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I see a lot of people in here with net worth over a million and am wondering why most of them don't retire already. If you're sitting on that much then any added value to your net worth is a pittance compared to the value of what you could be doing with your remaining time on this earth instead of dealing with work stresses, daily commutes, etc. But hey, to each their own.
Me, after decades of very poor financial management I'm just about now to the point where I'm back at a $0 net worth at age 40 after paying off tons of debt and student loans. Luckily, my wife and I are now making a great income and so we save and invest roughly 60% of what we're earning. That should allow for relative financial independence within 6-7 years once we've built up close to $500-600k. My wife will keep working only because she's already living her dream and making money at her passion (photography business), so we'll still have that income coming in, which also keeps growing each year and should already cover our basic expenses.
Easy enough when you live in Arizona...
Most of our net worth is in our condo, not our portfolio, so we're not really any closer than you are to early retirement.
If your home/apartment whatever is paid off, what are "typical" housing costs? And could you live on $40K a year at that point?
Here in Florida, I wouldn't want to live on "just" $40K, but with a paid off home, you could live a pretty good existence on $3K+ per month.
no 40k would not work here for us ,real estate taxes , health care , utility costs are still to high and would lead to a very stressful life .
over time a paid off house may contribute little to affordability . when we all bought houses in long island in the 1970's that house was 35k . those payments on that mortgage become less and less meaningful over time . that paid off mortgage amount you no longer pay would not even cover a utility bill today and taxes are 12-15k a year .. so in the scheme of things that paid off house really does not help much as far as living on 40k . it all depends on what happened over time to all the other costs
in our case a paid off house would reduce our income by the lost income on that money we would sink in to the property . .
so as an example we could buy a co-op and save 6k a year over renting but we would give up 15k in income on the money tied up in the co-op so cash flow would actually be less having a paid off co-op . we would actually have 9k less a year to spend by owning .
owning always has a hit to the income side as a trade off as that money tied up is no longer producing income . you may cut costs on one end but cash flow can take a hit so situation wise it may be more costly to own . don't forget you are buying an asset .
but while that asset may appreciate , it really does not help cash flow become greater without taking on loans , it just cuts some expenses . the question then becomes is the income you give up being offset by the savings by owning ?
i think last year our rent , dental work and health insurance costs would top 40k and groceries and eating out ,which we do a lot while on the go with the grand kids came in about 17k or so . our budget has been running in the 135-140k area the last 3 years . you can likely live the same life on half that in cheaper areas . but like i said proportionately it is the same .
we would do well as transplants if we wanted to move . a life time of higher wages here beefed up our ss checks . if anything we may be snow birds next year but that will add to costs .
but proportionately , living here has allowed us to develop an asset pool that matches what we need and likly would not have achieved living in a low cost area .so the higher wages and real estate investing opportunities that came from living here gave us what we needed to live here .
so we would not have retired on 1 million to be honest here , the numbers don't work for us .. but , because we lived here we got a much larger asset base from those higher wages , bigger ss checks from those higher wages and the real estate opportunity by being local and understanding our local market was superb .
when we had our pa house and thought about relocating there we found we could make do with 1/3 less income but pay was 1/2 . we had a better deal here in ny .
not only that but here all the kids are local , no one stays over , a 2 bedroom 2 bath apartment is plenty for the two of us .. but in pa we needed a 3000 sq ft home because everyone stayed over .
Last edited by mathjak107; 06-15-2018 at 04:49 AM..
OR
I’m 35
Income varies wildly
Net worth in the prefer not to say range
I just wanted to say that first off a million dollars isn’t some automatically retire situation. My mom died when I was 23, and as a result of basically what would have been her share of the family wealth, she wanted to make sure her two kids were taken care of. I’d rather have my mom back than my net worth. She was priceless!
I love pursuing my career and working toward my goals is what gives me excitement and hope for the future. I could sit around and relax the rest of the days of my life and do nothing. But then what kind of life would that be? What kind of person would I be? I’d rather work harder than people who have to work for a living, because I have more to prove. I wouldn’t dream of retirement. I’ll be working on what I love until I’m too senile to continue.
You're 37 with a $600K house that is paid off? How did you pull that one off?
Occupation and education
A combination of luck and investing.
I bought my first condo in 2004 right out of school, then bought a house in 2008 when the market was really beaten. I had saved 40k cash in the 4 years that i was living at the condo, in preparation for the house move/upgrade eventually.
Found a house that was renovated for ~380k, paid 40k down, and had a mortgage of about 340k. refinanced twice, down from a 30 year to a 15 year, and then down to a 10 year, to reduce the time. both refinances cost me zero dollars given the programs and incentives they had at the time. with the 10 year mortgage at ~3.25%, i kept paying extra, sometimes 1k or 2k above the ~3500 mortgage...until it was paid off in late 2014.
We've since finished the basement, added a full bath, put on solar panels, added an extension, remodeled the kitchen, changed the floors, etc. etc.
Now prices in the area (northern VA) have appreciated too, and it's worth about 600k give or take a few thousands.
hope that helps.
In the southeast. 27 and single. Close to six figures salary. Not sure on the net worth, but I'm sure outstanding student loan debt brings it down a little.
I like my job, but I can see myself getting bored with it over time. It is hard to walk away from a 35hr/week schedule, though.
i guess retirees could make people wonder a lot how it was done on such low incomes if they don't say they are retirees and have part time jobs they do that generate earned income .
it would look like:
30k earned income , multiple 7 figures net worth , queens nyc . 66
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How did you pull that one off?
