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A friend of mine recently received 14 million after taxes. Obviously he has professionals managing his money.
He is 30 and has decided to buy some real estate, pay off family debts and basically retire.
How much money will he live on per year assuming he socks away roughly 10 million in cash, spends 2 million in real estate and 2 million in cash purchases/paying off debts?
A friend of mine recently received 14 million after taxes. Obviously he has professionals managing his money.
He is 30 and has decided to buy some real estate, pay off family debts and basically retire.
How much money will he live on per year assuming he socks away roughly 10 million in cash, spends 2 million in real estate and 2 million in cash purchases/paying off debts?
But retiring at 30? I think he will be bored out of his mind in a couple of tears.
I mean, you can travel. And you can play so much golf, read so many books, drink yourself into oblivion so many times. And then? Its then time to do something productive.
In short, it'll be time to make a (real) life for yourself (I'm referring to him).
A friend of mine recently received 14 million after taxes. Obviously he has professionals managing his money. !
what happen he would not trust them to keep that 14 mil (a lot more before tax) to quadruple it self. good tract record so far.
Quote:
How much money will he live on per year assuming he socks away roughly 10 million in cash, spends 2 million in real estate and 2 million in cash purchases/paying off debts?
retired at 30 with 10 mil in cash and own 2 mil in real estate, cash will be gone fast enough, in the bright side he will young enough to start all over again.
30 years old person has a lot of want/need with cash in hand who/what will stop him/her to enjoy life.
this is another one of those dream boy threads. trouble is too much time is wasted posting on CDF about these fantasies rather than doing them. trust me on this when u hit your first million nothing happens.
when u have slain the dragon
the village does not in fact turn out to cheer
the beautiful princess does not in fact fall in love with you
I've heard of others in this situation and they do end up bored to death. It's kind of hard to have fun when everyone you know is working all day. It may sound like heaven but this person should be prepared.
My first thought is to split the money between 2 money managers. Why take the risk that your manager may be crooked? It's a long shot but a risk worth avoiding.
As for the initial question any money manager will tell you that a 5% withdraw will be a safe figure, the money should be growing at a 6% rate annually. So the math ain't that hard: 5% of 10 mil is an annual income before taxes of 500 grand.
SWR methodology would suggest with a simple well managed 60/40 portfolio he could withdraw 2-3% initially (at his young age) regardless of life expectancy if past history is any indication. That would mean $200-300,000 in the first year and inflation adjusted each year thereafter. At least a 95% chance of a healthy residual.
Or he could go with a % of remaining portfolio approach and withdraw 4-5% of remaining portfolio every year, so $400-500,000 in year one. That would result in fluctuating income from year to year (smoothing would be helpful) but he'd never run out and leave a (likely considerable) residual for family and/or charity.
Both rules of thumb.
Then there's annuities, though a very bad time to buy annuities if you have options.
Sad to imagine anyone who would actually retire at 30, even if he is financially able IMO.
A friend of mine recently received 14 million after taxes. Obviously he has professionals managing his money.
He is 30 and has decided to buy some real estate, pay off family debts and basically retire.
How much money will he live on per year assuming he socks away roughly 10 million in cash, spends 2 million in real estate and 2 million in cash purchases/paying off debts?
I'm just curious. Thanks!
Hmmm, is he single? I have an unmarried 25 year old daughter.
Heck, does he have a mother? I would be happy to fill that role if he needs a loving mom. P.S. I am great company and I love to travel (just can't afford it).
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