That is pretty ridiculous assumption wise and a terrible bit of analysis.

lol

There is a vast world of difference between alternating reservations at Per Se and French Laundry, than wondering whether you can afford to go to Ruby Tuesday. The budgets being discussed call into question the latter.

Exactly, this isn't about living a baller lifestyle. Obviously that would be out. We are talking about can you even just do any of the normal things average people do without always thinking about how you are on an insanely tight budget. Stuff like meeting some friends for wings and beer to watch the Monday night game at a sports bar would blow your entire week's entertainment budget. Stuff like being out and needing a pick me up you couldn't really justify buying a energy drink or coffee as the cost would just be too high a percentage. This type of self monitoring would drive you crazy. No one is saying it can't be done if you go into some spartan deny yourself everything type of lifestyle but most people don't find that desirable.

You're also living in some pretty lol digs. 1000 bucks total? You're either enjoying a normal lifestyle with a roommate or you're living in post-graduate/college digs.

Henry,

Those are some excellent points. In addition, if you think that 30 - 40 K will cover you as you get older, that would be foolish. Inflation which has been mentioned before would eat away at your purchasing power. Your nut will climb as well. You want a girlfriend/wife? I promise you that your costs will increase. How about a family? That will increase your costs as well. What about medical costs? Even if you remain single, the cost of health care will climb as you age (insurance, visiting doctor more often, etc...). Don't forget taxes, the amount you pay could fluctuate over time due to changing economic conditions and who is in power at the time.

I also love how many ITT don't discuss fluctuating returns on investments. Even if you pick the safer investments that average 5% yearly return, it doesn't mean those returns won't have significant variance. It's just like average win rates in cash game poker. You may average $3000/month but, you could have a $1500 month followed by a $4500 month. If you start to spend your $1 million principal, then your actual average return will decline over time. If you have a couple of years where the investment return doesn't meet your nut, then you burn through that prinicipal very quickly.

Again, I'm not talking about a "baller" lifestyle. I'm just talking about issues that you would run across if you tried to live off of $1 million principal and investment return for most of your life. It's a lot trickier than most people think. For me, I would want to be able to live off of $7 - 10 Million principal (after tax) because there is a lot of margin for error. Even with that amount of money, I wouldn't think about living a "baller" lifestyle. It would be very comfortable but, there could still be leaner years due to variance in investment return.

honestly 2 words come to mind: "it depends"

i own my own home, and besides that, every year, i have roughly $12,000 in expenses (that includes anything and everything i need and want) - therefore if i took in $50k a year i could reinvest a significant portion of that (as well as spend more if i chose to)

if you had no earned income, $1 million IS ENOUGH in MOST areas of the united states for me to live(pretty much, avoiding large cities)

best strategy? live below your income, the more the better... i think 5% interest can be archived fairly safely and if you invest correctly you can "insulate" against inflation~

i dont know what you consider a "baller" lifestyle, but if i made (from working) 70k-100k a year i would be living pretty large. with 7-10mil, with 0% interest rate, at AGE ZERO i would be able to spend 70-100k per year tax free until age 100 before that principal ran out...

....that would be baller to me...

70k-100k?

I spend 1700 a month for my home and the fixed items (TV/Power/Etc). Toss in another 800 for food, 500 for a car. And I'm already upto 36k a year and I'm still naked and never leaving my house.

Some of you people have delusional ideas of what "baller" is. Or how much money people really spend. 500 for a car is a cheap ***** car as well. Start adding in gym membership/health insurance/phone. 50/150/100. How much do you spend on clothes? Entertainment? Travel? Booze/Drugs?

i hope those are not monthly figures, yikes!

just goes to show you, if you either live in an expensive place, or have expensive tastes, you will need a lot more saved to keep you going (and generaly it wont last as long!). 34k+ a year after all living expenses are covered is pretty sweet, some ppl live on 34k a year... and they work for it!

$1700 with everything in is luxury? Good thing I didn't post my rent and I have a 1 bedroom.

Just utilities though

Cable $84-120
Phone $39
Internet $48
Hydro ~$100
Parking $189

So I'm at $460-500/month just on services associated with housing. To keep the price under $1000/month I'd need to find a condo for $500. Given I'm paying $189 for a parking spot that seems a little unlikely.

It is possible, obviously

If you live like a college kid this is so easy.

$400 rent with your other 3 friends.
$100 utilities
$300 for cereal and milk
$200 for gas, car repairs, w/e
$200 beer money
$200 for beer munchies
$4/month xbox live
______________________________
$1404

Wake at 2pm, play video games till your friends get back from work/school then party and try and get laid. That gives you a budget for 55 years at which point your liver should have already given out.

I wasted three seconds (two too many) figuring out that you mean water. You silly Canadians.

This will become a problem as you get older. A bunch of young-twenty somethings sharing a house is cool. Four guys 28+ sharing a home is pathetic.

This actually reminded me of a guy who kind of tried this (he ended up with a bunch of loser roommates) on $250k. He quit his job as a grocery store shelve restocker / small bar manager and tried to live on $250k. He was broke in a little over a year.

No I mean electricity. The water is included in my rent so I don't know how much it is.

Your tastes are out of alignment with a good majority of the population if a $500/mo car is "***** cheap". That's a fifth of the median pre-tax income; a fifth of median post-tax income for 25-64 full-time workers...

You can get a good condition 8yo BMW 3-series for ~$250-300/mo including a liberal maintenance budget and insurance, assuming you replace it every 5 years. Most single people would be very happy with one of those. Good, reliable cars, fashionable, semi-luxurious, well performing.

Gym membership? Why? Used weight bag + weight set = $400. Over 1 year that's half your price, and they're gonna last more than one year. Jogging is free; swimming also depending on where you live.

---

imo, $30K/yr isn't enough to live comfortably off of, but easily livable off of all the same - I've made it work on less. I would assume that if I was starting a family, I'd have a wife with a similar $1m or a job, though.

I'd take the $1m, move somewhere cheap, and start compounding it while my responsibilities/living costs were still low.

This is going to get very old eventually. You can't expect to want to live like a 21yo when you're 45. Two different people connected by causality...

yes...but it wouldn't be a fun life...and it would involve risk (aka the risk I live to 90 and outlive the money) or the risk I don't get the returns needed from indexing a huge chunk of the money.

LOL IIRC you're in your 50s, that'd be like a cheat code for this bet

Honestly I think you guys are just used to a much more extravagant lifestyle where you have a ton of stuff you deem as necessary when its actually not (like a million tv channels or driving a new car etc). I live in a 1 bedroom condo and my fixed expenses are as follows

Rent 1170
Cable and internet 40
Hydro 30
Groceries 300
Gym membership 36
MSP (medical) 54
Phone 44

1674 total/ month

Almost all my non poker friends are blue collar working class guys that barely make 30k a year and for the most part they do ok. Is it a great lifestyle? Idunno maybe not, but it would probably be a lot better if they didnt have to work themselves to death everyday.

This is an A+ level, i fell for it but realized during my critique what you had done.

To above poster, how do you live off of $300 a month in food? That seems absolutely absurd. Do you eat out at all? I guess if you just ate pasta/ramen/etc... like 100% of the time you could do maybe less than $300, but you'd also have to slay your neighbors out of meat-withdrawal

To summarize the thread and close it out:

If you don't have expensive tastes, $1m is plenty at $40k/year (thats 4% muni bond btw)

If you have more expensive tastes, you need more then $1m.

Are muni bonds real bonds? If they aren't then getting a 4% return means you have $5-10k not $40k to live off since you need to increase your principle every year at least until you get older.

Thread title should be changed to:
How long could you live off 30k/year without wanting to get a better paying job, save for retirement, date someone, have a family, go on vacation, or have fun going out with your friends?

From this I can safely conclude you know little about saving money.