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a million bucks isn't enough to retire on in perpetuity, but it is enough to set yourself up in such a way that you can, professionally, do almost anything you

by noodle 16y ago

a million bucks isn't enough to retire on in perpetuity, but it is enough to set yourself up in such a way that you can, professionally, do almost anything you want with your life as long as you have some sort of working income stream. i'd probably work on my current bootstrapped startup full-time for a while, see how it goes, and then travel the world while doing freelance work a few hours a day. edit: oh, and pay down all of my debts, of course.

byoung2 16y ago
a million bucks isn't enough to retire on in perpetuity It is if you don't live in the US. You could invest that money in the US where you can get decent returns and live somewhere like the Philippines where less than $1000/month affords you a comfortable lifestyle (see http://trifter.com/asia-pacific/philippines/true-cost-of-living-in-the-philippines-for-2009/ http://trifter.com/asia-pacific/philippines/true-cost-of-liv... for a middle class married couple who do it for under $500). Living in the Philippines will also give you a more relaxed lifestyle (maids, drivers, live-in cooks, etc) so you could even work on a startup if you wanted since you can't say you're too busy working or doing chores.
- noodle 16y ago
  > It is if you don't live in the US. i disagree. even if you adjust for inflation, consider taxes and such, you can live a very comfortable middle class lifestyle on $1m in the USA. going elsewhere, of course, makes it easier. but its not about "just living". retiring in perpetuity it about having enough money socked away that, for example, a major, expensive medical problem won't ruin it for you, or that you can put your kids through college. its the big non-regular life expenses that get in the way.
  - byoung2 16y ago
    I completely agree that you can do it in the US, I just meant that you can get more bang for your buck in a place like the Philippines. $1,000,000 invested in the US, even if you could get a 10% guaranteed return (that's a stretch in this economy), you'd earn $100,000 per year. Inflation is going to eat 3-5% of that $1,000,000 each year, so you can only take out $50-70,000 if you want the nest egg to stay intact. Give 1/3 of that to Uncle Sam for taxes, and you have $30-50,000 to live on, which won't go far, even in Arizona. Hopefully you have the restraint to live a lower-middle class lifestyle knowing you have $1,000,000 in the bank. In the Philippines that same middle class lifestyle can be had for $6,000/year, or if you want to live an upper-middle class lifestyle, $12,000/year.
    - anamax 16y ago
      You're assuming that you're only taxed on what you "take out" and that's wrong. You're taxed on taxable income, whether or not you "take it". Yes, income inside tax deferred accounts is not considered income until distributed, but other accounts don't work that way. If there are sales, dividends, or interest, you've got taxable events even if you leave the money in the account. Let's look at that $100k in earnings. $10-20k goes to taxes. (The marginal rate for $100k is higher, but you don't pay it on the whole amount.) $30-50k goes to inflation, leaving you $30-70k to "safely" take out. However, it's hard to get 10% these days - even 5% may be too high. Fortunately inflation is currently low too, but $5k for taxes and $20k for inflation leaves you with just $25k to safely take out.

by noodle 16y ago

byoung2 16y ago

a million bucks isn't enough to retire on in perpetuity It is if you don't live in the US. You could invest that money in the US where you can get decent returns and live somewhere like the Philippines where less than $1000/month affords you a comfortable lifestyle (see http://trifter.com/asia-pacific/philippines/true-cost-of-living-in-the-philippines-for-2009/ http://trifter.com/asia-pacific/philippines/true-cost-of-liv... for a middle class married couple who do it for under $500). Living in the Philippines will also give you a more relaxed lifestyle (maids, drivers, live-in cooks, etc) so you could even work on a startup if you wanted since you can't say you're too busy working or doing chores.

noodle 16y ago
> It is if you don't live in the US. i disagree. even if you adjust for inflation, consider taxes and such, you can live a very comfortable middle class lifestyle on $1m in the USA. going elsewhere, of course, makes it easier. but its not about "just living". retiring in perpetuity it about having enough money socked away that, for example, a major, expensive medical problem won't ruin it for you, or that you can put your kids through college. its the big non-regular life expenses that get in the way.
- byoung2 16y ago
  I completely agree that you can do it in the US, I just meant that you can get more bang for your buck in a place like the Philippines. $1,000,000 invested in the US, even if you could get a 10% guaranteed return (that's a stretch in this economy), you'd earn $100,000 per year. Inflation is going to eat 3-5% of that $1,000,000 each year, so you can only take out $50-70,000 if you want the nest egg to stay intact. Give 1/3 of that to Uncle Sam for taxes, and you have $30-50,000 to live on, which won't go far, even in Arizona. Hopefully you have the restraint to live a lower-middle class lifestyle knowing you have $1,000,000 in the bank. In the Philippines that same middle class lifestyle can be had for $6,000/year, or if you want to live an upper-middle class lifestyle, $12,000/year.
  - anamax 16y ago
    You're assuming that you're only taxed on what you "take out" and that's wrong. You're taxed on taxable income, whether or not you "take it". Yes, income inside tax deferred accounts is not considered income until distributed, but other accounts don't work that way. If there are sales, dividends, or interest, you've got taxable events even if you leave the money in the account. Let's look at that $100k in earnings. $10-20k goes to taxes. (The marginal rate for $100k is higher, but you don't pay it on the whole amount.) $30-50k goes to inflation, leaving you $30-70k to "safely" take out. However, it's hard to get 10% these days - even 5% may be too high. Fortunately inflation is currently low too, but $5k for taxes and $20k for inflation leaves you with just $25k to safely take out.