Is $750k cash enough to retire in your 30's? - Page 2 - Business, Finances and Investing Forum

Whatever he believes to be the best asset allocation - whether it be 60/40 stocks/bonds or 90/10 or something else - use margin and/or futures (futures might be difficult for only $750k) to make those ratios 60*1.4/40*1.4 for 60/40 (or 90*1.4/10*1.4 for 90/10).

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02-28-2017 , 03:53 PM

#27

LVpokerPRO

old hand

Join Date: Jul 2009 Posts: 1,930

He just threw a new plot twist today. His inheritance will be roughly a million when that day comes.

I'm going to try and get him to sign up so he can post here. I sent him the link already

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02-28-2017 , 04:34 PM

#28

Love Sosa

veteran

Join Date: Jan 2013 Posts: 2,308

Quote:

Originally Posted by LVpokerPRO

He just threw a new plot twist today. His inheritance will be roughly a million when that day comes.

I'm going to try and get him to sign up so he can post here. I sent him the link already

That certainly helps!

Although my advice is to never bank on such things until the money is actually in your account. A lot of things can happen.

Quote:

Originally Posted by jalexand42

Congrats! One of my favorite posts to see on the boglehead forums is when people hit two commas after lots of discipline.

pshhh two commas?

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02-28-2017 , 04:40 PM

#29

Frankie Fuzz

grinder

Join Date: Aug 2013 Posts: 534

Quote:

Originally Posted by LVpokerPRO

He just threw a new plot twist today. His inheritance will be roughly a million when that day comes.

I'm going to try and get him to sign up so he can post here. I sent him the link already

Obviously I am not familiar with his specific situation, but my understanding is that many people tend to underestimate end of life costs for seniors. It may make sense for him to be extremely conservative when using the possible inheritance in his calculations.

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02-28-2017 , 06:17 PM

#30

Mihkel05

banned

Join Date: Jul 2015 Posts: 4,835

Quote:

Originally Posted by maxtower

Buy 3 houses somewhere in the midwest for $250k each. You should be able to find a place where you can collect $1500-2000 in rent for each at that price level. After expenses, he should be clearing about $3k/month for a cool $36k/yr.

Rents and equity go up with inflation, so he is protected there.

I wouldn't attempt retiring on $750k in the stock market. It's too volatile and one early bad year effs your withdraw plans.

He probably can't buy properties cheap enough in the NorthEast or West Coast to do this.

This is pretty terrible and not likely reasonable even in the short term. Homes are depreciating assets. (As with all structures.)

Quote:

Originally Posted by Frankie Fuzz

This is worth highlighting for everyone.

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02-28-2017 , 07:24 PM

#31

Pokerlogist

veteran

Join Date: Jul 2005 Posts: 3,302

How does he pay for health insurance? That's a big bite. To live in Vegas, better keep earning. Become a card dealer maybe. He could live well, including golf, in some cheap foreign countries.

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02-28-2017 , 07:52 PM

#32

stinkypete

Carpal \'Tunnel

Join Date: Jul 2004 Posts: 15,783

Quote:

Originally Posted by Pokerlogist

To live in Vegas, better keep earning. Become a card dealer maybe.

lol. if he's good enough to have made $750k plus a house at poker, dealing cards will never be a good option. he'd make more playing 2/5 NL 20 hours a week during peak fish times than working full time at a dealing job. and dealing is hard work.

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02-28-2017 , 08:01 PM

#33

Pun Intended

adept

Join Date: Jul 2007 Posts: 849

Is he done with poker? Could probably easily supplement his investment income with 2/5 at fishy times a couple days a week and raise his standard of living to 35-40k/yr or something.

I realize it's technically not "retired", but he has to pass the time somehow.

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02-28-2017 , 08:11 PM

#34

PocketInfinities

veteran

Join Date: Aug 2008 Posts: 2,915

Quote:

Originally Posted by Pun Intended

but he has to pass the time somehow.

Pretty easy to fill multiple weeks with nothing but porn and video games

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02-28-2017 , 09:49 PM

#35

MediocrePlayer2.0

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Join Date: Jun 2012 Posts: 9,205

Is there anything the guy is super passionate about? Does he want to have more time to volunteer, play golf, etc, etc?

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02-28-2017 , 11:51 PM

#36

NewOldGuy

Pooh-Bah

Join Date: Mar 2009 Posts: 5,935

Quote:

Originally Posted by LVpokerPRO

....750,000 in cash saved.
He is 37 and wants to retire now (staying in USA).
...

His argument was that he can invest half a million into index funds and then just take a salary every month from that to golf and do whatever he wants to do every month.
...

Thoughts? I argued that with inflation, and a possible 50 years left to live that's not even $20,000 per year.

You're pretty close.

If we assume 2% long term inflation, and reasonably safe long term market returns of 6%, then on $500K he can draw today's equivalent of $1850/month for 55 years. Meaning he can increase the $1850/month amount by 2% annually to account for inflation, and he won't run out of money for 55 years. In the 55th year he'll be drawing about $5500/month or $66K.

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03-01-2017 , 04:50 AM

#37

theskillzdatklls

Pooh-Bah

Join Date: May 2008 Posts: 4,916

Quote:

Originally Posted by donfairplay

http://firecalc.com/

Firecalc says 100% success rate at $20,000 spending for 50 years on a $750,000 portfolio.

cool site thanks

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03-01-2017 , 08:24 AM

#38

SJCX

adept

Join Date: Aug 2006 Posts: 989

For 37 it isn't that much money at all and is going to be a boring hollow life

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03-01-2017 , 09:31 AM

#39

Mihkel05

banned

Join Date: Jul 2015 Posts: 4,835

Quote:

Originally Posted by NewOldGuy

You're ignoring variance in the 6% return. I'm not sure how many rounds of golf you can buy on 1850. I'm pretty sure his monthly expenses are significantly higher than that.

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03-01-2017 , 10:34 AM

#40

maxtower

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Join Date: Sep 2005 Posts: 7,996

Quote:

Originally Posted by Mihkel05

This is pretty terrible and not likely reasonable even in the short term. Homes are depreciating assets. (As with all structures.)

You're denying that a 5% real return in residential real estate is not achievable ?

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03-01-2017 , 10:35 AM

#41

NewOldGuy

Pooh-Bah

Join Date: Mar 2009 Posts: 5,935

Quote:

Originally Posted by Mihkel05

You're ignoring variance in the 6% return.

It's irrelevant if the long term CAGR is 6%. Higher years make up for lower years. My model has him depleting the principal over 55 years.

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03-01-2017 , 10:50 AM

#42

Mihkel05

banned

Join Date: Jul 2015 Posts: 4,835

Quote:

Originally Posted by NewOldGuy

It's irrelevant if the long term CAGR is 6%. Higher years make up for lower years. My model has him depleting the principal over 55 years.

This is completely wrong. Path dependence is critical to this problem. Your model is primitive and of virtually no use.

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03-01-2017 , 11:53 AM

#43

LVpokerPRO

old hand

Join Date: Jul 2009 Posts: 1,930

Don't forget he said he has no problem getting a part time job at a golf course or something else that might bring an extra 20k a year or so

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03-01-2017 , 12:11 PM

#44

jjshabado

Carpal Tunnel

Join Date: Jul 2006 Posts: 22,732

Seems like a pretty easy situation to be honest.

1. Invest money.
2. Try to get said part time job that he likes and play poker until he's done that.
3. If income from 1+2 is sufficient for him - stop playing poker and live off job + investment.

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03-01-2017 , 01:21 PM

#45

Mihkel05

banned

Join Date: Jul 2015 Posts: 4,835

Working part time at a golf course would save him tens of thousands tbh if his goal is literally "play lots of golf". Why doesn't he try this out part time to see if he likes it?

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03-01-2017 , 03:10 PM

#46

stinkypete

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Join Date: Jul 2004 Posts: 15,783

Golf memberships aren't nearly as expensive as you guys seem to think. And working at a decent golf course doesnt necessarily give you sufficient playing privileges unless you're okay with playing at ****ty times.

Sent from my Nexus 6P using Tapatalk

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03-01-2017 , 06:44 PM

#47

Love Sosa

veteran

Join Date: Jan 2013 Posts: 2,308

It's too bad that driving the beer cart is reserved for girls, that would be my preference if I worked at a golf course.

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03-01-2017 , 07:01 PM

#48

auralex14

veteran

Join Date: Feb 2007 Posts: 2,914

The question seems to have sparked an interesting dialogue, but the answer is no.

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03-01-2017 , 07:37 PM

#49

beet

centurion

Join Date: Sep 2014 Posts: 177

There is a blog called "mr money moustache" written by a guy in a relatively similar situation, who has done exactly this.

He had slightly more liquid cash (around $800k) and owned a few rental houses when he chose to retire in Colorado in his early 30s. He, his wife and their kid live on around $25k a year. However from looking at the breakdown of their expenses, it seems they live a more frugal life than many are accustomed to, or would desire.

The blog has actually gotten quite a following and I imagine that the revenues from it are significant enough that he could live a much more comfortable life should he choose to.

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03-01-2017 , 07:44 PM

#50

Mihkel05

banned

Join Date: Jul 2015 Posts: 4,835

Quote:

Originally Posted by stinkypete

Beyond the free perks and making money, he won't be spending it at the same rate. If he works 20 hours a week, including some time for commute and what not, he could easily have filled up 25 hours of his free time. Add in some extra free golf on top, and the value of not spending any money over that period is the real power of these silly part time jobs.

If he played 4 rounds a week, he'd prob be looking at something like $12000 (2k annual pass, $50 a round) a year. Assuming he still pays for a few rounds elsewhere. He could easily move down to like 100 paid rounds a year. $7k saved on a <20k budget is a huge amount.

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