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

[tivoboy]

I saw 100k, but right on the proportions

Yeah, his original post is over 1M at this point now. I don’t think ppl are really complaining solely about unrealized cap gains, it’s more unrealized cap gains and then taking Billions in loans to fund life/lifestyle/investments, and then being able to write off those loans interest payments as deductions after taking cap gains. At this point in the worlds history, where extraordinary wealth can be amassed by many more individuals like never before in our history, it would seem that some sort of change in the tax code would be warranted - I just can’t say what the best path is. A “wealth tax” isn’t really the right path, iMHO and mark to market cap gains taxes don’t either. I’d also like to see every person of such wealth pay the minimum amount of contrebut ion taxes into Soctal Security and Medicare, where most deca millionaires and billionaires end up paying basically nothing into those funds ever. The $1 salary that so many tech CEO’s take is really a way to stick it to the SS and Medicare funds, which doesn’t really seem right.

Think of this, if everyone paid only capital gains taxes on equity positions, nothing would fund Social Security or Medicare accounts. Extreme example, yes, but as more and more ppl move to non earned income, it does put downward pressure on the inflows for sure.

Let the flames begin!

 

[Zaxxon]

I saw 100k, but right on the proportions

1.1M now.

 

[MP3Mike]

then taking Billions in loans to fund life/lifestyle/investments, then being able to write off those loans interest payments as deductions after taking cap gains.

Can you really write off the loan interest payments? I think you can only do that if the funds are used for investment purposes. If you use it for living expenses you can't write off that portion of it.

 

[SageBrush]

it’s more unrealized cap gains and then taking Billions in loans to fund life/lifestyle/investments, and then being able to write off those loans interest payments as deductions after taking cap gains

I'll be surprised in 1/10,000 people are aware of that dodge.

Keep it simple: people are jealous

 

[SageBrush]

Can you really write off the loan interest payments? I think you can only do that if the funds are used for investment purposes. If you use it for living expenses you can't write off that portion of it.

Icahn said he reports all of his business dealings on his personal taxes so perhaps he is an example of living off loans whose interest is treated as a business expense but I think that if it exists at all, it is an uncommon dodge.

So far as I can tell, the much more common strategy for the recent uber-wealthy is to take advantage of the fact that their net worth grows faster than their interest payments. It's worth pointing out though that most of their net worth is unrealized so its actual value is uncertain and to a large degree actually un-realizable since any attempt to 'cash-out' would have a profound effect of the stock value.

This is the point Elon is making in his recent poll asking whether he should sell 10% of his TSLA shares. I don't think he is annoyed enough to do this in a day but the drop in TSLA and the concomitant drop in TSLA shareholder wealth would be profound if he did so. Anybody other than TSLAQ and the IRS looking forward to a $300B drop in shareholder value in order to see Elon pay $7B in taxes ?

 

[tivoboy]

I'll be surprised in 1/10,000 people are aware of that dodge.

Keep it simple: people are jealous

are you talking about the dodgers or the citizens. If it's the dodgers i'd say its probably more like 1 in 2. If it's citizens I'd probably put it more in the 1/100,000 range... so 10x FEWER.

 

[⚡️ELECTROMAN⚡️]

(Elon gets hit by a bus, an accounting scandal, a major and extended macro downturn, ...)

An accounting scandal is my biggest fear, but I tell myself that Tesla valuation is about as transparent as it gets. People are flying drones over their factories and counting cars coming out of the factory. You can see Tesla's everywhere when you're driving through town. You've got Sandy Munro dissecting the cars determining the cost to produce. It took a lot longer for Tesla to be profitable than they were originally projecting, so if they were going to cook their books they would have done it much sooner. What major companies like this have gone down in flames over an accounting scandal? Enron comes to mind, but that company would be the opposite of transparent.

I'm just thinking if someone had $2 million in TSLA they could safely retire right now based on future projections of company growth and stock price projections. Isn't that why so many people on this forum are all in on TSLA. The common theme is that it has the least risk versus possible reward out there.

 

[tivoboy]

An accounting scandal is my biggest fear,

Once they figure out exactly how he’s funneling 100M a month into the derivatives market, it’ll be game over. But, I think he’s probably ahead of that.

 

[tivoboy]

This is the point Elon is making in his recent poll asking whether he should sell 10% of his TSLA shares. I don't think he is annoyed enough to do this in a day but the drop in TSLA and the concomitant drop in TSLA shareholder wealth would be profound if he did so. Anybody other than TSLAQ and the IRS looking forward to a $300B drop in shareholder value in order to see Elon pay $7B in taxes ?

There might be a reason for the poll:

Elon Musk faces a $15 billion tax bill, which is likely the real reason he's selling stock

Elon Musk faces a tax bill of over $15 billion in the coming months on stock options, making a sale of Tesla stock this year likely regardless of the Twitter vote.

www.cnbc.com

I’m usually pretty good at math here, but doesn’t 92 million shares pledged to lenders indicate about nearly 110 BILLION in current stock value pledged.. certainly he pledge stock at 20$ and 50$ and 100$ and 200$, etc, but still this amount pledged as collateral - why isn’t anyone thinking about that.. that must be certainly more than his net ownership of Tesla pledged.

 

[Mokuzai]

Anybody have a good place to start looking for insurance for early retirees? Was laid off at the beginning of the year and am unofficially retired now at age 43. Riding the coattails of COBRA but I understand that I can only do that for 18 months total so will be needing my own insurance by mid 2022.

 

[cusetownusa]

Anybody have a good place to start looking for insurance for early retirees? Was laid off at the beginning of the year and am unofficially retired now at age 43. Riding the coattails of COBRA but I understand that I can only do that for 18 months total so will be needing my own insurance by mid 2022.

Go on the ACA exchange...pretty easy based on my experience. Depending on your income you will also get it subsidized.

 

[CarlS]

Go on the ACA exchange...pretty easy based on my experience. Depending on your income you will also get it subsidized.

The problem I'm finding is that very few of my family's doctors are included in any plan and they're mostly HMOs. I'm looking right now because my COBRA runs out at the end of this year.

 

[cusetownusa]

The problem I'm finding is that very few of my family's doctors are included in any plan and they're mostly HMOs. I'm looking right now because my COBRA runs out at the end of this year.

Interesting. Health care is very regional. I live in CNY so unfortunately I am not familiar with how it all works in Texas. Maybe this is a Texas thing?

 

[tivoboy]

Anybody have a good place to start looking for insurance for early retirees? Was laid off at the beginning of the year and am unofficially retired now at age 43. Riding the coattails of COBRA but I understand that I can only do that for 18 months total so will be needing my own insurance by mid 2022.

I thought one could extend COBRA up to 36 months, and not from any pandemic related regulation. Maybe that has changed, but, COBRA from a company policy is most likely going to HURT. Most people don’t know just how much companies actually pay for their employee/employee+Fam pay since an employee is only paying usually the Employee contribution amount, maybe 50% sometimes even less. So, when you get the COBRA paperwork maybe take a seat before opening the letter. If you’re “retiring” I’m going to assume some age here 50+ and unless you had a high deductible plan, an EE+1 at least (say spouse) could be easily 2000$ a month.

When looking at ACA plans in your area, which could be a lot less for sure, and certainly if your retirement income can be lower, you will certainly pay LESS but be warned, make SURE that the places you think you might go, need to go (current dr) want to keep access to are in the “network” of that plan. Up here in the Bay Area, there is only ONE ACA plan that allows access to Stanford Medical (which has bought up many of the smaller healthcare clinics and dr. Offices in the past 7-10 years, so people get into a plan that looks good on paper but ends up not allowing access to one of the largest providers around. So, do your research.

Depending on your prior industry, there may have a GROUP plan that you can access for less. Getting a group plan policy is much better than getting an individual and family plan policy usually for access. So, check that out. Even Consultants have a. Program for EX consultants to access group policies assuming they might do SOME work while moving to an off ramp.

Also, in your area there might be a large medical institution, entity that offers their OWN health insurance plan assuming that their primary hospitals and regional care centers, etc, are in their network. that can often be cheaper than ACA plans, depending on current location conditions and some factors that can still influence cost, such as age, smoker, etc. These plans always have emergency access or out of network options when the in network doesn’t have that type of care or capability. So, it’s not like you have to get back to Valencia after a MVA in Nebraska to get care. (Probably a bad example)

Just some thoughts.
Disclaimer: If you know all of this, please don’t interpret my response as lecturing. Just wanted to make sure you went into this research phase armed.

 

[juanmedina]

We went for Thanksgiving to my brother in law's new house and now my wife has house envy and she want us to upgrade our house . As of right now our house is 8.5% of our net worth and I was just curious how other Tesla investor's compared and what other think about what % of net worth should be allocated to a primary residence. We don't have a mortgage and going into early retirement with a new mortgage kind of concerns me.

 

[CHGolferJim]

We went for Thanksgiving to my brother in law's new house and now my wife has house envy and she want us to upgrade our house . As of right now our house is 8.5% of our net worth and I was just curious how other Tesla investor's compared and what other think about what % of net worth should be allocated to a primary residence. We don't have a mortgage and going into early retirement with a new mortgage kind of concerns me.

Well if you move you’ll probably have to pay for both added value and a bunch of improvements, so upgrading your current home might be cheaper! Think of it as another tax — for every (disclosed!) x of winnings at the TSLA casino, your wife may expect a percentage.

 

[UltradoomY]

We went for Thanksgiving to my brother in law's new house and now my wife has house envy and she want us to upgrade our house . As of right now our house is 8.5% of our net worth and I was just curious how other Tesla investor's compared and what other think about what % of net worth should be allocated to a primary residence. We don't have a mortgage and going into early retirement with a new mortgage kind of concerns me.

For my wife and I - we don't sweat the amount of net worth or size of the mortgage.
Mostly because we are glad we can use the mortgage interest as a deduction against our income and that along with rates being very low (2.4% for us) it isn't something we have worried about personally.

I have been firmly in the camp of a happy life is more than just financial freedom, that is great but if I don't enjoy the home we have then it isn't worth it to us.
However, this is just our viewpoint and I am sure others have differing points.
and to answer your question directly - we are at about 25% of our net worth in the home.

 

[Oil4AsphaultOnly]

We went for Thanksgiving to my brother in law's new house and now my wife has house envy and she want us to upgrade our house . As of right now our house is 8.5% of our net worth and I was just curious how other Tesla investor's compared and what other think about what % of net worth should be allocated to a primary residence. We don't have a mortgage and going into early retirement with a new mortgage kind of concerns me.

Kinda depends on where you live doesn't it? Out here in CA, it's not uncommon for the house (w/o mortgage) to be a significant chunk (> 20%) of one's net worth. Yeah, house hunting without a paycheck "sounds" sketchy, but it all depends on whether or not your retirement income can cover the mortgage? And considering you've paid off your mortgage, you should trust that you know how to keep your finances in check.

Not-advice, but for myself, I plan on saving enough to pay for things (mostly) in cash. Then if there's a loan available, take out the loan to keep cash available to continue selling those BPS. Life's too short to deny yourself indefinitely. That's why you're trying to retire right?

 

[adiggs]

We went for Thanksgiving to my brother in law's new house and now my wife has house envy and she want us to upgrade our house . As of right now our house is 8.5% of our net worth and I was just curious how other Tesla investor's compared and what other think about what % of net worth should be allocated to a primary residence. We don't have a mortgage and going into early retirement with a new mortgage kind of concerns me.

We're down in that range as well - around 5% of net worth. We're also looking for a new house and that % will go up.

Then again I don't count a single $ of the house value in my net worth. The way I see it - its either in the net worth as a resource / income, or its in the expense side as an expense reduction (assuming no mortgage). It can't be both and I count it as an expense reduction instead.


I have no opinion on % of net worth for a house - seems like a somewhat artificial measurement to me, but then by my measure, the home is 0%

 

[UkNorthampton]

We're down in that range as well - around 5% of net worth. We're also looking for a new house and that % will go up.

Then again I don't count a single $ of the house value in my net worth. The way I see it - its either in the net worth as a resource / income, or its in the expense side as an expense reduction (assuming no mortgage). It can't be both and I count it as an expense reduction instead.


I have no opinion on % of net worth for a house - seems like a somewhat artificial measurement to me, but then by my measure, the home is 0%

I wouldn't count a house in net worth as you need one (or ongoing rental payments).

Funnily enough, in the UK, most people EQUATE their house value to THEIR worth as a human. Perplexing to me & wife. Of the people we know, most are obsessed with houses and probably have above 100% of their NET worth in their houses ("equity") and seem to count it almost like income when remortgaging.

As for house as % of net worth, I find that an odd question. House envy I find odd too. Once you've secured financial freedom, spend on what you want, but I think of a house as a thing to utilise. Location, necessary space & facilities, neighbourhood, low maintenance, facilities nearby (always within 30 minutes of a hospital - Golden Hour).

We have capped property (council) tax in UK, so buying an expensive house probably isn't daft. Maybe more maintenance costs, but overall a fairly sensible thing to spend out on.

Trouble with houses, yachts etc is that there'll always be a bigger one.

I'd be nomadic with a small base by preference, as would my wife. If our financial future is REALLY secure though, that base would be whatever we thought was sensible.