6 ms·

> Putting in long hours in your 20s and 30s to have a massive nest egg that will last you the rest of your life by your 40s seems like a good trade-off. Even a

by dvt 5y ago

> Putting in long hours in your 20s and 30s to have a massive nest egg that will last you the rest of your life by your 40s seems like a good trade-off. Even amassing 7 figures by your late 20s/30s (very difficult to do reliably, also implies no debt, no adverse life events, etc.), is not remotely enough to make a "comfortable" living for the next ~5 decades of your life.

bserge 5y ago
Define comfortable
- sokoloff 5y ago
  For me, that’s targeting the same spendable money as the 95th percentile household who is earning a wage (paying high taxes on that), paying for a house, feeding two late model mid-luxury cars, and saving aggressively for retirement and college. So, significantly less than what would be needed to hit $250K of pre-tax money ($6M or so), but rather a paid-off house (taxes and insurance only), no further college or retirement savings, tax-optimized withdrawals, and buying health insurance as the major effects. I’m guessing that it’s less than half of $6M (in today’s money) and probably under $2M to hit a 90th percentile spendable money figure.
pb7 5y ago
$1M at 30 without any further contributions will be worth (after inflation) nearly $4M at 50, and nearly $8M at 60. If you're not "comfortable" spending every single penny you make while your nest egg grows, you have a spending problem.
- deleted 5y ago
  [deleted]
- bcrosby95 5y ago
  > that will last you the rest of your life by your 40s seems like a good trade-off. I read that to mean "retire at 40". If you retire at 40, your $1M isn't going to grow to $4M at 50.
  - mgkimsal 5y ago
    sure but if you keep spending moderate, it may grow to $2.5M-$3M, as it would probably already be around $2M in those 10 years. Instead of $8M at 60, perhaps you've spent along the way and only end up with $3M at 60?
cgh 5y ago
It is if you own a house mortgage-free. Dividend income on let’s say $1.5 million would be around $60,000/year. That’s pretty comfortable if your expenses don’t include shelter. That’s why my advice to young people is always to do what you have to in order to establish working credentials, then move somewhere cheap, buy a house and work remotely as much as you can. You’ll get it paid off in no time and that level of freedom cannot be overstated. Then you can start really saving. On the downside, you’ll probably be living somewhere small and uncool and that may not be enough incentive to leave the bright lights of the city.
- dvt 5y ago
  > On the downside, you’ll probably be living somewhere small and uncool and that may not be enough incentive to leave the bright lights of the city. This seems like social life suicide. I'm in my 30s, single, and omitted dating much in my 20s (because -- surprise surprise -- I was working way too much). I can't really move to the middle of nowhere where the dating pool is non-existent.
  - mensetmanusman 5y ago
    If you move there, then there will be at least one. Also, farmersonly.com (never thought I would see that Super Bowl commercial…)
  - mywittyname 5y ago
    Realistically though, 1.5MM brings in much more than $60k a year most of the time (an aggressive portfolio could return that much in a month, on occasion). So one could buy a place in a cool area with a cheap 30 year loan immediately before quitting. Live there for as long as you want, then sell it if you get the urge for a cheaper, less exciting lifestyle. Even if one overspends a little extra in those initial years paying a mortgage on a nicer place, much of that will be recouped upon sale, since places in cool areas tend to appreciate quit quickly and mortgages are highly leveraged.
    - echelon 5y ago
xyzzy21 5y ago
It depends on what other choices you make in terms of costs. If you are STUPID, you insist on living in hell-holes like California (LA or SF areas) and you lock yourself into foolish costs you can easily avoid. FOMO is an excellent and primary way to make you last statement a 100% certainty.

by dvt 5y ago

bserge 5y ago

Define comfortable

sokoloff 5y ago
For me, that’s targeting the same spendable money as the 95th percentile household who is earning a wage (paying high taxes on that), paying for a house, feeding two late model mid-luxury cars, and saving aggressively for retirement and college. So, significantly less than what would be needed to hit $250K of pre-tax money ($6M or so), but rather a paid-off house (taxes and insurance only), no further college or retirement savings, tax-optimized withdrawals, and buying health insurance as the major effects. I’m guessing that it’s less than half of $6M (in today’s money) and probably under $2M to hit a 90th percentile spendable money figure.

pb7 5y ago

$1M at 30 without any further contributions will be worth (after inflation) nearly $4M at 50, and nearly $8M at 60. If you're not "comfortable" spending every single penny you make while your nest egg grows, you have a spending problem.

deleted 5y ago
[deleted]
bcrosby95 5y ago
> that will last you the rest of your life by your 40s seems like a good trade-off. I read that to mean "retire at 40". If you retire at 40, your $1M isn't going to grow to $4M at 50.
- mgkimsal 5y ago
  sure but if you keep spending moderate, it may grow to $2.5M-$3M, as it would probably already be around $2M in those 10 years. Instead of $8M at 60, perhaps you've spent along the way and only end up with $3M at 60?

cgh 5y ago

It is if you own a house mortgage-free. Dividend income on let’s say $1.5 million would be around $60,000/year. That’s pretty comfortable if your expenses don’t include shelter. That’s why my advice to young people is always to do what you have to in order to establish working credentials, then move somewhere cheap, buy a house and work remotely as much as you can. You’ll get it paid off in no time and that level of freedom cannot be overstated. Then you can start really saving. On the downside, you’ll probably be living somewhere small and uncool and that may not be enough incentive to leave the bright lights of the city.

dvt 5y ago
> On the downside, you’ll probably be living somewhere small and uncool and that may not be enough incentive to leave the bright lights of the city. This seems like social life suicide. I'm in my 30s, single, and omitted dating much in my 20s (because -- surprise surprise -- I was working way too much). I can't really move to the middle of nowhere where the dating pool is non-existent.
- mensetmanusman 5y ago
  If you move there, then there will be at least one. Also, farmersonly.com (never thought I would see that Super Bowl commercial…)
- mywittyname 5y ago
  Realistically though, 1.5MM brings in much more than $60k a year most of the time (an aggressive portfolio could return that much in a month, on occasion). So one could buy a place in a cool area with a cheap 30 year loan immediately before quitting. Live there for as long as you want, then sell it if you get the urge for a cheaper, less exciting lifestyle. Even if one overspends a little extra in those initial years paying a mortgage on a nicer place, much of that will be recouped upon sale, since places in cool areas tend to appreciate quit quickly and mortgages are highly leveraged.
  - echelon 5y ago

xyzzy21 5y ago

It depends on what other choices you make in terms of costs. If you are STUPID, you insist on living in hell-holes like California (LA or SF areas) and you lock yourself into foolish costs you can easily avoid. FOMO is an excellent and primary way to make you last statement a 100% certainty.