Anonymous
04/18/2024 04:27
Subject: Re:Can 29yr old live off $1.5 million w/working?
Anonymous wrote:Anonymous wrote:Anonymous wrote:This board truly has no clue what the lifestyle of the average American is like.
Of course he can retire with 1.5mil and a paid off house! Of course it’s possible to squander it, but it’s also possible to live a nice, quiet, fulfilling life.
If he lives 60 more years, that's only 25k a year or basically 2k/month, in today's money. With this money he has to pay taxes, insurance, and upkeep on a home, plus maintenance and eventual replacement on a modest car. Plus food, clothing and healthcare. Even for a "nice, quiet, fulfilling life." I think your confidence is unfounded.
Never understand why DCUM people can’t understand buying bonds.
You buy $1.5MM of risk free bonds at 5% and you make $75k per year without touching the principal.
Many people can live on that per year.
Do you know what interest bonds were paying a couple of years ago?
Anonymous
04/18/2024 03:49
Subject: Can 29yr old live off $1.5 million w/working?
He needs 10 years of work history to get Medicare when he’s 65. Same requirement for social security. Does he have that?
He could just take a small low-stress job that provides health insurance and be in a much better position than he would be if he forgoes work entirely. I don’t really understand dropping out of the workforce before he’s 30.
He could just take a small low-stress job that provides health insurance and be in a much better position than he would be if he forgoes work entirely. I don’t really understand dropping out of the workforce before he’s 30.
Anonymous
04/18/2024 01:59
Subject: Can 29yr old live off $1.5 million w/working?
Maybe, but it all goes south very fast if he has medical or care needs insurance won't cover. He needs long term care insurance or he could easily run our of money or be on your couch.
Anonymous
04/18/2024 00:18
Subject: Re:Can 29yr old live off $1.5 million w/working?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:This board truly has no clue what the lifestyle of the average American is like.
Of course he can retire with 1.5mil and a paid off house! Of course it’s possible to squander it, but it’s also possible to live a nice, quiet, fulfilling life.
If he lives 60 more years, that's only 25k a year or basically 2k/month, in today's money. With this money he has to pay taxes, insurance, and upkeep on a home, plus maintenance and eventual replacement on a modest car. Plus food, clothing and healthcare. Even for a "nice, quiet, fulfilling life." I think your confidence is unfounded.
Never understand why DCUM people can’t understand buying bonds.
You buy $1.5MM of risk free bonds at 5% and you make $75k per year without touching the principal.
Many people can live on that per year.
This.
Once people understand this, it's like a lightbulb going off.
The average DCUM type doesn’t understand that 75K is the current MEDIAN American *household* income. Bunch of book smart idiots acting like 75K is poverty wages for a single man WITHOUT A MORTGAGE…
The plan you think is so tractable erodes away every year with inflation. In 60 years, that $75K will be the equivalent of $13K today. Nowhere near the median HHI. Instead, OP would find their quality of life significantly degraded after just 10 years, thereby increasing withdrawals and cutting into principal. Maintaining a $75K lifestyle in today’s dollars would last until OP reaches 50 years old. Then…all money is gone and no pension or SS to cover expenses.
Anonymous
04/18/2024 00:15
Subject: Re:Can 29yr old live off $1.5 million w/working?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:This board truly has no clue what the lifestyle of the average American is like.
Of course he can retire with 1.5mil and a paid off house! Of course it’s possible to squander it, but it’s also possible to live a nice, quiet, fulfilling life.
If he lives 60 more years, that's only 25k a year or basically 2k/month, in today's money. With this money he has to pay taxes, insurance, and upkeep on a home, plus maintenance and eventual replacement on a modest car. Plus food, clothing and healthcare. Even for a "nice, quiet, fulfilling life." I think your confidence is unfounded.
Never understand why DCUM people can’t understand buying bonds.
You buy $1.5MM of risk free bonds at 5% and you make $75k per year without touching the principal.
Many people can live on that per year.
Need to step up your mathematics game, my friend. Totally ignoring inflation.
Maybe he invested some in the market, maybe he deals drugs on the side, who knows. He doesn't have to tell his sibling everything. Without kids or extravagant hobbies and a paid house, it's more than enough. This is coming from a woman who loves expensive jewelry and bought a $400 fragrance today, so I'm not a frugality advocate btw.
Anonymous
04/18/2024 00:10
Subject: Re:Can 29yr old live off $1.5 million w/working?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:This board truly has no clue what the lifestyle of the average American is like.
Of course he can retire with 1.5mil and a paid off house! Of course it’s possible to squander it, but it’s also possible to live a nice, quiet, fulfilling life.
If he lives 60 more years, that's only 25k a year or basically 2k/month, in today's money. With this money he has to pay taxes, insurance, and upkeep on a home, plus maintenance and eventual replacement on a modest car. Plus food, clothing and healthcare. Even for a "nice, quiet, fulfilling life." I think your confidence is unfounded.
Never understand why DCUM people can’t understand buying bonds.
You buy $1.5MM of risk free bonds at 5% and you make $75k per year without touching the principal.
Many people can live on that per year.
This.
Once people understand this, it's like a lightbulb going off.
The average DCUM type doesn’t understand that 75K is the current MEDIAN American *household* income. Bunch of book smart idiots acting like 75K is poverty wages for a single man WITHOUT A MORTGAGE…
Are you agreeing with the PP, because they are basically saying what you are saying. That 75K would be plenty.
Yes I agree with them that it’s plenty. I disagree that the average DCUMer will ever experience that lightbulb moment.
Anonymous
04/18/2024 00:05
Subject: Re:Can 29yr old live off $1.5 million w/working?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:This board truly has no clue what the lifestyle of the average American is like.
Of course he can retire with 1.5mil and a paid off house! Of course it’s possible to squander it, but it’s also possible to live a nice, quiet, fulfilling life.
If he lives 60 more years, that's only 25k a year or basically 2k/month, in today's money. With this money he has to pay taxes, insurance, and upkeep on a home, plus maintenance and eventual replacement on a modest car. Plus food, clothing and healthcare. Even for a "nice, quiet, fulfilling life." I think your confidence is unfounded.
Never understand why DCUM people can’t understand buying bonds.
You buy $1.5MM of risk free bonds at 5% and you make $75k per year without touching the principal.
Many people can live on that per year.
Long term bonds are 4.7% at the moment, and inflation exists.
Go it…but PP was simply taking $1.5MM and dividing by 60 which makes zero sense to come out to $25k per year.
It makes total sense when you consider that each subsequent year’s withdrawal needs to index with inflation just to maintain the same standard of living. In 60 years, the equivalent withdrawal is about $150K. $1.5M doesn’t last as long as you might think.
Anonymous
04/18/2024 00:00
Subject: Re:Can 29yr old live off $1.5 million w/working?
Anonymous wrote:Anonymous wrote:Anonymous wrote:This board truly has no clue what the lifestyle of the average American is like.
Of course he can retire with 1.5mil and a paid off house! Of course it’s possible to squander it, but it’s also possible to live a nice, quiet, fulfilling life.
If he lives 60 more years, that's only 25k a year or basically 2k/month, in today's money. With this money he has to pay taxes, insurance, and upkeep on a home, plus maintenance and eventual replacement on a modest car. Plus food, clothing and healthcare. Even for a "nice, quiet, fulfilling life." I think your confidence is unfounded.
Never understand why DCUM people can’t understand buying bonds.
You buy $1.5MM of risk free bonds at 5% and you make $75k per year without touching the principal.
Many people can live on that per year.
Need to step up your mathematics game, my friend. Totally ignoring inflation.
Anonymous
04/17/2024 23:54
Subject: Can 29yr old live off $1.5 million w/working?
Anonymous wrote:Can my brother live the rest of his life without working? He is 29 years old and inherited a modest house and about $1.5 million. He has no intention to ever work again. He is not a big spender, no lavish vacations or expensive shopping sprees. He does make questionable financial choices sometimes such as paying way too much for something because he didn’t do any research. He is not great at “adulting” like remembering to paying bills and frequently lets his Obama insurance lapse. Overall a functioning person who has no interest in working. He has “done the math” and has determined that he never needs to work again and can live off the money we inherited from our parents. I’m not convinced but he is not open to discussion.
I inherited the same amount of money minus the house. I put it in an investment account. I don’t think it is enough to live on but maybe my life is just very different? I have a wife and a baby. We own a house and want to save for school and college. I did tell my brother that he is going to have a hard time finding a woman with his situation but he always seems to have a new girl he met on Tinder so who knows?
A 29 year old needs a nest egg that can last 61 years by most traditional measures. Negligible social security and pension. Such a person would need to be able to live off an initial withdrawal of 1/61 of available savings, with subsequent withdrawals indexed for inflation. That’s basically $1.5M / 61 = $24,600. Even if we’re talking after-tax money, this is a pretty LMC lifestyle.
Anonymous
04/17/2024 23:45
Subject: Can 29yr old live off $1.5 million w/working?
"Safe withdrawal rate" of 3-4% on $1.5M is somewhere in the $45K-$60K a year range. If he lives modestly and doesn't have to pay rent or mortgage, that seems doable to me (assuming he can find some reasonably affordable health insurance.) Probably a little too close for comfort for me personally, but I don't think it's way out of line.
Anonymous
04/17/2024 22:16
Subject: Can 29yr old live off $1.5 million w/working?
Or maybe camp out in Nevada?
Anonymous
04/17/2024 22:16
Subject: Re:Can 29yr old live off $1.5 million w/working?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:This board truly has no clue what the lifestyle of the average American is like.
Of course he can retire with 1.5mil and a paid off house! Of course it’s possible to squander it, but it’s also possible to live a nice, quiet, fulfilling life.
If he lives 60 more years, that's only 25k a year or basically 2k/month, in today's money. With this money he has to pay taxes, insurance, and upkeep on a home, plus maintenance and eventual replacement on a modest car. Plus food, clothing and healthcare. Even for a "nice, quiet, fulfilling life." I think your confidence is unfounded.
Never understand why DCUM people can’t understand buying bonds.
You buy $1.5MM of risk free bonds at 5% and you make $75k per year without touching the principal.
Many people can live on that per year.
This.
Once people understand this, it's like a lightbulb going off.
The average DCUM type doesn’t understand that 75K is the current MEDIAN American *household* income. Bunch of book smart idiots acting like 75K is poverty wages for a single man WITHOUT A MORTGAGE…
Are you agreeing with the PP, because they are basically saying what you are saying. That 75K would be plenty.
But 1.5mm making 75K in a low risk way is not realistic.
Anonymous
04/17/2024 22:15
Subject: Re:Can 29yr old live off $1.5 million w/working?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:This board truly has no clue what the lifestyle of the average American is like.
Of course he can retire with 1.5mil and a paid off house! Of course it’s possible to squander it, but it’s also possible to live a nice, quiet, fulfilling life.
If he lives 60 more years, that's only 25k a year or basically 2k/month, in today's money. With this money he has to pay taxes, insurance, and upkeep on a home, plus maintenance and eventual replacement on a modest car. Plus food, clothing and healthcare. Even for a "nice, quiet, fulfilling life." I think your confidence is unfounded.
Never understand why DCUM people can’t understand buying bonds.
You buy $1.5MM of risk free bonds at 5% and you make $75k per year without touching the principal.
Many people can live on that per year.
This.
Once people understand this, it's like a lightbulb going off.
The average DCUM type doesn’t understand that 75K is the current MEDIAN American *household* income. Bunch of book smart idiots acting like 75K is poverty wages for a single man WITHOUT A MORTGAGE…
Are you agreeing with the PP, because they are basically saying what you are saying. That 75K would be plenty.
Anonymous
04/17/2024 22:15
Subject: Can 29yr old live off $1.5 million w/working?
Can he live in a cheaper country?
Anonymous
04/17/2024 22:13
Subject: Re:Can 29yr old live off $1.5 million w/working?
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:This board truly has no clue what the lifestyle of the average American is like.
Of course he can retire with 1.5mil and a paid off house! Of course it’s possible to squander it, but it’s also possible to live a nice, quiet, fulfilling life.
If he lives 60 more years, that's only 25k a year or basically 2k/month, in today's money. With this money he has to pay taxes, insurance, and upkeep on a home, plus maintenance and eventual replacement on a modest car. Plus food, clothing and healthcare. Even for a "nice, quiet, fulfilling life." I think your confidence is unfounded.
Never understand why DCUM people can’t understand buying bonds.
You buy $1.5MM of risk free bonds at 5% and you make $75k per year without touching the principal.
Many people can live on that per year.
This.
Once people understand this, it's like a lightbulb going off.
This is in theory. Have you actually done this?
I have a now 8-year-ladder of tax free bonds paying 5%. The yield to maturity is not 5% due to the premium you have to pay to get them. And it is next to impossible to buy them directly. You have to go through a bond broker of some sort. I have them in an account that I manage. But before I moved them, I was paying .04 in a managed account. If I wanted to keep buying them (which I don't) I would have had to stay in that managed account.
And, as mentioned, they are not inflation adjusted.
I will add, that while they are tax free (federal, state, local if you buy them for the state where you live) the amount is taken into consideration for how much you pay for healthcare--ACA or Medicare.