How much money is enough?

[Geekbabe]

Save till your ears bleed, I thought I was on a good retirement track...then I got cancer...

Insurance doesn’t cover everything, heck my OTC drug bills are crazy, when you burn through all your vacation and sick time ( easy to do after over five yrs sick) you start burning through the retirement money. I think I have enough left to cremate me.

I hope to live long enough to leave my son with autism something... poor guy got a college degree and still can’t get or keep a job

so keep stashing the cash!

 

[njdevilsfan87]

IMO, the answer to this question is "coast FI" - it's the point where you no longer need to contribute another penny into your retirement or other long-term investment account (i.e. 529 account for child). Once you are coasting on investments can choose to "coast in life" by making just enough to cover your day-to-day expenses, which for many people would mean being able to drop to part-time work, and/or being able to focus on obtaining a job that doesn't run them into the ground for one reason or another.

You can hit this number at $500K, or $2M+. It all depends on your lifestyle and what you're happy/content with. At this point you have like 80% of the benefits of true FU money because you're free from the rat race. You can choose to remain a part of it, or you can do something else entirely if you wish.

For me, about ~$1.5M is the coast-FI number (California). Something closer to ~$2.5M would be true FU money, but it's of diminishing returns because I would actually prefer to work my job of choice at least part-time remotely. I'm not really in a stage of life where RE could be any good. At 33 I'm way too far out of actual retirement age where too many things could happen. If I hit $2.5M at 45 then sure I'll probably feel confident to actually call it quits for good, unless I experience lifestyle creep along the way which I will do my best to avoid.

 

[s0me0nesmind1]

IMO, the answer to this question is "coast FI" - it's the point where you no longer need to contribute another penny into your retirement or other long-term investment account (i.e. 529 account for child). Once you are coasting on investments can choose to "coast in life" by making just enough to cover your day-to-day expenses, which for many people would mean being able to drop to part-time work, and/or being able to focus on obtaining a job that doesn't run them into the ground for one reason or another.

You can hit this number at $500K, or $2M+. It all depends on your lifestyle and what you're happy/content with. At this point you have like 80% of the benefits of true FU money because you're free from the rat race. You can choose to remain a part of it, or you can do something else entirely if you wish.

For me, about ~$1.5M is this number. Something closer to ~$2.5M would be true FU money, but it's of diminishing returns because I would actually prefer to work my job of choice at least part-time remotely. And it'd be nice to be able to spend more on our vacations and not worry too much about it. So I'm already pretty much there at coast FI.

I have a hard time understanding what "part time" jobs are even available these days that pay anything reasonable.

Like if I'm making $150k now for a full time job, what the hell kind of part time job is going to get you 75k?

And to that, If you're working part time for the likes of chump change 30k (and that's being generous) why even work part time? Id rather work another year or so full time just to avoid having the part time. I mean commuting and that kind of stuff is one of main reasons working sucks to begin with.

 

[njdevilsfan87]

Like if I'm making $150k now for a full time job, what the hell kind of part time job is going to get you 75k?

It's actually kind of simple: you start full-time, prove your value to the company, and then say, "hey guys I now need to start working part-time for half my salary or hourly pay because of ____ (insert good reason here - hint hint kids)". It worked out fine for me. For my current job I originally signed on salaried at $175K and then moved over to hourly at the same pay rate within 2 months. Now I have the track record to show good production even at reduced hours. You only need to do it once to prove yourself... it's just doing it that first time (whether it be WFH 100% time, reduced hours, or a combination of both) that is toughest because you'll get some push back but it all comes down to this: your company needs to trust you enough to still be useful and thus give you a chance, and then you need to follow up. If the company isn't even willing, then it's time to find a new job that will. And that's the power of at least being coast-FI. Speaking from personal experience, the jobs are there, and more plentiful than people think - but most never ask because they're not in any position to even place the slightest risk losing their paychecks.

 

[Red Squirrel]

Best bet for part time would probably be to just start a small business. You don't need to giver 100%, just a little gig and only take on as many jobs as you want, not more. I would do an online booking system so you can just open up whatever days you want and keep others closed off. I sometimes consider practicing at something like drywall plastering and just doing that on the side, small jobs only. There are certain things like that which don't require a license but can still make half decent money.

Only danger with doing your own business stuff like that is some car insurance companies can get really stingy about using a personal vehicle for business use, but I think as long as you don't have any kind of decals on it you'll probably be ok.

 

[snoopy7548]

CoastFI is my backup plan. I'm probably around 2/3 the way there, or a bit more. It's not the end-all be-all, but it does give you some comfort knowing that you've hit a point where you can simply stop saving money and still retire comfortably.

Granted, you need to keep a job, but as njdevilsfan said, that job only needs to meet your basic requirements.

If you're making $100k now and you're aggressively saving for retirement, that $100k could certainly drop to something like $60-70k, or lower, depending on your expenses. With the expertise and experience you've obtained over the years, landing that $60-70k job, in the same field, should be pretty damn easy. It's the difference between being an engineering manager, with the accompanying technical experience, to being an extremely competent technician, and technician jobs, at least hands-on support, are a dime a dozen that aren't able to be outsourced.

 

[Fritzo]

According to my financial advisor, if you have $4 million in an investment account, you could live comfortably middle class off the interest without having to work. If you get above $20 million or so, your whole family can live comfortably without working.

After $50 million or so, you basically have unlimited money.

 

[dullard]

It has worked out so far, I have about 80k now. Another ~30k in outstanding loans.

The trick is to not buy anything.

So, I'm a bit confused here. If you truly retired with only $20k of assets, then you'd need a 72% annual return to be able to spend $1.2k/month. That sounds like you either aren't fully retired or you had more than $20k of assets. Something is missing. Are you getting other payments or pension or something else that you didn't include in your assets?

Your trick is correct though. Almost anyone can become wealthy by spending less than they earn.

 

[sdifox]

Best bet for part time would probably be to just start a small business. You don't need to giver 100%, just a little gig and only take on as many jobs as you want, not more. I would do an online booking system so you can just open up whatever days you want and keep others closed off. I sometimes consider practicing at something like drywall plastering and just doing that on the side, small jobs only. There are certain things like that which don't require a license but can still make half decent money.

Only danger with doing your own business stuff like that is some car insurance companies can get really stingy about using a personal vehicle for business use, but I think as long as you don't have any kind of decals on it you'll probably be ok.

Lol small business is more like 150% time.

 

[brianmanahan]

According to my financial advisor, if you have $4 million in an investment account, you could live comfortably middle class off the interest without having to work. If you get above $20 million or so, your whole family can live comfortably without working.

After $50 million or so, you basically have unlimited money.

safe withdrawal out of 4$ million would be like 120-150$k per year for the rest of your life

 

[JEDI]

safe withdrawal out of 4$ million would be like 120-150$k per year for the rest of your life

he said interest.
so 1% of $4M = $40k/year

tho you can do better with dividend stocks AND be taxed at the lower capital gains rate

 

[Fritzo]

he said interest.
so 1% of $4M = $40k/year

tho you can do better with dividend stocks AND be taxed at the lower capital gains rate

Investment returns on that kind of money are closer to 6-8%.

 

[brianmanahan]

he said interest.
so 1% of $4M = $40k/year

tho you can do better with dividend stocks AND be taxed at the lower capital gains rate

only spending the interest is pointless though unless you're trying keep all the capital for your estate or something

a %3 withdrawal rate will last you 33 years even if the portfolio just manages to stay even with inflation

 

[Red Squirrel]

Lol small business is more like 150% time.

Only if you choose to make it such. If it's your business you can run it your way.

 

[Spacehead]

I retired in my late 20s with like $20k, living in one of the most expensive places on earth.

If I can live here on $1,200 a month, it should be possible almost anywhere.

So, I'm a bit confused here. If you truly retired with only $20k of assets, then you'd need a 72% annual return to be able to spend $1.2k/month. That sounds like you either aren't fully retired or you had more than $20k of assets. Something is missing. Are you getting other payments or pension or something else that you didn't include in your assets?

Your trick is correct though. Almost anyone can become wealthy by spending less than they earn.

I'm glad i'm not the only one confused.
He started with 20K, now has 80K & 30K in loans, "living in one of the most expensive places on earth." Do you just "shelter in place" always?
Do you have a: house, car, health ins, eat?

 

[Scarpozzi]

I'm won't be able to retire for a long while...but I would need to be debt free with $1.5M cash to quit. I think I could invest (gamble) that much and live off the earnings (winnings) pretty easily in the stock market (playing cards with hookers).

 

[skyking]

when you stop worrying.
Which for many people is not possible.

That's my wife's issue. I am all but ready to go, but medical coverage and worry about the high costs of her meds has her wound up. She can't fathom not working.
I keep telling her we are good to go. I have two more years and then I can get my pension at 100%
The pension and my SS covers our current level of expenses, without tapping the investments.
The investments are set to cover for inflation and higher medical costs in the years to come.
In all likelihood, I will work another 5, she will want to keep working.

 

[Muse]

Its until you dont think about money any more.
How much that is depends on you.

Yeah, I remember someone mention a benchmark: when you don't bother looking at the price tags.

 

[skyking]

I don't think that will ever happen, because the spending is an activity unto itself.

 

[Muse]

You guys need to learn about cash secured OTM put options. Forget dividends and holding risky dividend stocks. That's old school of thought. I'm not totally against dividend stocks but to me holding too much dividend stocks also carry risks I don't want. I rather play options and let Theta be my friend. How often do you see casinos lose money? You can have dividend like income stream writing and selling put options. Then you basically act as the House at the casino.

Bookmarked... gotta check that out! I have a well regarded book, "Options for Rookies." Gotta get into that! Thanks!

 

[Muse]

I am with @Red Squirrel , stocks is gambling, and I already know I suck at that, haha.

The markets aren't easy for most people. Fucks with your mind, really does. Gotta have a good plan and stick with it. It's all easier said than done. Seems so easy sometimes, but that's an illusion. My returns have never justified all the time and effort I put into it, not even close. Fact is, the S&P500 averages 10% increase/year. I hear that 60% at least of investment counselors can't match that return. That when all you had to do was buy and forget the SPY! Warren Buffet (investment genius) said most people would best just buy the SPY and that's it. Hold on through the ups and downs.

 

[EliteRetard]

I'm glad i'm not the only one confused.
He started with 20K, now has 80K & 30K in loans, "living in one of the most expensive places on earth." Do you just "shelter in place" always?
Do you have a: house, car, health ins, eat?

I did "retire" with about $20k.
I do odd jobs for friends/family as I chose.
Rarely do I get paid with money, but often with food etc.
I'm not really doing anything to make money, but it's also not really $1,200/month.
I don't really have an official income, that $1,200 is just how much I think I could take each month.
Average spending varies (depends on location), currently it's like $600/month for everything including shared "housing".

No actual house, but I do have a reliable car (fully paid, maintenance is ~$30/yr).
No health insurance, and I rarely buy food (again I barter for food, and salvage throw away stuff).
Edit: I do want to mention that I have to pay $120/month for "medical" even with no benefit (thanks Obama)...

Not certain what "shelter in place" means, but I think I can assume.
Even since I was a child I've never "partied" or ever been invited for anything.
Never done drugs or alcohol, and never bothered with women (or any other wasteful relationships).
I do go out a few times a year, almost always to help family. Can't recall the last time I went out for anything else.
Not even sure when I last went to a store for myself. I do know I got clothing, since that eventually gets torn up doing odd jobs.

Cost of living here is like 75-100% higher than average and with housing over 300%.
It's clearly possible to live low income in very high cost areas, even with luxury items like a car/internet.
All the rich people ($60k+) need to stop bitching about how they're suffering with so little, being held down by "the man".

 

[Red Squirrel]

But how do you keep up with all your bills? Hydro, gas, insurance, rent, taxes, internet, cell etc... that adds up fast even in a small place since most have base fees. I'm not even in a high cost area and all that stuff adds up to a couple grand a month. Even if I moved to a smaller place it would not really change.

 

[shortylickens]

Yeah, I remember someone mention a benchmark: when you don't bother looking at the price tags.

When you dont even know how much is in the bank.
When you dont even know how many accounts you have, or where.
When you can afford to have a personal shopper who does know.

 

[TheVrolok]

But how do you keep up with all your bills? Hydro, gas, insurance, rent, taxes, internet, cell etc... that adds up fast even in a small place since most have base fees. I'm not even in a high cost area and all that stuff adds up to a couple grand a month. Even if I moved to a smaller place it would not really change.

Sounds like he lives a pretty ascetic lifestyle.