How much $ to retire and how to fund your lifestyle in retirement

[OrthoSurg]

First I am 64. So health care isn't an issue for me. And I have never made more than $40,000 in any year I have been alive. My Average yearly income is below $20,000. And I have lived a very good life. I work to live, not live to work. And I was influenced by Thoreau while in college. BS from Auburn, and Master's from Florida State University. As having so low an annual salary My Social security check is less than a thousand dollars. Which is almost enough for me to live on. But I recently married and she is in the field of Stochastics, and has her Doctorate in some area of Optimization. So money is something I think about even less. She doesn't spend much, so her bank account is growing quickly based solely on her work income.
You'll never see me post a photo of me drinking a bottle of beer or a shot of scotch that costs more than a Publix Sub. And I go into a grocery store having the prices determine what I will eat the next week instead of deciding what I feel like.
Twenty years ago I bought my first home. And I started planting trees in it that I would provide me with real food.Mangoes, Bananas, Lychees, Muscadines, and the odd citrus tree as I live in Florida. I was not considering buying a home. I was living in a County Park for free because it had a small lake, and I had been a lifeguard for the county for a few years. And the county had "caretakers" that were either law enforcement or firefighters that lived in their own trailer in the park for free. I bought the trailer from the previous caretaker for $1500. All I had to do was call the police of someone came into the park at night and was acting a fool. So...I purchased the home because it was too good a deal. Long story. After two years the man that sold it to me and came back to tell me how good a deal I got because the IRS had audited him claiming he would not have sold the house for that little. He set the price, not me. And he worked for the FBI so it wasn't like I took advantage of some senile old man. The house is now 7x the value I paid for it. A friend who owned a real estate business did the closing for me for cost. He was a bit nervous doing it until he met the man and determined he was of sound mind.
My hobbies also improve the bottom line..I used to hunt and fish. Now since I live on the coast I can pretty much offer any guest a fresh fish dinner...if they are willing to hold a pole for an hour.
I have an expensive hobby, Koi. I have a 51,000 gallon koi pond in my backyard. I Know a man that builds them for other people. He is also a friend. His estimate for if he built the pond for one of his clients was over $250,000. My costs were under $20,000. It took me 2 years just to finish digging the hole with a shovel.
Lake Luke
I also get my koi for very little money as I will take vacations to koi breeders and work with them for a few days during their busy times. And I am considered a gifted culler. As one breeder put it, "Luke you see the final koi. You see good traits. But you also see what I not see. You see in baby koi adult koi hobbyists want that is not good koi." He used to raise an eye at some of my selections. Now he smiles at himself. I can actually ask for any of the babies I cull through. And while the finished (large) koi are valuable, the babies are 1/10th the price so it is not costing the breeder to have me cull through his koi and pick some ones I like..especially since my tastes are esoteric.

I get most of my clothes at Goodwill ( If you do start shopping at Goodwill go on a Sunday morning because they rotate out the stock based on a color-coded tag, and the week before that color will be pulled from the floor they reduce it 50%. ) The only clothes I don't buy from Goodwill are underwear, socks, and shoes.
I do not travel much, once every few years going cross country. HOWEVER TSLA is going to give me a new Cybertrck to explore wherever wheels can take me. When I travel I do insane things like stop at a grocery store for a snack (fruit) instead of a coffee at starbucks. I have two starbucks gift cards on the fridge, and starbucks is three blocks down the street. And I have had those cars for at least 2 years...
Now I am going to go take a nap...on a second hand bed I really enjoy, with second hand high count thread sheets I got from Goodwill. Even the pillows are from a thrift store, but they were still in the plastic.
I do buy new vehicles but only because in my youth when I had very little money I had to buy used, and unfortunately always got some car that was undependable. So I buy "new," and keep them for 10-15 years. The ICE Dodge 5.7 liter hemi I am driving now is a 2008... I think? It has to last two more years. No Problem, it could last much longer.
I enjoy my life. More or less. But what I have shared is not my life.

Interesting,
When I was a student, got my first kid.
We managed to live a sporty life, a lot of camping, bicycling, triathlons and were spending about 70% or our income, I was making in the 40k, my wife too. Was commuting on my bicycle the most possible and then was driving 15 years old used cars and doing the maintenance myself.
When I graduated, my income did exactly what TSLA did since last year share price, but our lifestyle did not change at all. Just stopped the week end parties alcohol binges and replaced it with activities with the kids.
Bought the Duplex house we were renting the first floor appartement in a working class neighborhood with young professionals with young kids. Got couple more kids to fill the backstreet with basketball nets and hockey nets during winter. Bought a Model 3 as soon as I could.
We live from walking distance to local stores, city park, field park, school so no need for a second car but will still buy a Model Y to encourage Tesla’s mission.
Been pumping all my unused income intro TSLA stock since the beginning because that is the only stock that is future looking, environmental friendly and having extraordinary growth potential with a visionary leader. All this against the advice of my financial advisor.
But similarly, this it not my life either and hope my financial advisor is not reading these forums.

 

[Tslynk67]

First I am 64. So health care isn't an issue for me. And I have never made more than $40,000 in any year I have been alive. My Average yearly income is below $20,000. And I have lived a very good life. I work to live, not live to work. And I was influenced by Thoreau while in college. BS from Auburn, and Master's from Florida State University. As having so low an annual salary My Social security check is less than a thousand dollars. Which is almost enough for me to live on. But I recently married and she is in the field of Stochastics, and has her Doctorate in some area of Optimization. So money is something I think about even less. She doesn't spend much, so her bank account is growing quickly based solely on her work income.
You'll never see me post a photo of me drinking a bottle of beer or a shot of scotch that costs more than a Publix Sub. And I go into a grocery store having the prices determine what I will eat the next week instead of deciding what I feel like.
Twenty years ago I bought my first home. And I started planting trees in it that I would provide me with real food.Mangoes, Bananas, Lychees, Muscadines, and the odd citrus tree as I live in Florida. I was not considering buying a home. I was living in a County Park for free because it had a small lake, and I had been a lifeguard for the county for a few years. And the county had "caretakers" that were either law enforcement or firefighters that lived in their own trailer in the park for free. I bought the trailer from the previous caretaker for $1500. All I had to do was call the police of someone came into the park at night and was acting a fool. So...I purchased the home because it was too good a deal. Long story. After two years the man that sold it to me and came back to tell me how good a deal I got because the IRS had audited him claiming he would not have sold the house for that little. He set the price, not me. And he worked for the FBI so it wasn't like I took advantage of some senile old man. The house is now 7x the value I paid for it. A friend who owned a real estate business did the closing for me for cost. He was a bit nervous doing it until he met the man and determined he was of sound mind.
My hobbies also improve the bottom line..I used to hunt and fish. Now since I live on the coast I can pretty much offer any guest a fresh fish dinner...if they are willing to hold a pole for an hour.
I have an expensive hobby, Koi. I have a 51,000 gallon koi pond in my backyard. I Know a man that builds them for other people. He is also a friend. His estimate for if he built the pond for one of his clients was over $250,000. My costs were under $20,000. It took me 2 years just to finish digging the hole with a shovel.
Lake Luke
I also get my koi for very little money as I will take vacations to koi breeders and work with them for a few days during their busy times. And I am considered a gifted culler. As one breeder put it, "Luke you see the final koi. You see good traits. But you also see what I not see. You see in baby koi adult koi hobbyists want that is not good koi." He used to raise an eye at some of my selections. Now he smiles at himself. I can actually ask for any of the babies I cull through. And while the finished (large) koi are valuable, the babies are 1/10th the price so it is not costing the breeder to have me cull through his koi and pick some ones I like..especially since my tastes are esoteric.

I get most of my clothes at Goodwill ( If you do start shopping at Goodwill go on a Sunday morning because they rotate out the stock based on a color-coded tag, and the week before that color will be pulled from the floor they reduce it 50%. ) The only clothes I don't buy from Goodwill are underwear, socks, and shoes.
I do not travel much, once every few years going cross country. HOWEVER TSLA is going to give me a new Cybertrck to explore wherever wheels can take me. When I travel I do insane things like stop at a grocery store for a snack (fruit) instead of a coffee at starbucks. I have two starbucks gift cards on the fridge, and starbucks is three blocks down the street. And I have had those cars for at least 2 years...
Now I am going to go take a nap...on a second hand bed I really enjoy, with second hand high count thread sheets I got from Goodwill. Even the pillows are from a thrift store, but they were still in the plastic.
I do buy new vehicles but only because in my youth when I had very little money I had to buy used, and unfortunately always got some car that was undependable. So I buy "new," and keep them for 10-15 years. The ICE Dodge 5.7 liter hemi I am driving now is a 2008... I think? It has to last two more years. No Problem, it could last much longer.
I enjoy my life. More or less. But what I have shared is not my life.
EDIT:
I feel I should clarify driving the Dodge with the 5.7 liter hemi. It was late 2008 (I think). Gas was $4/gallon. I thought it would be advantageous to buy a "gas-guzzler". The sticker on the Dodge was $35k. I got it for my 1997(?) Nissan Pickup that was on its last leg and a little over $21k all in. I figured that the $20k in initial costs would lighten the cost of the fuel economy. And I thought gas would settle under $3/gal.
I unlike so many of you don't give a tinker's damn what happens to the work's air quality in 20 years. I have severe asthma which is triggered by cigarette smoke. For the first 50 years of my life no one cared about cigarette smoke. What were "adults" thinking? they could see, smell, and taste a dense cloud of known carcinogens and accepted it as if it were the right of others to kill not only themselves but everyone around them... and you worry about a couple of degrees? ( You are probably right, but my point is I don't care. I've lived through hell already.)

Any got the Cliffnotes for this, please post... *

Heads-up for the retirement planning, but I won't mention money as so many of you get a bit weird over that.

As many of you know, I'm buying a house - I thought "too early" to be cashing out, but it's the one my wife wants, and what wife wants, easier for me if she gets it.

After about a week of deliberation, I realised that I might be able to get the house without selling any of our shares, or at least minimising. So I took a mortgage for 90% of the purchase price, which was approved (helps having your trading accounts with the same bank, methinks), with a 1.27%APR, which is almost free money. I figured that I can easily service that mortgage by selling covered calls against our shares, I've seen that 3 months out, when IV is high, I can get around $100k for $800 strikes, if I can do that four times a year, I easily cover the mortgage payments and likely pay it off within 3-4 years.

Still have to work-out the renovation costs, so there might need to sell a bit, but will also look at aggressive calls as an alternative (if I have to sell 500 @ $500, then may as well write some $550 strikes, which might cover the immediate needs and maybe doesn't get exercised anyway, etc.).

So this would get the house, no more rent to pay, so I could stop the office job. This would be in June 2022, which also happens to coincide with a load of LEAPs I hold (DITM), so the plan there is to exercise to as many shares as I can, then start selling calls against those too - I would effectively become a full-time trader.

So that's now my plan, get the house, keep the shares (as much as possible), I think it's ambitious, but doable.

* just joshing you, I gave it a "love"

 

[CorneliusXX]

Any got the Cliffnotes for this, please post... *

Heads-up for the retirement planning, but I won't mention money as so many of you get a bit weird over that.

As many of you know, I'm buying a hose - I thought "too early" to be cashing out, but it's the one my wife wants, and what wife wants, easier for me if she gets it.

After about a week of deliberation, I realised that I might be able to get the house without selling any of our shares, or at least minimising. So I took a mortgage for 90% of the purchase price, which was approved (helps having your trading accounts with the same bank, methinks), with a 1.27%APR, which is almost free money. I figured that I can easily service that mortgage by selling covered calls against our shares, I've seen that 3 months out, when IV is high, I can get around $100k for $800 strikes, if I can do that four times a year, I easily cover the mortgage payments and likely pay it off within 3-4 years.

Still have to work-out the renovation costs, so there might need to sell a bit, but will also look at aggressive calls as an alternative (if I have to sell 500 @ $500, then may as well write some $550 strikes, which might cover the immediate needs and maybe doesn't get exercised anyway, etc.).

So this would get the house, no more rent to pay, so I could stop the office job. This would be in June 2022, which also happens to coincide with a load of LEAPs I hold (DITM), so the plan there is to exercise to as many shares as I can, then start selling calls against those too - I would effectively become a full-time trader.

So that's now my plan, get the house, keep the shares (as much as possible), I think it's ambitious, but doable.

* just joshing you, I gave it a "love"

What happens if there's a recession in 2022 and you've borrowed the money and the leaps aren't worth what you expect?

 

[Ocelot]

Samething here, was happy to tell my financial advisor when I had reached 2M. That was my original goal, but he said it’s minimum 5M to live on a $125,00 annual income and invest the remaining $125,000 for an always growing family thrust. His estimates was 5% average interest rate with a conservative portfolio, so $250,000 interest annually, $125,000 to live and $125,000 for investments for constant growth.

Here in Canada college schooling is not really that expensive, no health insurance needed because of universal healthcare however the 53% tax rate is making it hard to have some money to invest in the first place.

Curious... as to the need of the family trust, asides for mabye passing on property? Does the 5 million then include property, or is it just liquid assets? Could you not live off the 250k per year... hence not touching principal amount invested without the trust?

 

[Tslynk67]

What happens if there's a recession in 2022 and you've borrowed the money and the leaps aren't worth what you expect?

This kind of scenario is exactly what I was fearing when people were telling me to borrow against my shares (which is essentially what I'll be doing). The mortgage payment is €3700 per month, we currently pay €2500 in rent, no problem for us to pick up the delta for a bit - I can choose to continue working if I feel it's necessary.

Like I said, it's an ambition, not a certainty, would need things to go badly not to happen.

 

[smorgasbord]

We've got another thread in this area talking about this topic. A big part of this is the definition for lifestyle that you're looking for. A funny thing about income and lifestyle - the latter tends to grow to the former. There are people that are broke on $500k/year income, and there are people saving like crazy on $100k/year. Obviously the $500k/year household has more opportunities (travel, savings, car expense, ..), but that may or may not make them happier.

If you're looking for a $500k/year lifestyle, then $2M is not gonna cut it (or even be close). You'll be taking a lot of risk as you'll need a 25% annual gain for your portfolio to be flat.


But if you're looking for an $80k/year lifestyle (which is still better than the median in the US), then the 4% withdrawal rule of thumb has you covered at a $2M portfolio.


Me personally, I've found that our household will have a very nice lifestyle on a $4M portfolio with 10+ years to go to medicare. And buying back my time is more valuable than another $1-6M in the portfolio. That's me / my household; every body else's context is / will be different.

The 4% withdrawal has gotten a lot of press, but I personally don't recommend it to anyone who has invested in TSLA. It was designed for people who a) don't know how to invest, and b) don't know how to budget - or c) know how, but don't want to bother.

The idea is you :
A) Buy an S&P 500 index fund which transitions over to bond funds over time
B) Sell 4% of your portfolio's value the first year of retirement
C) Each subsequent year, adjust the dollar amount withdrawn by the rate of inflation

The 4% number was chosen to provide a virtual (not literal) certainty that you wouldn't run out of money in 30 years. If you retire earlier, you're supposed to reduce that initial percentage, if you retire later or expect do die younger (family history), you can increase it.

But, the main thing here is that the rules are absolute. Whether your portfolio balance is up or down or whether inflation is high or low, you keep withdrawing that same inflation adjusted amount each year.

Now, there have been subsequent studies showing that a 100% S&P 500 fund will do better over 30 years than the mix of stock and bonds. There have also been Monte Carlo simulations, which I discount because they choose inflation and stock returns that aren't correlated - for me only historical back-testing is valid. Some people say you can make that initial withdrawal at 7%, others say no more than 3% because.

The whole idea is, to me, hogwash. It assumes the initial 4% is what you need, and so you can't tighten your belt in leaner years. It assumes you don't rebalance your portfolio or anything since the good folks over at Standard & Poors do that for you.

That's not the way I'm going to live out my retirement, and I'll be surprised if anyone who is heavy into TSLA right now expects to suddenly change their investment strategy to be more passive because they have more time to think about investments. My experience is just the opposite.

 

[OrthoSurg]

Curious... as to the need of the family trust, asides for mabye passing on property? Does the 5 million then include property, or is it just liquid assets? Could you not live off the 250k per year... hence not touching principal amount invested without the trust?

Just liquid assets. Home was bought with my holding company through family thrust to make sure it is not liquidated if we die. It’s located just beside university and is intended to be for the kids and grandkids when they go to college. All my corporation income are invested through the thrust and kids are beneficiaries and can’t liquidate the holding in case we die, a voting committee structure was made.

I don’t want my 5 kids to touch the main investment funds. They have to work too! As Buffet said. I want them to inherit enough to do anything but not enough to do nothing.

 

[ZeApelido]

I think all your retirement estimates have forgotten the $100k a year on new Tesla products you are going to be spending.

 

[ZeApelido]

But seriously all the talk about personal finance is refreshing and motivating. It's healthy and may prevent people from making some dumb mistakes.

 

[WMTribe90]

The 4% withdrawal has gotten a lot of press, but I personally don't recommend it to anyone who has invested in TSLA. It was designed for people who a) don't know how to invest, and b) don't know how to budget - or c) know how, but don't want to bother.

The idea is you :
A) Buy an S&P 500 index fund which transitions over to bond funds over time
B) Sell 4% of your portfolio's value the first year of retirement
C) Each subsequent year, adjust the dollar amount withdrawn by the rate of inflation

The 4% number was chosen to provide a virtual (not literal) certainty that you wouldn't run out of money in 30 years. If you retire earlier, you're supposed to reduce that initial percentage, if you retire later or expect do die younger (family history), you can increase it.

But, the main thing here is that the rules are absolute. Whether your portfolio balance is up or down or whether inflation is high or low, you keep withdrawing that same inflation adjusted amount each year.

Now, there have been subsequent studies showing that a 100% S&P 500 fund will do better over 30 years than the mix of stock and bonds. There have also been Monte Carlo simulations, which I discount because they choose inflation and stock returns that aren't correlated - for me only historical back-testing is valid. Some people say you can make that initial withdrawal at 7%, others say no more than 3% because.

The whole idea is, to me, hogwash. It assumes the initial 4% is what you need, and so you can't tighten your belt in leaner years. It assumes you don't rebalance your portfolio or anything since the good folks over at Standard & Poors do that for you.

That's not the way I'm going to live out my retirement, and I'll be surprised if anyone who is heavy into TSLA right now expects to suddenly change their investment strategy to be more passive because they have more time to think about investments. My experience is just the opposite.

Few thoughts here, the 4% rule also assumes you never earn another dollar after retiring early and live entirely on “passive income”. Most early retirees I know continue to pursue passion projects, seasonal work, etc. and can easily supplement the 4% withdrawal rate. There’s no rule you have to withdraw 4% each year either. You’re just supposed to average 4% to avoid drawing down the principle too much over time. Lastly, a lot of FIRE folks lean heavy on the index funds, particularly Vanguard index funds with low fees, to help ensure steady, moderate, low-risk returns. However, since the vast majority of actively managed funds underperform the market, I really don’t see index investing as drastically hurting my returns and I sleep well at night. I hold a large chunk of Tesla, but everything else is indexed. Real estate also plays prominently in my and most FIRE portfolios, since it is rather passive, low risk, and provides steady rental income. Most FIRE “experts” have shunned bonds in recent years. Personally, I miss the days of CDs with 5% returns, but that’s just me.

 

[dakh]

You can retire and live well with far less than $5mil. But we are not ordinary people, we are TSLA investors. Preferably for us, when we retire we will have enough cushion in our net worth that we can continue to invest in TSLA. So, for example, if your goal for a retirement account is $5mil, you shouldn't retire until you have at least $7mil, which would give you plenty of runway to keep investing, even during market downturns. If you retire just when you've hit you're target retirement amount, you will likely be too cautious about investing any substantial amount of that anymore in a single volatile stock.

Why continue to grow your assets even after you've hit your retirement target? Because unlike working, investing in TSLA is easy and fun, and the gains you make can be used for charity, the next generation, personal splurges or pursuing activities of interest. Trust me on this, you will find it valuable.

It is easy to read your post as either "stocks always go up" or "this is for people who pull in major amounts of income with their work". Otherwise, where would one suddenly come up with an extra $2M? If we assume neither of these two is true, then you're effectively saying keep working and wait for your investment to hit a certain even larger target. Which may or may not ever happen, depending on where the overall market is going and what happens with Tesla specifically. Unless one is an active trader and confident in their ability make money to reinvest, I don't see this being such a rosy clear cut choice. We're here today, if I hit my financial independence number, it's anybody's guess if this is going to improve further or be taken away from me by mr. market. On the flip side though, I think it is much, much more risky to keep money in what would be normally considered safe assets now. Most of the investment info we have is for when there are safe assets available with reasonable yields, which is no longer the case and our government already have said that it plans to continue this for a long while. So keeping a large-ish exposure to Tesla I think is actually adding "safety" to my portfolio.

 

[dakh]

Reviving the thread over from the discussion in the main investment mega-topic, so over from this post by @WMTribe90

I started following Mr. Money Mustache and other FIRE bloggers around 2013. I retired at age 40 in 2017 with a family of 5 and net worth around 1.5 M. Full disclosure my wife still works, but the plan is for her to retire before 50. I’d be fine with her retiring tomorrow (net worth currently >3M), but I’m willing to have a leaner retirement. I think it's incorrect to characterize the FIRE lifestyle as requiring extreme frugality though. Frugality, especially in your early working years is a central tenet, but I think its more accurate to say FIRE requires a careful self-examination of what truly makes one happy, prioritizing your time over money and material things, and having the financial independence to not have to work out of necessity or with financial gain as the primary consideration. I don’t buy many material possessions, but I spend pretty lavishly for quality food and drink, some nice meals out, experiences (skiing/travel). Friends and family have no idea of our net worth looking in from the outside. My first Tesla shares were bought in 2013 and have added a nice cushion since I retired in 2017.

Apologies for the OT, but I hate seeing FIRE equated to extreme frugality and a life devoid of joy.

I kinda made this statement tongue in cheek since both elaborating on it in the investment thread isn't a great idea and also looking at what others posted earlier -- thinking they need $5 or $7M to retire, I think that's kinda true that they'll perceive MMM's spending as extreme frugality. MMM thought 1/10th of that is plenty good, given his annual expenses of something along the lines of $25K. Personally I don't think either is "correct". For me for example, additional spending on my, in MMM terms, rather outlandishly expensive hobbies like racing motorcycles, is well worth the additional expense, given my current income level. But the point that he's making is also that until you tried, you won't know. I personally might have end up having it both ways, but looking at this in general terms, I still think it is an entirely valid tradeoff to keep working if your work is something close enough to what you'd be doing anyway, pays really well, and enables you to do things that you would not be able to afford if you were to loose your "active income".

 

[ByeByeJohnny]

First I am 64. So health care isn't an issue for me. And I have never made more than $40,000 in any year I have been alive. My Average yearly income is below $20,000. And I have lived a very good life. I work to live, not live to work. And I was influenced by Thoreau while in college. BS from Auburn, and Master's from Florida State University. As having so low an annual salary My Social security check is less than a thousand dollars. Which is almost enough for me to live on. But I recently married and she is in the field of Stochastics, and has her Doctorate in some area of Optimization. So money is something I think about even less. She doesn't spend much, so her bank account is growing quickly based solely on her work income.
You'll never see me post a photo of me drinking a bottle of beer or a shot of scotch that costs more than a Publix Sub. And I go into a grocery store having the prices determine what I will eat the next week instead of deciding what I feel like.
Twenty years ago I bought my first home. And I started planting trees in it that I would provide me with real food.Mangoes, Bananas, Lychees, Muscadines, and the odd citrus tree as I live in Florida. I was not considering buying a home. I was living in a County Park for free because it had a small lake, and I had been a lifeguard for the county for a few years. And the county had "caretakers" that were either law enforcement or firefighters that lived in their own trailer in the park for free. I bought the trailer from the previous caretaker for $1500. All I had to do was call the police of someone came into the park at night and was acting a fool. So...I purchased the home because it was too good a deal. Long story. After two years the man that sold it to me and came back to tell me how good a deal I got because the IRS had audited him claiming he would not have sold the house for that little. He set the price, not me. And he worked for the FBI so it wasn't like I took advantage of some senile old man. The house is now 7x the value I paid for it. A friend who owned a real estate business did the closing for me for cost. He was a bit nervous doing it until he met the man and determined he was of sound mind.
My hobbies also improve the bottom line..I used to hunt and fish. Now since I live on the coast I can pretty much offer any guest a fresh fish dinner...if they are willing to hold a pole for an hour.
I have an expensive hobby, Koi. I have a 51,000 gallon koi pond in my backyard. I Know a man that builds them for other people. He is also a friend. His estimate for if he built the pond for one of his clients was over $250,000. My costs were under $20,000. It took me 2 years just to finish digging the hole with a shovel.
Lake Luke
I also get my koi for very little money as I will take vacations to koi breeders and work with them for a few days during their busy times. And I am considered a gifted culler. As one breeder put it, "Luke you see the final koi. You see good traits. But you also see what I not see. You see in baby koi adult koi hobbyists want that is not good koi." He used to raise an eye at some of my selections. Now he smiles at himself. I can actually ask for any of the babies I cull through. And while the finished (large) koi are valuable, the babies are 1/10th the price so it is not costing the breeder to have me cull through his koi and pick some ones I like..especially since my tastes are esoteric.

I get most of my clothes at Goodwill ( If you do start shopping at Goodwill go on a Sunday morning because they rotate out the stock based on a color-coded tag, and the week before that color will be pulled from the floor they reduce it 50%. ) The only clothes I don't buy from Goodwill are underwear, socks, and shoes.
I do not travel much, once every few years going cross country. HOWEVER TSLA is going to give me a new Cybertrck to explore wherever wheels can take me. When I travel I do insane things like stop at a grocery store for a snack (fruit) instead of a coffee at starbucks. I have two starbucks gift cards on the fridge, and starbucks is three blocks down the street. And I have had those cars for at least 2 years...
Now I am going to go take a nap...on a second hand bed I really enjoy, with second hand high count thread sheets I got from Goodwill. Even the pillows are from a thrift store, but they were still in the plastic.
I do buy new vehicles but only because in my youth when I had very little money I had to buy used, and unfortunately always got some car that was undependable. So I buy "new," and keep them for 10-15 years. The ICE Dodge 5.7 liter hemi I am driving now is a 2008... I think? It has to last two more years. No Problem, it could last much longer.
I enjoy my life. More or less. But what I have shared is not my life.
EDIT:
I feel I should clarify driving the Dodge with the 5.7 liter hemi. It was late 2008 (I think). Gas was $4/gallon. I thought it would be advantageous to buy a "gas-guzzler". The sticker on the Dodge was $35k. I got it for my 1997(?) Nissan Pickup that was on its last leg and a little over $21k all in. I figured that the $20k in initial costs would lighten the cost of the fuel economy. And I thought gas would settle under $3/gal.
I unlike so many of you don't give a tinker's damn what happens to the work's air quality in 20 years. I have severe asthma which is triggered by cigarette smoke. For the first 50 years of my life no one cared about cigarette smoke. What were "adults" thinking? they could see, smell, and taste a dense cloud of known carcinogens and accepted it as if it were the right of others to kill not only themselves but everyone around them... and you worry about a couple of degrees? ( You are probably right, but my point is I don't care. I've lived through hell already.)

Ok, you know we all want to know how you got yourself banned from a fish pond forum.

Also I'm only about three pages into your pond story but it looks like you already have a little island in the middle of your pond.

 

[dmvevguy]

Move to TN and be comfortable on $1M

Omg, THIS! I'm looking at Knoxville, TN area near the smokey mountains...super cheap homes for like $250-300k. 0 state income taxes...my gosh those tesla winnings will pay dividends in TN!

Do you have any advice or recommendations for decent locations and/or any advice in general on where to live in TN?

Thank you in advance!

 

[SOULPEDL]

And poof I"m here now. Better late than never.

 

[OrthoSurg]

But seriously all the talk about personal finance is refreshing and motivating. It's healthy and may prevent people from making some dumb mistakes.

Until it was all moved away.

I follow only 1 thread in whole TMC and that is Investor round table

 

[adiggs]

The 4% withdrawal has gotten a lot of press, but I personally don't recommend it to anyone who has invested in TSLA. It was designed for people who a) don't know how to invest, and b) don't know how to budget - or c) know how, but don't want to bother.

For me personally, I fully agree with this and the rest of your post.

I don't invest or act on the 4% rule. But I do use it as a thumb in the wind to see if I'm in the right ballpark (or if I've gone way past).

Figuring out the details of where exactly the actual money in retirement will come from (year to year), and how, is different from "4% of portfolio". If nothing else, those retirement accounts aren't available at my age and the 72t distributions (at least when I looked them up recently, and in this low interest rate environment) are closer to 2% than 4%.

 

[OrthoSurg]

Reviving the thread over from the discussion in the main investment mega-topic, so over from this post by @WMTribe90




I kinda made this statement tongue in cheek since both elaborating on it in the investment thread isn't a great idea and also looking at what others posted earlier -- thinking they need $5 or $7M to retire, I think that's kinda true that they'll perceive MMM's spending as extreme frugality. MMM thought 1/10th of that is plenty good, given his annual expenses of something along the lines of $25K. Personally I don't think either is "correct". For me for example, additional spending on my, in MMM terms, rather outlandishly expensive hobbies like racing motorcycles, is well worth the additional expense, given my current income level. But the point that he's making is also that until you tried, you won't know. I personally might have end up having it both ways, but looking at this in general terms, I still think it is an entirely valid tradeoff to keep working if your work is something close enough to what you'd be doing anyway, pays really well, and enables you to do things that you would not be able to afford if you were to loose your "active income".

You never know, after you divorce like MMM
You might find a high maintenant yatch-lover Kardashian sister who’s like to ride your boat on bumpy seas while sitting on your lap.

MMM pushed the enveloppe of frugality

bought a house in the suburbs of Denver at 20min drive
Extremely cheap houses, high rental fees if he want to rent.
Do everything by bike, finally purchased a Model 3 even after years he said he didn’t need one, no car was better than EV.
Was eating 2.40$/meal beans with proteins, had his work out for squats and lunges to make muscles during the night.
Everything was extremely optimized.

I am frugal by the sens that I hate going shopping in store and I don’t enjoy long 7 services meal.
Give me a Road bicycle and I will go for a century ride on 2 Gatorade and w cliff bars, however I do not look of give a damn about my wife buying only local organic food with $10 organic rice crispies that could be bought $2.50

I just don’t look at her $400 grocery bills anymore.

and she doesn’t look at the price of my road bike, even if I managed to find a good deal online, we accept that each of us spend as much as we want in the things that make us really happy.

 

[dakh]

That's not the way I'm going to live out my retirement, and I'll be surprised if anyone who is heavy into TSLA right now expects to suddenly change their investment strategy to be more passive because they have more time to think about investments. My experience is just the opposite.

Are you sure you're not conflating "passive" with "more risk averse"? I get it that you can keep a 2 or 3 year cushion in less risky assets, but still overall if I can't fall back on my paycheck, I definitely would take less risk with my investments. Just dumping money into TSLA and waiting for 30 years and then selling to pay for your food and shelter is very much "passive" investment, it also is quite risky.

 

[Bet TSLA]

The 4% withdrawal has gotten a lot of press, but I personally don't recommend it to anyone who has invested in TSLA. It was designed for people who a) don't know how to invest, and b) don't know how to budget - or c) know how, but don't want to bother.

The idea is you :
A) Buy an S&P 500 index fund which transitions over to bond funds over time
B) Sell 4% of your portfolio's value the first year of retirement
C) Each subsequent year, adjust the dollar amount withdrawn by the rate of inflation

The 4% number was chosen to provide a virtual (not literal) certainty that you wouldn't run out of money in 30 years. If you retire earlier, you're supposed to reduce that initial percentage, if you retire later or expect do die younger (family history), you can increase it.

But, the main thing here is that the rules are absolute. Whether your portfolio balance is up or down or whether inflation is high or low, you keep withdrawing that same inflation adjusted amount each year.

Now, there have been subsequent studies showing that a 100% S&P 500 fund will do better over 30 years than the mix of stock and bonds. There have also been Monte Carlo simulations, which I discount because they choose inflation and stock returns that aren't correlated - for me only historical back-testing is valid. Some people say you can make that initial withdrawal at 7%, others say no more than 3% because.

The whole idea is, to me, hogwash. It assumes the initial 4% is what you need, and so you can't tighten your belt in leaner years. It assumes you don't rebalance your portfolio or anything since the good folks over at Standard & Poors do that for you.

That's not the way I'm going to live out my retirement, and I'll be surprised if anyone who is heavy into TSLA right now expects to suddenly change their investment strategy to be more passive because they have more time to think about investments. My experience is just the opposite.

One important kind of insurance needed during retirement is incompetence insurance. You may no longer have the ability to invest in TSLA successfully. You may no longer have the ability to invest at all. You may lose interest. You may die, and leave a spouse who has no interest. So you may at some point require something passive. Essentially the 4% rule is about some rules of thumb for making that possible. Set it up while you're competent and interested and then just follow the rules and it will work out. The FIRECalc Calculator provides an excellent description of how to figure things out, and a variety of choices from types of investment to how certain you want to be.

There's nothing that demands you follow the rules you've set up and there are a huge variety of personal choices involved. I've long found some of the best analysis of the various choices at the Retire Early Home Page, a site that has been around approximately forever.

I've been retired for ten years now. So far, as @smorgasbord has said, I haven't followed any of this advice in any way, other than as a notional signpost of how much money I might need to retire.