3 ms·

500,000 invested intelligently would give you a yield where you could expect a decent income to live upon, so if you are clever enough that should be enough. Pl

by shaydoc 13y ago

500,000 invested intelligently would give you a yield where you could expect a decent income to live upon, so if you are clever enough that should be enough. Plus it would give you the freedom you wish for, plus a little incentive to do "something" as its not a crazy amount of money....

elviejo 13y ago
500k is the smallest number I've seen for this calculation. What kind of investment are you thinking?
- JoshTriplett 13y ago
  500k at 7% per year (common number used for the growth of the market as a whole, and thus the average growth of index funds) means $35k/year, not an unreasonable salary to live on.
  - jlgreco 13y ago
    Even assuming that 35k would be satisfying, that doesn't give you much headroom if something goes wrong.
    - saalweachter 13y ago
      Fun fact: 36% of Americans make less than $35k per year.
      - jlgreco 13y ago
        Oh yes, you can live on it. The question is if you can be satisfied with it. Well, you can live on it assuming that unexpected issues do not arise, plunge you into medical debt and render you unable to receive the best care you might otherwise be able to afford. That can cut short your "living on 35k a year" plan... A sad story many of those 35k/year Americans can likely talk about. Given the option of retiring now and living off of 35k/year for the rest of my life, or continuing to work for several more years, I am going to continue working.
        saalweachter 13y ago
        If my sole assets were a moneypile of $500,000 from which $35,000 were extracted for living expenses per year ... probably not. If I had to have a rough guess, my minimum retirement target is $300,000-600,000 of personal property, plus a moneypile or otherwise low/no-work income (if I were working an insignificant number of hours at something I could stop anytime but enjoyed doing, I would still consider myself retired in the conventional sense) yielding between $20,000 and $40,000 / year. So, using the 7% figure from the GP, that puts my target retirement assets at around $600,000-1,200,000.
  - mbreese 13y ago
    That's highly dependent upon where you live though... but not an unreasonable number for a single person. For me, since I have a family and currently live in CA, the number has to be significantly higher than 500K.
  - orangethirty 13y ago
    Yes, and that's my current goal by 40 (34 now). 35K/year might not sound like much, but it is a good chunk of money when you don't have debt. Plus, it doesn't mean you can then go on a start another business for the hell of it.
  - redfhendrix 13y ago
    You need to subtract ~3% inflation from that number every year to reach "spending power." Therefore, you're only receiving 20k in spending power and allowing nothing for value appreciation. If you can live on that, more power to you though.
    - 13b9f227ecf0 13y ago
      No to mention there's no such thing as low risk 7% returns. Maybe the S&P historically did that for a 15 year period here and there, but anyone telling you it's something you can plan on is either lying or a fool.
  - deleted 13y ago
    [deleted]
  - hapless 13y ago
    A 7% average return across 50 years is very different from a 7% return year in, year out, because the former fails to account for generational risk. You don't have the option of just withdrawing $0 on your "down" years. p.s. if you can find a risk free 7% return on 500k, open a retirement planning business, become very wealthy.
  - shaydoc 13y ago
    My family of 4 ( 2 adults, 2 kids) would spend about £24,000 per year, that's Northern Ireland, living fairly well on that too IMHO... I know this because I am fairly analytical about our finances since the two kids arrived, as we had to sacrifice one wage ( stay at home Mom )!
- shaydoc 13y ago
  There are some FTSE 100 companies with a 7% dividend, if that's too risky for you, buy a fund.... Have a look at http://www.topyields.nl/ http://www.topyields.nl/ also....
- neogodless 13y ago
  I actually thought he wrote $5 million and was nodding my head until I saw your comment. Oops! Pessimistically, I know I can get 1% interest and easily live off $50,000 / year. Obviously, you would hope to invest in a much better vehicle, figure on paying taxes on your investment income, and hope you stay ahead of inflation.
cynicalkane 13y ago
Incidentally, that's the number George Soros had in mind when he decided to go into finance to support his dream of being a philosopher. He ended up making a little more than that, however.
- shaydoc 13y ago
  If its good enough for George Soros, is good enough for me :-)
- deleted 13y ago
  [deleted]
- deleted 13y ago
  [deleted]
- deleted 13y ago
  [deleted]

by shaydoc 13y ago

elviejo 13y ago

500k is the smallest number I've seen for this calculation. What kind of investment are you thinking?

JoshTriplett 13y ago
500k at 7% per year (common number used for the growth of the market as a whole, and thus the average growth of index funds) means $35k/year, not an unreasonable salary to live on.
- jlgreco 13y ago
  Even assuming that 35k would be satisfying, that doesn't give you much headroom if something goes wrong.
  - saalweachter 13y ago
    Fun fact: 36% of Americans make less than $35k per year.
    - jlgreco 13y ago
      Oh yes, you can live on it. The question is if you can be satisfied with it. Well, you can live on it assuming that unexpected issues do not arise, plunge you into medical debt and render you unable to receive the best care you might otherwise be able to afford. That can cut short your "living on 35k a year" plan... A sad story many of those 35k/year Americans can likely talk about. Given the option of retiring now and living off of 35k/year for the rest of my life, or continuing to work for several more years, I am going to continue working.
      - saalweachter 13y ago
        If my sole assets were a moneypile of $500,000 from which $35,000 were extracted for living expenses per year ... probably not. If I had to have a rough guess, my minimum retirement target is $300,000-600,000 of personal property, plus a moneypile or otherwise low/no-work income (if I were working an insignificant number of hours at something I could stop anytime but enjoyed doing, I would still consider myself retired in the conventional sense) yielding between $20,000 and $40,000 / year. So, using the 7% figure from the GP, that puts my target retirement assets at around $600,000-1,200,000.
- mbreese 13y ago
  That's highly dependent upon where you live though... but not an unreasonable number for a single person. For me, since I have a family and currently live in CA, the number has to be significantly higher than 500K.
- orangethirty 13y ago
  Yes, and that's my current goal by 40 (34 now). 35K/year might not sound like much, but it is a good chunk of money when you don't have debt. Plus, it doesn't mean you can then go on a start another business for the hell of it.
- redfhendrix 13y ago
  You need to subtract ~3% inflation from that number every year to reach "spending power." Therefore, you're only receiving 20k in spending power and allowing nothing for value appreciation. If you can live on that, more power to you though.
  - 13b9f227ecf0 13y ago
    No to mention there's no such thing as low risk 7% returns. Maybe the S&P historically did that for a 15 year period here and there, but anyone telling you it's something you can plan on is either lying or a fool.
- deleted 13y ago
  [deleted]
- hapless 13y ago
  A 7% average return across 50 years is very different from a 7% return year in, year out, because the former fails to account for generational risk. You don't have the option of just withdrawing $0 on your "down" years. p.s. if you can find a risk free 7% return on 500k, open a retirement planning business, become very wealthy.
- shaydoc 13y ago
  My family of 4 ( 2 adults, 2 kids) would spend about £24,000 per year, that's Northern Ireland, living fairly well on that too IMHO... I know this because I am fairly analytical about our finances since the two kids arrived, as we had to sacrifice one wage ( stay at home Mom )!
shaydoc 13y ago
There are some FTSE 100 companies with a 7% dividend, if that's too risky for you, buy a fund.... Have a look at http://www.topyields.nl/ http://www.topyields.nl/ also....
neogodless 13y ago
I actually thought he wrote $5 million and was nodding my head until I saw your comment. Oops! Pessimistically, I know I can get 1% interest and easily live off $50,000 / year. Obviously, you would hope to invest in a much better vehicle, figure on paying taxes on your investment income, and hope you stay ahead of inflation.

cynicalkane 13y ago

Incidentally, that's the number George Soros had in mind when he decided to go into finance to support his dream of being a philosopher. He ended up making a little more than that, however.

shaydoc 13y ago
If its good enough for George Soros, is good enough for me :-)
deleted 13y ago
[deleted]
deleted 13y ago
[deleted]
deleted 13y ago
[deleted]