4 ms·

I think the point is he isn't "set for life" like some may expect NFL players to be.

dceddia 9y ago
He certainly could be, if he keeps living on $25k/year. See [0] and run some calculations at [1]. 0: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim... 1: https://networthify.com/calculator/earlyretirement https://networthify.com/calculator/earlyretirement
- opportune 9y ago
  People generally don't retire to $25k/year, especially if they eventually get married and have children. The only way to really make something like that work is to move somewhere extremely inexpensive like SEA. That's unrealistic for most people. This is the one thing that has always struck me as odd abut the FIRE community. FIRE is a good goal but it's highly abnormal for people to retire early with these very low annual salaries for themselves. Sure, it works if you're a single childless 30 year old. But you also generally have to be comfortable staying single and childless if you're going to "retire" to $25k/year.
  - umanwizard 9y ago
    Does SEA mean Seattle? My mind is blown that Seattle comes to your mind as the least expensive place in the US...
    - pc86 9y ago
      Southeast Asia.
    - opportune 9y ago
      No, Southeast Asia. E.g. Indonesia or Thailand (just not Singapore)
      - umanwizard 9y ago
        Ah, got it, thanks.
  - abalone 9y ago
    There are a lot of areas of the U.S. where people actually do retire on $25K/year. Having said that, they probably own their home, have cheap Medicare and have paid all child-related expenses at that point. So you're right, for most 30 year olds it's a different story. Also, even if people budget a $25K/year retirement there is always the possibility of needing long term nursing home care in the last years of life. (Say, if you're a football player that suffers dementia later in life.) Depending on the quality of care, that can wipe out even a $1M nest egg. It's a big financial concern at that age. It's not covered by insurance the way that, say, a heart attack or stroke is.
    - opportune 9y ago
      Yes, I don't mean to exclude those people. Both pairs of my grandparents had a fixed income of less than that. But as you said, they didn't have many personal expenses beyond bills and food.
- sokoloff 9y ago
  Agree. See a financial model here: https://news.ycombinator.com/item?id=14868501 https://news.ycombinator.com/item?id=14868501
castratikron 9y ago
If he put $1M in a bond fund, he could probably expect to get around $40k a year on the interest alone. He would only pay 10% capital gains tax on that, which would leave him with $36k. Well above his $25k yearly budget. The bachelor lifestyle is cheap.
- pc86 9y ago
  Not to mention the NFL pension on top of that. Not sure when he can draw it (at retirement, or does he wait until 55/60/62/65?), but even just modest investment returns + pensions puts him above the median US household income.
- ac29 9y ago
  Bond interest is taxed at normal income tax rates in the US, not capital gains tax rates.
- kelnos 9y ago
  Hell, he could put it in a municipal/tax-exempt bond fund and at the very least not pay federal taxes. If he lives in a state that has a state-specific bond fund, he could let it grow tax-free. 3-4% on one of those is not unreasonable. (But he'd probably want to diversify a bit...)
pmiller2 9y ago
Well, he may not have every option in the world (e.g. he can't simply move to San Francisco and hope to have a nice life without working), but he does effectively have his own personal basic income, and it's a significant amount. Right now, I couldn't imagine the additional freedom I'd have if I had ~$30-40k coming in every single year, regardless of what I did for work (if anything).
- pishpash 9y ago
  That's enough to live on and do those things you would do that only requires you. If you ever want to leverage something into a larger undertaking, that requires serious capital rather than a basic income.
  - zaccus 9y ago
    Unless you're a billionaire there are always going to be things you can't afford to do. For many if not most people, having enough passive income to live without having to work would be a dream come true.
ThrustVectoring 9y ago
He's set for life if he keeps his expenses at $25k/yr. $1.8MM / $25k = 72. Even if he loses half to taxes, that's still 36 years worth of expenses in assets. If I had that much, I'd retire in a heartbeat.
- nshelly 9y ago
  On the cumulative salary of $1.8m over three years he's looking at an effective rate of around 35%. But he definitely won't lose half of his pension to taxes. That's one of the main advantages is that is spread out over a number of years. The NFL, with all its faults in neglecting players health, was wise to set players up with pensions.
  - maxerickson 9y ago
    Does anybody know the history? I would sort of expect that the NFL Players Association had something to do with establishing it.
  - ThrustVectoring 9y ago
    I didn't even count the pension in there, just the $1.8m in salary.
  - willhslade 9y ago
    Um, what? Doesn't the average NFL player have a life expectancy of 53-59, and you can only collect the pension after 55? They can move it foward starting at age 35. Cynical me says it's a political nothing burger.
icantdrive55 9y ago
He's going to get $21,360 yr. forever. There are many places in America, and the world where 20 grand/yr. will do just fine. Not everyone ambition is to pay over 50% of their income working for iwontbehereinayear.com, or thebarriertoentryislowandthisistemporary.com He will never be homeless. Plus--he's one of the few people who should write a self-help book, or do the seminar thing? He's got it figured out early on. People want guys like him around them, and on their team. The amout of nit picking that goes on here is a bit much.

He certainly could be, if he keeps living on $25k/year. See [0] and run some calculations at [1]. 0: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim... 1: https://networthify.com/calculator/earlyretirement https://networthify.com/calculator/earlyretirement

opportune 9y ago
People generally don't retire to $25k/year, especially if they eventually get married and have children. The only way to really make something like that work is to move somewhere extremely inexpensive like SEA. That's unrealistic for most people. This is the one thing that has always struck me as odd abut the FIRE community. FIRE is a good goal but it's highly abnormal for people to retire early with these very low annual salaries for themselves. Sure, it works if you're a single childless 30 year old. But you also generally have to be comfortable staying single and childless if you're going to "retire" to $25k/year.
- umanwizard 9y ago
  Does SEA mean Seattle? My mind is blown that Seattle comes to your mind as the least expensive place in the US...
  - pc86 9y ago
    Southeast Asia.
  - opportune 9y ago
    No, Southeast Asia. E.g. Indonesia or Thailand (just not Singapore)
    - umanwizard 9y ago
      Ah, got it, thanks.
- abalone 9y ago
  There are a lot of areas of the U.S. where people actually do retire on $25K/year. Having said that, they probably own their home, have cheap Medicare and have paid all child-related expenses at that point. So you're right, for most 30 year olds it's a different story. Also, even if people budget a $25K/year retirement there is always the possibility of needing long term nursing home care in the last years of life. (Say, if you're a football player that suffers dementia later in life.) Depending on the quality of care, that can wipe out even a $1M nest egg. It's a big financial concern at that age. It's not covered by insurance the way that, say, a heart attack or stroke is.
  - opportune 9y ago
    Yes, I don't mean to exclude those people. Both pairs of my grandparents had a fixed income of less than that. But as you said, they didn't have many personal expenses beyond bills and food.
sokoloff 9y ago
Agree. See a financial model here: https://news.ycombinator.com/item?id=14868501 https://news.ycombinator.com/item?id=14868501

castratikron 9y ago

If he put $1M in a bond fund, he could probably expect to get around $40k a year on the interest alone. He would only pay 10% capital gains tax on that, which would leave him with $36k. Well above his $25k yearly budget. The bachelor lifestyle is cheap.

pc86 9y ago
Not to mention the NFL pension on top of that. Not sure when he can draw it (at retirement, or does he wait until 55/60/62/65?), but even just modest investment returns + pensions puts him above the median US household income.
ac29 9y ago
Bond interest is taxed at normal income tax rates in the US, not capital gains tax rates.
kelnos 9y ago
Hell, he could put it in a municipal/tax-exempt bond fund and at the very least not pay federal taxes. If he lives in a state that has a state-specific bond fund, he could let it grow tax-free. 3-4% on one of those is not unreasonable. (But he'd probably want to diversify a bit...)

pmiller2 9y ago

Well, he may not have every option in the world (e.g. he can't simply move to San Francisco and hope to have a nice life without working), but he does effectively have his own personal basic income, and it's a significant amount. Right now, I couldn't imagine the additional freedom I'd have if I had ~$30-40k coming in every single year, regardless of what I did for work (if anything).

pishpash 9y ago
That's enough to live on and do those things you would do that only requires you. If you ever want to leverage something into a larger undertaking, that requires serious capital rather than a basic income.
- zaccus 9y ago
  Unless you're a billionaire there are always going to be things you can't afford to do. For many if not most people, having enough passive income to live without having to work would be a dream come true.

ThrustVectoring 9y ago

He's set for life if he keeps his expenses at $25k/yr. $1.8MM / $25k = 72. Even if he loses half to taxes, that's still 36 years worth of expenses in assets. If I had that much, I'd retire in a heartbeat.

nshelly 9y ago
On the cumulative salary of $1.8m over three years he's looking at an effective rate of around 35%. But he definitely won't lose half of his pension to taxes. That's one of the main advantages is that is spread out over a number of years. The NFL, with all its faults in neglecting players health, was wise to set players up with pensions.
- maxerickson 9y ago
  Does anybody know the history? I would sort of expect that the NFL Players Association had something to do with establishing it.
- ThrustVectoring 9y ago
  I didn't even count the pension in there, just the $1.8m in salary.
- willhslade 9y ago
  Um, what? Doesn't the average NFL player have a life expectancy of 53-59, and you can only collect the pension after 55? They can move it foward starting at age 35. Cynical me says it's a political nothing burger.

icantdrive55 9y ago

He's going to get $21,360 yr. forever. There are many places in America, and the world where 20 grand/yr. will do just fine. Not everyone ambition is to pay over 50% of their income working for iwontbehereinayear.com, or thebarriertoentryislowandthisistemporary.com He will never be homeless. Plus--he's one of the few people who should write a self-help book, or do the seminar thing? He's got it figured out early on. People want guys like him around them, and on their team. The amout of nit picking that goes on here is a bit much.