5 ms·

my point is there’s a lot of people who complain about work that could in theory never work another day in their life again but do for non-financial reasons any

by tempsy 7y ago

my point is there’s a lot of people who complain about work that could in theory never work another day in their life again but do for non-financial reasons anyway

firecall 7y ago
How many is 'a lot'?
- tempsy 7y ago
  I don’t know but I think a lot of people (no dependents) could live off $1M in invested savings for the rest of their life. 5-10 years in a managerial class role nets many that much.
  - yibg 7y ago
    I see these types of comments here quit a bit, and I'm guessing they're mostly from folks with no kids or ever having kids. Certainly there is an argument to be made for working less and living with less, but for most people $1M invested doesn't check out. If you're relying solely on returns from that investment, then conservatively you can only safely withdraw 3-4%, which works out to 30-40k a year. That's close to full time on minimum wage in some states. While that's enough to survive, not sure if that'd be a fulfilling life for most, even while single. What happens if you have a family later? EDIT: Also not sure how many can actually save that much in 5-10 years. That's 100k - 200k of savings after tax. Even with compound interest, that's pretty tough for most I would think.
    - tempsy 7y ago
      There are REITs that generate 12% dividends you can easily buy, which would be $120K before tax. 3-4% is extremely conservative and you could certainly withdraw more. It’s also less about “never making another dime working” and more that you don’t need a traditional 9-5. You can and should figure out other sources of income.
      - yibg 7y ago
        There are investments that return 10+%, but that doesn't mean that's how much you should take out every year. The 3-4% (usually 4% for retirement savings) is to buffer for years where you get negative returns. I've never seen anyone recommend withdrawing 12% a year with plans to have the nestegg last a long time.
        tempsy 7y ago
        I was suggesting 6% not 12%. You can live off $60K as a single person even in higher cost cities pretty easily. Taxes aren’t actually that high even in CA at that level.
azinman2 7y ago
Sounds edge case-y (and only decreasing as wealth inequality increase)... but as you said, there are other reasons that keep them going. It’s not about “survival” in the most basic sense. That doesn’t make it any less real to those people.
- tempsy 7y ago
  $1M savings should last a life time if aggressively invested. If you have no dependents then 5-10 in a managerial class role should get you there
  - azinman2 7y ago
    I don’t understand your point. 39% of the country would have to borrow to cover a $400 surprise medical expense. Not many have $1MM in savings to “aggressively invest” (what does that even mean? Risky investments? Which means sometimes the luck will run out?). I also don’t know many ordinary managers with $5-10MM in savings. That’s quite some income, and those people must not be married with kids. Regardless, none of this negates that they can still feel valid pressures no matter what their success is. Typically having such success invites even more pressure as one is expected to keep it up, either by others or themselves. Few make it to such largess without overworking themselves. [1] https://www.bloomberg.com/opinion/articles/2019-06-04/the-400-emergency-expense-story-is-wrong https://www.bloomberg.com/opinion/articles/2019-06-04/the-40...
    - tempsy 7y ago
      I mean you’re proving my point exactly. People who have the savings to not work convince themselves that their identity is their job and do it to “keep up.” My point is that is all in your head, and if you’re going around complaining about how busy you are you then you’re doing it voluntarily and not because you will literally be homeless if you stop. $1M in a high quality REIT can generate 12% dividends, which is $120K. A single person could easily live off half that.
      - TuringNYC 7y ago

by tempsy 7y ago

my point is there’s a lot of people who complain about work that could in theory never work another day in their life again but do for non-financial reasons anyway

firecall 7y ago

How many is 'a lot'?

tempsy 7y ago
I don’t know but I think a lot of people (no dependents) could live off $1M in invested savings for the rest of their life. 5-10 years in a managerial class role nets many that much.
- yibg 7y ago
  I see these types of comments here quit a bit, and I'm guessing they're mostly from folks with no kids or ever having kids. Certainly there is an argument to be made for working less and living with less, but for most people $1M invested doesn't check out. If you're relying solely on returns from that investment, then conservatively you can only safely withdraw 3-4%, which works out to 30-40k a year. That's close to full time on minimum wage in some states. While that's enough to survive, not sure if that'd be a fulfilling life for most, even while single. What happens if you have a family later? EDIT: Also not sure how many can actually save that much in 5-10 years. That's 100k - 200k of savings after tax. Even with compound interest, that's pretty tough for most I would think.
  - tempsy 7y ago
    There are REITs that generate 12% dividends you can easily buy, which would be $120K before tax. 3-4% is extremely conservative and you could certainly withdraw more. It’s also less about “never making another dime working” and more that you don’t need a traditional 9-5. You can and should figure out other sources of income.
    - yibg 7y ago
      There are investments that return 10+%, but that doesn't mean that's how much you should take out every year. The 3-4% (usually 4% for retirement savings) is to buffer for years where you get negative returns. I've never seen anyone recommend withdrawing 12% a year with plans to have the nestegg last a long time.
      - tempsy 7y ago
        I was suggesting 6% not 12%. You can live off $60K as a single person even in higher cost cities pretty easily. Taxes aren’t actually that high even in CA at that level.

azinman2 7y ago

Sounds edge case-y (and only decreasing as wealth inequality increase)... but as you said, there are other reasons that keep them going. It’s not about “survival” in the most basic sense. That doesn’t make it any less real to those people.

tempsy 7y ago
$1M savings should last a life time if aggressively invested. If you have no dependents then 5-10 in a managerial class role should get you there
- azinman2 7y ago
  I don’t understand your point. 39% of the country would have to borrow to cover a $400 surprise medical expense. Not many have $1MM in savings to “aggressively invest” (what does that even mean? Risky investments? Which means sometimes the luck will run out?). I also don’t know many ordinary managers with $5-10MM in savings. That’s quite some income, and those people must not be married with kids. Regardless, none of this negates that they can still feel valid pressures no matter what their success is. Typically having such success invites even more pressure as one is expected to keep it up, either by others or themselves. Few make it to such largess without overworking themselves. [1] https://www.bloomberg.com/opinion/articles/2019-06-04/the-400-emergency-expense-story-is-wrong https://www.bloomberg.com/opinion/articles/2019-06-04/the-40...
  - tempsy 7y ago
    I mean you’re proving my point exactly. People who have the savings to not work convince themselves that their identity is their job and do it to “keep up.” My point is that is all in your head, and if you’re going around complaining about how busy you are you then you’re doing it voluntarily and not because you will literally be homeless if you stop. $1M in a high quality REIT can generate 12% dividends, which is $120K. A single person could easily live off half that.
    - TuringNYC 7y ago