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Lets say Hank is 30 years old, lives the OP lifestyle and has 20k in "passive income".
The first question I have is, what kind of passive income? We can get some clues from Hank's decisions.
(1) If he's willing to bet the farm on this income stream as a young man, it must be consistent. (It's not a business)
(2) If he's willing to buy the farm on this income stream, the ROI must be lower than a 4% home mortgage.
20,000 is 4% of 500,000 so it's safe to assume that Hank has half a million in low risk, low return passive investments. He also owns his 200,000 home.
Frank is thirty years old and has a net worth of $700,000. If he started at twenty, he's saved an average of $70,000 per year. If he lives on 20k a year that means he's earned 900,000 after taxes in his ten years of work. That's a pretax earnings of about 1,200,000.
Frank's average salary was 120,000 during his 20s.
The average income at age 20 is $12,000. (An income of $71,000 at age 20 puts you in the "1%" for your age)
The average income at age 30 is $36,000.
As an average guy, Hank makes 3x as much at age 30 as he did at 20. If his starting salary at 20 was 66,800 and got 13% raises ever year he would be making 200,000 at thirty. He would have earned 1,197,000 in pretax dollars.
If Frank works for one more at the same wage he will save $130,000. If he gets another 13% raise he will save $150,000.
It won't take many more years until he'll double or triple his passive income in retirement.
However there are many military retirees around. Tricare for healthcare and pensions from $17k to $30k/year.
If you own a home, have no debt, and migrate to a low COL area, sure it can be done.
It has been done.
My pension is less than $18k/year, though I served for 20 years to get my pension. Consider those who were 'medically retired', service members who are disabled badly may be 'medically retired' from Active Duty. They do not have to interface with the VA. They get their benefits directly from the DOD, I like do. Their pensions are calculated directly from whatever paygrade they were the day they became disabled. I retired as an E6 with 20 years of service, but someone else could become medically retired as an E3 with only 4 years of service. So their pension could easily be far less than my pension.
The best part of retiring from the military is that we do not deal with the VA. The VA is for vets, not the military.
Most of the time if your Medically retired (less than 20 years)
While you could draw a taxable retirement from your branch of service, the tax free VA compensation is higher. (And you can't have both.)
Quote:
Originally Posted by selhars
I'm lost.
The VA is for vets, not the military??
Retired military personnel ARE veterans, no?
They may not all choose to go to the VA. But they can, right?
Yes. Because of Tricare's copays and % I'd have to pay out of pocket on my service connected injuries (which would amount to a large % of my income.) I struggle through the VA as much as possible, and use Tricare to "fill in the gaps".
I mentioned it the first post, but I don't like alarm clocks, bosses, too much responsibility, deadlines, kissing ass, getting off late, 8am traffic, 5 o clock traffic, overtime, dress codes, not being able to watch The Price is Right if I want, etc etc. I like to sleep late, not have a bed time, swim, play basketball, talk/read on the internet like I'm doing now, visit my friends/parents whenever I want, learn how to do new things until I learn it or lose interest, go to the beach, etc.
Basically, I want to live like Billy Madison I guess with a few adult interest scattered in. It's as though the kid in me just wouldn't die. I tried to stomp him out though, but he thought I looked like a fool in a suit or clocking in.
I do want to travel too. I also thought about writing a book, but that's just one of those fun thoughts I entertain.
I admit to being a little lazy and immature. I've known this since I was about 12. I enjoy it though. I definitely don't want to sit on my butt all day though. However, I do like the option.
Having the freedom to do what you want, when you want, is the real issue here -- and I applaud you for pursuing this scenario!
Who the hell wants to be a typical wage slave, where so much of one's time is eaten up by some job that has one at the mercy of some employer? Living life on one's own terms (or at least as close to that as possible) is ideal, in my opinion. Not everyone cares about being a part of the traditional rat race or about making a certain amount of money or about obtaining a certain type of job.
One little detail...you can skip the chips and drink Serious! Get takeout and eat where the water is free. Or cheap things like drip coffee. Chips are a complete waste.
For lunch, I've gotten down to a free apple and free coffee at work most days.
Living the good life on $20,000 a year? Sure, if you're young, healthy, grow your own food, and do your own car and home repairs. If you get sick and need help (I'm suddenly in that position), you'll go through $20,000 a month. I'm glad I saved the money.
One little detail...you can skip the chips and drink Serious! Get takeout and eat where the water is free. Or cheap things like drip coffee. Chips are a complete waste.
For lunch, I've gotten down to a free apple and free coffee at work most days.
don't forget washing out re-using tea bags and drying paper towels .
not a lifestyle i would ever want to live unless forced in to it .
Having the freedom to do what you want, when you want, is the real issue here -- and I applaud you for pursuing this scenario!
Who the hell wants to be a typical wage slave, where so much of one's time is eaten up by some job that has one at the mercy of some employer? Living life on one's own terms (or at least as close to that as possible) is ideal, in my opinion. Not everyone cares about being a part of the traditional rat race or about making a certain amount of money or about obtaining a certain type of job.
there is a lot of unknown's in eddies life . like somehow a paid off house , a paid off car just appear as well no mention how he accumulated the assets he lives on . he has refused to answer now for years .
for all we know he inherited it which is not necessarily bad , however , starting a thread with retire in your 20 and 30's , who is joining me ? it is a bit different for others if a life of not working is handed to you
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