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Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-24-2005, 08:07 PM   #1
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Net Worth $1.6m @ 51 I don't feel rich - explain that!

Something to mull over. For those of you who only think about the financial aspects of RE.

When I was young - 20's - I never thought I in terms of how much money I would have at what age.

Now that I am 51 with a net worth of $1.6m I still don't feel like I have a lot of money. Or maybe it isn't that I don't feel as if I have alot of money. Maybe it is that ...?

I grew up poor and worked since I was 15 - worked for and paid for everything I have - no debt. Although I didn't live during the Great Depression I think others would say I live like I did.

It is as if I won the race but the challenge/enjoyment was in running the race.

Thoughts?
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-24-2005, 08:23 PM   #2
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

Quote:
Originally Posted by dex

Now that I am 51 with a net worth of $1.6m I still don't feel like I have a lot of money. Or maybe it isn't that I don't feel as if I have alot of money. Maybe it is that ...?
Could be that you are focusing on the wrong goal.

My approach was to figure out how much I needed to retire and hang it up when I got there. The goal wasn't to get to a point where I felt like I had a lot of money or was rich, it was to get to an amount to be reasonably sure I would no longer have to work for a living. Doesn't really matter that it is a big number or a relatively small number, so long as the number gets me to a withdrawal rate I have confidence in.



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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-24-2005, 08:36 PM   #3
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

Quote:
Originally Posted by dex
It is as if I won the race but the challenge/enjoyment was in running the race.
I think this is always the way. Having is never as good as aquiring.

It seems more true with money than most other things. Typically the more you have, the more you spend, the more you need.
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-24-2005, 08:52 PM   #4
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

I would feel like I had it made in the shade if I had a net worth of $1.6 M. That money, along with my pension and health insurance and I would be retired at the next early out offered!!!


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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-24-2005, 09:01 PM   #5
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

Quote:
Originally Posted by dex
Something to mull over. For those of you who only think about the financial aspects of RE.

When I was young - 20's - I never thought I in terms of how much money I would have at what age.

Now that I am 51 with a net worth of $1.6m I still don't feel like I have a lot of money.* Or maybe it isn't that I don't feel as if I have alot of money.* Maybe it is that ...?

I grew up poor and worked since I was 15 - worked for and paid for everything I have - no debt.* Although I didn't live during the Great Depression I think others would say I live like I did.

It is as if I won the race but the challenge/enjoyment was in running the race.

Thoughts?
Maybe it is not alot of money, I'm sure it is not to some but it is to others.

Alot is not important.... enough is.

So even if invested conservatively and you have enough to live to 90 no problem until you turn 91.
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-24-2005, 10:22 PM   #6
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

Dex......... You remind me of Me! DW and I, educated in inner city public schools, married young, had a large family and pulled the plow hard for a long time. We've earned a comfortable retirement and are looking forward to it. Yet, DW continues to work with "special" children and I volunteer with mulitiple charitiple organizations. We're comfortable with being in the harness and adding full value to society. We accept everyone else for what they want to do.

Do what you want to do. You sound like a productiive person. Don't stop! Using your savings to be "lazy" may not be right for you. Driving a Lexus and taking cruises may not be the right thing for you.

We enjoy this site. The participants are interesting and diverse, but sometimes narrow-minded. Do your thing. Enjoy it!
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-25-2005, 01:56 AM   #7
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

Quote:
Originally Posted by dex
Now that I am 51 with a net worth of $1.6m I still don't feel like I have a lot of money.* Or maybe it isn't that I don't feel as if I have alot of money.* Maybe it is that ...?
I can empathise with that, Dex. At 15 years younger and a nose (about $150k) ahead in net worth, we similarly do not feel "rich". Only you can know when "enough is enough".

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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-25-2005, 03:39 AM   #8
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

I can empathize with you perfectly. Frankly, one of the reasons we don't feel "rich" is that we have a nice start ... but we're not there, even with $1.6MM. If social security isn't there in 10 years, and if we run into a hitch in our ability to save, then our nice nest eggs may well not be enough, we'll see.

With respect, that is one potential logic challenge I perceive from time to time on these boards ... an assumption that today's savings rate can be tomorrow's savings rate, or higher. At this point, I've seen too many periods, and people, that were tripped up by surprising economic circumstances. I figure it is possible at any time that we could be forced to either begin eating into our nest egg, it could drop significantly in value, and / or we might be unable to keep adding to it. I don't believe that is pessimistic ... just a reflection of the reality we've seen over the last decade.
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-25-2005, 05:44 AM   #9
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

Explination:

$1.6M * 0.035 SWR = $56k/yr
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-25-2005, 05:49 AM   #10
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

Quote:
Originally Posted by REWahoo!
Could be that you are focusing on the wrong goal.*

My approach was to figure out how much I needed to retire and hang it up when I got there.* The goal wasn't to get to a point where I felt like I had a lot of money or was rich, it was to get to an amount to be reasonably sure I would no longer have to work for a living.* Doesn't really matter that it is a big number or a relatively small number, so long as the number gets me to a withdrawal rate I have confidence in.



I basically followed the REW approach, although I slimmed it down even further. *I didn't consider SWR because I had never heard of it.
I "glanced" at net worth I guess, but that was it. *It is now 12 years
later. *So far, so good. *I do have some "psychological"
(read non-financial) advantages unavailable to most ERs and ER wannabees. OTOH, even I remain wary of potholes in the yellow brick road to ER Nirvana. *Anyway, for those of you who tuned in late:
2 homes, 3 boats, no debt and since ER our combined net worth
has never cracked 500K (and never will). *We could do it with a LOT less
so you see, it really is all relative.

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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-25-2005, 07:01 AM   #11
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

Sounds like you're doing great dex for your age. Keep it up a few more years, and you should be able to afford a comfortable, worry-free retirement. If it were me, i wouldnt pull the trigger yet due to the combination of your age and money (meaning, if i were 62, i probably would with 1.6 mil, or if i had 2.5 mil at 51, i would, etc.).

I agree "rich" is relative. With your numbers, i'd still keep working. But i enjoy some of the finer things of life, i'm a very active, passionate person that is activity oriented, and I dont just outright hate my job. Others here, are more than content to live of meager means and sit at home all day, so they'd do just fine on 1.6mil at 51.
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-25-2005, 07:01 AM   #12
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

Quote:
Originally Posted by dex

For those of you who only think about the financial aspects of RE.

Thoughts?
Hi dex,

Anyone who ONLY thinks about the financial aspects of RE is missing the boat. Like my FIL used to say, "Money will be the least of your problems." Pop was almost always right. AS I approach my first ER birthday *I find the adjustment is mostly about wonderful lifestyle changes not financial obscession.

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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-25-2005, 07:36 AM   #13
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

Hmmm

Random thoughts - given the wide variety of lifestyles posting to this forum - saving for and already in ER - etc., etc - money is probably the only measuring stick - er ah common donominator - even the financial rags use net worth $ values.

My house, car, hobbies, hormonal urge to own a few DRIP stocks(heh heh couldn't resist) - and choice of lifestyle in other areas have obvious emotional/what's the right ?way to put it content - which are important for us - in our ER - which another would do different.

The mental aspects - posters have struggled with describing in the past.

To repeat - with 300k his and hers portfolio plus a rental duplex plus a paid up camp(house) in 1993 - I got there by accident - was an ER long before I discovered I were one - ala POGO.

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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-25-2005, 07:55 AM   #14
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

I grew up poor too, where there was never quite enough. I think it contributes to making me feel less secure about what I have. I am learning to live with that insecurity. You analogy to the depression was a good one.

The run up to FI was very satisfying, but that basic insecurity makes it hard to say I have enough and can get along on what I have.
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-25-2005, 08:31 AM   #15
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

I went through a similar thing, but on a much smaller scale last year when I sold my condo. When I walked out of that title company office with the check in hand for roughly $95K, I felt like I was on top of the world! While that's not enough to retire on, obviously, it was a major turning point in my life. Not only did that $95K (it was more like $76K after I paid off some credit cards I had used to finance renovations, and paid a few other things off) significantly boost my portfolio, but having the condo off my books meant that I was no longer paying a mortgage, HELOC, condo fee, and electric on it. So that was about a $1000-1100 per month savings right there. And then, as good luck would have it, I made the final payment on my car around the same time, so that was another monthly payment of $347.66 off the books.

Still, the moment was fleeting. I guess I just got used to having the money, so it didn't seem like such a big deal anymore. And I adapted to not having those monthly expenses on the condo, and the car payment, although I did this mainly by ramping up my monthly investment. So hey, maybe THAT's why I don't really feel any richer!

Still, my guess is that, as you accumulate wealth, you just get used to it, and what seems like a lot when you're at the bottom looking up at it, just doesn't seem like it once you're there! For instance, there was a time when I though a job paying $50K per year was a lot of money. At least, until I got there!
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-25-2005, 08:36 AM   #16
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

The average amount of funds saved by most Americans ifor retirement is reported in the media as around $40k. *That is $40,000; which is a far cry from $1.6 M. *Most do not have pensions and SS will be their PRIMARY source of income. *

The folks on this board are far far better off yet still can't seem to get a grip on the fact that they are in the top 5% of US households with their net worth. *Some here are in the top 1% with more than $3 million. *

Is $1.6 M enough? *It all depends on your personal needs for income and what you are willing to live on. *We can all live on less; it is a choice. *If you want more income then work longer and save more. *If you are OK with a smaller income because you have no debt and your life style is inexpensive then you can RE earlier. *If you want a higher standard of living, it is going to cost you. *It all comes down to choice. *

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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-25-2005, 08:55 AM   #17
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

I think a lot of it might depend on where that $1.6 million would be stashed. For instance, if a great deal of it is put away in 401k's, IRAs, and other retirement plans that can't be touched for awhile, or tied up in the value of your home, then you might not feel all that well-off.

For instance, at the age of 35, I figure I might have a net worth of around $450-500K. That's EVERYTHING...all retirement/savings/bonds/etc, equity in the house (minus the HELOC), a low estimate of the cars, and so on. But of that, I have maybe $7,000 in my checking account that's readily available. Stuff like the house, antique cars, etc, really isn't all that liquid, and I figure everything I have invested and in 401Ks and the IRA is there to make more money for me, and not be spent. So I don't feel particularly loaded at this point in my life. I feel secure, and not deprived, but not rolling in it either!
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-25-2005, 09:43 AM   #18
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

Quote:
Originally Posted by SteveR
The folks on this board are far far better off yet still can't seem to get a grip on the fact that they are in the top 5% of US households with their net worth. Some here are in the top 1% with more than $3 million.

Is $1.6 M enough? It all depends on your personal needs for income and what you are willing to live on. We can all live on less; it is a choice. If you want more income then work longer and save more. If you are OK with a smaller income because you have no debt and your life style is inexpensive then you can RE earlier. If you want a higher standard of living, it is going to cost you. It all comes down to choice.
Exactly. Posters on this board are nearly all "prodigious accumulators" and few would admit to feeling rich without a huge pile of reserves. Most retirees in this country will never have anything like $1.6 Million at any age, and I'm certain most would laugh at the thought that it is not "enough". I'm betting 90% would take Dex's deal in a heart beat. Personally, I think those numbers are OK but not rich
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-25-2005, 10:39 AM   #19
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

Maybe you do not feel rich because you are NOT rich... you are very well off and could probably live a normal life without earning any more money.

If you put all of your money in an immediate annuity, you would get about $8,669 per month, or about $100,000 per year... this is NOT rich but comfortable....
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!
Old 10-25-2005, 10:53 AM   #20
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Re: Net Worth $1.6m @ 51 I don't feel rich - explain that!

Quote:
Originally Posted by dex
Something to mull over. For those of you who only think about the financial aspects of RE.

It is as if I won the race but the challenge/enjoyment was in running the race.
I thought I'd seen this quote on the board before but I couldn't find it with a search. So with apologies if it's been said before by another poster:
A man is a success if he gets up in the morning and gets to bed at night, and in between he does what he wants to do.
-- Bob Dylan
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