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So, just what sort of approach do you use when picking those lotto tickets?
That's pretty rude, don't you think?
He may have a great salary, rent from properties/investments/land, or maybe he has inherited quite a bit of money.
I'm 31 and my goal is to have around $3 million to $4 million but realistically, I could probably do just fine on $2 million. I've invested quite a bit in the market, mutual funds, various commodities, etc as well as putting the maximum amount in both my personal ROTH IRA as well as my employer's 401k.
My goal is to be retired by my mid to late 50's. I've decided that retiring in my early 50's would be unrealistic simply because my ability to have a reliable cash flow by 52 or 53 would be difficult. I'm planning for 57 or 58 giving me a few more years of earning potential and the ability to hopefully start withdrawing from my ROTH at age 59 1/2.
My personal experience is that people like us who accumulate wealth do so over time living a disciplined lifestyle. When we retire or cash out we don't blow the nest egg or change spending habits much.
We really don't spend that much. If your house is paid you can live pretty darn comfortably on $5k or $6k a month in after tax income. You don't need $4 million to generate that. It's nice to have a big nest egg - but I'll never use it. You won't either.
Think about what your budget might look like. Taxes and insurance might be $1000. Another $500 for utilities and misc upkeep and repairs.
Food and dining out for two: $1000. We like to cook.
Cars and insurance and gas: maybe $600 unless you get the Porsche bug.
Entertainment: $1000. Includes trips to the bookstore, Peet's coffee, football game or two, maybe a drive up the coast.
You're going to help your kids - no way around it. Add some for that.
My SS benefit would be about $2.5k in current dollars if I wait until our retirement age. I'm confident it will be around in 10 years. That's about half! Assuming you have any faith in SS, you should calculate the off-balance sheet amount into your pot.
You truly don't need that much.
This is a great post and describes my situation (and that of my wife) perfectly. We retired at 55 with pensions and a decent amount of money in the bank. We are not rich but we have a nice life. We do not spend extravagantly but do like to travel and that is where our extra cash goes. We never were big spenders so making the pension money last is no big deal.
2-2.5 million might work. As it stands, my goal is 4 million.
So you plan to retire in 15 years...I hope you already have $2.5mm because you'd have to invest almost $100k a year if you had $2.5mm to get to $4m. That's a boat load of money and a short timeframe.
So you plan to retire in 15 years...I hope you already have $2.5mm because you'd have to invest almost $100k a year if you had $2.5mm to get to $4m. That's a boat load of money and a short timeframe.
So you're assuming 0% interest? We save/invest a little more than $95,000/year including my wife's 401K, but that should increase shortly. We have approximately $1mm not counting home equity. I also have a business interest that my share hopefully will be worth ~500,000-600,000 by that time.
Utilizing the rule of 72, if the market returns 10%/year over that 15 years, the $1.0mm would grow to $4.0mm without adding anything to it. Of course I'm not counting on earning 10%, but I'm also not counting on inheritance or other windfalls which could happen between now and then. I think we are set up to achieve the goal, but if I have to wait til 55 that's OK. Automobiles may end up being my downfall
So you're assuming 0% interest? We save/invest a little more than $95,000/year including my wife's 401K, but that should increase shortly. We have approximately $1mm not counting home equity. I also have a business interest that my share hopefully will be worth ~500,000-600,000 by that time.
Utilizing the rule of 72, if the market returns 10%/year over that 15 years, the $1.0mm would grow to $4.0mm without adding anything to it. Of course I'm not counting on earning 10%, but I'm also not counting on inheritance or other windfalls which could happen between now and then. I think we are set up to achieve the goal, but if I have to wait til 55 that's OK. Automobiles may end up being my downfall
There aren't too many pros who have returned 10% over 15 years, even in the golden years. Other than growing a business yourself, what investments do you foresee returning 10%?
Utilizing the rule of 72, if the market returns 10%/year over that 15 years, the $1.0mm would grow to $4.0mm without adding anything to it. Of course I'm not counting on earning 10%,
10% is a brave average growth rate considering the risk free rate is just about 0%, the economy is in the dumps, and near the end of 15 years, you are going to have to start adjusting everything out of high growth investment vehicles and towards income preservation. You either have to work (much) longer, get a huge raise, or adjust your expectations. Or get a windfall.
There aren't too many pros who have returned 10% over 15 years, even in the golden years. Other than growing a business yourself, what investments do you foresee returning 10%?
Quote:
Originally Posted by TheOverdog
10% is a brave average growth rate considering the risk free rate is just about 0%, the economy is in the dumps, and near the end of 15 years, you are going to have to start adjusting everything out of high growth investment vehicles and towards income preservation. You either have to work (much) longer, get a huge raise, or adjust your expectations. Or get a windfall.
Right, but you're missing the point that I said I'm not counting on getting the 10%, thus the high savings rate we are doing. And the numbers I showed utilizing the rule of 72 did not account for the $95,000/year we are currently adding to retirement or taxable accounts. Mathematically, even if we earn 5% on our money we should get to that number. The savings rate should be going up considerably in 2013 as well.
Other than growing a business yourself, what investments do you foresee returning 10%?
I have invested in Real Estate in the past and earned substantially more than 10% (Rehabs). Right now we have 1 rental and I'm not looking to create more risk by getting into real estate right now, but it is available to me in the future. I foresee the stock market returning at least 7%/year over the next 15 years, but I'm not a stock expert, just looking at historical gains. Everyone has an opinion on what the stock market will do.
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