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View Poll Results: Set for life?
500k - 1m 36 9.73%
1m - 1.5m 33 8.92%
1.5m - 2m 39 10.54%
2m-3m 68 18.38%
3m-5m 67 18.11%
5m-10m 71 19.19%
10m+ 56 15.14%
Voters: 370. You may not vote on this poll

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Old 11-07-2013, 07:08 AM   #121
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Re: What is the minimum amount of money it would take to be "set for life"

Here's my maths. Normally I would say that I need $100 a day. According to OOT being set for life means you must eat nice dinners and go on vacations, so I will up that to about $350/day. I projected that I will probably live for another 56 years.

$350*365*56=7154000

I need 7.2 million after taxes.
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Old 11-07-2013, 07:48 AM   #122
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Re: What is the minimum amount of money it would take to be "set for life"

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Originally Posted by Mark_K View Post
So if you want $100K of income, inflation adjusted for the rest of your life, you need $2,500,000 in your retirement account. (4% x $2.5M = $100K)
So, your assumption is something like 7% annual ROI?
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Old 11-07-2013, 08:09 AM   #123
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Re: What is the minimum amount of money it would take to be "set for life"

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Every single aspect of your life is exactly the same except now you have a large windfall of money for no reason.
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Old 11-07-2013, 09:00 AM   #124
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Re: What is the minimum amount of money it would take to be "set for life"

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I just came into this thread to savor Goodie's posts.
I'm glad I could be of service. You're welcome.
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Old 11-07-2013, 09:11 AM   #125
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Re: What is the minimum amount of money it would take to be "set for life"

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So, your assumption is something like 7% annual ROI?
Don't forget that you also don't need to save the principal at the end unless that's an explicit goal, which doesn't seem like the case for most people ITT. Especially since the OP talked about not having children,etc.
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Old 11-07-2013, 11:32 AM   #126
 
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Re: What is the minimum amount of money it would take to be "set for life"

The people saying that Biggie Smalls planned correctly with 1.5 million are completely correct. If your plan is to die at 25 then retirement planning becomes much easier.

Most of the erroneous calculations in this thread are occurring because people are assuming a fixed date that they will live to. Planning to live to 85 and spending your principle down to zero becomes a problem if you are still alive.

It's the unknowing that is the problem. The use of averages for inflation (particularly in times of the Fed holding rates artificially low on a historical basis), tax rates (When do we raise taxes to begin paying off the debt?) and rising medical costs, etc., are dangerously short sided when it comes to long term planning.

Cotton, you are talking about "untold" millions without understanding the time value of money. To retire today at 25 and be "set for life" is very difficult to achieve. I've been comfortably retired for more than eleven years and I'm not really sure how much I will need twenty years from today, there are hundreds of variables to account for. (And again, I'm not talking about merely surviving, set to me means having the "good"life.)
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Old 11-07-2013, 02:07 PM   #127
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Re: What is the minimum amount of money it would take to be "set for life"

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So, your assumption is something like 7% annual ROI?
The model assumes a diversified portfolio of stocks and bonds which has historically beat inflation by 3-4%
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Old 11-07-2013, 02:30 PM   #128
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Re: What is the minimum amount of money it would take to be "set for life"

people can become accustomed to all sorts of pointless luxuries and genuinely need them to be as happy as an african villager when he gets served a bowl of gruel.

2m is more than 90% of the worlds population will ever see. i'd still WANT more, and if the opportunity to make more doing something i didn't find too objectionable was on the table i'd do it, but if you can't make life work on that kind of a budget (60k/y @ 3% conservatively... and that's assuming you're leaving the principle completely in tact, which you obviously wouldnt as you get older) lack of money probably isn't your biggest problem.
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Old 11-07-2013, 03:22 PM   #129
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Re: What is the minimum amount of money it would take to be "set for life"

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The people saying that Biggie Smalls planned correctly with 1.5 million are completely correct. If your plan is to die at 25 then retirement planning becomes much easier.
I was trying to ad a little humor to the thread, although his calculation probably does reflect what he truly felt he needed in his life. His lyrics are some of the most raw, honest, ghetto poetry and story telling to ever exist, fluid, flowing pure lyrical genius all day long.

Did Biggie plan on dying? I wasn't aware of this revelation? I think his assessment of $1.5 was founded on the assumption that his life had improved and he would live much longer than 24+ years (it wasn't 25 btw) .
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Old 11-07-2013, 03:25 PM   #130
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Re: What is the minimum amount of money it would take to be "set for life"

If I got $50k passive income, I'd have no problem not working. Is this "set for life"? No. And I think this is where we all differ.
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Old 11-07-2013, 03:30 PM   #131
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Re: What is the minimum amount of money it would take to be "set for life"

Being able to gain 3% on average over a 50 to 60 year span does not mean you can withdraw 3% yearly while still having principle at the end with a lower than 1% risk of ruin.
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Old 11-07-2013, 03:33 PM   #132
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Re: What is the minimum amount of money it would take to be "set for life"

People seem to be forgetting that due to the fact that you don't have a job anymore, you now suddenly have an abundance of free time where you're going to be spending more money than you used to. For the average 9-5 working guy, you're now going to be filling those free hours consuming more goods and services. Now all of a sudden your yearly wage is not going to be enough to sustain your current costs of living.

Last edited by UnoTrap; 11-07-2013 at 03:43 PM.
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Old 11-07-2013, 03:34 PM   #133
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Re: What is the minimum amount of money it would take to be "set for life"

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If I got $50k passive income, I'd have no problem not working. Is this "set for life"? No. And I think this is where we all differ.
I think where we differ is how much 50k inflation adjusted from now to when you die with lower than 1% risk of ruin actually amounts to in lump sum format.
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Old 11-07-2013, 03:40 PM   #134
 
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Re: What is the minimum amount of money it would take to be "set for life"

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Originally Posted by PlayaHata1 View Post
I was trying to ad a little humor to the thread, although his calculation probably does reflect what he truly felt he needed in his life. His lyrics are some of the most raw, honest, ghetto poetry and story telling to ever exist, fluid, flowing pure lyrical genius all day long.

Did Biggie plan on dying? I wasn't aware of this revelation? I think his assessment of $1.5 was founded on the assumption that his life had improved and he would live much longer than 24+ years (it wasn't 25 btw) .
I was joking as well and I do like his music. (Which is somewhat odd, considering) But, with his lifestyle and tastes, one and a half million wouldn't have lasted him long at all. I've seen some of those young guys partying in LA and they're dropping $30,000 in one night, lol.
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Old 11-07-2013, 04:00 PM   #135
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Re: What is the minimum amount of money it would take to be "set for life"

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Originally Posted by UnoTrap View Post
People seem to be forgetting that due to the fact that you don't have a job anymore, you now suddenly have an abundance of free time where you're going to be spending more money than you used to. For the average 9-5 working guy, you're now going to be filling those free hours consuming more goods and services. Now all of a sudden your yearly wage is not going to be enough to sustain your current costs of living.
Don't discount the fact that enterprising hustlers can make money in their free time as a hobby. Getting away from a bland 9-5 may open up people's eyes to the possibilities of running a business or some other more fulfilling endeavor that will also lead to income and fun.
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