3 Levels of Financial Independence


My portfolio is biased towards yield and internationally diversified. S&P even at these lofty levels yields 1.7. European yields are a bit higher; Australian yields quite a bit higher. Emerging markets, despite the run-up of the past two years, are still under-loved compared to the US and yield more. I’m in between your two numbers net worth-wise (not counting the house). Am comfortable spending income plus 1% of net worth annually. Haven’t spent near that much yet but also haven’t replaced a car or a roof or any other big ticket item. And SS and a small pension will eventually kick in as will Medicare.


If you are 65 you can spend some of your principal. You have a maybe 30 years if lucky. So you can easily spend $30k per year even with no return on investments… and a $1m nest egg . With $10m $300k per year.
With even a a one percent return could bump that up a bit.
With a 3% return can live forever with maybe $40k per year draw…


You also have to consider how much you’ll be able to do and spend when you older. Most people eventually have limited mobility and can’t do that much anyway. It’s better to travel when you’re younger and have good mobility. Too many people think they’ll wait and do it later, but later they can’t even walk that well.


Prices for basic needs (energy, healthcare, new roofs, clothes that last more than one season) double on average every 15 years or so. Yes, I know that implies a 4-5% inflation rate and the official numbers are lower. The official numbers lie (all the ways they do is grist for another thread). Stock dividends or rental income are the safest income sources as both increase with prices. But if 30k suffices today a person will need 60k in 15 years and 120k in another 15.


One reason I retired early. Beyond that it’s scary how many people drop dead before the age of 65 or shortly thereafter even if they have healthy lifestyles and no bad habits. The odds of keeling over before you ever get to enjoy your nestegg are not inconsequential. Key retirement variables are how much you enjoy your job (would you consider it a tragedy to die at your place of work?) and how much you are accustomed to spending. Do you make your fun or buy it? Do you care if the hotel is 5 star or will you be out chasing around all the time and not even notice it’s an AirBnB fleatrap because all you do there is sleep and shower? Are you heavily into “culture” or more the outdoors?


I am enjoying retirement. Fifth ski season in Tahoe since leaving the BA. But I like working and making money. Having fun investing and fixing Tahoe properties. Something to do when the skiing isn’t good.


Just don’t go to retire in the neck of the woods with the red necks, you won’t enjoy it.

To do so, you have to look “American”.

Oh boy, killing one PC at a time.


Tahoe is 30% Latino 5% Asian . Full of pot smoking hippies… Hardly redneck


For sure. :zipper_mouth_face:


My thinking too Elt1. We retired early and we feel we are living a good life but we have nothing like all the $ figures quoted here. We dip into our portfolio on occasions for major things but because of the returns, we recoup and have been increasing thanks to good returns.


Um… If one plans to retire fabulously in the Bay Area as opposed to somewhere in the middle of nowhere like Texas or a Third World nation like Costa Rica, even $10 million might not be enough. To retire fabulously in a place like Palo Alto, I think definitely no less than $15 million, with $20 million being more safe.


Costa Rica is hardly third world. I’d take it over Palo Alto in a heartbeat and I grew up right next door in Stanford.
Bay Area congestion is so bad it’s hard to imagine anyone retiring here. “Making a stash” here - yeah, but retiring here? Why on God’s green earth? La Honda is as close to the mess as I want to be. I’m only sticking around because of aging parent issues. If high culture and not the outdoors was my thing there would also be many better choices for the price.


Well, one man’s garbage is definitely another one’s treasure! Good riddance to you and best of luck in the Third World! I’m sticking around here for sure and laughing all the way to the bank as usual… :rofl:


One step at a time, young man.
Get the $10 million first, report when you’ve achieved that, aim to be ahead of manch and elt1.
2 years, ok?


What a joker you are… :rofl:


I’m providing adult supervision :triumph:


Please provide your driver’s license, brokerage account where all your AAPL holdings are, and all grant deeds of all your real estate for us to analyze. And no I haven’t forgotten your villa in Singapore… :rofl:


No response? Ok I guess I would have to take a stab at it myself:

@hanera net worth analysis:

AAPL stock: $2M
2 Homes in South Bay: $2.5M ($1.5M mortgage assumed)
4 Homes in Austin: $1M
Villa in Singapore: $1.5M
Other misc. assets: $1M

Gross net worth: $8M
Actual net worth: $4M (wife takes half)


I thought @hanera paid off all houses? No?


I can only analyze so much due to limited data. That’s a question for @hanera not me… we can always infer further based on his responses… :wink: