Retire Early?

[Dale Dough]

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play 1 poker tourney a month (Live that is) so I can travel

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a cheap hobby

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lol

Also,

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If you aren't smart enough to make better than 5% on your investment that you probably shouldn't quit your salaried job.

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WTF? Blah blah blah CAPM beta etc etc. There's a limit to how much you can diversify away. He doesn't just want to put the money away for later, he wants to make sizable annual withdrawals. I'm sure that there exist absolute ripoffs in the finance market, but I very much doubt that 'smart = 10% guaranteed' is true.

EDIT oh and try the finance forum..

EDIT2 Why would you want to submit yourself to the torture of plane rides and big long tournaments? Both start to suck real fast, it's a double whammy. I'm admittedly not much of a tourist myself, so I like having somewhat of an excuse to be somewhere and then still enjoy the specifics a place has to offer - but casinos? It's fun for a while, but I definitely can't go too often or it'll make me sick.

My own hope is to find a business opportunity that involves traveling internationally - even though I hate flying, I like to experience the contrast between cultures.

[jordiepop]

you could live off 4 mil imo. at a modest 7% thats 280k a year. and we all know you would make so much more than that.

[CopTHIS]

You could just get a quote for buying an annuity...not sure how tax efficient they are in the US, but if you were risk adverse you could see how much it would cost for an increasing income stream that you were comfortable with. Then, if there was any left you could just go out and fritter it away [img]/images/graemlins/cool.gif[/img]

[Ron-Mexico]

So what I am hearing is, I could live off 1.5m (Live off the investments) but to really live it up, i'd need 3-4 million. I was thinking 2 million might be the magic number to live a carefree lifestyle (relatively speaking). 7% of 2m is 140k, thats pretty good living. Even worse case 100k at 5%.

[nsdjoe]

Don't forget to figure inflation. I don't know how old you are, but in 30 years, 100-140K isn't going to be a lot of money.

[TheMetetron]

This is my basic way of thinking of it. I figure market returns average 10% per year, or 7% per year adjusted for inflation. If I'm being conservative, say I take out 4% per year of the total investment. This should allow for market fluctuations, the market under performing in the future, and other irregularities. This would also allow me to invest in a decent amount of bonds to provide stability.

So whatever amount I need per year times 25 should be enough and will adjust itself for inflation over time.

I probably need $50k-100k per year depending on how I want to live, so I will need $1.25-$2.5 million to retire. In actuality, I will probably keep working until about $3-3.5million is saved up which should be sometime between 35 and 40 depending on how my investments do in the mean time. But if poker were to die by the time my portfolio was $1.5 million, I wouldn't ever work a real job again so that's the first goal I have to reach. After I hit $1.5 million, it is all for increased quality of life.

[z28dreams]

OP -

If you gave us your estimated required annual income, we could probably give a better answer.

It really depends where you want to live and what kind of lifestyle you want.

Would you settle to live on 60k a year? 100k? 150k?

[TheMetetron]

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OP -

If you gave us your estimated required annual income, we could probably give a better answer.

It really depends where you want to live and what kind of lifestyle you want.

Would you settle to live on 60k a year? 100k? 150k?

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If you aren't dumb with your money, I like my yearly expenses multiplied by 25 rule. It doesn't require inflation adjustments and is a good, quick way to figure out approximately what you will need to retire. Of course, by the time you retire, the number itself will have risen due to inflation. My lowball of $50k per year in today's dollars will be $75k per year in 2020. Which means in reality in 2020, I will need almost $1.9 million to retire at the low end of my scale.

[z28dreams]

Overall OP, a safe number to retire is probably something around $2mil+, with $3mil being much more on the comfortable side.

[bigbootch]

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So here's my situation.

I have a GOOD career job, but recently came into 7 figures.
I am fairly young, early 30's, wife 2 kids..

How much money do you need (After taxes) to be able to quit a career job and live forever off the investment \ interest you earn?

My ideal goal to keep myself busy is to play 1 poker tourney a month (Live that is) so I can travel.

I figure worse case, I could make 5% interest \ investment??

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Your question is 100% dependent on how exactly you want to live. It's silly to try to answer the question without knowing that.

In other words: if you want to rent a 2 bedroom apartment in some podunk city, drive honda civics, send your kids to a public college (and make them pay for it), don't take vacations, then 1m is probably enough.

But if you want to live in NYC, own your own place, drive nice cars, send your kids to columbia, etc., then you're gonna need much much more.

So at the very least we'd need an idea of where you'd like to live, and whether you're going to buy or not. If you decide to buy a 1m house somewhere, then suddenly you have no investment income. (yes, the house appreciates, but that is an illiquid part of your net worth that you can't live off of).