Early 30s ~$800k - can you live the rest of your days? (interest, financing)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I personally don't understand the goal of retiring at an extremely early age. To assume that current circumstances are going to be the norm going forward is extremely risky. Right now blogs, video channels and other social media products are very popular and some people are successfully deriving income from them. Many are heavily linked to social fads and/or celebrity-type fascination. Many of the people viewing these blogs are young and in a similar mindset. To assume that the audience will be the same going forward or the blogger's attraction will remain the same is unlikely.
Anything worthwhile requires work whether it be managing an investment portfolio, being a landlord, writing for a blog, or selling handmade crafts. Retiring in one's early 30s has a lot of time risk. One unfortunate event 15 years in and one is forced back into the workforce with no history of gainful employment or experience for the past 15 years. Health insurance is also a huge unknown. There is no way to predict exactly what plans will be available for people who are able to work but chose not to work.
It may sound outdated to some but as a former educator the entire premise of our public school system was to produce educated, productive and contributing members of society. Opting out at age 30 shorts the investment others have made for that purpose and ultimately risks the success of sustaining the model for the future.
There’s a pretty shallow definition of “retirement” in this thread which is why I hate the term. You can be “retired” from a career and still be a contributing member of society. Is a retired NFL player a contributing member of society? What about a stay at home parent that dropped their career to spend more time with their kids?
I think the difference today is many people my age discovered that all the “stuff” our parents bought didn’t necessarily make us any happier. I think this is partially because we have had to live like poor college kids a lot longer than gen z and boomers did and we realized it wasn’t all that bad. My wife and I didn’t earn over $50k combined until I was 29. I don’t look back on those days as being poor or any less fulfilling times than I feel today when we earn over 5x that amount. So...why not live like we did when we were happy making $50k, save the surplus and then be financially free at a young age and get to choose exactly how we want to spend our time?
That’s the mentality of many of these young naive non-contributors to society today...seems pretty shallow to me...right?
Last edited by mizzourah2006; 12-07-2019 at 06:39 AM..
With a net worth of $800,000 and an age of 30-34, one is not set for life. That person needs to keep working. Retirement at 55 might be feasible though on that trajectory.
With a net worth of $800,000 and an age of 30-34, one is not set for life. That person needs to keep working. Retirement at 55 might be feasible though on that trajectory.
Well I guess the thing is - I know $800k+ is a good bit so if I start seeing that I’m burning through money I could always get a job...even if it’s just part time.
However, I’ve not worked for a while now and my net worth grew substantially. Not because I’m a savvy investor but because I simply spend less then I make. I never see myself being a big spender. For one, spending money doesn’t really thrill me and two I want to stay retired...my most valuable possession.
Well I guess the thing is - I know $800k+ is a good bit so if I start seeing that I’m burning through money I could always get a job...even if it’s just part time.
However, I’ve not worked for a while now and my net worth grew substantially. Not because I’m a savvy investor but because I simply spend less then I make. I never see myself being a big spender. For one, spending money doesn’t really thrill me and two I want to stay retired...my most valuable possession.
Maybe we should all be taking financial lessons from you. You and I are about the same age. I would enjoy being a retired rich guy at my current age. I would probably find a way to not make $800,000 in today's $$$ not last for the next 50 years.
There might be a way to make $800,000 last. You might be living in a cheap, 1 bedroom apartment that might be borderline ghetto. That's not going to help you with attracting or retaining a woman for regular sex though.
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,351 posts, read 8,569,440 times
Reputation: 16698
Quote:
Originally Posted by Cabound1
No hard feelings here. Everyone has a different perspective. I have a 2000 Carrera with its 14k original miles. The ultimate garage queen. The 2019 Macan S does get driven. You mentioned you had a Ferrari. I bought a new 360 Modena the same year as the Carrera. Quickly sold it though - made even less sense than the Porsche. It was beautiful though.
I’m an equities person. I have virtually nothing income producing in taxable accounts. Think individual stocks and index ETFs. Most of my income is in the form of capital gains when I sell appreciated equities in taxable accounts. No SS (too young) , no pension or other income streams. Because I own the home and cars outright, my cash needs are minimal, generally around 35k a year. I can easily generate 35k spending money while incurring less than 17k (medi-cal limit for a single) MAGI. That’s how I get the free medical....CA opted for expanded Medicaid and my Kaiser plan happened to be a medi-cal option in my county (contra costa) for those who had had Kaiser for at least 12 months when the ACA came in. Trust me, I couldn’t believe it either.....
I do still hold a handful of losers from years ago that I liquidate to pay for the very occasional big expenses like the Macan S I bought a year or so. I probably won’t have an expense like that for a long while.
Oh, and the discounted PG&E (gas and electric) ..... when I qualified for medi-cal the county sent me a bunch of stuff basically saying “hey, you may qualify for this too”. All the programs had asset tests except the PGE program....all they required was low income. My gas and electric bill totaled less than $5 last month. Of course, October is a friendly month for utilities bills here, mild month, and PGE always does a yearly rebate that month. The thermostat was at 68 all month. I’d guess that my total utilities bills for the year were about $900. A 2500 sq ft one level home.
I’d like to point out that tone is hard to convey in writing. I’m not writing all this to brag. I’m writing it because someone out there “lurking” like I did for years might benefit from it. Otherwise, I’d just DM you. I learned an awful lot from the regulars here over the years and I’m grateful they shared their knowledge. Whether you, or anyone else approves of my actions really doesn’t matter - this information could be useful for someone so I feel compelled to share it. Again, no hard feelings.
Thanks for sharing. I can’t believe you don’t drive the 911 more. I lived just south of you in Pleasanton and on weekends I did all kinds of road trips. Many years ago I had 4 Porsche’s and a Ferrari 308. I did so many drives to the coast, redwoods, Sierras, etc. I loved the diversity of the landscape in California. Here in Georgia it’s pretty with lots of trees and winding roads at the base of the Appalachia’s, but it kind of all the same.
I think you have your life dialed in pretty well and in a desirable area. Best of luck to you.
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,351 posts, read 8,569,440 times
Reputation: 16698
Quote:
Originally Posted by mathjak107
if you plan in advance it is not hard to draw a 6 figure income the early years of retirement ..
the typical strategy for someone looking to get a subsidy from 62 to 65 on insurance is :
first off delay social security ..
start to spend down ira money . for a couple , up to 24k can be drawn out tax free using the standard deduction . you can go up to more than 40k and still have very low taxable income in the 4-5% tax range . this can be a better deal for some than roth conversions while still working can ever be . this is truly a gift from the tax gods ... you got to write it off while working and perhaps even at the peak of your earning years and then pay near nothing to access it .
i have met many retirees who actually had to create taxable income , or instead of a subsidized aca plan they would have been shuffled off to medicaid health health insurance since once you fall to low you have no choice , it is an automatic process to be put on medicaid insurance and not an aca .
have some roths you did early on to provide more cash flow that is tax free .
for those with whole life policies you can actually over fund them for decades .. yep , many had 3 and 4% interest minimums and by law there can be no expenses taken out on over funding ..
you can over fund up to what is called the modified endowment plan limits . that is the point the irs no longer considers it life insurance but an endowment and it all is taxable .
at retirement you can borrow out all the over funding , never pay it back and that is tax free money . the death benefit is just reduced by the amount not paid back .
set a side some cash too and you can see a 6 figure income with very little of it taxable .
i wasn't smart enough to see a good adviser early on who really knows how to play the 2nd half of the game . so i ended up having an overly expensive aca plan with poor coverage .
I always consider you to be the best kind of resource on financial matters here on cd. Thanks for the explanation.
Maybe we should all be taking financial lessons from you. You and I are about the same age. I would enjoy being a retired rich guy at my current age. I would probably find a way to not make $800,000 in today's $$$ not last for the next 50 years.
There might be a way to make $800,000 last. You might be living in a cheap, 1 bedroom apartment that might be borderline ghetto. That's not going to help you with attracting or retaining a woman for regular sex though.
Minimalism is cool though.
He's already said he has a paid for home and a paid for car and $800k in investments/cash.
There's tons of research suggesting that withdrawing 4% of your initial portfolio (and adjusting that amount for inflation each year) will last for 30 years in all but the worst 30 year cycles in our market history (I believe it's if you started withdrawals in 1966 and 1969). While there are many fewer 50-year cycles if we look at 50 years at a 3.5% withdrawal rate we end up with no 50-year cycles where an individual would run out of money.
Plus he has a significant other that splits living expenses and pays her own way. It's about as minimilastic of a lifestyle as DINKs earning $70-$80k/yr in a low cost of living area.
By definition, you're going to "live the rest of your days."
Houses take repairs and maintenance and cars have to be replaced, no matter how gently you use them.
How much do you live on per year? Whatever your wages are, minus taxes and savings.
Can you have fun? A better question is, how to be happy. Most people are happier working, accomplishing something, having a sense of purpose.
It sounds like you've been listening to Mr. Money Mustache. Having read some of his stuff, some critiques of his stuff, and graduating from the same university at the same time and place, I regard the guy as a snake oil salesman who mostly succeeded through a charmed life. No way does he live on $20,000 per year in Boulder or Longmont. Even here in low-cost Indianapolis, HUD classifies that as "extremely low income" for a family of three. For a family of two, it's "very low income." https://www.huduser.gov/portal/datas...2015_IL_in.pdf
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
