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What Is Your Number?

7K views 50 replies 24 participants last post by  Fermion 
#1 ·
How much money do you consider you would need to be financially independent and thereby consider work to be entirely optional?
Or, how would you calculate it?
 
#2 ·
3 million.

Would take me less than 100k to be debt free and financially independent, I would immediately invest the lions share of the rest diversified, buy inexpensive property, and work would be entirely up to me and what I feel like doing at that point. I would also take a deserved but not outrageous vacation or two, I deserve them.

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#3 ·
I think we've discussed this on here before, but for me it would be somewhere in the 3-4M mark. I have a large family of young children and healthcare is extremely expensive. We've had almost a quarter million in health/dental costs during the first eight years of our marriage, so I'm fudging quite a bit for unforeseen circumstances and the cost of quality private insurance. For my wife and I to replace our current income/benefits simply by living off interest it would be in that 3-4M mark.

If kids weren't part of the equation quite a bit less.
 
#9 ·
I think we've discussed this on here before, but for me it would be somewhere in the 3-4M mark. I have a large family of young children and healthcare is extremely expensive. For my wife and I to replace our current income/benefits simply by living off interest it would be in that 3-4M mark.

If kids weren't part of the equation quite a bit less.
Yeah, I make a couple hundred thousand every 6 months -- and I'd peg it around that mark. Oh wait, I'll be dead before I have the kind of cash set aside. Looks like I'll be setting my mark lower! :thumb:
 
#5 ·
$36k\year.

I currently live on less than $24k/Year (by choice)
(And when I say less: today's the 19th and I have $1,100+ left of my $1,925 alotted.)


Last year about this time I considered whether increasing my spending by $1k/ month would increase my quality of life.
(It won't)

Most of the things I enjoy doing (that I still can) are either profitable, save me money, or at worst break even.

If I could travel extensively or ride motorcycles.... I'd spend more.
 
#6 ·
Once you're retired, you should plan to live on 4% of your savings each year. That means you need to have about 25x your annual spending.

If you're close to retirement or in retirement, you need to be invested in some safer options. You're probably going to be able to earn about 7% -8% on those safer investments.

Inflation is around 3% - 3.5% each year on average. You need to grow your investment by that amount each year to keep up with inflation.

Earning 7% and spending 4% lets you reinvest 3%. This seems to be the ideal balance.
 
#17 ·
^ This is exactly where my 3M+ estimate comes to play, based off the "financially independent and thereby consider work to be entirely optional" criteria.

I'm 20-25 years from retirement and have mouths to feed, parents and in-laws that will need care, and enough obligations that 3M-4M is about right. If I were close to retirement, had properties paid off and kids on their own that number would be significantly less.
 
#27 ·
You are right.

I am on a couple 'investment' forums and that is a bit high.

I have done well with rental real estate.

15% can be the norm with rentals. I consider it to be 'safe', because you OWN real estate, actual property, and houses. But you need to be the physical person doing it. If a tenant calls about a sink with a leak you need to get up and go fix that leak. In exchange for those possible tasks, it is extremely 'safe'.

When I was working, we owned one apartment complex at each duty station. When I retired, we consolidated our holdings and extracted the equity to give us some cash, and we bought our Bug-Out-Location to build a farm.

We have been off-grid sustainable homesteading for thirteen years, we built up some investment cash. So we bought another rental property.

With our new RE investment, the conservative business plan projects over 15% ROI each year.
 
#10 ·
I have a military pension. During my Active Duty career, we invested in apartment complexes. So at my retirement, we had enough cash to buy ourselves a farm with no mortgage.

We have been living on this farm for fourteen years. With no mortgage payment, our Cost-of-living is very low. My pension is plenty.

Most of these 'retirement estimates' are way more than what I have. But they are assuming that you would still be making a mortgage payment and living in a high COL area.
 
#11 ·
...
Most of these 'retirement estimates' are way more than what I have. But they are assuming that you would still be making a mortgage payment and living in a high COL area.
Lot of time people find excuses to spend at levels that are way beyond necessary to get by. You don't need all that much if you own your home/land and avoid subscription billing for things. You can also spend more free time when retired to research the things you do buy and know if you are getting the best possible price for it.

I read some of the million dollar savings guesses made by people that think they will continue to spend at the same level as they are now. Once you are old you should not be paying for kids, mortgages, costs of going to work, daily eating out or for that matter any eating out, expensive clothes, new cars or lavish vacations that mostly consists of high priced staying at resorts. You can live on very little if you do your own household repairs and understand being frugal.

You should have enjoyed the high life when young so your modest needs retirement is not a endless bucket list of things you wanted to do but haven't.
 
#18 ·
It would probably be helpful if people listed their circumstances, age, obligations, etc. All those factors will influence the number heavily.

Age: 39yo
Marriage status: Married
Children/family: 4 kids 6yo and under, parents and In-laws with mediocre health and finances
Occupation: Work in IT, run side businesses with my wife
Median annual income for zip code: ~ 100k
Debt: House/car
 
#20 ·
Considering my age and stage of my career, I think around $10 million...I'd never consider working again. I'd have to seriously consider it with anything $7 million or more. Just buy a decent property, invest and live off of that while I travel and educate myself. Might try dedicating some time to writing like I've always wanted to.

Winning something like the Powerball with hundreds of millions would make it such a no brainer it wouldn't even be funny. At that point, you pretty much have to hide from the public for a few years at least anyway.
 
#25 ·
My number was 100K
Age:59
Marriage status:married
no children, extended family financially secure
Occupation:Husband is head of his department at the University, I work from home making home furnishings and beading. I occasionally work temp jobs or PT seasonally - I like to take jobs where the employee discounts helps pay for preps: sporting goods stores, grocery stores, feed store, hardware store....
Median annual income for post code: 24,635
Debt: None
Our largest expenditure would be health care if his job didn't cover it.
 
#26 ·
Age: 66
Marriage status: Single
Children/family: No children, have several extended family members
Occupation: Disabled/retired, semi-active author
Median annual income for post code: AGI of ~$36,000
Debt: No debt

Adding current needs and estimated requirements for status-quo life:
How far behind in daily living needs? $5,000
How far behind in daily medical needs? $3,000
How far behind in quality-of-life needs? $25,000
Estimated long-term daily living expenses? $1,000/month
Estimated long-term medical expenditures? $1,200/month
Estimated long-term quality-of-life expenditures? $800/month

All of which means I need about $30k-$40k to catch up, which includes vehicle repairs, additional medical gear, and a few things to make my life easier and a bit more endurable.

Given being able to catch up, I would need ~$3,000 per month income to have a life similar to what I have now. Which is not that great, other than my family, friends, and prepper people in my life.

I have preps, of course, some very good ones, but sadly lacking in several areas. My consumables levels are not that great. And my medical needs would be very difficult to meet in any significant long-term event.

With those factors in mind, for me to not worry about ever working again at anything that I did not want to; be able to have some quality-of-life aspects in my life that I no longer have (or have never had); have my daily needs met with an increase in both level and quality; have a reasonable chance of maintaining my health at a level that I can deal with on a daily basis; have my prepping level at a comfortable point; have the means to incorporate my long-range, multi-generational prepping plan in my overall life plan; and have enough income of a form and amount that will allow me to pay all government mandated expenses for the extent of my lifetime and the next six generations; I would need $25 million to $50 million initial lump sum to get things set up to be in a position to do everything on the list.

Reasoning:
The only way I would be comfortable and not be worrying about needing to generate significant income by doing some type of gainful employment to replace Social Security income and the intermittent and highly variable royalty income when it is lost due to future events would be to have a 85%+ self-sufficient and self-reliant working farm and ranch working estate of a size and nature to not only produce almost all of the needs for myself but for those that would be required to work for me in the running of the facility.

A minimum of 640 acres of quality fertile land in a reasonable weather four-season location would be required with much more than that if possible for the very-long-term requirements I have for multi-generational preps.

Housing and other facilities for not only myself, my extended family, but all employees and their families, as well. Even with providing the majority of the essentials to the employees from the production of the facility, they would still need an income of a from and amount for their use within the surrounding community now, and in the future after any major event.

With at least fifteen people required, and twenty or more preferred, at an estimated average salary of $40,000 per year, that would mean an income of $600,000 to $800,000 per year, plus at least $100,000 per year for myself and more likely $250,000 to cover myself and my extended family that would be on-site.

That would be ~$1,000,000 per year for salaries. At least $250,000 per year would be needed to be sure of being able to cover outside, mandatory expenses that various governments would impose on the operation.

Add another $250,000 per year for procurement of items that could not be produced in-house.

Or, in total, a place that could produce $1,500,000 in current forms of income.

If I could, I would set things up so I could do all the procurement of outside resources myself, which would probably be a huge initial investment, and another $250,000 or more yearly outlay. It would, however, ensure the supplies of items that could not be produced in-house, no matter what might happen in the future.

I do believe the initial amount of $25,000,000 to $50,000,000, plus another $25,000,000 for the outside procurement plan, would be adequate.

Could I get by on less than that? Sure. I would still have worries, though. Many of them.

Just my opinion.
 
#28 ·
I would need $25 million to $50 million initial lump sum to get things set up to be in a position to do everything on the list.

I do believe the initial amount of $25,000,000 to $50,000,000, plus another $25,000,000 for the outside procurement plan, would be adequate.

Could I get by on less than that? Sure. I would still have worries, though. Many of them.

Just my opinion.

Don't forget the $65 Million for the Gulfstream G650.
 
#31 ·
I am on a couple of investment forums. The conventional wisdom that everyone agrees is best, is to draw down your portfolio by 4% every year.

My problem is that I can not seem to wrap my mind around the idea of drawing my portfolio down, ever.

Obviously I need to withdraw some money each year for my living expenses. But from one year to the next I want my portfolio to be larger with each passing year. And obviously some estate planning, so it all gets to my heirs complete and intact without being taxed.
 
#34 ·
4 million in cash/stocks or about 500,000 in rental properties.

Although rental properties will still have me doing some work.

I am married only 27 years old and have a baby daughter.

Less than 46k debt on a rental property and another 5k on misc.

I want to give my daughter a head start fund when she turns 18 whether it's for college, trade school, or a business. So that will probably cost atleast 100k.
 
#36 ·
Wife and I are on Medicare and Social Security and pull in about $38,000.00 a year. Pull in another spendable $6,000.00 - $8,000.00 more a year with investments. Probably spend about what we bring in, but if we had to we could cut back. But I don’t expect to ever run out of money.
So how much do we need as a backup plan.... I’d think $500.000.00 will more than cover any and all future expenses but I have more just in case...
 
#41 ·
according to our financial advisor we are on target to be worth $9.4 Million (if Social Security is still available...$4.5 Million if it's not) that is if we live to be 90..we will be at about $750K when I'm 55 (my plan to no longer work)...but fingers crossed on all that..I would be perfectly happy to stop working now,(I've already retired once from the military) the wife could never stop ..she just likes her job to much...

We're already at the point where we realized all our planning for the future and investments will end up going to our kids as we are set with our income and spend/live off much less than we bring in....basically my Retirement and VA money cover our living expenses so my current job and my wife's just gets invested....kinda crazy when I can remember living pay check to pay check 20 years ago.......thank you Dave Ramsey!!! His lessons and our discipline to the program changed our lives!
 
#42 ·
It would probably be helpful if people listed their circumstances, age, obligations, etc. All those factors will influence the number heavily.

Age: 55yo
Marriage status: Married
Children/family: empty nest, parents and In-laws with mediocre health and finances
Occupation: Utility worker
Median annual income for zip code: ~ 36k
Debt: 26k for DD2 student loans that she is paying and 8k on rental house.

Retirement goal is 1.2 million with 3-5 years to go.
 
#43 ·
I consider myself semi-retired. With my line of work I can work two full days a week and make more than enough to cover all expenses. Most weeks it’s three or four half days. Sometimes it’s so busy I have to work five full days a week, but that’s only for a few months each year.

I won’t ever “retire” because I like what I do. It gets me out and about meeting new people and driving to see some wonderful places. I get time to do what I want to do and once the kids finish their schooling, I will take my work on the road and travel more.
 
#45 ·
Health insurance is the big obstacle to early retirement for me. Although my wife and I are both healthy and never use our insurance, WTF would we do if one of us suddenly got diagnosed with cancer or some other serious illness.

We are largely debt free and don't have a lot of expensive hobbies. We could easily make do with $2,000 or so a month income but for the health insurance issue. Health insurance is unaffordable for someone just buying a policy unconnected with employment.
 
#47 · (Edited)
Health Insurance is a big problem for me as well. We currently pay $1850/mo for my wife and I through our small business. My wife has an illness that requires monthly treatment, and that treatment would cost over $10,000/mo without coverage. So for us, it is not only the monthly premium that holds us back, but the fear that switching to a private plan through the network would cause my wife's treatment to no longer be covered. Health Insurance is the biggest stumbling block to our hopes of early retirement.

Age: 49
* married, no children
* zip code = over 100k
* willing to move to a less expensive state
* self employed
* Debt = 150k (mortgage: house worth 450k)
 
#48 ·
Lots of commentary about health costs, but we'll never have 'Medicare for all' in the US. The propaganda arm of the "industry" is far too powerful. And I'm convinced that DC has horse-traded the issues. If you're in favor of science, the environment, health care -- and 2A rights -- you have no political home to call your own. We'll have cheap Chinese doctors setting up shop here long before DC *ever* institutes single-payer.

As for never need to work again, I've completely given up on that idea. But the more attainable goal is to launch a business and at least get yourself out of the 9-5 rush hour rut, and working for a soulless organization ready to offshore you at any point.

It's risky to be completely dependent on a gig, so I'm thinking the best life is a balance between partially living on passive/investment income + augmented by a small scale business.
 
#49 ·
We actually did retire early so it is not just a theory.

The thing is, I have been making our entire income needs off of just a modest fraction of our portfolio, a chunk in a taxable account at a discount broker.

Maybe can't always depend on making 20% to 100% return each year forever though... :thumb:
 
#51 ·
Right now I am all cash. Mostly I have made our return in biotech stocks, and mostly Merck. I recognized over a year ago that Merck had a blockbuster cancer drug (Keytruda) and yet the market was being overly negative toward biotech (Merck was trading for $58). I bought and sold during the volatility and now Merck is $82. I also made some money on Celgene by buying when it was $61 and then having it get bought out for $95 a few weeks later. That was a bit lucky lol.

Right now I have swing traded Gilead a few times, buying in the $62 area and selling in the $65 area, then waiting for it to go back to $62. I just sold all my shares Friday and now am waiting for it to fall again.

It really seems easy money....I am sure something will go wrong someday but I have already made something like 3x my original investment stash.
 
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