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Inflation takes a bite, and a good rule of thumb is to expect 3% a year. But if you can capture the 7.85% return, and are able to survive on the recommended 4% drawdown, you should be ok, particularly with social security and a paid for home. Still, it's a little too close for comfort for me.
Yes, I agree. I used a more conservative 3% withdrawal rate, so the success rate for such a portfolio would be quite high.
I understand it would be too close for comfort for a lot of people on this forum....but the people here are atypical of the populace at large. If we could actually get the majority of people to save 10% consistently in a boring balanced index fund throughout their working lives, it would be a major miracle.
Yes, I agree. I used a more conservative 3% withdrawal rate, so the success rate for such a portfolio would be quite high.
I understand it would be too close for comfort for a lot of people on this forum....but the people here are atypical of the populace at large. If we could actually get the majority of people to save 10% consistently in a boring balanced index fund throughout their working lives, it would be a major miracle.
Absolutely. I'm not sweating things too much--both me and DW will have pensions, TSP--we both max those out, and we've got Roths going. But one negative is we started our fed careers a decade later than most people. So I'm putting away as much as I comfortably can in taxables. It's looking likely we will retire overseas so our cost of living hopefully will be fairly low.
Absolutely. I'm not sweating things too much--both me and DW will have pensions, TSP--we both max those out, and we've got Roths going. But one negative is we started our fed careers a decade later than most people. So I'm putting away as much as I comfortably can in taxables. It's looking likely we will retire overseas so our cost of living hopefully will be fairly low.
Sounds good. I also hope to draw a pension...we'll see how much I actually get.
Smart move to investing in rental properties. I wonder why you didn't continue to invest the income in more properties instead of putting it in a savings account earning low interest. Looks like you are in chicago and it seems there are amazing deals there right now.
It takes time to do the research and I really didn't want to be a landlord again. The money comes in so fast now because when money makes money it takes on a life of it's own. There were some minor health issue set backs as well. I've been watching this particular investment for about 4 years and timing is everything. We will be going to look at the condo's next month and hope to buy one then. I really did want to sell one of the rentals and do an exchange to avoid paying capital gains on the property but they're doing so well and making money. I have a feeling the window may be closing soon on the beach front property. We are also looking for a retirement home in Maine. Not so easy to find yet. At least I knew the money was safe in the savings accounts. A bad financial move this late in the game could be a disaster. I'm very conservative.
I know a man who inherited 20 to 30 thousand dollars. He went and bought a chain saw a wooded 40 acres, clear cut and sold the timber to the paper mill. He did this 15 to 20 times over the course of several years and had saved a few hunded thousand. Then he went and barrowed the money to buy some hotels and small businesses and it wasnt long before he blew by a million dollars. That would be impoossible now with the processers and iron mules in the woods so like I say time and place
My uncle worked in the asbestos abatement union in Chicago his entire working life, He always lived well and died with well over a million in all his retirements pensions savings and assets. He died at 75 YO of mesothielioma but for the most part lived a happy healthy life.
My grandmother inherited sevearl hundreed thousand from her family who ran an ice and coal biz and then married my grandfather who had a very lucrative Insurance co and they lived like millionaires most all their lives.
Im not on that kind of trajectory but through inheritances hard work and sacrifice I find myself very comfortable with good prospects for my families future.
I think if a person just makes good decisions and keeps themselves in the game they eventuaally find that opportunity and just have toi sieze on it. For some this happens quickly for others it take time so ya need to be patient live within your means and make your own personal happiness prority #1. If you cant be happy without having a million dollars in the bank then im concerned about you.
This is true. But some of us are not cut out for starting a business; or we simply don't want to. However, most people can get to "financially comfortable" status by saving and investing at least 10% of their income in a mix of stocks and bonds over their working lifetime.
If you invest $250 per month (10% of a lowish 30K per year income) in a plain vanilla mutual fund like Vanguard Balanced Index you'll have $363,802 after 30 years and $841,218 after 40 years (based on the returns of the past 20 years of 7.85% for the most expensive "Investor" share class).
Those dollar amounts aren't rich, but they are more than most people have by retirement age. So I think they count as "comfortable". If you add in a modest $800 per month SS check and a conservative 3% drawdown on 800k, that's $33,600 per year in income...a reasonable income for most retirees, especially if their homes are paid for.
I don't think you included inflation. This is 40 years and at 2-3% this would cut 850K to about 300K
I don't think you included inflation. This is 40 years and at 2-3% this would cut 850K to about 300K
Even after adjusting for inflation, the returns of the market outpace every other category, particularly real estate. Starting a business entails significant risk, not the least of which that 70% go kaput within five years. Most people would be better off indexing.
That is true but only IF you get married and STAY married.
I am gay, so it gets a little dicier with gay men. We're not generally good at maintaining long term relationships. My bf earns more but is more of a spender (but not crazily so). But he doesn't like talking about money, so there's no way we're moving in together until that discussion is thoroughly vetted. Plus, he has 3 cats & I'm allergic to them (I could probably handle one) and he doesn't want to give any of them up. It gets harder to marry/move in with someone when you're in your 40s or older....you get set in your ways. I know it's true for both of us.
One would think that out-of-the-closet gay men would have plenty of money to save...but I find that's generally not the case....They tend to spend everything they have and more, just like the rest of the population and perhaps worse. I think sometimes having kids can force some people into a more responsible, planner's mindset...but without kids in the picture, it's even easier to maintain that "live for today" kind of thinking.
Just as an aside, there are cat breeds with little undercoat and much less dander. There are also those hairless cats and a few sorts of 'Rex' curly haired cats that hardly shed. You might visit a few breeders, just to see if you react?
I'm sorry about your allergy and you are very wise to wait until your financial knowledge of each other is complete until you move in together.
I'm a woman. There was a period, for me, that was difficult when I was single and in my thirties or so when everyone was married and building a home. Then, somewhere in my late 40's and 50's the 'market' opened up again, with people getting divorced. I married in my 50's and am glad I waited. Sometimes maturity brings patience and understanding, too.
can't get rich by being cheap, and saving pennies, if you want to be super rich, start a business, and take risks.
Sometimes a business can be a noose around your neck, too. Often, you are married to a business and have little personal life or time. It is worse than being a penny pincher. You have to have the constitution for it.
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