Article: Worth $4 Million -- and Unable to Retire

[haha]

Quote:

Originally Posted by Lakedog If this were the case, then he would likely have no problem retiring with a nest egg of $4 million. Hard to believe there are people who cannot live well on $160k per year.

OK, you guys know everything. Who knows why these silly fellows think they have a problem?

Ha

[saluki9]

Quote:

Originally Posted by haha Not necesarily true at all. He may have been maximizing growth of his business at the expense of a large salary. A $4million cash-out is not bad, and he likely lived at least as well as most of us baggie washer/savers. Ha

Another possibility (and something that people are missing from the article) is that a lot of business owners may draw nice or high salaries but if you added back in all the expenses they pass through their business it would take a lot more assets to replicate that.

[audreyh1]

Quote:

Originally Posted by furpants If you're used to making $300k per year and spending most (or all) of it, $4 million ain't gonna support that lifestyle after you stop working.

Yep, that's the gist of it!

Audrey

[Gekko]

Well, I guess I'm the proverbial mmillionaire everybody is talking about. I have a NW between $3-4mm, age 46, married, no kids, and nowhere near retiring or feeling like I could retire and maintain my lifestyle.

But, far from being whiny about it, as this spat of recent millionaire articles likes to promote, I am deeply grateful for the prosperity I have. I didn't grow up middle-class, I grew up piss poor. Like pull the covers over your head so the roaches don't crawl all over you while you sleep poor. Like no heat in winter poor. Like eat grits for breakfast, lunch, and dinner poor. So, yeh, I'm a big deal executive now, and I got the girl so to speak, got my McMansion, know how to order to right wines and all, & hobnob with rich people on charity boards and such, which is all very nice, but I'd like to think I have some perspective on this money thing. Basically, I enjoy my lifestyle, I'm ambitious in my career, I'm still relatively young (though starting to feel the pangs of advancing age), and I still have some things I'd like to accomplish before turning in my badge.

I recognize that I could quit today and lead a perfectly fine "middle-calss" life. And I recognize that it is my choice not to do so.

Ronstar's got me pegged pretty well: I live in a crazy expensive town (NYC), bring home several hundred grand a year, save anywhere from $100K - $300K per year, and spend something like $200K - $250K (after-tax). Trust me, wifey and I are not all that extravagant compared to what we see others doing (does everybody say that). If you haven't lived in NYC, you just have no idea how somebody could spend this kinda money on a "middle-class" lifestyle, but I'm hear to tell you its possible.

So, where's the money going. Part of the big expense is the house, loads of insurance of all types, work-related clothes (wife has to look good too, its all part of the game), charitable giving, travel and vacation (which we enjoy greatly), eating out cause we don't have time to cook, etc. Oh and taxes. I pay more in taxes.... okay well don't get me started about that AMT.

Now I have no illusion about maintaining all aspects of our lifestyle in retirement, because gee... I won't be churning out money anymore. Duh!!!

It's a great ride while it lasts, and when the time comes to shift gears, I think I'll be pretty happy to do so. The key is that I have choices. I can quit and be okay, I can stay and continue to pile up savings, and I can rethink the whole thing, turn around and try something different. That freedom is priceless. By my calculations, if I wait til I'm 60 before touching any savings, I could maintain the same lifestyle.

FYI, one of the things I'm saving up additonal funds for is that when I shift gears, I want to be able to invest in new business opportunities, as well as do some speculative trading. I'm not the type to sit still too long and I will still want to find ways to make money, just different ways than I do right now.

Clearly, my way is not for everyone, but it seems to be working for me.

[Meadbh]

Quote:

Originally Posted by nun If drawing $80k per year from $2M in assets makes you middle class what does my planned $30k per year from $750k make me?----working class? But I'm not working... oh yes I remember now I'm poor . Actually I think with $30k as a single person I'd be at 3x the official poverty level and if you don't have a mortgage you can live a very comfortable life on $30k per year anywhere in the US.

For $30K a year you can live like a nun!

[chinaco]

He is not going to get much sympathy from the middle class world based on what was described.

Poor guy. I guess he is not FIRE ready under his terms. Oh well... back to work. Another 10 years, a pretty good stock market... he should double that at least. $8M will give him $320k/yr. Then everything will be peachy in the world.

[W2R]

It's not just what we have, it's what we spend (I know, I'm preaching to the choir, here).

If someone does not particularly feel a driving need to live in a McMansion in an area with high housing costs, and does not have a deep yearning or desire for worldwide travel, life can be SO much more satisfying.

I have neither of these desires. Right now I am happily LBYM'ing for about $16K above my paid off house, while I prepare to retire. I am hoping to have a little more after ER, but honestly I don't know what I would do with more than $40K/year. Granted, I will have lifetime healthcare taken care of by Uncle Sam.

To spend more than $40K/year, I think I would have to be a shopping addict. Frankly, I wouldn't want to spend that much time tramping through stores or haunting online shopping websites. There is more to life, people!

Maybe Madison Avenue is causing all this dissatisfaction. Or, maybe there is some sort of extreme lack of self-confidence and people think, "If I only owned (xyz), I would impress people and be loved and admired!". I don't want that kind of love and admiration, because it isn't real.

[bow-tie]

I'm confused. So... the person in the article had the ability to build a business worth $4M, but didn't have the foresight to look ahead and see if the nest egg would support their lifestyle. Uh..... say what??

I think I can follow Gekko POV, although it's completely alien to my lifestyle. Regardless, at least he has done the math, and understands his choices and what they mean.

[CuppaJoe]

This is an "ah-ha!" moment for me! Forget that my salary is X number of dollars more than the average, I’m now firmly a member of the "working poor." Will retire anyway, most likely at a higher standard of living than while working.

Was it Greenspan who recently pointed out that a hedge fund manager making less than $129 million/year is not in the major leagues in his field. Oh, my poor poor childhood acquaintance has the hedge fund title, address in Greenwich, CT, etc. but I wonder does he have enough to retire comfortably?

[Milton]

Quote:

Originally Posted by Gekko Well, I guess I'm the proverbial mmillionaire everybody is talking about. I have a NW between $3-4mm, age 46, married, no kids, and nowhere near retiring or feeling like I could retire and maintain my lifestyle.

I suspect that you could easily retire and maintain your current lifestyle - more or less, anyway - if you were prepared to move to a less expensive city. But of course, there's no need for you to do that, as long as you're still enjoying working. An interest in FIRE does not mean that you are obliged to retire ASAP, or that you should feel guilty about choosing to continue to work (your tax contributions are greatly appreciated!).

Quote:

Originally Posted by Gekko spend something like $200K - $250K (after-tax) ... If you haven't lived in NYC, you just have no idea how somebody could spend this kinda money on a "middle-class" lifestyle, but I'm hear to tell you its possible.

Wow.

Quote:

Originally Posted by Gekko It's a great ride while it lasts, and when the time comes to shift gears, I think I'll be pretty happy to do so. The key is that I have choices. I can quit and be okay, I can stay and continue to pile up savings, and I can rethink the whole thing, turn around and try something different. That freedom is priceless. By my calculations, if I wait til I'm 60 before touching any savings, I could maintain the same lifestyle.

Fair enough!