Your math is pretty far off if you don't think someone would even be able to afford to print some ink onto some paper.

Also, the $10/day for entertainment is definitely on the low side but entirely doable. I don't even know what we are assuming anymore, but on a $30k budget ($2500/month) -- you could easily fit up to $1,000/month into entertainment ($33.33/day) but it would not be difficult at all to spend significantly less than this.

Exactly, variables are everything. If you live at home with your mom in a big city where you don't need a car, trust me, you can afford movies, popcorn, and dates.

Here is a pretty basic monthly budget that still has plenty of fat that could be trimmed:

Rent: $700
Utilities: $300 (includes Electricity, Cell phone, Cable, Internet, Heat, etc...)
Transportation: $300
Health Insurance: $250
Food: $300
Entertainment: $300

TOTAL: $2,150/month or $25,800/year.

Each of the above categories has padding that could either be trimmed or allocated differently. For example, although $300/month is way more than enough to eat a perfectly healthy diet, if you really wanted to splurge on food you could easily come under budget in any of the other categories to make up for it. The only exception being health insurance depending on the individual. With a high-deductible plan most people will be spend less than that.

Note that I am under the $30,000/year we have been using as a basis point, so not only is there breathing room in each of those categories, but we still have another $350 or so per month that hasn't even been budgeted yet.

A budget focused on entertainment could look like this (and there is still padding in the other categories):

Rent: $600 (could be way less if you get a roommate)
Utilities: $200 (includes Electricity, Cell phone, Cable, Internet, Heat, etc...)
Transportation: $200
Health Insurance: $200
Food: $200
Entertainment: $1100

TOTAL: $2,500/month or $30,000/year.

I'll interject here, has this thread deviated from the original question? I'm way to lazy to read all 34 pages. Because writing a 30K a year budget and living off your million year by year is cleary not the way to go about it..

1 million dollars will provide an inflation-adjusted $30-40k per year for the rest of your life with a low risk of ruin.

For the sake of simplicity though, most of us have just been assuming a budget of $30k/year. In the numbers I used in my budget, I was trying to allocate what the average amount would be for the rest of your life. Some months (or years) could be higher or lower as long as it averages out. For example, if I bought a car for $8,000 cash, that goes way over what I allocated for a transportation budget ($667/month just for the car and that doesn't include gas or maintenance for that year), but if I end up driving that car for 10 years the average drops to $67/month for the car plus whatever gas/maintenance ends up being.

But getting a million dollars and deciding to live off a fixed budget and RENT is entirely the wrong way to go about things? Why, oh why in the name of god would you RENT an apartment if you had a million dollars cash?

PAID OFF REAL ESTATE....

Hell, in my city you can buy a 1 bedroom house that needs basically no work for 25K right now...

Buy one of those...

Or hell, do what I did, buy a huge house and rent it out room by room o folks like I did... your living expenses will practically be 0...

Lets try to open our minds here a little...

No offense, but you mentioned you have already been robbed and live in a bad neighborhood (and had to put a lot of work into fixing it up too). This is not somewhere I would want to retire. Most people are going to have to spend a lot more than $25k to be in a good home in a safe neighborhood. Don't take that the wrong way -- I think you have a lot of potential to get some great returns on your investment there.

However, even assuming a $150k house that would still leave $850,000 principal and about $25k/year to live off of.

Buying means you also need to factor in property taxes, home insurance, and maintenance (which are already priced into the rent but split amongst many more people). Utilities will cost more too.

There is nothing wrong with renting and in many cases it is better than owning. It is very situation specific though.

Good points... any house you buy for 25K, the neighborhood is gonna have some grit..

But do we really have to go up to 150K for a single guy? I guess it's all depending on area. Where you want to live is obviously a huge factor in this. In Des Moines you can get a decent home for a single guy in a good neighborhood for 50-60K right now.

No we don't have to go that high and I completely agree with you. When I retire it will probably be the equivalent of a $50kish home but it will be on 40-80+ acres. The reason I went with $150k is just because most people in this thread don't even believe that is possible. They wipe their ass with $50k and think anyone who doesn't is just "merely surviving"

Exactly... when I was reading this thread I was just shaking my head and laughing...

It's clear these people have never lived in poverty, or close to poverty. Man, when you live in poverty you learn so many ways to work the system its amazing... like I said, my food budget is 0 dollars a month... and that's just the start of it.

This thread is ridiculous. Having $2500/month post-tax would be easy as **** for most of the people who make that kind of money now who are single. The only difference would be that instead of spending the 8 hours working, they would need to find something cheap and enjoyable to do. Many options have been listed in this thread already so I won't get into that.

FWIW i also know quite a few people living on around 2500 post-tax. They don't have problems going out for a movie every now and then or go for a decent meal. The only difference is that some hate their jobs and would be much much happier if they could spend 9-10 hours reading, playing video games, exercising, watching movies, hanging with their friends at night...etc.

Also, fwiw i make quite a bit more than 30k/year now, but when i was first out of college i was at about 2500 post-tax. I lived in a decent area with avg. cost of living and never really felt broke. I was able to enjoy my company with people who had similar incomes.

To conclude, having $2500 post-tax living in an avg. city in the US is very much doable and likely more fulfilling than working a **** job. Just ask those who make $10/hr if they'd be much happier with $2500/month w/o having to work.

Average life span is 80.

So we have to live for 55 years on the million...

That is 1515.15 / mo + any interest you have on that million.

There is a large difference in lifestyle between 25k and 40k. Like vastly different. I think the line falls somewhere in there depending on locale and going by the Henry17 standards for not being in poverty (like someone arguing you can eat at the food bank... or go hunting... for free.. GLHF borrowing a truck/gun/tag/boots/processing/etc on the free).

I disagree with your grad budget for several reasons:
1) It is incredibly poor and doesn't account for many things. 20k + a bunch of random extra isn't 20k. 20k while not paying for basic things you need doesn't "prove" anything either. These people are living unsustainable lives on their budgets.
2) Time. These people have a vast amount of time sucked up for them and built in social networks. This is more Henry's issue than mine.

Many people have been arguing back on forth on the ROI. I think a 4% ROI is quite high. In fact absurdly so, as it implies a nominal 7% ROI with a 3% inflation and no variance in said income and tax free. That is absurd for a passive investment. I think perhaps 3% real before taxes could be done, which would be more in line with around 25.5k a year depending on laws/location/etc. And this gets real ****ty really fast. Some of the things that are acceptable as a 23 year old are patently ridiculous at age 40. Even the assumptions that are made while people are young begin to degrade even as they approach their elder years (health etc).

I'm not even going to address the ideas about food being free and those other things as they're strawmen about being beggars essentially. Which goes back to the sub-saharan Africa on $.15 dollars a day and a life expectancy in your mid-30s.

That is because they also do other stuff. If you don't budget for anything beyond shelter and substance that is surviving.


Ok so now we are going to get handouts and eat a shelters. This is **** absurd. Like i said just get arrested and go to jail and you can live on $2000/year easy.


You can't. A movie ticket is $11-14 depending on the theatre and $16-18 for 3D movies. Popcorn is $5-8 depending on the size. So you are looking at $20 minimum when you factor in getting there. If you go to the movies you need two days worth of entertainment budget.



$600 alone would be impossible. You could get a room in a house for that or an apartment with a bar fridge and a hot plate but you could never get an apartment for $600 even in student or crime filled areas in Canada.

Again impossible. My electricity bill alone is $200/month. Cable is $120/month but if I just got basic it would be about $50-60/month. Cell phone is $140-160/month but again for something basic you could get by on $50/month. High speed basic is $50/month.

Again impossible. Minimum for insurance is $50-75/month on a **** car. $20-30/week in gas. Then you have maintenance. My car started to shoot out puffs of white smoke on ignition and now after $130 in towing I get to pay $2700. My GF's car needed an alternator last month so there goes $550.

$200 for food is $6.67 a day or $2.22 a meal. I think those ads asking for money to feed people in Africa claim they can feed someone for that but unless you are having rice with veggies six days of the week so that you can buy meat for one day you are not going to make it. For some ****ed up reason StatsCanada tracks the weekly price of chicken and last time I checked chicken breasts were $22/kg for boneless and $15/kg with bone in.

If you can't, then why do I do it? If you can't, then how come many of my friends do it? More importantly, we do it on less than the income numbers we've been using throughout this thread. Again, I agree with you and Thremp that it's not a great lifestyle. It's just silly to say you can't afford popcorn, drinks, eating out, etc, because as I've told you guys before, I have plenty of counterexamples to those claims (including myself).

1) The reason it doesn't account for everything, is because I was just trying to give you a big picture of what my friends likely spend. If you have such an issue with that, then just replace the $500 savings with miscellaneous. That's pretty much what I do, since I spend more money than them, I just don't save. Even they find the money to go see movies, grab drinks, grab lunch, etc. And that's off $20K. If they had $30K-$40K, they'd feel like kings. Honestly, I've talked with them about future income/careers, and they say they don't know what they'd do with $50K a year, since they don't feel like they deprive themselves now, and never pass up food, drinks, movies, etc. because of money. (Personally, I think that's crazy, because I could easily find ways to spend much more than $50K.) On a similar note, I think the other budgets I've put in this post (like the $2500 a month, and the $3000 a month one, are much more relevant and doable, and I tried to make them flexible by leaving a good chunk for miscellaneous).

2) You're right, they do have more time tied up in school. With that said though, they're also living on less than the numbers we've been using throughout this discussion. So if you give them an extra $10K-$20K, they'd easily be able to entertain themselves throughout the day.

Because you are willing to go spend multiple days budget on one night and then do nothing other nights. I'm not really sure what you are arguing about if the budget is $10 a day and a movie is $11 minimum (except on Tuesdays) you obviously can't go to a movie and get popcorn with just the $10 a day budget. $11>$10. You need to spend multiple days and thus it involves saving to do it.

You keep saying 30-40k but no one has suggested any ROIs equivalent to 3-4% post tax post inflation. That is even being friendly to some investments that are relatively swingy for a venture such as this. Something like TIPS or what not is significantly lower.

But on the topic of budget. The reason it doesn't account for anything is not because it gives a "big picture" its because it sucks and you're lazy. You did a half ass, piss poor analysis. You don't even include a car lol wtf, which is a pretty standard option that most people in the above scenario want to include.

Again the 2.5k and 3k are about as pertinent as a 10k and a 50k, as they're amounts of money that are in excess of the 1M example.

Why would I have a $10 a day budget? $10 a day is $300 a month. Who says I can't spend more than that?

My food + entertainment budget is probably $20-$30 a day and represents most of my income. If I made $30K-$40K a year, I could afford it to be a good deal higher. You're right that some days I don't do much (even then though, I usually still wind up grabbing lunch with friends, or eating out by myself).

Let me ask you something Henry. You're one of the few people in this discussion who actually doesn't work, which gives you a unique perspective on filling up free time. Are you telling me, there aren't some days were you don't feel like going out and doing much, and therefore don't spend much (please answer honestly)? It seems you spend a good deal of time on this forum, so I'm wondering if there are days were you mostly spend in your home, reading, surfing the internet, watching TV, etc. I'm not saying you do this all the time, and I'm not saying our hypothetical person should do this all the time. I'm just saying that most people like to veg out at home a couple days a week, which means there entertainment budget can be higher than average in some days. My point is that, if one has a $50 a day budget, there's many days they'll go over that, not because they deprive themselves, but more because a couple days a week they likely just wanted to stay home, and didn't spend much as a result. I guess this would also be true if you sometimes leave the house to do cheap stuff. I'm not saying this is important to the discussion, I'm just curious.

I'm no expert on investing. However, is it really that hard to get 3-4 percent if you put your money in Vanguard mutual funds, or something along those lines?

Oh, here we go again. Thremp can only have an serious conversation for a few minutes before he blows up, and starts posting insults, lols, and wtfs. The reason the $20K budget was so broad, is because I was guessing what other people spend. I know about how often we go out for drinks, food, etc. I also know that they told me they save like $500 a month since we've started grad school. If you really want to argue about budgets, why don't we quit talking about the $20K estimate of my friends, and focus on the other 3+ budgets I posted throughout this thread (based off $30K-$40K a year, for someone with a high entertainment budget).

What should we be arguing about right now? Whether or not one can get $30K-$40K a year off $1M? Or whether $30K-$40K a year is doable? If it's the former, you have a good point. If it's the latter, plenty of people in this thread have said that they personally do it, know people who do it, could do it, etc. So I don't understand why you and Henry keep insisting it can't be done. You guys should just say, "Look, a lot of people do live happily on that income, I just wouldn't want to. Even though I can afford movies, popcorn, drinks, lunch, etc., I really want more than that. I want to have nice clothes, nice apartments, nice cars, go out to nicer restaurants and bars, etc. And you definitely can't do that on $30K-$40K. In fact, it's not easy to do that unless you get to the $75K-$100K level." That's how I personally feel. I know from recent experience that you can eat out often (once or twice a day), go out for drinks a few times a week, go see movies, go watch the game somewhere, etc. However, you can't do a lot more than that. I personally want to be able to afford more than that, so I'd be disappointed with $30K-$40K a year. That's just not the same thing as saying one can't make it on $30K-$40K a year.

You guys still arguning about this

Yes. Since we need guaranteed income and insurance of principle. Like losing 20% of your mil would be a disaster of epic proportions.



Again, I think 40k is doable in most locales. I think 30k is doable in some locales and is starting to really pinch (assuming these are post tax numbers). I don't think either are representative of what you could earn on a million with the constraints given (to live forever, so no principle drawdown, busto = epic badness). As above I think ~25k is a more realistic post tax figure (2.5% return adjusted for inflation and taxes). Now we need to have a normal life on 2k a month without going to the food bank, skipping healthcare, stealing stuff, borrowing everything imaginable, loitering, etc.

Losing 20% would be somewhat disastrous, but 20% swings happen in the other direction as well. Obviously the past is not necessarily indicative of the future. But I wonder what returns one got through Vanguard over the past 20 years. I may look this up later, because I haven't even tried to determine if the $30K-$40K numbers others came up with are reasonable.

I agree. I don't know why people are talking about the food bank and other gov't programs. Sure, you could use these things (either legally or by cheating the system). However, that doesn't have any role in this conversation. We are talking about whether or not someone can stand on their own two feet with this income.

Edit: For anyone interested, here's the 10-year annual returns on Vanguard funds. Definitely a mixed bag. I some case they're negative. In other cases, returns would have made you a good chunk of money.

Edit 2: Could we use present/future value tables to shed some light on this?

The problem lies in that once you have a downswing, to sustain consumption you destroy principle which erodes further ability to sustain yourself on said principle. Basically its impossible to recover from if you have a fixed budget.

It's possible if you live in NYC... unlimited monthly metro cards is 80 dollars a month. you don't need to drive period in NYC. Now, I don't know how many other cities have a good enough public transportation system that you don't need to drive, but i bet it can be done in Chicago too. But yes, if you intend to drive 200 a month transportation is impossible, not getting around that.