so that the next year I would have enough to get a cost of living increase of 5%.. etc.

It could be substantially less if you plan on spending down the principal as well... but given medical advances and the fact you will have some advantages (having more money and no stress for work) you may want to shoot the estimated years to go a bit high. In any case it would be nice to be able to leave all the principal behind (which would build slowly as well) so your kids wouldn't have to work if played right as well.

[Larimani]

$2,000,000

You people are crazy. First of all, getting a 5% return on investments year in and year out is not an easy thing to do. That is not retiring. You can expect about a 1% return on average, and that's not including taxes. I would want around 100K a year in interest after taxes so 15 million taxed right would be sufficient to live on interest.

[TheMainEvent]

[ QUOTE ]
You people are crazy. First of all, getting a 5% return on investments year in and year out is not an easy thing to do. That is not retiring. You can expect about a 1% return on average, and that's not including taxes.

[/ QUOTE ]

Huh? I agree 5% is a little high if you are concentrating on "safe" investments, but 1% is definately too low. Hell, even for a savings account that is low.

[ QUOTE ]
[ QUOTE ]
You people are crazy. First of all, getting a 5% return on investments year in and year out is not an easy thing to do. That is not retiring. You can expect about a 1% return on average, and that's not including taxes.

[/ QUOTE ]

Huh? I agree 5% is a little high if you are concentrating on "safe" investments, but 1% is definately too low. Hell, even for a savings account that is low.

[/ QUOTE ]

I'm saying on average over the next years including taxes. Don't forget that all interest and money made on investments is still very taxable. This is being "retired." Like I said before, if you are working at 5% return year in and year out, it's very possible, but you are not retired.

Have you looked at the weak bank interest rates right now? And low yeild stock options aren't going to be doing so hot either.

[TheMainEvent]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
You people are crazy. First of all, getting a 5% return on investments year in and year out is not an easy thing to do. That is not retiring. You can expect about a 1% return on average, and that's not including taxes.

[/ QUOTE ]

Huh? I agree 5% is a little high if you are concentrating on "safe" investments, but 1% is definately too low. Hell, even for a savings account that is low.

[/ QUOTE ]

I'm saying on average over the next years including taxes. Don't forget that all interest and money made on investments is still very taxable. This is being "retired." Like I said before, if you are working at 5% return year in and year out, it's very possible, but you are not retired.

Have you looked at the weak bank interest rates right now? And low yeild stock options aren't going to be doing so hot either.

[/ QUOTE ]

Sorry, forget what I'm typing sometimes. Damn pot and technology.

[bobbyi]

[ QUOTE ]
A married couple both working as public school teachers probably make an amount similar to this. Do you think most teachers live a very expensive lifesyle?

[/ QUOTE ]
Wtf? That is an insane comparison. How can you compare a situation where you are have regular jobs and need to be saving up a large portion of your money for the future to a situation where you have millions in the bank and whatever you "pay yourself" is 100% disposable? This isn't like having a $100k salary. This means that you are literally spending $100k a year. That's about $275 a day. You don't think you can by spending an average of less than $275 per day on food, insurance, entertainment, etc.? That's a huge amount.

[david050173]

[ QUOTE ]
[ QUOTE ]
A married couple both working as public school teachers probably make an amount similar to this. Do you think most teachers live a very expensive lifesyle?

[/ QUOTE ]
Wtf? That is an insane comparison. How can you compare a situation where you are have regular jobs and need to be saving up a large portion of your money for the future to a situation where you have millions in the bank and whatever you "pay yourself" is 100% disposable? This isn't like having a $100k salary. This means that you are literally spending $100k a year. That's about $275 a day. You don't think you can by spending an average of less than $275 per day on food, insurance, entertainment, etc.? That's a huge amount.

[/ QUOTE ]

Your comparision is flawed in that most of your money isn't disposable income. You still have to grow your princple to prevent inflation from eroding your buying power. You still have to pay taxes on that growth. You still have to buy health insurance(look the prices for 50-60 year olds with a family). I am sure you don't better than a salary man but not by much.

As you get older, staying healthy becomes VERY expensive. So do nursing homes the last few years of your life.

[elmo]

taxes and inflation suck

[celiboy]

For me it would have to be $2 Mil. This would be 80K per year at 4% so after taxes you'd be looking at 60K. My expenses are about $1500 a month - excluding mortgage which will be gone in one year at 31 - so that is about 20K after tax so 80K pretax would be more than enough for trips, a new car every 10 years, etc. Personally I'm not working past 45 since working for "the man" is Bullshit.

[david050173]

[ QUOTE ]
For me it would have to be $2 Mil. This would be 80K per year at 4% so after taxes you'd be looking at 60K. My expenses are about $1500 a month - excluding mortgage which will be gone in one year at 31 - so that is about 20K after tax so 80K pretax would be more than enough for trips, a new car every 10 years, etc. Personally I'm not working past 45 since working for "the man" is Bullshit.

[/ QUOTE ]

Using your numbers, you start with 80k a year. You pay 20k in taxes. You then need to invest 40k a year to order to grow your princple. Then you need 1500 a month to live. That leaves you 2k a year to go on trips. And I am guessing your 1500 a month doesn't include health care that your company is paying. And if you think that 40k princple growth is bullshit, take a look at what inflation does over periods of 20 years

Reality isn't quite as grim as the above numbers suggest. You should be able to get 6-8% with a conservative investment strategy and you can probably lower your tax burden a bit more. And you can also eat into your princple eventually. On the other hand if you have a family (a majority of people end up with one even if that isn't thier plan at 21), your 1500 a month is probably a absurdly low
for most people.

And finally note that early retirement (less than 45)is much different than retiring at 65. Social Security, medicare, and the fact that you have 20 less years to worry about really change the equations.

Why does everyone think it is so easy to make this much on average investing without it being full time work? Inflation and taxes are the rake, you have a very small edge with low risk low yeilding investments and will not always get the same amount.

[captZEEbo1]

I think some of you guys are WAY overestimating how much you need. Like let's say for some unknown reason you really think you'll spend 80-100k/yr as is (which is what you based your number on). Okay that's a shitload. When you are in the typically retired stage (75) and probably have 10 years to live left or so, you will STILL be getting 80-100k/yr PLUS you will have 1M in the bank besides that. This figure is much too high at the end of your life, no? Or am I missing something b/c of inflation?

[jackdaniels]

The biggest misconception in this thread is that you need to live on the interest alone (well, aside from the guy who thinks he can get 30% per year in interest on his money /images/graemlins/confused.gif ). What you want to do is die broke. That's right, spend every single penny you have accumulated. In fact, "The last check you write should be to the undertaker - and it should bounce!" (NOTE: this quote was taken from a book called " Die Broke (http://www.amazon.com/exec/obidos/tg/detail/-/0887308678/002-5065319-4992842?v=glance) " - I haven't read it so can't recommend it).

If your goal is to "retire", you should ask yourself what exactly you mean by that. For most people that means not HAVING to go to work (many retirees still do) while being able to sustain the lifestyle to which you have become accustomed. Conservative estimates show that maitaining a $50,000/year income, after taxes, for 35-40 years will require $1,000,000 in capital - WHICH WILL BE USED UP DURING THIS PERIOD. I haven't done the math on the above but in my quest to answer the exact question in this thread, I was given that figure.

[durrrr]

i came up w/ 7mil, minimum. I'd want more.

[Shajen]

This advice is good, if you don't want to leave your family any money.

I gave the correct answer last time we had this thread. /images/graemlins/grin.gif

The answer is $5 million, for me.

Emigrant Direct has a 4% annual percentage yield on their savings account.

Couple this with Roth IRAs, 401ks, stocks, bonds, etc, and you could live comfortably on the $200k or so you'd make off this in interest alone.

Any less and I think inflation would get you. Obviously, more would be better.

[cdxx]

[ QUOTE ]
You can expect about a 1% return on average, and that's not including taxes.

[/ QUOTE ]

your interest may not be taxed at the normal rate, for example dividents and/or capital gains.

[moondogg]

[ QUOTE ]
Emigrant Direct has a 4% annual percentage yield on their savings account.


[/ QUOTE ]

Keep in mind that the APY for savings accounts is not guaranteed over time either. When I opened accounts with Netbank and ING, they were paying over 5%. Over the last few years though they dropped to about 2%. Their working their way back up, but another recession (of which there will be many during an extended retirement) will probably knock them back down again.

[Shajen]

yeah, I'm aware of this, I was merely giving one example of how you can make a 4% return (as of right now) without doing a damned thing with the money.

Good comment though.

[ggbman]

I think about $3 million would be good for me, if i really hated my work i would do it with 2.

[Nicholasp27]

[ QUOTE ]

CDs barely get 3% right now and u never wanna lock them for more than 6 months at a time which lowers ur rate....

[/ QUOTE ]


emigrant direct gives u 4% and u can withdraw at any point in time that u'd like

ing is currently at 3.5%

every time the fed raises the rate, up goes the savings as well

about 6 years ago, when the rates where higher, ing was offering over 6% and u can withdraw it anytime, unlike cds

[Nicholasp27]

keep in mind that there are lots of ways to make money with that much capital other than stocks, etc

u can buy pre-construction homes in new neighborhoods, rent them out for 2 years and then sell them in the final phase once the builder has upped the price by 20%

u can buy homes/duplexes/small apartments and rent them out...with inflation, in 10 years your note will be much smaller than the rent you bring in minus maintenance and admin and taxes

u can buy some office/retail buildings and rent them out for however long in the same manner

both the homes/duplexes/apartments and the office/retail will increase in value

and u aren't taxed on real estate gains until u sell, and even then u aren't if u put it back into real estate within 90 days...so u can start off with a 100k pre-construction house...rent it out for a few years, sell it and buy a bigger home, rinse and repeat until u have a multi-million dollar estate a few decades later


buy land; low taxes and no maintenance...if u buy in the proper areas, u can make a good return

buy land and build a subdivision

etc etc

[celiboy]

The thing I don't get is that all the online projections (which are provided by brokerage, investment firms) about how much you need to retire all come up with amounts that for 75% of families is unrealistic. Most people in their 50's are STILL paying off their mortgages at that time so how are these people going to have enough to retire?

That's why I'm getting my mortgage out of the way ASAP and then pumping my retirement accounts with 30K a year....even then 20 years at 30,000 a year will barely let me retire at 50 so either I think a lot of people are screwed, or we/financial services industry is overestimating what you need to retire.

[Nicholasp27]

well we aren't getting social security

also, if inflation is 2%, then the amount u need doubles every 35 years, so when we are 50 (if low 20s now), then u'll need 200k to live the same as if u live on 100k now...

to make things worse, it'll double again to 400k by the time u are 85...and if medicine lets us live to 110, then again to 800k!

so u can't just save enough to live on 100k/year without growing that amount 2% each year



additionally, who is to say that there won't be more bills in the future, making u need even more besides inflation?

there were no car bills or gasoline purchases in the 1800s...there were no cable bills 50ish years ago...no high-speed internet at 40/month just 10 years ago and no cell phone bills at 40+/month just 10 years ago

cable+internet+cell phone=150-200/month=2k/year that u didnt have 10 years ago

who knows what all we'll come up with to charge u monthly in 30 years...

[Nicholasp27]

btw, a reasonable goal for young people to try to do right now (especially easy if u are making hundreds/month playing poker in the evenings)...


save 100/week into the index fund (u can have money autotransfer to ing each week from checking account and then automove from ing savings to ing index each month)

that's 5200/year

do that for 20 years@10% (index fund has historically done 11% over 20 year periods)

that's $500k

never invest another dime and in 20 more years (so 60 if u are 20 now), u have over 2million


even better is if u put that 5k/year into a roth ira, as it'll grow tax-free and u can WITHDRAW TAX FREE...that 5k/year for 20 years will be 4mil when u retire, which is more like 6mil if u were taxed when withdrawing...

now, hopefully u also have 401k from work, stock plans, etc etc...but simply saving 100/week for 20 years and then never touching it again gets u 2-4mil when u hit the retirement age...

[david050173]

Real estate is not some magical investment where everyone makes money every year. Like the stock market it tends to go up but there have been local recessions where real estate has had no price change for over a decade. Trying to extrapolate from the last 5 years is like using 1997-99 as your model for stock returns. There is also the some what debatable questions of if you are a land lord, are you really retired. Real estate is definitely a good investment but it is definitely requires more work than buying a mutal fund (reits are not quite the same as buying property directly). And finally if you have an investement that guarantees 20% rate of return, this discussion is meaningless. With that type of return, you might as well build up a 20 million dollar nest egg and not have to worry about sweating the little stuff.


You should be able to beat CD rates since you can afford to lock your money up for more years (you do ladders of 5 or 10 year treasuries) and can take some risk (some percentage in stock, reits, and corporate bonds).

[Prelude008]

this post has made me think my "bleek" finances are even worse than I thought for the future.

Just curious, are the "millions" realistic? How many people are actually working towards aquiring the "millions" needed and what's your progress/strategies?

The answer is:

... if you're currently 20 years old, have never had a "real job", have a current net worth that is either negative or at most 4 digits, and think that a $30 gets you a "nice" dinner at a restaurant... then $1M seems like it will do the trick

...if you're 25 years old, have worked in various jobs earning between $30k and $60k, of various degrees of crappyness, but have still enjoyed the occasional $100 meal, stayed in the Four Seasons on business, dated a high maintenance woman, or thought about going to law/business/medical school in order to "get a real career", then $3M sounds right.

...if you are 30 years old and have completed law/business/medical school, enjoy a $150k+ salary, drive a new European car, live in a nice apartment, regularly use Zagat's, have a net worth in the 5-digits, have a spouse and/or dependents, and are confident in your long-term value and marketability in the workplace, then your nut is $10M

...if you are 35-years old, have been slaving away as a banker/doctor/lawyer for several years, have a net worth in the 6-digits or barely 7-digits,and you realize how difficult it actually is to accumulate after-tax money for retirement, despite your significant income stream, and have learned that it is impossible to "save" your way to being rich, then your number is $5M

[mmcd]

[ QUOTE ]
[ QUOTE ]
A married couple both working as public school teachers probably make an amount similar to this. Do you think most teachers live a very expensive lifesyle?

[/ QUOTE ]
Wtf? That is an insane comparison. How can you compare a situation where you are have regular jobs and need to be saving up a large portion of your money for the future to a situation where you have millions in the bank and whatever you "pay yourself" is 100% disposable? This isn't like having a $100k salary. This means that you are literally spending $100k a year. That's about $275 a day. You don't think you can by spending an average of less than $275 per day on food, insurance, entertainment, etc.? That's a huge amount.

[/ QUOTE ]

As I said before...

[ QUOTE ]
I think even looking at this situation in terms of X dollars per year is wrong. I think far to many people focus on paying their bills and maintaining their lifestyle or whatever rather than accumulating wealth.


[/ QUOTE ]

[mmcd]

Also, once you cross a certain threshold of wealth, making lots of money (and accumulating more wealth) becomes very very easy. Most of the numbers quoted in this thread are WELL below that threshold.

[whiskeytown]

probably the size of the WSOP first place this year - 7.5 mil - though I'd settle for the 5 mil. too if it wasn't taxed - /images/graemlins/grin.gif

My requirements are much less as I get older, but if I'm 25 or 35, I've got years to live, and let's not be stingy...

RB

[Nicholasp27]

of course real estate isn't 'magic' or 'guaranteed'

but u can do things like get rent while waiting for property value to rise...and there is the fact that u don't pay taxes on real estate gains if u reinvest it into real estate (tho u do pay property tax and u have to pay fees to sell the house, etc)


but i think it's more realistic to get huge % gains in real estate than in stocks year in and year out


if the govt gets rid of taxes on dividends, then investing in some of the 5+% annual dividend stocks will be nice

[Rotating Rabbit]

hm coming from an investment banker there's a lot of misguided thinking in this thread.

not one person as far i have read has mentioned discounting future interest cash flows.

With only $1m liquid assets, and being sensitive to risk and wanting revenue (ie ur returns are hit by tax too), you are really looking to invest to maintain the present value of that $1m, which would only give 20-30k a year for the rest of ur life (allowing for some premium).

$10m would be a good starting point.