4 ms·

The "standard" advice is the 4%-rule -- the idea that you can withdraw an inflation-adjusted 4% of your original portfolio in perpetuity. 5% is aggressive and

The "standard" advice is the 4%-rule -- the idea that you can withdraw an inflation-adjusted 4% of your original portfolio in perpetuity. 5% is aggressive and has failed historically. They're probably looking at $12k/year spending for two people. If you want to move to live on this much, you have to live like a local, and it might not be super pleasant.

gaius 9y ago
Indeed. If you are going to do this then your capital has two jobs, it has to support you while you travel, and it has to bootstrap you back into Western life when you return (such as covering rent/deposit on a mortgage etc etc while you job hunt). Three jobs in fact as it has to give you a buffer for emergencies, if you have a health situation or need a quick repatriation for any reason. Traveling means not living like a local in a poor country, because the locals aren't hopping on a plane at the drop of a hat, they live where they live and are pretty much stuck there. And you won't be having much fun if you have money worries hanging over your head! Without thinking about it especially much I'd guess you'd want at least a mil in capital to pull this off, perfectly possible to achieve living a frugal lifestyle while working in Big Tech for 10 years - if you could bear it for that long.
- pc86 9y ago
  One thing people forget is the mental overload of making $150-200k a year but spending 20-25% of that. Yes, initially if you've never saved or had money before it feels good to sock away $4k+ out of each paycheck. But eventually when you look at your bank account and see tens or hundreds of thousands of dollars you start wonder why you can't just go have that $100 dessert you saw on YouTube. Living like a pauper for ten years while having to get multiple bank accounts to handle FDIC coverage is harder than it sounds.
  - gaius 9y ago
    I’d imagine your main savings vehicle would be Vanguard funds with dividends reinvested, try to get benefits of compounding as early as possible. But you are right the psychological overhead of being the only one of your friends to miss out on everything would take a huge toll.
  - spacehome 9y ago
    These people aren't keeping hundreds of thousands of dollars in cash. It's all in low-fee index funds.
  - derekp7 9y ago
    That's why it is important to still have disposable income after your expenses are taken care of. But the more important item, is general life stress. A lot of stress situations can be made to go away if you throw money at it (things like a constantly-breaking car, or living in a high crime area, or general boredom). That is the main reason that people have a hard time saving at almost any income level (until you hit over 70 - 85K).

gaius 9y ago

Indeed. If you are going to do this then your capital has two jobs, it has to support you while you travel, and it has to bootstrap you back into Western life when you return (such as covering rent/deposit on a mortgage etc etc while you job hunt). Three jobs in fact as it has to give you a buffer for emergencies, if you have a health situation or need a quick repatriation for any reason. Traveling means not living like a local in a poor country, because the locals aren't hopping on a plane at the drop of a hat, they live where they live and are pretty much stuck there. And you won't be having much fun if you have money worries hanging over your head! Without thinking about it especially much I'd guess you'd want at least a mil in capital to pull this off, perfectly possible to achieve living a frugal lifestyle while working in Big Tech for 10 years - if you could bear it for that long.

pc86 9y ago
One thing people forget is the mental overload of making $150-200k a year but spending 20-25% of that. Yes, initially if you've never saved or had money before it feels good to sock away $4k+ out of each paycheck. But eventually when you look at your bank account and see tens or hundreds of thousands of dollars you start wonder why you can't just go have that $100 dessert you saw on YouTube. Living like a pauper for ten years while having to get multiple bank accounts to handle FDIC coverage is harder than it sounds.
- gaius 9y ago
  I’d imagine your main savings vehicle would be Vanguard funds with dividends reinvested, try to get benefits of compounding as early as possible. But you are right the psychological overhead of being the only one of your friends to miss out on everything would take a huge toll.
- spacehome 9y ago
  These people aren't keeping hundreds of thousands of dollars in cash. It's all in low-fee index funds.
- derekp7 9y ago
  That's why it is important to still have disposable income after your expenses are taken care of. But the more important item, is general life stress. A lot of stress situations can be made to go away if you throw money at it (things like a constantly-breaking car, or living in a high crime area, or general boredom). That is the main reason that people have a hard time saving at almost any income level (until you hit over 70 - 85K).