Hmm, but no matter how disciplined you are with spending, there is still the matter of investment risk. Your target asset amount only gives you some probability of maintaining your lifestyle. Wouldn’t you be willing to work “just a little bit longer” to have a higher probability of meeting your projected cashflow? The reason why most people do not retire early is not that they *cannot* afford some lifestyle with their level of assets. It’s that the incremental cost of working slightly longer is low compared to the opportunity and benefits, and security of having more money.
Let’s rephrase the question as “if you already had $2 million, how much would you need to be paid to continue working?”. If you actually have that money and are in your 30s or 40s, you probably make several hundred thousand dollars a year. So you would probably be motivated to work a bit longer. It’s different if say, you have a $40k job and won a lottery, in which case your incremental benefit of working would be much lower.
If the question were rephrased again as “COULD you retire with X dollars”, I’m sure a lot of people would say yes. The issue here is that I see a lot of people who actually do have a secure amount of money, and most of them just keep working anyway. Few are motivated to make the active choice to quit their jobs, to uproot their family and move or just sit around at home. They just choose to work, since they don’t actively hate their jobs, they don’t have much else to do, and the benefits of working outweigh the cost.
You’re really speaking for yourself (and admittedly the majority) on this one. I know MANY people who packed up their positions and moved their families off the grid the minute they were out of debt and good many more that quit their careers to follow a minimalist lifestyle with just a few hundred stashed away. For me personally (and my wife, we’ve talked about this) we have no desire to send out kids to a blue ribbon school or drive new cars. To you there’s a high opportunity cost to forgoe future cash flows, for me there’s a high opportunity cost (given my own utility function) for ever day not being outdoors with friends and family. I’m 100% sure that I’m in the extreme minority, I’m just saying that obviously no rule applies to everyone.
To answer your question from a different angle:
If I won $2M in cash in the lottery or $3M if I stayed in the work force for another 5 years ($200k per year), I’d take the $2M and go.
What it boils down to most is that what I most want to do are sports and every year of my 30’s and 40’s that is spent working comes at a VERY high marginal cost because those are the last of my best years to operate at a high physical level.
People don’t realise that there aren’t many things to pursue in life if you don’t have a job and retire yourself .Part of a job is about generating cash flow but another part is about thinking you are making an impact or whatever. I always think people like dan bilzerian who spend most their time doing fun looking stuff are quite miserable.I at least need to feel I am doing something important or chase a goal and have some fun on the side.Retiring yourself because you have X amount of net cash is stupid IMO.
^ You and Greenie would get along great. Protestant work ethic. If you’re not pounding out 60 hours a week with limited vacation, you’re not fulfilling your life. Two weeks of vacation? Who the hell can use that? I could spend years studying things I enjoy: history, philosophy, and even finance in a theoretical sense. I don’t need to work to be mentally stimulated. In fact, I find work quite the opposite. Now that doesn’t mean I wouldn’t take on interesting projects or what not if I hit my number. But I wouldn’t be doing anything I don’t like to do.
To make an analogy , When I am with my girlfriend for more than 2/3 days consecutively sometimes I make a point of not seeing each other for a week or a bit more. I think many leisure type activities are enjoyable at their correct dose. Believe it or not I read much more non relevant literature when I am busy than holidays. I think humans don’t have the necessary self control to stop their life going downhill and becoming lazy if they don’t have things to do that require commitment and creating value for others.
Didn’t we cover this in the happiness thread? I think I declared victory when I said happiness requires a person to pursue a value - that could be grinding out TPS reports for some people or training to become the best ultimate frisbee player in your hippie village. Doesn’t matter what it is, happiness comes from pursuit of values.
Anyway for me my $2mm would enable me to invest my own money in a particular strategy, not rely on outside capital, and avoid the headaches that go along with that. I would still be working in that case and would likely have an employee or two. The hours would me around 30/wk and the salary would be plenty to live comfortably. For me, that is ideal.
How could you be so bland and unoriginal that the best way you can think of to spend a lifetime by any conceivable metric (purpose, value, joy) requires working a 9-5 at a faceless corporation that will absolutely forget you as that sad old man that came in for 40 years within days of your death? The idea that you need to punch a clock to pursue a goal simply points to vapid unoriginality there are literally infinite goals out there that don’t involve TPS reports for the bobs.
I mean look, if your career is astronaut, brain surgeon, artist, astrophysicist or some other actually meaningful pursuit fine. But for nearly anyone in finance or accounting to say that is just a depressing reflection of deeper issues in personal development.
^that’s a bit harsh. where a person comes from socio-economically could have a lot to do with it. perhaps being an accountant is a huge accomplishment for someone given their background and upbringing. if your dad was a career criminal and your mom was a crackhead, being an accountant is something to be very proud of.
Something very uniquely powerful about work is that…you can lose it. You can always (at least for most people) get fired and it can have huge consequences on your life. In other self-determined pursuits you don’t have that sword hanging over your head. Fear of getting fired (i.e. rejected, i.e. not desired i.e. not loved…) is a huge psychological driver that many in fact feed off. It gets them going, focused, sharp, and disciplined. I’m not saying one should do this or that but we come to the job market with that mindset, however subconscious, and it’s part of the reason many have difficulty letting go even when having the opportunity.
If all goes as planned (which it never does), when I retire:
my son will be 9 and my daughter will be 8 - my wife or I will be able to cook them a healthy breakfast, make them a healthy lunch and walk them to school. One of us will be there to walk them home after school or make sure they’re getting to the after-school event of the day. The wife can participate in in-classroom activities and I can coach on their sports teams. Dinner will be cooked at home and there will be plenty of learning going on surrounding topics that aren’t covered in school.
many of our foods will be organic, because they’ll be grown in our back yard
I currently teach an introductionary investing course at a nonprofit, I’ll probably expand this to become more frequently and possibly throw in a few more courses
I’ll have more opportunities to get down to the dog shelter, food shelter, ronald mcdonald house, habitat for humanity, etc.
summers…we’ll be taking some long road trips out west, start in Montana and end up in Arizona. No rush on the trip, we won’t have anywhere to be. Maybe we’ll go see California one year, the east coast the next.
winters…we can go south for nice relaxing vacations over the kids winter breaks…again, nowhere we NEED to be
I may very well start my own business, the wife might do the same, but the point is that this business doesn’t need to be profit driven, it can be creatively driven. There are plenty of problems that can be solved in this world and without the need for profit to be in the equation, that opens up more possibilities. Maybe I’ll run for office, maybe I’ll sit on the board of several of the nonprofits that I work with, maybe I’ll pick up some home renevation projects, maybe I’ll try my hand at flipping a house.
My number is $1M. At that point my family’s needs are satisfied for the rest of our lives and I can pursue these activities. I’m not the least bit worrried about becoming bored because I’m not forced to wake up in the morning and go earn income.
Maybe I misstated my thoughts,what you described above is a very sad image which is not coherent with what I had in mind.I meant that people should be pursuing something grand in their lives to be happy .This grand thing could be taking care of your family or it could be researching about the HIV vaccine. I just don’t find the idea of waking up every single day doing leisure type of activities very appealing .
Expneses such as healthcare, kids college (assuming you retire before they go there) and just BAU living will, will probably end up costing you 3-5mm easy.
Or is everyone here investment pro getting 10% guaranteed return a year?
I already retired at 40. Ohai correctly listed how most people do not. Everyone says “when I get __ I’m going to __”, but they rarely actually do it.
And so, all the reasons how they don’t succeed in their stated goal, can be analyzed, as Ohai just did, and just as I did when at was 16. Knowing where they failed, you can simply NOT do what they did, and retire at 40. Take “lifestyle creep”, simply don’t do that. Why? Because 1) you’ll never retire if you do that, and 2) because spending money doesn’t actually improve quality of life, but retiring at 40 does!
“But PA, you just travel around the world, trade stocks, write music, and post on the internet”. Yup, and it’s awesome.
^Flying solo, I’d imagine. Can’t believe anyone would want to be in your presence for more than 10 minutes. (Which explains why your mother fed you with a slingshot.)
If I got turfed, I’d laugh and enjoy the next few months of severance on the golf course. I hope few believe their value is tied to what some soulless corporation thinks, but you’re probably right.
