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Old 02-28-2017, 03:23 PM   #26
PocketInfinities
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Re: Is $750k cash enough to retire in your 30's?

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Originally Posted by BetzPH View Post
Interested to here what you mean by the bolded, are you saying real estate?
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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Old 02-28-2017, 03:53 PM   #27
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Re: Is $750k cash enough to retire in your 30's?

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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Old 02-28-2017, 04:34 PM   #28
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Re: Is $750k cash enough to retire in your 30's?

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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.

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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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Old 02-28-2017, 04:40 PM   #29
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Re: Is $750k cash enough to retire in your 30's?

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Originally Posted by LVpokerPRO View Post
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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Old 02-28-2017, 06:17 PM   #30
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Re: Is $750k cash enough to retire in your 30's?

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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.)

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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.
This is worth highlighting for everyone.
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Old 02-28-2017, 07:24 PM   #31
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Re: Is $750k cash enough to retire in your 30's?

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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Old 02-28-2017, 07:52 PM   #32
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Re: Is $750k cash enough to retire in your 30's?

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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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Old 02-28-2017, 08:01 PM   #33
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Re: Is $750k cash enough to retire in your 30's?

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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Old 02-28-2017, 08:11 PM   #34
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Re: Is $750k cash enough to retire in your 30's?

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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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Old 02-28-2017, 09:49 PM   #35
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Re: Is $750k cash enough to retire in your 30's?

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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Old 02-28-2017, 11:51 PM   #36
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Re: Is $750k cash enough to retire in your 30's?

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Originally Posted by LVpokerPRO View Post
....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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Old 03-01-2017, 04:50 AM   #37
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Re: Is $750k cash enough to retire in your 30's?

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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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Old 03-01-2017, 08:24 AM   #38
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Re: Is $750k cash enough to retire in your 30's?

For 37 it isn't that much money at all and is going to be a boring hollow life
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Old 03-01-2017, 09:31 AM   #39
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Re: Is $750k cash enough to retire in your 30's?

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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.
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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Old 03-01-2017, 10:34 AM   #40
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Re: Is $750k cash enough to retire in your 30's?

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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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Old 03-01-2017, 10:35 AM   #41
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Re: Is $750k cash enough to retire in your 30's?

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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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Old 03-01-2017, 10:50 AM   #42
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Re: Is $750k cash enough to retire in your 30's?

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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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Old 03-01-2017, 11:53 AM   #43
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Re: Is $750k cash enough to retire in your 30's?

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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Old 03-01-2017, 12:11 PM   #44
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Re: Is $750k cash enough to retire in your 30's?

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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Old 03-01-2017, 01:21 PM   #45
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Re: Is $750k cash enough to retire in your 30's?

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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Old 03-01-2017, 03:10 PM   #46
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Re: Is $750k cash enough to retire in your 30's?

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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Old 03-01-2017, 06:44 PM   #47
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Re: Is $750k cash enough to retire in your 30's?

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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Old 03-01-2017, 07:01 PM   #48
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Re: Is $750k cash enough to retire in your 30's?

The question seems to have sparked an interesting dialogue, but the answer is no.
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Old 03-01-2017, 07:37 PM   #49
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Re: Is $750k cash enough to retire in your 30's?

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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Old 03-01-2017, 07:44 PM   #50
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Re: Is $750k cash enough to retire in your 30's?

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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
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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